OB: meaning, features, importance, challenges and opportunities.

What is Organizational Behavior (OB)?

Organizational behavior (OB) is the study of human behavior in the work setting, the influence of an organization on its employees, and the employees of the organization.

One of the earliest and most influential definitions of an organization, provided by a renowned psychologist, is from Chester I. Barnard. Barnard was an American business executive and management theorist. He offered his definition of an organization in his book "The Functions of the Executive," which was first published in 1938. Here is his definition:

"An organization is a system of consciously coordinated activities or forces of two or more persons."

Barnard's definition emphasizes the coordinated efforts of individuals within an organization to achieve common goals or objectives. It has been a foundational concept in the field of organizational theory and management.

organizational behavior: a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization's effectiveness.

Organizational behavior is the behavioral approach of the management, not the whole of management. It studies human (employees) behavior and application in organizational settings.

OB’s study helps to better understand the behavior of employees and let the managers take action to make sound relationships between employees and organizational goals and achieve them in the future.

An organization’s tasks are done through people, individually, or collectively on their own or in collaboration with technology. The management of organizational behavior is the central task of the manager – a task that involves the ability to (i) understand the behavior patterns of the individual, groups, and organizations, (ii) to predict the behavior responses will be obtained by various managerial actions, (iii) to use this understanding and these predictions to achieve control in the organization.

The most common definitions of organizational behavior are:

Organizational behavior is directly concerned with the understanding, prediction, and control of human behavior in the organization. – Luthans
OB is the study of what people think, feel, and do in and around the organizations. – McShane and Glinow

Thus, organizational behavior is the study and application of knowledge about how people act within organizations. It is a human tool for human benefit. It applies broadly to the behavior of people in all types of organizations such as education, government, business, and service organizations.

Wherever organizations are, there is a need to understand organizational behavior. Through this, a manager can fully understand his people’s behavior and apply such understanding to motivation, career development, communication, mutual cooperation, change perception, conflict management, and ultimately drive their collective efforts in the achievement of objectives.

Features of Organizational Behavior

Organizational behavior interprets the actions of people in a meaningful manner and helps management with strategies formulation. It aims to build better relationships at the workplace so as to achieve human and organizational objectives.

The salient features of OB can be pointed out as:

A separate field of study.
A behavioral approach.
Cause and effect relationship.
Interdisciplinary in nature.
Goal-oriented.
Human approach for human benefits.
Art as well as science.

These features of OB help to know how it understands, predicts, and manages human behavior in a meaningful manner.

Importance of Organizational Behavior

Human behavior is predetermined, goal-directed, yet unexpected. Understanding human behavior has become increasingly important for managers in order to properly manage people. Understanding why individuals act the way they do can help managers get the most out of their employees’ efforts in order to achieve organizational goals more effectively.

In doing so, OB seeks to find the answer to these main 3 questions.

Why do people (employees) behave as they behave?
Why do people do what they do at work in organizations?
What influences people’s behavior at work?

Organizational behavior helps managers to focus on the whole complex behavior of employees in the organization by identifying the cause and effect of that behavior.

The main objective of the OB is to effective use of the resources which is in the organization. It deals with the organization’s employees to move them to do work to achieve certain targeted goals. In this way, it increases the productivity of the particular organization.

The main benefits, as well as the importance of OB, can be pointed out below:

Helps to understand the organization and employees in a better way.
Helps to motivate employees and devolve employee morale.
Improves labor relations.
Promotes effective prediction and control of employees’ behavior.
Effective utilization of human resources.
Develops a productive, cooperative, and harmonized relationship between employees and the organization.
Boosts up the achievement of organizational goals and objectives.

After all, the ultimate goal of these important points of the OB is to enhance the performance and productivity of the organization and accomplish the desired goals.

Key Elements/Components of Organizational Behavior

As everything is made up of something such as we humans with different organs the same OB has also four key elements people, structure, technology, and external environment. The first three elements are related to the internal environment of OB and the fourth one is outside.

When people come together in an organization to achieve a goal, they need some type of structure. People also employ technology to assist them in doing their tasks, thus there is a mix of people, structure, and technology.

Furthermore, these factors are both influenced by and influenced by the external environment. Each of the four OB aspects will be briefly discussed.

People

There can be no organization without individuals. They make form the organization’s internal social system. Individuals and groups make up people. Formal or informal groups might be small or vast, interconnected and complex.

People are dynamic by nature because they interact with and influence one another. Forming, changing, and dissolving groups are all possibilities. Organizations exist to serve the general public.

Structure

There is a structure to everything in the world. The human body, a tree, a house, and even the website you’re reading all have different types of structures. The roles and duties of personnel in an organization are defined by the structure.

It results in the division of labor. Some may be executives, while others may be bosses, assistants, individuals, or employees. All of these persons are interconnected in order to achieve the goals in a coordinated manner. The authority-responsibility ties are clarified by the structure.

