Organizational Behavior

Organizational Behavior (OB) is a field of study focused on understanding the dynamics of individuals, groups, and teams within organizations, as well as the organizations themselves. It employs scientific research and empirical data to explore, predict, and influence behavior, enhancing overall organizational effectiveness. The discipline considers multiple levels of analysis, including individual motivations, team dynamics, and organizational culture, while recognizing that these components are interdependent within a larger system. OB integrates insights from various fields such as psychology, sociology, anthropology, and political science to create a comprehensive understanding of workplace behavior.

Practically, OB has significant applications for management, aiding in leadership development, team management, and conflict resolution. It emphasizes that effective strategies can vary based on situational contexts, advocating for a contingency approach rather than one-size-fits-all solutions. Additionally, OB investigates how informal organizational culture influences employee interactions and performance. By understanding the nuanced behaviors and interactions within organizations, managers can better facilitate teamwork, resolve conflicts, and ultimately drive organizational success.

Published in: 2021

By: Wienclaw, Ruth A.

Subject Terms

Organizational Behavior

Organization behavior is the study of the functioning and performance of individuals, groups, and teams within organizations as well as of organizations as a whole. Based on scientific research and empirical data, organizational behavioral theorists attempt to understand, predict, and influence behavior at all levels within the organization. There are many practical applications of organizational behavior theory for managers. For example, at the individual level, organizational behavior theory can help managers learn to be better leaders and communicate with and motivate their workers. At a team level, organizational behavior theory helps managers understand how teams are formed and function, and how to best support them so that synergy occurs. At the organizational level, organizational behavior theory can help managers better understand how the organization works and how each subsystem within it works together to make up the organization as a whole.

Organizational behavior is the systematic study and application of how individuals and groups think and act within organizations and how these activities affect the effectiveness of the organization as a whole. Organizational behavior theorists take a systems approach, looking not only at individuals or groups as isolated entities, but also as part of an interactive social system in which the actions of one part influence the functioning of another. Rather than merely focusing on the profitability of the organization in isolation, the discipline of organizational behavior attempts to improve organizational effectiveness at all levels within the organization. To do this, organizational behavior theorists attempt to understand, predict, and influence events on the individual, group, and organizational levels.

The field of organizational behavior is based on several principles. First, organizational behavior theory and practice does not operate in isolation, but is multidisciplinary, drawing on the insights arising not only from its own research but also the research and insights of other disciplines. For example, psychology has contributed to organizational behavior theory by helping explain issues relating to individual and interpersonal behavior, as well as the dynamics of groups and teams. Sociology has contributed to the knowledge of organizational behavior by increasing the understanding of how groups and teams act and interact, working together to contribute to the functioning of the organization as a social system. Anthropology contributes understanding of culture and rituals, while political science helps us understand conflict between groups as well as organizational environments, power, and decision making. Newer disciplines, such as information systems theory, help organizational behavior theorists understand the dynamics of teams, how organizations manage knowledge, and how decisions are made.

Just as the disciplines from which it gathers insights are based on empirical evidence, organizational behavior applies the scientific method in an attempt to systematically study the actions and interactions of individuals and teams within an organization. The scientific method involves observing behavior within organizations, formulating a theory based on the observations to explain why the behavior occurs, experimenting and collecting data to determine the truth of the hypothesis, and validating or modifying the hypothesis as appropriate.

This process differs from some early management theorists who often took lessons learned in isolated situations (such as the success of one large manufacturing company) and turned them into a list of simple steps to follow for success in all businesses. Rather, organizational behavior theory takes a contingency approach. This approach assumes that an action does not necessarily always have the same consequences, and may result in a different reaction in different situations. What this means practically is that one solution is not universally the best and behavior cannot be distilled into simple lists of steps that ensure success. In general, it has been found that proposed absolute or universal rules need to be tempered by too many exceptions. For example, in the study of leadership, researchers and practitioners alike have found that there is not one best way to lead, but that the "ideal" management style is contingent on the needs, abilities, and personalities of both the employees performing the tasks and of their leader or manager. Because of real world experiences, organizational behavior theorists tend to temper their theories by trying to better understand when and why a principle works and by not stating absolutes.

