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1Introduction

tothe Field of

Organizational Behavior

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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Quicken Loans

Quicken Loans has become one of America’s most successful companies through high involvement, a focus on creativity, a strong culture, and other effective organizational behavior practices.

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Organizational Behavior and OrganizationsOrganizational behavior

The study of what people think, feel, and do in and around organizations

OrganizationsGroups of people who work interdependently

toward some purposeCollective entitiesCollective sense of purpose

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Why Study OB?Satisfy the need to understand and predict

Helps us to test/improve personal theories

Influence behavior – get things done

OB improves an organization’s financial health

OB is for everyone

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Organizational EffectivenessThe ultimate dependent

variable in OB

Old approach – achieving stated goals

Problem with goal attainmentCould set easy goalsCompany might achieve

wrong goals

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Four Perspectives of Organizational Effectiveness

Stakeholder Perspective

High-Performance WP Perspective

Organizational Learning Perspective

Open Systems Perspective

NOTE: Need to consider all four perspectives when assessing a company’s effectiveness

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Open Systems PerspectiveOrganizations are complex systems that

“live” within, and depend on, the external environment

Effective organizationsMaintain a close “fit” with changing conditionsTransform inputs to outputs efficiently and

flexibly

Foundation for the other three organizational effectiveness perspectives

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•Products/services

•Shareholder dividends

•Community support

•Waste/pollution

Technological subsystem

Marketing /Sales

subsystem

Production

subsystem

Cultural

subsystem

subsystem

subsyste

m

Purchasing

subsystem

Engineering

subsystem

Accounting

subsystem

subsyst

em

Socialization subsystem

subs

yste

m

•Raw materials

•Human resources

•Information

•Finances

•Equipment

FeedbackFeedback

subsyste

m

subsystem

subsy

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m

Managerial

subsystem

Transforming inputs to outputs

Open Systems Perspective

External Environment

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Organizational Learning Perspective

An organization’s capacity to acquire, share, use, and store valuable knowledge

Need to consider both stock and flow of knowledgeStock: intellectual capitalFlow: org learning processes

of acquisition, sharing, use, and storage

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Intellectual Capital

Relationship Capital

Value derived from satisfied customers, reliable suppliers, etc.

StructuralCapital

Knowledge captured in systems and structures

HumanCapital

Knowledge that people possess and generate

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Organizational Learning Processes

Knowledge Acquisition

Knowledge Sharing

KnowledgeUse

Knowledge Storage

• Learning

• Scanning

• Grafting

• Experimenting

• Communicating

• Info systems

• Internal learning

• Training

• Observing

• Awareness of knowledge

• Sense making (locating knowledge)

• Autonomy to apply knowledge

• Human memory

• Documentation

• Practices/habits

• Databases

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Organizational MemoryThe storage and preservation of

intellectual capital

Retain intellectual capital by:Keeping knowledgeable employeesTransferring knowledge to othersTransferring human capital to

structural capital

Successful companies also unlearn

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High-Performance Work Practices

Workplace practices that leverage the potential of human capital

Four HPWPs (likely others)1. Employee involvement2. Job autonomy 3. Develop competencies (training, selection)4. Performance-based rewards

Need to “bundle” them – work best together

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Corporate Social Responsibility at MTN

At MTN Group, Africa’s largest mobile (cell) phone company, employees help the community and environment through the company’s award-winning “21 Days of Y’ello Care” program. This photo shows MTN employees painting schools during a recent Y’ello Care event.

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Stakeholder PerspectiveStakeholders: entities who affect

or are affected by the firm’s objectives and actions

Personalizes the open systems perspective

Challenges with stakeholder perspective:Stakeholders have conflicting

interestsFirms have limited resources to

satisfy all stakeholder needs

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Stakeholders: Values and Ethics

Values and ethics prioritize stakeholder interests

ValuesStable, evaluative beliefs, guide

preferences for outcomes or courses of action in various situations

EthicsMoral principles/values,

determine whether actions are right/wrong and outcomes are good or bad

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Stakeholders and CSRStakeholder perspective

includes corporate social responsibility (CSR)Benefit society and

environment beyond the firm’s immediate financial interests or legal obligations

Organization’s contract with society

Triple bottom lineEconomy, society,

environment

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GlobalizationEconomic, social, and cultural connectivity

with people in other parts of the world

Due to better communication and transportation systems

Effects of globalization on organizationsLarger markets, lower costs, more innovationIncreasing diversityIncreasing work intensification, less work-life

balance (24/7 schedule)

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Increasing Workforce Diversity

Surface-level vs deep-level diversity

ImplicationsBetter knowledge,

decisions, representation, financial returns

Manage challenges of diversity (e.g. teams, conflict)

Ethical imperative of diversity

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Emerging Employment Relationships

Work/life balance Minimizing conflict between work and nonwork

demands

Virtual workUsing information technology to perform one’s

job away from the traditional physical workplaceTelecommuting – issues of social isolation,

emphasis on face time, employee self-motivated

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Organizational Behavior Anchors

Systematic research anchorOB knowledge is built on systematic

researchEvidence-based management – rely on

research evidence, not fads, untested assumptions

Multidisciplinary anchorMany OB concepts adopted from other

disciplinesOB develops its own theories, but scans

other fields

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Organizational Behavior Anchors (con’t)

Contingency anchorA particular action may have different

consequences in different situationsNeed to diagnose the situation and select

best strategy under those conditions

Multiple levels of analysis anchorIndividual, team, organizational level of

analysisOB topics usually relevant at all three

levels of analysis