Introduction

What makes employees see their work in different ways? How do these differences
affect their motivation and satisfaction with the job? Would they respond differently to
rewards, different types of leadership or structures at work? How would they work
together? If you have ever wondered about how people act and think the way they
do in the workplace, you have been thinking about organisational behaviour (OB),
probably without knowing it. By studying concepts and research in OB you will be
able to understand and ultimately affect attitudes and behaviours at your current or
future place of work. This chapter provides an introduction and background to the
field of OB. It is broken down into four important questions to consider when studying
organisational behaviour:

1 What is OB? 2 Why does OB matter? Where does OB knowledge come from? 4
Why is OB more important today than ever?

What is Organisational Behaviour (OB)? What is this business about ‘organisational

behaviour’? Do organisations really behave? Perhaps not, but people certainly do.
The field of OB is really about understanding how people think, act and react in the
workplace, and the influence of many factors on their behaviour. These factors
include issues around individuals, their relationships with others such as their co-
workers and boss, the group or department they are in, and the structure and culture
of the organisations they work in. As a discipline, OB is ultimately concerned with
using this information to promote certain desirable employee attitudes and
behaviours, as well as the effectiveness of the organi- sation more broadly. Because
these factors around people, their relationships, and the broader organisational
context all affect how they act in the workplace, the field, then, is inherently multi-
level. By multi-level we mean that individuals operate within groups, and groups
operate within organisations, and likewise organisations operate within a larger
environmental context. If we fail to take the contexts into consideration we are
missing a key piece of the puzzle. We cannot understand one employee in isolation.
Individuals are part of a team and the team influences that individual. For example, if
everyone in Bob’s team is in a really grumpy mood that is likely to influence Bob and
he’ll probably be feeling the same way by the end of the day even though he woke
up in a great mood. Likewise, Bob’s input, personality, knowledge and so on, has an
influence on his team. And we see that teams are part of departments and
departments are part of organisations with their own history, values, culture, policies
and so on. And finally, the whole organisation is all part of a larger environmental
context including the market, economic situation, local, national and global
regulations and national culture(s).
These influences go from top down, for example from the environment or the
organisation on the individual, or from bottom up, from the individual to the
organisation. Individual Team Department Organisation Environment Figure  The
multi-level nature of the field of OB organisational behaviour is a field of study which
seeks to understand and improve organisational effectiveness by examining factors
such as individuals, teams, and organisational culture and structure and the way
they interact .

While studying OB, it’s useful to take a systems thinking approach. This basically means that if
we want to understand a problem, we need to keep in mind how that problem is part of an overall
system. In the context of organisational behaviour, systems thinking helps us to realise that an
organisation is made of different parts that affect and are affected by one another. Similarly the
organisation interacts with its larger environment. Systems thinking has its roots in general
systems theory, which was originally developed from the physical sciences. Ludwig von
Bertalanffy (1968) and Kast and Rosenzweig (1972) , who later brought this to the field of OB,
suggested that a system is a complex structure of interacting elements which are open to, and
interact with their environment. Systems theory suggests that the organisation is a system made
of interrelated and interdependent parts. One can study each component in isolation, but when
we do so, we fail to capture the essence of the whole. As you read this chapter, be sure to keep
in mind what level the material is focused on – is it the individual, the team, or the organisation?
– and remember that they are all influenced by and influence other levels. Similarly, as you are
reading each of the chapters in the text- book, it may feel as if they are independent and
unrelated. Try to take a systems perspective and remind yourself that they do influence and are
influenced by each other. If you have work experience, try to think of how these aspects of the
workplace affected your own behaviour. For example, you might think about how your personality
affected the way you worked with others on a team, and how that team operated within the larger
culture of the organisation. If you don’t have work experience, sport teams, schools and families
operate in a similar way. Just as OB involves a complex interplay across various levels of
analysis the field itself draws from a variety of fields of research. In order to better understand
individual-level phenomena such as personality and job performance, OB draws from work and
organisational psychol- ogy, whereas research in cognitive psychology informs our discussion on
perception. In order to understand groups and teams and emotions, OB draws from social
psychology. At the organisational level, theories of sociology and anthropology help us to
understand the structure of the organisation and inform our understanding of culture and values.
You are probably less familiar with interdisciplinary fields than with more traditional ‘verti- cal’
fields such as accounting, marketing, or finance. OB cuts across lots of other disciplines that
provide us with some understanding of how people behave in different situations as well as
information about work in general, bringing them together with the goal of understanding how
and why people act the way they do at work. Additionally, there is a concern for both the
employee – the person – and the workplace – the bottom line. Why Does OB Matter? First of all,
OB matters because the concepts within OB, and in this textbook, affect the success of
companies and the experience of its employees working there. In a 2003 study, Fulmer et al.
suggested that organisations that value the research outcomes within OB

