Chapter One

An Overview of
Organizational
Behavior
What is Organization
 An organization is a structured entity
formed by a group of individuals who
come together to achieve a common
goal or purpose.
 It can be a formal entity such as a
company, government agency, or
nonprofit organization, or it can be an
informal group of people working to-
gether towards a specific objective.
What Is Behavior

 Behavior refers to the actions, reactions, or

conduct of individuals or organisms in re-
sponse to internal or external stimuli. It en-
compasses the way people or animals act, in-
teract, and respond to their environment.
What is Organizational Behavior
“Organizational Behavior is a field of study that investi-
gates the impact that individuals, groups and struc-
ture have on behavior within organizations, for the
purpose of applying such knowledge toward improv-
ing organization's effectiveness,” - Stephen P. Robbins

“Organizational Behaviour is the study and application

of knowledge about how people – as individuals and
as groups – act within organizations,” - Keith Davis &
John Newstorm.
Why We Study Organizational Behavior
 Understanding Human Behavior:
 Improving Employee, and Organizational Per-
formance:
 Enhancing Leadership and Management:
 Effective Communication and Collaboration:
 Adapting to Change:
 Enhancing Organizational Culture:
 Improving Decision Making:
 Managing Diversity and Inclusion:
 Enhancing Organizational Performance:
The Importance of Studying Organiza-
tional Behavior
 OB is a way of thinking.
 OB is multidisciplinary.
 There is a distinctly humanistic orientation
with OB.
 The field of OB is performance oriented.
 The external environment is seen as having
significant impact on OB.
Organizational Behavior Model

 A model is a simplified representation or

conceptual framework that is used to
understand, explain, or predict a particu-
lar phenomenon or system.

 It is a simplified version of reality that

captures the essential elements and rela-
tionships between them.
Three Levels of Analysis in OB Model
Contributing
Contributing Disciplines
Disciplines to
to the
the O-B
O-B Field
Field (cont’d)
(cont’d)

1–9
Contributing Disciplines to the OB Field:
Contributing Disciplines to the O-B Field (cont’d)
Contributing
Contributing Disciplines
Disciplines to
to the
the O-B
O-B Field
Field (cont’d)
(cont’d)

1–12
 Contributing
Contributing Disciplines
Disciplines to
to the
the O-B
O-B Field
Field (cont’d)
(cont’d)
Engineering is a broad discipline that involves the
application of scientific, mathematical, and techni-
cal knowledge to design, create, and improve struc-
tures, systems, devices, and processes.

• Systems Thinking:
• Process Design and Optimization:
Engineering • Human Factors Engineering:
• Data Analysis and Decision Support: Organization
• Technology Implementation:
• Organizational Design and Change Man-
agement:

1–13
 Contributing
Contributing Disciplines
Disciplines to
to the
the O-B
O-B Field
Field (cont’d)
(cont’d)
Management refers to the process of planning, orga-
nizing, coordinating, directing, and controlling re-
sources within an organization to achieve specific
goals and objectives.

 Creating a Positive Work Environment:

 Leadership and Influence:
Management  Organizational Structure and Design:
 Managing Change: Organization
 Performance Management:
 Conflict Resolution and Team Dynamics
 Decision-Making Processes:
 Organizational Culture:

1–14
 Contributing
Contributing Disciplines
Disciplines to
to the
the O-B
O-B Field
Field (cont’d)
(cont’d)
Medicine is the field of study and practice focused on
maintaining and restoring health, preventing and treating
diseases, and promoting well-being in individuals and
communities.

