Chapter 1

Introduction to
Organizational Behavior

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 After reading this chapter, you should be able to:

1) Define Organizational Behavior (OB)

2) Identify the primary behavioral disciplines
contributing to OB
3) Describe the three goals of OB
4) List the major challenges and opportunities
for managers to use OB concepts
5) Describe how OB concepts can help make
organizations more productive

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After reading this chapter, you should be able to:

6) Discuss why workforce diversity has

become an important issue in management
7) Explain how managers and organizations
are responding to the problem of employee
ethical dilemmas
8) Discuss how a knowledge of OB can help
managers stimulate organizational
innovation and change

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CHANGE IS THE REALITY OF LIFE.
Intelligence, passion, strong work
ethics, teamwork orientation, and a
real concern for people are the
qualities required today of an ideal
work atmosphere.

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• Organizational Behavior - systematic
study of the actions
and attitudes
that people
exhibit within
organizations

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 Organizations and Human
resource is an important
element for an organization’s
success or failure.

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ORGANIZATIONAL BEHAVIOR
• “Organizational Behavior is the study of the many
factors that affect how individuals and groups act
in the organization and how organizations
manage their environments” (George and Jones,
1999)
• “Organizational Behavior is an interdisciplinary
field dedicated to better understanding and
managing people at work.” (Kreitner and Kinicki,
1998)
• “Organizational Behavior is a discipline that has
a connection with the ways managers interact
and manage employees in the workplace.” (Hunt
and Cesborn, 2001)
The field of OB seeks to replace intuitive
explanations with systematic study

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Systematic study - the use of
scientific evidence gathered under
controlled conditions and measured
and interpreted in a reasonably
rigorous manner to attribute cause
and effect

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• Studying organizational behavior is
needed so that information and guidelines
can show managers some approaches
that will make them relate with other
individuals in the organization.
• This knowledge can help them make
correct decisions about how to motivate
and coordinate people and resources, as
well as to accomplish the organization’s
goals. 1-11
Organizational Behavior makes people
understand why employees or workers
join the organization. Managers will
understand why employees are satisfied
or unsatisfied about their jobs, why some
workers produce good jobs while others
do a poor job, why some employees stay
with one organization for many years but
others leave in just few months.

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ORGANIZATIONAL BEHAVIOR
It makes people correctly:

1.Understand
2.Describe
3.Analyze

How characteristics of individuals, groups,

situations, and the organization itself affect how
members feel about and act within their
organization.
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 Organizational citizenship

• Discretionary behavior
• Not part of an employee's formal job requirements
• Promotes the effective functioning of the organization

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 Examples of Organizational Citizenship

• Helping others on one's work team

• Volunteering for extra job activities
• Avoiding unnecessary conflicts
• Making constructive statements about one's work
group and the overall organization

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EIGHT MAJOR ENVIRONMENTAL FORCES
REDESIGNING MANAGEMENT PRACTICES
• Power of human resources. It is the
capability to get things completed in the
manner one wants them to be done.
• Globalization. It is the interconnection
among nations in transportation,
distribution, communication and economic
networks.
• Multiculturalism (cultural diversity). It is the
huge assortment of differences produced
by cultural trends like history,
characteristics, economic, and more. 1-16
EIGHT MAJOR ENVIRONMENTAL FORCES
REDESIGNING MANAGEMENT PRACTICES
• Rapidity of Change. It is the rate at which
change occurs in technology, demographics,
globalization and new products and services.
• Psychological Contact. It is the unwritten set
of expectations of the employment
relationship which details what each party
looks forward to give and receive. Example:
openness, integrity, supporting growth, etc.
• Technology. It is the process that transforms
raw materials or intellectual capital into
products and services.
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EIGHT MAJOR ENVIRONMENTAL FORCES
REDESIGNING MANAGEMENT PRACTICES
• Service Economy. The field of service like
transportation, communication, wholesale
and retail, finance, insurance, and
government.
• Teamwork. It provides better approach to
quality good sand services. It makes
people engaged and committed to the
goals of the organization.

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 SEVEN CONCEPTS THAT REVOLVE
AROUND THE INDIVIDUAL IN OB:
• Uniqueness of an individual. No two
persons react to the same stimulus,
each person has its own individuality.
• A total person. When a certain person is
hired for a job, the organization accepts
him in his totality.
• Attribution. It is important to disclose the
root cause of a certain employee’s
disturbed behavior.

