Understanding Organizational Behavior

Topic: Management
Words: 3626 Pages: 13


An organization is a planned and coordinated system of human activities that is purposefully undertaken to accomplish a goal. It means that the organization is structured to achieve a specific purpose. Nonetheless, organizations must deal with different environmental influences that require their management. Organizational behavior refers to the theory of human and social behavior in the context of organizations. It is all about how individuals are influenced by and react to the environment they find themselves working in. It has been defined as the study of individual behavior in organizations (Kuhn, 2021). The main goal of organizational behavior is to understand why people act the way they do when they work in an organization. Organizational behavior includes employee motivation, communication, leadership, and how people conform to rules. Organizational behavior enables employees to either be satisfied with their job or not satisfied but still perform their tasks within the organization.

Since the beginning of the 20th century, many factors have been introduced that have changed how individuals work in organizations. These include introducing new organizations or business models, such as outsourcing and franchising (Bird et al., 2022). Additionally, there have been significant technological changes with new computer systems and communication devices, such as mobile phones and video conferencing, to connect people globally (Kuhn, 2021). This paper intends to examine the changing management practices from the 20th century, theories, concepts, and evidence in organizational behavior, and explain the corporate culture and the learning organization concept.

In addition, the main factors affecting organizational behavior have been proposed by executive directors and researchers in the field of organizational behavior. It includes organizational structure, management practices, leadership strategies, human relations practices, technological developments, and corporate culture (Kuhn, 2021). Since these factors directly impact how individuals within an organization function, it is important for management to consider and adopt a flexible medium-term plan to reflect the new changing environment. Two models can help managers adapt to change: the quantitative model and the qualitative one (Kuhn, 2021). The quantitative model focuses on analyzing the data and understanding whether a change is required by looking at the current data, whereas the qualitative model focuses on more strategic planning decisions, where the manager has to consider whether they need to adopt a new strategy.

Changing Management Practices from the Early 20th Century

The management practices that have changed from the early 20th century include introducing new organizations or business models such as outsourcing and franchising. These have significantly impacted how organizations are structured, managed, and functioning. The change in organizational structure has happened through outsourcing strategic administrative and marketing functions to third-party companies (Villani et al., 2022). It has meant that less specialized managers are required to manage these areas, allowing the individuals responsible for the procedures to focus on expanding the number of customers they manage. In addition, businesses can reduce organizational costs by outsourcing their administrative functions, thus freeing up managers and executives to focus on advancing these businesses’ development and profitability.

The introduction of franchising is necessary since it allows companies to expand their business without committing additional resources. Franchising adds value to the organization’s brand by appointing franchisees who can develop and manage new locations independently (Bak et al., 2020). The relationships between a franchiser and a franchisee are often considered long-term relationships. It is a multi-stage process that requires companies to find appropriate franchisees, negotiate agreements, and monitor the performance of their franchisees. However, franchising has proved beneficial due to its high returns in terms of investment and high profits, leading to brand loyalty, which is the crucial reason franchising is becoming increasingly popular today (Rondi et al., 2022). Franchising is an organizational form popular in developed countries such as the U.K., in which a company sells a product for a fee or royalties to another company that markets and sells it under its name. It is a significant change since the development of franchising has led to the establishment of new businesses, new small firms, and more broad distribution of products.

Additionally, there have been significant technological changes with new computer systems. People can connect and communicate globally through the development of teleconferencing systems and devices such as mobile phones and video conferencing. The introduction of new computer systems has led to the development of teleworking or mobile working, where employees can access their files, applications, and other corporate data from the workplace. When telecommunications first developed, there was no way for users to communicate with each other easily. However, there are several ways in which people can easily pass information. For example, a variety of computer systems are available today to allow individuals to communicate online with each other through instant messaging programs, video conferencing, and e-mail (van Kemenade and Hardjono, 2018). It means that even during the COVID-19 pandemic, organizations could hold meetings through teleconferencing devices from anywhere in the world.

Globalization is another massive factor that has changed how people work in an organization. It has happened with the introduction of new business models such as outsourcing and franchising (Nicholas, 2018). The expansion of these businesses has led to the establishment of new companies. These firms then created many small enterprises, increasing consumer choice and providing more competition in industries such as I.T., banking, fashion, and travel (Nicholas, 2018). These factors have led to many changes in organizational structure and management, which have experienced a significant impact on how people work within organizations today.

