Introduction to Organizational Behavior

Introduction to Organizational Behavior

• Organizations have three levels: individual, team/group, and organizational.
• Strategy management defines an organization's direction and resource allocation to achieve a competitive advantage.
  • Strategy formulation involves identifying goals, analyzing the environment, and choosing the best actions.
  • Strategy implementation is putting the formulated strategy into action.
• Strategic human capital management aligns HR practices with business strategy.
• Organizational behavior derailers include poor leadership, misalignment of goals, resistance to change, poor communication, cultural misfit, and ethical lapses.

Strategy Formulation

• Vision and mission define the organization's long-term purpose.
• External analysis includes industry trends, competition (like Porter's Five Forces), and macroeconomic factors (PESTEL analysis).
• Internal analysis evaluates resources, capabilities, and competitive advantages (SWOT analysis, VRIO framework).
• Strategic objectives set specific, measurable goals aligned with the mission.
• Strategy selection involves choosing corporate, business, and functional strategies (e.g., cost leadership, differentiation).

Organization Planning Processes

• Strategic plan outlines long-term strategies (5+ years).
• Annual operating plan (AOP) focuses on short-term strategies (one year).
• Human resource plan (HRP) describes human resource capabilities related to short and long-term goals.

Galbraith Star Model

• This model ensures strategy implementation and consists of five elements.
  • Strategy: Defines the direction and competitive advantage.
  • Structure: Organizes roles and responsibilities.
  • Processes: Workflows and communication.
  • Rewards: Incentives.
  • People: Talent development and management.

Human Relations Movement

• Focuses on social needs, employee satisfaction, informal work groups, and democratic leadership styles.

McGregor's Theory X and Theory Y

• Theory X assumes workers dislike work and need to be controlled.
• Theory Y assumes work is natural and people can be self-directed.

Strategic Implementation

• Involves converting strategies into actions.
  • Resource allocation aligns resources with strategic goals.
  • Organizational structure supports strategy execution.
  • Leadership and culture must support strategic initiatives.
  • Performance management involves metrics and feedback systems.

Human Capital as a Strategic Asset

• Valuable, rare, inimitable, and non-substitutable resources create a competitive advantage.

Motivation

• Motivation initiates, guides, and sustains goal-oriented behavior.
• Intrinsic motivation is internal drive.
• Extrinsic motivation comes from external rewards.
• Performance = Ability × Motivation × Opportunity (P=A×M×O)

Need-Based Theories

• Maslow's Hierarchy of Needs: Needs must be met progressively.
• Alderfer's ERG Theory: Existence, Relatedness, Growth.
• McClelland's Theory: Need for achievement, power, and affiliation.

Job Design Motivation

• Job enlargement adds more tasks at the same complexity level.
• Job enrichment adds new tasks, increases autonomy, and provides growth opportunities.
• Job rotation moves employees between different tasks.
• Job crafting is proactive job reshaping.
• Job simplification removes tasks from roles.
• Job Satisfaction is the enjoyment derived from a job

Engagement

• Engagement is satisfaction plus excitement and enthusiasm.
• Gallup Q12 assesses employee engagement.

Job Characteristics Model (Hackman & Oldham)

• Model defining critical job elements influencing motivation.

Equity Theory

• Employees compare their input/output ratio to others' ratios in the workplace.
• Perceived inequity motivates restoration of balance.

Cognitive Dissonance Theory (Festinger)

• People strive for internal consistency among their beliefs.
• Discomfort arises from contradictions.
• People reduce dissonance by adjusting beliefs or behaviors.

SMART Goals

• Specific, Measurable, Achievable, Relevant, Time-bound goals.

Organizational Justice

• Distributive Justice: Fairness of resource distribution.
• Procedural Justice: Fairness of allocation processes.
• Interactional Justice: Fairness of treatment.

Compensation

• Compensation includes all forms (direct financial payment, benefits) to employees.
  • Merit Pay: Linked to performance evaluations.
  • Incentive Pay: Based on targets or outcomes.
  • Skill-Based Pay: Based on employee skill level.
  • Benchmarking: Comparing pay with other organizations.
  • Characteristics of successful compensation systems: Equity, transparency, alignment with strategy, flexibility, motivation, retention, and legality.

Total Compensation vs. Total Rewards

• Total Compensation: Direct financial payments.
• Total Rewards: Broader concept including non-financial rewards.

Extrinsic vs. Intrinsic Rewards

• Extrinsic rewards come from outside (salary, bonuses).
• Intrinsic rewards come from within (satisfaction, growth).

Government Regulations

• FLSA (Fair Labor Standards Act): Minimum wage, overtime.
• Equal Pay Act: Prohibits wage disparity based on sex.

Determining Wage Structures

• Grades vs. Bands: Grouping jobs into levels or broader ranges.
• Comp-Ratios: Employee salary relative to the midpoint (e.g., 1 = market rate).

Different Types of Compensation

• Base pay, variable pay, benefits, perquisites.
• Profit sharing
• Equity/ownership (giving employees ownership).
• Stock options
  • Incentive Stock Options (ISOs)
  • Non-Qualified Stock Options (NSOs)
  • Employee Stock Purchase Plans (ESPPs)
  • Concerns with stock options: market risk, dilution, complexity, retention.
• Vesting and vesting period: Employee ownership over time (cliff vesting, graded vesting).

Incentive/Variable Compensation

• Includes bonuses, commissions, profit sharing. Different types, and their intended benefits.

This quiz explores key concepts in organizational behavior, including strategy management and human capital alignment. Gain insights into how organizations define their direction, handle change, and implement strategies effectively. Test your knowledge on leadership qualities and the factors that derail organizational behavior.