outperform their counterpart organisations. The study compared the 100 Best Companies to
Work For in America with organisations matched for size and industry. The results showed that
not only did employees from the 100 best companies have more positive attitudes towards their
workplaces, but also these organisations outperformed their counterparts financially.
Furthermore, businesses which took a more systematic approach to making changes in their
organisation, following good OB practice (called organisational behaviour modification)
experienced a 17 per cent increase in performance (Stajkovic and Luthans, 1997). This practice
involved identifying, measuring, analysing, intervening in and evaluat- ing employees’ behaviours
in contrast to changes made more haphazardly. These studies highlight the importance of not
only the content of OB but also its systematic approach. While this is all well and good, you might
be asking yourself, why does OB matter to me, personally? Here are a few reasons why
understanding OB may matter to you, regardless of where your career takes you.

1.  It will provide you with a better understanding of the world of work: Chances are you will have
a job at some point in your life, and it will be likely to make up a significant percentage of your
waking hours. Insights coming from OB can help you to work better, to promote more positive
relationships with your co-workers and boss, and even know when quitting your job might be the
best move for you. Because OB is the study of why people behave as they do in work settings, it
is probably the most applicable material to any job. The content that we will cover has to do with
all human behaviour in the workplace and often more generally – it’ll give you insights into
working with other people, managing stress, and structuring jobs and companies. Many people
are promoted into management positions based on technical expertise, with little understanding
of people – how to manage them, who to hire, how to work through conflict and what motivates
people. Even if you don’t pursue a job in human resources or management, the knowledge and
skills you learn in this OB module will be useful.

2  It promotes self-insight and personal growth: In addition to improving

your skills in working with others, studying OB can be a bit like pointing a
microscope at yourself. Because the field is about understanding people
in the workplace, it is personally relevant to you. When you study
personality,  you might consider dimensions of your own personality and
how they may impact the way you behave and how others respond to
you. By studying perception,you might consider the way you accurately
(or inaccurately) categorise events or the factors that shape how you see
yourself and the world. In studying attitudes and values,  especially in
relation to organisational structure and culture,  you might have a better
understanding of the kind of workplace where you might find the most
mean- ing and satisfaction. Through an understanding of leadership and
power and politics you might consider what type of boss inspires you
and what type of leader you might like to be. And considering emotions
and stress may give you insights into how to maintain and promote your
own psychological health. Finally, understanding team dynamics   and
communication might help you to make sense of how people speak to
you and what they mean, and how to avoid and learn from conflict.

3  It gives you the ability to speak with others from various disciplines:
One of the most useful things about having a background in OB is that
you are able to talk to different people about their jobs. If you have
friends in diverse fields – engineering, medicine, music, journalism,
education – you will be able to talk to all of them about what they do
because you have an understanding of people at work. After studying
OB, you might not understand the content of their work, but you will be
able to get to grips with the context of the workplace.

Now Do you think the statement below are

true?

1 You can read a person’s emotional state by watching their

facial expressions closely.
2 Taller people are more successful than shorter people.
3 Better decisions are made without emotions.
4 Organisations that treat their employees fairly and with
respect are more profitable than others.

Research Methods in OB:

In general, research in OB and other social sciences involves developing and testing theor ies.
Theories are collections of statements that specify how and why variables are related, as well as
the conditions in which they should (or should not) be related. However interesting or logical the
theories are, they are only useful when they have stood up to testing. Verifica- tion of theories is
necessary to show that they are indeed accurate and applicable. There are different methods of
conducting OB research for the development and verification of theory, including:

Quantitative survey research – This methodology involves the use of surveys of a population and
attempts to quantify a phenomenon (that is, to numerically represent something such as
performance or attitudes). The data gathered is analysed using statistics to find trends in
behaviour across individuals, groups or organisations. Survey research is often very useful to
theory testing.

