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CHAPTER 1
What Is Organizational Behavior?
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
1-1. Demonstrate the importance of interpersonal skills in the workplace.
1-2. Define organizational behavior (OB).
1-3. Show the value to OB of systematic study.
1-4. Identify the major behavioral science disciplines that contribute to OB.
1-5. Demonstrate why few absolutes apply to OB.
1-6. Identify managers’ challenges and opportunities in applying OB concepts.
1-7. Compare the three levels of analysis in this text’s OB model.
INSTRUCTOR RESOURCES
Instructors may wish to use the following resources when presenting this chapter.
Text Exercises
Myth or Science?: “Management by Walking Around Is the Most Effective Management”
Personal Inventory Assessments: Multicultural Awareness Scale
An Ethical Choice: Vacation Deficit Disorder
Career OBjectives: What do I say about my termination?
Point/Counterpoint: The Battle of The Texts
Questions for Review
Experiential Exercise: Managing the OB Way
Ethical Dilemma: There’s a Drone in Your Soup
Text Cases
Case Incident 1: Apple Goes Global
Case Incident 2: Big Data for Dummies
Instructor’s Choice
This section presents an exercise that is NOT found in the student's textbook. Instructor's Choice
reinforces the text's emphasis through various activities. Some Instructor's Choice activities are
centered on debates, group exercises, Internet research, and student experiences. Some can be
used in class in their entirety, while others require some additional work on the student's part.
The course instructor may choose to use these at any time throughout the class—some may be
more effective as icebreakers, while some may be used to pull together various concepts covered
in the chapter.
Web Exercises
At the end of each chapter of this Instructor’s Manual, you will find suggested exercises and
ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics on the
Web” are set up so that you can simply photocopy the pages, distribute them to your class, and
make assignments accordingly. You may want to assign the exercises as an out-of-class activity
or as lab activities with your class.
Summary and Implications for Managers
A. Managers need to develop their interpersonal, or people, skills to be effective in their
jobs.
B. 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.
C. Specific implications for managers are below:
1. Resist the inclination to rely on generalizations; some provide valid insights into
human behavior, but many are erroneous.
2. Use metrics and situational variables rather than “hunches” to explain
cause-and-effect relationships.
3. Work on your interpersonal skills to increase your leadership potential.
4. Improve your technical skills and conceptual skills through training and staying
current with organizational behavior trends like big data.
5. Organizational behavior can improve your employees’ work quality and productivity
by showing you how to empower your employees, design and implement change
programs, improve customer service, and help your employees balance work–life
conflicts.
This chaper begins with a vignette entitled, “Wall Street Warriors.” The details of this story are at once disheartening
and inspiring, reflecting the complexity of organizational life. They also highlight several issues of interest to those
of us seeking to understand organizational behavior, including motivation, ethics, emotions, personality, and
culture. Throughout this text, you’ll learn how we can systematically study all these elements.
BRIEF CHAPTER OUTLINE
I. The Importance of Interpersonal Skills
A. Better financial performance.
B. Lower turnover of quality employees.
C. Higher quality workplace relationships and employee job satisfaction, stress, and
turnover.
D. Greater social responsibility awareness.
II. Management and Organizational Behavior
A. Definitions
1. Manager: Someone who gets things done through other people. They make
decisions, allocate resources, and direct the activities of others to attain goals.
2. Organization: A consciously coordinated social unit composed of two or more
people that functions on a relatively continuous basis to achieve a common goal or set
of goals.
B. Management Functions
1. All managers perform five primary management functions: planning, organizing,
commanding, coordinating, and controlling. Modern management scholars have
condensed these functions to four: planning, organizing, leading, and controlling.
C. Management Roles
1. Introduction
a. In the late 1960s, Henry Mintzberg studied five executives to determine what
managers did on their jobs. He concluded that managers perform ten different,
highly interrelated roles or sets of behaviors attributable to their jobs.
2. The ten roles can be grouped as being primarily concerned with interpersonal
relationships, the transfer of information, and decision making. (Exhibit 1-1)
a. Interpersonal Roles: Figurehead, Leader, Liaison
b. Informational Roles: Monitor, Disseminator, Spokesperson—a conduit to transmit
information to organizational members and represent the organization to
outsiders.
c. Decisional Roles: Entrepreneur, Disturbance handlers, Resource allocator,
Negotiator role
D. Management Skills
1. Technical Skills: The ability to apply specialized knowledge or expertise. All jobs
require some specialized expertise, and many people develop their technical skills on
the job.
