Chapter One

Introduction to Organizational Behavior

Learning Objectives
 DEFINE organizational behavior (OB)

 IDENTIFY the major behavioral science disciplines that

contribute to OB.

 IDENTIFY the challenges and opportunities managers have in

applying OB concepts.

 IDENTIFY the three levels of analysis in OB.

 DESCRIBE the two major forms of workforce diversity,

primary and secondary diversity categories.

 IDENTIFY the six elements of an organization’s structure.

 DESCRIBE the common organizational designs.

Three Good Reasons Why You Should
Care About . . . Organizational Behavior
1. Understanding the dynamics of behavior in
organizations is essential to achieving personal
success as a manager, regardless of your area of
specialization.
2. Principles of organizational behavior are
involved in making people both productive and
happy on their jobs.
3. People can make or break their organizations,
requiring successful companies to be able to
address a wide variety of OB issues.
Organizational Behavior (OB)
Definition:
“A field of study that
investigates the impact that
Individuals, Groups, and
Structure have on behaviour
within Organizations for the
purpose of applying such
knowledge towards improving
an Organization’s
Effectiveness.” ( Robbin, S.P.)

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 Focal Points of OB
 Jobs
 Work
 Absenteeism
 Employment turnover
 Productivity
 Human performance
 Management

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 Contributing Disciplines to the
OB Field
Micro:
The Individual

Macro:
Groups &
Organizations

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Copyright ©2014 Pearson Education, Inc.

 Challenges and Opportunities for OB
 Responding to economic pressures
 Responding to globalization
 Managing workplace diversity
 Improving customer service
 Improving people skills
 Stimulating innovation and change
 Coping with “temporariness”
 Working in networked organizations
 Helping employees with work-life conflicts
 Improving ethical behavior
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 Responding to Economic Pressures
 Effective management is especially important during
tough economic times
 Employees look to their managers to provide
security during the instability of a recession

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Responding to Globalization

 Increased foreign assignments

 Differing needs and aspirations in
workforce
 Working with people from
different cultures
 Domestic motivational techniques
and managerial styles may not
work
 Overseeing movement of jobs to
countries with low-cost labor 1-9
 Managing Workforce Diversity
 Workforce diversity: organizations are becoming a
more heterogeneous mix of people in terms of
gender, age, race, ethnicity, and sexual orientation

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Diversity Categories
 Gender
 Race
 National origin
 Age
 Disability
 Domestic partners
 Religion

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 Improving Customer
Service and People Skills
 The majority of
employees in
developed nations
work in service jobs
 They must know
how to please their
customers
 People skills are
essential to success in
today’s organizations

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 Stimulating Innovation and Change

 Flexibility
 Quality
Improvement
 Staying
Competitive

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Copyright ©2014 Pearson Education, Inc.
 Coping with Temporariness
 Jobs are constantly changing
 Skills need to be updated for
workers to stay on target
 Workers need to be able to deal
with change
 Employees need to be able to
cope with flexibility,
spontaneity and unpredictability

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 Working in Networked Organizations

 Managers must
adapt their skills
and communication
styles to succeed in
an online
environment

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Helping Employees Handle Work-Life
Conflict

 The line between work

and non work has
blurred and managers
are increasingly dealing
with conflicts that arise
between work and life
away from work

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Improving Ethical Behavior
 Managers facing ethical dilemmas or
ethical choices are required to identify
right and wrong conduct
 This can be difficult on a global economy
where different cultures approach decisions
from different perspectives
 Companies promoting strong ethical
missions:
 Encourage employees to behave with
integrity
 Provide strong leadership that influence
employee decisions to behave ethically

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Three Levels of OB Analysis

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 Implications for Managers

 OB helps with:
 Insights to improve people skills
 Valuing of workforce diversity
 Empowering people and creating a positive
work environment
 Dealing with change in the workplace
 Coping in a world of temporariness
 Creating an ethically healthy work environment
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The Nature of People
Primary Diversity Categories Secondary Diversity Categories

•Age •Education
•Race •Working Experience
•Ethnicity •Income
•Gender •Marital Status
•Physical Abilities and Qualities •Religious Beliefs
•Sexual and Affectional Orientation •Geographic location
•Parental Issues
•Personal Styles (Personality)
•other

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 Age
 Relationship between age and
performance is important
because
 Performance may decrease
with age
 The workforce is aging
 Mandatory retirement is
outlawed
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 Gender
 Do women perform as well on the job
as men?
 Few, if any, important differences
 Perception that women in male
domains are less likeable, more
hostile, and less desirable as
supervisors
 Working mothers prefer part-time,
flexible work schedules and
telecommuting
 Women more likely to turnover and
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be absent
 Race and Ethnicity

 The biological groupings

within humankind,
representing superficial
physical differences.
 Identification with a Cultural
group that has shared
traditions and heritage. Some
identify strongly while not to
others.
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Physical Abilities and Qualities
 Variety of characteristics
including body type,
physical size, facial features,
specific abilities or
disabilities, and visible and
invisible physical and
mental talents or limitations.
 Disabilities Act requires
employers to make
reasonable accommodations
for people with physical or
mental disabilities 1-24
 Other Biographical Characteristics

 Sexual Orientation –
Feelings of sexual attraction towards members of the
same or opposite gender

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The Nature of People
Secondary Diversity Categories:

1. Education:
The individual’s formal and informal learning and training

2. Work Experience:
The employment and volunteer positions the person has held and the
variety of past organizations

3. Income:
The economic conditions which the person grew up and current
economic status

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The Nature of People
4. Marital Status:
The person’s situation as never married, married, widowed or
divorce

5. Religious Beliefs :
Fundamental teachings received about deities and values acquired
from formal or informal practices

6. Geographic Location :
The location (s) the person was raised or spent a significant part of
life, including types of communities and urban areas versus rural
areas.