Another issue that has changed how individuals work in organizations is increased mergers and acquisitions (M&A). It is due to organizations having more power in making decisions internally (Baker, Storbacka, and Brodie, 2019). It is an essential change since the introduction of M&A has led to the growth of organizations with more advanced core competencies and higher productivity levels (Dahlgaard-Park et al., 2018). It is significant because organizations have increased efficiency since employees now have more power.

Current Theories, Concepts, and Evidence in Organizational Behavior

The current organization behavior theories can be divided into two main categories: behavioral theories of management (BTM), also known as Human Resource Management (HRM), and the contingency approach, known as Organization Design Theory. The premise of behavioral management theory is that managers will see people as valuable resources to help them accomplish goals by understanding the human side of their workforce (Claus, 2019). Nonetheless, behavioral theories of management are described as the study of principles, techniques, and procedures to manage human behavior in organizations. Employees feel they are a part of a particular group when management shows a special interest in them (Adamson and Tsourapas, 2020). It is a crucial theory since it is used in many spheres of life, such as the arts and culture, politics, science, and technology. Contingency theories, on the other hand, concentrate on how organizational structure and leadership practices can be used to make an organization successful or unsuccessful.

Contingency theories, on the other hand, concentrate on how organizational structure and leadership practices can be used to make an organization successful or unsuccessful. Contingency theories are divided into two different approaches: effectiveness and efficiency. The efficiency approach attempts to achieve efficient operations by using rational ways of planning, organizing, and controlling (Luthans et al., 2021). It is often based on the idea that people can only change their working practices if management shows them how their actions are causing problems. Furthermore, contingency theories emphasize the importance of leadership in bringing about success for an organization. However, contingency theories are considered non-deterministic and stress that no one type of leader or organization structure will bring about success or failure (Buchanan and Huczynski, 2019). Their strong evidence proves the justification behind contingency theories since research has uncovered a link between different organizational structures and leadership practices regarding how well an organization performs. It implies that the factors that lead to a successful organization are based on its situation.

Behavioral management theories are based on the contingency approach, where individuals are considered secondary organizational actors essential to achieving plans. Fred Gluckman and R.F. Cannings developed the contingency approach in 1958 (Kim et al., 2019). It investigates the causes behind the performance effects of managers. An example is that a manager may have high expectations of an employee who knows they may not be able to achieve them, but they believe they will try because they want to demonstrate their commitment to their job. Employees are motivated by their desire for recognition and personal growth and development.

The other critical theory is the functionalist theory, which is based on an organization’s social and cultural aspects. It is also known as corporate culture, a set of assumptions and values that members of an organization or group share. This functions in a way where employees identify their roles within their work groups, such as a worker bee, queen bee, or drone bee (Abbas et al., 2019). For example, in most organizations, there has to be someone who works hard to get things done while others work hard to appear to be working hard. Another critical factor is how an organization reacts to change in an industry since it will be different if it involves new products, new competition, or changing technology which leads to new ways of doing things.

Personality, Individual Differences, and the Relevance of Different Motivation Theories

Personality is a person’s characteristic pattern of perceiving, interpreting, and relating to the environment and oneself. It is important because it influences how people behave within organizations by managing different circumstances if they are in diverse situations (Ryan, Soenens, and Vansteenkiste, 2019). For example, one person may approach work in a severe manner while another will be more relaxed about their job (Williams et al., 2018). A person’s personality can also be influenced by previous experiences, such as education or the social environment they grew up (Williams et al., 2018). Personality can also be used as a good predictor of job performance because it tells us whether an employee will remain committed to their job and possess critical skills necessary for success on the job. For example, if someone is impulsive and their job involves lots of responsibility and independence, it may lead to job-related problems (Williams et al., 2018). Personality characteristics are linked with the personality theories behaviorists use in defining personality and the different frameworks they use by which they can explain human behavior.

