1

What Is
Organizational
Behavior?

1.1

Introduction
Organizational Behavior
Explains and predicts how people and groups
interpret events, react, and behave in organizations

Organization
Consists of people with formally assigned roles
working together to achieve common goals

Managers
Organizational members who are responsible for the
attainment of organizational goals
1.2

Introduction
Managerial Functions
Planning
Organizing
Leading
Controlling

1.3

Why Is OB Important?

The core of Organizational Behavior is

being effective at work.

OB helps you become a more effective

employee and a better manager.

Organizations as a whole also benefit from

OB.

OB also helps companies perform well.

1.4

Why Is OB Important?

The effective management of people is key to the

creation of a competitive advantage and business
strategy execution

Competitive advantage: anything that gives a firm an

edge over rivals in attracting customers and
defending itself against competition
To have a competitive advantage a company must
ultimately be able to give customers superior value for
their money (a combination of quality, service, and
acceptable price)

A better product that is worth a premium price or a good

product at a lower price can both be a source of competitive
advantage
1.5

Table 1-2

Sources of Competitive Advantage

Innovation:
Distribution:
Speed:
Convenience:
First to market:
Cost:
Service:
Quality:
Branding:

Developing new products, services, and

markets and improving current ones
Dominating distribution channels to block
competition
Excelling at getting your product or service to
consumers quickly
Being the easiest for customers to do
business with
Introducing products and services before
competitors
Being the lowest cost provider
Providing the best customer support before, during,
or after the sale
Providing the highest quality product or service
Developing the most positive image
1.6

Gaining a Competitive Advantage

Through OB
Types of Business Strategies
Cost Leadership
Lowest cost producer for a particular level of
product
quality
Differentiation Strategy
Developing a product or service that has unique
characteristics valued by customers
Specialization
Focus on a narrow market segment and pursue
either a
differentiation or cost leadership strategy
Growth
Company expansion organically or through
acquisitions

Changing Business Strategy

1.7

Current OB Issues

Globalization
The internationalization of business has become the
norm for many organizations

Parochialism
Viewing the world solely through ones own eyes and
perspective

Global Mindset
Set of individual attributes that enable you to influence
individuals, groups, and organizations from diverse
socio/cultural/institutional systems
Effective management requires flexibility and an
appreciation that peoples expectations and values differ
1.8

Current OB Issues
Technology
Ethics

Standards of behavior about how people ought to

act in different situations
Three types of errors:
1. Omission
2. Remission
3. Commission

Organizational Culture
Code of Conduct
Code of Ethics

1.9

Table 1-3

Why Employees Act Unethically

1.10