Acrefore 9780190236557 e 23

Organizational Behavior
Neal M. Ashkanasy, University of Queensland and Alana D. Dorris, University of Queensland
https://doi.org/10.1093/acrefore/9780190236557.013.23
Published online: 29 March 2017
Summary
Organizational behavior (OB) is a discipline that includes principles from psychology, sociology, and anthropology.
Its focus is on understanding how people behave in organizational work environments. Broadly speaking, OB
covers three main levels of analysis: micro (individuals), meso (groups), and macro (the organization). Topics at the
micro level include managing the diverse workforce; effects of individual differences in attitudes; job satisfaction
and engagement, including their implications for performance and management; personality, including the effects
of different cultures; perception and its effects on decision-making; employee values; emotions, including
emotional intelligence, emotional labor, and the effects of positive and negative affect on decision-making and
creativity (including common biases and errors in decision-making); and motivation, including the effects of
rewards and goal-setting and implications for management. Topics at the meso level of analysis include group
decision-making; managing work teams for optimum performance (including maximizing team performance and
communication); managing team conflict (including the effects of task and relationship conflict on team
effectiveness); team climate and group emotional tone; power, organizational politics, and ethical decision-making;
and leadership, including leadership development and leadership effectiveness. At the organizational level, topics
include organizational design and its effect on organizational performance; affective events theory and the physical
environment; organizational culture and climate; and organizational change.
Keywords: micro, meso, macro, organizational psychology, organizational sociology, organizational anthropology
Subjects: Organizational and Institutional Psychology
Introduction
Organizational behavior (OB) is the study of how people behave in organizational work
environments. More specifically, Robbins, Judge, Millett, and Boyle (2014, p. 8) describe it as “[a]
field of study that investigates the impact that individual groups and structure have on behavior
within organizations, for the purposes of applying such knowledge towards improving an
organization’s effectiveness.” The OB field looks at the specific context of the work environment
in terms of human attitudes, cognition, and behavior, and it embodies contributions from
psychology, social psychology, sociology, and anthropology. The field is also rapidly evolving
because of the demands of today’s fast-paced world, where technology has given rise to work-
from-home employees, globalization, and an ageing workforce. Thus, while managers and OB
researchers seek to help employees find a work-life balance, improve ethical behavior
(Ardichivili, Mitchell, & Jondle, 2009), customer service, and people skills (see, e.g., Brady &
Cronin, 2001), they must simultaneously deal with issues such as workforce diversity, work-life
balance, and cultural differences.
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The most widely accepted model of OB consists of three interrelated levels: (1) micro (the
individual level), (2) meso (the group level), and (3) macro (the organizational level). The
behavioral sciences that make up the OB field contribute an element to each of these levels. In
particular, OB deals with the interactions that take place among the three levels and, in turn,
addresses how to improve performance of the organization as a whole.
In order to study OB and apply it to the workplace, it is first necessary to understand its end goal.
In particular, if the goal is organizational effectiveness, then these questions arise: What can be
done to make an organization more effective? And what determines organizational effectiveness?
To answer these questions, dependent variables that include attitudes and behaviors such as
productivity, job satisfaction, job performance, turnover intentions, withdrawal, motivation, and
workplace deviance are introduced. Moreover, each level—micro, meso, and macro—has
implications for guiding managers in their efforts to create a healthier work climate to enable
increased organizational performance that includes higher sales, profits, and return on
investment (ROE).
The Micro (Individual) Level of Analysis
The micro or individual level of analysis has its roots in social and organizational psychology. In
this article, six central topics are identified and discussed: (1) diversity; (2) attitudes and job
satisfaction; (3) personality and values; (4) emotions and moods; (5) perception and individual
decision-making; and (6) motivation.
Diversity
An obvious but oft-forgotten element at the individual level of OB is the diverse workforce. It is
easy to recognize how different each employee is in terms of personal characteristics like age,
skin color, nationality, ethnicity, and gender. Other, less biological characteristics include tenure,
religion, sexual orientation, and gender identity. In the Australian context, while the
Commonwealth Disability Discrimination Act of 1992 helped to increase participation of people
with disabilities working in organizations, discrimination and exclusion still continue to inhibit
equality (Feather & Boeckmann, 2007). In Western societies like Australia and the United States,
however, antidiscrimination legislation is now addressing issues associated with an ageing
workforce.
In terms of gender, there continues to be significant discrimination against female employees.

Males have traditionally had much higher participation in the workforce, with only a significant
increase in the female workforce beginning in the mid-1980s. Additionally, according to Ostroff
and Atwater’s (2003) study of engineering managers, female managers earn a significantly lower
salary than their male counterparts, especially when they are supervising mostly other females.
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Job Satisfaction and Job Engagement

