Organizational behaviour(often abbreviated as OB) is a field of study that investi gates how individuals,

groups, and structure affect and are affected by behaviour within organizations. Behaviour refers to what
people do in the organization, how they per- form, and what their attitudes are. Because the organizations
studied are often business organizations, OB is frequently applied to address workplace issues such as
absenteeism, turnover, productivity, motivation, working in groups, and job satisfaction. Managers often
apply the knowledge gained from OB research to help them manage their organ- izations more effectively.

OB Is for Everyone
It may seem natural to think that the study of OB is for lead ers and managers of organizations. After all, they often set the
agenda for everyone else. However, OB is for everyone. For instance, many employees have informal leadership roles. They are
often expected to move beyond simply pro- viding labour to playing a more proactive role in achieving organizational success.
As well, managers are increasingly
asking employees to share in their decision-making processes rather than simply follow orders. For instance, employees in some
retail stores can make decisions about when to accept returned items on their own, without involving the manager. Thus, in
many organizations, the roles of managers and employees have become blurred. 2

OB is not just for managers and employees. Entrepreneurs and self-employed indi- viduals may not act as managers, but
they certainly interact with other individuals and organizations as part of their work. In fact, much of OB is relevant beyond the
workplace.

OB applies equally well to all situations in which you interact with others. In fact, OB is relevant anywhere that people come
together and share experiences, work on goals, or meet to solve problems. The study of OB can shed light on the interactions
among family members, the voluntary group that comes together to do something about reviving the downtown area, students
working as a team on a class project, the parents who sit on the board of their child’s daycare centre, or even the members of
a lunchtime pickup basketball team. Throughout the textbook, a feature called OB in the Street will help you understand
these broader connections .

What Do We Mean by Organization?

An organization is a consciously coordinated social unit, made up of a group of people, who work together on
common goals on a relatively continuous basis. Manufacturing and service firms are organizations, and so are
schools, hospitals, churches, military units, retail stores, police departments, volunteer organizations, start-
ups, and local, provincial, and federal government agencies. Inner City Renovation, which we discussed in
the opening vignette, is a for-profit organization, but its partners are nonprofit organizations. Thus, when we
say “organization” throughout this textbook, we are referring not only to large manufacturing firms but also
to small mom-and-pop stores, as well as to the variety of other forms of organization that exist. Small
businesses make up a significant part of the economy.3Businesses that employ no more than 20 people are
responsible for about one-quarter of all Canadian jobs. Small businesses employing 50 or fewer people make
up 24 percent of Canada’s gross national product. Micro businesses (companies with 5 or fewer employees
managed by an owner/operator, often as sole proprietor- ships) account for about 8 percent of the
employment in this country.

The examples in this textbook present various organi- zations so that you gain a better understanding of
the many types that exist. Though you might not have con- sidered this before, the college or university you
attend is every bit as m uch a “real” organization as is Hudson’s Bay Company or Air Canada or the Toronto
Raptors. A small, for-profit organization that hires people with limited skills to renovate and build in the
inner city of Winnipeg is as

much a real organization as is London, Ontario-based EllisDon, one of North America’s largest
construction companies. Therefore, the theories we cover should be considered in light of the variety of
organizations you may encounter. We try to point out instances where the theory m ay be less applicable
(or especially applicable) to a particular type of organization. For the most part, however, you should
expect that the discussions in this textbook apply across the broad spectrum of organizations. Throughout,
we highlight applications to a variety of organizations in our feature OB in the Workplace.

MAKIN G SENSE OF BEHAVIOUR IN ORGAN IZATIO N S

The managers at Inner City Renovation (ICR) quickly noticed that some of their employees had special challenges, such as
their unemployment rates, their inconsistent job records, and their low education levels.4Managers interviewed employees
about their career interests and their needs for skill development. In addition, employees have had one-on-one meetings with
the ICR president and the employee support worker. Interviews and meetings are ways to collect data about employee
behaviour. While ICR managers are not researchers, they understand the need for doing some research on their employees.
How is OB research carried out, and in what situations does it apply?

