Oromia State University

Organizational Behavior
Master of Business Administration

Cr.H = 3

April 2022
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 1-1
Learning Outcomes
 By the end of this chapter you should be able to:
• Define organizational behaviour (OB) and discuss its goals
as a field of study.
• Identify the major disciplines that contribute to
understanding OB.
• Demonstrate evidence of the value of OB for individuals
and companies.
• Identify the main methods used in OB research.
• Identify the major levels of analysis in OB and the
interplay among them.
• Summaries contemporary issues facing the field of OB.

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 1-2

 Chapter 1:
Introduction to Organizational Behavior

1.1 What is Organizational Behavior?

Meaning of Organization
•Organizations are defined as social systems or
arrangements, constructed by people who can also change
them.
•Organization is a combination of humanity and technology.
•Organizations are a systems cooperative activates – and
their coordination requires something intangible and
personal that is largely a matter of personal relationships.

1-3
Cont’d …
• A complex set of forces affects the nature of
organizations today.
• It can be classified into 4 areas: people, structure,
technology and environment.
• When people join the organization to accomplish
the goals/objectives, some kind of structure is
required. They use machinery, gadgets and
technology to achieve organizational goals. At the
same time they are influenced by external
environment.

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Cont’d …
 Definitions of Organizational behavior
• The study of organizations and of the collections
of individuals within them together comprises the
field of Organizational behavior (OB).
• OB is defined as the systematic study and
application of knowledge about how individuals
and groups act within the organizations where
they work.

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Cont’d …
 OB is a field of study that investigate the impact
that individuals, groups and structure have on
behaviour within organizations for the purpose of
applying such knowledge towards improving an
organization’s effectiveness.

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Cont’d …
 Why Organizational Behavior Matters?
• OB matters at three critical levels.
o It matters because it is all about things you care
about. OB can help you become a more engaged
organizational member. Getting along with others,
getting a great job, lowering your stress level,
making more effective decisions, and working
effectively within a team…these are all great
things, and OB addresses them!

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Cont’d …
o It matters because employers care about OB.
Which skills are the most important for employers
when evaluating job candidates, and OB topics
topped the list.
o The following were the top five personal
qualities/skills:
1. Communication skills (verbal and written)
2. Honesty/integrity
3. Interpersonal skills (relates well to others)
4. Motivation/initiative5.Strong work ethic
 These are all things we will cover in OB
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Cont’d …
 Finally, it matters because organizations care
about OB. The best companies in the world
understand that the people make the place. How
do we know this?
o We know that organizations that value their
employees are more profitable than those that do
not.

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 1-9

1.2 Nature of OB
o A field of study and not a discipline
o Interdisciplinary Approach
o An Applied Science
o Normative and Value Centred
o Humanistic & optimistic
o Oriented Towards Organizational Objectives
o A total Systems Approach
1.3 Contributing Disciplines to OB
Many behavioral sciences
have contributed to the
development of
Organizational Behavior

See E X H I B I T 1–3 for details

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Psychology
• The science that seeks to measure, explain, and
sometimes change the behavior of humans and
other animals.
 Unit of Analysis: Individual
 Contributions to OB:
– Learning, motivation, personality, emotions, perception
– Training, leadership effectiveness, job satisfaction
– Individual decision making, performance appraisal
attitude measurement
– Employee selection, work design, and work stress

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Social Psychology
• An area within psychology that blends concepts
from psychology and sociology and that focuses
on the influence of people on one another.
 Unit of Analysis: Group
 Contributions to OB:
– Behavioral change
– Attitude change
– Communication
– Group processes
– Group decision making

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Sociology

The study of people in relation to their fellow

human beings.
Unit of Analysis:
-- Organizational System -- Group

 Contributions to OB:
– Group dynamics – Formal organization theory
– Work teams – Organizational technology
– Communication – Organizational change
– Power – Organizational culture
– Conflict
– Intergroup behavior
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Anthropology

The study of societies to learn about human beings

and their activities.

