Organizational Behavior

Why is Organizational Behavior Important?

Organizational behavior plays an important role in business. Although finance, accounting, marketing, etc., are all essential for a company, people and dynamics are central to the functioning of an organization. Essentially, without people, any organization would fail to exist.

How employees and managers act within an organization can impact the business's overall performance.

Now, why is this employee frequently absent? Is it because they have problems working with their team? Is the work environment toxic in terms of office politics? Does the team leader fail to motivate employees? These are all questions organizational behavior can answer.

As a result, we study organizational behavior to understand how to make a business more efficient in terms of people, culture, structure, leadership, etc.

Organizational Behavior & Management

One of the primary applications of organizational behavior is in management. Managers play a significant role in ensuring that an organization performs efficiently. We can broadly categorize a manager's function can into five different aspects:

1. Planning - setting goals and objectives that contribute to the organization's mission.

2. Organizing - assigning tasks to the right teams and employees.

3. Motivating - communicating with and providing feedback and rewards to employees.

4. Administrating - overseeing absences, new hires, payroll, etc.

5. Controlling - tracking progress and performance, and ensuring projects are completed on time.

Beyond the five primary functions of management, managers also have a range of roles and skills they must use in their day-to-day tasks. According to Mintzberg, we can divide these roles into three broad categories:

1. Interpersonal roles - including being a figurehead, a leader, and a liaison for the organization.

2. Informational roles - being a spokesperson, disseminator, and monitoring all internal and external aspects of the organization.

3. Decisional roles - being a negotiator, disturbance handler, entrepreneur, and resource allocator.¹

Finally, a manager must also possess considerable managerial skills, such as:

• Interpersonal and people skills,

• Technical skills,

• Problem-solving skills,

• Analytical skills,

• Communication and networking skills.

These skills help managers fulfill their roles effectively and thus contribute to not only their performance but that of the employees they manage and, thus, the organization as a whole. Therefore, managers are vital to an organization's success. As a result, many organizations implement vigorous recruitment and selection programs, in addition to training and development programs for those in management positions.

Organizational Behavior Theories

There are a variety of organizational behavior theories that encompass the different aspects of an organization. Beyond management and leadership, communication, culture, structure, and human resources are also central to organizational behavior. Some of the critical organizational behavior theories are as follows:

• Organizational psychology is the study of moods, emotions, personality, values, and value systems within an organization. Key theories include affective events, situation strength, and cultural values theories.

• Job satisfaction relates to employees' happiness with their roles and the organization. The organization needs to make sure that employees are satisfied, as this increases their motivation and performance at work and contributes to the overall organizational culture and environment.

  Check out our explanation of Job Satisfaction to learn more about the organizational factors contributing to employee satisfaction levels.

• Group dynamics describe organizational teams. Group dynamics explore how we interact and behave within groups and how two or more groups interact with one another. Positive group dynamics can drive creativity and innovation, but unfavorable dynamics hinder team progress. As a result, this concept is fundamental in organizations that rely on large teams to complete tasks and projects.

• Organizational communication is another crucial organizational behavior theory, as communication is the backbone of all organizational tasks. The way communication flows within an organization can have a significant impact on team and individual performance. Additionally, manager and leader communication influences motivation which is also essential for performance.

  Want to learn more about the types of communication? Head over to our Organizational Communication explanation.

• Organizational leadership, as you may already know from the previous section, is essential for motivating the workforce, overseeing tasks, and carrying out the organization's mission. Therefore, leadership theories are central to organizational behavior.

• Organizational structure and culture lay the foundations of an organization. Organizational structure influences team structure, communication flow, and project outcomes. On the other hand, organizational culture can impact dynamics, values, and relations between employees at all levels of the organization.

• Human resource (HR) policies communicate expectations and procedures regarding employees in the organization. The human resource function represents all people aspects of the organization, from recruitment and selection to training and termination. Along with individual managers, human resources also play a crucial role in delivering feedback to employees and the organization as a whole.

  Learn more about the human resource function of an organization in our Human Resource Policies explanation.

Organizational Behavior and Human Decision Processes

A key part of organizational behavior includes studying human decision processes. As a result, the topic of organizational behavior is a blend of business, psychology, sociology, and anthropology concepts. Although both business and economics study human decision-making processes, let's take a closer look at how organizational behavior combines all the different topics to assess businesses.

• Psychology provides a basis for understanding human behavior concerning emotions, attitudes, leadership, values, perceptions, etc. Psychology also helps us understand group communication, decision-making processes, and the factors influencing decision-making.

• Sociology helps us understand communication, the idea of change in the organizational context, and organizational culture.

• Anthropology helps us understand organizational culture and the internal and external environment and facilitates the processes of international teams and organizations.

Examples of Organizational Behavior

Let's now take a look at some examples of organizational behavior in action based on the general OB model.

Secondly, let's look at group-level inputs, processes, and outcomes.

Finally, to finish today's explanation, let's observe an organizational-level situation.