Organizational Behavior: Terminology

and Concepts
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Maslow's Theory

photo - J. Finkelstein
Schermerhorn et al (2005), define organizational behavior (OB) as "the study of human
behavior in organizations" (p. 3). OB uses scientific methods to test hypotheses. OB is
also a multi-disciplinary study, taking knowledge from social and behavioral sciences and
applying it to real-world situations.
Why is organizational behavior important to study? If people are an organizations most
important asset then understanding how humans behave in organizations will improve
productivity. Understanding OB allows better worker relations, more realistic
expectations and improves job satisfaction.

Organizational Culture
An organizations culture stems from "the shared beliefs and values that influence the
behavior of organizational members" (Schermerhorn, Jr et al., 2005, 9). Every
organization has a different culture. For example, at one small brewery, the corporate
culture expects employees in any position to learn constantly about the industry and then
teach clients. The culture also encourages direct communications with any other
employee no matter what level on the org chart they are. Other company's cultures may
expect employees to only do their job and not give input at all.

Diversity
Organizations which do not have a culture of encouraging diversity are at a decided
disadvantage. In the modern world of global business, not hiring the best person for the
job solely because of gender, race, ethnicity, religion or age is not only foolish, but
probably illegal.
Some organizations are even going to the extreme of trying to eliminate all subcultures
and become truly multicultural. "The multicultural organization is a firm that values
diversity but systematically works to block the transfer of societally based subcultures
into the fabric of the organization" (Schermerhorn, Jr et al., 2005, p. 440).
Communication
Two types of organizational communication exist, formal and informal. Organizations of
all sizes make use of both, whether directly or indirectly. Formal channels of
communication generally follow the chain of command or org chart and are top down.
Informal channels on the other hand tend to be more open and spontaneous. Scuttlebutt or
gossip is also considered forms informal organizational communication.
Many small companies rely more on informal communications channels. Small
organizations by and large adhere less to formal command structures and all employees
are generally more active in feedback and decision making.

Adams Equity Theory

Organizational Effectiveness and Efficiency

Organizational effectiveness measures how well an organization is in sync. Even with the
best management, superior strategy and flawless execution an organization can be less
successful than it could be. Organizations who understand employees as partners stand a
much better chance of achieving high organizational effectiveness and efficiency.
"Organizational effectiveness is about each individual doing everything they know how
to do and doing it well" (NIH, 2004).
Smaller organizations should exhibit more organizational efficiency due to less
bureaucratic management. This is not always the case as smaller organizations oftentimes
have less clear strategic goals and incomplete systems. Smaller organizations tend to not
have as many mature systems in place for employees. This creates inefficiency as several,
and oftentimes conflicting, methods are created by employees and not management.
These systems may also conflict with management's strategic plan.

Organizational Learning
In todays fast paced, global business environment, organizations need to adapt quickly to
threats and opportunities. How an organization learns directly affects the speed and
efficiency of an organization to handle opportunities and threats. Richard Karash supplies
this definition, "A "Learning Organization" is one in which people at all levels,
individually and collectively, are continually increasing their capacity to produce results
they really care about" (Karash, 2002).
At many small organizations, employees are constantly learning and experimenting. New
products are created and new markets serviced based on employee suggestions. At one
small brewery, gluten-free beer, was conceived by a team who were researching new
product ideas. The beer was then created by the Brewmaster. After a one year test phase,
in which many iterations of the beer was brewed and sampled, a final product was
introduced. All employees of the company contributed and in the process learned about
the beer brewing process, helping them both professionally and personally.

Conclusion
Whether an organization is for profit or not, motivating and utilizing the talent an
organization has is vital in the business world today. Understanding organizational
behavior is a major factor for increased opportunity and success in the business world.
Gaining an awareness of an organizations culture is necessary for continued diverse
growth.
In order to attract the best talent to an organization, a culture of diversity and open
communication is needed. Once an organization has the best talent it can find, the
organization can improve efficiency and have more wide-spread viewpoints to learn
from. Care must be taken though, to make sure the organizational culture is compatible
with the strategic goals of an organization.