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What Is Organizational Behavior? A Management Focused Introduction To Key OB Concepts

Updated on September 18, 2012

Organizational Behavior: An Overview

A favorable work situation is undoubtedly best for both a business and its employees. A work environment where employees are challenged to constantly improve their skills and increase their knowledge results in higher employee satisfaction as well as higher profit margins. A management structure which rewards employees commensurately with their performance provides incentives to maximize productivity. Such policies make employees enjoy work, and can even invoke the Sawyer effect, turning work into play.

Understanding how people behave in organizations is critical to accomplishing the above goals. Organizational behavior is the study of how people behave within an organization, and what incentives (or disincentives) influence their behaviors. While organizational behavior is typically applied in a business context, the principles are equally applicable to any organization – a church, a school, a team. The term organization is broadly defined as any group of individuals who collaborate to achieve a common goal. In the case of a business, that goal is profitability and economic value. In the case of a sports team, it’s to win the championship.

In any situation involving teamwork, having a thorough understanding of organizational behavior is critical to establishing a positive environment for cooperation and collaboration. Organizational behavior can be viewed as an application of concepts of psychology and sociology to the business or team environment.


Levels of Organizational Behavior

Organizational behavior focuses on three main levels: the individual, the group, and the organization. The definition of an individual and the organization should be obvious. The definition of a group is two or more people working together to achieve a common goal. A team is a group in which members work together under specific routines to achieve a specific goal. In the modern world, teams can be virtual in nature, collaborating via information technology and never actually meeting.

The way an organization is set up is important, because organizational culture and structure can have major impacts on the way groups and teams interact to achieve the goals of the organization as a whole.

Organizational behavior is an important concept for employees at all levels to understand, but it is most important to managers, especially upper level and executive managers. An effective manager understands the intrinsic and extrinsic motivating factors that affect his team, and can use them to encourage productivity and foster a positive work environment for everyone. Managers’ ultimate goal is organizational effectiveness: the ability of an organization to achieve its set goals, whatever those goals may be. Effective management is critical for business success.

Managerial Functions in Organizational Behavior

Managers have four main duties: planning, organizing, controlling, and leading.

  1. Planning is the process of establishing an organizational strategy which describes how resources will be divided, allocated, and utilized to aid in the accomplishment of organizational goals. Planning is often a thought-intensive process, because a lot of variables have to be taken into account, and the future is rarely certain. Effective managers must craft strategies that can not only deal with current problems, but can also continue effectively in “crisis” situations.
  2. Organizing is the process of establishing a management and organizational structure that will best enable the organization to achieve its goals. Employees are grouped into groups, teams, and departments based on their function (for example, sales, marketing, accounting, etc). A trend that is increasingly seen is cross-training – training employees so in an emergency, they can go beyond the normal scope of their job to assist in other areas.
  3. Leading is the process of actually running operations – coordinating activities to ensure that employees are all working towards accomplishing the set organizational goals. In the 21st century, management style is shifting towards self-managed teams – instead of always having a supervisor directly overseeing their work, many teams are given a degree of autonomy to do their jobs in the way that allows them to best accomplish the set goals. Managers are tasked with a support role, acquiring resources, training, or other things needed for the team to do their job.
  4. Controlling describes the constant process of monitoring and evaluating performance against goals and applying corrective actions where needed. Controlling is used across all departments of the organization, from accounting to supply chain management.


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Manager Types and Skills

Managers can be classified by their roles and actions. Below is an overview of some of the more common roles.

  • Leader: a manager that passes down orders to employees and encourages commitment to organizational goals
  • Liaison: Coordinates activities between different groups and teams
  • Monitor: Especially effective at planning and controlling, finds problems and remedies them, also foresees problems before they can crop up
  • Entrepreneur: “new idea” thinker who expands the organization into new areas
  • Negotiatior: acts as an intermediary between the organization and its suppliers and customers, trying to reach an equilibrium beneficial to each party involved

No matter what specific type of role a manager falls into, they need three primary types of skills.

  1. Conceptual skills: utilization of logic to diagnose the causes of effects. Can be thought of as “IQ”
  2. Human skills: utilization of interpersonal skills to effectively lead a group. Can be thought of as “EQ”
  3. Technical skills: utilization of job/industry-specific knowledge and practices to ensure organizational goals are achieved. Can be thought of as “education/experience”


This article is written by Skyler Greene, all rights reserved. It's hosted on HubPages, an online community where everyday experts like you and me can publish high-quality articles like this one and earn a share of the ad revenue they generate. Sign up for HubPages.

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