Chapter 1:

Introduction to
Organizational Behavior
 What is an Organization?
We can define the term organization as two or more
individuals who are interacting with each other within a
deliberately structured set up and working in an
interdependent way to achieve some common objective/s.
• An organization is a collection of people who work
together to achieve individual and organizational goals.
 Individual goals are what people are trying to
accomplish for themselves such as earning a lot of
money, achieving power and prestige, and enjoying
work.
 Organizational goals are what the organization as a
whole is trying to accomplish such as providing
innovative products and services to customers, making
a profit, and achieving high levels of market share.
 What is Behavior?
Is it the behavior of organization or the behavior of the
people who are working in the organization?
 It is the behavior of the people working in an
organization to achieve common goals or objectives.
• Behavior is a response of an individual or group to an
action, environment, person, or stimulus.
 Individual behavior can be defined as how an individual
behaves at work. A person’s behavior is influenced by
the factors − Attitude, Perception, Personality, Stress,
Belief, Norms or other psychological matters.
 Group behavior refers to the ways people behave in
large- or small-group situations. A group behavior can
be stated as a course of action a group takes as a
family.
 What is Organizational Behavior?
• Organizational Behavior (OB) is the study of
factors that have an impact on how people and
groups act, think, feel, and respond to work and
organizations, and how organizations respond to
their environments.
• Organizational Behavior (OB) is a field of study
that investigates the impact that individuals,
groups, and structure have on behavior within
organizations, for the purpose of applying such
knowledge toward improving an organization’s
effectiveness.
• OB studies three determinants of behavior in
organizations- individuals, groups and structure.
 Why Should We Study
Organizational Behavior?
• In our competitive, complex, and constantly changing
world, organizations must be both efficient and
effective in what they do. To do this, organizations
must have competent employees that know how to
work together to reach organizational goals. As a
result, it is important to understand how to build and
maintain a competent and cooperative work force.
• OB helps us understand questions like:
 Why are some motivated to join an organization while others
are not?
 Why do some people feel good or bad about their jobs?
 Why do some people stay with an organization for 30 years
while others change jobs regularly?
 …Why Should We Study
Organizational Behavior?
• By studying organizational behavior, both employees
and managers come to understand what makes people
behave the way they do.
 Employees can use this knowledge to increase their
own job satisfaction and improve work performance.
 Managers can use this knowledge to accomplish goals
and help employees achieve optimal performance.
• More importantly, learning about organizational
behavior will help you to understand your own
behaviors, attitudes, ethical views, and performance, as
well as those of the people with whom you'll be
working. This type of knowledge will assist you in
working effectively with managers, colleagues, and
subordinates.
…Why Should We Study
Organizational Behavior?
To learn about yourself and others.
To understand how organizations
work.
To become familiar with team work.
To help you think about the people
issues faced by managers and
entrepreneurs.
To understand, influence, and predict
organizational events.
The Importance of Interpersonal Skills in the
Workplace
Interpersonal skills help to achieve managerial
effectiveness
• Development of managers’ interpersonal skills is
important for organizations to get and keep high
performing employees.
• Having managers with good interpersonal skills help
to
Make the workplace more pleasant
Make easier to hire and keep qualified people
Positive work outcomes
Generate superior financial performance
In today’s competitive and demanding workplace,
managers can’t succeed on their technical skills alone.
They also have to have good people skills.
 Management Functions
Henri Fayol, French industrialist, wrote that all managers
perform five management functions- planning, organizing,
commanding, coordinating, and controlling. Today, we have
condensed these to four:

1. Planning: A process that includes defining goals, establishing

strategy, and developing plans to coordinate activities.

2. Organizing: Determining what tasks are to be done, who is to

do them, how the tasks are to be grouped, who reports to
whom, and where decisions are to be made.

3. Leading: A function that includes motivating employees,

directing others, selecting the most effective communication
channels, and resolving conflicts.

