Organizational Behavior – Definition and Importance of OB | Management Notes

What is meant by Organizational Behavior?

Organizational behavior (OB) is a broad field of business study that examines how people behave in an organization and how managers can influence them to act in specific ways that are beneficial to the organization.

The study of organizational behavior is influenced by many disciplines, including management theory, psychology, and efficiency analysis. It is difficult to pinpoint exactly what organizational behavior is or how it works, but key components are leadership, culture, structure, and communication.

It is very important to study organizational behavior because it provides an understanding of why people behave as they do in organizations. In any organization, the importance of organizational behavior has tremendous necessities.

Organizational Behavior helps us to study human beings and their complex nature in organizations by identifying the causes and effects of behavior.

Having the concept and knowledge of Organizational Psychology helps to scientifically study human behavior in organizational settings. The organizational structure also affects organizational behavior because it defines how tasks are divided, grouped, and coordinated in organizations.

There are various reasons for studying organizational behavior because the relevance of organizational behavior in today’s business environment can’t be separated. Along with the various benefits of organizational behavior, there exist limitations of organizational behavior too.

But there is a huge scope of organizational behavior in the long run in the future. The main objective of Organizational Behavior is to understand human interactions in an organization, find what is driving it, and influence it for better results in attaining business goals.

Organizational behavior (OB) examines the effect of individuals, groups, and structures on an organization’s behavior. The findings of this study can greatly benefit an organization. Organizational behavior is the study of how organization performance is affected by the behavior of its members.

Organizational behavior focuses on employment issues, such as employment, work, leaves, turnover, productivity, and human performance.

Motivation, leadership behavior, power dynamics, interpersonal communication, group dynamics, learning attitudes, perceptions, conflicts, work design, and work stress are topics covered by Organizational Behavior.

This course will introduce you to a variety of organizational behavior theories and concepts. It is common for people to share “facts” or suggestions that are based on human behavior or organizational needs as facts about both the ways people behave and how they think. One example is “two heads are better than one”. However, these statements are not always true.

Organizational Behavior’s off-line objective is therefore to replace traditional ideas. Studies of organizational behavior can benefit managers since they focus on methods to increase productivity, decrease absenteeism, and boost job satisfaction.

The purpose of Organizational Behavior is to enable managers to lead ethically. Through organizational behavior, better behavior predictions can be made.

Objectives of Organizational Behavior (OB) 

The establishment of a social system in the organization.

To assess employee motivation.
Encouraging employees to work enthusiastically for the organization.
Creating an environment conducive to effective leadership development.
Employees should be taught effective group behavior.
To identify the reasons for conflict and to resolve the conflict.
Finding out the reasons for frustration and reducing or eliminating them.
Increasing the morale of employees.
Maintaining a work-friendly organizational environment.
The purpose of this study is to determine how to develop an organization effectively.

Why is Organizational Behavior(OB) important?

Some of the importance of Organizational Behavior (OB) in any type of organizations is as follows:

Organizational Behavior helps in understanding Organization and Employees in a better way which supports Organizational behavior management.
Organizational Behavior helps in motivating employees.
Organizational Behavior helps in improving Industrial / Labor relations.
Organizational Behavior helps in predicting and controlling Human Behavior.
Organizational Behavior helps in the effective utilization of Human Resources.

1. Organizational Behavior Management

The study of  OB helps to understand the organization and people in a better way. OB is important it helps to develop a friendly relationship between organization and employees creating a proper working environment in an organization. This helps in employee commitment as well as maintains Organizational Citizenship Behavior.

Studying OB provides a better understanding of the organization structure and organization culture as well which further supports organizational behavior management.

Similarly, studying Organizational Behavior topics helps to find out the factor causing the behavior, and helps to apply different strategies to control the critical behavior which harms the organization.

2. OB helps in motivating employees

The importance of organizational behavior (OB) cannot be neglected because studying Organizational Behavior helps managers to motivate the employees bringing good organizational performance automatically leading to job satisfaction.

This helps to achieve the organizational goals properly as we cannot neglect the importance of employee behavior in an organization.

