14e

Organizational
Behavior
Human Behavior at
Work

Chapter One
The Dynamics of
People and
John W. Newstrom Organizations

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 Learning Objectives
 The meaning of organizational behavior
 The key goals and forces with which it is
concerned
 The basic concepts of organizational behavior
 The major approaches taken in this book
 How organizational behavior affects
organizational performance
 The limitations of organizational behavior

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 Organizational Behavior (OB)
 Systematic study and application of knowledge
about how people act within organizations
 Identifies ways in which people can act more
effectively
 Is a scientific discipline and an applied science
 Provides a useful set of analysis tools

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 Benefits of Organizational Behavior
 Helps observe the behavior of individuals within
an organization
 Aids in understanding the complexities involved
in interpersonal relations
 Examines the dynamics of relationships within
small groups
 Aids in viewing and managing organizations as
whole systems

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 Goals of Organizational Behavior
 To systematically describe how people behave
under various circumstances
 To understand people’s behavior
 To predict an individual’s behavior
 To control human behavior at work

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 Forces of Organizational Behavior
 People
 Constitute the internal social system of the
organization
 Diversity: Occurs when employees bring a wide
array of educational backgrounds, talents, and
perspectives to their jobs
 Structure
 Formal relationship and use of people in
organizations

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 Forces of Organizational Behavior
 People must be related in some structural way so
their work can be effectively coordinated
 Technology
 Provides the tools necessary for employees to
carry out their tasks
 Environment
 Organizations operate in internal and external
environments

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 Forces of Organizational Behavior
 Changes create demands on organizations
 External environment affects human behavior
 Influences people’s attitudes
 Affects working conditions
 Provides competition for resources and power

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 Positive Characteristics of the OB Field
 Theories: Offer explanation of how and why
people think, feel, and act as they do
 Practical
 Identify important variables and link them to form
propositions that are tested through research
 Research: Gathering and interpreting relevant
evidence that will support a behavioral theory or
help change it
 Ongoing process to uncover behavioral knowledge
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 Positive Characteristics of the OB Field
 Practice: Conscious application of conceptual
models and research results
 To improve individual and organizational
performance at work
 Evidence-based management: Managers become
committed to a rigorous collection of facts and
combine them with relevant research

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 Figure 1.1 - The Interaction of Theory, Research,
and Practice in Organizational Behavior

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 Figure 1.2 - Fundamental Concepts of
Organizational Behavior

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 Nature of People
 Individual differences: Requires managers to
employ a unique approach to every individual
employee
 Law of individual differences: Belief that each
person is different from all others
 Perception: Unique way in which each person
sees, organizes, and interprets things
 Selective perception: Paying attention to features
of work environment that are consistent with or
reinforce one’s own expectations
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 Nature of People
 Whole person - Organizations employ a whole
person rather than certain characteristics
 Home life is not totally separable from work life
 Emotional conditions are not separate from
physical conditions
 Ways to develop a better employee and person
 Motivated behavior
 Desire for involvement
 Value of the person
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 Nature of Organizations
Social systems

• Activities in organizations are governed by social laws as well

as psychological laws

Mutual interest

• Organization and its employees depending on each other to

achieve their respective goals

Ethics

• Use of moral principles and values to affect the behavior of

individuals and organizations

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 Figure 1.3 - Mutual Interest Provides a
Superordinate Goal for Employees, the
Organization, and Society

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 Human Resources Approach
 Growth and development of people toward
higher levels of competency, creativity, and
fulfillment
 People are the central resource in any
organization and any society
 Called supportive approach
 Because the manager’s primary role changes from
control of employees to active support of their
growth and performance

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 Contingency Approach
 Different situations require different behavioral
practices for greatest effectiveness
 Required as managers need to know under what
conditions they should choose one behavioral
approach over another
 Encourages analysis of each situation prior to
action and discouraging habitual practice based
on universal assumptions about people

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 Results-Oriented Approach
 Productivity: Ratio that compares units of output
with units of input
 Measured in terms of economic inputs and
outputs

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 Figure 1.5 - Equations Showing the Role of
Organizational Behavior in Work Systems

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 Systems Approach
 Many variables operate within a system
 Parts of a system are interdependent and larger
systems contain many subsystems
 Systems require inputs, engage in dynamic
process, and produce outputs
 Mechanism is cyclical and self-sustaining
 Systems produce both:
 Positive and negative results
 Intended and unintended consequences
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 Systems Approach
 Multiple ways can be used to achieve a desired
objective
 Systems can be understood, changed and
managed if focus is on problem causes instead of
symptoms
 Cost-benefit analysis: Determining whether
potential actions will have a net positive or net
negative effect

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 Figure 1.6 - Cost-Benefit Analysis of
Organizational Behavior Options

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 Limitations of Organizational Behavior
 Behavioral bias: Satisfying employee experiences
while overlooking the broader system of the
organization in relation to all its publics
 Law of diminishing returns: Increases of a
desirable practice produce declining, zero, and
then negative returns as more increases are
added
 Every situation has an optimum amount of a
desirable practice

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 Limitations of Organizational Behavior
 Organizational effectiveness is achieved by
combining all system variables together in a
balanced way
 Manipulation of people: Using people to further
one’s own need
 Ethical leadership: Maintaining high ethical and
moral integrity through:
 Social responsibility
 Open communication
 Cost-benefit analysis
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 Limitations of Organizational Behavior
 Sustainability: Capacity of a system to endure
across time by balancing the triple bottom line
 Triple bottom line: Demands based on planet,
people, and profit

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 Continuing Challenges of
Organizational Behavior
 Seeking quick fixes
 Quick fix: Addressing the symptoms while
neglecting underlying problems
 Varying environments
 Shrinking demand
 Scarce resources
 More intense competition
 Organizational stagnation or decline
 Increased stress and conflict
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 Continuing Challenges of
Organizational Behavior
 Definitional confusion - Difficulty emerging as a
clearly defined field
 Lack of consensus regarding:
 Unit of analysis
 Needs
 Focus
 Contributions to date

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