Laboratory studies or experiments – Experiments involve the manipulation of certain variables in

controlled environments. In OB research, experiments are often conducted with samples of
university students. They provide precision but are often limited in their generalisability to a real-
life situation.

Qualitative interviews and focus groups – Interviews provide an in-depth understanding of

phenomena through interviewing one individual at a time or in groups. Interviews range from
unstructured to highly structured and researchers analyse the data for themes in responses.
Case studies – A case study involves a very in-depth study of one individual, group or
organisation. Case studies may include observation over a period of time, analysis of historical
records, and interviews. Case studies provide rich understanding of phenomena and are realistic,
but they often have limited generalisability to other settings or contexts.

Meta-analyses – A meta-analysis involves the statistical compilation of a previous body of

quantitative research on a particular topic. While they can often account for some limitations
within any given study such as small sample size, results of meta-analyses are only as good as
the studies that are included.
Why is OB more important than ever?

Globalisation

The global economy is continuing to change rapidly due to technological innovations, economic
fluctuations and the rise of service and knowledge work, among other reasons. Globalisation has
meant that goods, services, and capital frequently flow across borders and so organisa- tions
need to move beyond a local focus. This also means that the context where many people
complete work and craft their careers has changed as well. It can be argued that globalisation
has changed the job of a manager. Now, managers are more likely to experience the following:

1  Working with people from different cultural backgrounds.

As a manager, you are likely to be responsible for managing people with very different
backgrounds from your own. Your communications, ideas for motivating and recognising others,
and even your mannerisms may be interpreted very differently from your intentions. Similarly this
miscommunication may be happening among members of your team. How do you ensure
everyone is working towards the team’s goal and getting on well?

2  Increased foreign assignments.

As he was leaving General Electric (GE), Jack Welch said: ‘The Jack Welch of the future cannot
be like me. I spent my entire career in the United States. The next head of GE will be somebody
who spent time in Bombay, in Hong Kong, in Buenos Aires. We have to send our best and
brightest overseas and make sure they have the training that will allow them to be the global
leaders who will make GE flourish in the future’ (Mor Barak, 2014). What factors might affect the
success of a foreign assignment? A manager might be trying to lead a workforce with very
different needs, beliefs, expectations, and practices from his or her own, while facing his or her
own issues with being away from home.

3  Managing across time zones and managing virtual teams.

Even if a manager is not on a foreign assignment some of the same issues may arise at home.
Because of globalisation, many companies are multi-national and are spread across many
different countries, many have clients or customers in other countries, and others involve
collaborations with or outsourcing from other companies across borders. Consider managing a
team which is located across the globe. How (and when) do you communicate? It is important to
take the cultural context into consideration when studying concepts and theories in OB. Did you
notice that many of the historical studies mentioned above took place in companies in the US?
What effect might that have on the field? Considering the cultural dimensions is consistent with
taking a systems thinking and contingency approach as mentioned before. Let’s say you learned
all about the importance of rewards and recognition for employees and from this you develop a
scheme to motivate your employees that involves giving a weekly bonus to the best worker in
each work group. It works brilliantly in Ireland. You tell your manager friend in the US. It works
brilliantly there. Then you are transferred to Japan and set up the same system, and it is a total
flop. Why? The cultural differences.

Japan is a much more collectivistic culture and employees do not like to be singled out for
individual attention, because this goes against group norms and values. Therefore, it’s important
to see how the larger environment affects the individual (systems thinking) as well as how one
theory works in one situation but not another (contingency approach).

Changing workplace demographics

There have been a number of changes to the demographic makeup of the workplace, particu-
larly in the following three ways:
1 There has been an increase of women in the workforce. The increase of women and dual-
earner couples has triggered a desire for more family-friendly practices and flexibility.
Additionally, many men are expressing a desire to reduce time spent at work in favour of
increased engagement at home.

