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1. Introduction to
the Field of
Organizational
Behavior
McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 1-2
Practicing OB at Brasilata
Brasilata has become one of
Brazil’s most innovative and
productive companies by applying
organizational behavior
knowledge, including employee
involvement, creativity,
motivation, leadership, teamwork,
and organizational culture.

3. 1-3
Organizational Behavior and
Organizations
 Organizational behavior
• The study of what people think,
feel, and do in and around
organizations
 Organizations
• Groups of people who work
interdependently toward some
purpose
• Collective entities – people
interact with each other in an
organized way.
• Collective sense of purpose

4. 1-4
Why Study OB?
 Satisfy the need to understand and predict
 Helps us to test personal theories
 Influence behavior – get things done
 OB improves an organization’s financial
health - leverages human capital
 OB is for everyone – regardless of profession
or position one’s hold in the organization

5. 1-5
Organizational Effectiveness
 The ultimate dependent
variable in OB
 Old approach -- achievement of
stated goals
 Problem with goal attainment
• Could set easy goals
• Company might achieve wrong
goals

6. 1-6
Four Perspectives of
Organizational Effectiveness
Open Systems Perspective
Organizational Learning Perspective
High-Performance WP Perspective
Stakeholder Perspective
NOTE: Need to consider all four perspectives
when assessing a company’s effectiveness

7. 1-7
Open Systems Perspective
 Organizations are complex systems that
“live” within (and depend upon) the external
environment
 Effective organizations
• Maintain a close “fit” with changing conditions
• Transform inputs to outputs efficiently and flexibly
 Foundation for the other three organizational
effectiveness perspectives

8. 1-8
Open Systems Perspective
External
Environment
• Products/services
• Shareholder
dividends
•Community support
•Waste/pollution
Technological
subsystem
Transforming inputs to outputs
Marketing
/Sales
subsystem
Production
subsystem
subsystem
Engineerin
g
subsystem
Accounting
subsystem
•Raw materials
•Human
resources
•Information
•Finances
•Equipment
Managerial
subsystem
Feedback Feedback

9. Open Systems Perspective
 External environment - raw materials, job
applicants, financial resources, etc.
 Internal subsystems – transform outputs into
inputs e.g. departments, teams, work
processes, etc,
 Organization – Environment Fit - effective
when organizations maintain a good “fit with
their external environment.
 Internal Subsystems Effectiveness - how
well the organization transforms inputs to
outputs
McShane/Von Glinow OB 6e © 2013 The 9 McGraw-Hill Companies, Inc. All rights reserved

10. 1-10
Organizational Learning
Perspective
 An organization’s capacity to acquire, share,
use, and store valuable knowledge
 Need to consider both stock and flow of
knowledge
• Stock: intellectual capital
• Flow: org learning processes
of acquisition, sharing, use,
and storage

11. 1-11
Intellectual Capital
Relationship
Capital
Value derived from satisfied customers,
reliable suppliers, etc.
Structural
Capital
Knowledge captured in systems and
structures (documentation, finished
products)
Human
Capital
Knowledge that people possess and
generate (KSAO)

12. 1-12
The Human Capital Advantage
 Employee knowledge, skills, and abilities
 Competitive advantage because:
• Helps discover opportunities and minimize threats
in the external environment
• Rare and difficult to imitate
• Nonsubstitutable: Not easily replaced by
technology

13. 1-13
Organizational Learning
Processes
Knowledge
Acquisition
Knowledge
Sharing
Knowledge
Use
Knowledge
Storage
• Information and
ideas from the
external
environment
(hiring people,
acquiring
companies,
experimentation,
etc)
• Communication
• Training
• Info systems
• Observation
• Awareness
• Sensemaking
• Autonomy
• Empowerment
• Human memory
• Documentation
• Practices/habits
• Databases

14. 1-14
Organizational Memory
 The storage and preservation of intellectual
capital
 Retain intellectual capital by:
• Keeping knowledgeable employees
• Transferring knowledge to others
• Transferring human capital to
structural capital
 Successful companies also unlearn (unlearn
routines and patterns of behavior, removes
knowledge that no longer adds value)

15. 1-15
High-Performance Practices at
American Express
American Express encourages
employees to go “off script,”
meaning that they are
empowered to customize their
conversations rather than rely on
memorized statements. This
autonomy is one of several high
performance work practices.