Organizational behavior: improving performance and commitment in the workplace. One of the example of Organizational Citizenship Behavior is Civic Virtue which creates higher job satisfaction and yields better job performance from employees as they feel they are the part of the organization as the same way they are the part of the country.

3. Industrial or Labour relations can be improved with the help of OB

Studying Organizational Behavior(OB) helps to improve industrial/labor relations. Organizational Behavior Management helps in understanding the root cause of the problem, predict its future course of action and control its negative consequences.

As managers are aware of the positive and negative consequences of the behavior, it enables managers to maintain friendly relations with their employees which creates peace and harmony in the organization.

4. Organizational Behavior helps in predicting and controlling Human Behavior

Studying OB helps in the study of human behavior as well as supports in controlling it. It is the one of the most important reasons for studying Organizational Behavior. Organizational behavior: improving performance and commitment in the workplace.

Organizational behavior and human decision processes are to some extent related to each other. Knowledge of Organizational Behavior research is very much important for the management students who are going to have a career as a successful manager.

If all the Organizational Behavior theories are studied properly then it helps to bring organizational effectiveness. 

5. Human resources can effectively be utilized with the help of OB

Studying Organizational Behavior (OB) helps in the effective utilization of Human Resources. Knowledge of and nature of Organisational Behaviour helps managers to manage people’s behavior and the organization effectively.

Likewise, it enables managers to inspire and motivate employees toward higher productivity and better results as the manager is able to analyze and understand the nature and behavior of his employees.

After the employees are provided with their job description it becomes easy to analyze their behavior in the organization. Therefore the essentials of organizational behavior cannot be denied.

Forces affecting organisational behaviour are / What are the 4 elements of organizational behavior?

The four key elements of Organizational Behavior (OB) are as follows:

a) People
b) Structure
c) Technology
d) External Environment

a) People : In any organization, people are the platform for interaction and behavior. Individuals and groups constitute people. Human behavior and action identifies, recognizes and develops the interactive relations towards societal attitudes and behaviors.

b) Structure : In every organization, there is a structure, which describes the overall structure for roles, rules, relations, hierarchy, and authority. In addition, it also involves the grouping of jobs, assigning jobs within divisions and units, and assigning workers tasks. Therefore, it influences behavior of employees in an organization.

c) Technology : The process of converting input into output is called technology. It provides the resources with which people work, as well as affecting their tasks. Technology allows people to do more work in a more efficient manner.

Consequently, technology can also influence people’s behavior, so managing technology is an important role for any organization.

d) External Environment : Every organization operates within an external and internal environment. Within each organization are a number of resources, a structure, culture, etc. The external environment consists of economics, politics, socioculture, and technology.

The various factors influence one another in complicated ways. Therefore, the environment becomes a key element in the study of organizational behavior.

Levels of Organizational Behavior

The behavior of people can be analyzed using Organizational Behavior at three levels. The three basic levels of analysis in organizational behavior are:

•  Individual Level Analysis
• Group Level Analysis
• Organization System-Level Analysis

Models of Organizational Behavior

The five models of organizational behavior are as follows:

a) Autocratic model

The autocratic model is based on strength, power, and formal authority. An autocratic organization is one in which the people in control of the tasks in the organisation (management/owners) have formal authority over the employees who work for them.

Employees at lower levels carry little responsibility for the work performed. Since key decisions are made at the top management level, their ideas and innovations are not generally welcomed.  Read More……

b) Custodial model 

A custodial model focuses on providing economic security for employees through wages and other benefits that will create employee loyalty and motivation. In some countries, many professional companies offer health benefits, corporate cars, salary packaging, and so on – these are all incentives designed to attract and retain quality employees.

Organizers believe that by increasing worker skills, motivating employees, and leveraging employee expertise, they will have a competitive advantage. Read More……

c) Supportive model

Unlike the two earlier approaches, the supportive model is aimed at aspiring leaders. The custodial model doesn’t rely on control and authority (the autocratic model) or on incentives (the autocratic model), but rather on the manager-employee relationship and how employees are treated on a day-to-day basis.

