Organizational behavior (OB) is a discipline that includes principles from psychology, sociology, and anthropology. Its focus is on understanding how people behave in organizational work environments. Broadly speaking, OB covers three main levels of analysis: micro (individuals), meso (groups), and macro (the organization). Topics at the micro level include managing the diverse workforce; effects of individual differences in attitudes; job satisfaction and engagement, including their implications for performance and management; personality, including the effects of different cultures; perception and its effects on decision-making; employee values; emotions, including emotional intelligence, emotional labor, and the effects of positive and negative affect on decision-making and creativity (including common biases and errors in decision-making); and motivation, including the effects of rewards and goal-setting and implications for management. Topics at the meso level of analysis include group decision-making; managing work teams for optimum performance (including maximizing team performance and communication); managing team conflict (including the effects of task and relationship conflict on team effectiveness); team climate and group emotional tone; power, organizational politics, and ethical decision-making; and leadership, including leadership development and leadership effectiveness. At the organizational level, topics include organizational design and its effect on organizational performance; affective events theory and the physical environment; organizational culture and climate; and organizational change.
Organizational behavior (OB) is the study of how people behave in organizational work environments. More specifically, Robbins, Judge, Millett, and Boyle (2014, p. 8) describe it as “[a] field of study that investigates the impact that individual groups and structure have on behavior within organizations, for the purposes of applying such knowledge towards improving an organization’s effectiveness.” The OB field looks at the specific context of the work environment in terms of human attitudes, cognition, and behavior, and it embodies contributions from psychology, social psychology, sociology, and anthropology. The field is also rapidly evolving because of the demands of today’s fast-paced world, where technology has given rise to work-from-home employees, globalization, and an ageing workforce. Thus, while managers and OB researchers seek to help employees find a work-life balance, improve ethical behavior (Ardichivili, Mitchell, & Jondle, 2009), customer service, and people skills (see, e.g., Brady & Cronin, 2001), they must simultaneously deal with issues such as workforce diversity, work-life balance, and cultural differences.
The most widely accepted model of OB consists of three interrelated levels: (1) micro (the individual level), (2) meso (the group level), and (3) macro (the organizational level). The behavioral sciences that make up the OB field contribute an element to each of these levels. In particular, OB deals with the interactions that take place among the three levels and, in turn, addresses how to improve performance of the organization as a whole.
In order to study OB and apply it to the workplace, it is first necessary to understand its end goal. In particular, if the goal is organizational effectiveness, then these questions arise: What can be done to make an organization more effective? And what determines organizational effectiveness? To answer these questions, dependent variables that include attitudes and behaviors such as productivity, job satisfaction, job performance, turnover intentions, withdrawal, motivation, and workplace deviance are introduced. Moreover, each level—micro, meso, and macro—has implications for guiding managers in their efforts to create a healthier work climate to enable increased organizational performance that includes higher sales, profits, and return on investment (ROE).
The micro or individual level of analysis has its roots in social and organizational psychology. In this article, six central topics are identified and discussed: (1) diversity; (2) attitudes and job satisfaction; (3) personality and values; (4) emotions and moods; (5) perception and individual decision-making; and (6) motivation.
An obvious but oft-forgotten element at the individual level of OB is the diverse workforce. It is easy to recognize how different each employee is in terms of personal characteristics like age, skin color, nationality, ethnicity, and gender. Other, less biological characteristics include tenure, religion, sexual orientation, and gender identity. In the Australian context, while the Commonwealth Disability Discrimination Act of 1992 helped to increase participation of people with disabilities working in organizations, discrimination and exclusion still continue to inhibit equality (Feather & Boeckmann, 2007). In Western societies like Australia and the United States, however, antidiscrimination legislation is now addressing issues associated with an ageing workforce.
In terms of gender, there continues to be significant discrimination against female employees. Males have traditionally had much higher participation in the workforce, with only a significant increase in the female workforce beginning in the mid-1980s. Additionally, according to Ostroff and Atwater’s (2003) study of engineering managers, female managers earn a significantly lower salary than their male counterparts, especially when they are supervising mostly other females.
Job satisfaction is an attitudinal variable that comes about when an employee evaluates all the components of her or his job, which include affective, cognitive, and behavioral aspects (Weiss, 2002). Increased job satisfaction is associated with increased job performance, organizational citizenship behaviors (OCBs), and reduced turnover intentions (Wilkin, 2012). Moreover, traditional workers nowadays are frequently replaced by contingent workers in order to reduce costs and work in a nonsystematic manner. According to Wilkin’s (2012) findings, however, contingent workers as a group are less satisfied with their jobs than permanent employees are.
Job engagement concerns the degree of involvement that an employee experiences on the job (Kahn, 1990). It describes the degree to which an employee identifies with their job and considers their performance in that job important; it also determines that employee’s level of participation within their workplace. Britt, Dickinson, Greene-Shortridge, and McKibbin (2007) describe the two extremes of job satisfaction and employee engagement: a feeling of responsibility and commitment to superior job performance versus a feeling of disengagement leading to the employee wanting to withdraw or disconnect from work. The first scenario is also related to organizational commitment, the level of identification an employee has with an organization and its goals. Employees with high organizational commitment, job satisfaction, and employee engagement tend to perceive that their organization values their contribution and contributes to their wellbeing.
