Importance of Organizational Behavior

Importance of Organizational Behavior

Organizations are involved in every facet of our lives. Everyone whether they like it or not are members of multiple organizations. Personally to argue that the study of organizational behavior or to propose any negative response to a structure that is closely involved with our lives is moot. The reality is that organizations organize our lives. Our schedules are almost entirely set by organizations.

What happens in the economy and in the courts and in technology (all elements of the environment of organizations) affects all of our lives profoundly. The reason most organizations do things the way they do is largely a function of what they can make money doing, what is legal, and what technology permits.

Organizations have a tremendous impact on our professional lives and organizational structure. Prestige in industrialized nations is determined by occupation, and by rank within the organization we work for. So bankers (an occupation) have a certain status in society, and bankers who are senior vice-presidents (a high rank) are particularly blessed.

Most people's income is derived from their jobs in organizations, so organizations also largely determine the amount of money that individuals have. Organizations wield considerably more power than individuals do, so the individuals who control organizations also have considerable power.

The discipline of Organizational Behavior encompasses three broad areas:

1. The Behavior of People in Organizations

OB draws on psychology, anthropology and sociology to gain insight into the behavior of individuals in organizational settings. Topics studied include:

• perception, cognition, learning

• personality and motivation

• leadership, power, conformity, communication

• decision making

2. Organizational Structure

Organizations consist of people organized to achieve organizational goals (like manufacture computers). One of the most important strategic elements of an organization is its structure: how the people are arranged so as to produce what the organization produces. Topics include:

• task identification and division of labor

• departmentation

• coordination and control mechanisms

• processes and procedures, such as promotion, hiring policies, compensation

• organizational form (e.g., bureaucracy)

• size

• centralization of decision-making

• the relationships among these variables

3. Behavior of organizations

Just as we can study the interactions of individuals with the organization and with each other, we can also study the interactions of organizations with their environments, which include individual citizens and other organizations including the government. Some of the behaviors of organizations that we are interested in include:

• adoption of new practices such as

• downsizing

• team-based structure

• domestic partner benefits (e.g., partners of gay employees get full medical coverage)

• re-engineering

• environmental protection ("green" practices)

• adaptation to changing conditions

• global competition

• increasing pace of technological change

• changing social structure (e.g., status of women)

What makes an organization successful is not solely the product. Just because their technology is good today doesn't mean it will always be good. There are a lot of makers of vacuum tubes that can attest to that. Financial strength is basically a measure of the company's past success. What determines whether the company will continue to develop sought-after products, will continue to develop cutting edge technology, will continue to make the right guesses about which way the market is going to go, will continue to make sound investments, is the people and the organizational culture and structure.

Individuals that understand the organization and its behaviors have the advantage to manage