Individual differences are described as the diversity concerning mental or behavioral characteristics. These individual differences may be inherited genetically or developed in early childhood by their experiences. These individual differences affect what motivates employees, which could affect a company’s sustainability (Deng, 2020). People with similar characteristics tend to work well in a team setting. It means that team members who worked together regularly will have higher scores on individual differences than individuals randomly assigned to the same team. An example is when employees are reprimanded for failing to complete their work, the situation might make them more anxious, affecting their performance (Deng, 2020). The distinction between intrinsic and extrinsic motivation is when an employee is inspired by the pleasure they get from doing the work rather than receiving rewards such as money or praise. The main advantage of intrinsic motivation is that it results in better job performance and higher skill levels than extrinsic motivation since people are more likely to do things that they find exciting and enjoyable.

Different motivation theories include incentive theory, equity theory, and expectancy theory. The incentive theory is closely linked to classical conditioning, which suggests that individuals are likely to repeat behaviors accompanied by pleasant consequences such as rewards. For example, when employees feel they are not receiving something they deserve, this can lead to conflict within the organization and reduced job performance. Equity theory is based on the idea that rewards and punishments should be evenly distributed amongst employees who perform their job similarly (Berberoglu, 2018). This idea can lead to problems since it has not been known which employees are getting more rewards or punishments than others. For instance, if an employee is given more responsibility, this could lead to resentment in the other employees who are not receiving similar rewards due to their job.

The Influences of Organizational Culture and Structure

Organizational culture is the values, norms, beliefs, and behaviors that guide how people behave in an organization. Before this can be assessed, it is essential to understand the functions of organizational culture and why they are important in organizations (Vroom, 2019). The main reason that corporate culture is influential is that it comprises a set of shared assumptions, beliefs, and values that guide employees and leaders on how to behave within the organization. Employees within an organization will also learn from each other since there will be clear leaders who will teach new employees what is expected from them in terms of behavior and attitude.

Organizational structure refers to a set of rules and regulations defined by the formal organization, such as job descriptions and procedures that govern how people behave within the organization. It is essential to highlight that structure is not necessarily a good thing since it can lead to rigidity in an organization, especially when it involves cultural differences between different departments or areas of work. For instance, certain employees may behave differently in various departments or companies where regulations restrict their actions. Organizational culture is essential because it influences how employees behave (Lowie and Verspoor, 2019). Employees may continue to act in a certain way after they have been given specific training, which shows them that their employers value their behavior.

Nonetheless, organizational culture also influences employees’ attitudes and behaviors because it can influence what kind of people are more likely to be successful within an organization. The main factor influencing organizational culture is a change in leadership as people change their cultural values (Rupp et al., 2018). It shows that leadership styles within the organization play a considerable role in how employees are influenced, which is crucial because it affects job performance.

Organizations with a strong culture are said to be stable and have a high level of employee retention. In contrast, an organization with a weak culture is said to have low levels of employee retention (Ryan and Ryan, 2019). It can affect the organization’s sustainability by increasing staff attrition rates, lowering productivity, and decreasing the quality of products or services. For instance, the more employees a company has, its turnover rate will be higher. It means a large company may have multiple positions that need to be filled. As they continue to fill these positions, they will begin to lose employees, which increases their attrition rate. Additionally, turnover rates can impact employee motivation because they may feel they are not part of the team (Ryan and Ryan, 2019). It can happen if an employee is put in a position where they feel like they are not receiving respect from other employees or their manager because there is no effort to prevent this from happening.

The Concept of Managing Groups and Teams

Managing groups and teams happens when an organization can involve its employees in the management processes and decisions about the organization. It includes changing the organization’s culture, structure, and mission. Managing groups and teams can contribute positively or negatively to employees’ job satisfaction depending on how they are managed and whether they have adequate support to perform their job (Meng and Berger, 2019). Suppose an organization has a leader with strong relationships with employees; this will encourage better attitudes within the workforce since they feel they have reason to trust their leaders and be valued as workforce members. However, a lack of leadership at the top can affect employee attitudes and behaviors because they may not feel that they are being heard or valued within the organization.

Workforce diversity is defined as an individual’s distinctive mix of demographic factors such as ethnicity, gender, nationality, and educational background. Workforce diversity includes racial, socio-economic, cultural, gender, and other differences. Managing workforce diversity is essential since it ensures that all employees feel included in the organization and respected, no matter their demographic (Altay et al., 2018). This kind of management allows employees to feel their opinions and ideas are valued, contributing to better job performance and a positive work environment for everyone. Additionally, it can influence an employee’s attitude and job performance because, for example, some people may feel it is vital to know as much about a different culture as possible. It can lead to increased diversity within the workforce since it can encourage employees to share their knowledge with others, which will improve how cultures are perceived.