Personality represents a person’s enduring traits. The key here is the concept of enduring. The most widely adopted model of personality is the so-called Big Five (Costa & McCrae, 1992): extraversion, agreeableness, conscientiousness, emotional stability, and openness. Employees high in conscientiousness tend to have higher levels of job knowledge, probably because they invest more into learning about their role. Those higher in emotional stability tend to have higher levels of job satisfaction and lower levels of stress, most likely because of their positive and opportunistic outlooks. Agreeableness, similarly, is associated with being better liked and may lead to higher employee performance and decreased levels of deviant behavior.
Personal value systems are behind each employee’s attitudes and personality. Each employee enters an organization with an already established set of beliefs about what should be and what should not be. Today, researchers realize that personality and values are linked to organizations and organizational behavior. Years ago, only personality’s relation to organizations was of concern, but now managers are more interested in an employee’s flexibility to adapt to organizational change and to remain high in organizational commitment. Holland’s (1973) theory of personality-job fit describes six personality types (realistic, investigative, social, conventional, enterprising, and artistic) and theorizes that job satisfaction and turnover are determined by how well a person matches her or his personality to a job. In addition to person-job (P-J) fit, researchers have also argued for person-organization (P-O) fit, whereby employees desire to be a part of and are selected by an organization that matches their values. The Big Five would suggest, for example, that extraverted employees would desire to be in team environments; agreeable people would align well with supportive organizational cultures rather than more aggressive ones; and people high on openness would fit better in organizations that emphasize creativity and innovation (Anderson, Spataro, & Flynn, 2008).
Personality predisposes people to have certain moods (feelings that tend to be less intense but longer lasting than emotions) and emotions (intense feelings directed at someone or something). In particular, personalities with extraversion and emotional stability partially determine an individual predisposition to experience emotion more or less intensely.
Affect is also related as describing the positive and negative feelings that people experience (Ashkanasy, 2003). Moreover, emotions, mood, and affect interrelate; a bad mood, for instance, can lead individuals to experience a negative emotion. Emotions are action-oriented while moods tend to be more cognitive. This is because emotions are caused by a specific event that might only last a few seconds, while moods are general and can last for hours or even days. One of the sources of emotions is personality. Dispositional or trait affects correlate, on the one hand, with personality and are what make an individual more likely to respond to a situation in a predictable way (Watson & Tellegen, 1985). Moreover, like personality, affective traits have proven to be stable over time and across settings (Diener, Larsen, Levine, & Emmons, 1985; Watson, 1988; Watson & Tellegen, 1985; Watson & Walker, 1996). State affect, on the other hand, is similar to mood and represents how an individual feels in the moment.
Fritz, Sonnentag, Spector, and McInroe (2010) focus on the importance of stress recovery in affective experiences. In fact, an individual employee’s affective state is critical to OB, and today more attention is being focused on discrete affective states. Emotions like fear and sadness may be related to counterproductive work behaviors (Judge et al., 2006). Stress recovery is another factor that is essential for more positive moods leading to positive organizational outcomes. In a study, Fritz et al. (2010) looked at levels of psychological detachment of employees on weekends away from the workplace and how it was associated with higher wellbeing and affect.
Ashkanasy and Daus (2002) suggest that emotional intelligence is distinct but positively related to other types of intelligence like IQ. It is defined by Mayer and Salovey (1997) as the ability to perceive, assimilate, understand, and manage emotion in the self and others. As such, it is an individual difference and develops over a lifetime, but it can be improved with training. Boyatzis and McKee (2005) describe emotional intelligence further as a form of adaptive resilience, insofar as employees high in emotional intelligence tend to engage in positive coping mechanisms and take a generally positive outlook toward challenging work situations.
Emotional labor occurs when an employee expresses her or his emotions in a way that is consistent with an organization’s display rules, and usually means that the employee engages in either surface or deep acting (Hochschild, 1983). This is because the emotions an employee is expressing as part of their role at work may be different from the emotions they are actually feeling (Ozcelik, 2013). Emotional labor has implications for an employee’s mental and physical health and wellbeing. Moreover, because of the discrepancy between felt emotions (how an employee actually feels) and displayed emotions or surface acting (what the organization requires the employee to emotionally display), surface acting has been linked to negative organizational outcomes such as heightened emotional exhaustion and reduced commitment (Erickson & Wharton, 1997; Brotheridge & Grandey, 2002; Grandey, 2003; Groth, Hennig-Thurau, & Walsh, 2009).
