For any employee, manager, entrepreneur, and administrator working in the field of business, understanding organizational behavior is essential. It helps to perform effectively at work, motivate subordinates, create meaningful relationships with coworkers, and represent the interest of the company. This factsheet will analyze three vital components of what organizational behavior entails: its definition, its use within the company, and how it can be a potential source of business’s success or a failure.
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Definition of Organizational Behavior
Firstly, to have a comprehensive understanding of organizational behavior, addressing its definition is crucial. Stewart, Courtright, and Manz (2019) defined organizational behavior as a study of how employees behave within the company’s environment and emphasized its interrelation with the way individuals interact within the group setting. On the other hand, Caza, Vough,
and Puranik (2018) claimed that it “can be linked to nearly everything: from mergers, motivation and meaning‐making to ethnicity, entrepreneurship and emotions to politics, participation and project teams” (p. 889). The definition highlights the term’s relation to individuality and its fluidity, indicating that it is different for every company. From the description, it is also apparent that organizational behavior is an influential component that must be carefully developed to reach the best business outcomes.
Components of Organizational Behavior
Organizational behavior and its multiple aspects are interconnected with the productivity, motivation, and performance of every individual. Gravina et al. (2018) separates the role of organizational behavior in three primary parts:
- Physical environment and organization’s structure
- Leadership and team dynamics
- Corporate culture
Firstly, as per the company’s structure, management hierarchy plays a crucial role in shaping organizational behavior. For instance, if a business structure allows for accessible and timely communication between employees, whether in a form of a digital exchange or face-to-face conference, a sense of community is developed (Gravina et al., 2018). Furthermore, a hierarchy that enables workers to seek upper management for advice and feedback also contributes to the overall quality of the organizational behavior.
Leadership and Teamwork
As per leadership and teams, the way groups and individual workers are managed is greatly determined by organizational behavior. Gravina et al. (2018) revealed that the quality of “instructions, prompts, or changes in resource availability meant to teach, encourage, or enable the performance” are significant aspects of leadership (p. 201). Whether a leader provides timely feedback, observes himself and others, and motivates subordinates directly influences the group dynamics and the quality of teamwork (Gravina et al., 2018). Teamwork and leadership are interconnected components since, without dedicated followers and committed leaders, organizational behavior and productivity will suffer.
Organizational culture and attitudes within the company also contribute to the concept of organizational behavior and create a particular business climate. A set of commonly shared values, beliefs, and opinions widely shared by workers within a business not only dictates dress code and code of conduct but also affects business’s ethical and psychological climate (Gravina et al., 2018). Creating and maintaining a corporate culture with certain beliefs and values is directly connected to organizational behavior as it determines the way employees performs their duties and represent their employer.
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Organizational Behavior: A Tool for Success or a Path Towards Failure
There is a positive relationship between the company’s organizational behavior and its business outcomes. In the case of Volkswagen,
corporate culture was a direct source of public scandal that resulted in a significant loss for the company. As a result of so-called “unethical pro-organizational behaviors” that promoted unethical acts intended to benefit the business and its members, multiple management levels got involved in cheating on emissions tests (Bryant & Merritt, 2019, p. 987). If not for the overall attitude of transactional leadership that flawed the organizational behavior, the ethical failure would not have been normalized and would have been prevented. Consequently, corporate practices that favor profit over ethical decisions and well-being of customers can be considered a major cause of business failure. On the opposite, Bryant and Merritt (2019) concluded that ethical, coherent, and socially responsible organizational behavior that favors transformational leadership, healthy corporate culture, and efficient teamwork is a foundation that leads to better business outcomes. Therefore, it can be argued that the way companies shape their organizational behavior is critical for their success.
Bryant, W., & Merritt, S. M. (2019). Unethical pro-organizational behavior and positive leader–employee relationships. Journal of Business Ethics, 156(4), 987-1005. Web.
Caza, B., Vough, H., & Puranik, H. (2018). Identity work in organizations and occupations: Definitions, theories, and pathways forward. Journal of Organizational Behavior, 39(7), 889-910.
Gravina, N., Villacorta, J., Albert, K., Clark, R., Curry, S., & Wilder, D. (2018). A literature review of organizational behavior management interventions in human service settings from 1990 to 2016. Journal of Organizational Behavior Management, 38(3), 191-224.
Stewart, G., Courtright, S., & Manz, C. (2019). Self-leadership: A paradoxical core of organizational behavior. Annual Review of Organizational Psychology and Organizational Behavior, 6(1), 47-67.