Technology

Work would be difficult, even not impossible, without technology. It provides the financial and physical resources necessary to make people’s work more convenient.

Machines, tools, procedures, and resources are provided by the people. The type of technology is determined by the nature of organizational tasks and the size of activities. Technology has the potential to limit people’s freedom.

External Environment

The external environment, in which an organization operates, is a wider social structure. The external environment, which encompasses socio-cultural, economic, political, legal, technological, and geographic influences, has an impact on organizations.

These forces have a variety of effects on people’s attitudes, motivations, and working conditions in an organization. Similarly, the organization has some impact on the environment, but it is not as strong. The organization obtains its inputs from the environment and returns its outputs to it.

Levels of OB

Organizational behavior analyzes the behavior of people at three levels in the organizational setting viz. individual level, group level, and organizational level.

The first level is consist of the behavior of the individual employee and such behavior is complex in nature. The use of psychology is effective means to understand people’s behavior at this level.

The group is consist of two or more people working together to accomplish some common goals. They collectively work. At the organizational level, the group of people constitutes the organization and analyzes how the organization and people interact with the environment.

Each lower level of OB is the floor of the upper levels. To understand the organization’s system levels as they level up the behavior of understanding needs to be systemized.

Fundamental Concepts of Organizational Behavior (Basic Assumptions)

Every field of social science (or even physical science) has a philosophical foundation of basic concepts (assumptions) that guide its development. In accounting, for example, a fundamental concept is that ‘for every debit, there will be a credit. In physics, a basic philosophy is that elements of nature are uniform

But the same cannot be said for people. Organizational behavior has certain basic assumptions revolving around the nature of people and the nature of organizations.

The Nature of People

In this category, there are four basic assumptions of OB.

Individual Differences: Even though people have a lot in common, there are far more differences than similarities. Physical traits, IQ, aptitudes, attitudes, personality, abilities, and so on differ between people. Each person is distinct from the moment they are born, and their subsequent experiences further distinguish them. These distinctions must be taken into account by managers since they have an impact on employee behavior on the job.

A Whole Person: This concept implies that a person’s job behavior cannot be viewed in isolation. When an employee arrives to work he arrives as a whole person, his or her past, sentiments, emotions, feelings, and so on are intrinsically tied to the talents they use on the job. Managers must support a man’s whole development rather than a certain facet of his personality.

Caused Behavior (Motivation): Humanity is caused, motivated, and goal-directed, according to psychologists. People’s actions are driven by wants that can be guided and controlled to achieve desired outcomes.

Value of a Person: People should be treated differently from other resources in the organization, according to this principle. In companies, people’s feelings, aspirations/desires, sentiments, skills, and so on should be recognized. People should be treated with dignity, respect, and fairness.

The Nature of Organization

This category contains two basic assumptions about the organization. They are: (1) organizations are social systems, and (ii) they are formed on the basis of mutual interest.

Social Systems: Organizations, according to social scientists, are social systems. They are subject to social and psychological laws and regulations. The social system coordinates its members’ activities in order to attain common goals. Humans are social creatures. People have a variety of social and psychological demands, as well as varied positions and roles. People’s actions are influenced by both personal and organizational purposes.

Mutual Interest: The phrase “organizations require people, and people need organizations” exemplifies this principle. Employees require organization in order to achieve their objectives, and organizations require people in order to achieve their objectives.

Contributing Disciplines to the Field of Organizational Behavior

Organizational behavior is the integrated body of knowledge contributed by a number of behavioral disciplines. It is an interdisciplinary field.

The major contributing disciplines are:

Psychology
Sociology
Social Psychology
Anthropology
Political Science
Economic
History
And, other social sciences.

All these disciplines had played important role in adding separate and useful elements to the knowledge of organizational behavior. These are the disciplines that made OB a multidisciplinary discipline in nature.

Challenges and Opportunities to OB

The world of management has changed a lot in the past few decades. Today’s managers are facing a number of behavioral issues and challenges in their organizations.

Some important changes in the workplace seen are increasing competition, changing employees’ expectations, declining loyalty towards organizations, increasing number of women workers, old age employees, and minorities among others.

In addition, today there are a lot of challenges and opportunities for managers to use knowledge of organizational behavior. Some of the main ones are:

Globalization: Organizations often operate on a global scale, which requires OB to address cross-cultural communication, different work practices, and varying management styles and expectations. Globalization is the economic integration of a country’s economy at the global level. The world has now become a global village. Globalization assumes all businesses operate in a single place i.e. global village. Globalization has enabled the availability of all types and all countries’ products in a single place. Availability of international products in the domestic market and expansion of domestic products at the international level has achieved through globalization. Globalization has both challenges and opportunities for organizational behavior. Challenges such as it have negatively impacted the market of local business, difficult for managers to cope with international norms, values, and cultures, ever-growing competition, advancement of technology, etc. It also provides opportunities such as a domestic product getting international customers, a place in the international market, an extended market, revenue, new investment opportunities, and better career perspectives. it involves increased foreign assignments, working with people from different cultures, coping with anticipated backlash, overseeing movement of jobs to countries with now cost labor, managing people during war terrors, etc.