An autocratic approach is opposed by this approach, which holds that employees are self-motivated and can contribute value and insight to the organization beyond just their day-to-day duties.

Motivating employees with a positive work environment where they can express their ideas is the aim of the model. Consequently, the employees have some type of “buy-in” to the organization and its direction.

d) Collegial model

Teamwork is the foundation of the collegial model – everyone works together as colleagues (hence the name). A corporate culture and overall environment that aligns with this model needs to be created, where everyone is actively participating – it is not about job titles and status – everyone is encouraged to work together to build a better company.

Managers are responsible for fostering teamwork and creating positive, energetic workplaces. The manager can be viewed as the “coach” of the team.

As a coach, my goal is to make the team perform well overall, rather than focusing on my own performance or that of specific individuals.

In businesses with big market changes and where ideas and innovation are key factors of competitive advantage, the collegial model is quite beneficial. This can be effective in marketing teams, research and development, technology/software, and really anywhere that needs to come up with new solutions.

e) System model

System models are the final form of organization models. Out of the five models presented here, this is the most contemporary form.

In the system model, the organization considers the overall structure and team environment, as well as each individual’s talents, potential, and goals. The system model seeks to balance the goals of individuals with the goals of the organization.

The majority of employees seek good remuneration, job security, and a positive work environment where the organization contributes to the community and/or its customers. We believe a successful manager-employee partnership is one where everyone feels that they are part of the vision and part of the team.

Goals of Organizational Behavior

The goals of Organizational Behavior can be classified as below:

• Describe
• Understand
• Predict and
• Control

Steps of Organizational Behavior Modification

Behavior modification is the process that involves making specific behavior occur more or less often by systematically managing its cues and consequences. The modern behaviorist places great emphasis on operant conditioning to motivate individuals and mold their behavior.

Behavior modification, or OB MOD, uses various reinforcements to influence individual behavior. OB Mod is derived and developed from the work of B.F. Skinner.

Managers can use this technique to eliminate or modify undesirable behavior and replace it with behavior that is more compatible with achieving goals.

In simple terms, OB Mod is a technique for modifying the behavior of organizational members, so that they engage in desirable and undesirable behaviors and replace them with behaviors that are more favorable.

Motivation and enhancing organizational effectiveness can be achieved by using it. The Steps of Organizational Behavior Modification are as below:

1) Identification of Critical Behavior

The first step in the OB Mod is to identify performance-related behaviors. The behavior should be identified as desirable or undesirable from the point of view of the organization. Following that, critical behaviors should be given due consideration, as they contribute greatly to the employees’ performance.

Through discussions with the particular employee and his immediate superior, who are intimately familiar with the job behaviors, it is possible to identify critical behaviors.

Attendance or absenteeism, tardiness or promptness, complaints or constructive criticism, listening to or not listening to instructions are some of the critical behaviors that affect job performance.

By modifying these behaviors, it could result in better work outcomes. The critical behavior should be paid attention to since it keeps occurring repeatedly.

2) Measurement Of Behavior

The manager must now measure how often these critical behaviors are observed over time after identifying the critical behaviors of the employees. Both observation and record analysis can be used to do this.

If the frequency is within the acceptable limit, it will require no action, but if it exceeds the acceptable limit, it will need immediate attention. The measurement of behavior will also help the managers in determining the success in changing the employees’ behavior.

3) Identifying and Analyzing Behavioral consequences

A functional analysis will have to be performed by the managers next. The purpose of this analysis is to find out what circumstances lead to certain types of behavior, what are the consequences of such behavior, etc. Identifying the consequences of a behavior is important since these consequences affect subsequent behavior.

A functional analysis should attempt to uncover the competing contingencies affecting each behavior as well, since some contingent consequences seem to affect critical behavior only on the surface.

4) Develop and apply intervention strategy

Identifying critical behaviors and identifying the factors that cause them is the first step toward developing an effective intervention strategy. There are several strategies available at this stage. Some of these strategies include positive reinforcement, punishment, and extinction.

Different strategies will be used in different situations. The frequency of the resulting behavior is measured after a strategy has been developed and implemented.