 Employee Health and Well-being:

 Workforce Productivity:
 Occupational Health and Safety:
Medicine  Mental Health Support: Individuals
 Employee Assistance Programs:
 Health Promotion and Wellness Pro-
grams:
 Disability Management:

1–15
Challenges
Challengesand
andOpportunities
Opportunitiesfor
forOB
OB

 Responding to Globalization
 Managing Workforce Diversity
 Improving Quality and Productivity
 Total quality management (TQM)
 Improving People Skills
 Empowering People
 Coping with changes
 Stimulating Innovation and Change
 Improving Ethical Behavior
1–16
Organization
OrganizationAs
AsAASystem
System
 A system refers to a collection of
interrelated and interconnected
elements or components that work
together to achieve a common
purpose or goal.

 The system perspective considers

an organization as a complex,
interrelated set of components that
work together to achieve common
goals. Here are some key aspects of
an organization as a system:

1–17
Contributing
Contributing Disciplines
Disciplines to
to the
the O-B
O-B Field
Field (cont’d)
(cont’d)

1–18
Components
Componentsof
ofOrganization
OrganizationSystem
System

Inputs:
 Inputs are the resources,
information, or stimuli that enter
the system from its external
environment.

 These can include raw materials,

data, energy, human resources,
financial resources, or any other
inputs necessary for the system to
function.

1–19
Components
Componentsof
ofOrganization
OrganizationSystem
System

Processes or Operations:

 Processes or operations refer to

the activities, actions, or
transformations that occur within
the system.

 These processes take the inputs

and convert them into outputs or
desired outcomes. Processes can
involve various steps, tasks, rules,
procedures, or interactions among
the system's components.

1–20
Components
Componentsof
ofOrganization
OrganizationSystem
System

Outputs:
 Outputs are the results, products, services,
or outcomes that are produced by the
system.
 These outputs are generated as a result of
the system's processes and are delivered to
the system's external environment or
stakeholders.

1–21
Components
Componentsof
ofOrganization
OrganizationSystem
System

Feedback:
 Feedback is an essential part of a system as it
provides information about the system's
performance and outcomes.
 Feedback can come from both internal and
external sources and helps the system monitor
its outputs, compare them with desired goals
or standards, and make necessary
adjustments or improvements.

1–22
Components
Componentsof
ofOrganization
OrganizationSystem
System

Control and Regulation:

 Control and regulation mechanisms are put in
place to monitor, manage, and guide the
system's operations.
 These mechanisms can include policies, rules,
procedures, quality standards, performance
metrics, or governance structures. They
ensure that the system operates within
defined boundaries and achieves its intended
goals.
1–23
Components
Componentsof
ofOrganization
OrganizationSystem
System

Interconnections and Relationships:

 The parts of a system are interconnected

and have relationships with each other.

 These relationships can be hierarchical

(such as in a hierarchical organizational
structure), lateral (such as in cross-
functional teams), or based on flows of
information, resources, or authority.
Interactions and relationships among
system parts are vital for coordination and
cooperation.

1–24
Components
Componentsof
ofOrganization
OrganizationSystem
System

Boundaries:

 Every system has boundaries that define

its scope and distinguish it from its
external environment.

 These boundaries determine what is

considered part of the system and what is
external to it. Boundaries help in defining
the system's inputs, processes, outputs,
and the interactions it has with its
environment.

1–25
Components
Componentsof
ofOrganization
OrganizationSystem
System

Environment:
 The environment is the external context or
surroundings in which the system
operates.

 It includes factors, influences, or

conditions that can impact the system,
such as market conditions, competitors,
regulatory frameworks, social trends, or
technological changes. The system
interacts with its environment and can be
influenced by it.

