Module 1

Introduction to Organizational Behavior

At the end of Module 1 students should be able to:

1. Describe the general history of management theory and practice and frame how organizational
behavior has developed from these into a discreet field.

2. Describe organizational behavior and differentiate between the three levels of influence.

3. Describe contemporary issues and topics in organizational behavior.

INTRODUCTION

Welcome to the first Module of the course Human Behavior in Organization. In this module, we
will look closely into the institution of learning Organizational Behavior (OB). The study of organizational
behavior encompasses the behavior of individual organization members and groups within
organizations; the myriad of organizational processes, dynamics, and conditions of the organization as a
whole; and the ways in which all these factors interrelate. This course helps students develop
conceptual, diagnostic and personal skills for dealing with human interaction in complex organizations
with diverse workforces. We will take a systems approach to the material, finding in systems theories
the common framework that links organizational processes and dynamics at the individual, group, and
organizational levels. We will compare and contrast behavioral theories and deal with a range of topics,
including individual development and motivation, group and team development and dynamics,
communication, leadership, conflict, power/politics, culture, diversity, creativity, ethics, decision-
making, and the organizational psyche. The student will develop skills in applying these concepts and
theories by analyzing realistic organizational cases and processing and discussing those analyses with
fellow students and the instructor. The student will bring these skills to their own organizations to
assess current management practices and develop recommendations for improvement.

We will create a learning environment in which what the students already know, what I and other
experts know, and what the students are learning will interact and mutually energize each other. Class
sessions will include posted lectures, case studies, videos, student input, and small group projects and
interactions. Each class will become a mini-lab in which participants will practice ideas, skills, concepts,
and perspectives that we introduce during the course. You should not be overly concerned with coming
up with the “right” answer. A “right” answer is one that you can articulate and support, while drawing
upon the references noted for the course.

Let’s look at two young professionals, Manuel and Rachel. Manuel has an entry level sales position with
a computer software company. He spends time at the office and also travels to visit existing clients and
build relationships with potential ones. His company is motivating and supportive to their sales force
and schedules frequent team building and training opportunities. Manuel’s coworkers have diverse
experiences and backgrounds and work well to support each other in their sales endeavors.

Rachel works as an entry level accountant at a high profile accounting firm. She works long hours and
spends a majority of her day in her cubicle working on her computer. To meet impending deadlines, her
supervisors now require Rachel’s team to work Saturdays. Their team is understaffed to meet their
deadlines so oftentimes work becomes sloppy when the team rushes to have something to present to
the client.

The organizational behavior of Manuel’s company and Rachel’s company are extremely different.
Manuel works in a healthy and supportive atmosphere whereas Rachel is being forced to work long
hours on an understaffed team. Even if Manuel and Rachel had similar personality types, their
workplace performance and satisfaction will greatly differ depending on the organizational behavior of
their company.

You may think that numbers and operations are the key to any business. While this is true on many
levels, the behavior of an organization is equally as important. It is impossible to have strong numbers,
without a strong workplace environment. Understanding what motivates people is key to building a
strong and happy environment. If you have an entry level position or if you are the main person in
charge, understanding the behavior of individuals and teams can be extremely beneficial.
Could you imagine taking a test without studying? If you did, chances are you wouldn’t do so well. Just
like studying for a test, studying organizational behavior can help prepare you to be more successful in
your career. So let’s start “studying” to better understand organizational behavior and how it impacts
the workforce!

MANAGEMENT THEORY AND ORGANIZATIONAL BEHAVIOR

Management theory? I thought this was an organizational behavior class.

You are probably wondering why the first section in your organizational behavior text is focused on
management theory. Like most modern-day theories and ideologies, organizational behavior has
evolved over time as people adapt to changes in society. In order to understand organizational behavior,
we must first understand management theory and how the people before us used these theories to
guide and direct formal organizations to be more successful.

It is important to remember that organizational behavior has developed from management theory into a
distinct field of its own. Let’s move ahead to deep dive into how management theories influenced and
formed organizational behavior as it is known today.

History of Management Theory

So what is management theory? First, let’s break down the term. Theories help us understand our
experiences by using research and observable facts. Management is the act of supervising and directing
people, tasks, and things. So, simply put, management theory is a collection of understandings and
findings that help managers best support their teams and goals.
The Importance of Management Theories

Management theories help organizations to focus, communicate, and evolve. Using management theory
in the workplace allows leadership to focus on their main goals. When a management style or theory is
implemented, it automatically streamlines the top priorities for the organization. Management theory
also allows us to better communicate with people we work with which in turn allows us to work more
efficiently. By understanding management theory, basic assumptions about management styles and
goals can be assumed and can save time during daily interactions and meetings within an organization.

