Chapter 1
Introduction to the
field of
organisational
behaviour
Learning objectives
1.1 Define organisational behaviour and
organisations, and discuss the importance of
this field of inquiry
1.2 Compare and contrast the four current
perspectives of organisational effectiveness
1.3 Debate the organisational opportunities and
challenges of globalisation, workforce diversity
and emerging employment relationships
1.4 Discuss the anchors on which organisational
behaviour knowledge is based
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Practising OB at Telstra
David Thodey and Telstra employees have
orchestrated a classic turnaround of the
telecommunications company through
organisational behaviour practices
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Organisational Behaviour and
Organisations
• Organisational behaviour defined
– The study of what people think, feel and do in
and around organisations
• Organisations defined
– Groups of people who work interdependently
toward some purpose
– Collective entities
– Collective sense of purpose
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Why Study OB?
•
•
•
•
Satisfy the need to understand and predict
Helps us to test personal theories
Influence behaviour—get things done
OB improves an organisation’s financial
health
• OB is for everyone
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Organisational Effectiveness
• The ultimate
dependent variable
in OB
• Old approach:
achieve stated goals
• Problem with goal
attainment
– Could set easy goals
– Company might
achieve wrong goals
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Four Perspectives of
Organisational Effectiveness
Need to consider all four perspectives when
assessing an organisation’s effectiveness
• Open systems perspective
• Organisational learning perspective
• High performance work practices
perspective
• Stakeholder perspective
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Open Systems Perspective
• Organisations are complex systems that
‘live’ within (and depend upon) the
external environment
• Effective organisations
– Maintain a close ‘fit’ with changing conditions
– Transform inputs to outputs efficiently and
flexibly
• Foundation for the other three
organisational effectiveness perspectives
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Open Systems Perspective
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Organisational Learning
Perspective
• An organisation’s capacity
to acquire, share, use and
store valuable knowledge
• Need to consider both
stock and flow of
knowledge
– Stock: intellectual capital
– Flow: organisation’s
processes of knowledge
acquisition, sharing, use and
storage
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Intellectual Capital
Human
Capital
Knowledge that people possess and
generate
Structural
Capital
Knowledge captured in systems and
structures
Relationship
Capital
Value derived from satisfied customers,
reliable suppliers, etc.
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The Human Capital Advantage
• Employee knowledge, skills and abilities
• Competitive advantage because:
– Helps discover opportunities and minimise
threats in the external environment
– Rare and difficult to imitate
– Non-substitutable: not easily replaced by
technology
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Organisational Learning
Processes
Knowledge
Acquisition
Knowledge
Sharing
Knowledge
Use
Knowledge
Storage
• Learning
• Communication
• Awareness
• Human memory
• Scanning
• Training
• Sensemaking
• Documentation
• Grafting
• Info systems
• Autonomy
• Practices/habits
• Experimenting
• Observation
• Empowerment
• Databases
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Organisational 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
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High-Performance Work
Practices
• Workplace practices that leverage the
potential of human capital
• Four HPWPs (likely others)
–
–
–
–
Employee involvement
Job autonomy
Employee competence (training, selection)
Reward performance and competencies
• Need to ‘bundle’ practices because they
work best together
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Corporate Social Responsibility
at MTN Group in Africa
At MTN Group,
Africa’s largest
mobile phone
company, employees
help the community
and environment
through the
company’s awardwinning ‘21 Days of
Y’ello Care’ program
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Stakeholder Perspective
• Stakeholders: entities who affect or are
affected by the firm’s objectives and
actions
• Personalises the open systems
perspective
• Challenges with stakeholder perspective:
– Stakeholders have conflicting interests
– Firms have limited resources to satisfy all
stakeholder needs
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Stakeholders: Values and
Ethics
• Values and ethics prioritise stakeholder
interests
• Values
– Relatively stable, evaluative beliefs, guide
preferences for outcomes or courses of action
in various situations
• Ethics
– Moral principles and values, determine
whether actions are right or wrong and
outcomes are good or bad
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Stakeholders and CSR
• Stakeholder perspective
includes corporate social
responsibility (CSR)
– Benefit society and
environment beyond the
firm’s immediate
financial interests or
legal obligations
– Organisation’s contract
with society
• Triple bottom line
– Economy, society
environment
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Globalisation
• Economic, social and cultural connectivity
with people in other parts of the world
• Improved communication and
transportation systems have increased
globalisation
• Effects of globalisation on organisations
– Cost efficiencies, innovation, knowledge
– Increasing diversity
– Increasing competitive pressures,
intensification
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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
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Emerging Employment
Relationships
• Work–life balance
– Minimising conflict between work and nonwork demands
• Virtual work
– Using information technology to perform one’s
job away from the traditional physical
workplace
– Teleworking: issues of social isolation,
emphasis on face time, employee selfleadership
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Organisational Behaviour
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
– OB develops its own theories, but scans other
fields
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Organisational Behaviour Anchors
continued
• Contingency anchor
– A particular action may have different
consequences in different situations
– Need to diagnose the situation and select
best strategy under those conditions
• Multiple levels of analysis anchor
– Individual, team, organisational level of
analysis
– OB topics usually relevant at all three levels of
analysis
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Chapter 1
Introduction to the
field of
organisational
behaviour