2. Human Skills: Ability to work with, understand, and motivate other people, both
individually and in groups.
3. Conceptual Skills: The mental ability to analyze and diagnose complex situations.
E. Effective Versus Successful Managerial Activities
1. Luthans and his associates studied more than 450 managers. They found that all
managers engage in four managerial activities:
a. Traditional management
b. Communication
c. Human resource management
d. Networking
2. Successful managers are defined as those who were promoted the fastest.
(Exhibit 1-2)
3. Organizational Behavior: OB is a field of study that investigates the impact that
individuals, groups, and structure have on behavior within organizations for the
purpose of applying such knowledge toward improving an organization’s
effectiveness.
4. OB studies three determinants of behavior in organizations: individuals, groups, and
structure.
III. Complementing Intuition with Systematic Study
A. Introduction
1. Each of us is a student of behavior.
B. The systematic approach used in this book will uncover important facts and relationships,
and will provide a base from which more accurate predictions of behavior can be made.
1. Systematic Study of Behavior
a. Behavior, generally, is predictable if we know how the person perceived the
situation and what is important to him or her.
C. Evidence-Based Management (EBM)
1. Complements systematic study.
2. Argues for managers to make decisions on evidence.
D. Intuition
1. Systematic study and EBM add to intuition, or those “gut feelings” about “why I do
what I do” and “what makes others tick.”
2. If we make all decisions with intuition or gut instinct, we’re likely working with
incomplete information.
E. Use a combination
F. Big Data
1. Background: The use of big data for managerial practices is a relatively new area, but
one that holds convincing promise.
2. Current Usage: The reasons for data analytics include predicting any event, detecting
how much risk is incurred at any time, and preventing catastrophes.
3. New Trends: The use of Big Data for understanding, helping, and managing people is
relatively new but holds promise.
4. Limitations: Use evidence as much as possible to inform your intuition and
experience.
IV. Disciplines That Contribute to the OB Field
A. Introduction
1. Organizational behavior is an applied behavioral science that is built upon
contributions from a number of behavioral disciplines.
2. The predominant areas are psychology, sociology, social psychology, and
anthropology.
3. Exhibit 1-3 overviews the major contributions to the study of organizational behavior.
B. Psychology
1. Psychology is the science that seeks to measure, explain, and sometimes change the
behavior of humans and other animals.
C. Social Psychology
1. Social psychology blends the concepts of psychology and sociology.
D. Sociology
1. Sociologists study the social system in which individuals fill their roles; that is,
sociology studies people in relation to their fellow human beings.
E. Anthropology
1. Anthropology is the study of societies to learn about human beings and their
activities.
V. There Are Few Absolutes in OB
A. Introduction
1. There are few, if any, simple and universal principles that explain organizational
behavior.
2. Contingency variables—situational factors are variables that moderate the
relationship between the independent and dependent variables.
VI. Challenges and Opportunities for OB
A. Introduction
1. There are many challenges and opportunities today for managers to use OB concepts.
2. Employment options today have adapted to include new opportunities for workers.
(Exhibit 1-4)
B. Responding to Economic Pressure
1. In economic tough times, effective management is an asset.
2. In good times, understanding how to reward, satisfy, and retain employees is at a
premium. In bad times, issues like stress, decision making, and coping come to the
forefront.
C. Responding to Globalization
1. Increased Foreign Assignments
2. Working with People from Different Cultures
3. Overseeing Movement of Jobs to Countries with Low-Cost Labor
4. Adapting to Differing Cultural and Regulatory Norms
D. Workforce Demographics
1. As students of OB, we can investigate what factors lead employees to make various
choices and how their experiences affect their perceptions of their workplaces. In
turn, this can help us predict organizational outcomes.
E. Managing Workforce Diversity
1. 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.
F. Improving Customer Service
1. Service employees include technical support representatives, fast-food counter
workers, sales clerks, nurses, automobile repair technicians, consultants, financial
planners, and flight attendants.
