Chapter 1 - Introduction To Organizational Behavior
Chapter 1 - Introduction To Organizational Behavior
Chapter 1 - Introduction To Organizational Behavior
Module Introduction
Since the period of Industrial Revolution, the study of organizational behavior has been
viewed as an essential tool in managing the organizations. This aims to learn how people
behave in the workplace and how these behaviors affect the organization. This chapter primarily
focuses on the overview of what organizational behavior is and why it is deemed important in
determining organizational effectiveness. It shall also examine how the human capital can be a
source of competitive advantage of an organization.
The introduction to human behavior in organizations shall bring about a better
understanding of the course and shall illustrate the roadmap for the topics to be discussed along
the study of this course.
Topic Outcomes
After reading and understanding this module, students will be able to:
1. Define organization and organizational behavior;
2. Describe how organizational behavior determines the effectiveness of an organization.
Definition of Organization
So as to facilitate efficiency and effectiveness in learning the basic concepts of
organizational behavior, we begin first with the nature of organization. The term organization is
defined as a collection of individuals who work together, having a coordinated system, towards
the attainment of a common goal.
Organizations can be characterized by the following features :
(1) Network of individuals. An organization consists of individuals forming relationships to
get things done and problems be solved.
(2) System. This feature is related to the first one, whereby everyone in this network of
individuals follows a coherent and well-defined structure and processes.
(3) Coordinated activities. In order to achieve a common goal, the organization integrates all
the various activities. This also facilitates efficiency as regards the use of resources and
allows the individuals and groups to perform effectively.
(4) Division of Labor. Activities are grouped according to the job family. Thus, for the
organization to be able to accomplish these several functions, activities are divided into
departments. Each department is often headed by an expert of a given field.
(5) Goal Orientation. This serves as the primary reason why an organization exists. There
must be a goal or a common purpose. For example, a supermarket is established to
achieve a goal of creating profits and at the same time to provide convenience and one
stop shop for all the grocery and household goods.
(6) Continuity over time, regardless of membership change. An organization affords to
operate even if there is a change of its members. Since there is an established system
with a solid foundation of its structure and processes, new members may continue to
manage and still pursue with the achievement of the organizational goals.
Generally, an organization can be considered effective when it is able to achieve its
goals.
The Individual. When there is a fit between individual needs/values and organization’s
expectations, there is a reduced likelihood of frustrations and conflict as a result of their
behaviors. Hence, the management must ensure that they are able to integrate the individual
and organization. This will then foster a satisfactory work environment while attaining the
organizational goals as well.
The Group. All organizations are composed of groups. Groups are generally composed
of two or more individuals working together and influencing one another as they interact.
Informal groups are also formed within the organizations given the nature of people having
social needs - feeling of belongingness. In today’s work environment, groups are turned into
teams. Teams are groups of individuals who work together, having their respective roles and
are performing for a common goal. A group of basketball players becomes a team when a
specific and common goal brings them together, e.g. to win a game as one. Each is given a role
to perform during the entire game. On the other hand, some assemblies for a show are not
considered as teams. They are gathered together as a crowd but they only interact to a very
little extent. Goals are not even specific.
Group members as time passes by develop relationships between and among them,
resulting in influences and rise of group leaders. Recognizing the existence of groups in the
organization can help the management in analyzing group pressures that further affect the
individual performance. When groups are well-managed, business transactions are smoothly
being done, e.g. planning, organizing, and coordinating.
The organization. One feature of an organization is the system - there follows the
existence of a formal structure. And formal organizations are composed of individuals and
groups interacting within the structure. The hierarchy in the structure guides the entire
organizations on how the communication and information flow and how its people carry out their
activities. In relation to organizational behavior, the management systems, structure pattern and
leadership styles affect the behavior of employees. When one member of the organization feels
that there is a bottleneck, it could dramatically affect the way an employee performs in the
workplace.
Very true that individual, interpersonal and organizational factors define the employee
value in the workplace.
Exhibit 1.2
Factors and Outcomes of a Strategic Approach to Organizational Behavior
(Hitt, Miller and Colella, 2012)
Shown in Figure 2 is the VRIO Framework. It is the matrix whereby we identify whether
the human resources in the organization have value, are rare and are difficult to imitate and are
supported by effective management. If the answer to all these criteria is yes, then the
organization would reflect a sustained competitive advantage and above normal performance.