Ashkanasy and Ashton-James (2008) make the case that the moods and emotions managers experience in response to positive or negative workplace situations affect outcomes and behavior not only at the individual level, but also in terms of strategic decision-making processes at the organizational level. These authors focus on affective events theory (Weiss & Cropanzano, 1996), which holds that organizational events trigger affective responses in organizational members, which in turn affect organizational attitudes, cognition, and behavior.
Like personality, emotions, moods, and attitudes, perceptions also influence employees’ behaviors in the workplace. Perception is the way in which people organize and interpret sensory cues in order to give meaning to their surroundings. It can be influenced by time, work setting, social setting, other contextual factors such as time of day, time of year, temperature, a target’s clothing or appearance, as well as personal trait dispositions, attitudes, and value systems. In fact, a person’s behavior is based on her or his perception of reality—not necessarily the same as actual reality. Perception greatly influences individual decision-making because individuals base their behaviors on their perceptions of reality. In this regard, attribution theory (Martinko, 1995) outlines how individuals judge others and is our attempt to conclude whether a person’s behavior is internally or externally caused.
Decision-making occurs as a reaction to a problem when the individual perceives there to be discrepancy between the current state of affairs and the state s/he desires. As such, decisions are the choices individuals make from a set of alternative courses of action. Each individual interprets information in her or his own way and decides which information is relevant to weigh pros and cons of each decision and its alternatives to come to her or his perception of the best outcome. In other words, each of our unique perceptual processes influences the final outcome (Janis & Mann, 1977).
Although there is no perfect model for approaching decision-making, there are nonetheless many biases that individuals can make themselves aware of in order to maximize their outcomes. First, overconfidence bias is an inclination to overestimate the correctness of a decision. Those most likely to commit this error tend to be people with weak intellectual and interpersonal abilities. Anchoring bias occurs when individuals focus on the first information they receive, failing to adjust for information received subsequently. Marketers tend to use anchors in order to make impressions on clients quickly and project their brand names. Confirmation bias occurs when individuals only use facts that support their decisions while discounting all contrary views. Lastly, availability bias occurs when individuals base their judgments on information readily available. For example, a manager might rate an employee on a performance appraisal based on behavior in the past few days, rather than the past six months or year.
Other errors in decision-making include hindsight bias and escalation of commitment. Hindsight bias is a tendency to believe, incorrectly, after an outcome of an event has already happened, that the decision-maker would have accurately predicted that same outcome. Furthermore, this bias, despite its prevalence, is especially insidious because it inhibits the ability to learn from the past and take responsibility for mistakes. Escalation of commitment is an inclination to continue with a chosen course of action instead of listening to negative feedback regarding that choice. When individuals feel responsible for their actions and those consequences, they escalate commitment probably because they have invested so much into making that particular decision. One solution to escalating commitment is to seek a source of clear, less distorted feedback (Staw, 1981).
The last but certainly not least important individual level topic is motivation. Like each of the topics discussed so far, a worker’s motivation is also influenced by individual differences and situational context. Motivation can be defined as the processes that explain a person’s intensity, direction, and persistence toward reaching a goal. Work motivation has often been viewed as the set of energetic forces that determine the form, direction, intensity, and duration of behavior (Latham & Pinder, 2005). Motivation can be further described as the persistence toward a goal. In fact many non-academics would probably describe it as the extent to which a person wants and tries to do well at a particular task (Mitchell, 1982).
Early theories of motivation began with Maslow’s (1943) hierarchy of needs theory, which holds that each person has five needs in hierarchical order: physiological, safety, social, esteem, and self-actualization. These constitute the “lower-order” needs, while social and esteem needs are “higher-order” needs. Self-esteem for instance underlies motivation from the time of childhood. Another early theory is McGregor’s (1960) X-Y theory of motivation: Theory X is the concept whereby individuals must be pushed to work; and theory Y is positive, embodying the assumption that employees naturally like work and responsibility and can exercise self-direction.
Herzberg subsequently proposed the “two-factor theory” that attitude toward work can determine whether an employee succeeds or fails. Herzberg (1966) relates intrinsic factors, like advancement in a job, recognition, praise, and responsibility to increased job satisfaction, while extrinsic factors like the organizational climate, relationship with supervisor, and salary relate to job dissatisfaction. In other words, the hygiene factors are associated with the work context while the motivators are associated with the intrinsic factors associated with job motivation.
Although traditional theories of motivation still appear in OB textbooks, there is unfortunately little empirical data to support their validity. More contemporary theories of motivation, with more acceptable research validity, include self-determination theory, which holds that people prefer to have control over their actions. If a task an individual enjoyed now feels like a chore, then this will undermine motivation. Higher self-determined motivation (or intrinsically determined motivation) is correlated with increased wellbeing, job satisfaction, commitment, and decreased burnout and turnover intent. In this regard, Fernet, Gagne, and Austin (2010) found that work motivation relates to reactions to interpersonal relationships at work and organizational burnout. Thus, by supporting work self-determination, managers can help facilitate adaptive employee organizational behaviors while decreasing turnover intention (Richer, Blanchard, & Vallerand, 2002).