Workforce Diversity: It means that the workplace has a heterogeneous mix of people in terms of gender, race, ethnicity, and sexual orientation. Fostering continuous learning, skills development, and career growth opportunities for employees is a challenge in an evolving job market. Workforce diversity means differences in people working in the organization such as in terms of age, race, culture, gender, values, education, geography, income, and so forth. It is obvious that an organization consists of diverse groups of people having different backgrounds. The differences in people should be taken into consideration by the managers. The managers should understand the backgrounds of their employees, plan accordingly, and develop teamwork and harmony in the organization. If done so, workforce diversity provides benefits such as group work, mutual understanding among employees, increased creativity, productivity, and proper use of different talents. If not done so, inter-personal conflicts, dissatisfaction, and turnover go on increasing.

Quality and Productivity: Quality is having a degree of excellence as compared to others and productivity means producing maximum out of minimum input and cost. Due to globalization, the demand of customers is ever-changing, they do not demand only products/services rather they demand quality products/services. Thus it is a growing concern for managers to give quality services/prodcuts and motivate employees so that productivity can be achieved from employee’s best (100%) contribution. Increasing quality and productivity in an organization helps managers to gain customers who last longer, create a brand, a unique position in the market, and ignoring it organizations lose customers’ interest.

Improving Employee’s Skills: Today one thing is clear today’s business world is not the same as it was. Most businesses have moved to the service and knowledge base sector and uncertainties are ever-increasing. Changes in management practices, increasing competition, teamwork, decentralization, and quality awareness have demanded a high level of skills and knowledge. Thus managers are forced to improve their employee’s skills. For this, managers must train and re-educate employees, less skilled employees must be trained, and skilled employees also should be trained to be even better and adaptable. Managers should be responsive to employees’ skills and make them able to compete with competitors.

Coping with Temporariness: In recent times, the product life cycles are slimming, the methods of operations are improving, and fashions are changing very fast. In those days, the managers needed to introduce major change programs once or twice a decade. Today, change is an ongoing activity for most managers. The concept of continuous improvement implies constant change. In yesteryears, there used to be a long period of stability, occasionally interrupted by a short period of change, but at present, the change process is an ongoing activity due to competitiveness in developing new products and services with better features. Everyone in the organization faces today is one of permanent temporariness. The actual jobs that workers perform are in a permanent state of flux. So, workers need to continually update their knowledge and skills to perform new job requirements.

Total Quality Management (TQM): Total Quality Management (TQM) is a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes. The components of TQM are; (a) An intense focus on the customer, (b) Concern for continual improvement, (c) Improvement in the quality of everything the organization does, (d) Accurate measurement and, (e) Empowerment of employees.

Empowerment of Employees: “Give a person a fish, and you feed that person for a day, Teach a person to fish, and you feed that person for life.” This line best describes the importance of empowering employees. Today managers are not just managers they are leaders, coaches, and advisors to make employees compete and satisfy them. Giving required decision-making powers and freedom to lower levels make them discharge duties based on their competency. Self-managed teamwork, self-appraisal, job enrichment, etc. are effective means a manager can empower employees. It makes managers loose duties and employees get opportunities to apply their knowledge and learn how to take responsibility and make the right decisions based on situations. By doing so managers’ workloads are reduced and employees get freedom, feel motivated and discharge duties as they want.

Diversity and Inclusion: Managing a diverse workforce, which includes people of various backgrounds, ethnicities, genders, and generations, poses challenges related to inclusion, equity, and creating a harmonious work environment.

Technological Advancements: Rapid technological changes impact how work is done and how employees interact. Keeping up with technology and ensuring that it enhances rather than hinders work processes is a continuous challenge.

Remote Work and Virtual Teams: The rise of remote work and virtual teams introduces challenges in terms of managing and engaging employees who are not physically present in the workplace.

