Organizational Behavior (OB) can be defined as the understanding, prediction and management of human behavior both individually or in a group that occur within an organization.
Internal and external perspectives are the two theories of how organizational behavior can be viewed from an organization’s point of view. In this tutorial, we will be learning in detail about both the theories.
Importance of OB
While working in an organization, it is very important to understand others behavior as well as make others understand ours. In order to maintain a healthy working environment, we need to adapt to the environment and understand the goals we need to achieve. This can be done easily if we understand the importance of OB.
Following points bring out the importance of OB:
- It helps in explaining the interpersonal relationships employees share with each other as well as with their higher and lower subordinates.
- The prediction of individual behavior can be explained.
- It balances the cordial relationship in an enterprise by maintaining effective communication.
- It assists in marketing.
- It helps managers to encourage their sub-ordinates.
- Any change within the organization can be made easier.
- It helps in predicting human behavior & their application to achieve organizational goals.
- It helps in making the organization more effective.
Thus studying organizational behavior helps in recognizing the patterns of human behavior and in turn throw light on how these patterns profoundly influence the performance of an organization.
There are three major factors that affect OB. The working environment being the base for all three factors, they are also known as the determinants of OB. The three determinants are:
An organization consists of people with different traits, personality, skills, qualities, interests, background, beliefs, values and intelligence. In order to maintain a healthy environment, all the employees should be treated equally and be judged according to their work and other aspects that affects the firm.
Example: A company offers campus placement to trainees from different states like Orissa, Haryana, Arunachal Pradesh and many more. However, during and after training, all trainees are examined only on the basis of their performance in the tasks assigned.
Structure is the layout design of an organization. It is the construction and arrangement of relationships, strategies according to the organizational goal.
Example: Organizational structure defines the relation of a manager with employees and co-workers.
Technology can be defined as the implementation of scientific knowledge for practical usage. It also provides the resources required by the people that affect their work and task performance in the right direction.
Example: Introduction of SAP, big data and other software in the market determines individual and organizational performance.
All companies function within a given internal and external environment. Internal environment can be defined as the conditions, factors, and elements within an enterprise that influences the activities, choices made by the firm, and especially the behavior of the employees. While external environment can be defined as outside factors that affect the company’s ability to operate. Some of them can be manipulated by the company’s marketing, while others require the company to make adjustments.
Some examples of internal environment include employee morale, culture changes, financial changes or issues, and some examples of external environment include political factors, changes to the economy and the company itself.
The concept of OB is based on two key elements namely:
- Nature of people
- Nature of the organization
Nature of People
In simple words, nature of people is the basic qualities of a person, or the character that personifies an individual they can be similar or unique. Talking at the organizational level, some major factors affecting the nature of people have been highlighted. They are:
- Individual Difference: It is the managerial approach towards each employee individually, that is one-on-one approach and not the statistical approach, that is, avoidance of single rule. Example: Manager should not be biased towards any particular employee rather should treat them equally and try not to judge anyone on any other factor apart from their work.
- Perception: It is a unique ability to observe, listen and conclude something. It is believing in our senses. In short, the way we interpret things and have our point of view is our perception. Example: Aman thinks late night parties spoil youth while Anamika thinks late night parties are a way of making new friends. Here we see both Aman and Anamika have different perception about the same thing.
- A whole person: As we all know that a person’s skill or brain cannot be employed we have to employee a whole person. Skill comes from background and knowledge. Our personal life cannot be totally separated from our work life, just like emotional conditions are not separable from physical conditions. So, people function is the functioning of a total human being not a specific feature of human being.
- Motivated behavior: It is the behavior implanted or caused by some motivation from some person, group or even a situation. In an organization, we can see two different types of motivated employees −
- Positive motivation: Encouraging others to change their behavior or say complete a task by luring them with promotions or any other profits. Example: “If you complete this, you will gain this.”
- Negative motivation: Forcing or warning others to change their behavior else there can be serious consequences. Example − “If you don’t complete this, you will be deprived from the office.”
- Value of person: Employees want to be valued and appreciated for their skills and abilities followed by opportunities which help them develop themselves.
Nature of Organization
Nature of organization states the motive of the firm. It is the opportunities it provides in the global market. It also defines the employees’ standard; in short, it defines the character of the company by acting as a mirror reflection of the company. We can understand the nature of any firm with its social system, the mutual interest it shares and the work ethics.
Let us take a quick look at all these factors:
- Social System: Every organization socializes with other firms, their customers, or simply the outer world, and all of its employees – their own social roles and status. Their behavior is mainly influenced by their group as well as individual drives. Social system are of two types namely −
- Formal: Groups formed by people working together in a firm or people that belong to the same club is considered as formal social system. Example: A success party after getting a project.
- Informal: A group of friends, people socializing with others freely, enjoying, partying or chilling. Example: Birthday party.
- Mutual interest: Every organization needs people and people need organizations to survive and prosper. Basically it’s a mutual understanding between the organization and the employees that helps both reach their respective objectives. Example: We deposit our money in the bank, in return the bank gives us loan, interest, etc.
- Ethics: They are the moral principles of an individual, group, and organization. In order to attract and keep valuable employees, ethical treatment is necessary and some moral standards need to be set. In fact, companies are now establishing code of ethics training reward for notable ethical behavior.