1

What Is
Organisational
Behaviour?

1.1
Chapter Outline

Why Is OB Important?
Gaining a Competitive Advantage Through OB
Where Does OB Come from?
Current OB Issues
How Do We Know What We Know?
Organization of the Book
Summary and Application

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Learning Objectives

What is Organizational Behaviour?

How can OB make you a more effective employee
and manager?
How can OB improve a firms performance?
Why do OB concepts need to be applied flexibly to
match a companys diverse employee needs?
What role does OB play in organizational ethics?
From where does our knowledge about OB come?
Why is the scientific process relevant to OB?

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Introduction

Organizational Behaviour
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
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 Because it explains how
organizations work, knowing
about OB is essential to being
effective at all organizational
levels.

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1.5
Introduction

Managerial Functions
Planning
Organizing
Leading
Controlling

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Table 1-1
Some Questions
Organizational Behaviour Can Help Answer
How can diversity both help and hurt team
performance?
Why are emotions important at work?
Are some personality characteristics related to
higher job performance?
Is there more than one way to fit in an
organization?
Is there one best way to lead?
Is saying, Do your best! the best way to motivate
high performance?
What are some common decision making errors,
and how can I avoid them?
What is the role of politics at work?
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Table 1-1
Some Questions
Organizational Behavior Can Help Answer
What steps can I take to effectively manage my
career?
What are the positive and negative effects of stress
at work?
What is globalization, and how does it affect me?
What is organizational culture, and why is it
important?
How can technology leverage what we know about
organizational behaviour to improve work
performance?
Why do some people behave unethically in
organizations?
Why are some teams more effective than others?
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Investing now in developing
your OB skills will prepare
you to be a more effective
employee and manager and
help you move up faster in
any organization.

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1.9
Why Is OB Important?

The core of Organizational Behaviour 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.

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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 1.11
Effectively implementing OB
concepts increases
organizational performance.

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1.12
Table 1-2

Sources of Competitive Advantage

Innovation: Developing new products, services, and
markets and improving current ones
Distribution: Dominating distribution channels to block
competition
Speed: Excelling at getting your product or service to
consumers quickly
Convenience: Being the easiest for customers to do
business with
First to market: Introducing products and services before
competitors
Cost: Being the lowest cost provider
Service: Providing the best customer support before, during,
or after the sale
Quality: Providing the highest quality product or service
Branding: Developing the most positive image

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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
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Where Does OB Come From?

Scientific Management
The belief that productivity is maximized when
organizations are rationalized with precise sets of
instructions based on time-and-motion studies

Hawthorne Effect
When people improve some aspect of their behavior or
performance simply because they are being assessed

Human Relations Movement

Views organizations as cooperative systems and treats
workers orientations, values, and feelings as important
parts of organizational dynamics and performance

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 Dont focus only on
productivityyou must also
meet worker needs to be an
effective leader

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1.16
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
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 Being able to recognize, manage,
and leverage cultural differences in
an organization can enhance both
personal and organizational success.

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1.18
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 1.19
 Technology can help
organizations implement OB
concepts more effectively

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1.20
Table 1-3

Why Employees Act Unethically

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Although ethical dilemmas
are not always easy to
manage, ethics is essential
to long-term organizational
performance.

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1.22
Figure 1-1

A Formula for Ethical Behavior

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Current OB Issues

Social Responsibility
Socially responsible programs and policies being
implemented by U.S. corporations include:
Workplace diversity
Favorable working conditions
Non-exploitation of workers, particularly in regards to
discrimination and harassment
Work-life balance initiatives
Community volunteerism and charitable giving programs
Environmental Green programs including recycling and
resource conservation
Reducing carbon emissions
Partnering with environmentally friendly suppliers and 1.24
companies
Current OB Issues

Social Responsibility
Corporate Social Responsibility
Businesses living and working together for the
common good and valuing human dignity

Sustainability is not just for the short term; its

building for the long haul.
~Walter J. Cleaver, President and CEO
of the Human Resource Planning Society

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Social responsibility initiatives can
motivate employees and improve
organizational performance.

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How Do We Know What We Know?

Intuition
The Scientific Method

Method of knowledge generation that relies on systematic

studies that identify and replicate a result using a variety of
methods, samples, and settings
Theory
Hypotheses Independent and Dependent
Variables
Correlation
Meta-Analysis
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Figure 1-2

The Scientific Method

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Figure 1-3

Interpreting Correlations

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Figure 1-3

Interpreting Correlations

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 Summary

Organizational behavior takes a systems approach

to how individuals and groups act in organizations.
Employees relate to organizations in several ways.
Individual employees relate to each other as
individuals. Individual employees also relate to
workgroups and to the organization as a whole.
Organizations are social systems, and managing
the resulting social dynamics is a critical part of
effective job performance and effective
management.
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Video Cases

City of Greensburg, Kansas: Ethics and

Social Responsibility
1. In what ways do the activities of Greensburg
exemplify good ethics and social
responsibility? Explain.
2. What are the potential consequences of
rebuilding Greensburg without concern for
green practices?
3. What risks are involved in rebuilding
Greensburg as a green town?

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