Work-Life Balance: Balancing work demands with personal life is an ongoing concern for employees. It is a challenge for organizations to support employees in maintaining a healthy work-life balance. The typical employee in the 1960s or 1970s showed up at the workplace Monday through Friday and did his or her job 8 or 9-hour chunk of time. The workplace and hours were specified. That’s no longer true for a large segment of today’s workforce. Employees are increasingly complaining that the line between work and non-work time has become blurred, creating personal conflict and stress. Many forces have contributed to blurring the lines between employees’ work life and personal life. First, the creation of global organizations means their world never sleeps. At any time and on any day, for instance, thousands of General Electric employees are working somewhere. Second, communication technology allows employees to do their work at home, in their cars, or on the beach in Cox’s Bazar. This lets many people in technical and professional jobs do their work anytime and from any place. Third, organizations are asking employees to put in longer hours. Finally, fewer families have only a single breadwinner. Today’s married employee is typically part of a dual-career couple. This makes it increasingly difficult for married employees to find the time to fulfill commitments to home, spouse, children, parents, and friends. Today’s married employee is typically part of a dual-career couple. This makes it increasingly difficult for married employees to find the time to fulfill commitments to home, spouse, children, parents, and friends. Employees are increasingly recognizing that work is squeezing out personal lives and they’re not happy about it. For example, recent studies suggest that employees want jobs that give them flexibility in their work schedules so they can better manage work/life conflicts. Also, the next generation of employees is likely to show similar concerns. A majority of college and university students say that attaining a balance between personal life and work is a primary career goal. They want a life as well as a job.

Mental Health and Well-being: Issues related to employee mental health and well-being are increasingly recognized. OB must address how organizations can promote mental health, manage stress, and support employees' overall well-being.

Leadership and Management: Developing effective leaders and managers is a perennial challenge. Leaders must adapt their styles to changing work environments and employee expectations.

Employee Engagement: Keeping employees engaged and motivated remains a challenge. Disengaged employees can have a negative impact on productivity and morale.

Communication: Effective communication within organizations is crucial. Managing communication flows, ensuring transparency, and addressing issues of miscommunication are ongoing challenges.

Workforce Aging: As the workforce ages, organizations must address the needs and expectations of older employees, such as retirement planning and succession planning.

improving people skills: managers need to improve their people skills(social skills) and come out as a good leader, motivator and listenor.

working in networked organizations: technology has allowed people to work together while being miles apart, with the help of computers. they do not even need an office space and can simple work from the comfort of their homes. managers need to improve their skills accordingly as leading and motivating people online is very different than doing the same in an office.

creating a positive work environment: Positive organizational behavior(positive organizational scholarship) is concerned with how organizations develop human strength, foster vitality and resilience and unlock potential. according to researchers, people all have certain thing they are excellent at yet they only focus on their limitations and rarely think about how to exploit their strength.

Improving Customer Service: OB can contribute to improving organizational performance by showing drat how employees’ attitudes and behavior are associated with customer satisfaction. In that case, service should be the first production-oriented by using technological opportunities like a computer, the internet, etc. To improve customer service we need to provide sales service and also the after-sales service.

Managing Organizational Change: Introducing organizational change is often met with resistance. Managing change and ensuring that employees adapt and thrive amid change is an ongoing challenge. Change is important but not easy. Today organizations are forced to change, and the unchanged organization does not seem to have progress. Due to rapid change in environmental variables organization needs to assume change, change in structure, change in culture, re-organization departments, underperforming units, and so on. The study of organizational behavior helps to effectively cope with such challenges such as it helps to understanding the cause and effect of change, how to react and initiate change, how to cope with change, how to reduce resistance to change in the workplace, etc. Moreover, managers and employees should be always prepared to adapt to change and thrive in such environments.

Improving Ethical Behavior: Encouraging ethical behavior and addressing issues of misconduct, such as harassment or unethical practices, is a significant challenge for OB professionals. Ethics means knowing what is right and what is wrong. A manager should maintain and improve the ethical behavior of employees. The manager should ensure that employees are positive about the organization’s rules, regulations, and policies. If not, he should find the causes and develops rules that best with employees’ ethics and the organization’s ethics. Since organizational ethics are different in different organizations, a manager must consider making policies acceptable to employees. This increases satisfaction among employees and later improves productivity. During the work time employees may get into some dilemmas where they might not be able to differentiate what is wrong and what is right, at this time manager’s prime duty is to get rid of such dilemmas. Misuse of power and insider practices should be avoided in organizational settings. In addition, managers should organize various workshops, seminars & training programs so that the ethical behavior of employees will be maintained and improved. (ethical delimas are situations where individuals are required to define right and wrong conduct.)

All these factors have both challenges and opportunities for the manager, organization, and its people. If the manager is skillful and creative, organizational behavior turns towards the growth of the business by nurturing these factors’ positive aspects. Similarly, if there is a passive and uncreative manager the outcome is negative.

Conclusion

Organizational behavior is hence the study of how and why people behave the way they behave in the organizational settings and coming out with the cause and effect of such behavior and making a producing relationship between people’s interests and the organization’s interest.

The study of OB and its usefulness has significant benefits to the manager in managing human resources as well as achieving organizational objectives effectively and efficiently. Thus, a manager should carefully understand the behavior of his employees and motivate them accordingly to get fruitful results from the practice of organizational behavior.