Jayne Parker never intended to have develop a global-leadership program. on the 2019 Nation’s 100 Largest
a decades-long tenure working with Employers list.)
the Walt Disney Co. In the late “Every couple of years,” Parker says,
1980s, Parker was building a career “I was tapped on the shoulder by The internal mobility and deep
as a consultant in organizational someone who said, ‘We’d like you to alignment with the company values
development and structural design go do this.’ I was having a lot of fun, that Parker herself experienced are
when a headhunter came calling to and I gained so much admiration and among the priorities Disney has for
recruit her for a “large entertainment respect for the brand—who we are, its entire 200,000-strong employee
company in Central Florida.” A native what we do and how we do it.” population, a workforce that has
Floridian, she knew what that meant. seen tremendous changes in recent
Before she knew it, Parker had spent years. With a new CEO in the
Parker joined Disney in 1988, tasked 20 years in the company’s theme forecast a few years down the line
with leading training programs that parks and resorts unit, holding titles and the company about to complete
shared with corporate leaders such as director and vice president its largest acquisition to date, the
Disney’s secrets to success for of organization improvement and pace of transformation doesn’t
people management and guest head of HR for the division. In 2009, appear to be letting up.
services—which ultimately laid the she was given her biggest
groundwork for the creation of the assignment yet: executive vice “This is a place where our HR
company’s Disney Institute. Two president and CHRO for the entire leaders are getting to do work in the
years later, she was asked to Walt Disney Co. (Disney ranked 33rd next few years that is truly
once-in-a-lifetime,” says Parker. internally. the company was in some way
impacted by this organizational
Ongoing Evolutions “We had different talent-acquisition change so, in order for it to be
How Disney’s HR team tackles future practices [among the business successful, we felt we needed
change is largely predicated on an units],” Parker says. “Now, we work everyone at Disney to understand
internal change that was ushered in from common platforms and, why this change was necessary and
just over five years ago. Prior to that whether you work in the Center of how it impacted them.”
time, HR operations were segmented Excellence or in a business segment,
by Disney’s business units—a format you have access to the same Change management is nothing new
that often led to overlap. information and the same for a company that has undergone
candidates, which has really helped as many transitions as Disney.
For instance, HR representatives us.” However, Bill Capodagli,
from the theme-park division would management consultant and author
be at the same MBA-recruiting event Being able to continuously evolve of The Disney Way: Harnessing the
as HR professionals from other has been key—Parker notes there Management Secrets of Disney in
Disney units, like Walt Disney have barely been six months without Your Company, o bserves there are
Studios and ESPN. a change to at least one of the certain core values that have always
centers. More than five years driven the organization’s work.
“We were competing with ourselves,” removed from the centralization, she
she says. “We had to present Disney adds, heads of HR at the business In particular, he says, the
as one company with many units are more often suggesting organization has upheld “the
opportunities in order for graduates things they think can be done underlying values that Walt instilled
to understand that they can have a commonly, bringing more into the in his company decades
very interesting and varied career fold of the Centers of Excellence. ago—innovation, quality, storytelling,
path at the Walt Disney Co.” mutual respect and trust. I tell my
The collaboration demonstrated clients that, when values are deeply
through the development of the COE rooted in a company, they rarely
In 2013, Disney launched its Centers change; in fact, the organization
of Excellence, covering seven HR model mirrors that of another recent
evolution: a strategic reorganization changes in order to protect their
focuses, ranging from talent values.”
acquisition to diversity. In what of the business units announced in
became known as the AND Model, March 2018. The new format
each head of HR would maintain his consolidated direct-to-consumer Investing in Employees
or her position while also taking the services, technology and That idea is evinced through a highly
helm of a Center of Excellence. international media operations into a impactful employee benefit that
single, worldwide business, into launched last year.
which elements of media networks
Since her background included time and studio entertainment also
as a head of HR for a business unit, In August, the company announced
moved. Meanwhile, parks and the creation of Disney Aspire, a
Parker says, she had the unique resorts and consumer-products
perspective of being able to groundbreaking
operations also combined. education-assistance program open
understand the individualized HR
needs of the units. The day-to-day of to its 80,000 hourly workers.
overseeing the 100,000-plus mostly The concept was conceived by CEO Employees can access a wide range
frontline and largely unionized Bob Iger, who worked with the of degrees and certifications—all
workers in the theme parks and executive team to refine it. When the cost-free. With a $150 million
resorts, for instance, differed move was unveiled, Iger said in a investment in the program’s first five
drastically from the HR needs of the press statement that the effort aimed years, Disney is paying all tuition
company’s studio division. However, to strategically position “our upfront and reimbursing employees
commonalities also existed, and businesses for the future, creating a for books and other fees. The
leadership had to carefully consider more effective global framework to educational programs, offered at a
both during the centralization. serve consumers worldwide, vast network of schools in both
increase growth and maximize online and in-class formats, do not
shareholder value.” need to relate to employees’ current
Talent acquisition is one area that work at Disney.
