Chapter
1
What is
Organizational
Behavior?
Slide
1-1
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.
Learning Goals
 What is the definition of “organizational behavior”
(OB)?
 What are the two primary outcomes in studies of
OB?
 What factors affect the two primary OB outcomes?
 Why might firms that are good at OB tend to be
more profitable?
 What is the role of theory in the scientific method?
 How are correlations interpreted?
Slide
1-2
Discussion Questions
 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?
Slide
1-3
Table 1-1
The Best of Coworkers, the Worst of
Coworkers
Slide
1-4
Organizational Behavior Defined
 Organizational behavior (OB)
 Human resource management
 Strategic management
Slide
1-5
OB Foundations
 Theories and concepts in OB are drawn from a
wide variety of disciplines
Industrial and organizational psychology
Social psychology
Sociology
Economics
Slide
1-6
Integrative Model of Organizational
Behavior





Individual Outcomes
Individual Mechanisms
Individual Characteristics
Group Mechanisms
Organizational Mechanisms
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1-7
Figure 1-1
Integrative Model of OB
Slide
1-8
Does Organizational Behavior Matter?
 Resource-based view
Financial resources (revenue, equity)
Physical resources (buildings, machines, technology)
Knowledge, decision-making, culture, ability,
wisdom
Image, culture, goodwill
Slide
1-9
Discussion Question
 Is it really the people that make some
companies more profitable than others?
Slide
1-10
What Makes a Resource Valuable?
 Rare
 Inimitable
History
Numerous small decisions
Socially complex resources
Slide
1-11
Figure 1-2
What Makes a Resource Valuable?
Slide
1-12
Research Evidence
 OB practices were associated with better firm
performance
 Firms that valued OB had a 19% higher survival rate
than firms that 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 profitability
Rule of one-eighth
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1-13
Table 1-2
Survey Questions Designed to Assess High
Performance Work Practices
Slide
1-14
Table 1-3
Some of the “100 Best Companies to Work
For” in 2009
Slide
1-15
How Do We Know
 Method of Experience
 Method of Intuition
 Method of Authority
 Method of Science
Slide
1-16
Scientific Studies
 Theory
 Hypotheses
 Correlation (r)
Slide
1-17
Figure 1-3
The Scientific Method
Slide
1-18
Figure 1-4
Different Correlation Sizes
Slide
1-19
Social Recognition & Job Performance
 How often does social recognition lead to
higher job performance?
Burger King study
Correlation between social recognition
and job performance was .28
Correlation between social recognition and
retention rates was .20
Slide
1-20
Establishing Relationships
 It turns out that making causal inferences —
establishing that one variable really does
cause another — requires establishing three
things.
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1-21
Table 1-4
Notable Correlations
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1-22
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
Slide
1-23
Takeaways
 Organizational behavior is a field of study devoted to
understanding and explaining the attitudes and
behaviors of individuals and groups in organizations.
More simply, 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.
Slide
1-24
Takeaways, Cont’d
 The effective management of organizational
behavior can help a company become more
profitable because good people are a valuable
resource.
Rare
Hard to imitate
History that cannot be bought or copied
Make numerous small decisions that cannot be
observed by competitors
Create socially complex resources such as culture,
teamwork, trust, and reputation.
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1-25
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. Theories about organizational
behavior are built from a combination of interviews,
observation, research reviews, and reflection. Theories
form the beginning point for the scientific method and
inspire hypotheses that can be tested with data.
 A correlation is a statistic that expresses the strength of a
relationship between two variables (ranging from 0 to ±
1). In OB research, a .50 correlation is considered
“strong,” a .30 correlation is considered “moderate,” and a
.10 correlation is considered “weak.”
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1-26