Understanding Organizational Behavior

• Coupling individual understanding of behavior gained through experience with systematic OB analysis helps managers become more effective.
• Many important challenges faced by managers, along with the three levels of OB study, are described.

Introduction

• Managers describe people problems as their most frequent and troublesome problems.
• Common issues include poor communication skills from bosses and employee resistance to company reorganization.
• Before the 1980s, business school curricula emphasized the technical aspects of management like economics, accounting, finance, and quantitative skills.
• Coursework in human behavior and people skills received less attention.
• Over the past three decades, business faculty realized the role of understanding human behavior in determining a manager's effectiveness.
• Required courses on people skills have been added to many curricula.
• Developing managers' interpersonal skills helps organizations attract and keep high-performing employees.
• Outstanding employees are always in short supply, regardless of labor market conditions.
• Companies known as good places to work have a big advantage.
• A recent survey involving hundreds of workplaces and over 200,000 respondents showed strong relationships between social relationships among co-workers and supervisors and overall job satisfaction.
• Positive social relationships were associated with lower stress at work and lower intentions to quit.
• Managers with good interpersonal skills make the workplace more pleasant, making it easier to hire and keep qualified people.
• Creating a pleasant workplace makes good economic sense, with companies like the "100 Best Companies to Work for in America" found to generate superior financial performance.
• Managers can't succeed on technical skills alone in today's competitive and demanding workplace; they also need good people skills.

Organizational Behavior

• Organizational Behavior (OB) studies the influence of individuals, groups, and structure on behavior within organizations.
• The goal of OB is to apply that knowledge toward improving an organization's effectiveness.
• OB studies the three determinants of behavior in organizations: individuals, groups, and structure.
• OB applies the knowledge gained to make organizations work more effectively.
• The text focuses on motivation, leader behavior and power, interpersonal communication, group structure and processes, attitude development and perception, change processes, conflict and negotiation, and work design.

Intuition With Systematic Study

• People develop intuitive understandings of the behaviors of other people through experience with common sense.
• This experiential method of "reading" human behavior can often lead to erroneous predictions.
• Predictive ability improves by taking the systematic approach to the study of human behavior.
• The assumption of the systematic approach is that human behavior is not random, with fundamental consistencies that can be identified and modified to reflect individual differences.
• Systematic study of behavior means examining relationships, attempting to attribute causes and effects, and basing conclusions on scientific evidence. Evidence is data gathered under controlled conditions, measured, and interpreted in a reasonably rigorous manner.
• Evidence-based Management (EBM) involves basing managerial decisions on the best available scientific evidence.
• Managers must be scientific in their thinking about managerial problems and not rely on instinct.
• Intuition ("gut feelings") about "what makes others tick" is most accurate when coupled with systematic thinking and evidence-based management.
• Managers can use the systematic study of OB to enhance intuitive understanding of behavior and improve accuracy in explaining and predicting workplace behavior.
• Big data makes effective decision-making and managing human resources easier.
• Managers use big data to define objectives, develop theories of causality, and test the theories to determine which employee activities are relevant to the objectives.

Disciplines that Contribute to OB

• Organizational behavior is an applied behavioral science built on contributions from behavioral disciplines, including psychology, social psychology, sociology, and anthropology.
• Psychology's contributions have been mainly at the individual or micro level of analysis.
• Other disciplines have contributed to understanding macro concepts such as group processes and organization.
• Psychology seeks to measure, explain, and sometimes change the behavior of humans and other animals.
• Contributors include learning theorists, personality theorists, counseling psychologists, and industrial and organizational psychologists.
• Early industrial/organizational psychologists studied the problems of fatigue, boredom, and working conditions that could impede efficient work performance.
• More recently, their contributions have expanded to include learning, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, decision-making processes, performance appraisals, attitude measurement, employee-selection techniques, work design, and job stress.
• Social psychology blends concepts from both psychology and sociology to focus on people's influence on one another.
• One major study area is change - how to implement it and how to reduce barriers to its acceptance.
• Social psychologists contribute to measuring, understanding, and changing attitudes, identifying communication patterns, and building trust and made contributions to the study of group behavior, power, and conflict.
• Sociology studies people in relation to their social environment or culture.
• Psychology focuses on the individual; sociology studies people in relation to their social environment or culture.
• Sociologists have contributed to OB through their study of group behavior in organizations, particularly formal and complex organizations.
• Sociologists have studied organizational culture, formal organization theory and structure, organizational technology, communications, power, and conflict.
• Anthropology studies societies to learn about human beings and their activities.
• Anthropologists' work on cultures and environments helps understand differences in fundamental values, attitudes, and behavior between people in different countries and within different organizations.
• Much of our current understanding of organizational culture, organizational environments, and differences among national cultures are a result of the work of anthropologists or those using their methods.