Theories can only reach so far, and management theories are no exception. There is no such thing as a
one-size-fits-all management theory. What may work for one organization may not be relevant for
another. Therefore, when one theory does not fit a particular situation, it is important to explore the
option of developing a new theory that would lead in a new, more applicable direction. While some
theories can stand the test of time, other theories may grow to be irrelevant and new theories will
develop in their place.

The Evolution of Management Theory

While the next section will get into the nitty-gritty behind the history of different types of management
theory, it is important to have a basic understanding as to why management theory was such an
important and ground-breaking idea. The industrial revolution is at the center of management theory.
From the late 1700s through the early 1900s, the industrial revolution brought extraordinary change to
the workplace and forever transformed the way companies operate.
The industrial revolution brought better and faster technology allowing companies to perform more
efficiently than ever before and gave them the ability to dramatically increase their output. However,
increased output meant lower prices which increased demand which in turn required more employees.
Companies that once had a couple dozen employees were now growing into gigantic corporations. No
longer was it possible for a manager to know each and every one of their employees on a friendly level.
In order to meet demand, company leadership had to ensure their employees were productive. Sounds
simple, right? Not exactly.

While productivity goals can be set easily, managing a team to meet productivity goals was not so
simple. For the first time, managers had to find new and innovative ways to motivate a sizable number
of employees to perform. Since this was a new concept, research, observations, experiments, and trial
and error were all used to find new and better ways to manage employees. The industrial revolution
gave birth to a variety of management theories and concepts, many of which are still relevant and
essential in today’s workforce. In addition, many management theories have developed since the end of
the industrial revolution as society continues to evolve. Each management theory plays a role in modern
management theory and how it is implemented.

Let’s take a look at some key management theories, explore their history and reasoning, and learn about
the masterminds behind them.

Different Management Theories

During the Industrial Revolution, it became obvious that the ways companies operated their businesses
had to drastically change. While many people were in agreement that change was inevitable, pioneers in
management theory differed in how they believed things should change and operate. In this page, we
are going to explore six different management theories, all of which helped to form the base of
management as it is known today. Keep in mind as you read about each one, that while some parts of
the theories may be common sense to us today, at the time they were developed, they were
groundbreaking. While the industrial revolution sparked these new theories, even more innovation
came in the decades that followed as companies changed to adapt to business needs.

Scientific Management Theory

Frederick Winslow Taylor developed and published his Scientific Management Theory in 1909. At its
core, scientific management theory believes that it is vital to find the most effective way to complete
each and every task, no matter how small. In the early 1900s, managers would give orders to their
workers with no guidance on how to accomplish them. Managers and employees rarely, if ever, had
interaction with one another. Taylor believed this was an inefficient way to operate a business and
recommended some key changes.

Taylor argued each task should be completed as efficiently as possible. In addition, everyone should be
assigned a particular job based on their skills and abilities and must be evaluated based on the quantity
and quality of their work. Taylor did not think it was fair or cost effective to pay every employee the
same amount, regardless of their output. While this may sound like common sense today, this was a
groundbreaking idea in the early 1900s. Another big component of scientific management theory is the
idea of training and development. Taylor argued it was extremely important to monitor and train your
employees on the tasks they are assigned to. By ensuring your employees are efficient at their work, the
output will be larger and of a higher quality.

One part of the scientific management theory that is not common today is the idea that managers
strictly manage and employees simply work. Nowadays, most companies offer room for growth and
advancement for their employees as opposed to keeping a distinct barrier between management and
employees. This theory had a huge impact on the way companies operated and were able to create a
more balanced pay system, better training, and a more efficient workforce.

Administrative Management Theory

Administrative management theory was developed by Henri Fayol in the early 1900s and is considered
to be highly relevant even today. Fayol created fourteen principles which he believed outlined the basis
for strong and successful companies. It is important to know that Fayol agreed with many of Taylor’s
ideas and ideologies, however, the main difference is that Taylor focused on the process of completing
the work most effectively, and Fayol focuses on the organizational structure of a company as a whole.

Some of Fayol’s principles included a clear division of labor, ensuring each employee had only one direct
manager to report to, and a healthy manager-employee relationship. Another important part of Fayol’s
administrative management theory is the idea that everyone in a company should be aligned by
organizational goals. Fayol believed that organizational structure was vital to the success and
productivity of a company.

