Chapter 1 What is Organizational Behaviour?
Chapter 1
W hat is Organizational Behaviour?
What is Organizational Behaviour? ORGANIZATIONAL BEHAVIOUR DEFINED Organizational Behaviour (OB) is a field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviours of individuals and groups in organizations. • Scholars in management conduct research on OB. • Managers or consultants then apply the findings from that research in order to find out whether they help meet “real-‐world” challenges. • OB can be contrasted with two other courses: o Human resources management: Field of study that focuses on the applications of OB theories and principles in organizations. § Best ways to structure training programs to promote employee learning. o Strategic management: Field of study devoted to exploring the product choices and industry characteristics that affect an organization’s profitability § Relationship between firm diversification and firm profitability AN INTEGRATIVE MODEL OF OB INDIVIDUAL CHARACTERISTICS AND
GROUP MECHANISMS
INDIVUAL MECHANISMS
Personality, Cultural Values, and Ability Teams, Diversity, and Communication
Stress
Leadership Styles and Behaviour
Motivation
ORGANIZATIONAL MECHANISMS
Trust, Justice, and Ethics
Organizational Culture and Change
Job Satisfaction
Power, Influence, and Negotiation
Organizational Structure
Learning and Decision Making
INDIVIDUAL OUTCOMES Job Performance Organizational Commitment
INDIVIDUAL OUTCOMES Job Performance | Organizational Commitment • The rightmost portion of the model contains the two primary outcomes of interest to OB researches. • Employees have two primary goals for their working lives o To perform their jobs well o To remain members of an organization they respect • Managers have two primary goals for their employees o To maximize their job performance o To retain these employees for a significant length of time INDIVIDUAL MECHANISMS Job Satisfaction | Stress | Motivation | Trust, Justice, and Ethics | Learning and Decision Making • Job satisfaction which captures what employees feel when thinking about their jobs, and doing day-‐to-‐day work • Stress which reflects employees’ psychological responses to job demands that tax or exceed their capacities • Motivation which captures the energetic forces that drive employees’ work effort • Trust, justice and ethics reflect the degree to which employees feel that their company conducts business with fairness, honesty, and integrity. • Learning and decision making which deals with how employees gain job knowledge and how they use that knowledge to make accurate judgements on the job. INDIVIDUAL CHARACTERISTICS AND GROUP MECHANISMS Personality, Cultural Values, and Ability | Teams, Diversity, and Communication Power, Influence, and Negotiation | Leadership Styles and Behaviour • It is important to understand what factors improve those individual mechanisms. • The integrative model also acknowledges that employees do not work alone o Instead, they typically work in one or more groups or teams led by some formal leader ORGANIZATIONAL MECHANISMS Organizational Structure | Organizational Culture and Change • Individuals and groups function within the organizational context • Every company has an organizational structure that dictates how the units within the firm link to other units • Every company has a culture that captures “the way things are” in the organization, the shared knowledge about the rules, norms, and values that shape employee attitudes and behaviours. THE VALUE OF AN INTEGRATIVE MODEL • Each chapter of the textbook will open with a depiction of this integrative model. • OB for students, which will illustrate how OB concepts can be applied to improve academic success
DOES ORGANIZATIONAL BEHAVIOUR MATTER? BUILDING A CONCEPTUAL ARGUMENT • Resource-‐based view is a model that argues that rare and inimitable resources help firms maintain competitive advantage. o Includes financial, physical, and OB resources (knowledge, decision making etc) o A resource is more valuable when it is rare. o A resource is more valuable when it is inimitable • Inimitable resources are those that are incapable of being imitated or copied o History § People create history – experience, wisdom and knowledge § Being established in an industry (WestJet) o Numerous Small Decisions § People make many small decisions day in and day out § Big decisions can be copied (Diet Coke with Line) § In order to mimic, competitors must pay attention to the little day-‐to-‐day actions (WestJet flight attendants) o Socially Complex Resources § People are the source of socially complex resources, such as culture, teamwork, trust, and reputations. § These resources are termed “socially complex,” because it is not always clear how they came about. § Culture, teamwork, trust and reputation spring from the social dynamics within a given organization at a given time. RESEARCH EVIDENCE • Good people are both rare and inimitable and therefore create a resource that is valuable for creating competitive advantage. • Research has shown that better OB practices were associated with better firm performance SO WHAT’S SO HARD? • Good OB does seem to matter in terms of company profitability • “The effective management of OB requires a belief that several different practices are important, along with long-‐term commitment to improving those practices” • Rule of one-‐eighth: the belief that one-‐eighth, or 12 percent of organizations will actually do what is required to build profits by putting people first. o The integrative model of OB used to structure this book was designed with this rule in mind. • High job performance depends not just on employee motivation but also on fostering high levels of satisfaction, effectively managing stress, creating a trust climate, and committing to employee higher learning. o Failing to do any one of those things might hinder the effectiveness of the other concepts in the model.
HOW DO WE “KNOW” WHAT WE KNOW ABOUT ORGANIZATIONAL BEHAVIOUR? The Scientific Method THEORY
VERIFICATION
HYPOTHESES
DATA
•
• • • •
Theory: a collection of verbal and symbolic assertions that specify how and why variables are related, as well as the conditions in which they should (and should not) be related A theory tells a story of and supplies the familiar who, what, where, when and why Theories must be tested to verify that their predictions are accurate Hypotheses: Written predictions that specify relationships between variables. Correlation: The statistical relationship between two variables, abbreviated r, it can be positive or negative and range from 0 (no statistical relationship) to +-‐ 1 (a perfect statistical relationship)
W hat is Organizational Behaviour?