Few Absolutes in OB

• Laws in the physical sciences like chemistry, astronomy, and physics are consistent and apply in a wide range of situations.
• The laws allow scientists to generalize about the pull of gravity or be confident about sending astronauts into space to repair satellites.
• Human beings are complex, and few, if any, simple and universal principles explain organizational behavior.
• Because we are not alike, our ability to make simple, accurate, and sweeping generalizations is limited.
• 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.
• OB concepts reflect situational, or contingency, conditions.
• We can say x leads to y, but only under conditions specified in z - the contingency variables.
• The science of OB was developed by applying general concepts to a particular situation, person, or group.
• OB scholars avoid stating that everyone likes complex and challenging work because not everyone wants a challenging job.
• Some people prefer routine to varied, or simple over complex.
• A job attractive to one person may not be to another; its appeal is contingent upon the person who holds it.
• Weathers of research-based theories about how people behave in organizations.
• Don't expect to find a lot of straightforward cause-and-effect relationships because organizational behavior theories mirror the complex and complicated subject matter with which they deal.

Challenges and Opportunities for OB

• Understanding organizational behavior has never been more important for managers.
• Dramatic changes in organizations include the typical employee getting older.
• More women and people of color are in the workplace; corporate downsizing and the heavy use of temporary workers are severing the bonds of loyalty that tied many employees to their employers.
• Global competition requires employees to become more flexible and cope with rapid change as the global recession has brought to the forefront the challenges of working with and managing people during uncertain times.

Responding to Economic Pressures

• When the U.S. economy plunged into a deep and prolonged recession in 2008, layoffs and job losses were widespread, and those who survived the axe were often asked to accept pay cuts.
• Managers are on the front lines with employees who must be fired, who are asked to make do with less, and who worry about their futures.
• The difference between good and bad management can be the difference between profit and loss, or ultimately, between survival and failure.
• Managing employees well when times are good can be just as hard, if not harder, than when times are bad.
• OB approaches sometimes differ; in good times, understanding how to reward, satisfy, and retain employees is a premium. In bad times, issues like stress, decision making, and coping come to the fore.

Responding to Globalization

• Challenges faced by managers that can benefit by the use of OB concepts include dealing with a workforce that may hold different needs, aspirations, and attitudes with the increase in foreign assignments.
• Working with people from different cultures requires motivational techniques and managerial styles to be modified to remain effective.
• Overseeing movement of jobs to countries with low-cost labor may make economic sense.
• Managers must be able to deal with unions, government, and the public, who see outsourcing as a threat to their livelihood.
• Balancing the needs of the company with the needs of the community is at the heart of a firm's concerns over social responsibility.
• Adapting to differing cultural and regulatory norms is crucial for managers to know the cultural norms of the workforce in each of the countries where they do business.
• Managers also need to consider local and country regulations, and violating these can have implications for operations in the country and for political relations between countries.
• Managers also need to be cognizant of differences in regulations for competitors. Many times, the laws will give national companies significant financial advantages over foreign subsidiaries.

Managing Workforce Diversity

• A main challenge for organizations is adapting to people who are different. We describe this challenge as workforce diversity.
• Whereas globalization focuses on differences among people from different countries, workforce diversity addresses differences among people within given countries.
• 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. Managing this diversity is a global concern.
• Diversity presents opportunities and poses challenging questions for managers and employees in all countries.

Improving Customer Service

• The majority of the workforce in developed nations works in service jobs.
• Poor service experiences are detrimental to organizational failure.
• Managers must create customer-responsive cultures whose members are friendly, courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what is necessary to please the customer.

