Chapter 1:
What is Organizational Behavior?
What is Organizational Behavior?
Organizational behavior (OB) attempts to understand, explain, and
improve the attitudes, cognitions, and behaviors of individuals and
groups/teams in organizations
– Goal is to maximize the output of entities,
processes, and structures
Contributing Disciplines
OB is an applied behavioral science built on a variety of disciplines:
• Psychology
• General
• Social
• I/O
• Sociology
• Anthropology
• Economics
Importance of level
of analysis
An Integrative Model of OB
• Highlights within-org. factors
• Disregards factors outside the org.
History of OB
1920s-1930s
– Hawthrone electric company
– Wanted to examine how changes in environmental conditions
(i.e., lighting, breaks) impact employee productivity
– Regardless of modification, worker productivity changed when
the researchers were present
– Why?
History of OB
1940s
– Mathematical modeling and statistical analysis
– Quantitative approach (numbers-based: sales, ROA, ROI, etc.)
1950-1970s
– Economic approach (the Carnegie method)
– Resource dependence and resource-based view
– Bounded rationality in decision-making
– Satisficing rather than maximizing (Simon, 1957)
1980s-present
– Focus on individuals
– Qualitative, survey, and observation
Does OB Matter?
OB is extremely important
Without OB, we wouldn’t understand:
– Internalized factors that motivate and drive behavior
– Why some employees are more successful, driven, or satisfied than
others
– How employees’ KSAs impact orgs.
– How employees develop KSAs at work
– Why employees behave the way they do
– What makes leadership (in)effective
– Etc.
Resource-based View of OB
The resource-based view (RBV) of the firm argues that resources are
most important when they create a sustainable (i.e., long-term)
competitive advantage
There are several different types of resources:
– Financial (e.g., revenue, equity)
– Physical (e.g., technology, machinery)
– KSAs (e.g., personal competencies, tacit
knowledge)
Resource-based View of OB
The RBV suggests that resources provide a sustainable competitive
advantage when they are:
– Rare – cannot be easily obtained by competitors
– Valuable – create long-term benefits for the org.
– Inimitable – cannot be imitated or duplicated by competitors
– All employees are inimitable; however, not all employees
have the desirable characteristics and
qualities required for success in each
specific org.
– Importance of fit and inimitability
Resource-based View of OB
OB provides information on what types of employees, groups/
teams, structural dynamics, pay and performance systems, etc. are
most effective for creating a sustainable competitive advantage
Generalizability of OB?
Why can’t we make sweeping generalizations about all organizational
members, orgs., or external markets?
There are few, if any, simple and universal principles that explain all
OB because organizations are:
• Unique,
• Changing rapidly,
• Socially complex, and
• Comprised of numerous people all making
numerous small decisions
Thus, it’s impossible to account for everything
Applying OB Principles
Difficulty in applying OB principles?
This problem is known as the Rule of One-Eighth: Only...
• ½ of orgs. believe there’s a connection between managing people
and profitability
• ½ of those orgs. take a systematic approach to comprehensive
change
• ½ of those orgs. persist in maintaining the changes long enough to
reap benefits
½ x ½ x ½ = 1/8th = estimated number of orgs. that believe, implement,
and persist in applying the principles of OB