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What is 'Organizational Behavior (OB)'

Organizational behavior (OB) is the study of the way people interact within groups. Normally this study is applied in an attempt to create more efficient business organizations. The central idea of the study of organizational behavior is that a scientific approach can be applied to the management of workers. Organizational behavior theories are used for human resource purposes to maximize the output from individual group members.

BREAKING DOWN 'Organizational Behavior (OB)'

There are a variety of different models and philosophies of organizational behavior. Areas of research include improving job performance, increasing job satisfaction, promoting innovation and encouraging leadership. In order to achieve the desired results, managers may adopt different tactics, including reorganizing groups, modifying compensation structures and changing the way performance is evaluated.

History

While organizational behavior as a field of academic study was not fully recognized by the American Psychological Association until the 1970s, its roots go back to the late 1920s when the Hawthorne Electric Company set up a series of experiments designed to discern how changes in environment and design changed the productivity of their employees.

Their various studies, conducted between the years of 1924 and 1933, were broad and meticulously measured over large periods of time. The studies included the effect of various types of breaks (lots of small breaks, a few long ones, etc.) on productivity, productivity in isolation, and productivity in varying levels of light. The most famous finding resulting from the Hawthorne Studies is what is now called the Hawthorne Effect, the change in behavior of a test subject when they know they are being observed.

To focus on that one finding, some have argued, is to ignore a wider set of studies that would become credited for the development of organizational behavior as a field of study and the human resources profession as we now know it. The idea of looking scientifically at behavior and productivity in the workplace with the goal of increasing the amount and quality of work an employee can get done, was coupled with the idea that workers were not interchangeable resources. Workers were instead unique in terms of their psychology and potential fit with a company. These ideas were radically new when Hawthorne first began the studies, and they helped create a field of study and an entire professional field. 

Organizational behavior has focused on various different topics of study. In part because of the Second World War, during the 1940s, the field focused on logistics and management science. During this period, the emphasis was on using mathematical modeling and statistical analysis to find the best answers for complex problems. Studies by the Carnegie School of Home Economics in the 1950s and 1960s furthered these rationalist approaches to decision making problems. 

In the 1970s, theories of contingency and institutions, as well as organizational ecology, resource dependence, and bounded rationality came to the fore as the field focused more on quantitative research. These findings and sets of theories helped organizations better understand how to improve business structure and decision making. 

Since the 1970s, a good deal of the work being done in the field of organizational behavior has been on cultural components of organizations, including topics such as race, class, gender roles, and cultural relativism and their roles on group building and productivity. These studies, a part of a shift in focus in the field towards qualitative research, and among other things, take into account the ways in which identity and background can inform decision making. 

Academic Focuses

Academic Programs focusing on organizational behavior are usually found in business schools, and schools of social work and psychology. They draw from the fields of anthropology, ethnography, and leadership studies and use quantitative, qualitative, and computer models as methods to explore and test ideas. Depending on the program, one can study specific topics within organizational behavior, or broader fields.

The topics covered by Micro OB include cognition, decision making, learning, motivation, negotiation, impressions, group process, stereotyping, and power and influence. 

Macro OB covers organizations as social systems, dynamics of change, markets, relationships between organizations and their environments, as well as identity in organizational process, how social movements influence markets, and the power of social networks.

OB in Practice

Findings from the organizational behavior body of research can be used by executives and human relations professionals to better understand a business’s culture, how that culture may facilitate or hinder productivity and employee retention, and how to best evaluate candidates skill set and personality during the hiring process. 

The application of theory and knowledge from the field of organizational behavior can be broken down into sections of personality, job satisfaction and reward management, leadership, authority, power, and politics. There is rarely one correct way to assess the right way to manage any of these things, but OB research can provide a set of guidelines and topics to follow.

  • Personality – essentially a series patterned behavior – plays a large role in the way a person interacts with groups and produces work. Knowing a person’s personality, either through a series of tests or through conversation can give a better idea of whether they are a fit for the environment they’d be hired into, and how best to motivate that person.
  • Theories around job satisfaction vary widely, but some argue that a satisfying job consists of a solid reward system, compelling work, good supervisors, and satisfactory working conditions. 
  • Leadership, what it looks like and where it is derived from is a rich topic of debate and study within the field of organizational behavior. When one views it connected to management, it can be either broad, focused, centralized or de-centralized, decision-oriented, intrinsic in a person’s personality or a result of a place of authority.
  • Power, authority, and politics all operate inter-dependently in a workplace. Understanding the appropriate ways, as agreed upon by a workplace rules and general ethical guidelines, in which these elements are exhibited and used are key components to running a cohesive business.
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