Core self-evaluation (CSE) theory is a relatively new concept that relates to self-confidence in general, such that people with higher CSE tend to be more committed to goals (Bono & Colbert, 2005). These core self-evaluations also extend to interpersonal relationships, as well as employee creativity. Employees with higher CSE are more likely to trust coworkers, which may also contribute to increased motivation for goal attainment (Johnson, Kristof-Brown, van Vianen, de Pater, & Klein, 2003). In general, employees with positive CSE tend to be more intrinsically motivated, thus additionally playing a role in increasing employee creativity (Judge, Bono, Erez, & Locke, 2005). Finally, according to research by Amabile (1996), intrinsic motivation or self-determined goal attainment is critical in facilitating employee creativity.
While self-determination theory and CSE focus on the reward system behind motivation and employee work behaviors, Locke and Latham’s (1990) goal-setting theory specifically addresses the impact that goal specificity, challenge, and feedback has on motivation and performance. These authors posit that our performance is increased when specific and difficult goals are set, rather than ambiguous and general goals. Goal-setting seems to be an important motivational tool, but it is important that the employee has had a chance to take part in the goal-setting process so they are more likely to attain their goals and perform highly.
Related to goal-setting is Hobfoll’s (1989) conservation of resources (COR) theory, which holds that people have a basic motivation to obtain, maintain, and protect what they value (i.e., their resources). Additionally there is a global application of goal-setting theory for each of the motivation theories. Not enough research has been conducted regarding the value of goal-setting in global contexts, however, and because of this, goal-setting is not recommended without consideration of cultural and work-related differences (Konopaske & Ivancevich, 2004).
Other motivational theories include self-efficacy theory, and reinforcement, equity, and expectancy theories. Self-efficacy or social cognitive or learning theory is an individual’s belief that s/he can perform a task (Bandura, 1977). This theory complements goal-setting theory in that self-efficacy is higher when a manager assigns a difficult task because employees attribute the manager’s behavior to him or her thinking that the employee is capable; the employee in turn feels more confident and capable.
Reinforcement theory (Skinner, 1938) counters goal-setting theory insofar as it is a behaviorist approach rather than cognitive and is based in the notion that reinforcement conditions behavior, or in other words focuses on external causes rather than the value an individual attributes to goals. Furthermore, this theory instead emphasizes the behavior itself rather than what precedes the behavior. Additionally, managers may use operant conditioning, a part of behaviorism, to reinforce people to act in a desired way.
Social-learning theory (Bandura, 1977) extends operant conditioning and also acknowledges the influence of observational learning and perception, and the fact that people can learn and retain information by paying attention, observing, and modeling the desired behavior.
Equity theory (Adams, 1963) looks at how employees compare themselves to others and how that affects their motivation and in turn their organizational behaviors. Employees who perceive inequity for instance, will either change how much effort they are putting in (their inputs), change or distort their perceptions (either of self or others in relation to work), change their outcomes, turnover, or choose a different referent (acknowledge performance in relation to another employee but find someone else they can be better than).
Last but not least, Vroom’s (1964) expectancy theory holds that individuals are motivated by the extent to which they can see that their effort is likely to result in valued outcomes. This theory has received strong support in empirical research (see Van Erde & Thierry, 1996, for meta-analytic results). Like each of the preceding theories, expectancy theory has important implications that managers should consider. For instance, managers should communicate with employees to determine their preferences to know what rewards to offer subordinates to elicit motivation. Managers can also make sure to identify and communicate clearly the level of performance they desire from an employee, as well as to establish attainable goals with the employee and to be very clear and precise about how and when performance will be rewarded (Konopaske & Ivancevich, 2004).
The second level of OB research also emerges from social and organizational psychology and relates to groups or teams. Topics covered so far include individual differences: diversity, personality and emotions, values and attitudes, motivation, and decision-making. Thus, in this section, attention turns to how individuals come together to form groups and teams, and begins laying the foundation for understanding the dynamics of group and team behavior. Topics at this level also include communication, leadership, power and politics, and conflict.
A group consists of two or more individuals who come together to achieve a similar goal. Groups can be formal or informal. A formal group on the one hand is assigned by the organization’s management and is a component of the organization’s structure. An informal group on the other hand is not determined by the organization and often forms in response to a need for social contact. Teams are formal groups that come together to meet a specific group goal.
Although groups are thought to go through five stages of development (Tuckman, 1965: forming, storming, norming, performing, and adjourning) and to transition to effectiveness at the halfway mark (Gersick, 1988), group effectiveness is in fact far more complex. For example, two types of conformity to group norms are possible: compliance (just going along with the group’s norms but not accepting them) and personal acceptance (when group members’ individual beliefs match group norms). Behavior in groups then falls into required behavior usually defined by the formal group and emergent behavior that grows out of interactions among group members (Champoux, 2011).