1–26
Types
Typesof
ofOrganization
OrganizationSystem
System
Closed System:
 A closed system is a system that does not
exchange matter or energy with its external
environment.
 It is self-contained and isolated from its
surroundings. While it may interact
internally and undergo transformations or
processes, it does not receive inputs from or
release outputs to the external environment.
 In a closed system, the total amount of
matter and energy remains constant.
Examples of closed systems include a sealed
jar, a thermos, or a theoretical model in • Accounting System:
physics. • Internal Communication Network:
• Security Systems:
• Internal Training Programs: 1–27
Types
Typesof
ofOrganization
OrganizationSystem
System
Open System:
 An open system is a system that
exchanges matter, energy, and
information with its external
environment.
 It is characterized by a continuous flow
of inputs and outputs between the system
and its surroundings..
 This exchange allows the system to
maintain its functioning and adapt to
changes in the external environment.  Supply Chain:
Living organisms, ecosystems, social  Market Interactions:
organizations, and many technological  Collaboration and Partnerships:
systems are examples of open systems.  Regulatory Compliance:
 Innovation and Knowledge Acquisition:
 Human Resources: 1–28
 Methods
A
Aschematic
schematic model
model of
of systems
systems Economic conditions
Processes
Competitor’s action
 A schematic model of systems, often Objectives
Union activity
referred to as a systems diagram or
Policies
system architecture, is a visual Decisions
representation that depicts the
components and relationships within a
system.
 It provides a high-level overview of how
Material Products
the system is structured and how its parts Services
Capital
interact. Human Profits
Resource Education
Energy Energy

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The
The Formal
Formaland
andInformal
Informal
Organization
Organization
 Formal Organization
 A formal organization refers to the
officially established structure,
processes, and relationships within an
entity, such as a company,
government agency, or nonprofit
organization.

 It represents the planned and

deliberate arrangement of roles,
responsibilities, and authority levels
to achieve specific objectives.
Organizational Chart
Top-Bottom
 Formal Structure:
 Established Procedures and Policies:
 Clear Lines of Authority:
 Official Communication Channels:
 Formalized Processes: 1–30
The
The Formal
Formaland
andInformal
Informal
Organization
Organization
 Informal Organization
 Informal organization refers to the
unofficial, spontaneous, and social
networks, relationships, and
interactions that exist within the
formal organization.

 It represents the informal

connections, communication patterns,
and social dynamics that emerge
among individuals and groups.
 Social Networks:
 Grapevine Communication:
 Emergent Roles and Influencers:
 Norms and Informal Rules:
 Social Cohesion and Support: 1–31
The
TheThree
Three Basic
Basic Units
UnitsOf
Of
Analysis
AnalysisIn
InOB
OB

 Organizational behavior can be

analyzed by three units: the individual,
the group, and the Organization
system as a whole.

 A full understanding must include an

examination of behavioral factors at
each level.

1–32
The
The Characteristics
Characteristicsof
of
Organization
OrganizationBehavior
Behavior

 An Interdisciplinary Focus:
In many ways, organizational behavior
synthesizes several other fields of study.

 A Descriptive Nature:
A primary goal of organizational behavior is to
describe relationships between two or more
behavioral variables.

1–33
The
The Characteristics
Characteristicsof
of
Organization
OrganizationBehavior
Behavior

 A Descriptive Nature:
Dependent Variable:
 The dependent variable is the variable that is
being studied or measured to determine its
relationship with other factors.

 For example, job satisfaction, employee

turnover, productivity, and job performance
can be dependent variables in organizational
behavior research.

1–34
The
The Characteristics
Characteristicsof
of
Organization
OrganizationBehavior
Behavior

 Independent Variable:
 The independent variable is the variable that
is hypothesized to have an effect on the
dependent variable.

 Independent variables can include leadership

style, organizational culture, job design,
training programs, and various other factors
that researchers believe may influence the
dependent variable.

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Ethics
Ethicsand
andOrganizational
OrganizationalBehavior
Behavior
 Ethics: moral principles/values -- determines
whether actions are right/wrong and
outcomes are good/bad.
 An organization’s ethics are rules, beliefs,
and values that outline ways in which
managers and workers should behave when
confronted with a situation that may help or
harm other people inside or outside an
organization.
 Ethical behavior enhances the well-being
(the happiness, health, and prosperity) of
individuals, groups, organizations, and the
organizational environment.

1–36
• End of the Chapter.
• Thank You For Your
Time.