Chapter 1What is OrganizationalBehavior?

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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Learning Goals

What is the definition of “organizational behavior”? What are the two primary outcomes in studies of

organizational behavior? What factors affect those two primary outcomes?

Do firms that are good at organizational behavior tend to be more profitable? Why might that be, and is there any research evidence to support this tendency?

What is theory, and what is its role in the scientific method?

What does a “correlation” represent, and what are “big”, “moderate”, and “small” correlations? What is a meta-analysis?

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Discussion Question

Think of the worst coworker you've ever had. What did that person do that was so bad?

Think of the best coworker you've ever had. What did that person do that was so good?

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The Best of Coworkers, the Worst of Coworkers

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Basic Elements of Organizational Behavior

Organizational behavior (OB) is the field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviors of individuals and groups in organizations.

Human resource management takes the theories and principles studies in OB and explores the “nuts and bolts” applications of those principles in organizations.

Strategic management focuses on the product choices and industry characteristics that affect an organization's profitability.

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OB Foundations

Theories and concepts in OB are drawn from a wide variety of disciplinesIndustrial and organizational psychology

Job performance and individual characteristicsSocial psychology

Satisfaction, emotions, and team processesSociology

Team characteristics and organizational structureEconomics

Motivation, learning, and decision making

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Integrative Model of Organizational Behavior

Individual OutcomesJob performanceOrganizational commitment

Individual MechanismsJob satisfactionStressMotivationTrust, justice, and ethicsLearning and decision making

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Individual CharacteristicsPersonality and cultural valuesAbility

Group MechanismsTeam characteristicsTeam processesLeader power and influenceLeader styles and behaviors

Organizational MechanismsOrganizational structureOrganizational culture

Integrative Model of Organizational Behavior, cont’d

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Integrative Model of OB

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Does Organizational Behavior Matter?

Resource-based viewFinancial resources (revenue, equity)Physical resources (buildings, machines)Knowledge, decision-making, culture

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Discussion Question

Is it really the people that make some companies more profitable than others?

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RareResources, people

InimitableHistory

A collective pool of experience, wisdom, and knowledge that benefits the organization

Numerous small decisionsPeople make many small decisions day-in and day-out,

week-in and week-out

Socially complex resourcesCulture, teamwork, trust

What Makes a Resource Valuable?

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What Makes a Resource Valuable?

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Research Evidence

OB practices were associated with better firm performance

Firms who valued OB had a 19% higher survival rate than firms who did not value OB

Good people comprise a valuable resource for companies

There is no “magic bullet” OB practice – one thing that, in-and-of itself, can increase profitabilityRule of one-eighthOB on Screen

Office Space

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How Do We Know

Method of Experience – People hold firmly to some belief because it is consistent with their own experience and observations.

Method of Intuition – People hold firmly to some belief because it “just stands to reason”—it seems obvious or self-evident.

Method of Authority – People hold firmly to some belief because some respected official, agency, or source has said it is so.

Method of Science – People accept some belief because scientific studies have tended to replicate that result using a series of samples, settings, and methods.

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Scientific Studies

Theorya collection of assertions—both

verbal and symbolic—that specifies how and why variables are related, as well as the conditions under which they should (and should not) be related

tells a story—supplying the familiar who, what, where, when, and why elements found in any newspaper or magazine article

Hypotheseswritten predictions that specify

relationships between variables

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The Scientific MethodF

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Correlation (r)Describes the statistical relationship between

two variablesCan be positive or negative and range from 0

(no statistical relationship) to ± 1 (a perfect statistical relationship)

Scientific Studies, cont’d

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Different Correlation SizesF

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Different Correlation SizesF

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Different Correlation SizesF

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Social Recognition & Job Performance

How often does social recognition lead to higher job performance?Burger King studyCorrelation between social recognition

and job performance was .28Restaurants that received training in social

recognition averaged 44 seconds of drive-through time nine months later versus 62 seconds for the control group locations.

Correlation between social recognition and retention rates was .20Restaurants that received training in social recognition had a

16 percent better retention rate than the control group locations nine months later.

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Notable CorrelationsT

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Meta-analysis

The best way to test a theory is to conduct many studies, each of which is as different as possible from the ones that preceded it.

Meta-analysis takes all of the correlations found in studies of a particular relationship and calculates a weighted average (such that correlations based on studies with large samples are weighted more than correlations based on studies with small samples). .50 correlation is considered “strong,” a .30 correlation

is considered “moderate,” and a .10 correlation is considered “weak.”

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Takeaways

Organizational behavior is a field of study devoted to understanding and explaining the attitudes and behaviors of individuals and groups in organizations. It focuses on why individuals and groups in organizations act the way they do.

The two primary outcomes - job performance and organizational commitment. A number of factors affect performance and

commitment, including individual mechanisms, individual characteristics, group mechanisms, and organizational mechanisms.

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Takeaways, Cont’d

The effective management of organizational behavior can help a company become more profitable because good people are a valuable resource. RareHard to imitateHistory that cannot be bought or copied,Make numerous small decisions that cannot be

observed by competitorsCreate socially complex resources such as culture,

teamwork, trust, and reputation. Good OB policies have been linked to employee

productivity, firm profitability, and even firm survival.

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Takeaways, Cont’d

A theory is a collection of assertions, both verbal and symbolic, that specifies how and why variables are related, as well as the conditions in which they should (and should not) be related.

A correlation is a statistic that expresses the strength of a relationship between two variables (ranging from 0 to 1). A meta-analysis summarizes the results of several

research studies. It takes the correlations from those research studies and calculates a weighted average to give more weight to studies with larger samples.