After a behavior change has occurred in the right direction, a reinforcement schedule that maintains the desired behavior will be selected by the manager.

5) Evaluate performance

OB Mod’s final step is to evaluate whether the intervention strategies are working properly. Modification of behavior is intended to improve performance by changing undesirable behaviors. If undesirable behavior has been replaced with desirable behavior, evaluation will reveal whether this has been achieved.

A permanent or temporary change in behavior has occurred. Additionally, the evaluation will show whether or not the performance has improved. If there is a positive change, that indicates that the interventions are successful. A minor change, however, may necessitate a different and more appropriate strategy.

Organizational Citizenship Behavior Definition

Organizational Citizenship Behavior (OCB) that has been studied since 1970s is defined as the voluntary commitment of the person within an organization or company that is not part of his or her contractual tasks.

It refers to discretionary, non-required contributions by members to the organizations that employ them. It describes all the positive and constructive employee actions and behaviors that aren’t part of their formal job description.

The five most common types of Organizational Citizenship Behavior defined by Dennis Organ in the year 1988 while studying on organizational citizenship behavior are altruism, courtesy, sportsmanship, conscientiousness, and civic virtue.

1) Altruism

Altruism is defined as the desire to help or otherwise assist another individual, while not expecting a reward in compensation for that assistance.

A common example outside of a business setting would be someone who drives a neighbor to work when their car has broken down, while not expecting as money or favors in compensation.

In a business setting altruistic behavior is generally related to the work or project that the business group is working on.

2) Courtesy

Courtesy is defined as behavior which is polite and considerate towards other people. Courtesy outside of a workplace setting includes behavior such as asking how someone’s morning has been or asking after the welfare of a neighbor’s child.

In a business context courtesy is usually exhibited through behaviors such as inquiring about personal subjects that a coworker has previously brought up, asking if a coworker is having any trouble with a certain work related project, and informing coworkers about prior commitments or any other problems that might cause them to reduce their workload or be absent from work.

3) Sportsmanship

Sportsmanship is defined as exhibiting no negative behavior when something does not go a planned or when something is being perceived as annoying difficult, frustrating or otherwise negative.

Outside of a business context, sportsmanship is most commonly associated with sports and games poor sportsmanship, for example, might occur when a player on a soccer team swears stomps and argues when their team loses a soccer game.

4) Conscientiousness

Conscientiousness is defined as behavior that suggests a reasonable level of self-control and discipline, which extends beyond the minimum requirements expected in that situation.

In the context of a business setting, conscientiousness is observed when an employee not only meets their employer’s requirements – such as coming into work on time and completing assignments on time–but exceeds them.

5) Civic Virtue

Civic virtue is defined as behavior which exhibits how well a person represents an organization with which they are associated, and how well that person supports their organization outside of an official capacity.

Individual Behavior as Input-Output System

Individual behavior (IB) is complex, dynamic and changed by various environmental factors, inherited and learned social factors. IB is affected by way of information collection from the environment, process it through psychology, cognitive and physiological system and finally response to situation. It may be covert or overt perspective.

Covert perspective is unobservable since it is process of mental and psychological factors. Whereas, overt perspective is observable behavior physically.

IB is directed to goal and helps to understand organizational behavior (OB). IB focuses on needs and desires. Thus, task, resources, and skills should match every individual and subordinates. The conceptual framework for understanding IB is as follows.

a) Input

Individual receives information from environmental stimuli through human senses. When individual receives information, they start to show it in behavior. Individual receives internal stimuli through heredity and external stimuli through social factors.

i) Internal Stimuli

Internal stimuli exist in individual which helps to receive, understand and predict the information received from internal environment. They affect individual behavior and reaction such as:

• Personal characteristics: It involves age, gender, length of service, marital status, emotional intelligence. Each factor affects IB.

• Personality: It is the traits and qualities in individual like physical fitness, self-confidence, intelligence, sense of responsibility, vision, foresight, flexibility, human character.

• Emotion: Emotion is the feeling derived from circumstances, experience, relationship etc. It is affective state of consciousness like joy, sorrow, fear, hate, and is affected by psychological and behavioral change.

