Why Organizational Behavior Matters

An Introductory Topic with Educational Administration Graduate Students

Based on Neck, Houghton & Murray’s (2017) Organizational Behavior: A Critical Thinking Approach
 Learning Outcomes

Explained basic concept of OB and its value in organizations

Described the key role of managing human capital in creating a sustainable competitive advantage for organizations

Identified the major behavioral science disciplines that contribute to OB

Demonstrated the value of critical thinking in the OB context

Identified the major challenges and opportunities in the field of OB

Described the importance of ethical behavior in global organizations

Differentiated the three basic levels of analysis at which OB may be examined; and

Outlined the benefits of positive OB and high involvement management

Success of Your Organization (School)

The success of your organization doesn’t depend on your

understanding of economics, or organizational development, or
marketing. It depends, quite simply, on your understanding of
human psychology: how each individual employee connects
with your company and how each individual employee connects
with your customers.
- Curt Coffman and Gabriela Gonzales-Molina
Authors of Follow This Path: How the World’s
Greatest Organizations Drive Growth by
Unleashing Human Potential
Does OB really matter?
Organizational Behavior
OB is defined as:

A field of study
Focused on Understanding, explaining, and
improving attitudes of individuals and groups in
organizations.

Organization is defined as:

Structured arrangement of people working
together to accomplish specific goals

Therefore, OB focuses on figuring how and why

individual employees and groups behave the
way they do within an organizational setting
OB and Researching
How will research help organizational behavior?
Understanding the ways people act and interact
in an organization has these advantages:

1. You can explain behavior. You can explain

why your school head and co-teachers are
doing what they are doing.

2. You can predict behavior. You can

anticipate what your school head and co-
teachers will do in a given circumstances or
situation.

3. You can influence behavior. You can shape

the action of your school head and co-
teachers in a way that would help accomplish
organizational goals and objectives or targets.
Four Major Functions of Managers
1. Planning. Evaluate current position, where it wants to
be in the future, set goals, design strategies, identify
actions and resources needs to achieve success.

2. Organizing. Arrange resources, people to functions

and implement the strategy.

3. Leading. Ensure teams and individuals achieve the

goals effectively and efficiently. Motivate people and
communicate them to achieve the goals.

4. Controlling. Monitor employee performance and

ensure milestones are reached, take corrective or
preventive actions where and when necessary.
Skills

1. Technical skill. An aptitude for performing and applying specialized tasks. e.g. proficiency in
the use of technologies: database, spreadsheet, email, social networking tools

2. Human skill. Ability to relate to other people. People with effective human skill take the
feeling into account and are adept at dealing with conflict.
2.1. Emotional Intelligence (EI). An awareness of how your actions and emotions affect
those around you and the ability to understand and empathize with the feelings of
others.

3. Conceptual skill. Capacity to see the organization as a whole and understand how each part
relates to each other and how it fits into its overall environment.
Thinking Critically

1. OB helps managers explain, predict, and influence behavior in the workplace. Identify the
types of behavior your are most interested in explaining, understanding, and predicting in the
workplace.

2. Of the four main functions managers fulfil, which do you think is most likely to be
enhanced by understanding of organizational behavior? Why?

3. Managers need technical, human, and conceptual skills. Which of these skills are
least likely to be learned on the job? Explain your position.

4. Compare these arguments:

4.1 success of an organization lies with its people
4.2 every employee is replaceable and expendable.
Which argument do you consider more compelling? And why?
Strategic OB approach

 based on the idea that PEOPLE are the key to productivity, competitive edge, and financial
success.

Managers must place a high value on human capital.

Value
Competitive
Human Capital Rareness
Advantage
Inimitability
Human Capital

 is the sum of people’s skills, knowledge, experience, and general attributes.

Managing Human Capital

 Organizations have two kinds of resources: Tangible and Intangible.

 Tangible resource: these are physical assets that include equipment, property, and inventory.

 Intangible resource: Organization’s reputation, culture, relationship with customers, trust

between managers and co-workers.
Managing Human Capital

 Three aspects of human capital that enhance competitive advantage: value, rareness, and
inimitability.
 Value: The difference between fulfilling the requirements of your job and working with an eye
on company strategy.
Human Capital Value: accumulates when employees work toward the strategic goals of
an organization to achieve competitive advantage
Employees need to have the skills, abilities to execute the strategy
They must have genuine willingness to contribute to the performance and
success of organization.
Managers must nurture continually high performing employees. Regardless of
market labor condition, outstanding employees are always in short supply.
Managing Human Capital

 Three aspects of human capital that enhance competitive advantage: value, rareness, and
inimitability.
 Rareness: not everyone has the right skillset to further progress the organization.

Human Capital Rareness: the level of exceptional skills and talents of employees in an
industry.
E.g. excellent computer programmer with an outstanding eye for detail.
E.g employee who has a gift of dealing customer complaints and in creating
resolutions.
All of these can be learned given the right training and encouragement.
Managing Human Capital

 Three aspects of human capital that enhance competitive advantage: value, rareness, and
inimitability.
 Inimitability: skills and attributes that are unique and too difficult to copy.