What is Organizational Behaviour? ORGANIZATIONAL BEHAVIOUR DEFINED Organizational Behaviour (OB) is a field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviours of individuals and groups in organizations. • Scholars in management conduct research on OB. • Managers or consultants then apply the findings from that research in order to find out whether they help meet “real-‐world” challenges. • OB can be contrasted with two other courses: o Human resources management: Field of study that focuses on the applications of OB theories and principles in organizations. § Best ways to structure training programs to promote employee learning. o Strategic management: Field of study devoted to exploring the product choices and industry characteristics that affect an organization’s profitability § Relationship between firm diversification and firm profitability AN INTEGRATIVE MODEL OF OB INDIVIDUAL CHARACTERISTICS AND
GROUP MECHANISMS
INDIVUAL MECHANISMS
Personality, Cultural Values, and Ability Teams, Diversity, and Communication
Stress
Leadership Styles and Behaviour
Motivation
ORGANIZATIONAL MECHANISMS
Trust, Justice, and Ethics
Organizational Culture and Change
Job Satisfaction
Power, Influence, and Negotiation
Organizational Structure
Learning and Decision Making
INDIVIDUAL OUTCOMES Job Performance Organizational Commitment
INDIVIDUAL OUTCOMES Job Performance | Organizational Commitment • The rightmost portion of the model contains the two primary outcomes of interest to OB researches. • Employees have two primary goals for their working lives o To perform their jobs well o To remain members of an organization they respect • Managers have two primary goals for their employees o To maximize their job performance o To retain these employees for a significant length of time INDIVIDUAL MECHANISMS Job Satisfaction | Stress | Motivation | Trust, Justice, and Ethics | Learning and Decision Making • Job satisfaction which captures what employees feel when thinking about their jobs, and doing day-‐to-‐day work • Stress which reflects employees’ psychological responses to job demands that tax or exceed their capacities • Motivation which captures the energetic forces that drive employees’ work effort • Trust, justice and ethics reflect the degree to which employees feel that their company conducts business with fairness, honesty, and integrity. • Learning and decision making which deals with how employees gain job knowledge and how they use that knowledge to make accurate judgements on the job. INDIVIDUAL CHARACTERISTICS AND GROUP MECHANISMS Personality, Cultural Values, and Ability | Teams, Diversity, and Communication Power, Influence, and Negotiation | Leadership Styles and Behaviour • It is important to understand what factors improve those individual mechanisms. • The integrative model also acknowledges that employees do not work alone o Instead, they typically work in one or more groups or teams led by some formal leader ORGANIZATIONAL MECHANISMS Organizational Structure | Organizational Culture and Change • Individuals and groups function within the organizational context • Every company has an organizational structure that dictates how the units within the firm link to other units • Every company has a culture that captures “the way things are” in the organization, the shared knowledge about the rules, norms, and values that shape employee attitudes and behaviours. THE VALUE OF AN INTEGRATIVE MODEL • Each chapter of the textbook will open with a depiction of this integrative model. • OB for students, which will illustrate how OB concepts can be applied to improve academic success
DOES ORGANIZATIONAL BEHAVIOUR MATTER? BUILDING A CONCEPTUAL ARGUMENT • Resource-‐based view is a model that argues that rare and inimitable resources help firms maintain competitive advantage. o Includes financial, physical, and OB resources (knowledge, decision making etc) o A resource is more valuable when it is rare. o A resource is more valuable when it is inimitable • Inimitable resources are those that are incapable of being imitated or copied o History § People create history – experience, wisdom and knowledge § Being established in an industry (WestJet) o Numerous Small Decisions § People make many small decisions day in and day out § Big decisions can be copied (Diet Coke with Line) § In order to mimic, competitors must pay attention to the little day-‐to-‐day actions (WestJet flight attendants) o Socially Complex Resources § People are the source of socially complex resources, such as culture, teamwork, trust, and reputations. § These resources are termed “socially complex,” because it is not always clear how they came about. § Culture, teamwork, trust and reputation spring from the social dynamics within a given organization at a given time. RESEARCH EVIDENCE • Good people are both rare and inimitable and therefore create a resource that is valuable for creating competitive advantage. • Research has shown that better OB practices were associated with better firm performance SO WHAT’S SO HARD? • Good OB does seem to matter in terms of company profitability • “The effective management of OB requires a belief that several different practices are important, along with long-‐term commitment to improving those practices” • Rule of one-‐eighth: the belief that one-‐eighth, or 12 percent of organizations will actually do what is required to build profits by putting people first. o The integrative model of OB used to structure this book was designed with this rule in mind. • High job performance depends not just on employee motivation but also on fostering high levels of satisfaction, effectively managing stress, creating a trust climate, and committing to employee higher learning. o Failing to do any one of those things might hinder the effectiveness of the other concepts in the model.
HOW DO WE “KNOW” WHAT WE KNOW ABOUT ORGANIZATIONAL BEHAVIOUR? The Scientific Method THEORY
VERIFICATION
HYPOTHESES
DATA
•
• • • •
Theory: a collection of verbal and symbolic assertions that specify how and why variables are related, as well as the conditions in which they should (and should not) be related A theory tells a story of and supplies the familiar who, what, where, when and why Theories must be tested to verify that their predictions are accurate Hypotheses: Written predictions that specify relationships between variables. Correlation: The statistical relationship between two variables, abbreviated r, it can be positive or negative and range from 0 (no statistical relationship) to +-‐ 1 (a perfect statistical relationship)