• Values: It is individual sense of right and wrong, good or bad, desirable or undesirable. It is an element of judgment and culture is the principal source of value.

• Beliefs: It is psychological foundation of perception and attitude developed through past experiences and learning. They provide continuity to personality and provide meaning to perception.

• Attitude: It is judgment about object, people, or events. It reflects how one feels about something and is specific to only object, people, and events.

• Ability: It involves physical and mental skills to deal with complex problems and tactful situations. Training and efficiency development programs can strengthen ability on task.

ii) External Stimuli

Environment provides forces that senses through hearing, seeing, smelling, touching, and tasting. It includes physical factors and socio-cultural factors.

• Physical factors: Organizational climate, office environment, working conditions
• Socio-cultural factors: Management system, culture

The handling of external environment affects individual behavior.

b) Processing

It is the interpretation part of individual behavior. It shows how individual receives information from external factors, understands, and predicts them. Information is collected from environment as input and a detailed study is made to respond properly. It mediates between input and output of IB. It consists of:

• Physiological Process: Parental and heredity in nature, biological foundation like nervous system and sense organs. It affects individual sensing, interpretation, and response.

• Cognitive Process: Act of knowing and understanding information from external environment. Involves perception, thinking, decision making. Focus on high mental process for assessing information.

• Psychological Process: Involves learning and motivation. Learning is permanent change in behavior as result of information and experience. Motivation encourages performance toward goal achievement. They are key determinants of IB on job.

c) Output

Output is behavioral response. It is the outcome of input and processing components of IB. Individual processes information from environmental stimuli through psychological, cognitive, and physiological process, and finally responds in terms of behavior.

Individual behavior can be covert or overt. IB is important to understand organizational behavior (OB). Outcome can be seen in productivity, absenteeism, turnover, job satisfaction, and organizational citizenship.

Thus, managers must understand, predict, and manage behavior for effective management of OB.

d) Feedback

OB is continuous throughout the functioning and existence of organization. It is necessary to evaluate IB. If expected output is achieved, guidance for better performance is given.

If deficiency is found in output, it is necessary to improve future performance to achieve expected output.

Determinants of Organizational Behavior

a) Beliefs

Beliefs is psychological foundation and internal feeling that something is true, even though it is unproved and irrational. It refers to long-term perception or attitude toward an object that an individual develops through past experience and learning. They are based on knowledge, opinion, and faith.

Belief provides a big impact on individual behavior. Beliefs are mental attitude established by some truth, moral, or facts presented by parents, teachers, peers, reference groups, experts etc. Belief is distinct from judgment, which is a conscious mental act that involves arriving at a conclusion about a proposition.

Development of Beliefs: Belief is based on knowledge, opinion, and faith. Individual beliefs develop through two factors:

• Culture factor: Culture impacts beliefs. These factors are tradition, custom, and values considered by individuals in society. Such cultural values are gained from parents, peers, teachers, reference groups etc. Change in cultural values affects individual’s beliefs and behavior.

• Functional factor: To fulfill needs and expectations, individuals involve in organization to do work. In this course, they interact with managers, colleagues, and juniors. They can get new ideas, concepts, knowledge, and technology. These factors develop and change individual beliefs and organizational behavior.

Significance of Beliefs

• Help to determine reaction: Beliefs help determine the action and reaction to events, objects, and individuals. Individuals understand matters based on set beliefs and values, which influence their reaction.

• Facilitate for standard: Beliefs are an important source of behavioral standards. Every culture involves some standards followed by all individuals. Consideration of cultural, custom, and tradition values facilitates standard behavior.

• Show personality: Personality is the outcome of internal and external traits such as family, peers, teachers, reference groups, academic qualifications, and job experience. Personality affects individual behavior.

• Source of motivation: When employees believe that hard work supports organizational goals and individual needs, they are motivated for better performance.

• Influence of action: People act or react based on beliefs developed through social interaction, education, and job experience.