Globalization refers to a change in markets where there is more competition between countries, and this has caused companies to become more interdependent. For example, international organizations such as the International Monetary Fund are responsible for ensuring that markets are fair for all participants. It means having reasonable regulations for many countries worldwide, affecting relations between nations, individuals, and jobs. Globalization is crucial because it influences how employees are managed (Saad and Abbas, 2018). For example, suppose a country has strict regulations. In that case, this can affect how employees within the workforce behave and interact with other employees, customers, and suppliers. Additionally, an interdependent market also means that there will be more issues with negotiating prices between countries, which will also affect other aspects of the business. For example, when a company produces products in 35 different countries, more negotiations will be needed to determine which company will deliver products at what price, which can affect employee attitudes.

Concept of Learning Organizations

A learning organization is competent in knowledge creation, acquisition, and transfer, as well as behavior modification, to take into account new information and insights. The concept of learning organizations has become more popular because it allows organizations to observe their performance and that of their clients in different ways. It is important since it improves their service quality (Rahman, 2019). According to Khaskheli et al. (2020), the learning organization concept fosters an atmosphere where new and expanded thinking habits are encouraged, collective aspiration is set free, and people are constantly discovering how to learn together. Adopting this culture benefits a company, not just its employees. Because a creative, successful company survives off the solutions its employees develop. Additionally, it encourages a genuine desire for growth and can significantly improve a company’s bottom line.

Learning organizational culture is vital since it leads to improved innovation and enhances knowledge sharing. Innovation is critical for survival, and it can contribute to the formation of new ideas. Additionally, companies and organizations need to know how to share knowledge with their employees since this leads to a more knowledgeable team that can take better care of clients. It can also influence an employee’s attitude since they can learn new things that may improve their work (Kharroubi, 2021). For example, one of these innovations may involve changing how business processes are handled within an organization so that employees feel as though they are doing their jobs better. Innovation distinguishes a firm by enabling it to meet clients’ needs differently. For example, Apple Computer Inc has released new products every year since 1984, including the iMac and iPod. Innovations such as these are essential for organizations to focus on since they contribute towards better services that allow clients to be more satisfied with their work and lead them to be loyal customers.

Additionally, learning organization enhances knowledge sharing through group discussions and teamwork. There are several ways of doing this, for example, workplace communities, collaborative team projects, and management support (Inegbedion et al., 2020). These can work together to help enhance knowledge sharing amongst employees since they feel they can share their knowledge without criticism. It helps develop a strong learning culture where key staff members know more about the organization and learn from other people’s perspectives.

The organizational concept is crucial because it enhances problem-solving skills. The likelihood of success multiplies when people work together to accomplish a common goal. Each person contributes their specific knowledge and viewpoint, which is especially helpful when a firm deals with a complex problem (Urbancová et al., 2020). Educating employees helps solve problems since it requires management to think about how they want the business set up and what would be similar. Additionally, it can influence an employee’s attitude because this can build confidence in the organization if employees feel they can contribute their ideas and suggestions towards improving their workplace. Effective decision-making is assisted by confidence, leading to better quality and service for an organization’s customers.


In conclusion, the theory of learning organizations is becoming increasingly important because it creates an atmosphere where the employees can learn and develop within their workplace. It allows the organization to achieve better results than if the company had not adopted this concept. Learning organizational culture helps enhance employee satisfaction, giving the company a competitive advantage since it leads to better quality products or services. Overall, learning corporate culture is essential for companies because it improves attitudes and helps develop employee trust, which is vital for an effective business.

The critical motivation theories are incentive theory, expectancy, and equity theory. These are vital in an organization since they affect employee attitudes which is extremely important in a business environment. Confidence is also crucial because it allows people to take responsibility for their actions and make decisions. It leads to better decision-making and the organization’s best business products and services. A significant criticism of the theory of learning organizations is that it focuses too much on the member’s personal development instead of on the organization itself. This paper can help one to understand better what a learning organization culture is and how it can help organizations function better.

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