Chapter 1 - What is Organizational Behavior?

Organizational Behavior

OB: Studies human attitudes, behavior, and performance in workplace settings.

Human Resource Management

Applies OB principles to design organizational programs (selection, training, rewards).

OB is the scientific "why" behind HR and Strategy.

Strategic Management

Analyzes firm positioning, industry trends, and competitive advantages.

Human Capital & KSAOs

Human Capital: The total economic value of employees' collective capabilities.

KSAOs: Knowledge, Skills, Abilities, and Other characteristics (e.g., personality, values).

Resource-Based View (RBV) & VRIN Framework

• RBV: Theory that rare and inimitable resources drive sustained competitive advantage.

• VRIN Criteria:

  • V - Valuable: Captures opportunities or neutralizes threats.

  • R - Rare: Scarce and not easily acquired by rivals.

  • I - Inimitable: Cannot be easily copied or replicated.

  • N - Non-substitutable: Cannot be replaced with a different equivalent resource.

The 3 Barriers to Imitation (Why Human Resources are Inimitable)

1. History: Unique collective experiences, wisdom, and culture built over time.

2. Causal Ambiguity: Unclear exact combination of small daily decisions/practices driving success.

3. Social Complexity: Trust, teamwork, and interpersonal relationships that cannot be bought or copied overnight.

The Rule of 1/8th

• Only 12.5% of firms see lasting financial gains from OB practices:

  • 1/2 see the connection between people and profits.

  • 1/2 of those make comprehensive, multi-layered changes (not single fixes).

  • 1/2 of those persist long enough for practices to become culturally ingrained.

The Two Primary Outcomes of Colquitt's Integrative Model of OB

• Job Performance: How effectively employees perform their duties.

• Organizational Commitment: Whether employees choose to remain with the company.

• All other mechanisms (individual, group, organizational) drive these two outcomes.

The 4 Methods of Knowing

1. Experience: Based on personal events and observations.

2. Intuition: Believing something because it feels obvious or "gut-right."

3. Authority: Believing something because an expert/leader said so.

4. Science: Acquiring knowledge through systematic observation, empirical testing, and verifiable data.

Evidence-Based Management (EBM) & The Scientific Process

EBM: Making management decisions based on scientific evidence rather than fads or gut feeling.

Correlation (r) Benchmarks in OB

Ranges from -1.00 to +1.00 (measures strength & direction).

OB Standards:

• r=0.50 Strong relationship

• r=0.30 Moderate relationship

• r=0 No relationship

 3 Conditions Required to Prove Causation

1. Correlation: The two variables must be statistically associated.

2. Temporal Precedence: The cause must occur before the effect in time.

3. Elimination of Alternative Explanations: Non-spuriousness (no third confounding variable causing both).

Meta-Analysis

A statistical method that pools correlation results across dozens or hundreds of independent studies.Calculates a single weighted-average correlation, providing the strongest empirical evidence for OB practices.