Human Capital Inimitability: the degree to which skills and talents of employees can be
emulated by other organizations. However, the higher the level of inimitability, the more
competitive an organization will be.

Successful organizations ensure that their talented employees possess skills and
talents that are difficult to imitate.
Employees have a feel or instinct for a method or a process but can’t easily
articulate it. They just know it is right.
Organizational culture and values are too difficult to imitate and often determine
why employees choose to work for one company over others that offers similar
produces, and services.
This boils down to organizational shared values, attitudes and culture.
Thinking Critically

 Compare the relative importance of tangible and intangible resources. Can an organization
succeed without adequate resourcing in both areas? Why and why not?
 Explain in your own words how value, rareness, and inimitability in human capital contribute
to an organization’s competitive advantage.
Watch this video

Human capital in the age of constant change

Question and Answer will follow

Watch this video

Questions:

1. What line, statement or phrase has disturbed you? And why?

2. Any reaction or disagreement from the video?
3. What is the main lesson we can learn from the speaker?
Behavioral Science Disciplines that Contribute OB

Psychology

 the study of human mind

Measures and explains behavioral characteristics
Organizational Psychology: focus on factors affecting work performance and efficiency such as
lethargy and boredom
Recently, Psychologists focus on mental health and well-being of employees in relationship to
work performance and it created methods to deal with challenges such as stress.
Psychologists helped design performance appraisal, decision-making processes, recruitment
techniques and training programs.
Behavioral Science Disciplines that Contribute OB

Sociology

 it focuses on the way groups behave, communicate and exchange information in a social
setting.
It contributed to OB in terms of group dynamics, communication, power, organizational culture
and conflict
Behavioral Science Disciplines that Contribute OB

Social Psychology

 focuses on the way people influence each other in a social setting.

Social Psychologists look at behaviors, feelings, actions, beliefs, and intentions, how they
constructed and influenced by others
Its contributions are reducing the level of prejudice, discrimination, and stereotyping by
designing processes to change attitudes, build communication, and improve the way groups
work together.
Behavioral Science Disciplines that Contribute OB

Political Science

 studies behavior of individuals and groups within a political environment.

Political scientists focus on how conflict is managed and structured, how power is distributed,
and how power is abused or manipulated for the purpose of self-interest.
Their studies helped improved understanding of how different interests, motivations, and
preferences can lead to conflict and power struggles between individuals and groups.
Behavioral Science Disciplines that Contribute OB

Anthropology

 a study of people, their activities in relation to social, environmental and cultural influences.
Anthropological research has become even more significant because it increases our
understanding of other cultures and the types of values and attitudes held by others from
other countries and organizations.
Thinking Critically

 What factors are likely to have played a role in early management theory’s
emphasis on physical tasks and working conditions?

Of the five behavioral sciences, which one do you consider to be the most
relent to the field of management today?
The Most Important Skill for Employees by HR Professional 2006
Rank Basic Knowledge/Applied Skills % Rank Basic Knowledge/Applied Skills %

1 Critical Thinking/Problem Solving 77.8 11 Lifelong learning/Self-direction 64.0

2 IT application 77.4 12 Foreign Language 63.3

3 Teamwork/Collaboration 74.2 13 Mathematics 48.8

4 Creativity/Innovation 73.6 14 Writing in English 54.4

5 Diversity 67.1 15 Reading comprehension 41.0

6 Leadership 66.9 16 Science 38.7

7 Oral Communication 65.9 17 English Language 32.8

8 Professional/work ethics 64.4 18 Government/Economics 24.8

9 Ethics/Social Responsibility 64.3 19 History/Geography 17.9

10 Written Communication 64.0 20 Humanities/Arts 9.5

What is critical thinking skill?

 Ability to use of intelligence, knowledge, and skills to question and carefully

explore situations and arrive at thoughtful conclusion based on evidence and
reason.

As problem-solving tool, the critical thinking approach is a powerful

analytical method that helps managers consider the intended and unintended
consequences of individual behaviors.

Organization managers who think independently without judgement and

bias predict patterns of behaviors and processes and ask the right questions
e.g. how? Why? Not just what? In order to make effective decision.
The rise of unemployment

 In many countries, there is rise of unemployment rate.

Certainly, there are enough people. However, businesses change their
requirements especially when it comes to skills
 Some new graduates cannot fill vacant jobs due to mismatch of
competencies and skills job requirements.
Businesses or organizations have become more selective in hiring new
employees.
Advantage of Critical thinker Applicant/Employee

 your ability to think critically will differentiate you from other job applicants.
 In job interview, critical thinkers take time to think carefully about the
questions asked.
Their answers to interview questions are based on facts and experiences not
based on emotions or biases.
Once hired, critical thinkers are more likely to succeed.
Companies/organizations expect employees to play a pivotal role in helping
achieve goals.
Advantage of Critical thinker Applicant/Employee

 You don’t need to be expert of critical thinking. Some of the skills associated
with it can be learned.

However, employers will look into candidates who have a questioning mind, a
willingness to embrace change, and a keen desire to learn.