Improving People Skills

• Relevant concepts and theories can help explain and predict the behavior of people at work.
• Insights into specific people skills can be useful on the job.
• Networking allows people to communicate and work together even though they may be thousands of miles apart.
• Independent contractors can telecommute via computer to workplaces around the globe and change employers as the demand for their services changes.
• Software programmers, graphic designers, systems analysts, technical writers, photo researchers, book and media editors, and medical transcribers are examples of people who can work from home or other non-office locations.
• A manager's job is different in a networked organization.
• Motivating and leading people and making collaborative decisions online requires different techniques than when individuals are physically present in a single location.
• As more employees do their jobs by linking to others through networks, managers must develop new skills, and OB can provide valuable insights to help with honing those skills.

Enhancing Employee Well-Being at Work

• A typical employee in the 1960s or 1970s showed up at a specified workplace Monday through Friday and worked for clearly defined 8- or 9-hour chunks of time.
• Even if employees work from home or from half a continent away, managers need to consider well-being at work.
• One of the biggest challenges to maintaining employee well-being is that organizations are asking employees to put in longer hours, either in the office or online.
• Employees are increasingly complaining that the line between work and non-work time has become blurred, creating personal conflicts and stress.
• Employee well-being is challenged by heavy outside commitments.
• Millions of single-parent households and employees with dependent parents have even more significant challenges in balancing work and family responsibilities.
• Recent studies suggest employees want jobs that give them flexibility in their work schedules so they can better manage work-life conflicts.
• Organizations that don't help their people achieve work-life balance will find it increasingly difficult to attract and retain the most capable and motivated employees.

Positive & Ethical Work Environment

• A real growth area in OB is positive organizational scholarship (also called positive organizational behavior), which studies how organizations develop human strengths, foster vitality and resilience, and unlock potential.
• Researchers in this area say that too much of OB research and management practice has been targeted toward identifying what's wrong with organizations and their employees and they try to study what's good about them.
• Some independent variables in positive OB research are engagement, hope, optimism, and resilience in the face of strain.
• Positive organizational scholars have studied a concept called "reflected best-self"- asking employees to think about when they were at their "personal best" in order to understand how to exploit their strengths.
• Positive organizational scholarship does not deny the value of the negative, but it challenges researchers to look at OB through a new lens and pushes organizations to exploit employees' strengths rather than dwell on their limitations.
• Companies must strive toward improving ethical behavior.
• In an organizational world characterized by cutbacks, expectations of increasing productivity, and tough competition, employees feel pressured to cut corners, break rules, and engage in other questionable practices.
• Employees face ethical dilemmas and ethical choices, in which they are required to identify right and wrong conduct.
• Employees engaging unethical practices give excuses such as "Everyone does it" or "You have to seize every advantage nowadays".
• Determining the ethically correct way to behave is especially difficult in a global economy because different cultures have different perspectives on certain ethical issues like fair treatment of employees in an economic downturn.
• It is important create an ethically healthy climate for employees with minimal ambiguity about what right and wrong behaviors are.
• Companies that promote a strong ethical mission, encourage employees to behave with integrity, and provide strong ethical leadership can influence employee decisions to behave ethically.

Analysis Levels

• There are three levels of OB analysis, building from the individual to the organizational perspectives.
• Individual level: examines foundations of individual behavior: personality, values, perception, decision making, motivation, emotions, and moods.
• Group level: group behavior is more than the sum of the behaviors of the individuals within it; additionally, individuals act differently when in groups. Group behavior is explored by providing basic group concepts and examining what makes teams effective: communication, decision making, leadership, power, politics, conflict, and negotiation.
• Organization system level: organizational behavior, while composed of both individual and group behaviors, is more than the sum of its parts. The section describes how an organization's structure and culture affects individual behavior and finishes with change techniques in organizational settings.

Summary & Implications for Managers

• Managers should develop their interpersonal, or people, skills to be effective in their jobs.
• Organizational behavior (OB) investigates the impact that individuals, groups, and structure have on behavior within an organization, and it applies that knowledge to make organizations work more effectively.
• Resist the inclination to rely on generalizations, as some provide valid insights into human behavior, but many are erroneous.
• Use metrics and situational variables rather than hunches to explain cause-and-effect relationships.
• Improving interpersonal skills increases leadership potential.
• Improves technical and conceptual skills through training and staying current with organizational trends like big data.
• Organizational behavior can improve employees' work quality and productivity by showing you how to empower your employees, design and implement change programs, improve customer service, and address the work-life balance conflict.