Bureaucratic Management Theory

The word bureaucracy tends to give off a negative vibe, implying that a bureaucratic organization is an
impersonal machine that focuses more on numbers and output than on the wellbeing of its employees.
However, its intended meaning is quite different. At the end of the 19th century, Max Weber created
the bureaucratic management theory. Unlike today’s interpretation of the word, Weber believed that
bureaucracy meant carefully developing and spelling out company objectives and divisions of labor.
While this included developing a hierarchy of command within the company, it also included supporting
and developing employees.

Weber built onto Taylor’s theory by adding a few key ideas of his own. Like Taylor, Weber believed
efficiency in completing tasks was a key component to success and recommended detailed record
keeping at all levels to monitor efficiency as well as areas of opportunity. He agreed that all employees
need to have clear job expectations and each job should be standardized to allow for maximum
productivity. The greatest difference between the scientific theory and the bureaucratic theory is that
Weber believed in the importance of human emotion.

Emotion in business? This was absolutely unheard of during the industrial revolution. However, Weber
believed the two words were closely associated. Weber argued that the increased use of technology
could have a negative impact on a company’s culture. Too much change can be harmful to company
morale and create long lasting negative effects on company success. In addition, Weber argued it was
extremely important to hire based on skill and, just as importantly, personality. To ensure the safety and
longevity of a company’s culture, Weber believed hiring employees based on their personality was
critical.

Even in today’s business world, there is an anti-bureaucratic tone. For example, the term management is
often replaced with leadership. The argument for this is that management is a mundane and structured
task while leadership is a unique and heroic act. With this thought process, managers are viewed in a
negative light while leaders are appreciated and recognized. Although in many places managers and
leaders may appear to perform their job the same way, the focus on eliminating bureaucratic tone and
perceived terminology from today’s workplace is evident.

Now that you have read about three management theories, do any of them seem familiar? Maybe you
have experienced certain aspects of each of these theories first hand. During an interview process,
onboarding process, or the day-to-day work environment, some parts of these theories are still active
today. Try connecting some of these theories to your personal experiences as we move onto the next
three theories we are going to discuss in this module: Human Relations Management Theory, General
Management Theory, and X&Y Management Theory.

Human Relations Management Theory

As the title implies, Human Relations Management Theory is centered around human interactions and
relationships. Elton Mayo believed that all early management theories only focused on how money
affects employee performance. He believed there were more factors that influenced how employees
behaved and performed at work. To test his theory, he began a study at Chicago’s Western Electric
Hawthorne Plant in the 1920s and 1930s and created his own management theory based on his findings
which are more commonly known today as The Hawthorne Effect.

The initial goal of the study was to determine how changing the lighting would or would not affect
employee productivity. They began the study with a small group of employees who they interacted with
throughout the process. The study found that regardless of how they changed the lighting, productivity
increased. When they were unable to make a connection as to why productivity improved, they began
branching out to other departments to see if the results were similar. They realized that the lighting
changes did not affect productivity but instead the daily interactions with the employees throughout the
process motivated them to work more efficiently and increase their output. They allowed employees to
voice their opinions, frustrations, and successes which in turn helped the employees feel more valuable.
In addition, since they knew they were being monitored, they were more motivated to perform on a
higher level. This was a revolutionary discovery that put the spotlight on human relations and
highlighted the importance of individual and group dynamics.

General Systems Theory

In the 1940s, biologist Ludwig von Bertalanffy created his General Systems Theory. I know you’re
probably wondering why a biologist would have any impact on management. Keep reading to see if you
can connect the dots.

Ludwig von Bertalanffy believed that your body is the sum of all parts. For example, your nervous system
works together with your digestive system, which work with each organ and muscle group to allow a
person to function. If one function of the body fails to work, the body as a whole cannot effectively
operate. Humans are most healthy and functional when all aspects of their being are working together
effectively. He also argued that the environment can have an effect on each of the parts. A broken leg
can prevent you from walking or the flu can have you bedridden for days. Each of these issues can
damage the overall productivity of a person.

Ludwig von Bertalanffy’s theory is still found today in many management styles and theories. His work
shows that external factors can prove to be toxic to an environment. Although he was referring to the
human body, the same can be said for the workplace. Negativity and other toxic outlooks can have a
harmful effect on motivation and performance at all levels in an organization. And, like his theory states,
even when only one component of the organization isn’t executing properly, it will have an undesirable
effect on the rest of the organization.

X&Y Management Theory

Based on his observations in the 1950s and 1960s, Douglas McGregor developed the X&Y Management
Theory, arguing that all managers can be grouped into two categories. The first category known as
Theory X explains that managers have a negative view of their employees and believe that employees
need to be forced or coaxed into working. Theory X Managers tend to micromanage with the belief that
employees will not motivate themselves to complete their work. This theory can be linked back to the
scientific management theory and its focus on output above employee development and input.

