Every company has an organizational structure that dictates how the

Chapter 1
units within the firm link to (and communicate with) other units. 9:43 PM Thursday, September 28, 2023
Sometimes structures are centralized around a decision-making
authority, whereas other times, structures are decentralized, affording
each unit some autonomy

Every company also has an organizational culture that captures the

way things are in the organization shared knowledge about the Considering rule of 1/8: Figure 1-1 suggests that high job performance
values and beliefs that shape employee attitudes and behaviors depends not just on employee motivation but also on fostering high levels
of satisfaction, effectively managing stress, creating a trusting climate, and
committing to employee learning. Failing to do any one of those things
Organizational behavior (OB) is a field of study devoted to understanding, explaining, and ultimately
could hinder the effectiveness of the other concepts in the model
improving the attitudes and behaviors of individuals and groups

Human resource management takes the theories and principles studied in OB and
explores the nuts-and-bolts applications of those principles in organizations. An OB
study might explore the relationship between learning and job performance, whereas a
human resource management study might examine the best ways to structure training
programs to promote employee learning

team characteristics and diversity describing how Most employees have two primary goals for their working lives:
teams are formed, staffed, and composed, and how to perform their jobs well and to remain a member of an
Strategic management focuses on the product choices and industry team members come to rely on one another as they organization that they respect.
characteristics that affect an organization s profitability. A strategic do their work Likewise, most managers have two primary goals for their
management study might examine the relationship between firm employees: to maximize their job performance and to ensure
diversification (when a firm expands into a new product segment) and firm team processes and communication how teams that they stay with the firm for a significant length of time.
profitability. behave, including their coordination, conflict, and
cohesion

industrial and organizational how leaders behave in their leadership roles, as leader
psychology, social psychology. styles and behaviors capture the specific actions that
Sociology, economics leaders take to influence others at work Job Satisfaction: what employees feel when thinking about their jobs and doing their day-to-day work

how individuals become leaders in the first place, Stress: employees psychological responses to job demands that tax or exceed their capacities
covering leader power and negotiation to summarize
how individuals attain authority over others Trust, justice, and ethics: reflect the degree to which employees feel that their company does business
with fairness, honesty, and integrity

learning and decision making: deals with how employees gain job knowledge and how they use that
knowledge to make accurate judgments on the job

Personality and cultural values reflect the various traits and tendencies that describe how people act,
with commonly studied traits including extraversion, conscientiousness, and collectivism

personality and cultural values affect the way people behave at work, the kinds of tasks they re
interested in, and how they react to events that happen on the job.

Ability, which describes the cognitive abilities (verbal, quantitative, etc.), emotional skills (other
awareness, emotion regulation, etc.), and physical abilities (strength, endurance, etc.) that employees
bring to a job.

Ability influences the kinds of tasks an employee is good at (and not so good at).

effective OB can help keep a product good over the long term --------- effective management of OB can help make a product get better, incrementally, over the long term.

OB Behvavior Covers Topics:

BUILDING A CONCEPTUAL ARGUMENT Resource-based view:

why OB might affect the bottom -line profitability of an organization?
This perspective describes what exactly makes resources valuable that is, what makes them capable of creating
long-term profits for the firm
Resources : financial (revenue, equity, etc.) and physical (buildings, machines, technology) resources, resources
related to organizational behavior, such as the knowledge, ability, and wisdom of the workforce, as well as the
image, culture, and goodwill of the organization.

Good people are also rare witness the adage good

people are hard to find

a collective pool of experience, wisdom, and knowledge that

benefits the organization. History cannot be bought

Big decisions can be copied; they are visible to competitors and

observable by industry experts. In contrast, the behind the
scenes decisions at the Apple Store are more invisible to
Microsoft, especially the decisions that involve the hiring and
management of employees a resource is more valuable when it is inimitable ,
meaning that it cannot be imitated.
Good people, in contrast, are much more difficult
People also create socially complex resources , like culture, to imitate but technology, marketing strategy and
teamwork, trust, and reputation. These resources are termed manufacturing practices can be imitated
socially complex because it s not always clear how they came to
develop, though it is clear which organizations do (and do not)
possess them.

Good people are both rare and inimitable and therefore create a resource that is valuable for creating competitive
advantage
better OB practices were associated with better firm performance. ...... Related to firm survival
Good OB ...... Better profit. Example of best companies to work for, including google, intel, microsoft

Rule of One-Eighth : One must bear in mind that one-half of organizations won t believe the connection between how they
manage their people and the profits they earn. One-half of those who do see the con nection will do what many
organizations have done try to make a single change to solve their problems, not realizing that the effective management of
people requires a more comprehensive and systematic approach. Of the firms that make comprehensive changes, probably
only about one-half will persist with their practices long enough to actually derive economic benefits. Since one-half times
one-half times one-half equals one-eighth, at best 12 percent of organiza tions will actually do what is required to build
profits by putting people firs

It s often difficult to fix companies that struggle with OB issues. Such companies often struggle in a number of different
areas and on a number of different levels.

AT THE BOOKSTORE: Lencioni uses the term healthy to describe an organization with high morale, low turnover, minimal politics, and high productivity. In other words, health
has to do with the management of people, unlike smarts, which Lencioni describes as organizations having effective strategy, marketing, finance, and technology.
organizational health is a key part of maintaining a competitive advantage, for two reasons:

First, it s rarer than organizational smarts. Second, organizational health has a multiplier effect on smarts, allowing companies to tap into their knowledge, experience, and
expertise to a greater extent than their competitors.

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 scientific method requires that theories be used to inspire hypotheses . Hypotheses are written predictions that
specify relationships between variables
Example: Finding the correlation of Social Recognition Behaviors and performance. The correlation provides a
number that expresses an answer to the how often question.

a correlation of .50 is considered strong in organizational behavior research. A .30 correlation is considered
moderate, a .10 correlation is considered weak in organizational behavior research. even weak correlations
can be important if they predict costly behaviors such as theft or ethical violations

correlation does not imply causation. It turns out that making causal inferences establishing that one variable really does cause another requires establishing three things. 35 First, that the two variables are
correlated. Second, that the presumed cause precedes the presumed effect in time. Third, that no alternative explanation exists for the correlation. The third criterion is often fulfilled in experiments, where
researchers have more control over the setting in which the study occurs.

The best way to test a theory is to conduct many studies, each of which is as different as possible from the ones that preceded it.
After completing all of those studies, you could look back on the results and create some sort of average correlation across all of the studies. This process is what a technique called meta-analysis does. It takes all of
the correlations found in studies of a particular relationship and calculates a weighted average (such that correlations based on studies with large samples are weighted more than correlations based on studies with
small samples

meta-analyses can form the foundation for evidence-based management a perspective that argues that scientific findings should form the foundation for management education, much as they do for m edical
education. Proponents of evidence -based management argue that human resources should be transformed into a sort of R&D department for managing people.

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