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Posted: September 25th, 2023
Organizational behavior (OB) is the study of how individuals
Organizational behavior (OB) is the study of how individuals, groups, and organizations interact and influence one another. Though it is largely used within the field of business management as means to understand–and more effectively manage–groups of people. The reason businesses look to OB is because it can help organizations increase employee performance, while also creating a positive working environment.
Definition of Organizational Behavior
Organizational behavior is the study of how individuals and groups interact within an organization and how these interactions affect an organization’s performance toward its goal or goals. The field examines the impact of various factors on behavior within an organization.
The focus of organizational behavior tends to center around employee productivity. For example, organizational behavior studies have shown that employees who feel valued and appreciated tend to be more motivated and productive, leading to increased profits for the organization. However, organizational behavior can also focus on the ways in which organizations can better manage, change and improve behavior in order to achieve desired outcomes (i.e., productivity, employee well-being, or workplace satisfaction).
Organizational Behavior vs. Organizational Culture
Organizational culture refers to qualities of the workplace itself that influence its employees, whereas organizational behavior refers to the resulting behavior of the people within it.
Organizational culture includes factors such as the company’s mission statement, core values and expectations of the company’s employees. It defines the company’s identity and how it wants to be perceived. For example, if a company has a mission statement focused on providing the highest quality of customer service, then the company’s core values may be centered around customer satisfaction, communication and professionalism. This will shape the expectations of the employees, such as expecting them to be courteous and willing to go the extra mile to serve the customer.
Organizational behavior is the resulting behavior of the people within the organization based on the culture they’re immersed in. If the company culture is one that promotes customer service, then the employees are likely to display behaviors such as friendliness and helpfulness when dealing with customers.
The opposite may be true if the company’s culture revolves around a competitive environment and employees are expected to go above and beyond to be the most successful. In this case, employees may display behavior such as aggressiveness and competitiveness in order to achieve the highest results.
Organizational culture serves as the foundation for the behavior the employees exhibit, and the two are closely intertwined. If a company wants to create a positive working environment, it is important to establish an organizational culture that promotes healthy behavior among its employees.
Benefits of Understanding Organizational Behavior
Understanding organizational behavior can help companies and businesses create and cultivate a positive culture and work environment that will ultimately improve the organization as a whole.
Benefits of organizational behavior have been shown to include:
Increased employee satisfaction
Increased customer satisfaction
Increased innovation
Increased productivity and performance
Increased trust between employees and the company/management
Better communication within the organization
Bringing out leadership qualities of employees
Employees are more likely to behave ethically
Reduction in employee burnout
Reduction in worker attrition and turnover
4 Elements of Organizational Behavior
Human behavior is a complex and multifaceted area of research that’s constantly evolving and changing with the times. In the realm of organizational behavior, the research thus far has shown that four key elements contribute to human behavior within a workplace:
People: Everyone brings their own personality, values and communication style to a workplace environment. The interaction of employees with work and with one another is perhaps the most important element in a work environment.
Structure: Refers to the relationships and roles of employees to one another and within the company. Includes elements such as hierarchies, job descriptions, departmentation and compensation system.
Technology: The machines, tools and resources provided to employees to perform their job duties, work with customers and otherwise function within a role and as a part of the organization.
External environments: Both internal and external environments included. This refers both to physical environments (lighting, space, furniture, etc.) and broader conditions (economy, customers, politics, etc.)
Critical to understanding organizational behavior is grasping that all four of these components make up the culture of a company and the way in which the employees behave within it. Company leaders can create change within their organization by pinpointing areas of weakness and adjusting accordingly.
Examples of Organizational Behavior
There are four key elements that contribute to organizational behavior. So let’s take a look at examples of these at play to better understand what organizational behavior is, how it works, and what it looks like across various organizations.
People
People are the most important element of organizational behavior. Their attitudes and beliefs shape how the workplace operates, and how work is completed. For example, someone who is highly motivated and enthusiastic about their work may inspire others to do the same.