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 SEVEN CONCEPTS THAT REVOLVE
AROUND THE INDIVIDUAL IN OB:
• Ethics and Dignity. Employees deserve
a human treatment. People are to be
treated differently from other factors of
production because they are of a higher
order in the universe.
• Organizations as social systems.
Individual behavior is governed by
psychology which must be acceptable
to the society.

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 SEVEN CONCEPTS THAT REVOLVE
AROUND THE INDIVIDUAL IN OB:
• Mutuality of Interest. Under normal
condition, the individual tries his best to
work for the organization. In return, the
organization makes him a capable
person through the opportunities given
to him.
• Holistic Benefit. These mentioned six
concepts when practices within groups
create synergy that brings holistic
advantage.
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 • Consciously coordinated
Organization social unit
• Composed of two or more
people
• Functions on a continuous
basis to achieve a common
goal
• Characterized by formal roles
that define the behavior of its
members

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 Contributing Disciplines
Psychology seeks to Sociology studies
measure,explain, people in relation to their
and change fellow human beings
behavior

Social psychology
focuses on the
influence of people
on one another

Political science is the

Anthropology is the
study of the
study of societies
behavior of individuals
to learn about human
and groups within
beings and their activities
a political environment 1-23
Goals of Organizational Behavior

• Explain, predict,
and control
human behavior

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Challenges and Opportunities for OB
• Typical employee is getting older
• More women and minorities in the
workplace
• Global competition is requiring employees
to become more flexible
• Historical loyalty-bonds that held many
employees to their employers are being
severed

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 IMPORTANCE OF OB
• Effective Confronting. An individual with
proactive thinking about approaching
troubles can work without pressures
and plan ahead.
• OB is a science. Though OB is
probabilistic in nature, it is based on
validated facts.
• OB enhances conviction. OB can
provide confidence in making things
happen.
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 IMPORTANCE OF OB
• OB improves perceptual skills. With
enhanced self-perception and perception of
others through OB, a person can become
successful.
• OB helps motivate people. A person can use
the knowledge in motivation theory and its
application to delegate authority and inspire
people.
• OB makes better employer-employee
relations. OB through conflict resolution and
negotiation can help achieve better industrial
relations. 1-27
 IMPORTANCE OF OB
• OB teaches managers about consumer
behavior. OB can be extended to
understanding consumers better.

• OB makes managers expert in people

skills. It is expected that managers must
be skillful in dealing with people which
could be learned from OB.

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 Responding to Globalization
• Increased Foreign Assignments
• Working with People from Different
Cultures
• Coping with Anti-Capitalism Backlash
• Overseeing Movement of Jobs to
Countries with Low-cost Labor

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Managing Diversity

Workforce diversity -
organizations are
becoming a more
heterogeneous mix of
people in terms of
gender, age, race,
ethnicity, and sexual
orientation

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 Diversity Implications

• Managers have to shift their philosophy from treating

everyone alike to recognizing differences and
responding to those differences in ways that ensure
employee retention and greater productivity.

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 Improving Quality and
Productivity
• Quality management
• Process reengineering

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 Quality Management
1) Intense focus on the customer
2) Concern for continual improvement
3) Improvement in the quality of everything
the organization does
4) Accurate measurement
5) Empowerment of employees

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 Process Reengineering
• Evaluating process • Redefines jobs and
in terms of requires most
contribution to goals employees to
• Inefficient processes undergo training
thrown out and new
systems introduced

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 OB Insights

• Improving People Skills

• Improving Customer Service
• Empowering People
• Working in Networked Organizations
• Stimulating Innovation and Change

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 OB Insights

• Coping with “Temporariness”

• Helping Employees Balance Work/Life Conflicts
• Declining Employee Loyalty
• Improving Ethical Behavior

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 Levels of OB Analysis

Individual Level

Group Level

Organization System Level

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Determinants of Employee Performance

• Productivity
• Absenteeism
• Turnover

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 Summary
1) Defined Organizational Behavior (OB)
2) Identified the primary behavioral disciplines
contributing to OB
3) Described the three goals of OB
4) Listed the major challenges and
opportunities for managers to use OB
concepts
5) Described how OB concepts can help make
organizations more productive
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 Summary
6) Discussed why workforce diversity has
become an important issue in management
7) Explained how managers and organizations
are responding to the problem of employee
ethical dilemmas
8) Discussed how a knowledge of OB can help
managers stimulate organizational
innovation and change

1-40