Job satisfaction is an attitudinal variable that comes about when an employee evaluates all the
components of her or his job, which include affective, cognitive, and behavioral aspects (Weiss,
2002). Increased job satisfaction is associated with increased job performance, organizational
citizenship behaviors (OCBs), and reduced turnover intentions (Wilkin, 2012). Moreover,
traditional workers nowadays are frequently replaced by contingent workers in order to reduce
costs and work in a nonsystematic manner. According to Wilkin’s (2012) findings, however,
contingent workers as a group are less satisfied with their jobs than permanent employees are.
Job engagement concerns the degree of involvement that an employee experiences on the job
(Kahn, 1990). It describes the degree to which an employee identifies with their job and considers
their performance in that job important; it also determines that employee’s level of participation
within their workplace. Britt, Dickinson, Greene-Shortridge, and McKibbin (2007) describe the
two extremes of job satisfaction and employee engagement: a feeling of responsibility and
commitment to superior job performance versus a feeling of disengagement leading to the
employee wanting to withdraw or disconnect from work. The first scenario is also related to
organizational commitment, the level of identification an employee has with an organization and
its goals. Employees with high organizational commitment, job satisfaction, and employee
engagement tend to perceive that their organization values their contribution and contributes to
their wellbeing.
Personality
Personality represents a person’s enduring traits. The key here is the concept of enduring. The
most widely adopted model of personality is the so-called Big Five (Costa & McCrae, 1992):
extraversion, agreeableness, conscientiousness, emotional stability, and openness. Employees
high in conscientiousness tend to have higher levels of job knowledge, probably because they
invest more into learning about their role. Those higher in emotional stability tend to have higher
levels of job satisfaction and lower levels of stress, most likely because of their positive and
opportunistic outlooks. Agreeableness, similarly, is associated with being better liked and may
lead to higher employee performance and decreased levels of deviant behavior.
Although the personality traits in the Big Five have been shown to relate to organizational
behavior, organizational performance, career success (Judge, Higgins, Thoresen, & Barrick,
2006), and other personality traits are also relevant to the field. Examples include positive self-
evaluation, self-monitoring (the degree to which an individual is aware of comparisons with
others), Machiavellianism (the degree to which a person is practical, maintains emotional
distance, and believes the end will justify the means), narcissism (having a grandiose sense of
self-importance and entitlement), risk-taking, proactive personality, and type A personality. In
particular, those who like themselves and are grounded in their belief that they are capable
human beings are more likely to perform better because they have fewer self-doubts that may
impede goal achievements. Individuals high in Machiavellianism may need a certain environment
in order to succeed, such as a job that requires negotiation skills and offers significant rewards,
although their inclination to engage in political behavior can sometimes limit their potential.
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Employees who are high on narcissism may wreak organizational havoc by manipulating
subordinates and harming the overall business because of their over-inflated perceptions of self.
Higher levels of self-monitoring often lead to better performance but they may cause lower
commitment to the organization. Risk-taking can be positive or negative; it may be great for
someone who thrives on rapid decision-making, but it may prove stressful for someone who likes
to weigh pros and cons carefully before making decisions. Type A individuals may achieve high
performance but may risk doing so in a way that causes stress and conflict. Proactive personality,
on the other hand, is usually associated with positive organizational performance.
Employee Values
Personal value systems are behind each employee’s attitudes and personality. Each employee
enters an organization with an already established set of beliefs about what should be and what
should not be. Today, researchers realize that personality and values are linked to organizations
and organizational behavior. Years ago, only personality’s relation to organizations was of
concern, but now managers are more interested in an employee’s flexibility to adapt to
organizational change and to remain high in organizational commitment. Holland’s (1973)
theory of personality-job fit describes six personality types (realistic, investigative, social,
conventional, enterprising, and artistic) and theorizes that job satisfaction and turnover are
determined by how well a person matches her or his personality to a job. In addition to person-
job (P-J) fit, researchers have also argued for person-organization (P-O) fit, whereby employees
desire to be a part of and are selected by an organization that matches their values. The Big Five
would suggest, for example, that extraverted employees would desire to be in team
environments; agreeable people would align well with supportive organizational cultures rather
than more aggressive ones; and people high on openness would fit better in organizations that
emphasize creativity and innovation (Anderson, Spataro, & Flynn, 2008).
Individual Differences, Affect, and Emotion

Personality predisposes people to have certain moods (feelings that tend to be less intense but
longer lasting than emotions) and emotions (intense feelings directed at someone or something).
In particular, personalities with extraversion and emotional stability partially determine an
individual predisposition to experience emotion more or less intensely.
Affect is also related as describing the positive and negative feelings that people experience
(Ashkanasy, 2003). Moreover, emotions, mood, and affect interrelate; a bad mood, for instance,
can lead individuals to experience a negative emotion. Emotions are action-oriented while moods
tend to be more cognitive. This is because emotions are caused by a specific event that might only
last a few seconds, while moods are general and can last for hours or even days. One of the
sources of emotions is personality. Dispositional or trait affects correlate, on the one hand, with
personality and are what make an individual more likely to respond to a situation in a predictable
way (Watson & Tellegen, 1985). Moreover, like personality, affective traits have proven to be
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stable over time and across settings (Diener, Larsen, Levine, & Emmons, 1985; Watson, 1988;
Watson & Tellegen, 1985; Watson & Walker, 1996). State affect, on the other hand, is similar to
mood and represents how an individual feels in the moment.
The Role of Affect in Organizational Behavior
For many years, affect and emotions were ignored in the field of OB despite being fundamental
factors underlying employee behavior (Ashforth & Humphrey, 1995). OB researchers traditionally
focused on solely decreasing the effects of strong negative emotions that were seen to impede
individual, group, and organizational level productivity. More recent theories of OB focus,
however, on affect, which is seen to have positive, as well as negative, effects on behavior,
described by Barsade, Brief, and Spataro (2003, p. 3) as the “affective revolution.” In particular,
scholars now understand that emotions can be measured objectively and be observed through
nonverbal displays such as facial expression and gestures, verbal displays, fMRI, and hormone
levels (Ashkanasy, 2003; Rashotte, 2002).
Fritz, Sonnentag, Spector, and McInroe (2010) focus on the importance of stress recovery in
affective experiences. In fact, an individual employee’s affective state is critical to OB, and today
more attention is being focused on discrete affective states. Emotions like fear and sadness may
be related to counterproductive work behaviors (Judge et al., 2006). Stress recovery is another
factor that is essential for more positive moods leading to positive organizational outcomes. In a
study, Fritz et al. (2010) looked at levels of psychological detachment of employees on weekends
away from the workplace and how it was associated with higher wellbeing and affect.
Emotional Intelligence and Emotional Labor
Ashkanasy and Daus (2002) suggest that emotional intelligence is distinct but positively related
to other types of intelligence like IQ. It is defined by Mayer and Salovey (1997) as the ability to
perceive, assimilate, understand, and manage emotion in the self and others. As such, it is an
individual difference and develops over a lifetime, but it can be improved with training. Boyatzis
and McKee (2005) describe emotional intelligence further as a form of adaptive resilience, insofar
as employees high in emotional intelligence tend to engage in positive coping mechanisms and
take a generally positive outlook toward challenging work situations.
Emotional labor occurs when an employee expresses her or his emotions in a way that is
consistent with an organization’s display rules, and usually means that the employee engages in
either surface or deep acting (Hochschild, 1983). This is because the emotions an employee is
expressing as part of their role at work may be different from the emotions they are actually
feeling (Ozcelik, 2013). Emotional labor has implications for an employee’s mental and physical
health and wellbeing. Moreover, because of the discrepancy between felt emotions (how an
employee actually feels) and displayed emotions or surface acting (what the organization
requires the employee to emotionally display), surface acting has been linked to negative
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organizational outcomes such as heightened emotional exhaustion and reduced commitment