On the opposite side of the spectrum, Theory Y Managers believe that employees are inherently
motivated to work. Theory Y managers value the importance of helping their employees to thrive by
providing opportunities for learning and development. Theory Y is focused on the idea of team versus
independent work. McGregor argued that a team environment paired with an emphasis on individual
professional development produces better results and a healthier work environment. Theory Y
continues to prove its relevance and is still present in today’s business world.

Now that we’ve discussed six different management theories, where do we go next? I’m so glad you
asked! There is a very important link between management theory and organizational behavior.
Although the concepts are different, these six management theories helped develop organizational
behavior into its own unique field. Let’s move on to learn more about how the two are connected!

Management Theory and Organizational Behavior

Similar to some of the management theories we discussed, the foundations of organizational behavior
can be traced back to the Industrial Revolution. While the Industrial Revolution began to change
company management styles in hopes of increasing productivity, it was also changing the overall culture
and behavior of each organization. For the first time, companies were growing at an alarming rate,
forcing them to change their workflow, company policies, and management styles.

The first management theory that helped establish the foundation for organizational behavior was
Taylor’s Scientific Management Theory. As we discussed earlier, Taylor placed a huge focus on
productivity and worked to establish the most efficient ways to accomplish every task, big and small.
Taylor’s theory impacted each organization’s productivity and it also changed the professional and
personal dynamic of its employees and managers. This classical approach to management was later
challenged by the onset of the human relations management movement which helped to further
develop the groundwork organizational behavior.

While effective for productivity, the scientific management theory was missing a key component, human
relations. In response to the classical management approach, human relations management theory was
born. The Hawthorne Studies were a shining example of how much human relations and interactions
can affect the workforce. A connection was finally made between productivity and the people
responsible for it. The Hawthorne Studies proved that it was important for companies to take interest in
their employees in order to increase productivity and decrease turnover. Not only did the studies show
that individuals performed better when given attention, it also revealed that group dynamics were
equally as important as individual contentment. It was becoming clear that the individual and group
dynamics in an organization were equally important and directly related to the output of a company. It
was through this revelation that people began to study the behavior of organizations at multiple levels;
individual, group, and whole organization.
Another big impact on the development of organizational behavior was McGregor’s Theory X & Theory
Y. As you read in the last section, the two theories are extremely different. Theory X states that people
are inherently lazy and need to be forced to work. Theory Y on the other hand, says that people are
motivated to work and argues the importance of a team dynamic. Theory Y is the more effective of the
two theories and is a fundamental part of the foundation for organizational behavior.

While organizational behavior roots can be found in many management theories, it was not officially
recognized as a field of its own until the 1970s. Since the 1970s, organizational behavior has developed
into its own unique field covering a wide variety of topics for individual and group relations within
organizations. This course will help you deep dive into the interworking of organizational behavior and
help you understand how organizational behavior affects the day-to-day lives of employees in the
workplace.

Activity No. 1

Essay: Use your own words, plagiarism is a crime (R.A. 8293) (Minimum of 300 words – Maximum of 500
words)

1. In your own perspective, why does organizational behavior matter in the workplace?
2. In addition to advances in technology, why is that productivity became a large motivation in the
development of management theory during The Industrial Revolution?

3. How is management theory connected to organizational behavior?

Let’s move on to better define organizational behavior and enhance our understanding of its influence
on an organization!

ORGANIZATIONAL BEHAVIOR AS ITS OWN FIELD

We have discussed management theories and their connections to organizational behavior, however,
we have not clearly defined organizational behavior itself. In order to be successful in this course, it is
important to fully understand what organizational behavior is, why it is important, and how it can
influence an organization on multiple levels.
What is Organizational Behavior?

In a nutshell, organizational behavior is the study of how human behavior affects an organization.
Organizational behavior aims to learn how an organization operates through the behaviors of its
members. Instead of taking a strictly numerical approach to determine an organization’s operations, it
takes a more psychological approach. By understanding people, you can better understand an
organization.

Organizational behavior is intended to explain behavior and make behavioral predictions based on
observations. If you can understand behaviors, you can better understand how an organization works. In
addition, organizational behavior studies how an organization can affect behavior. So, if you think about
it, behavior affects an organization and an organization affects behavior. Let that sink in for a second—
it’s all connected! They each affect the other, creating a never ending loop between the two. Therefore,
in order to have a healthy and successful organization, it is extremely important to understand the ins
and outs of organizational behavior!