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The Nature of People
7. Parental Status:
Having or not having children and the circumstances which the child
are raised, either single or two-adult parenting.

8. Personal Style:
Tendency of the Individual to think, feel or act in a particular way.

 All categories of diversity contribute to the formation of a person’s

life experiences, perspectives, and skill sets.

 An effective organization can learn to recognize, understand,

appreciate, respect and utilize these aspects of a person in the pursuit
of its mission and objectives.

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The Nature of Organization
 The definition of organization:

“ Is a group of two or more people working together to

achieve a common goal.”
Zainal Ariffin Ahmad et,al

 Different types of organization namely business, government

agencies, statutory bodies, NGO, associations, clubs and
many types of formalized groups.

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 Fundamental of An Organization
What Is Organization Structure?
 It defines how job tasks are formally divided,
grouped, and coordinated

 Key elements to be addressed

 Work specialization
 Departmentalization
 Chain of command
 Span of control
 Centralization
 Decentralization
 Formalization

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Element 1: Work Specialization

 Work specialization: Describes the degree to

which activities in the organization are subdivided
into separate jobs
 Also known as division of labor
 Benefits

 Greater efficiency and lower costs

 Costs

 Human costs when carried too far

 Job enlargement as a solution
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Element 2: Departmentalization
 Departmentalization: Basis by which jobs
are grouped together so that common tasks
can be coordinated
 Common bases:
 Function
 Product
 Geography
 Process
 Customer
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Element 3: Chain of Command

 Chain of command: Unbroken line of

authority that extends from the top of the
organization to the lowest echelon and
clarifies who reports to whom
 Authority: positional rights
 Unity of command principle: one boss
 Fewer organizations find this is relevant

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Element 4: Span of Control

 Span of control: The number of employees

a manager is expected to effectively and
efficiently direct
 Determines the number of levels and
managers an organization has
 Trend is toward wider spans of control
 Wider span depends on knowledgeable employees
 Affects speed of communication and decision making

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Contrasting Spans of Control

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Element 5: Centralization and Decentralization
 Centralization : Degree to which decision making
is concentrated at a single point in the organization
 Only includes formal authority: positional rights
 Highly centralized when top managers make all
the decisions
 Decentralized when front line employees and
supervisors make decisions
 Trend is toward increased decentralization

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Element 6: Formalization
 Formalization: Degree
to which jobs within the
organization are
standardized
 Formal - minimum discretion
over what is to be done, when
it is done, and how
 Informal - freedom to act is
necessary
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Common Organizational Designs

 Simple structure
 Bureaucracy
 Matrix structure

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Simple Structure

 Low degree of departmentalization

 Wide spans of control
 Authority centralized in a single person
 Little formalization
 Difficult to maintain in anything other than small
organizations
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 Bureaucracy
 Highly routine operating tasks achieved
through specialization

 Formal rules and regulations

 Centralized authority
 Narrow spans of control
 Tasks grouped by functional
departments
 Decision making follows the chain of
command
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 Matrix Structure
 Combines two forms of departmentalization
 Functional
 Product
 Dual chain of command
 Advantages
 Facilitates coordination and efficient
allocation of specialists
 Disadvantages
 Possible confusion, fosters power struggles,
stress 1-41
 New Design Options: Virtual
 Virtual: A small core organization
that outsources its major business
functions
 Highly centralized with little or
no departmentalization
 Provides maximum flexibility
while concentrating on what the
organization does best
 Reduced control over key parts
of the business

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The Boundaryless Organization
 Boundaryless
organization:
 Eliminates the chain of
command
 Has limitless spans of control
 Replaces departments with
empowered teams
 Breaks down geographical
barriers

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 Two Models of
Organizational Design

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 Forces Influencing Structure
 Strategy
 Innovation – introduce new offerings - organic
 Cost-minimization – cost control - mechanistic
 Imitation – minimal risk and maximum profit - both
 Organization Size
 Bigger becomes mechanistic
 Technology
 Routine equals mechanistic, non-routine is organic
 Environment
 Dynamic environments lead to organic structures
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Organizational Designs and Employee
Behavior
 Cannot generalize any link between structure and
performance
 Too much individual variance
 Consider employee preferences for
 Work specialization
 Span of control
 Centralization

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Global Implications
 National culture influences
organizational structure
 High power distance cultures accept
mechanistic structures

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Implications for Managers
 Structural relationships impact attitude and
behavior
 Structure constrains employee behaviors

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Keep in Mind…
 As tasks become more complex and required skills
more diverse, more use of cross-functional teams
 Simple structures are easy to create but difficult to
grow
 External boundaries can be reduced through
globalization, strategic alliances, customer-
organizational links, and telecommuting

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