Although many of the decisions made in organizations occur in groups and teams, such decisions are not necessarily optimal. Groups may have more complex knowledge and increased perspectives than individuals but may suffer from conformity pressures or domination by one or two members. Group decision-making has the potential to be affected by groupthink or group shift. In groupthink, group pressures to conform to the group norms deter the group from thinking of alternative courses of action (Janis & Mann, 1977). In the past, researchers attempted to explain the effects of group discussion on decision-making through the following approaches: group decision rules, interpersonal comparisons, and informational influence. Myers and Lamm (1976), however, present a conceptual schema comprised of interpersonal comparisons and informational influence approaches that focus on attitude development in a more social context. They found that their research is consistent with the group polarization hypothesis: The initial majority predicts the consensus outcome 90% of the time. The term group polarization was founded in Serge Moscovici and his colleagues’ literature (e.g., Moscovici & Zavalloni, 1969). Polarization refers to an increase in the extremity of the average response of the subject population.
In other words, the Myer and Lamm (1976) schema is based on the idea that four elements feed into one another: social motivation, cognitive foundation, attitude change, and action commitment. Social motivation (comparing self with others in order to be perceived favorably) feeds into cognitive foundation, which in turn feeds into attitude change and action commitment. Managers of organizations can help reduce the negative phenomena and increase the likelihood of functional groups by encouraging brainstorming or openly looking at alternatives in the process of decision-making such as the nominal group technique (which involves restricting interpersonal communication in order to encourage free thinking and proceeding to a decision in a formal and systematic fashion such as voting).
OB researchers typically focus on team performance and especially the factors that make teams most effective. Researchers (e.g., see De Dreu & Van Vianen, 2001) have organized the critical components of effective teams into three main categories: context, composition, and process. Context refers to the team’s physical and psychological environment, and in particular the factors that enable a climate of trust. Composition refers to the means whereby the abilities of each individual member can best be most effectively marshaled. Process is maximized when members have a common goal or are able to reflect and adjust the team plan (for reflexivity, see West, 1996).
In order to build high-performing work teams, communication is critical, especially if team conflict is to be minimized. Communication serves four main functions: control, motivation, emotional expression, and information (Scott & Mitchell, 1976). The communication process involves the transfer of meaning from a sender to a receiver through formal channels established by an organization and informal channels, created spontaneously and emerging out of individual choice. Communication can flow downward from managers to subordinates, upward from subordinates to managers, or between members of the same group. Meaning can be transferred from one person to another orally, through writing, or nonverbally through facial expressions and body movement. In fact, body movement and body language may complicate verbal communication and add ambiguity to the situation as does physical distance between team members.
High-performance teams tend to have some of the following characteristics: interpersonal trust, psychological and physical safety, openness to challenges and ideas, an ability to listen to other points of view, and an ability to share knowledge readily to reduce task ambiguity (Castka, Bamber, Sharp, & Belohoubek, 2001). Although the development of communication competence is essential for a work team to become high-performing, that communication competence is also influenced by gender, personality, ability, and emotional intelligence of the members. Ironically, it is the self-reliant team members who are often able to develop this communication competence. Although capable of working autonomously, self-reliant team members know when to ask for support from others and act interdependently.
Emotions also play a part in communicating a message or attitude to other team members. Emotional contagion, for instance, is a fascinating effect of emotions on nonverbal communication, and it is the subconscious process of sharing another person’s emotions by mimicking that team member’s nonverbal behavior (Hatfield, Cacioppo, & Rapson, 1993). Importantly, positive communication, expressions, and support of team members distinguished high-performing teams from low-performing ones (Bakker & Schaufeli, 2008).
Because of member interdependence, teams are inclined to more conflict than individual workers. In particular, diversity in individual differences leads to conflict (Thomas, 1992; Wall & Callister, 1995; see also Cohen & Bailey, 1997). Jehn (1997) identifies three types of conflict: task, relationship, and process. Process conflict concerns how task accomplishment should proceed and who is responsible for what; task conflict focuses on the actual content and goals of the work (Robbins et al., 2014); and relationship conflict is based on differences in interpersonal relationships. While conflict, and especially task conflict, does have some positive benefits such as greater innovation (Tjosvold, 1997), it can also lead to lowered team performance and decreased job satisfaction, or even turnover. De Dreu and Van Vianen (2001) found that team conflict can result in one of three responses: (1) collaborating with others to find an acceptable solution; (2) contending and pushing one member’s perspective on others; or (3) avoiding and ignoring the problem.
Team effectiveness can suffer in particular from relationship conflict, which may threaten team members’ personal identities and self-esteem (Pelled, 1995). In this regard, Murnighan and Conlon (1991) studied members of British string quartets and found that the most successful teams avoided relationship conflict while collaborating to resolve task conflicts. This may be because relationship conflict distracts team members from the task, reducing team performance and functioning. As noted earlier, positive affect is associated with collaboration, cooperation, and problem resolution, while negative affect tends to be associated with competitive behaviors, especially during conflict (Rhoades, Arnold, & Jay, 2001).
