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Chapter 1

Chapter 1 on Introduction to OB.docx

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Simon Fraser University
Business Administration
BUS 272
Graeme Coetzer

Chapter 1 Introduction to the Field of Organizational Behavior Organizational behavior - The study of what people think, feel, and do in and around organizations - Focus on employee behavior, decisions, perceptions, and emotional responses - The study of how organizations interact with their external environments, especially in the context of employee behavior and decisions Organizations - Groups of people who work interdependently toward some purpose - Collective entities - Collective sense of purpose - Required a minimal level of communication, coordination, and collaboration to achieve organizational objectives Why study OB? - Satisfy the need to understand and predict - Helps us to test personal theories - Influence behaviour – get things done - OB improves an organization’s financial health - OB is for everyone. Organizational Effectiveness - The ultimate dependent variable in OB - Old approach – achievement of stated goals - Has too many substitute labels – organizational performance, success, goodness, health, competitiveness, excellence - Problem with goal attainment o Could set easy goals o Company might achieve wrong goals Four perspectives of organizational effectiveness (Need to consider all four perspectives when assessing a company’s effectiveness) - Open System Perspectives o One of the earliest and well entrenched ways of thinking about organizations o Organizations are complex systems that “live” within (and depend upon) the external environment o Open describe this permeable relationship; closed system operate without dependence on or interaction with an external environment o Depend on the external environment  Resources, such as raw materials, job applicants, financial resources, information, and equipment  Consists of rules and expectations, such as laws and cultural norms o Inside are subsystems: departments, teams, informal groups, work processes, technological configurations, etc. o Effective organizations  Maintain a close “fit” with changing conditions  Transform inputs to outputs efficiently and flexibly  Move into different environments if the current environment is too challenging  Fluidly reconfiguring their subsystems to become more consistent with new environment o Internal subsystems effectiveness  Most common indicator of this internal transformation process is organizational efficiency/ productivity  The ratio of inputs to outcomes  Companies that produce more goods or services with less labor, materials, and energy are more efficient o Foundation for the other three organizational effectiveness perspective External Environment - Raw Material External Environment - Human Resources - Products/services - Information Transforming inputs - Shareholder dividends - Finances to outputs - Community support - Equipment - Waste/ pollution - Organizational Learning Perspective o An organization’s capacity to acquire, share, use, and store valuable knowledge o Main driver of competitive advantage  Organizational memory  The storage and preservation of intellectual capital  Retain intellectual capital by o Keeping knowledgeable employees o Transferring knowledge to others o Transferring human capital to structural capital  Successful companies also unlearn o Absorptive capacity (knowledge prerequisite)  The ability to recognize the value of new information, assimilate it, and use it for value-added activities o Need to consider both stock and flow of knowledge  Stock: intellectual capital  Human capital: knowledge, skills, and abilities that people possess, generate economic value  Structural capital: knowledge captured in systems and structures  Relationship capital: value derived from satisfied customers, reliable suppliers, etc.  Flow: organizational learning processes of acquisition, sharing, and use Knowledge Knowledge Knowledge Knowledge Acquisition Sharing Use Storage Learing Communication Awareness Human memory Scanning Training Sensemaking Documentation Grafting Info systems Autonomy Practices/habits Experimenting Observation Empowerment Databases - High Performance Work Practices Perspective (HPWPs) o Effective organizations incorporate server workplace practices that leverage the potential of human capital o Human capital (employee knowledge, skills, abilities) is competitive advantage  Help discover opportunities and minimize threats in the external environment  Rare and difficult to imitate  Can’t be replaced by technology o Four HPWPs 1. Employee involvement 2. Job autonomy  Tend to strengthen employee motivation  Improve decision making, organizatio
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