One of the reasons that it is necessary to take a contingency approach when trying to understand behavior in organizations is that organizations are systems comprising numerous subsystems. The functioning of each subsystem impacts the functioning of the other subsystems. Therefore, in addition to the contingency approach, organizational behavior theory is also founded on the premise of systems theory. In this approach, the organization is viewed as a system made up of interdependent subsystems, each of which affects the effectiveness of the other as well as the effectiveness of the organization as a whole. For example, a strike by one segment of workers in an organization negatively impacts the ability of the organization as a whole to meet its objectives whether those be to efficiently collect garbage, transport passengers, or produce auto parts. However, systems theory affects organizations in less obvious ways, too. For example, when writing a proposal for a new contract, if one work group fails to meet its deadline for writing the technical response, a budget cannot be developed to submit to the prospective client and the production of a professional-looking proposal cannot be done in a timely manner. If enough of these small actions with negative impacts occur, the organization will not win the contract. This, in turn, could affect the profitability and even the viability of the organization and, along with it, the jobs and lives of the individuals and teams of which it is comprised. Each subsystem (technical work group, accounting or costing group, and proposal production group) affects the ability of the other groups—as well as of the organization in general—to do their jobs.

Although such insights are interesting in the abstract, organizational behavior is a practical discipline that not only attempts to understand and predict behavior, but to influence it. To this end, organizational behavior theorists have made significant contributions to management theory and practice.

Applications

The field of organizational behavior is concerned with all three levels of functioning within the organization: individual, groups and teams, and the organization as a whole. At the individual level, organizational theorists study the characteristics, thought processes, and behaviors of employees. This subset of organizational behavior includes analyzing employees' personality, motivation, roles, and cultural differences and how such elements affect their behavior and interactions within the organization. Understanding these processes prepares the manager to better motivate individuals and help them reach their full potential within the organization. At the team level, organizational behavior theorists look at such concepts as what distinguishes a team from a group, what processes are involved in the formation of a team, how leadership arises within a team, and the best way to manage teams. At the organizational level, theorists examine how the actions of individuals and teams affect the organization and its effectiveness, as well as how the organization interacts with the greater culture and society.

Individual Behavior

When setting up a new organization, there are many considerations that impact how it will be structured. For example, a computer software development firm will need programmers through necessity. The number and type of employees needed will depend on what product the firm is trying to deliver and what level of work is sustainable. If these employees could work completely on their own, they would each be able to do their jobs however they wished. For example, Harvey may like to start at noon and work through the evening or keep his work area in a constant state of controlled chaos while Chuck may be a morning person who keeps everything in its place. If they could work alone, this would not be a problem. In reality, however, people typically do not work in isolation and individual differences in work style, ability to communicate, and desire to be in charge can bring about clashes. Harvey and Chuck may need to share an office and reach an accommodation about how best to work together. Or, the programmer must depend on input from the designer and must also coordinate with other programmers working on other parts of the project. S/he may also be called on to demonstrate the new software to potential customers or work with marketing personnel to support efforts to maintain and increase the company's market share. One of the roles of the manager in an organization is to help minimize such differences, utilizing the abilities of the workers to meet the needs of the organization and supporting the needs of the workers with the resources of the organization.

Organizational behavior theorists examine many aspects of human behavior in order to help understand, predict, and control how people act and interact in the workplace. One practical application of the knowledge of individual differences is situational leadership theory. In this approach to leadership, theorists state that effective leaders change the style of their leadership depending on the ability and even the personality of the people they are trying to lead. For example, in cases where the workers do not have sufficient knowledge of how to do the job, the leader typically must be more directive than in situations where the workers are highly skilled and experienced. Similarly, the contingency leadership model suggests that effective leadership depends on whether the leader's style is appropriate to the situation. For example, a leader who prefers to wade into a situation and tell people what to do will not be successful in a situation where a team works best through synergy; piggybacking ideas off each other and developing a product or idea may be greater than what they could have done alone.