(Erickson & Wharton, 1997; Brotheridge & Grandey, 2002; Grandey, 2003; Groth, Hennig-
Thurau, & Walsh, 2009).
Affect and Organizational Decision-Making
Ashkanasy and Ashton-James (2008) make the case that the moods and emotions managers
experience in response to positive or negative workplace situations affect outcomes and behavior
not only at the individual level, but also in terms of strategic decision-making processes at the
organizational level. These authors focus on affective events theory (Weiss & Cropanzano, 1996),
which holds that organizational events trigger affective responses in organizational members,
which in turn affect organizational attitudes, cognition, and behavior.
Perceptions and Behavior

Like personality, emotions, moods, and attitudes, perceptions also influence employees’
behaviors in the workplace. Perception is the way in which people organize and interpret sensory
cues in order to give meaning to their surroundings. It can be influenced by time, work setting,
social setting, other contextual factors such as time of day, time of year, temperature, a target’s
clothing or appearance, as well as personal trait dispositions, attitudes, and value systems. In
fact, a person’s behavior is based on her or his perception of reality—not necessarily the same as
actual reality. Perception greatly influences individual decision-making because individuals base
their behaviors on their perceptions of reality. In this regard, attribution theory (Martinko, 1995)
outlines how individuals judge others and is our attempt to conclude whether a person’s behavior
is internally or externally caused.
Decision-Making and the Role of Perception

Decision-making occurs as a reaction to a problem when the individual perceives there to be
discrepancy between the current state of affairs and the state s/he desires. As such, decisions are
the choices individuals make from a set of alternative courses of action. Each individual interprets
information in her or his own way and decides which information is relevant to weigh pros and
cons of each decision and its alternatives to come to her or his perception of the best outcome. In
other words, each of our unique perceptual processes influences the final outcome (Janis & Mann,
1977).
Common Biases in Decision-Making

Although there is no perfect model for approaching decision-making, there are nonetheless
many biases that individuals can make themselves aware of in order to maximize their outcomes.
First, overconfidence bias is an inclination to overestimate the correctness of a decision. Those
most likely to commit this error tend to be people with weak intellectual and interpersonal
abilities. Anchoring bias occurs when individuals focus on the first information they receive,
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failing to adjust for information received subsequently. Marketers tend to use anchors in order to
make impressions on clients quickly and project their brand names. Confirmation bias occurs
when individuals only use facts that support their decisions while discounting all contrary views.
Lastly, availability bias occurs when individuals base their judgments on information readily
available. For example, a manager might rate an employee on a performance appraisal based on
behavior in the past few days, rather than the past six months or year.
Errors in Decision-Making
Other errors in decision-making include hindsight bias and escalation of commitment. Hindsight
bias is a tendency to believe, incorrectly, after an outcome of an event has already happened, that
the decision-maker would have accurately predicted that same outcome. Furthermore, this bias,
despite its prevalence, is especially insidious because it inhibits the ability to learn from the past
and take responsibility for mistakes. Escalation of commitment is an inclination to continue with
a chosen course of action instead of listening to negative feedback regarding that choice. When
individuals feel responsible for their actions and those consequences, they escalate commitment
probably because they have invested so much into making that particular decision. One solution
to escalating commitment is to seek a source of clear, less distorted feedback (Staw, 1981).
Motivation
The last but certainly not least important individual level topic is motivation. Like each of the
topics discussed so far, a worker’s motivation is also influenced by individual differences and
situational context. Motivation can be defined as the processes that explain a person’s intensity,
direction, and persistence toward reaching a goal. Work motivation has often been viewed as the
set of energetic forces that determine the form, direction, intensity, and duration of behavior
(Latham & Pinder, 2005). Motivation can be further described as the persistence toward a goal. In
fact many non-academics would probably describe it as the extent to which a person wants and
tries to do well at a particular task (Mitchell, 1982).
Early theories of motivation began with Maslow’s (1943) hierarchy of needs theory, which holds
that each person has five needs in hierarchical order: physiological, safety, social, esteem, and
self-actualization. These constitute the “lower-order” needs, while social and esteem needs are
“higher-order” needs. Self-esteem for instance underlies motivation from the time of childhood.
Another early theory is McGregor’s (1960) X-Y theory of motivation: Theory X is the concept
whereby individuals must be pushed to work; and theory Y is positive, embodying the assumption
that employees naturally like work and responsibility and can exercise self-direction.
Herzberg subsequently proposed the “two-factor theory” that attitude toward work can
determine whether an employee succeeds or fails. Herzberg (1966) relates intrinsic factors, like
advancement in a job, recognition, praise, and responsibility to increased job satisfaction, while
extrinsic factors like the organizational climate, relationship with supervisor, and salary relate to
job dissatisfaction. In other words, the hygiene factors are associated with the work context while
the motivators are associated with the intrinsic factors associated with job motivation.
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Contemporary Theories of Motivation
Although traditional theories of motivation still appear in OB textbooks, there is unfortunately