We have thus far considered why OB can be applied in a variety of settings. In this next section, we
consider the other fields of study that have contributed to OB and discuss the fact that OB is a scientific
discipline, with careful research that is conducted to test and evaluate theories.
The Building Blocks of OB

OB is an applied behavioural science that is built upon contributions from a number of behavioural disciplines. The main areas are
psychology, sociology, social psychology, anthropology, and political science. 5As we will learn, psychology’s contributions have been
mainly at the individual or micro-level of analysis. The other four disciplines have con- tributed to our understanding of macro
concepts, such as group processes and organi- zation. Exhibit 1-1 presents an overview of the major contributions to the study of OB.

The Rigour of OB

Whether you want to respond to the challenges of the Canadian workplace, which we discuss later in the chapter,
manage well, guarantee satisfying and rewarding employment for yourself, or know how to work better in groups
and teams, it pays to understand organizational behaviour. OB provides a systematic approach to the study of
behav- iour in organizations, as well as groups and teams. Underlying this systematic approach is the belief that
behaviour is not random. Thus research studies are conducted and are the basis for all of the claims made in
this textbook.

OB Looks at Consistencies

Certainly there are differences among individuals. Placed in similar situations, people don’t all act exactly
alike. However, there are certain fundam ental consistencies under- lying the behaviour of most individuals
that can be identified and then modified to reflect individual differences.

These fundamental consistencies are very important because they allow predictabil- ity. For instance,
when you get into your car, you make some definite and usually highly accurate predictions about how
other people will behave.

What may be less obvious is that there are rules (written and unwritten) in almost every setting. Thus, it
can be argued that it’s possible to predict behaviour (undoubtedly, not always with 100-percent accuracy) in
supermarkets, classrooms, doctors’ offices, elevators, and in most structured situations. For instance, do you
turn around and face the doors when you get into an elevator? Almost everyone does. Is there a sign inside
the elevator that tells you to do this? Probably not! Just as we make predictions about driv- ers, where there
are definite rules of the road, so we can make predictions about the behaviour of people in elevators, where
there are few written rules. This example sup- ports a major foundation of this textbook: Behaviour is
generally predictable, and the

systematic studyof behaviour is a means to making reasonably accurate predictions.

OB Looks Beyond Common Sense

When we use the phrase systematic study, we mean looking at relationships, attempt- ing to attribute causes
and effects, and basing our conclusions on scientific evidence— that is, on data gathered under controlled
conditions, and measured and interpreted in a reasonably rigorous manner—rather than relying on common
sense. OB uses sci- entific research to uncover how behaviour works in organizations. Exhibit 1-2 on page 8
illustrates the common methods researchers use to study topics in OB.

Asystematicapproachdoesnotmeanthatthosethingsyouhavecometobelieveinanunsystematicwayarenecessarilyincorrect.Someoftheconclusionswemakeinthistextbook,
basedonsolidresearchfindings,willsupportwhatyoualwaysknewwastrue.Youwillalsobeexposedtoresearchevidencethatrunscountertowhatyoumighthavethought
wascommonsense.Infact,oneofthechallengestoteachingasubjectsuch as OB is to overcome the notion, held by many, that “it’s all
common sense.”6

Youwillfindthatmanyoftheso-calledcommon-senseviewsyouholdabouthumanbehaviourarewrong,oncloserexamination.Moreover,whatoneperson
considerscom-monsensefrequentlyrunscountertoanother’sversion.Areleadersbornormade?Whatisitthatmotivatespeopleatworknowadays?Youprobablyhaveanswe
rstosuchquestions,andindividualswhohavenotreviewedtheresearcharelikelytodifferontheiranswers.

If understanding behaviour were simply common sense, we would not observe many of the problems that
occur in the workplace, because managers and employees would know how to behave. For instance, we likely
would not see people being bullied in the workplace, managers who don’t know how to manage, and team
members who don’t inform team m ates when their work is going to be late. Unfortunately, as you will see from

examples throughout the textbook, many individuals exhibit less than desirable behav- iour in the
workplace. With a stronger grounding in the systematic analysis of OB, indi- viduals would be able to
avoid some of these mistakes. This chapter’sPoin t / Cou n t erpoin t on page 22 looks at how systematic OB
is.