The problem is that organization fail to attract employees with critical

thinking skills while organizations are changing, employees need to introduce
something new, fresh ideas to stay ahead of the competition.
The Framework

Behavior
Five-Step Critical-
Change Thinking
Framework for
Managing and
Changing Behvaior
Explain Observe
Neck et al, (2014).
Management, NJ: Wiley.

Analyze Interpret
Scientific Method and OB

 Scholars use scientific method to conduct research that managers can use to
understand their employees and enhance critical thinking in OB

Research often begin with theory (Deductive) or data (Inductive)

 Theory: a set of principles intended to explain behavioral phenomena in

organization.

Model/s: use in research- a simplified snapshots of reality to summarize and

illustrate the reasons behind certain behaviors such as absenteeism or
turnover.
Scientific Method and OB

 Connecting the elements of models are independent variables, factors that

remain unchanged and dependent variables, factors affected by the
independent variables.

Scholars write prediction called – hypothesis – a statement that specifies the

relationships between two or more variables.
OB Challenges and Opportunities

1. Globalization – we become more interconnected globally – trade, culture,

technology, and politics.

-it is easy for employees to many organizations around the world. When
transferred assignment abroad, it would be a challenge to adjust to a new
culture.
-you are expected to learn their language and work with people from different
cultures.

-even homes-based work, you are likely to be working with people from
abroad via technology.

- It is vital to work well with them regardless of their location and background.
Communicating effectively across time zones via technology is important.
OB Challenges and Opportunities

2. Economic Factors- economic events will have a significant impact on our

work or job. Financial crisis or recession may lead employers to lay off workers.

- It may also result to reduced wages, unemployment, bankruptcy and labor

shortage.

- It is always a challenge for organization to strategize plan and overcome

economic stumbling block by seeking talent and skills set for workforce to find
innovative ways to differentiate themselves from competition.

- To grow in a work which is constantly changing, you need to be agile,

adaptable and open to learning new skills when required.
OB Challenges and Opportunities

3. Work Diversity – demographic profile is an organization is changing

resulting to diversity.

- This would encourage organization to foster inclusive working environment

that do not discriminate against employers regardless of gender, race, ethnicity,
age, and sexual orientation

- In large organizations, employees are educated with diversity and taught

with the importance of respecting individual differences.

- Forming and building good working relationships is central to achieving

professional success
OB Challenges and Opportunities

4. Customer Service – organizations are creating customer-responsive cultures

to meet the increasing and changing needs and demands of customer bases.

- Organizations need to strive in understanding the customers’ needs first and

then tailor the product or services to customer requirements.

- E.g. ISO certification and other quality assurance certifications have been
trendy

- Thus, there is a need to develop a customer-focused attitude and think

creatively about how to satisfy customers’ needs.
OB Challenges and Opportunities

5. People Skills – managers and employees must have excellent people skills
such as the ability to communicate and interact with others in order to work
harmoniously with co-workers.

- Being able to relate to other people has just as much impact on success as
your technical skills, especially when you are leading and managing teams.
OB Challenges and Opportunities

6. Innovation and change – organizations need to simulate innovation and

change by becoming faster and more agile than the competition.

- Tangible resources are no longer the mainstay of an organization. The most

important assets are the people and their abilities to continuously create,
strategize, innovate, and convert their ideas into a quality products,
processes and services.

- Critical thinking is imperative in innovation. Thus, you need to question,

analyze, and create to come up with new, original ideas that will appeal to
your customers to secure a competitive advantage.
OB Challenges and Opportunities

7. Sustainability – many organizations are striving to build a more sustainable

and responsible global markets by taking environmental factors into
consideration during decision-making and goal-setting.

- Whatever role you play, you will need to take into account the effects of your
decisions and the decisions of others may have on environment, your
community, and organization itself.
Think Critically

1. Among the challenges and opportunities, which one is the most difficult or
easiest to address and why?

2. In your current organization, have you experience any of the

aforementioned challenges and what way? Please describe it.

3. Whether local or global organizations, have you noted or observed a

company or business, institution, association or NGO which uphold the
sustainable development practices? What do you think are the benefits and
consequences of their practices to community or organization itself?
Levels of Analysis in Organziational Behavior

1. Individual Level
2. Team or Group Level
3. Organizational Level
Levels of Analysis in Organziational Behavior

1. Individual Level
1.1 diversity
1.2 personality
1.3 emotions
1.4 attitudes
1.5 perception
1.6 motivation
Levels of Analysis in Organziational Behavior

2. Group Level
2.1 Team and Teamwork
2.2 Decision-making
2.3 Creativity and innovation
2.4 Conflict
2.5 Leadership
2.6 Power and Politics
2.7 Communication
Levels of Analysis in Organizational Behavior

3. Group Level
3.1 Organizational culture
3.2 Organizational strategy
3.3 Organizational change
3.4 Organizational structure

With these levels, understanding individuals is a foundation for a better

understanding of teams and groups in the organization. This means, you can
better predict and influence how groups or teams interact when you have a
strong foundation in each member.