has seen significant impacts from the
shift. The talent-acquisition center Shortly after announcing the
offers recruiting support across all reorganization, Iger attended a town Conceived by HR—and quickly
divisions, while a single technology hall Parker was hosting, answering approved by Iger, who proposed
platform was designed to facilitate questions from global HR doubling its initial budget—Disney
online applications employees. Aspire was developed with a
companywide—demonstrating brand long-range focus for employees,
continuity and showing candidates “[Iger] wanted the whole HR team Parker says.
the opportunities for internal mobility, worldwide to hear from the CEO
while streamlining processes about his hopes, his dreams and his “In reality, all of those 80,000 people
objectives for the reorganization,” are not always going to work for the
Parker says. “Every single person in Walt Disney Co., so we can have a
higher purpose—equipping our program. Twelve women participated in the
employees to be successful and pilot and 20 are enrolled in the
helping them create the futures they The first employee to enroll recently second round, which kicked off in
want,” she says. completed a trade certification, and April.
students have applied to and
Disney partnered with Guild enrolled in the entire span of “People can see a bright future for
Education to design and operate the program offerings. On the college themselves, and that’s because of
program. Guild CEO Rachel Carlson level, there has been strong their relationship with the Walt
says, compared to some companies participation in courses focused on Disney Co.,” Parker adds. “That’s
the organization works with, which organizational leadership, what’s made this possible.”
may only have a handful of key job cybersecurity, business,
titles, Disney’s hundreds of positions communications and finance. Looking Forward
posed a unique but exciting The focus on diversity embedded in
challenge, as they sought to create Carlson says the early indicators are CODE: Rosie will continue to be at
opportunities to suit a range of “tremendous.” the heart of Disney’s work in the
interests at all education levels. coming years, Parker says.
“We’ve seen unmatched enthusiasm
“That meant we had to work together amongst Disney employees for this “In order for us be successful, we
as a team to think about the diverse program,” she says. “We’ll know believe our employees have to
needs of that broad employee base,” we’re successful as we start to see reflect the audiences we’re here to
Carlson says. The depth and breadth graduates earn diplomas and serve, and our audiences are very
of the employee population is among channel their learning into career diverse,” she says.
the reasons Disney Aspire is so advancement and increased
comprehensive—employees can economic opportunity—at Disney or
pursue college and post-grad To that end, Parker helped the
beyond.” company achieve gender equality in
degrees, GED, vocational training,
English-language learning and more. its global workforce and appointed
Capodagli says he advises clients the company’s first chief diversity
that they can’t attain Disney-caliber officer in 2011. The HR
To help students navigate the customer service—it consistently centralization, she adds, also has
complexities of returning to school, ranks at the top of global lists for helped the company focus on
Guild offers personalized coaching corporate reputation—without diversity in its hiring practices, as
throughout the journey—from employee satisfaction. And one of applicant data are more readily
selecting a school and program to the best ways to achieve that is by available across the company.
filing the application all the way providing ongoing learning
through to degree completion. opportunities. Developing diverse leaders from
within the ranks has also been a
“We believe our coaching model is “If you watch a group of 3- or priority, with a range of mentorship
paramount to the success” of 4-year-olds on the playground, their and development programs targeting
participants, Carlson says. joy and excitement for discovering high-potentials for executive
new things is contagious,” he says. leadership.
In rolling out the program, Parker “In the adult world of work,
fielded many questions from continuous learning experiences can On the leadership front, the company
employees who thought the initiative serve to rekindle the exuberance of is facing a significant shift as it
was too good to be true. Once those youth.” prepares for the 2021 retirement of
notions were dispelled, she says, Iger, CEO since 2005.
she spent many an evening Education is also at the heart of
reviewing reports that contained another Disney initiative, CODE:
firsthand reactions from workers Though Parker didn’t share details of
Rosie—which stands for Creating a timeline for identifying Iger’s
about Disney Aspire, which she Opportunities for Diverse Engineers
described as an emotional successor, she cites the importance
and is a reference to World War II of the company’s
experience. icon Rosie the Riveter. Launched in leadership-development focus and
2016, the program teaches women its culture that encourages talent
“I’m so proud of the impact this is across the company how to code, movement.
having—not necessarily the impact it with no tech background needed.
will have on the company, but it’s the Participants undergo three months of
impact this will have on our education and then a year of “One of Disney’s strengths is
employees’ lives,” Parker says. real-world experience. The company growing talent and helping people
holds the participants’ jobs for them see their career opportunities across
in case they want to return after divisions,” Parker says. “Employees
Since Disney Aspire launched, more can make a career that
than 23,000 eligible employees have completing the program, though
most decide to funnel into coding encompasses incredibly different
created accounts, expressing experiences, which is motivating
interest in taking advantage of the jobs at Disney, Parker says.
