Understanding Organizational Behavior: Key Concepts
Part 1: Introduction to Organizational Behavior
Chapter 1: An Overview of Organizational Behavior
Ricky W. Griffin/Jean M. Phillips/Stanley M. Gully, Organizational Behavior: Managing People and Organizations, Twelfth Edition. © 2017 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter Learning Objectives
After studying this chapter, you should be able to:
- Define organizational behavior and describe how it impacts both personal and organizational success.
- Identify the basic management functions and essential skills that comprise the management process and relate them to organizational behavior.
- Describe the strategic context of organizational behavior and discuss the relationships between strategy and organizational behavior.
- Identify and describe contextual perspectives on organizational behavior.
- Describe the role of organizational behavior in managing for effectiveness and discuss the role of research in organizational behavior.
- Summarize the framework around which this book is organized.
What Is Organizational Behavior?
Organizational behavior (OB) is the study of:
- Human behavior in organizational settings
- The interface between human behavior and the organization
- The organization itself
Organizational Behavior Framework
Figure 1.7
An array of environmental, individual, group and team, leadership, and organizational characteristics impact organizational behavior. If managers understand these concepts and characteristics they can better promote organizational effectiveness.
The Nature of Organizational Behavior
Figure 1.1
The field of organizational behavior attempts to understand human behavior in organizational settings, the organization itself, and the individual organization interface. As illustrated here, these areas are highly interrelated. Thus, although it is possible to focus on only one of these areas at a time, a complete understanding of organizational behavior requires knowledge of all three areas.
Why Study OB?
Studying OB can help you:
- Become a better employee
- Become a better manager
- Understand how people behave and why they do what they do
- Help you focus on developing a global mindset
Organizations that successfully implement OB principles have:
- Motivated, engaged employees whose goals align with business strategy (high performance employees)
- Strong leadership and direction
- Better bottom lines
The Managerial Context of Organizational Behavior
Management Functions
- Planning
- Organizing
- Leading
- Controlling
Resources Used by Managers
- Human
- Financial
- Physical
- Information
Functions of Management
Basic Managerial Functions
Figure 1.2
Managers engage in the four basic functions of planning, organizing, leading, and controlling. These functions are applied to human, financial, physical, and information resources with the ultimate purpose of efficiently and effectively attaining organizational goals.
Critical Managerial Skills
Human Resource Management
Human Resource Management (HRM)
- The set of organizational activities directed at attracting, developing, and maintaining an effective workforce
Questions OB Helps HR Managers Answer
- Which applicants should be hired?
- Which rewards will be more motivating than others?
The Strategic Context of OB
Competitive Advantage
- An organization’s edge over rivals in attracting customers and defending itself against competition
Sources of Competitive Advantage
- Innovation
- Distribution
- Speed
- Convenience
- First to market
- Cost
- Service
- Quality
- Branding
Types of Business Strategies (1 of 2)
The Five Generic Competitive Strategies
Types of Business Strategies (2 of 2)
Growth Strategy
- Company expansion organically or through mergers and acquisitions
- Response to investor preference for rising earnings
- Success depends on company’s ability to find and retain the right number and types of employees to sustain growth
Integrating Business Strategies and OB
- Implementation and change require large-scale organizational changes
- New organizational culture
- New employee behaviors
Contextual Perspectives on Organizational Behavior—A History (1 of 2)
Scientific Management
- First formal study of OB (1890s), abandoned after WWI
- Based on the belief that productivity is maximized when organizations are rationalized with precise sets of instructions based on time-and-motion studies.
- Maximized productivity but led to monotonous, dehumanizing conditions
Guiding Principles
- Replace rule-of-thumb work methods with methods based on scientifically studying the tasks using time-and-motion studies.
- Scientifically select, train, and develop all workers rather than leaving them to passively train themselves.
Contextual Perspectives of Organizational Behavior—A History (2 of 2)
- Managers provide detailed instructions and supervision to workers to ensure that they are following the scientifically developed methods.
- Divide work nearly equally between workers and managers. Managers should apply scientific management principles to planning the work, and workers should actually perform the tasks.
History of Organizational Behavior
Human Relations Movement
- Inspired by the Hawthorne effect:
- When people improve some aspect of their behavior or performance simply because they are being assessed
- Viewed organizations as cooperative systems
- Treated workers’ orientations, values, and feelings as important parts of organizational dynamics and performance
- Created a new era of more humane, employee-centered management and highlighted the importance of people to organizational success
- But was hampered by unsound research methods
Contemporary Organizational Behavior
Contextual Perspectives on Organizational Behavior
- Systems Perspective
- Situational Perspective
- Contingency
- Interactional
The Systems Perspective (1 of 2)
System
- A set of interrelated elements that function as a whole—inputs are combined/transformed by managers into outputs from the system
Value of the Systems Perspective
- Underscores the importance of an organization’s environment
- Conceptualizes the flow and interaction of various elements of the organization
The Systems Approach to Organizations
Figure 1.3
The systems approach to organizations provides a useful framework for understanding how the elements of an organization interact among themselves and with their environment. Various inputs are transformed into different outputs, with important feedback from the environment. If managers do not understand these interrelations, they may tend to ignore their environment or overlook important interrelationships within their organizations.