little empirical data to support their validity. More contemporary theories of motivation, with
more acceptable research validity, include self-determination theory, which holds that people
prefer to have control over their actions. If a task an individual enjoyed now feels like a chore,
then this will undermine motivation. Higher self-determined motivation (or intrinsically
determined motivation) is correlated with increased wellbeing, job satisfaction, commitment,
and decreased burnout and turnover intent. In this regard, Fernet, Gagne, and Austin (2010)
found that work motivation relates to reactions to interpersonal relationships at work and
organizational burnout. Thus, by supporting work self-determination, managers can help
facilitate adaptive employee organizational behaviors while decreasing turnover intention
(Richer, Blanchard, & Vallerand, 2002).
Core self-evaluation (CSE) theory is a relatively new concept that relates to self-confidence in
general, such that people with higher CSE tend to be more committed to goals (Bono & Colbert,
2005). These core self-evaluations also extend to interpersonal relationships, as well as employee
creativity. Employees with higher CSE are more likely to trust coworkers, which may also
contribute to increased motivation for goal attainment (Johnson, Kristof-Brown, van Vianen, de
Pater, & Klein, 2003). In general, employees with positive CSE tend to be more intrinsically
motivated, thus additionally playing a role in increasing employee creativity (Judge, Bono, Erez,
& Locke, 2005). Finally, according to research by Amabile (1996), intrinsic motivation or self-
determined goal attainment is critical in facilitating employee creativity.
Goal-Setting and Conservation of Resources
While self-determination theory and CSE focus on the reward system behind motivation and
employee work behaviors, Locke and Latham’s (1990) goal-setting theory specifically addresses
the impact that goal specificity, challenge, and feedback has on motivation and performance.
These authors posit that our performance is increased when specific and difficult goals are set,
rather than ambiguous and general goals. Goal-setting seems to be an important motivational
tool, but it is important that the employee has had a chance to take part in the goal-setting
process so they are more likely to attain their goals and perform highly.
Related to goal-setting is Hobfoll’s (1989) conservation of resources (COR) theory, which holds
that people have a basic motivation to obtain, maintain, and protect what they value (i.e., their
resources). Additionally there is a global application of goal-setting theory for each of the
motivation theories. Not enough research has been conducted regarding the value of goal-setting
in global contexts, however, and because of this, goal-setting is not recommended without
consideration of cultural and work-related differences (Konopaske & Ivancevich, 2004).
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Self-Efficacy and Motivation
Other motivational theories include self-efficacy theory, and reinforcement, equity, and
expectancy theories. Self-efficacy or social cognitive or learning theory is an individual’s belief that
s/he can perform a task (Bandura, 1977). This theory complements goal-setting theory in that
self-efficacy is higher when a manager assigns a difficult task because employees attribute the
manager’s behavior to him or her thinking that the employee is capable; the employee in turn
feels more confident and capable.
Reinforcement theory (Skinner, 1938) counters goal-setting theory insofar as it is a behaviorist