Evolution of Organizational Behavior

The academic study of organizational behavior can be dated back to Taylor’s scientific theory as we
discussed earlier in this module. However, certain components of organizational behavior can date back
even further. In this section we will discuss how organizational behavior developed into a field of its
own.

Looking back thousands of years we can find components of organizational behavior. Famous
philosophers like Plato and Aristotle discussed key components of today’s organizations including the
importance of leadership and clear communication. While these seem like very basic and broad
concepts today, at the time they were innovative ideas and helped to lay the foundation for
organizational behavior.

If organizational behavior were a simple topic, this course would be short and sweet. We could simply
say that organizational behavior is how people and groups act within an organization. But it’s not so
simple!
When organizational behavior grew into an academic study with the rise of the Industrial Revolution, it
began to complicate what could appear to be simple topics. People began asking a lot of questions and
started critiquing how organizations operated. Like many academic ventures, people began to deep dive
into how behavior plays a role in organizations and why changes in behavior alter the way organizations
operate. Along the way, organizational behavior has grown to incorporate components of management,
psychology, leadership, personality traits, motivation, etc.

Organizational behavior has grown into its own niche within a wide variety of other genres. This is
exciting because it allows us to really investigate each and every aspect of behavior within an
organization! Today, organizational behavior is recognized as an essential component of an organization.
Scholars and businesses alike recognize its importance and continue to help it adapt to current issues
and new findings.

One of the great things about organizational behavior is that it is constantly changing. The rest of this
module will discuss contemporary issues in organizational behavior and how organizations are adapting
to and learning from these challenges.

Three Levels of Influence

If you have ever held a job, taken a class, or participated in an organized activity, you have seen levels of
influence. The three levels of influence are the individual, the group, and the organization. The three
levels are interconnected so it is critical to understand each one.

The Individual

The individual level includes each individual person within an organization. Each individual acts
differently which affects group dynamics and the organization as a whole. If there are a lot of happy and
efficient individuals, the work environment will be an efficient and productive one. However, if there are
a lot of negative and disgruntled individuals, it can create a toxic environment.

It is impossible for a company to study each individual employee’s behavior, however, it is important for
a company to create guidelines and expectations that will attract employees with desirable behaviors.
For example, a company may hire employees based on their personality or how they answer behavioral
based interview questions. At the same time, companies can help influence individual behavior. They do
this by creating a code of conduct, establishing policy and procedure guidelines, and by developing
incentives and consequences.

The Group

The group level includes any groups within an organization. Groups can range in size from a couple
people working together, to a large group with dozens or hundreds of members. As we just discussed,
individuals can affect a group and a group can affect an organization. And at the same time, a group can
affect individuals and an organization can affect a group. Imagine organizational behavior as a large
spider web over each organization. The spider web connects each level of influence with the two others,
creating a pathway between each one.

The Organization

Finally, the organization level incorporates the organization as a whole. In case you haven’t picked up on
the trend, it’s important to point out that the organization impacts the individual and group behavior
and that individual and group behavior impacts an organization.

Activity No. 2

How is organizational behavior unique?

CONTEMPORARY ISSUES

Organizational behavior is constantly evolving. Modern issues and current events have an effect on
organizational culture and behavior alike. Changes in society impact how organizations operate. While it
is important to understand the history of organizational behavior, it is equally important to understand
how contemporary issues affect organizational behavior. The rest of this module will discuss current
challenges within the workforce and how they impact organizations on an individual, group, and
organizational level. Pay close attention as you will see some, if not all, of these issues in your own
workplace!

Telecommuting

The Industrial Revolution was just that, revolutionary. Since then, technology innovation has accelerated
and now plays a huge role in day-to-day life. Many would claim that technology makes life easier,
allowing people access to information at the drop of a hat. Others, however, would disagree and argue
that technology is detrimental to human interactions and negatively impacts relationships. Without a
doubt, technology has changed the face of modern society and the organizations within it.

Since technology plays a prominent role in organizations, it impacts organizational behavior. Technology
allows organizations to be in constant communication. With cell phones, emails, and video conferencing,
people are readily available at any time of day or night. This can be beneficial for many people, providing
them a continuous connection to their workplace or it could be damaging to work-life balance. New
technology innovations have also made once time-consuming tasks much more efficient, allowing
people to accomplish more in less time.

With all of the great things technology brings to the table, it also brings challenges. One contemporary
issue facing organizations today is telecommuting. Telecommuting is a work arrangement which allows
employees to work remotely, often from home, while completing their tasks. Telecommuting has many
benefits and also presents a number of challenges. To better understand how telecommuting impacts
organizational behavior, let’s learn more about how it works.