One of the objectives of this textbook is to expose you to a systematic analysis of behaviour, in the
belief that such analysis will improve your accuracy in explaining and predicting behaviour. Understanding
OB may also help you behave better in organi- zations and groups as well. For example, after studying OB,
you may realize that you should not discuss The Apprentice at 8:00 a.m. in the manager’s office if your
manager needs quiet time, is an introvert, and is production-oriented. 7

OB Has Few Absolutes

There are few, if any, simple and universal principles that explain OB. In contrast, the physical sciences—chem
istry, astronomy, and physics, for exam ple—have laws that are consistent and apply in a wide range of situations.
Such laws allow scientists to gener- alize about the pull of gravity or to confidently send astronauts into space to
repair satellites. However, as one noted behavioural researcher concluded, “God gave all the easy problems to the
physicists.” Human beings are complex. Because we are not alike, our ability to make simple, accurate, and
sweeping generalizations is limited. Two people often act differently in the same situation, and the same person’s
behaviour changes in different situations.

OB Takes a Contingency Approach

Just because people can behave differently at different times does not mean, of course,
that we cannot offer reasonably accurate explanations of human behaviour or make

valid predictions. It does mean, however, that OB must consider behaviour within the context in which it occurs—known as a
contingency approach . So, for example, OB scholars would avoid stating that effective leaders should alw ays seek the ideas of their

employees before making a decision. Rather, we may find that in some situations a par- ticipative style is clearly superior, but in other
situations an autocratic decision style is m ore effective. In other words, as you will see in Chapter 8, the effectiveness of a particular
leadership style depends on the situation in which it is used. The OB scholar would therefore try to describe the situations to which
each style is suited.

Consistent with the contingency approach, the Poin t / Cou n t erpoin t feature included in each chapter presents debates on
some of the more controversial issues in OB. These debates highlight the fact that within OB there is disagreement on many
issues. The

Point/Counterpointformat gives you the opportunity to explore different points of view

on an issue, discover how diverse perspectives complement and oppose each other, and
gain insight into some of the current debates in the OB field.

HOW WILL KNOWING O B MAKEA DIFFEREN CE?

When we talk about the impact of OB in each chapter, we consider the impact on both
the workplace and the individual (see our features OB in the Workplace and OB in the
Street). So let’s begin our discussion of OB’s impact by looking broadly at how knowing
about OB makes a difference in the workplace, before we look at how OB affects us
individually.

In the Workplace

From a management point of view, understanding OB can help you manage well. Still, you might wonder
whether managing well really makes a difference. Markham, Ontario- based Black Photo Corporation’s
president, Rod Smith, learned that not listening to employee demands can have undesirable consequences
when he was confronted with a union drive at Black’s. He notes the difficulties he has experienced in
working with a union. “One of the things that you lose when you get unionized is that ability to be com
passionate, because the rules are the rules, and they catch people in ways we prefer not to catch them.”8

Consider another manager’s perspective. Aris Kaplanis, president and CEO of Toronto- based Teranet,
understands the importance of managing well. In the high-tech industry, where turnover is typically 10 to 20
percent, Teranet’s annual turnover rate is less than 1 percent. Kaplanis believes that his turnover is low because
Teranet developed a corporate culture that is both humane and family-friendly. “My perspective is that the
company has two assets—one is the custom ers, the other is our em ployees. Both of these assets have to be
serviced.”9

The evidence indicates that managing people well makes for better corporations overall. Exhibit 1-3 on
page 10 shows that many of the firms that made the KPMG/Ipsos Reid list of “Most Respected
Corporations for Human Resource Management” also scored high on financial performance and best long-
term investment value. Five of the companies placed in the top 10 on both financial measures.

Each year, Report on Business (ROB) m agazine publishes a list of the “50 Best Em ployers in Canada.” The
magazine’s 2005 survey identified three main traits of best-loved com- panies: (1) they show appreciation for their
employees, (2) they coach employees to help them move up in the organization, and (3) they have good leaders who
present the corporate strategy clearly and consistently.10