2 With the rise of globalisation, emigration, and global careers, the workforce is becoming more
diverse. It is very common for individuals to work in some capacity with others of a different race
or cultural background. For example, within the United States, the Hispanic population is growing
exponentially faster than the White population. In fact, minority groups now outnumber the
traditional majority group members in California and New Mexico.

3 People are living and continuing to work longer than ever before. In some countries, such as
the US, individuals over 85 are the fastest growing segment of the population. In many countries
the mandatory retirement ages are becoming older and mandatory retirement limits do not exist
in many countries.

So why would the changing demographics of the workplace be important in understanding OB?
In most countries, legislation exists to prevent discrimination in a wide range of employ- ment
and employment-related areas. These include recruitment and promotion, pay, work- ing
conditions, training or experience, dismissal and harassment. This legislation often defines
discrimination as treating one person in a less favourable way than another person based on any
of several grounds which may include gender, marital or family status, sexual orientation or
religion. Employers need to be mindful that their practices are in line with the law. Additionally,
while diversity has the potential to bring about more perspectives, greater innovations, and better
decision-making, these things do not happen on their own (Stahl et al., 2010). When people are
different from one another there are added challenges that need to be overcome and this has
implications in the workplace as well. For example, gender differences in communication ▸
Chapter 10 ◂ may need to be tackled in order to promote effective communication in the
workplace; teams comprising diverse members may pose added challenges ▸ Chapter 7 ◂ ;
individual stereotypes and perceptual biases ▸ Chapter 3 ◂ , attitudes and values ▸ Chapter 4
◂ and cultural differences ▸ Chapter 12 ◂ may affect the abil- ity for individuals to work together
to achieve organisational goals while maintaining personal well-being ▸ Chapters 5 and 6 ◂

Technological growth

It is clear the last few centuries have seen tremendous technological growth. This has changed
the nature of work and this has implications for personal privacy and work–life balance. Through
technological growth, we have seen the decrease of the manufacturing sector and the huge
growth of the services and information industries. Furthermore, this has polarised workforce
needs. For example, think about the technology now in place when you go to an airport. In many
airports, there are touch screens where you check in for your flight. You can also check in from
home and print off your boarding pass. Highly technical jobs are needed to set up and monitor
those systems (therefore there is an increase in high- skill jobs), but the mid-level jobs which
involve the technical aspect of checking you in, confirming seats and dealing with issues are now
handled electronically. However, someone is still needed to do the manual job of putting the
baggage claim tickets on the baggage and lifting it onto the conveyor belt. Furthermore, there are
growing needs for employees to have competence in both technical skills and service skills.
Technicians often interact directly with the customers and customers are allowed, even
encouraged, to influence the design process. Currently, being creative and innovative is of
utmost importance in order to compete. Companies have to continually reinvent themselves,
adapting their products or services to changing customer needs and demands. Furthermore, as
an employer, job applicants and employees have access to much more information than before
about your company. For example, websites such as www.glassdoor.com provide reviews of
companies and CEOs, and even include a place for applicants to post the questions they were
asked at interview. Simi- larly, employers have more access to information about their employees
through social media sources such as LinkedIn and Facebook. Additionally, technological
advances have opened opportunities for employees to be accessible to their employer just about
24 hours a day, 7 days a week. This brings issues around work–life balance to the forefront.
Where is the line between open information exchange and privacy?

Summary:

The field of OB is really about understanding how people think, act and react in the work- place,
and the influence of many factors on their behaviour. The field is concerned with the well-being of
employees as well as the performance of the organisation. It is important to remember that OB is
multi-level and to consider workplaces through a systems thinking approach. Try to keep this in
mind when reading through the following chapters. Remem- ber each topic cannot be considered
in isolation, as each is really affected by the others, so try to see connections across the
chapters.research. Within this chapter, several historical perspectives on OB were presented
including Scientific Management, Fordism, Bureaucracy, the Human Relations Movement and
Positive Organisational Behaviour. Be sure you can identify the main points of each and see how
the field progressed historically. Finally, as you read this textbook consider both the history of OB
and the contemporary issues that make OB more important now than ever before, such as
globalisation, changing workplace demographics and technology growth. These issues are
discussed as we move through the chapters in this textbook.