16. 1-16
High-Performance Work
Practices
 Workplace practices that leverage the
potential of human capital
 Four HPWPs (likely others)
1. Employee involvement
2. Job autonomy (motivation, improve decision-making,
organizational responsiveness, and
commitment to change)
3. Employee competence (training, selection of
people with KSAO)
4. Performance-based rewards (financial and non-financial
rewards valued by employees)
 Need to “bundle” them – work best together

17. 1-17
Corporate Social Responsibility
at MTN Group in Africa
At MTN Group, Africa’s largest
mobile (cell) phone company,
employees help the community
and environment through the
company’s award-winning “21
Days of Y’ello Care” program.
This photo shows MTN
employees in Uganda planting
trees during a Y’ello Care event.

18. 1-18
Stakeholder Perspective
 Stakeholders: entities who affect
or are affected by the firm’s
objectives and actions
 Personalizes the open systems
perspective (identifies people
and social entities in the
environment
 Challenges with stakeholder
perspective:
• Stakeholders have conflicting
interests
• Firms have limited resources to
satisfy all stakeholder needs

19. 1-19
Stakeholders: Values and
Ethics
 Values and ethics prioritize stakeholder
interests
 Values
• Stable, evaluative beliefs, guide preferences for
outcomes or courses of action in various situations
 Ethics
• Moral principles/values, determine whether actions
are right/wrong and outcomes are good or bad

20. 1-20
Stakeholders and CSR
 Stakeholder perspective includes
corporate social responsibility
(CSR)
• Benefit society and environment
beyond the firm’s immediate
financial interests or legal
obligations
• Organization’s contract with
society
 Triple bottom line
• Economy, society, environment

21. 1-21
Globalization
 Economic, social, and cultural connectivity
with people in other parts of the world
 Improved communication and transportation
systems have increased globalization
 Effects of globalization on organizations
• Cost efficiencies, innovation, knowledge
• Increasing diversity (cultural values, leadership,
etc)
• Increasing competitive pressures, intensification
(additional knowledge and skills, global mindset)

22. 1-22
Increasing Workforce Diversity
 Surface-level vs deep-level
diversity
 Implications
• Better knowledge, decisions,
representation, financial returns
• Manage challenges of diversity
(e.g. teams, conflict)
• Ethical imperative of diversity

23. 1-23
Emerging Employment
Relationships
 Work/life balance
• Minimizing conflict between work and nonwork
demands number one indicator of career success
 Virtual work
• Using information technology to perform one’s job
away from the traditional physical workplace
• Telecommuting – issues of social isolation,
emphasis on face time, employee self-leadership

24. 1-24
Organizational Behavior
Anchors
 Systematic research anchor
• OB knowledge is built on systematic research
• Evidence-based management – decisions and
actions based on research evidence rather than
fads, hype, and untested assumptions
 Multidisciplinary anchor
• Many OB concepts adopted from other disciplines,
psychology (individual and interpersonal behavior),
sociology, communications, marketing, info
systems.
• OB develops its own theories, but scans other
fields

25. 1-25
Organizational Behavior
Anchors (con’t)
 Contingency anchor
• A particular action may have different
consequences in different situations (no single
solution is best all the time)
• Need to diagnose the situation and select best
strategy under those conditions
 Multiple levels of analysis anchor
• Individual, team, organizational level of analysis
• OB topics usually relevant at all three levels of
analysis

26. Introduction to
the Field of
Organizational
Behavior