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, All Rights Reserved

 Chapter One

The Dynamics of
People and Organizations

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 Chapter Objectives
 To understand:
• The meaning of organizational behavior
• The key goals and forces with which it is
concerned
• Basic concepts of organizational behavior
• Major approaches taken in this book
• How organizational behavior affects
organizational performance
• Limitations of organizational behavior

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 Introduction
 Basic Concepts
• Organizations are complex
• Human behavior in organizations is sometimes
unpredictable
• Human behavior can be partially understood
• There are no perfect solutions to organizational
problems
• Organizational behavior is needed

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 Understanding Organizational Behavior
 Organizational behavior…
• The systematic study and careful application
of knowledge about how people act within
organizations
• Strives to find ways in which people can act
more effectively
• Is an applied science
• Provides a useful set of analysis tools

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 Understanding Organizational Behavior
 Goals
• Describe
• Understand
• Predict, and
• Control human behavior at work
 Organizational behavior is a human tool for
human benefit
• It is not designed to limit freedoms or take
away rights

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 Understanding Organizational Behavior
 Primary Forces
• People
• Structure
• Technology
• Environment

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 Understanding Organizational Behavior

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 Positive Characteristics of the OB Field

Practice

Theory Research

 Interdisciplinary nature
• Emerging base of research knowledge, models,
and conceptual frameworks
 Good, practical theories
 Acceptance by practicing managers

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 Fundamental Concepts
 The Nature of People
• Individual differences
• Perception
• A whole person
• Motivated behavior
• Desire for involvement
• Value of the person

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 Fundamental Concepts

 The Nature of Organizations

• Social systems
• Mutual interest
• Ethics

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 Fundamental Concepts
 Mutual Interest Provides a Subordinate Goal

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 Basic Approaches of This Book

 Organizational behavior seeks to integrate…

• People
• Structure
• Technology
• Environment
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 Basic Approaches of This Book

Human Resources Employee growth and development are

(Supportive) encouraged and supported
Contingency Different managerial behaviors are
required by different environments
Results-Oriented Outcomes of organizational behavior
programs are assessed in terms of their
effectiveness
Systems All parts of an organization interact in a
complex relationship

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 Human Resources Approach
 A supportive approach…
• Helps employees become better, more
responsible people
• Creates a climate in which employees can
contribute to the limit of their improved abilities
• Leads to operating efficiencies
• Results in work satisfaction
• Produces better results

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 Contingency Approach
 Few across-the-board concepts apply in all
instances
• Different situations require different practices
• The key question is when to use a specific
approach
• Prior analysis is required

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 Results-Oriented Approach
 A dominant goal for many organizations is to be
productive
• A ratio that compares output with input, often
against a predetermined standard
• Productivity is measured in terms of economics,
but human and social inputs are also important
• TQM is an integrated attempt to improve the
quality of products and services

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 OB Equations

Knowledge x Skill = Ability

Attitude x Situation = Motivation

Ability x Motivation = Potential performance

Potential performance x Resources x Opportunity =

Organizational results

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 Systems Approach Fundamentals
 There are many variables within a system
 The parts of a system are interdependent
 There are many subsystems
 Systems require inputs, a process, and outputs
 The input-process-output mechanism is cyclical
and self-sustaining
 Systems produce positive and negative results,
and intended and unintended consequences
 Consequences may be short-term, long-term,
or both

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 Systems Approach

Potential Costs

Proposed OB Action Compare

Potential Benefits Decide

 A systems approach requires…

• Holistic organizational behavior
• Cost-benefit analysis

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 Limitations of Organizational Behavior
 Limitations
• Behavioral bias
• The law of diminishing returns
• Unethical manipulation of people
 Ethical Leadership Principles
• Social responsibility
• Open communication
• Cost-benefit analysis

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 Continuing Challenges
 Seeking Quick Fixes
• Embracing the newest fad
• Addressing symptoms, not underlying problems
• Fragmented efforts
 Varying Environments
• Shrinking demand
• Scarce resources
• More intense competition
• Organizational stagnation or decline
• Increased stress and conflict
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