Emotional climate is now recognized as important to team processes (Ashkanasy & Härtel, 2014), and team climate in general has important implications for how individuals behave individually and collectively to effect organizational outcomes. This idea is consistent with Druskat and Wolff’s (2001) notion that team emotional-intelligence climate can help a team manage both types of conflict (task and relationship). In Jehn’s (1997) study, she found that emotion was most often negative during team conflict, and this had a negative effect on performance and satisfaction regardless of the type of conflict team members were experiencing. High emotionality, as Jehn calls it, causes team members to lose sight of the work task and focus instead on the negative affect. Jehn noted, however, that absence of group conflict might also may block innovative ideas and stifle creativity (Jehn, 1997).
Power and organizational politics can trigger employee conflict, thus affecting employee wellbeing, job satisfaction, and performance, in turn affecting team and organizational productivity (Vigoda, 2000). Because power is a function of dependency, it can often lead to unethical behavior and thus become a source of conflict. Types of power include formal and personal power. Formal power embodies coercive, reward, and legitimate power. Coercive power depends on fear. Reward power is the opposite and occurs when an individual complies because s/he receives positive benefits from acting in accordance with the person in power. In formal groups and organizations, the most easily accessed form of power is legitimate because this form comes to be from one’s position in the organizational hierarchy (Raven, 1993). Power tactics represent the means by which those in a position of power translate their power base (formal or personal) into specific actions.
The nine influence tactics that managers use according to Yukl and Tracey (1992) are (1) rational persuasion, (2) inspirational appeal, (3) consultation, (4) ingratiation, (5) exchange, (6) personal appeal, (7) coalition, (8) legitimating, and (9) pressure. Of these tactics, inspirational appeal, consultation, and rational persuasion were among the strategies most effective in influencing task commitment. In this study, there was also a correlation found between a manager’s rational persuasion and a subordinate rating her effectively. Perhaps this is because persuasion requires some level of expertise, although more research is needed to verify which methods are most successful. Moreover, resource dependence theory dominates much theorizing about power and organizational politics. In fact, it is one of the central themes of Pfeffer and Salancik’s (1973) treatise on the external control of organizations. First, the theory emphasizes the importance of the organizational environment in understanding the context of how decisions of power are made (see also Pfeffer & Leblebici, 1973). Resource dependence theory is based on the premise that some organizations have more power than others, occasioned by specifics regarding their interdependence. Pfeffer and Salancik further propose that external interdependence and internal organizational processes are related and that this relationship is mediated by power.
Political skill is the ability to use power tactics to influence others to enhance an individual’s personal objectives. In addition, a politically skilled person is able to influence another person without being detected (one reason why he or she is effective). Persons exerting political skill leave a sense of trust and sincerity with the people they interact with. An individual possessing a high level of political skill must understand the organizational culture they are exerting influence within in order to make an impression on his or her target. While some researchers suggest political behavior is a critical way to understand behavior that occurs in organizations, others simply see it as a necessary evil of work life (Champoux, 2011). Political behavior focuses on using power to reach a result and can be viewed as unofficial and unsanctioned behavior (Mintzberg, 1985). Unlike other organizational processes, political behavior involves both power and influence (Mayes & Allen, 1977). Moreover, because political behavior involves the use of power to influence others, it can often result in conflict.
In concluding this section on power and politics, it is also appropriate to address the dark side, where organizational members who are persuasive and powerful enough might become prone to abuse standards of equity and justice and thereby engage in unethical behavior. An employee who takes advantage of her position of power may use deception, lying, or intimidation to advance her own interests (Champoux, 2011). When exploring interpersonal injustice, it is important to consider the intent of the perpetrator, as well as the effect of the perpetrator’s treatment from the victim’s point of view. Umphress, Simmons, Folger, Ren, and Bobocel (2013) found in this regard that not only does injustice perceived by the self or coworkers influence attitudes and behavior within organizations, but injustice also influences observer reactions both inside and outside of the organization.
Leadership plays an integrative part in understanding group behavior, because the leader is engaged in directing individuals toward attitudes and behaviors, hopefully also in the direction of those group members’ goals. Although there is no set of universal leadership traits, extraversion from the Big Five personality framework has been shown in meta-analytic studies to be positively correlated with transformational, while neuroticism appears to be negatively correlated (Bono & Judge, 2004). There are also various perspectives to leadership, including the competency perspective, which addresses the personality traits of leaders; the behavioral perspective, which addresses leader behaviors, specifically task versus people-oriented leadership; and the contingency perspective, which is based on the idea that leadership involves an interaction of personal traits and situational factors. Fiedler’s (1967) contingency, for example, suggests that leader effectiveness depends on the person’s natural fit to the situation and the leader’s score on a “least preferred coworker” scale.
More recently identified styles of leadership include transformational leadership (Bass, Avolio, & Atwater, 1996), charismatic leadership (Conger & Kanungo, 1988), and authentic leadership (Luthans & Avolio, 2003). In a nutshell, transformational leaders inspire followers to act based on the good of the organization; charismatic leaders project a vision and convey a new set of values; and authentic leaders convey trust and genuine sentiment.