2. Employee attitudes and behavior are associated with customer satisfaction.
G. Improving People Skills
1. People skills are essential to managerial effectiveness.
H. Working in Networked Organizations
1. Networked organizations are becoming more pronounced.
2. Manager’s job is fundamentally different in networked organizations. Challenges of
motivating and leading “online” require different techniques.
I. Using Social Media
1. Ethical questions regarding HR use of social media.
2. Employee use of social media at work.
J. Enhancing Employee Well-Being at Work
1. The creation of the global workforce means work no longer sleeps. Workers are
on-call 24-hours a day or working nontraditional shifts.
2. Balancing work and life demands now surpasses job security as an employee priority.
K. Creating a Positive Work Environment
1. Positive organizational scholarship is an area of OB research that concerns how
organizations develop human strength, foster vitality and resilience, and unlock
potential.
L. Improving Ethical Behavior
1. Ethical dilemmas and ethical choices are situations in which an individual is
required to define right and wrong conduct.
VII. Coming Attractions: Developing an OB Model
A. An Overview
1. A model is an abstraction of reality, a simplified representation of some real-world
phenomenon. (Exhibit 1-5)
2. It proposes three types of variables (inputs, processes, and outcomes) at three levels
of analysis (individual, group, and organizational).
3. The model proceeds from left to right, with inputs leading to processes, and processes
leading to outcomes.
B. Inputs
1. Inputs are the variables like personality, group structure, and organizational culture
that lead to processes.
2. Group structure, roles, and team responsibilities are typically assigned immediately
before or after a group is formed.
3. Finally, organizational structure and culture are usually the result of years of
development and change as the organization adapts to its environment and builds up
customs and norms.
C. Processes
1. If inputs are like the nouns in organizational behavior, processes are like verbs.
2. Processes are actions that individuals, groups, and organizations engage in as a result
of inputs and that lead to certain outcomes.
3. At the individual level, processes include emotions and moods, motivation,
perception, and decision making.
4. At the group level, they include communication, leadership, power and politics, and
conflict and negotiation.
5. Finally, at the organizational level, processes include human resource management
and change practices.
D. Outcomes
1. Outcomes are the key variables that you want to explain or predict, and that are
affected by some other variables.
2. At the group level, cohesion and functioning are the dependent variables.
3. Finally, at the organizational level we look at overall profitability and survival.
4. Attitudes and stress
a. Employee attitudes are the evaluations employees make, ranging from positive to
negative, about objects, people, or events.
b. Stress is an unpleasant psychological process that occurs in response to
environmental pressures.
c. The belief that satisfied employees are more productive than dissatisfied
employees has been a basic tenet among managers for years, though only now has
research begun to support it.
5. Task performance
a. The combination of effectiveness and efficiency at doing your core job tasks is a
reflection of your level of task performance.
b. Obviously task performance is the most important human output contributing to
organizational effectiveness, so in every chapter we devote considerable time to
detailing how task performance is affected by the topic in question.
6. Organizational Citizenship Behavior (OCB)
a. The discretionary behavior that is not part of an employee’s formal job
requirements, and that contributes to the psychological and social environment of
the workplace, is called citizenship behavior.
b. Successful organizations need employees who will do more than their usual job
duties—who will provide performance beyond expectations.
c. Evidence indicates organizations that have such employees outperform those that
don’t.
d. As a result, OB is concerned with citizenship behavior as an outcome variable.
7. Withdrawal behavior
a. Withdrawal behavior is the set of actions that employees take to separate
themselves from the organization.
b. There are many forms of withdrawal, ranging from showing up late or failing to
attend meetings to absenteeism and turnover.
c. Employee withdrawal can have a very negative effect on an organization.
d. Absenteeism also costs organizations significant amounts of money and time
every year.
e. All organizations, of course, have some turnover.
f. While high turnover often impairs an organization’s ability to achieve its goals,
quitting is not all bad. People quit because they are optimistic about their outside
prospects.
g. So why do employees withdraw from work?
i. Reasons include negative job attitudes, emotions and moods, and negative
interactions with co-workers and supervisors.