• Support on career choice: Beliefs support career planning. When individuals believe academic qualifications are key for their future career, they work hard in that area, facilitating professional growth.

b) Attitude

Attitude is a judgmental statement concerning objects, people, and events, either favorable or unfavorable. It reflects feelings about something.

Personality and attitude are genetic but may change under the influence of role models. Attitude is specific and less stable, changing with time and situations. It is influenced by parents, teachers, seniors, colleagues, professors, reference groups, experience, education, media, knowledge, and environment. It affects individual behavior and motivation.

Companies endorse popular personalities, leading players, film stars etc., to develop a positive attitude toward their products.

Components of Attitude

• Affective Components: Emotional or feeling segment of attitude. Can be positive, negative, or neutral. Managing employee attitude helps achieve organizational targets.

• Behavioral Components: Focus on behavior toward something, including beliefs, opinion, knowledge, and information. Shows intention toward people, events, and objects. Short-term behavior affects customer decisions.

• Cognitive Components: Controls how a person thinks and understands continuously. Related to knowledge, beliefs, preferences, and models that shape interpretation of the world.

Types of Job-related Attitude

• Job Satisfaction: Collection of feelings toward a job, positive or negative. Influenced by compensation, work, promotion, supervision, recognition, and responsibilities.

• Job Involvement: Degree of employee engagement, participation, and self-performance. High job involvement maximizes effort and accountability, reducing supervision costs.

• Organizational Commitment: Emotional attachment or loyalty toward an organization. Influenced by job characteristics, performance, payment, supervisor relationships, and work conditions.

c) Values

Values represent sense of right and wrong, good and bad, desirable and undesirable. They are stable, long-lasting beliefs important to individual behavior.

• Content and intensity: Determines importance of values like freedom, pleasure, self-respect, honesty, and equality.

• Influence on organization: Values affect individual attitude, behavior, and decision-making. Culture is the main source of organizational values.

• Types of Values:

  • Terminal Value: Ultimate life goals, including self-respect, family security, recognition, freedom, harmony, professional excellence.

  • Instrumental Values: Preferred behavioral modes to achieve terminal values. Includes honesty, sincerity, ambition, independence, hard work, capability, courage, helpfulness, politeness.

Cross-culture Values

• Power Distance: Acceptance of unequal power distribution. Low power distance emphasizes accessibility, high power distance emphasizes authority.

• Uncertainty Avoider: Comfort level with uncertain and ambiguous situations. Strong avoiders stress rules, hard work, conformity, and security.

• Individualism or Collectivism: Individualist culture focuses on independence, personal achievement. Collective culture favors interdependence and loyalty.

• Masculinity or Feminist: Masculine culture differentiates gender roles, dominance, and economic performance. Feminist culture emphasizes gender equality, quality of life, and consensus.

People  Also Ask

What is organizational behavior and why is it important in the workplace?

Organizational behavior refers to the study of how individuals and groups behave within an organization and how their behavior influences the overall functioning and performance of the organization.

It encompasses a wide range of factors such as individual behavior, group dynamics, communication patterns, leadership styles, decision-making processes, and organizational culture.

Understanding organizational behavior is crucial for creating a positive and productive work environment where employees can thrive and contribute effectively to the company’s success.

In the workplace, organizational behavior plays a pivotal role in shaping the interactions between employees, their attitudes towards work, job satisfaction, and overall well-being. It helps leaders and managers identify and address issues that might hinder productivity, teamwork, and employee motivation.

By understanding the psychological and social factors that influence behavior, organizations can create strategies to enhance employee performance, job satisfaction, and retention rates.

How does organizational behavior impact employee productivity and performance?

Organizational behavior significantly impacts employee productivity and performance. When employees are motivated and engaged, they are more likely to be productive and efficient in their roles.

A positive work environment that fosters collaboration, open communication, and supportive leadership enhances employee morale and satisfaction, leading to improved productivity.

On the other hand, negative organizational behavior, such as a toxic work culture, poor communication, or ineffective leadership, can hamper employee motivation and decrease productivity.

Conflicts within teams, lack of trust, and low job satisfaction can also lead to decreased performance and efficiency.

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