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Chapter 1

Organizational Chapter 1.docx

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University of Guelph
PSYC 3080
Meghan Mc Murtry

Organizational Behaviour- Chapter 1 Field of Organizational Psychology  OB- study of what people think, feel, and do in and around organizations  Examines: o Employee behavior o Decisions o Perceptions o Emotional responses o How individuals and teams in organizations relate to each other and their counterparts  Studies how organizations interact with external environments o Particularly in the context of the employee behavior and decisions  Organizations- groups of people who work interdependently toward some purpose  History: o 3500 BC- temples constructed with organized actions of many people o Ancient Rome- craftspeople and merchants run by elected managers o 1670- Hudsons Bay company created  Oldest commercial organization  Key features of organizations o Collective entities  Made up of human beings and people interact with it in organized ways  Requires communications, coordination, and collaboration  All organizational members are interdependent  Share materials, information, and expertise o Members have a collective sense of purpose Historical Foundations  Emerged as a distinct field in the 1940s  Plato- Greek philosopher wrote about the essence of leadership  Confucius- Chinese philosopher discussed the virtues of ethics and leadership  1776- Adam Smith showed benefits of job specialization and division  1876- Max Weber was a German sociologist who wrote about rational organizations, work ethic, and charismatic leadership  Fredrick Winslow Taylor- industrial engineer o Created systematic leadership, organized work processes, and employee motivation o Used goal setting and rewards  1900s William Lyon Mackenzie King was a pioneering consultant o Promoted work involvement and organizational rewards  20s-40s- Elton Mayo introduced human relations school of management o Studied employee attitudes and informal group dynamics Why Study OB?  Helps fulfill the need to understand and predict the world  Question and rebuild personal theories that have developed through observation and experience  Provides knowledge and tools for working with through others Perspectives of Organizations Effectiveness  All OB theories have the objective to make organizations effective  Organizational effectiveness- ultimate dependent variable in OB o Always trying to improve effectiveness  Companies are effective when they achieve their stated organizational objective  Four perspectives o Open systems o Organizational learning o High performance work perspectives o Stakeholders  Organizations are effective when they: o Good fit with their external environment o Are learning organizations o Have efficient and adaptive internal subsystems o Satisfy the needs of key stakeholders Open Systems Perspective  Earliest and most used ways of thinking about organizations  Other perspectives seen as extensions of open model  View organizations as complex organisms that live in an external environment o “Open”- permeable relationship o “Closed”- operate without dependence or interaction with an external environment  Open systems o Organizations depend on external environment for resources  Raw materials, human resources, information, financial resources, equipment o External environment demands how organization should operate  E.g. rules and expectations, accounting, technology o Some environmental resources transformed into outputs  Exported into external environment o Other resources become subsystems  Organization subsystems are organized interdependently so they can interact inputs into outputs  Some outputs may be valued by the external environment o Other outputs may have adverse effects on the environment and the organizations relationship with the environment  Good fit- organization puts resources where they are most useful to adapt to and align with needs of external environment  Poor fit- offer the wrong products and operate inappropriately  Defines effectiveness by how well it transforms inputs into outputs o Organizational efficiency- ratio of inputs to outputs o Companies that produce more good or services with less labour, materials, and energy are most efficient  Coordination is vital in the relationship o Problem: information gets lost, ideas not shared, materials are hoarded Organizational Learning Perspective  Views knowledge as the main driver of competition o Also known as knowledge management  Depends on: o Knowledge acquisition- extracting information and ideas from the external environment  Most powerful way is by hiring individuals  Organizations learn from external sources o Knowledge sharing- distribute knowledge to others across the organization  Usually occurs through structure/informal communication o Knowledge use- apply knowledge in ways that add value to the organization  Must have enough autonomy to apply it  Requires a culture that supports the learning process o Knowledge storage- any means by which knowledge is held for later retrieval  Important prerequisite for acquiring, sharing, and using new knowledge is the amount already held in the organization o Absorptive capacity  Intellectual capital- company’s stock of knowledge o Human capital- knowledge, skills, and abilities that employees carry around in their heads  Issue when people leave and take information with them o Structural capital- knowledge captured and retained in an organizations systems and structures and finished products  Still intact if every employee left a company o Relationship capital- value derived from relationships with customers, supp
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