Leader-member exchange theory (LMX; see Graen & Uhl-Bien, 1995) assumes that leadership emerges from exchange relationships between a leader and her or his followers. More recently, Tse, Troth, and Ashkanasy (2015) expanded on LMX to include social processes (e.g., emotional intelligence, emotional labor, and discrete emotions), arguing that affect plays a large part in the leader-member relationship.
An emerging new topic in leadership concerns leadership development, which embodies the readiness of leadership aspirants to change (Hannah & Avolio, 2010). In this regard, the learning literature suggests that intrinsic motivation is necessary in order to engage in development (see Hidi & Harackiewicz, 2000), but also that the individual needs to be goal-oriented and have developmental efficacy or self-confidence that s/he can successfully perform in leadership contexts.
Ashkanasy, Dasborough, and Ascough (2009) argue further that developing the affective side of leaders is important. In this case, because emotions are so pervasive within organizations, it is important that leaders learn how to manage them in order to improve team performance and interactions with employees that affect attitudes and behavior at almost every organizational level.
Leaders, or those in positions of power, are particularly more likely to run into ethical issues, and only more recently have organizational behavior researchers considered the ethical implications of leadership. As Gallagher, Mazur, and Ashkanasy (2015) describe, since 2009 , organizations have been under increasing pressure to cut costs or “do more with less,” and this sometimes can lead to abusive supervision, whereby employee job demands exceed employee resources, and supervisors engage in bullying, undermining, victimization, or personal attacks on subordinates (Tepper, 2000).
Supervisors who are very high or low in emotional intelligence may be more likely to experience stress associated with a very demanding high-performance organizational culture. These supervisors may be more likely to try to meet the high demands and pressures through manipulative behaviors (Kilduff, Chiaburu, & Menges, 2010). This has serious implications for employee wellbeing and the organization as a whole. Abusive supervision detracts from the ability for those under attack to perform effectively, and targets often come to doubt their own ability to perform (Tepper, 2000).
The final level of OB derives from research traditions across three disciplines: organizational psychology, organizational sociology, and organizational anthropology. Moreover, just as teams and groups are more than the sum of their individual team members, organizations are also more than the sum of the teams or groups residing within them. As such, structure, climate, and culture play key roles in shaping and being shaped by employee attitudes and behaviors, and they ultimately determine organizational performance and productivity.
Organizational structure is a sociological phenomenon that determines the way tasks are formally divided and coordinated within an organization. In this regard, jobs are often grouped by the similarity of functions performed, the product or service produced, or the geographical location. Often, the number of forms of departmentalization will depend on the size of the organization, with larger organizations having more forms of departmentalization than others. Organizations are also organized by the chain of command or the hierarchy of authority that determines the span of control, or how many employees a manager can efficiently and effectively lead. With efforts to reduce costs since the global financial crisis of 2009 , organizations have tended to adopt a wider, flatter span of control, where more employees report to one supervisor.
Organizational structure also concerns the level of centralization or decentralization, the degree to which decision-making is focused at a single point within an organization. Formalization is also the degree to which jobs are organized in an organization. These levels are determined by the organization and also vary greatly across the world. For example, Finnish organizations tend to be more decentralized than their Australian counterparts and, as a consequence, are more innovative (Leiponen & Helfat, 2011).
Mintzberg (1979) was the first to set out a taxonomy of organizational structure. Within his model, the most common organizational design is the simple structure characterized by a low level of departmentalization, a wide span of control, and centralized authority. Other organizational types emerge in larger organizations, which tend to be bureaucratic and more routinized. Rules are formalized, tasks are grouped into departments, authority is centralized, and the chain of command involves narrow spans of control and decision-making. An alternative is the matrix structure, often found in hospitals, universities, and government agencies. This form of organization combines functional and product departmentalization where employees answer to two bosses: functional department managers and product managers.
New design options include the virtual organization and the boundaryless organization, an organization that has no chain of command and limitless spans of control. Structures differ based on whether the organization seeks to use an innovation strategy, imitation strategy, or cost-minimization strategy (Galunic & Eisenhardt, 1994). Organizational structure can have a significant effect on employee attitudes and behavior. Evidence generally shows that work specialization leads to higher employee productivity but also lower job satisfaction (Porter & Lawler, 1965). Gagné and Deci emphasize that autonomous work motivation (i.e., intrinsic motivation and integrated extrinsic motivation) is promoted in work climates that are interesting, challenging, and allow choice. Parker, Wall, and Jackson (1997) specifically relate job enlargement to autonomous motivation. Job enlargement was first discussed by management theorists like Lawler and Hall (1970), who believed that jobs should be enlarged to improve the intrinsic motivation of workers. Today, most of the job-design literature is built around the issue of work specialization (job enlargement and enrichment). In Parker, Wall, and Jackson’s study, they observed that horizontally enlarging jobs through team-based assembly cells led to greater understanding and acceptance of the company’s vision and more engagement in new work roles. (In sum, by structuring work to allow more autonomy among employees and identification among individual work groups, employees stand to gain more internal autonomous motivation leading to improved work outcomes (van Knippenberg & van Schie, 2000).