8. Group cohesion
a. Group cohesion is the extent to which members of a group support and validate
one another at work.
b. When employees trust one another, seek common goals, and work together to
achieve these common ends, the group is cohesive; when employees are divided
among themselves in terms of what they want to achieve and have little loyalty to
one another, the group is not cohesive.
c. Companies attempt to increase cohesion in a variety of ways ranging from brief
icebreaker sessions to social events like picnics, parties, and outdoor
adventure-team retreats.
9. Group functioning
a. In the same way that positive job attitudes can be associated with higher levels of
task performance, group cohesion should lead to positive group functioning.
b. Group functioning refers to the quantity and quality of a group’s work output.
c. In some organizations, an effective group is one that stays focused on a core task
and achieves its ends as specified.
d. Other organizations look for teams that are able to work together collaboratively
to provide excellent customer service.
e. Still others put more of a premium on group creativity and the flexibility to adapt
to changing situations. In each case, different types of activities will be required to
get the most from the team.
10. Productivity
a. The highest level of analysis in organizational behavior is the organization as a
whole.
b. An organization is productive if it achieves its goals by transforming inputs into
outputs at the lowest cost. This requires both effectiveness and efficiency.
c. Popular measures of organizational efficiency include return on investment, profit
per dollar of sales, and output per hour of labor.
d. Service organizations must include customer needs and requirements in assessing
their effectiveness.
11. Survival
a. The final outcome we will consider is organizational survival, which is simply
evidence that the organization is able to exist and grow over the long term.
E. Having reviewed the input, process, and outcome model, we’re going to change the
figure up a little bit by grouping topics together based on whether we study them at the
individual, group, or organizational level.
1. As you can see in Exhibit 1-6, we will deal with inputs, processes, and outcomes at
all three levels of analysis, but we group the chapters as shown here to correspond
with the typical ways that research has been done in these areas.
2. It is easier to understand one unified presentation about how personality leads to
motivation, which leads to performance, than to jump around levels of analysis.
3. Because each level builds on the one that precedes it, after going through them in
sequence, you will have a good idea of how the human side of organizations
functions. (Exhibit 1-6)
IX. Summary and Implications for Managers
A. Managers need to develop their interpersonal, or people, skills to be effective in their
jobs.
B. 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.
C. Specific implications for managers are:
1. Resist the inclination to rely on generalizations; some provide valid insights into
human behavior, but many are erroneous.
2. Use metrics and situational variables rather than “hunches” to explain
cause-and-effect relationships.
3. Work on your interpersonal skills to increase your leadership potential.
4. Improve your technical skills and conceptual skills through training and staying
current with organizational behavior trends like big data.
5. Organizational behavior can improve your employees’ work quality and productivity
by showing you how to empower your employees, design and implement change
programs, improve customer service, and help your employees balance work–life
conflicts.
EXPANDED CHAPTER OUTLINE
I. The Importance of Interpersonal Skills
A. Until the late 1980s, business school curricula emphasized the technical aspects of
management, focusing on economics, accounting, finance, and quantitative techniques.
B. Coursework in human behavior and people skills received relatively less attention.
C. Since then however, business schools have realized the significant role interpersonal
skills play in determining a manager’s effectiveness.
D. Incorporating OB principles into the workplace can yield many important organizational
outcomes.
E. Better financial performance.
F. Lower turnover of quality employees.
G. Higher quality workplace relationships and employee job satisfaction, lower stress and
turnover.
H. Greater social responsibility awareness.
I. Companies with reputations as good places to work—such as Genentech, the Boston
Consulting Group, Qualcomm, McKinsey & Company, Proctor & Gamble, Facebook,
and Southwest Airlines—have a big advantage when attracting high performing
employees.
J. A recent national study of the U.S. workforce found that:
1. Social relationships among coworkers and supervisors were strongly related to job
satisfaction.
2. Employees who know how to relate to their managers well, with supportive dialogue
and proactivity, will find their ideas are endorsed more often, further improving
workplace satisfaction.
3. Increasing the OB element in organizations can foster social responsibility awareness.
K. Managers cannot succeed on technical skills alone, they must have people skills.
II. Management and OB
A. Definitions
1. Manager: Someone who gets things done through other people. They make
decisions, allocate resources, and direct the activities of others to attain goals.
2. Organization: A consciously coordinated social unit composed of two or more
people that functions on a relatively continuous basis to achieve a common goal or set
of goals.