Another area in which organizational behavioral theorists are interested in, regarding the effects of individual differences and their impact on management effectiveness, is employee motivation. Motivation is the study of the needs and thought processes that determine a person's behavior. Understanding what motivates a person can help a manager better reward that person for behavior that contributes to achieving the objectives of the organization. For example, if a worker is motivated by money, a manager can use the possibility of raises or bonuses to motivate the desired behavior. On the other hand, if the worker is motivated by status or power, a promotion or corner office may offer a greater incentive for desired behavior. There are two general approaches to motivation considered by organizational theorists. Content theories of motivation examine the dynamics of people's needs, and use these to explain why the same person maybe motivated differently at different times. Process theories of motivation, on the other hand, examine the processes by which needs are translated into behavior. These theories help both organizational theorists and managers better understand, predict, and influence the performance of employees.

In addition to idiosyncratic differences between people based on individual personality types and preferences, organizational behavior theorists and managers alike are concerned with individual differences between people based on their cultures. Certainly, it is important not to offend others in the course of getting a task done, but this issue goes deeper. Different cultures have different ways of doing things, and unless these differences are understood and accommodated, motivating the worker and meeting organizational objectives will be more difficult than necessary. For example, when communicating, most women prefer to make eye contact with the person to whom they are speaking and tend to devote their full attention to the conversation. Many men, on the other hand, do not expect these things in a conversation and often multitask while talking. This can lead to miscommunication and conflict when such differences in communication styles result in situations where people believe that they are not being listened to or not being taken seriously. In another example, in the Japanese culture one must be able to not only understand what the other person is saying, but to also correctly understand the nonverbal cues that accompany the verbal part of the communication. For example, in order to be polite, Japanese businesspersons may say what they think the other person wants to hear—such as saying that they will give serious consideration to a proposal—while giving nonverbal cues that say that they have already rejected the other person's idea. Each culture has its own subtleties of communication. Such differences must be understood in order to facilitate effective communication so that organizational goals can be met.

Team Behavior & Processes

An increasing amount of work is performed by teams rather than by groups or individuals. Although some tasks are better performed by the single individual working alone, organizations are finding that many tasks are better accomplished through teamwork. There are several differences between a team and a group of individuals working together. Whereas the group may have a common goal (e.g., complete 100 new widgets before the close of business), work teams tend to develop their own mission and their members are vested in accomplishing it. Therefore, although both groups and teams may be accountable to a manager, team members are also accountable to each other for getting their part of the work done. Therefore, in workgroups, leadership is typically held by a single person, whereas in a team, all members tend to share leadership. Another major difference between groups and teams is that groups do not have a stable culture; as a result, conflict frequently arises. True teams, on the other hand, have a collaborative culture in which the team members trust each other. As a result, work groups may or may not accomplish their goals whereas true teams tend to achieve synergy, producing products or ideas that are greater than those that could have been accomplished by the individuals alone.

Not all teams are created equally, however. Organizational behavior theorists have observed four different types of teams. In the manager-led work team, the manger is responsible for the design of the organizational context of the team's activities as well as the design of the team performing the work. Although the team itself is responsible for performing the work, the manager is responsible for monitoring and managing the performance of the team. In the self-managing work team, although the manager designs the organizational context of the team and the structure of the group, the team itself not only performs the task to be done but monitors and manages its performance. In the self-designing work team, the manager sets the organizational context within which the work must be performed, but the team organizes itself and specifies how it will perform this work. Finally, the self-governing work team performs all these tasks as well as designs the organizational context in which they occur. When the manager understands such underlying dynamics of team behavior, s/he can be better able to support the team and promote the synergy that is possible through team efforts.

Whether work is being performed in a work group or in a team setting, eventually conflicts will arise. Organizational behavior theorists study these aspects of the organization also, and help managers understand how best to minimize the negative impact of such situations. The key to conflict resolution often lies in understanding when it is best to be assertive and when it is best to be cooperative. The scientific observation of organizational behavior has led to several theories about what situations are best suited for various conflict resolution styles. For example, when each side knows that it has to work with the other and that the interests of both parties are important, collaboration (when both parties try to find a mutually beneficial solution to a shared problem) or compromise (when both parties give a little and get a little in return) are frequently the best approaches to conflict resolution. However, when one of the parties views the conflict as a win/lose situation, it is often necessary to compete. In other situations it may be best to accommodate the other person's desires in the short-term in order to win a more important battle later on. Even avoidance -- walking away from the problem—can be an effective way to manage conflict in the short-term if it allows tempers to cool down and the parties to come back later and resolve the conflict.

