Chapter 1

What is Organizational
Behavior?
McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Goals
What is the definition of organizational behavior?
What are the two primary outcomes in studies of
organizational behavior? What factors affect those two
primary outcomes?
Do firms that are good at organizational behavior tend to
be more profitable? Why might that be, and is there any
research evidence to support this tendency?
What is theory, and what is its role in the scientific
method?
What does a correlation represent, and what are big,
moderate, and small correlations? What is a metaanalysis?
Slide
1-2

Discussion Questions
Think of the worst coworker you've ever
had. What did that person do that was so
bad?
Think of the best coworker you've ever
had. What did that person do that was so
good?
Slide
1-3

Table 1-1

The Best of Coworkers, the Worst

of Coworkers

Slide
1-4

Basic Elements of Organizational

Behavior
Organizational behavior (OB)

Human resource management

Strategic management
Slide
1-5

OB Foundations
Theories and concepts in OB are drawn
from a wide variety of disciplines
Industrial and organizational psychology
Social psychology
Sociology
Economics

Slide
1-6

Integrative Model of Organizational

Behavior
Individual Outcomes

Individual Mechanisms

Slide
1-7

Integrative Model of Organizational

Behavior, contd
Individual Characteristics

Group Mechanisms

Organizational Mechanisms

Slide
1-8

Figure 1-1

Integrative Model of OB

Slide
1-9

Does Organizational Behavior Matter?

Resource-based view
Financial resources (revenue, equity)
Physical resources (buildings, machines)
Knowledge, decision-making, culture

Slide
1-10

Discussion Question
Is it really the people that make some
companies more profitable than
others?

Slide
1-11

What Makes a Resource Valuable?

Rare
Resources, people

Inimitable
History

Numerous small decisions

Socially complex resources
Slide
1-12

Figure 1-2

What Makes a Resource Valuable?

Slide
1-13

Research Evidence
OB practices were associated with better firm
performance
Firms who valued OB had a 19% higher survival
rate than firms who did not value OB
Good people comprise a valuable resource for
companies
There is no magic bullet OB practice one thing
that, in-and-of itself, can increase profitability
Rule of one-eighth
OB on Screen
Office Space
Slide
1-14

How Do We Know
Method of Experience

Method of Intuition
Method of Authority
Method of Science
Slide
1-15

Scientific Studies
Theory

Hypotheses

Slide
1-16

Figure 1-3

The Scientific Method

Slide
1-17

Scientific Studies, contd

Correlation (r)
Describes the statistical relationship between
two variables
Can be positive or negative and range from 0
(no statistical relationship) to 1 (a perfect
statistical relationship)

Slide
1-18

Figure 1-4

Different Correlation Sizes

Slide
1-19

Figure 1-4

Different Correlation Sizes

Slide
1-20

Figure 1-4

Different Correlation Sizes

Slide
1-21

Social Recognition & Job Performance

How often does social recognition lead to higher
job performance?
Burger King study
Correlation between social recognition
and job performance was .28
Correlation between social recognition and retention
rates was .20

Slide
1-22

Table 1-4

Notable Correlations

Slide
1-23

Meta-analysis
The best way to test a theory is to conduct many
studies, each of which is as different as possible
from the ones that preceded it.
Meta-analysis

Slide
1-24

Takeaways
Organizational behavior is a field of study
devoted to understanding and explaining the
attitudes and behaviors of individuals and
groups in organizations. It focuses on why
individuals and groups in organizations act the
way they do.
The two primary outcomes - job performance
and organizational commitment.
A number of factors affect performance and
commitment, including individual mechanisms,
individual characteristics, group mechanisms, and
organizational mechanisms.
Slide
1-25

Takeaways, Contd
The effective management of organizational
behavior can help a company become more
profitable because good people are a valuable
resource.
Rare
Hard to imitate
History that cannot be bought or copied,
Make numerous small decisions that cannot be
observed by competitors
Create socially complex resources such as culture,
teamwork, trust, and reputation.
Good OB policies have been linked to employee
productivity, firm profitability, and even firm survival.
Slide
1-26

Takeaways, Contd
A theory is a collection of assertions, both verbal
and symbolic, that specifies how and why
variables are related, as well as the conditions in
which they should (and should not) be related.
A correlation is a statistic that expresses the
strength of a relationship between two variables
(ranging from 0 to 1).
A meta-analysis summarizes the results of several
research studies. It takes the correlations from those
research studies and calculates a weighted average to
give more weight to studies with larger samples.
Slide
1-27