Ashkanasy, Ayoko, and Jehn (2014) extend the topic of organizational structure to discuss, from a psychological perspective, how the physical work environment shapes employee attitudes, behaviors, and organizational outcomes. Elsbach (2003) pointed out that the space within which employees conduct their work is critical to employees’ levels of performance and productivity. In their study, Ashkanasy and his colleagues looked at the underlying processes influencing how the physical environment determines employee attitudes and behaviors, in turn affecting productivity levels. They base their model on affective events theory (Weiss & Cropanzano, 1996), which holds that particular “affective” events in the work environment are likely to be the immediate cause of employee behavior and performance in organizations (see also Ashkanasy & Humphrey, 2011). Specifically, Ashkanasy and colleagues (2014) looked at how this theory holds in extremely crowded open-plan office designs and how employees in these offices are more likely to experience negative affect, conflict, and territoriality, negatively impacting attitudes, behaviors, and work performance.
Although organizational structure and the physical environment are important determinants of employee attitudes and behaviors, organizational culture and climate lie at the heart of organizational interactions (Ashkanasy & Jackson, 2001). Organizational culture derives from an anthropological research tradition, while organizational climate is based on organizational psychology.
A central presumption of culture is that, as Smircich (1983) noted, organizational behavior is not a function of what goes on inside individual employees’ heads, but between employees, as evidenced in daily organizational communication and language. As such, organizational culture allows one organization to distinguish itself from another, while conveying a sense of identity for its members.
Organizational culture creates organizational climate or employees’ shared perceptions about their organization and work environment. Organizational climate has been found to facilitate and/or inhibit displays of certain behaviors in one study (Smith-Crowe, Burke, & Landis, 2003), and overall, organizational climate is often viewed as a surface-level indicator of the functioning of the employee/organizational environment relationship (Ryan, Horvath, Ployhart, Schmitt, & Slade, 2000). For instance, a more restrictive climate may inhibit individual decision-making in contrast to a more supportive climate in which the organization may intervene at the individual level and in which the ability/job performance relationship is supported (James, Demaree, Mulaik, & Ladd, 1992). In a study focused on safety climate, Smith-Crowe and colleagues found that organizational climate is essential in determining whether training will transfer to employee performance, and this is most likely because organizational climate moderates the knowledge/performance relationship. Gibbs and Cooper (2010) also found that a supportive organizational climate is positively related to employee performance. They specifically looked at PsyCap, the higher-order construct of psychological capital first proposed by Luthans and Youssef (2004).
The final topic covered in this article is organizational change. Organizational culture and climate can both be negatively impacted by organizational change and, in turn, negatively affect employee wellbeing, attitudes, and performance, reflecting onto organizational performance. Often, there is great resistance to change, and the success rate of organizational change initiatives averages at less than 30% (Al-Haddad & Kotnour, 2015). In order to overcome this resistance, it is important that managers plan ahead for changes and emphasize education and communication about them. As organizations becoming increasingly globalized, change has become the norm, and this will continue into the future.
Additionally, as organizations become increasingly globalized, organizational changes often involve mergers that have important organizational implications. In this regard, Kavanagh and Ashkanasy (2006) found that, for a merger to be successful, there needs to be alignment between the individual values and organizational cultures of merging partners. Managers during a merger situation need to be especially cognizant of how this organizational change affects the company’s original organizational culture.
Organizational development (OD), a collection of planned change interventions, may be the way to improve organizational performance and increase employee wellbeing. OD focuses on employees respecting one another, trust and support, equal power, confrontation of problems, and participation of everyone affected by the organizational change (Lines, 2004). Moreover, when an organization already has an established climate and culture that support change and innovation, an organization may have less trouble adapting to the change.
Organizational change research encompasses almost all aspects of organizational behavior. Individuals and employees are motivated to achieve success and be perceived as successful. In this regard, each of the individual differences—personality, affect, past experiences, values, and perceptions—plays into whether individuals can transcend obstacles and deal with the barriers encountered along the journey toward achievement. Teams are similarly motivated to be successful in a collective sense and to prove that they contribute to the organization as a whole. In addition to individual differences, team members deal with bringing all those individual differences together, which can wreak havoc on team communication and cause further obstacles in terms of power differences and conflicts in regard to decision-making processes. Last, at the organizational level of organizational behavior, it is important to account for all of these micro- and meso-level differences, and to address the complexity of economic pressures, increasing globalization, and global and transnational organizations to the mix. This is at the top level of sophistication because, as emphasized before, just as groups equal much more than the sum of individual members, organizations are much more than the sum of their teams. The organizational structure, the formal organization, the organizational culture, and climate and organizational rules all impact whether an organization can perform effectively. Organizational behavior, through its complex study of human behavior at its very conception, offers much-needed practical implications for managers in understanding people at work.
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