approach rather than cognitive and is based in the notion that reinforcement conditions behavior,
or in other words focuses on external causes rather than the value an individual attributes to
goals. Furthermore, this theory instead emphasizes the behavior itself rather than what precedes
the behavior. Additionally, managers may use operant conditioning, a part of behaviorism, to
reinforce people to act in a desired way.
Social-learning theory (Bandura, 1977) extends operant conditioning and also acknowledges the
influence of observational learning and perception, and the fact that people can learn and retain
information by paying attention, observing, and modeling the desired behavior.
Equity theory (Adams, 1963) looks at how employees compare themselves to others and how that
affects their motivation and in turn their organizational behaviors. Employees who perceive
inequity for instance, will either change how much effort they are putting in (their inputs),
change or distort their perceptions (either of self or others in relation to work), change their
outcomes, turnover, or choose a different referent (acknowledge performance in relation to
another employee but find someone else they can be better than).
Last but not least, Vroom’s (1964) expectancy theory holds that individuals are motivated by the
extent to which they can see that their effort is likely to result in valued outcomes. This theory has
received strong support in empirical research (see Van Erde & Thierry, 1996, for meta-analytic
results). Like each of the preceding theories, expectancy theory has important implications that
managers should consider. For instance, managers should communicate with employees to
determine their preferences to know what rewards to offer subordinates to elicit motivation.
Managers can also make sure to identify and communicate clearly the level of performance they
desire from an employee, as well as to establish attainable goals with the employee and to be very
clear and precise about how and when performance will be rewarded (Konopaske & Ivancevich,
2004).
The Meso (Group) Level of Analysis
The second level of OB research also emerges from social and organizational psychology and
relates to groups or teams. Topics covered so far include individual differences: diversity,
personality and emotions, values and attitudes, motivation, and decision-making. Thus, in this
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section, attention turns to how individuals come together to form groups and teams, and begins
laying the foundation for understanding the dynamics of group and team behavior. Topics at this
level also include communication, leadership, power and politics, and conflict.
A group consists of two or more individuals who come together to achieve a similar goal. Groups
can be formal or informal. A formal group on the one hand is assigned by the organization’s
management and is a component of the organization’s structure. An informal group on the other
hand is not determined by the organization and often forms in response to a need for social
contact. Teams are formal groups that come together to meet a specific group goal.
Although groups are thought to go through five stages of development (Tuckman, 1965: forming,
storming, norming, performing, and adjourning) and to transition to effectiveness at the halfway
mark (Gersick, 1988), group effectiveness is in fact far more complex. For example, two types of
conformity to group norms are possible: compliance (just going along with the group’s norms but
not accepting them) and personal acceptance (when group members’ individual beliefs match
group norms). Behavior in groups then falls into required behavior usually defined by the formal
group and emergent behavior that grows out of interactions among group members (Champoux,
2011).
Group Decision-Making
Although many of the decisions made in organizations occur in groups and teams, such decisions
are not necessarily optimal. Groups may have more complex knowledge and increased
perspectives than individuals but may suffer from conformity pressures or domination by one or
two members. Group decision-making has the potential to be affected by groupthink or group
shift. In groupthink, group pressures to conform to the group norms deter the group from
thinking of alternative courses of action (Janis & Mann, 1977). In the past, researchers attempted
to explain the effects of group discussion on decision-making through the following approaches:
group decision rules, interpersonal comparisons, and informational influence. Myers and Lamm
(1976), however, present a conceptual schema comprised of interpersonal comparisons and
informational influence approaches that focus on attitude development in a more social context.
They found that their research is consistent with the group polarization hypothesis: The initial
majority predicts the consensus outcome 90% of the time. The term group polarization was
founded in Serge Moscovici and his colleagues’ literature (e.g., Moscovici & Zavalloni, 1969).
Polarization refers to an increase in the extremity of the average response of the subject
population.
In other words, the Myer and Lamm (1976) schema is based on the idea that four elements feed
into one another: social motivation, cognitive foundation, attitude change, and action
commitment. Social motivation (comparing self with others in order to be perceived favorably)
feeds into cognitive foundation, which in turn feeds into attitude change and action commitment.
Managers of organizations can help reduce the negative phenomena and increase the likelihood
of functional groups by encouraging brainstorming or openly looking at alternatives in the
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process of decision-making such as the nominal group technique (which involves restricting
interpersonal communication in order to encourage free thinking and proceeding to a decision in
a formal and systematic fashion such as voting).
Elements of Team Performance
OB researchers typically focus on team performance and especially the factors that make teams
most effective. Researchers (e.g., see De Dreu & Van Vianen, 2001) have organized the critical
components of effective teams into three main categories: context, composition, and process.
Context refers to the team’s physical and psychological environment, and in particular the factors
that enable a climate of trust. Composition refers to the means whereby the abilities of each
individual member can best be most effectively marshaled. Process is maximized when members
have a common goal or are able to reflect and adjust the team plan (for reflexivity, see West,
1996).
Communication
In order to build high-performing work teams, communication is critical, especially if team
conflict is to be minimized. Communication serves four main functions: control, motivation,
emotional expression, and information (Scott & Mitchell, 1976). The communication process
involves the transfer of meaning from a sender to a receiver through formal channels established
by an organization and informal channels, created spontaneously and emerging out of individual
choice. Communication can flow downward from managers to subordinates, upward from
subordinates to managers, or between members of the same group. Meaning can be transferred
from one person to another orally, through writing, or nonverbally through facial expressions
and body movement. In fact, body movement and body language may complicate verbal
communication and add ambiguity to the situation as does physical distance between team
members.
High-performance teams tend to have some of the following characteristics: interpersonal trust,
psychological and physical safety, openness to challenges and ideas, an ability to listen to other
points of view, and an ability to share knowledge readily to reduce task ambiguity (Castka,
Bamber, Sharp, & Belohoubek, 2001). Although the development of communication competence
is essential for a work team to become high-performing, that communication competence is also
influenced by gender, personality, ability, and emotional intelligence of the members. Ironically,
it is the self-reliant team members who are often able to develop this communication
competence. Although capable of working autonomously, self-reliant team members know when
to ask for support from others and act interdependently.
Emotions also play a part in communicating a message or attitude to other team members.
Emotional contagion, for instance, is a fascinating effect of emotions on nonverbal
communication, and it is the subconscious process of sharing another person’s emotions by
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mimicking that team member’s nonverbal behavior (Hatfield, Cacioppo, & Rapson, 1993).
Importantly, positive communication, expressions, and support of team members distinguished
high-performing teams from low-performing ones (Bakker & Schaufeli, 2008).
Team Conflict
Because of member interdependence, teams are inclined to more conflict than individual workers.
In particular, diversity in individual differences leads to conflict (Thomas, 1992; Wall & Callister,
1995; see also Cohen & Bailey, 1997). Jehn (1997) identifies three types of conflict: task,
relationship, and process. Process conflict concerns how task accomplishment should proceed and
who is responsible for what; task conflict focuses on the actual content and goals of the work
(Robbins et al., 2014); and relationship conflict is based on differences in interpersonal
relationships. While conflict, and especially task conflict, does have some positive benefits such
as greater innovation (Tjosvold, 1997), it can also lead to lowered team performance and
decreased job satisfaction, or even turnover. De Dreu and Van Vianen (2001) found that team
conflict can result in one of three responses: (1) collaborating with others to find an acceptable
solution; (2) contending and pushing one member’s perspective on others; or (3) avoiding and
ignoring the problem.
Team Effectiveness and Relationship Conflict

Team effectiveness can suffer in particular from relationship conflict, which may threaten team
members’ personal identities and self-esteem (Pelled, 1995). In this regard, Murnighan and
Conlon (1991) studied members of British string quartets and found that the most successful
teams avoided relationship conflict while collaborating to resolve task conflicts. This may be
because relationship conflict distracts team members from the task, reducing team performance
and functioning. As noted earlier, positive affect is associated with collaboration, cooperation,
and problem resolution, while negative affect tends to be associated with competitive behaviors,
especially during conflict (Rhoades, Arnold, & Jay, 2001).
Team Climate and Emotionality

Emotional climate is now recognized as important to team processes (Ashkanasy & Härtel, 2014),
and team climate in general has important implications for how individuals behave individually
and collectively to effect organizational outcomes. This idea is consistent with Druskat and
Wolff’s (2001) notion that team emotional-intelligence climate can help a team manage both
types of conflict (task and relationship). In Jehn’s (1997) study, she found that emotion was most
often negative during team conflict, and this had a negative effect on performance and
satisfaction regardless of the type of conflict team members were experiencing. High
emotionality, as Jehn calls it, causes team members to lose sight of the work task and focus
instead on the negative affect. Jehn noted, however, that absence of group conflict might also
may block innovative ideas and stifle creativity (Jehn, 1997).
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Power and Politics