The Situational Perspective (2 of 2)
The Situational Perspective
- In most organizations, situations and outcomes are influenced by other variables
The Universal Model
- Presumes a direct cause-and-effect linkage between variables
- Complexities of human behavior and organizational settings make universal conclusions virtually impossible
Universal versus Situational Approach
Figure 1.4
Managers once believed that they could identify the “one best way” of solving problems or reacting to situations. Here we illustrate a more realistic view, the situational approach. The situational approach suggests that approaches to problems and situations are contingent on elements of the situation.
Interactionalism: People and Situations
Interactionalism
- Focuses on how individuals and situations interact continuously to determine individuals’ behavior
- Attempts to explain how people select, interpret, and change various situations
Managing for Effectiveness (1 of 8)
Managers’ Goals
- Enhance behaviors and attitudes
- Promote citizenship
- Minimize dysfunctional behaviors
- Drive strategic execution
Managing for Effectiveness (2 of 8)
Individual Behaviors
- Productivity
- Narrow measure of efficiency: number of products or services created per unit of input
- Performance
- Broader concept made up of all work-related behaviors
- Commitment
- The degree to which an employee considers himself or herself a true member of the organization, overlooks minor sources of dissatisfaction, and intends to stay with the organization
Managing for Effectiveness (3 of 8)
Organizational Citizenship
- Behavior of individuals that makes a positive overall contribution to the organization
- Encompasses all factors outside the strict requirements of the job
Examples
- Willingness to train new hires
- Works late/overtime
- Good attendance
- Represents the organization well
- Personal values consistent with the organization
Managing for Effectiveness (4 of 8)
Dysfunctional Behaviors
- Behaviors that detract from, rather than contribute to, organizational performance
Examples
- Absenteeism
- Turnover
- Theft, sabotage
- Sexual and Racial Harassment
- Politicized behavior (spreading rumors, etc.)
- Incivility, rudeness
- Bullying and Workplace violence
Managing for Effectiveness (5 of 8)
Strategic Execution
- The degree to which managers and their employees understand and carry out the actions needed to achieve strategic goals
- Assessed at the individual/group level, the organizational level, and in terms of financial performance
- Often requires balancing seemingly contradictory outcomes
- For example, paying workers high salaries can enhance satisfaction and reduce turnover, but detracts from bottom-line performance.
Managing for Effectiveness (6 of 8)
Quality of Information: How Do We Know What We Know?
- “Common” sense and intuition and are often wrong—examples where one thing doesn’t necessarily lead to the other
- Goals, confidence and performance
- Satisfaction and productivity
- Cohesion and performance
- Rewards and motivation
- OB relies on the scientific method
- Method of knowledge generation that relies on systematic studies that identify and replicate a result using a variety of methods, samples, and settings
The Scientific Method
Figure 1.5
The scientific method is a useful approach to learning more about organizational behavior. Using theory to develop hypotheses and then collecting and studying relevant data can help generate new knowledge.
Managing for Effectiveness (7 of 8)
The Scientific Method
- A theory is a collection of verbal and symbolic assertions that specify how and why variables are related, and the conditions under which they should and should not relate.
- A hypothesis is a written prediction specifying expected relationships between certain variables.
- The independent variable is the variable that is predicted to affect something else.
- The dependent variable is variable predicted to be affected by something else.
- Example: In a hypothetical case, setting a specific, difficult, achievable goal is the independent variable, and the number of products assembled is our dependent variable.
Managing for Effectiveness (8 of 8)
- Correlation—Reflects the size and strength of the statistical relationship between two variables
- Ranges between −1 and +1
- A correlation of +1 is a perfect positive relationship: the higher the goal, the more products assembled.
- A correlation of −1 is a perfect negative relationship: higher an assembler’s goal, the lower her performance
- A correlation of 0 means that there is no statistical relationship
- Meta-analysis is used to combine the results of many different research studies done in a variety of organizations and for a variety of jobs.
- There may not be global replication of behaviors
Interpreting Correlations
Figure 1.6
Correlations between variables can range from −1 to +1. By studying correlations we can learn more about how two variable are related. Correlations of −1 or +1 are unusual, as is a correlation of 0. Fortunately, we can still learn a great deal from correlations that are statistically significant.
The Framework of the Text
How Our Textbook Is Organized
- Part 1 (chapters 1–2): environmental factors
- Part 2 (chapters 3–6): individual factors
- Part 3 (chapters 7–10): group factors
- Part 4 (chapters 11–13): leadership
- Part 5 (chapters 14–16): organizational factors
Organizational Behavior Framework
Figure 1.7
An array of environmental, individual, group and team, leadership, and organizational characteristics impact organizational behavior. If managers understand these concepts and characteristics they can better promote organizational effectiveness.
Organizational Behavior in Action
Based on Your Reading of This Chapter:
- What do you think are the most important things a manager does? Is how a manager does these things also important? Why or why not?
- Some people have suggested that understanding human behavior at work is the single most important requirement for managerial success. Do you agree or disagree with this statement? Why?
- The chapter identifies four basic managerial functions. Based on your own experiences and observations, provide an example of each function.
- Why will learning about OB help you to get a better job and a better career, and be a better manager?
- Some people believe that individuals working in an organization have basic human rights to satisfaction with their work and to the opportunity to grow and develop. How would you defend this position? How would you argue against it?
Think of something that you believe leads to employee productivity based on intuition that may not prove to be true if tested systematically. Now apply the scientific method and describe how you might test your theory.