4. Controlling: Monitoring activities to ensure they are being

accomplished as planned and correcting any significant
deviations.
 Managerial Roles
Henry Mintzberg, In 1960s, a graduate
student at Massachusetts Institute of
Technology undertook a study of five
executives to determine the roles of
manager and discovered ten managerial
roles. These 10 roles can be separated into
three groups:
1. Informational (managing by information)
2. Interpersonal (managing through people)
3. Decisional (managing through action)
 …Managerial Roles
• Informational (managing by information):
1. Monitor: Seek and acquire work-related information.
2. Disseminator: Communicate information to others within the
organization.
3. Spokesperson: Communicate information to outsiders.
• Interpersonal (managing through people):
1. Figurehead: Perform social and legal duties, act as symbolic leader.
2. Leader: Direct and motivate subordinates, select and train
employees.
3. Liaison: Establish and maintain contacts within and outside the
organization
• Decisional (managing through action):
1. Entrepreneur: Identify new ideas and initiate improvement
projects.
2. Disturbance Handler: Deals with disputes or problems and takes
corrective action.
3. Resource Allocator: Decide where to apply resources.
4. Negotiator: Defends business interests.
 Management Skills Needed to
Achieve Goals
Robert Katz has identified three essential
management skills:
1. Technical Skills: The ability to apply
specialized knowledge or expertise.
2. Human Skills: The ability to understand,
communicate with, motivate, and
support other people, both individually
and in groups.
3. Conceptual Skills: The mental ability to
analyze and diagnose complex situations.
 Effective vs. Successful
Managerial Activities
Fred Luthans identified that all managers
engaged in four managerial activities:
1. Traditional Management: Decision making,
planning, and controlling.
2. Communication: Exchanging routine
information and processing paperwork.
3. Human Resource Management: Motivating,
disciplining, managing conflict, staffing and
training.
4. Networking: Socializing, politicking, and
interacting with others.
…Effective vs. Successful
Managerial Activities
 Intuition and Systematic Study
• Intuition is a ‘gut feelings’ not supported by
research. If we make all decisions with
intuition, we are likely making decisions with
incomplete information. 
• Systematic study looking at relationships,
attempting to attribute causes and effects and
drawing conclusions based on scientific
evidence.
We need to enhance our intuitive views of
behavior with a systematic analysis, in the
belief that such analysis will improve our
accuracy in explaining and predicting behavior.
Five Anchors of Organizational Behavior
Research into organizational behavior is guided by five
driving principles or anchors.
 …Five Anchors of Organizational Behavior

1. The Multidisciplinary Anchor: The

multidisciplinary anchor beliefs that
the field of organizational behavior
should develop by importing knowledge
from many other disciplines, not just
from its own isolated research base.
Some of these disciplines include
psychology, sociology, anthropology,
political science, economics,
communications, information systems,
and marketing.
…Five Anchors of Organizational Behavior

2.The Systematic Research Anchor:

The systematic research anchor
dictates that organizational
behavior knowledge should be
based on systematic research,
which typically involves forming
research questions, systematically
collecting data, and testing
hypotheses against those data.
 …Five Anchors of Organizational Behavior

3. The Contingency Anchor: Different

actions and decisions may have
different consequences in different
settings. The contingency anchor
requires an awareness that no single
solution will work in every situation.
There is a need to evaluate specific
situations and select a solution that fits
the situation to which it is to be
applied.
 …Five Anchors of Organizational Behavior
4. The Multiple Levels of Analysis Anchor:
This anchor dictates that solutions be
evaluated from the perspectives of
various organizational levels including
that of individuals, of functional teams
or departments, of executives and of
the company as a whole. Many
solutions when applied affect several or
all levels of the organization. Analysis of
the effects at various levels is critical to
success.
…Five Anchors of Organizational Behavior

5. The Open Systems Anchor: This

anchor view that organizations are
open systems. The organization and
the environment in which it exists are
interconnected. A company’s survival
and success depend on how well
employees sense environmental
changes and alter their patterns of
behavior to fit those emerging
conditions.
 Disciplines that contribute to OB
Many behavioral sciences have contributed to the
development of Organizational Behavior. Some of them
are discussed below:
1. Psychology: The science that seeks to measure, explain,
and sometimes change the behavior of humans and
other animals. Organizational psychologists concerned
themselves with the problem of fatigue, boredom and
other factors relevant to working conditions that
hamper efficient work performance. 
 Contributions to OB: Learning, Motivation, Personality,
Emotions, Perception, Training, Leadership
effectiveness, Job satisfaction, Individual decision
making, Performance appraisal, Attitude
measurement, Employee selection, Work design, and
Work stress.
 …Disciplines that contribute to OB
2. Sociology: The study of social behavior,
relationships among social groups and societies,
and the maintenance of social order.
 Contributions to OB: Communication, Power,
Conflict, Intergroup behavior, Formal organization
theory, Organizational technology, Organizational
change, Organizational culture.
3. Social Psychology: Social psychology blends
concepts from psychology and sociology. It is the
study of human behavior in the context of social
situations.
 Contributions to OB: Behavioral change, Attitude
change, Communication, Group processes, Group
decision making, Power, Conflict, Intergroup
behavior.
 …Disciplines that contribute to OB
4. Anthropology: The study of societies to learn about
human beings and their activities.
 Contributions to OB:
• Comparative values
• Comparative attitudes
• Cross-cultural analysis
• Organizational culture
• Organizational environment
• Power
5. Political Science: The study of the behavior of
individuals and group within a political environment.
 Contributions to OB:
• Conflict
• Intra-organizational politics
• Power
 Why Few Absolutes Apply to OB?
Human beings are complex. Because they are not
alike, their ability to make simple, accurate, and
broad generalizations is limited.
• Two people often act very differently in the same
situation, and the same person’s behavior changes
in different situations. Not everyone is motivated
by money, and people may behave differently at
a religious service than they do at a party.
• That does not mean that OB cannot offer
reasonably accurate explanations of human
behavior or make valid predictions. It does mean
that OB concepts must reflect situational or
contingency conditions.
 …Why Few Absolutes Apply to OB?
We can say x leads to y, but only under conditions
specified in z —the contingency variables (contingency
variables moderate the relationship between the
independent and dependent variables).