Power and organizational politics can trigger employee conflict, thus affecting employee
wellbeing, job satisfaction, and performance, in turn affecting team and organizational
productivity (Vigoda, 2000). Because power is a function of dependency, it can often lead to
unethical behavior and thus become a source of conflict. Types of power include formal and
personal power. Formal power embodies coercive, reward, and legitimate power. Coercive power
depends on fear. Reward power is the opposite and occurs when an individual complies because s/
he receives positive benefits from acting in accordance with the person in power. In formal
groups and organizations, the most easily accessed form of power is legitimate because this form
comes to be from one’s position in the organizational hierarchy (Raven, 1993). Power tactics
represent the means by which those in a position of power translate their power base (formal or
personal) into specific actions.
The nine influence tactics that managers use according to Yukl and Tracey (1992) are (1) rational
persuasion, (2) inspirational appeal, (3) consultation, (4) ingratiation, (5) exchange, (6) personal
appeal, (7) coalition, (8) legitimating, and (9) pressure. Of these tactics, inspirational appeal,
consultation, and rational persuasion were among the strategies most effective in influencing
task commitment. In this study, there was also a correlation found between a manager’s rational
persuasion and a subordinate rating her effectively. Perhaps this is because persuasion requires
some level of expertise, although more research is needed to verify which methods are most
successful. Moreover, resource dependence theory dominates much theorizing about power and
organizational politics. In fact, it is one of the central themes of Pfeffer and Salancik’s (1973)
treatise on the external control of organizations. First, the theory emphasizes the importance of
the organizational environment in understanding the context of how decisions of power are made
(see also Pfeffer & Leblebici, 1973). Resource dependence theory is based on the premise that
some organizations have more power than others, occasioned by specifics regarding their
interdependence. Pfeffer and Salancik further propose that external interdependence and internal
organizational processes are related and that this relationship is mediated by power.
Organizational Politics
Political skill is the ability to use power tactics to influence others to enhance an individual’s
personal objectives. In addition, a politically skilled person is able to influence another person
without being detected (one reason why he or she is effective). Persons exerting political skill
leave a sense of trust and sincerity with the people they interact with. An individual possessing a
high level of political skill must understand the organizational culture they are exerting influence
within in order to make an impression on his or her target. While some researchers suggest
political behavior is a critical way to understand behavior that occurs in organizations, others
simply see it as a necessary evil of work life (Champoux, 2011). Political behavior focuses on using
power to reach a result and can be viewed as unofficial and unsanctioned behavior (Mintzberg,
1985). Unlike other organizational processes, political behavior involves both power and
influence (Mayes & Allen, 1977). Moreover, because political behavior involves the use of power to
influence others, it can often result in conflict.
Page 13 of 26
Organizational Politics, Power, and Ethics