According to Global Workplace Analytics 2018 Telecommuting Trend Data, telecommuting numbers are
on the rise. There are currently over 4.3 million employees that work from home, at least half of the
time. In addition, the telecommuter population has grown 11.7% over the last year, which is the largest
yearly growth since 2008. It is obvious that telecommuting is changing the way employees interact with
their peers and supervisors. Let’s move on and discuss how telecommuting both challenges and
improves organizational behavior.

First, let’s discuss the positive impact telecommuting has on organizational behavior. Telecommuting
allows people to work from anywhere, anytime. This is appealing to many people because it allows them
to better balance their work and personal life. People who telecommute are oftentimes self-motivated
and efficient as they do not have the typical distractions of a traditional workplace environment.
Telecommuters are often happier in their jobs and are therefore more motivated to perform on a higher
level. This in turn benefits the organization and ensures better employee retention. In addition,
telecommuting allows companies to hire from a larger pool of candidates which gives them the ability to
be more selective in the skill sets and personalities of their employees. Telecommuting can also save
companies a lot of money by limiting the amount of office space and supplies needed to operate their
business.
So far, telecommuting sounds great! However, there are some challenges to managing telecommuters.
Being self-motivated is a huge key to success for telecommuters. If they cannot find a productive place
to work, telecommuters may become easily distracted and not meet their deadlines. This becomes a
challenge because organizations need to rethink how they will manage telecommuters. Since the
managers and employees are not housed in the same building, managers cannot stop by their office to
see first-hand how they are doing. Instead, they need to rely on other electronic methods to ensure
their team is meeting deadlines. Telecommuting also cuts back on daily interactions with other
employees. While conference calls and video conferencing is common practice today, some
telecommuters may feel isolated and struggle with the lack of face-to-face communication. This can
have an impact on morale.

Finally, another popular practice in today’s organizations is having employees that telecommute only
part-time. This can create an organization where some employees telecommute all the time, others
telecommute part of the time, and the remainder work from the office all the time. A 2010 study of the
effects telecommuting had on non-telecommuters revealed some interesting findings. First, non-
telecommuters were frustrated with telecommuters. Some even grew to be envious towards the
telecommuters’ working arrangement. This has the potential to create a toxic work environment and
have a negative impact on productivity. There are, however, some key things organizations can do to
help limit these issues. It is extremely important for organizations that offer telecommuting to establish
clear and concise policies and procedures for their telecommuters. These policies and procedures need
to include accessibility expectations, communication requirements, mandatory technology capabilities,
etc.

As you can see, with forethought and a clearly defined and executed plan, telecommuting can be
extremely beneficial to organizations. Let’s move on to learn about other contemporary issues in
organizational behavior!

Green Business Practices

Close your eyes and try to picture yourself walking around during the Industrial Revolution. What do you
see? Maybe rows and rows of employees with their heads down, working away on the task at hand.
Maybe you see an assembly line, quickly working a product down the row. You may picture managers in
early 1900s clothing, observing their employees from an observation deck as they work. Or maybe you
picture the outside of a factory, with smoke billowing out of smokestacks, evidence of the production
occurring within the building.

Let’s focus on those smoke stacks for a minute. Do you think that companies during the Industrial
Revolution cared about their carbon footprint? Do you think they even knew that their business could
have a negative impact on our environment? If they did, do you think they would care enough to change
their practices? Do you think their customers and local citizens would demand better environmental
practices if they knew the impact of pollution? While these may not have been important questions
back in the day, they are critical in today’s society, as climate change becomes an ever-present issue.
You may have heard of modern terms like sustainability, going green, carbon footprint, or triple bottom
line. These terms play an important role in modern society and sustainability specifically, is becoming
common practice as consumers are becoming more aware of the impact companies have on the
environment.

STARBUCKS

Starbucks is the first store that comes to mind when people think about national coffee shop chains—
after all, there are over 13,000 locations in the United States alone. In fact, in some cities, you can be
within walking distance of 30 different Starbucks locations at once.

Starbucks is taking action to show its dedication “going green.” In fact, if you visit their website, they
have a portion of their website dedicated to enacting sustainable solutions where they talk about
enacting change in their stores, their packaging, and their power solutions. They even are participating
in strategies to address climate change issues.

In 2018, as a part of their mission, Starbucks announced a change in the way they deliver their drinks,
they will use cups made from all recyclable material and stop using plastic straws by 2020.

