Importance Of Organizational Behavior
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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
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
coordination and control mechanisms
processes and procedures, such as promotion, hiring policies, compensation
organizational form (e.g., bureaucracy)
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
domestic partner benefits (e.g., partners of gay employees get full medical coverage)
environmental protection ("green" practices)
adaptation to changing conditions
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 an organization. Understanding how organizations really work, is key to rising to the top levels of management. Most people who work in organizations come to understand the politics and issues in their own departments. But they don't get much opportunity what happens in the rest of the organization. Hence, their presentations, their political moves, their organizational initiatives are all in better tune with the organization as a whole, and are more apt to be admired by people higher in the organization.
Within an Organization
The formal organization chart of an organization can be thought of as a network. It is a directed graph (a non-symmetric network) that records the social relation "reports to". That social relation tends to channel a lot of the communications within an organization. For example, a lot of prescriptive information (i.e., do this, stop doing that) flows downward along the links. It's unusual, and can cause problems, when prescriptive information moves in a different pattern, such as from a boss to someone else's subordinate, or among peers, or from a subordinate to a supervisor. At the same time, a lot of descriptive flows up the links, often in the form of reports.
The formal organization also determines a lot of other communication as well. For example, most roles (jobs) within an organization are interlinked, forcing occupants of those roles to interact with others playing their own roles. For example, the personnel department, like the payroll department, generally has to interact with all employees. People in the marketing research department work closely with people in the marketing department, who also work with people in the new product development department.
In addition to these formally prescribed communications, there are also multitudes of informal communications, ranging from getting technical advice to sexual harassment.
Given that there are many ways to structure communication in an organization, the question arises how the pattern of communications within the organization affects the performance of the organization -- its ability to sell products, reduce costs, adapt to changes in environment, etc. In other words, what is the best communication structure?
One way to investigate this question is to perform controlled lab experiments. This is what Alex Bavelas and his student Harold Leavitt did at MIT in the late 40s and 50s.
What he found out was that the more centralized a structure is, the better it performs. They use "centralization" to refer to the distance nodes are from the most central node, who acts as an information integrator. The closer everyone is to that integrator, the faster the puzzle is solved. Of course, channeling all information to a single integrator is not the only possible strategy for solving problems. But it is a reasonable strategy that is easy to implement and which works well with simple problems.
One possible reason for this is that in the centralized systems, the number of possible patterns of communication was much smaller. People were more or less forced to adopt a certain strategy for solving the problem. In contrast, for the circle, there were many possibilities, only a few of which worked well. Even if they all worked well, it was much harder for people to choose one strategy and stick to it. It is often the case in organizations that a satisfactory strategy that is easy to find, implement and stick to is superior to an optimal strategy that is hard to find, hard to implement, and hard to stick with.
It clear that organizational behavior plays a tremendous role on our relationships both professionally and socially. It is clear that an individual that understand the organization and its behaviors have the advantage to manage an organization. Consequently OB is essential to life.