In concluding this section on power and politics, it is also appropriate to address the dark side,
where organizational members who are persuasive and powerful enough might become prone to
abuse standards of equity and justice and thereby engage in unethical behavior. An employee who
takes advantage of her position of power may use deception, lying, or intimidation to advance her
own interests (Champoux, 2011). When exploring interpersonal injustice, it is important to
consider the intent of the perpetrator, as well as the effect of the perpetrator’s treatment from the
victim’s point of view. Umphress, Simmons, Folger, Ren, and Bobocel (2013) found in this regard
that not only does injustice perceived by the self or coworkers influence attitudes and behavior
within organizations, but injustice also influences observer reactions both inside and outside of
the organization.
Leadership
Leadership plays an integrative part in understanding group behavior, because the leader is
engaged in directing individuals toward attitudes and behaviors, hopefully also in the direction of
those group members’ goals. Although there is no set of universal leadership traits, extraversion
from the Big Five personality framework has been shown in meta-analytic studies to be positively
correlated with transformational, while neuroticism appears to be negatively correlated (Bono &
Judge, 2004). There are also various perspectives to leadership, including the competency
perspective, which addresses the personality traits of leaders; the behavioral perspective, which
addresses leader behaviors, specifically task versus people-oriented leadership; and the
contingency perspective, which is based on the idea that leadership involves an interaction of
personal traits and situational factors. Fiedler’s (1967) contingency, for example, suggests that
leader effectiveness depends on the person’s natural fit to the situation and the leader’s score on
a “least preferred coworker” scale.
More recently identified styles of leadership include transformational leadership (Bass, Avolio, &
Atwater, 1996), charismatic leadership (Conger & Kanungo, 1988), and authentic leadership
(Luthans & Avolio, 2003). In a nutshell, transformational leaders inspire followers to act based on
the good of the organization; charismatic leaders project a vision and convey a new set of values;
and authentic leaders convey trust and genuine sentiment.
Leader-member exchange theory (LMX; see Graen & Uhl-Bien, 1995) assumes that leadership
emerges from exchange relationships between a leader and her or his followers. More recently,
Tse, Troth, and Ashkanasy (2015) expanded on LMX to include social processes (e.g., emotional
intelligence, emotional labor, and discrete emotions), arguing that affect plays a large part in the
leader-member relationship.
Page 14 of 26
Leadership Development
An emerging new topic in leadership concerns leadership development, which embodies the
readiness of leadership aspirants to change (Hannah & Avolio, 2010). In this regard, the learning
literature suggests that intrinsic motivation is necessary in order to engage in development (see
Hidi & Harackiewicz, 2000), but also that the individual needs to be goal-oriented and have
developmental efficacy or self-confidence that s/he can successfully perform in leadership
contexts.
Ashkanasy, Dasborough, and Ascough (2009) argue further that developing the affective side of
leaders is important. In this case, because emotions are so pervasive within organizations, it is
important that leaders learn how to manage them in order to improve team performance and
interactions with employees that affect attitudes and behavior at almost every organizational
level.
Abusive Leadership
Leaders, or those in positions of power, are particularly more likely to run into ethical issues, and
only more recently have organizational behavior researchers considered the ethical implications
of leadership. As Gallagher, Mazur, and Ashkanasy (2015) describe, since 2009, organizations
have been under increasing pressure to cut costs or “do more with less,” and this sometimes can
lead to abusive supervision, whereby employee job demands exceed employee resources, and
supervisors engage in bullying, undermining, victimization, or personal attacks on subordinates
(Tepper, 2000).
Supervisors who are very high or low in emotional intelligence may be more likely to experience
stress associated with a very demanding high-performance organizational culture. These
supervisors may be more likely to try to meet the high demands and pressures through
manipulative behaviors (Kilduff, Chiaburu, & Menges, 2010). This has serious implications for
employee wellbeing and the organization as a whole. Abusive supervision detracts from the
ability for those under attack to perform effectively, and targets often come to doubt their own
ability to perform (Tepper, 2000).
The Macro (Organizational) Level of Analysis
The final level of OB derives from research traditions across three disciplines: organizational
psychology, organizational sociology, and organizational anthropology. Moreover, just as teams
and groups are more than the sum of their individual team members, organizations are also more
than the sum of the teams or groups residing within them. As such, structure, climate, and
culture play key roles in shaping and being shaped by employee attitudes and behaviors, and they
ultimately determine organizational performance and productivity.
Page 15 of 26
Organizational Structure
Organizational structure is a sociological phenomenon that determines the way tasks are
formally divided and coordinated within an organization. In this regard, jobs are often grouped by
the similarity of functions performed, the product or service produced, or the geographical
location. Often, the number of forms of departmentalization will depend on the size of the
organization, with larger organizations having more forms of departmentalization than others.
Organizations are also organized by the chain of command or the hierarchy of authority that
determines the span of control, or how many employees a manager can efficiently and effectively
lead. With efforts to reduce costs since the global financial crisis of 2009, organizations have
tended to adopt a wider, flatter span of control, where more employees report to one supervisor.
Organizational structure also concerns the level of centralization or decentralization, the degree
to which decision-making is focused at a single point within an organization. Formalization is
also the degree to which jobs are organized in an organization. These levels are determined by the
organization and also vary greatly across the world. For example, Finnish organizations tend to
be more decentralized than their Australian counterparts and, as a consequence, are more
innovative (Leiponen & Helfat, 2011).
Mintzberg (1979) was the first to set out a taxonomy of organizational structure. Within his
model, the most common organizational design is the simple structure characterized by a low
level of departmentalization, a wide span of control, and centralized authority. Other
organizational types emerge in larger organizations, which tend to be bureaucratic and more
routinized. Rules are formalized, tasks are grouped into departments, authority is centralized,
and the chain of command involves narrow spans of control and decision-making. An alternative
is the matrix structure, often found in hospitals, universities, and government agencies. This
form of organization combines functional and product departmentalization where employees
answer to two bosses: functional department managers and product managers.
New design options include the virtual organization and the boundaryless organization, an
organization that has no chain of command and limitless spans of control. Structures differ based
on whether the organization seeks to use an innovation strategy, imitation strategy, or cost-
minimization strategy (Galunic & Eisenhardt, 1994). Organizational structure can have a
significant effect on employee attitudes and behavior. Evidence generally shows that work
specialization leads to higher employee productivity but also lower job satisfaction (Porter &
Lawler, 1965). Gagné and Deci emphasize that autonomous work motivation (i.e., intrinsic
motivation and integrated extrinsic motivation) is promoted in work climates that are
interesting, challenging, and allow choice. Parker, Wall, and Jackson (1997) specifically relate job
enlargement to autonomous motivation. Job enlargement was first discussed by management
theorists like Lawler and Hall (1970), who believed that jobs should be enlarged to improve the
intrinsic motivation of workers. Today, most of the job-design literature is built around the issue
of work specialization (job enlargement and enrichment). In Parker, Wall, and Jackson’s study,
they observed that horizontally enlarging jobs through team-based assembly cells led to greater
understanding and acceptance of the company’s vision and more engagement in new work roles.
Page 16 of 26
(In sum, by structuring work to allow more autonomy among employees and identification
among individual work groups, employees stand to gain more internal autonomous motivation
leading to improved work outcomes (van Knippenberg & van Schie, 2000).
The Physical Environment of Work

Ashkanasy, Ayoko, and Jehn (2014) extend the topic of organizational structure to discuss, from a
psychological perspective, how the physical work environment shapes employee attitudes,
behaviors, and organizational outcomes. Elsbach (2003) pointed out that the space within which
employees conduct their work is critical to employees’ levels of performance and productivity. In
their study, Ashkanasy and his colleagues looked at the underlying processes influencing how the
physical environment determines employee attitudes and behaviors, in turn affecting
productivity levels. They base their model on affective events theory (Weiss & Cropanzano, 1996),
which holds that particular “affective” events in the work environment are likely to be the
immediate cause of employee behavior and performance in organizations (see also Ashkanasy &
Humphrey, 2011). Specifically, Ashkanasy and colleagues (2014) looked at how this theory holds
in extremely crowded open-plan office designs and how employees in these offices are more
likely to experience negative affect, conflict, and territoriality, negatively impacting attitudes,
behaviors, and work performance.
Organizational Climate and Culture