Contingency

x Variables

(z)
y
Independent Variable (X) Contingency Variable (Z) Dependent Variable (Y)

Boss Gives “Thumbs Up” Sign In American Culture Understood as Complementing

Boss Gives “Thumbs Up” Sign In Iranian Culture Understood as Insulting – “Up Yours”
Challenges and Opportunities for
Organizational Behavior
1. Responding to Economic Pressures
2. Responding to Globalization
3. Managing Workforce Diversity
4. Improving Customer Service
5. Improving People Skills
6. Stimulating Innovation and Change
7. Coping with “Temporariness”
8. Working in Networked Organizations
9. Helping Employees Balance Work-Life Conflicts
10.Creating a Positive Work Environment
11.Improving Ethical Behavior
…Challenges and Opportunities for OB
Responding to Economic Pressures:
• Recession, Layoffs, Pay cuts
• OB approaches in good times - understanding how to reward,
satisfy, and retain employees.
• OB approaches in bad times - stress, decision making, and
coping.
Responding to Globalization:
• Organizations are no longer constrained by national borders.
• Manager’s job is changing and challenging for responding to
globalization:
 Increased foreign assignments
 Working with people from different cultures
 Overseeing movement of jobs to countries with low-cost
labor
…Challenges and Opportunities for OB
Managing Workforce Diversity: 
• One of the most important challenges for organizations is
adapting to people who are different.
• Globalization focuses on differences between people from
different countries but workforce diversity focuses on
differences among people within the same country.
• Workforce diversity acknowledges a workforce of women
and men; many racial and ethnic groups; individuals with
a variety of physical or psychological abilities; and people
who differ in age and sexual orientation.
• When diversity is not managed properly, there is a
potentiality for higher turnover, more difficult
communication, and more interpersonal conflicts.
…Challenges and Opportunities for OB
Improving Customer Service:  
• Service related jobs require interaction with an
organization’s customers. Management needs to ensure
that employees do what it takes to please customers.
• Management needs to create a customer responsive
culture. OB can help managers for improving
organization’s performance by
 Developing employees attitudes and behavior
associated with customer satisfaction.
 Creating cultures in which employees respond
promptly
 Make willingness to do what’s necessary to please the
customer.
…Challenges and Opportunities for OB
Improving People Skills:
• OB helps to
 Explain and predict the behavior of people at
work
 Learn ways to design motivating jobs
 Improve listening skills
 Create effective teams
Stimulating Innovation and Change:  
• Victory will go to the organizations that maintain
their flexibility, continually improve their quality
and beat their competition to the marketplace with
a constant stream of innovative products and
services.
• The challenge for managers is to stimulate their
employees creativity and tolerance for change.
…Challenges and Opportunities for OB
Coping with ‘Temporariness’:  
• Nothing is permanent in the world.
Organization continually -
Reorganize their various divisions
Sell off poor performing businesses
Downsize operations
Subcontract non critical services
Operations to other organizations
Replace permanent employees with
temporary workers.
 …Challenges and Opportunities for OB
Working in Networked Organizations:
• Technology changes allow people to communicate
and work together even though they may be
thousands of miles apart. Managers must develop
new skills as more employees do their jobs by
linking to others through networks.
Helping Employees Balance Work-Life Conflicts:  
• Employees are increasingly recognizing that work is
infringing on their personal lives and they are not
happy about it.
• Organizations that don’t help their people achieve
work-life balance will find it difficult to attract and
retain the most capable and motivated employees.
…Challenges and Opportunities for OB
Creating a Positive Work Environment:
• Organizations are trying to realize a
competitive advantage by fostering a
positive work environment.
Improving Ethical Behavior:
• Members of organizations are increasingly
finding themselves facing ethical dilemmas,
situations in which they are required to
define right and wrong conduct.
• Managers need to create an ethically
healthy climate for his or her employees.