Organizational Behavior – Chapter 1 Comprehensive Notes

Definition & Scope of Organizational Behavior (OB)

• Field of study devoted to understanding, explaining, and ultimately improving the attitudes & behaviors of individuals and groups in organizations.
  • Focused question: Why do people at work think, feel, & act the way they do?
• Distinguished from, yet interconnected with:
  • Human Resource Management: applies OB theories to “nuts-and-bolts” HR practices (e.g., training design, appraisal systems).
  • Strategic Management: examines firm-level decisions (e.g., diversification, mergers) & industry conditions affecting profitability.
• Draws on multiple disciplines:
  • Industrial/Organizational Psychology ➜ job performance, individual differences.
  • Social Psychology ➜ satisfaction, emotions, team processes.
  • Sociology & Anthropology ➜ team characteristics, structure, culture.
  • Economics ➜ motivation, learning, decision making.

Primary OB Outcomes

• Job Performance
  • Doing work activities well; defined by specific task, citizenship, & counter-productive behaviors (detailed Ch.2).
• Organizational Commitment
  • Desire to remain a member of the org.; shaped by affective, continuance, & normative forces (detailed Ch.3).
• Employees & managers share twin goals: \text{High Performance} \land \text{High Commitment}

Integrative Model of OB (Figure 1-1)

• Provides a road-map showing how 15 chapter topics connect; 5 broad categories:
  1. Individual Outcomes ➜ Job Performance, Org. Commitment.
  2. Individual Mechanisms (direct drivers):
  • Job Satisfaction (Ch.4)
  • Stress (Ch.5)
  • Motivation (Ch.6)
  • Trust, Justice, & Ethics (Ch.7)
  • Learning & Decision Making (Ch.8)
  1. Individual Characteristics (shape mechanisms):
  • Personality & Cultural Values (Ch.9)
  • Ability – cognitive, emotional, physical (Ch.10)
  1. Group Mechanisms:
  • Team Characteristics & Diversity (Ch.11)
  • Team Processes & Communication (Ch.12)
  • Leader Power & Negotiation (Ch.13)
  • Leader Styles & Behaviors (Ch.14)
  1. Organizational Mechanisms:
  • Organizational Structure (Ch.15)
  • Organizational Culture (Ch.16)

Examples & Metaphors

• Best vs. Worst Coworker Table
  • Illustrates contrasting behaviors (e.g., adapts vs. resists change, helps vs. mocks newcomers).
  • "Million-Dollar Question": Why do two employees act so differently?
• Google People Analytics (“PiLab”)
  • Motto: "Don’t politick. Use data."
  • Uses surveys (Googlegeist), hiring analytics, promotion studies to refine people practices.
  • Project Oxygen proved managers matter; identified “Oxygen 8” qualities (coach, empower, care, results-oriented, communicator, career developer, visionary, technical expertise).
• Hyundai Quality Teams
  • Expanded quality circles \times 8, broad training ➜ tech leadership & reliability gains; supports cross-cultural OB application.

Why OB ➜ Profitability?

• Resource-Based View (RBV)
  • Valuable resources: financial, physical & OB-related (knowledge, culture, goodwill).
  • A resource is strategic when Rare & Inimitable.
  • History (collective experience) – cannot be bought.
  • Numerous Small Decisions – invisible daily choices competitors can’t copy.
  • Socially Complex Resources – culture, teamwork, trust, reputation.
• Rule of One-Eighth
  1. \tfrac{1}{2} firms doubt people ➜ profits link.
  2. \tfrac{1}{2} of believers make a single change (not systemic).
  3. \tfrac{1}{2} of those persist long enough.
  • \tfrac{1}{2} \times \tfrac{1}{2} \times \tfrac{1}{2}=\tfrac{1}{8}=12\% ➜ only 12\% truly reap OB-driven profits.
• Research Evidence
  • High-Performance Work Practices survey of n=968 firms: +1-unit practice ➜ 7\% ↓turnover, \$27{,}000 ↑sales/employee, \$3{,}800 ↑profit.
  • IPO study (n=136): Firms valuing OB had 19\% higher 5-yr survival.
  • Fortune “100 Best Companies to Work For” portfolio doubled broader market returns.

Scientific Method in OB

• Methods of Knowing
  1. Experience 2. Intuition 3. Authority 4. Science (systematic data).
• Theory ➜ Hypotheses ➜ Data ➜ Verification (Figure 1-3).
  • Theory = story of variables & relationships.
  • Hypothesis = testable prediction.
  • Example hypothesis: “Manager social recognition will ↑ unit performance & commitment.”
• Correlation (r)
  • Range -1 \rightarrow 0 \rightarrow +1; indicates strength & direction.
  • OB conventions: |r| \ge .50 strong, |r| \approx .30 moderate, |r| \approx .10 weak.
• Burger King Social Recognition Field Experiment
  • n=21 restaurants, 525 employees; recognition training vs. control.
  • Results: r=.28 with drive-through speed (44 s vs. 62 s); r=.20 with retention (16% better).
  • Recognition effect ≈ pay-for-performance effect.
• Meta-Analysis
  • Aggregates correlations across studies; social recognition \bar{r}=.21 across 96 orgs.
• Evidence-Based Management & Analytics
  • Use of R&D-like HR functions; Verizon & Google exemplify.
  • Sports analogy: Moneyball & sabermetrics—data challenge intuition (OB On Screen).

OB in a Global Context

• Globalization (“world is flat”) requires adapting OB concepts across cultures.
  • Cross-Cultural Differences: Relationships in model not always universal.
  • International Corporations: decide uniform vs. localized HR policies.
  • Expatriation challenges: performance & commitment abroad.
  • Managing Diversity: multicultural teams demand extra leadership skill.

Self-Assessment Example: Introspection Scale

• 10-item survey; reliable & valid.
• Scoring ≥26 ➜ high private self-consciousness ➜ likely to value OB insights.

Key Terminology (with page cues)

• Inimitable, Socially Complex Resources, Causal Inference, Meta-Analysis, Analytics, etc.
• Definitions emphasize link to profitability & research rigor.

Practical Implications & Applications

• To boost performance/commitment:
  • Address multiple levers (satisfaction, stress, motivation, trust, learning).
  • Build systems that are rare/inimitable: culture, history, talent pipelines.
  • Persist beyond “one-shot” fixes; embrace continuous, data-driven improvements.
• Managerial checklist (inspired by Google’s Oxygen 8 & RBV):
  • Coach & empower; communicate vision; show concern; focus on results & development; maintain technical credibility.
  • Track turnover, satisfaction, motivation metrics; run small-scale experiments; scale what works.

Numerical & Statistical References

• \text{One-Eighth Rule}=12\% of firms truly people-first.
• High-Performance work practice impact: 7\% ↓turnover; \$27K ↑sales/employee; \$3.8K ↑profit.
• Social recognition–performance r=.28; recognition–commitment r=.20.
• Meta-analysis recognition \bar{r}=.21 across 96 orgs.
• Notable science correlations:
  • Height–Weight r=.44; Ibuprofen–Pain r=.14; Smoking–Lung Cancer 25 yrs r=.08.