If you read through the comments, you can see Starbucks replying to concerns about not having a straw
option, letting customers know that there will be straws available for those who need them but that the
straws will be made of alternative materials.
Sustainability is a balancing act. It is the ability to successfully perform tasks in the present, while also
doing what is necessary to protect the future. Sustainability in regards to the environment includes
reducing your carbon footprint and changing operations to be more environmentally friendly.
Companies that choose to practice sustainability face many challenges. While many organizations are in
agreement that sustainability is important, few have found a way to successfully implement sustainable
practices. Change towards sustainability starts with the organizational level but is executed at the
individual and group level. Organizational behavior needs to change on all three levels in order to be
successful.

SUSTAINABILITY PRACTICES

Let’s look at a simple example of how to implement sustainability. Imagine a company is trying to reduce
their paper usage. In theory, it sounds like a great idea, but what’s the best way to make it happen? In
order to be successful, the three levels of influence must work together.

First, the company needs to implement a company-wide goal to reduce paper usage. Most importantly,
they need to explain the plan for how to achieve this goal. Then, the groups and individuals within the
company need to change their daily behaviors to meet the goal. Now, what happens if no one reiterates
the goal/plan? Probably nothing. The goal of minimizing paper usage would be a thing of the past. The
follow-through of the plan is equally as important as the goal itself. Paper usage would need to become
a common topic of conversation. It would need to become a part of the company’s culture through
consistent training, purposeful discussions, and regular evaluations.

The paper usage example, in a nutshell, explains the complications of sustainability in today’s society.
It’s easy to set a goal to become more sustainable. It becomes more complicated to create a plan to
reach the goal of sustainability. More difficult still is the ability of an organization to follow-through and
instill the plan within their culture. Changing an organization’s behavior to meet sustainability goals is
not a quick and easy thing. It takes lots of time, energy, consistency, and motivation to successfully
lessen an organization’s carbon footprint. While most organizations recognize the importance of going
green, many are still struggling to successfully evolve their organization’s behavior to meet sustainability
goals.

Outsourcing

Before we get started, it is important to define outsourcing. Outsourcing is the practice of hiring external
assets to provide services to help perform job functions typically done by internal employees.
Companies in the United States outsource for a variety of services including but not limited to call
centers, information technology (IT), human resources, and manufacturing.

Outsourcing is a hot button topic in America. Keeping jobs within the United States is a big concern for
many Americans whom argue the importance of employing citizens before hiring outside of the country.
If outsourcing is considered such a taboo practice, then why do companies continue to outsource? For
starters, outsourcing can save companies a lot of money. The appeal of increasing profit margins can
oftentimes outweigh the value put on hiring American workers. If companies can hire employees to do
the same job as their current employees but for a lower cost, why wouldn’t they? This is a controversial
topic in today’s business world. Outsourcing effects each level of influence within an organization
differently. However, outsourcing, without a doubt, has an impact on a company’s organizational
behavior.

Modern technology has connected every corner of the world. Within seconds, people on opposite ends
of the world can “meet” through emails, phone calls, video conferences, etc. This has allowed
outsourcing to become a more feasible business practice than in past decades. Employees that once all
lived in similar locations are now scattered across the country, or the world, bringing together a wider
variety of backgrounds and experiences. Managing international teams can be a challenge and may
create a disconnection between managers and employees.

Even company employees whose jobs are not directly impacted by outsourcing may be affected. For
example, if a company outsources their human resources division, it may have an indirect effect on the
marketing department. While the employees within the marketing department have job security, their
interactions with human resources may pose a challenge as there would be lack of familiarity and
relatability. This has the potential to lead to frustration and disconnect. While companies may control
the outsourcing process, they give up partial control by hiring a third party. Changing company
procedures or practices used to be completed in house, but with outsourcing they now have a much
lengthier modification process. This new process may cost additional resources, time, and money.

Freelancing is another form of outsourcing that is becoming more popular. Companies use freelancers
for a variety of reasons. Sometimes, there are special projects that require an outside perspective or
expertise. Other companies frequently use freelancers in order to keep their full time employee count
low and to incorporate a variety of backgrounds and experiences. While there are a number of benefits
to using freelancers, there are some challenges that accompany them. Hiring too many freelancers (or
outsourcing too many positions) can make uniformity extremely challenging. Keeping company
standards and/or products consistent with high quality may prove to be difficult when there are too
many cooks in the kitchen. Constant turnover or changes in staffing may create a challenging work
environment and make it difficult to maintain effective employee relationships.

So, what do you think? Is outsourcing good or bad for an organization? Obviously the answer depends
on the situation and circumstances of each company. However, regardless of your feelings or opinions
towards outsourcing, one thing is certain: outsourcing impacts organizational behavior.