Unit of Analysis:
-- Organizational System -- Group

 Contributions to OB: – Comparative values

– Organizational culture – Comparative attitudes
– Organizational environment – Cross-cultural analysis

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 1.4 Challenges and Opportunities for OB

• Responding to Economic Pressures

• Responding to Globalization

• Managing Workforce Diversity

• Improving Quality and Productivity

• Improving Customer Service

• Improving People Skills

• Stimulating Innovation and Change

1-16
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Cont’d …

• Coping with “Temporariness”

• Working in Networked Organizations

• Helping Employees Balance Work-Life Conflicts

• Creating a Positive Work Environment

• Improving Ethical Behavior

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Responding to Economic Pressures
 What do you do during difficult
economic times?
– Effective management is critical
during hard economic times.
– Managers need to handle difficult
activities such as firing employees,
motivating employees to do more
with less and working through the
stress employees feel when they are
worrying about their future.
– OB focuses on issues such as stress,
decision making, and coping during
difficult times.
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Responding to Globalization
 Increased foreign
assignments
 Working with people
from different cultures
 Overseeing movement of
jobs to countries with
low-cost labor

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Managing Workforce Diversity
 The people in organizations are becoming more
heterogeneous demographically
– Embracing diversity
– Changing demographics
– Changing management philosophy
– Recognizing and responding to differences

1-20
1.5 Developing an OB Model
 A model is an abstraction of reality – a simplified
representation of some real-world phenomenon.
 Our OB model has three levels of analysis
– Each level is constructed on the prior level

E X H I B I T 1-4

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Cont’d …
• A distinction is made in OB regarding which level
of the organization is being studied at any given
time.
• There are three key levels of analysis in OB.
• They are examining the individual, the group, and
the organization.
• For example, if I want to understand my boss’s
personality, I would be examining the individual
level of analysis.

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Cont’d …
• If we want to know about how my manager’s
personality affects my team, I am examining
things at the team level.
• But, if I want to understand how my organization’s
culture affects my boss’s behavior, I would be
interested in the organizational level of analysis.

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1.6 Types of Study Variables
Independent (X)
– The presumed cause of the
change in the dependent
variable (Y).
– This is the variable that OB
researchers manipulate to
observe the changes in Y.
Dependent (Y)
– This is the response to X (the
independent variable).
– It is what the OB researchers
want to predict or explain.
– The interesting variable!
 Interesting OB Dependent Variables
 Productivity
– Transforming inputs to outputs at lowest cost.
Includes the concepts of effectiveness
(achievement of goals) and efficiency (meeting
goals at a low cost).
 Absenteeism
– Failure to report to work – a huge cost to
employers.
 Turnover
– Voluntary and involuntary permanent withdrawal
from an organization.
 Deviant Workplace Behavior
– Voluntary behavior that violates significant
organizational norms and thereby threatens the well-
being of the organization and/or any of its members
 Organizational Citizenship Behavior (OCB)
– Discretionary behavior that is not part of an
employee’s formal job requirements, but that
nevertheless promotes the effective functioning of the
organization.
 Job Satisfaction
– A general attitude (not a behavior) toward one’s job; a
positive feeling of one's job resulting from an
evaluation of its characteristics.
 The Independent Variables
 The independent variable (X) can be at any of these
three levels in this model:
• Individual
– Biographical characteristics, personality and
emotions, values and attitudes, ability, perception,
motivation, individual learning and individual
decision making.
• Group
– Communication, group decision making,
leadership and trust, group structure, conflict,
power and politics, and work teams.
Cont’d …
• Organization System
– Organizational culture, human resource policies
and practices, and organizational structure and
design.

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 The Dependent Variables
Dependent Variable
A response that is affected by an independent variable
(what organizational behavior researchers try to

y
understand)

x
The Dependent Variables (cont’d)

Productivity
A performance measure that
includes effectiveness and efficiency

Effectiveness
Achievement of goals

Efficiency
Meeting goals at a low
cost
The Dependent Variables (cont’d)

Absenteeism
The failure to report to work

Turnover
The voluntary and
involuntary permanent
withdrawal from an
organization
The Dependent Variables (cont’d)

Deviant Workplace Behavior

Voluntary behavior that violates
significant organizational norms and
thereby threatens the well-being of
the organization and/or any of its
members
The Dependent Variables (cont’d)

Organizational Citizenship
Behavior (OCB)
Discretionary behavior that is not
part of an employee’s formal job
requirements, but that nevertheless
promotes the effective functioning of
the organization
The Dependent Variables (cont’d)

Job Satisfaction
A general attitude (not a behavior) toward one’s
job; a positive feeling of one's job resulting from
an evaluation of its characteristics
The Independent Variables

Independent Variable
The presumed cause of some change in the dependent
variable; major determinants of a dependent variable

Independent
Variables Can Be

Individual-Level Group-Level Organization

Variables Variables System-Level
Variables