Some employees may value timeliness over perfection and prioritize meeting deadlines over taking care of themselves. Others might value both equally, while still others might prioritize self-care over the other two. It’s important to create a team of individuals who can work together effectively and efficiently, and who possess the values and personalities that are well-suited to the job at hand. This will help ensure that the boundaries between work and personal life are maintained, and that goals are met in a timely manner.
Structure
The structure of an organization can influence how work is carried out. A hierarchical system with clear roles and responsibilities, for example, may encourage people to work together in a structured, efficient manner.
Some organizations maintain strict hierarchies and role definitions, while others choose to adopt a less rigid, more collaborative approach. A chosen structure and its proper (or improper) management can provide workers with clarity or lead to chaos and confusion. These structural elements can dictate how effectively and comfortably employees are able to suggest changes, ask for help and escalate problems. If your organization seems to struggle with these issues and it is reflected in the behavior of the staff, it may be time to take a look at the structures in place.
Technology
Technology can have a huge impact on organizational behavior. Automated systems can streamline processes, making it easier for people to do their jobs. Likewise, poorly-designed systems can easily grind production to a halt.
Have you ever been to a hospital that seems to be constantly out of essential supplies? Or a retail establishment where the point-of-sale system reboots every 10 minutes? These operational failures of supply chain systems can have a massive impact on both customer and employee satisfaction. Ensuring that your employees have the tools necessary to perform well in their roles is critical to the overall success of the company.
External Environments
The external environment can also have a significant impact on an organization. Economic conditions, for example, can affect the availability of resources, while changes in the law can create new challenges. Companies must be aware of their external environment in order to adapt and remain competitive.
Imagine for a moment a large and highly profitable company paying a CEO and top executives large year-end bonuses, but claiming there’s no “room in the budget” to hire desperately needed staff or replace broken essential equipment. Employees receive the blame and are assigned impersonal remediation modules on how to improve performance when quotas are not met, are assaulted by customers while on the job or experience disciplinary action after admitting to mistakes made while overworked due to staffing shortages. Meanwhile, the economy is trash, most of the company’s employees aren’t paid a living wage and the benefits provided by the company are sparse or nonexistent. Sound like a place you’d want to work?
Organizational behavior is indeed a complex topic with many nuances to consider. Let me attempt to address your questions while providing some additional context and examples.
You accurately defined organizational behavior as the study of how individuals and groups interact within an organization and how these interactions affect performance. There are four key elements that shape these dynamics: people, structure, technology, and external environment. All four components interact to form an organization’s unique culture, which then influences the behaviors exhibited by members of that culture.
In terms of people, individual personalities, values, communication styles, and the relationships between employees are paramount. A motivated, enthusiastic team that shares core values like collaboration can inspire high performance, whereas conflict or misaligned priorities may breed inefficiency (Ertürk, 2020). Structure also guides behavior through hierarchies, roles, policies and other frameworks. Too much rigidity can stifle innovation, while ambiguity breeds uncertainty (Griffin & Moorhead, 2014).
Technology also powerfully shapes organizational behavior. Automated systems can streamline work when designed well but create frustrations when faulty (Boudreau & Robey, 2005). The external environment likewise exerts influence through economic conditions, regulations, community relationships, and more. For example, during recessions organizations may tighten budgets in ways that damage morale if not handled sensitively (Cascio, 2006).
Some examples of these dynamics in action: A healthcare system’s electronic medical records crashing regularly likely decreases patient and provider satisfaction. Meanwhile, a flexible, collaborative company culture could encourage constructive problem-solving and idea-sharing among engaged employees. And leaders attentive to external realities, like shifting consumer priorities, may spot new market opportunities that energize their workforce.
In summary, organizational behavior is a complex, multifaceted field that considers how the four key elements of people, structure, technology and external environment interact to form a unique culture influencing member behaviors. With awareness and adjustments in these areas, organizations can cultivate highly productive, satisfying workplaces. Please let me know if any part of this overview requires further explanation or examples. I’m happy to discuss and expand on this topic.