Workforce Generations

Think about your most recent family gathering. Were your grandparents there? Maybe your parents,
nieces, or uncles? What did conversations around the dinner table sound like? Sometimes family
reunions are accompanied by a lot of drama and differing opinions. While some differences may be
caused by opposing beliefs, other differences may be something a little less obvious. Generational
differences can include lifestyle differences, motivational differences, etc. Although you may view these
differences as quirky things your Aunt Susie or Grandma Betty say or do, there may actually be reasons
they act a certain way. Understanding generational differences may help to shed some light on why your
family acts the way they do. More importantly, learning about generational differences may provide
helpful insight into how your coworkers operate. This can be extremely beneficial in creating healthy
working relationships and developing a stronger team.

There are three generations who are primarily active in today’s workforce; Baby Boomers, Generation X,
and Generation Y—with Generation Z just beginning to enter the workforce. Let’s break down each one
and examine some similarities and differences! Keep in mind, these are generalizations and there are
exceptions within each generation.

· Baby Boomers: born between 1946 and 1964. Baby Boomers have been working the longest and
have extensive knowledge and experience. They want and oftentimes expect others to value their input
and opinions. Baby Boomers believe that hard work equates to long hours and that integrity in the
workforce should be top priority. They are known to “live to work” and place extreme value on career
advancement and promotion. They enjoy working in a team environment and are said to have created
meeting culture.

· Generation X: born between 1965 and 1981. Generation X has been through a roller-coaster of
economic events. Downturns and upswings have impacted their career choices, career successes, and
career futures. Unlike the Baby Boomers, Generation X has a more “work to live” mentality and value
their life outside of the workplace. While they have a good work ethic, their work-life balance is of
highest importance to them.

· Generation Y: born between 1982 and 1997. Generation Y, also known as Millennials, are the
youngest members of the current workforce. Generation Y typically grew up with two working parents
and a to-do list constantly on display throughout their childhood. Because of this, Generation Y has the
ability to multitask and also values work-life balance. However, differently from Generation X,
Generation Y believes they need to accomplish things on their to-do list in order to enjoy their free time.
Therefore, Generation Y tends to be very goal oriented and efficient.

· Generation Z: born between 1997 and today. Generation Z has never known a world before
technology. They have grown up in an “always on” world where technology is readily available and used
on a regular basis. Technology has been utilized as a babysitter by many parents of this generation and it
is also present in the classroom. This constant access to technology makes Generation Z extremely tech
savvy but has also changed behavior and lifestyle. Whether or not these behavioral and lifestyle changes
will carry on into their adulthood is yet to be determined. Generation Z is starting to enter into the
workforce with the oldest members turning 22-years-old in 2019.
Why can’t we all just get along?

Although there are many differences between the three workplace generations we discussed, there are
certain things that all three can agree on. All three generations place a huge value on family. In addition,
all three generations believe training and feedback is extremely important for a successful career.
Finally, change is hard. Young, old, or somewhere in the middle, most people do not enjoy change.
Regardless of your personal opinions and preferences, getting to know your coworkers and how they
operate is extremely beneficial to all three levels of influence.

Activity No. 3

1. Why are companies increasing their focus on developing stronger green business practices?

2. Why has multiple backgrounds and cultures become a complication in outsourcing?

SUMMARY

While some parts of this module may seem self-explanatory, it is fascinating to think about the process
that led to the study of organizational behavior. Every little detail about the way individuals, groups, and
organizations operate has an influence on the culture and operations of an organization. Management
theories played a huge role in establishing the foundation for organizational behavior and laid the
groundwork for the way workplaces operate today.

Let’s look back at Manuel and Rachel from the beginning of the module. Manuel’s computer software
sales company understands the importance of organizational behavior and has created a motivational
and inclusive work environment. Their understanding of organizational behavior allows their company
to excel in sales and reach high percentages of employee satisfaction. Rachel’s accounting firm on the
other hand, has deadlines as their one and only priority. While it may be effective short-term, Rachel’s
company will eventually suffer the effects of poor organizational behavior and will most likely suffer
from high turnover and a loss of clients.

Discussing the history of organizational behavior is necessary to understand why there was a need for it
in the first place. Just as importantly, the current trends and challenges facing organizational behavior
today need to be examined. Now that you have a clear understanding of both the history and current
challenges of organizational behavior, you are better equipped to deep-dive into the interworking of
organizational behavior.

Congratulations on taking the first step towards understanding organizational behavior. Let’s move on
and deep-dive further into the details of organizational behavior!

References

Taylor, F. W. (1914). The principles of scientific management. Harper.

McCann, Leo. “From Management to Leadership.” The SAGE Sociology of Work and Employment, edited
by S Edgell, E Granter, and H Gottfried, SAGE, 2015.
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Module 1