developmentally and is also the
greatest form of stability for future
succession-planning.” growth through acquisitions is just Steering the Disney workforce
part of our DNA,” Parker says. “We through to the other side of the
Capodagli predicts a leader with a have created an expertise in HR of acquisition will be among the tasks
long-range focus similar to Iger’s working through what happens facing HR in the coming years.
would be critical to continuity. pre-announcement of an acquisition, Navigating a rapidly shifting
after the announcement and—maybe marketplace—for instance, Disney is
most important—have developed gearing up for the launch of its own
“The biggest unknown,” he adds, “is expertise in the integration work streaming service later this year—will
whether or not Bob’s successor will that’s required after the close of also take center stage, Parker says.
follow in his footsteps as a long-term these acquisitions.”
strategist and values-driven leader.”
“How and where consumers and
Parker says such work requires a viewers want to be entertained is
Another change coming down the deep understanding of the business changing, and that’s an opportunity
pike is Disney’s acquisition of 21st rationale for the acquisition, one that for us in HR to help our business
Century Fox. The deal was inked last acknowledges it’s not just motivated executives make those shifts, to
summer and received EU regulatory by intellectual property. make sure we’re the best competitor
approval in the fall, at which time Iger in a changing landscape,” Parker
said he was optimistic it will close says, noting that, with 30 years at
before June 2019. It’s the largest “We have to make sure we study the
companies we’re acquiring and Disney now in the rearview mirror,
acquisition yet for Disney, which her experience has shown her that
already has a string of major appreciate what’s made them so
successful,” she says. “In doing so, the greatest challenges she faced in
acquisitions under its belt: Marvel, her roles have also been the most
Lucasfilm and BAMTECH Media, we can understand what they’ve
done better than we have, learn from fulfilling experiences. “I’ve had a
among many others. chance to do the work I’ve dreamed
their strengths and apply that to our
businesses.” of doing.”
“We’re a company where the idea of
looking to expand opportunities for
Chapter Review.
I. Identification. Identify what is being referred to in each of the following statements.
__________________1. It refers to the actions of individuals and groups in an
organizational context.
__________________2. It is the sum of skills, knowledge, and general attributes of
people in the organization.
__________________3. It is defined as the collection of individuals who work together,
having a coordinated system, towards the attainment of a
common goal
__________________4. These are the outputs of the individuals in the workplace.
__________________5. It relates to the feelings that individuals and groups have about
their work and the workplace.
II. Essay. Briefly discuss the common features of an organization in not more than 8
sentences. Cite some examples. (Items No. 6-15)
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Short Case Study.
Organizational Behavior Case: Conceptual Model: Dream or Reality? (Luthans, 2012, p.30)
Hank James has been section head for the accounting group at Yake Company for 14
years. His boss, Mary Stein, feels that Hank is about ready to be moved up to the corporate
finance staff, but it is company policy to send people like Hank to the University Executive
Development Program before such a promotion is made. Hank has enrolled in the program; one
of the first parts deals with organizational behavior. Hank felt that after 14 years of managing
people, this would be a snap. However, during the discussion on organizational behavior, the
professor made some comments that really bothered Hank.
The professor said:Most managers know their functional specialty but do a lousy job of
managing their people. One of the problems is that just because managers have a lot of
experience with people, they think they are experts. The fact is that behavioral scientists are just
beginning to understand human behavior. In addition, to effectively manage people, we also
have to somehow be able to better predict and control organizational behavior. Some models
are now developed and research is accumulating that we hope will help the manager better
understand, predict, and manage organi- zational behavior.
Hank is upset by the fact that his professor apparently discounts the value of experience
in managing people, and he cannot see how a conceptual framework that some professor
dreamed up and some esoteric research can help him manage people better.
1. Do you think Hank is justified in his concerns after hearing the professor? What role can
experience play in managing people?
2. What is the purpose of conceptual frameworks such as those presented in this chapter? How
would you weigh the relative value of studying theories and research findings versus
“school-of-hard-knocks” experience for the effective management of people?
3. Using the conceptual framework presented in the chapter, how would you explain to Hank
that this could help him better manage people in his organization?
References
Books
Black, S., Gardner, D. G., Pierce, J. L., & Steers, R. (2019). Organizational Behavior.
OpenStax Rice University.
Hitt, M. A., Miller, C. C., Colella, A., & Triana, M. (2017). Organizational Behavior (5th
ed.). Wiley Global Education
Hitt, M. A., Miller, C. C., and Colella, A. (2012). Organizational Behavior (3rd ed.). Wiley
Global Education
Schermerhorn Jr., J. R., Hunt, J. G., Osborn, R. N., & Uhl-Bien, M. (2010).
Organizational Behavior (11th ed.). Wiley.
Electronic Sources