Organizational Processes

In addition to the assumptions, values, and beliefs of the individual workers and the shared assumptions, values, and beliefs of work teams, it is important to understand the assumptions, values, and beliefs of the organization as an entity. Although one can learn about an organization from observing formal aspects like its goals, structure, and other resources, such data only gives part of the picture. To truly understand the organization, one also needs to understand the informal aspects of the organization—those things understood by the employees but that are not written down or formalized. These include such things as its attitudes, values, feelings, interactions, and norms. The differentiation between the aspects of the formal organization and the informal organization is often described as an iceberg, with the formal structures being equivalent to the ten percent of the iceberg that is observable above the water line, but the real nature of the organization being hidden beneath—not readily observable to the casual observer but requiring careful study and analysis.

Organizational behavioral theorists and practitioners need to understand not only the easily observable aspects of the organization, but the organizational culture in order to truly understand the behaviors and processes that make the organization run. Although organizations can experience problems stemming from their formal structures and aspects, more often it is the aspects of its informal culture that can create problems.

To be truly effective, a manager must understand not only the requirements set out in the formal organization, but also those implied as part of the informal organization. Understanding the values of one's workers, for example, will help the manager know better how to motivate them. Understanding their values and feelings will help the manager avoid destructive conflict or defuse conflict situations when they occur. Understanding how employees interact with each other and the informal norms of work teams will help the manager be better able to support their efforts and facilitate their synergy and contributions to organizational effectiveness.

Terms & Concepts

Conflict: Situation in which one party believes that its interests are negatively affected by another party.

Conflict Management: The process of altering the severity and form of conflict in order to maximize its benefits and minimize its negative consequences. Between parties, conflict can be resolved through collaboration, accommodation, competition, compromise, or avoidance. Conflict management can also refer to interventions performed by an objective outside party in the attempt to de-escalate conflict between two or more parties.

Contingency Approach: A foundational concept in organizational behavior theory in which it is recognized that the consequences of an action may differ depending on the given situation in which it is performed.

Empirical: Theories or evidence that are derived from, or based on, observation or experiment.

Formal Organization: The goals, structure, skills, technology, and other resources of the organization that are readily observable to others.

Informal Organization: The attitudes, values, feelings, interactions, and group norms that affect organizational functioning and effectiveness.

Leadership Theory: Models of the ways in which to influence others while helping them to achieve the goals of the team or organization.

Motivation: The needs and thought process that determine a person's behavior. Motivating factors do not necessarily remain constant, but may change with the individual's current circumstances.

Organizational Culture: The set of basic shared assumptions, values, and beliefs that affect the way employees act within an organization.

Scientific Method: Cornerstone of organizational behavior theory in which a systematic approach is used to understand some aspect of behavior in the workplace by individuals, teams, or organizations. The scientific method is based on controlled and systematic data collection, interpretation, and verification in a search for reproducible results. In organizational behavior theory, the goal is to be able to apply these results to real world applications.

Synergy: The process by which the combined product resulting from the work of a team of individuals is greater than the results of their individual efforts

Systems Theory: Cornerstone of organizational behavior theory that assumes that the organization comprises multiple subsystems and that the functioning of each affects both the functioning of the others and the organization as a whole.

Bibliography

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De Ven, A., & Lifschitz, A. (2013). Rational and reasonable microfoundations of markets and institutions. Academy of Management Perspectives, 27(2), 156-172. Retrieved November 20, 2013 from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=88419319&site=bsi-live

Kaur, J. (2014). Organizational citizenship behaviors: managing interpersonal conflict at workplace. IUP Journal of Organizational Behavior,13(4), 19–37. Retrieved November 19, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=99384994&site=bsi-live

McShane, S. L. & Von Glinow, M. A. (2003). Organizational behavior: Emerging realities for the workplace revolution (2nd ed). Boston: McGraw-Hill/Irwin.

Nahavandi, A. (2000). What is a team? In Nahavandi, Afsaneh. The Art and Science of Leadership (2nd ed).Upper Saddle River, NJ: Prentice Hall.

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Organizational Behavior

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Subject Terms

Organizational Behavior

Applications

Individual Behavior

Team Behavior & Processes

Organizational Processes

Terms & Concepts

Bibliography

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