As a child, did you marvel at the behavior of bees in a hive? Did you find their organization of labor and interactions so fascinating that you wished you could get a closer view? It is remarkable how organizations behave, no matter the size or species. Understanding organizational behavior is essential for success as an organizational leader, and fortunately, one can closely study the behavior of business organizations without getting stung.

Aspects of organizational behavior are examined throughout the University of Wisconsin-Parkside online MBA program with a Concentration in General Management curriculum, and extensively in the Contemporary Challenges in Managing Organizations course. The course examines traditional theories and contemporary managerial perspectives to optimize organizational effectiveness. Course topics include leadership, motivation and performance, decision-making and empowerment, organization climate, culture and change, individual human processes and overall global management.

Organizational Behavior Defined

What exactly is organizational behavior (OB)? Why is it a critical component of an MBA core curriculum? Why is understanding it critical for aspiring managers and executives? According to Pearson, “OB is the study of human behavior in the workplace, the interaction between people and the organization with the intent to understand and predict human behavior. The understanding of individual, group and organizational behavior is critical to success as a leader or a follower, and it requires a systematic study to even begin to grasp all of the variables that impact behavior.”

In the nearly 100 years since its inception, the study of OB has become increasingly essential in helping to understand success factors in such things as individual and collective job performance, employee retention, innovation, and leadership development. Experts in organizational behavior are often brought in as consultants to evaluate organizational structures and recommend actions such as reorganizations, modifications to compensation structures or new methods for performance evaluation. Interestingly, when consultants are brought in to observe, the potential exists for the “Hawthorne Effect,” which is a change in behaviors when employees know they are being observed. Consultants must account for this effect, so as to not skew their findings.

Milestones in OB History

The study began in the late 1920s with a series of studies on worker behavior at the Hawthorne Works plant in Cicero, Illinois. That study led to more like it on the effects of factors like work breaks, lighting and isolation on productivity.

The academic study of organizational behavior began in the 1970s, when it was recognized by the American Psychological Association. Many studies have since shown how certain variables consistently produce certain results.

Through the years, OB studies have examined the limits of interchangeability of employees, ways to increase employee productivity, logistics management, and personality and team fit. A breakthrough known as the contingency theory asserts that there is no one right way to organize a company, lead a company or make decisions. Bounded rationality is another theory that has proven true over time, and it asserts that the rationality of individuals is limited by the information they have, their cognitive limitations and the finite amount of time they have to make a decision. These ideas have psychological and sociological implications that transcend work environments and reveal great insights into human social behaviors.

Benefits of Understanding Organizational Behavior

A company and its employees benefit in many ways when managers have a strong educational foundation in organizational behavior. These are a few of the broad examples:

  • Understand the organizational impacts of individual and group behaviors.
  • Identify and promote “prosocial” behaviors that benefit the company.
  • Identify the causes of “antisocial” behaviors that lead to a toxic organization.
  • Gain the insights and tools to motivate employees and teams.
  • Promote stronger working relationships between management and employees.
  • Create a positive workplace culture through effective incentives.
  • Predict and control employee behavior.
  • Make optimal use of human resources.
  • Predict likely employee response before initiating organizational changes.
  • Improve individual, team, department, and company performance.

Mastering the machinery of organizational behavior can help a manager influence a variety of factors by pulling the right levers. Influencing organizational behavior — and individual behavior by extension — can impact the company in beneficial ways, from improving employee performance to creating a more positive company culture.

Learn more about UW-Parkside’s online MBA program with a Concentration in General Management.


Chron: Organizational Behavior Skills Needed by Managers

Management Notes: Importance of Organizational Behavior

Chron: How to Explain the Importance of Organizational Behaviors

Chron: Impacts of Organizational Behavior in Business

Pearson: Organizational Behavior Defined