Although organizational structure and the physical environment are important determinants of
employee attitudes and behaviors, organizational culture and climate lie at the heart of
organizational interactions (Ashkanasy & Jackson, 2001). Organizational culture derives from an
anthropological research tradition, while organizational climate is based on organizational
psychology.
A central presumption of culture is that, as Smircich (1983) noted, organizational behavior is not
a function of what goes on inside individual employees’ heads, but between employees, as
evidenced in daily organizational communication and language. As such, organizational culture
allows one organization to distinguish itself from another, while conveying a sense of identity for
its members.
Organizational Climate and its Relation to Organizational Culture

Organizational culture creates organizational climate or employees’ shared perceptions about
their organization and work environment. Organizational climate has been found to facilitate
and/or inhibit displays of certain behaviors in one study (Smith-Crowe, Burke, & Landis, 2003),
and overall, organizational climate is often viewed as a surface-level indicator of the functioning
of the employee/organizational environment relationship (Ryan, Horvath, Ployhart, Schmitt, &
Slade, 2000). For instance, a more restrictive climate may inhibit individual decision-making in
contrast to a more supportive climate in which the organization may intervene at the individual
level and in which the ability/job performance relationship is supported (James, Demaree,
Page 17 of 26
Mulaik, & Ladd, 1992). In a study focused on safety climate, Smith-Crowe and colleagues found
that organizational climate is essential in determining whether training will transfer to employee
performance, and this is most likely because organizational climate moderates the knowledge/
performance relationship. Gibbs and Cooper (2010) also found that a supportive organizational
climate is positively related to employee performance. They specifically looked at PsyCap, the
higher-order construct of psychological capital first proposed by Luthans and Youssef (2004).
Organizational Change
The final topic covered in this article is organizational change. Organizational culture and climate
can both be negatively impacted by organizational change and, in turn, negatively affect
employee wellbeing, attitudes, and performance, reflecting onto organizational performance.
Often, there is great resistance to change, and the success rate of organizational change
initiatives averages at less than 30% (Al-Haddad & Kotnour, 2015). In order to overcome this
resistance, it is important that managers plan ahead for changes and emphasize education and
communication about them. As organizations becoming increasingly globalized, change has
become the norm, and this will continue into the future.
Additionally, as organizations become increasingly globalized, organizational changes often

involve mergers that have important organizational implications. In this regard, Kavanagh and
Ashkanasy (2006) found that, for a merger to be successful, there needs to be alignment between
the individual values and organizational cultures of merging partners. Managers during a merger
situation need to be especially cognizant of how this organizational change affects the company’s
original organizational culture.
Organizational development (OD), a collection of planned change interventions, may be the way
to improve organizational performance and increase employee wellbeing. OD focuses on
employees respecting one another, trust and support, equal power, confrontation of problems,
and participation of everyone affected by the organizational change (Lines, 2004). Moreover,
when an organization already has an established climate and culture that support change and
innovation, an organization may have less trouble adapting to the change.
Organizational change research encompasses almost all aspects of organizational behavior.

Individuals and employees are motivated to achieve success and be perceived as successful. In
this regard, each of the individual differences—personality, affect, past experiences, values, and
perceptions—plays into whether individuals can transcend obstacles and deal with the barriers
encountered along the journey toward achievement. Teams are similarly motivated to be
successful in a collective sense and to prove that they contribute to the organization as a whole. In
addition to individual differences, team members deal with bringing all those individual
differences together, which can wreak havoc on team communication and cause further obstacles
in terms of power differences and conflicts in regard to decision-making processes. Last, at the
organizational level of organizational behavior, it is important to account for all of these micro-
and meso-level differences, and to address the complexity of economic pressures, increasing
globalization, and global and transnational organizations to the mix. This is at the top level of
sophistication because, as emphasized before, just as groups equal much more than the sum of
Page 18 of 26
individual members, organizations are much more than the sum of their teams. The
organizational structure, the formal organization, the organizational culture, and climate and
organizational rules all impact whether an organization can perform effectively. Organizational
behavior, through its complex study of human behavior at its very conception, offers much-
needed practical implications for managers in understanding people at work.
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Organizational Behavior

Subjects: Organizational and Institutional Psychology

The Micro (Individual) Level of Analysis

In terms of gender, there continues to be significant discrimination against female employees.

Job Satisfaction and Job Engagement

Individual Differences, Affect, and Emotion

The Role of Affect in Organizational Behavior

Emotional Intelligence and Emotional Labor

organizational outcomes such as heightened emotional exhaustion and reduced commitment

Affect and Organizational Decision-Making

Perceptions and Behavior

Decision-Making and the Role of Perception

Common Biases in Decision-Making

Contemporary Theories of Motivation

Although traditional theories of motivation still appear in OB textbooks, there is unfortunately

Goal-Setting and Conservation of Resources

Self-Efficacy and Motivation

Reinforcement theory (Skinner, 1938) counters goal-setting theory insofar as it is a behaviorist

The Meso (Group) Level of Analysis

Elements of Team Performance

Team Effectiveness and Relationship Conflict

Team Climate and Emotionality

Power and Politics

Organizational Politics, Power, and Ethics

The Macro (Organizational) Level of Analysis

The Physical Environment of Work

Organizational Climate and Culture

Organizational Climate and its Relation to Organizational Culture

Additionally, as organizations become increasingly globalized, organizational changes often

Organizational change research encompasses almost all aspects of organizational behavior.

Bandura, A. (1977). Social learning theory. Alexandria, VA: Prentice Hall.

Fiedler, F. E. (1967). A theory of leadership effectiveness. New York: McGraw-Hill.

Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370–396.

McGregor, D. (1960). The human side of enterprise. New York: McGraw-Hill.

Ozcelik, H. (2013). An empirical analysis of surface acting in intra-organizational relationships. Journal of

Vroom, V. H. (1964). Work and motivation. New York: Wiley.

Human Resource Management and Organizational Psychology

Organizational Climate and Culture

Overqualification in the Workplace

Communication and Intergroup Relations

Training from an Organizational Psychology Perspective

Dual Process Models of Persuasion

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