Study Guide: Business Psychology and

Organizational Behavior
This study guide provides a comprehensive review of the core concepts, theories, and applications
within the field of Business Psychology and Organizational Behavior (OB). It is designed to
facilitate a deep understanding of human behavior in organizational contexts, covering individual,
group, and structural dynamics.

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Part I: Short-Answer Quiz

Instructions: Answer the following ten questions in 2–3 sentences each.

1. What is the difference between centralization and decentralization in organizational

decision-making?
2. How do organizational founders create and sustain their company's culture?
3. Distinguish between challenge stressors and hindrance stressors in a workplace
environment.
4. Define emotional labor and explain the difference between surface acting and deep
acting.
5. What is social loafing, and why is it more common in larger groups?
6. How does the Punctuated-Equilibrium Model describe group development differently
than the Five-Stage Model?
7. Identify and define the two types of personal power.
8. What is Affective Events Theory (AET), and what does it suggest about workplace
performance?
9. Describe the difference between surface-level diversity and deep-level diversity.
10. Contrast the mechanistic model and the organic model of organizational structure.

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Part II: Answer Key

1. Centralization vs. Decentralization: Centralization refers to the degree to which
decision-making authority is concentrated at a single point in the organization, typically
among top-level managers. Decentralization occurs when decision-making is pushed down
to the managers closest to the action or even to workgroups, often leading to faster problem-
solving and increased employee input.
2. Culture Creation by Founders: Founders create culture by hiring and keeping employees
who think and feel the way they do, and by indoctrinating and socializing those employees
into their way of thinking. Additionally, the founders' own behavior acts as a visible role
 model that encourages employees to identify with them and internalize their beliefs and
values.
3. Challenge vs. Hindrance Stressors: Challenge stressors are associated with workload,
pressure to complete tasks, and time urgency, which can sometimes lead to higher
performance if managed well. Hindrance stressors are factors that keep individuals from
reaching their goals, such as red tape, office politics, or confusion over job responsibilities.
4. Emotional Labor: Emotional labor is an employee’s expression of organizationally
desired emotions during interpersonal transactions at work. Surface acting involves hiding
one's inner feelings to follow display rules, while deep acting involves trying to modify
one's true inner feelings to match the required emotional display.
5. Social Loafing: Social loafing is the tendency for individuals to expend less effort when
working collectively than when working alone. It is more common in larger groups because
individuals may feel their contribution is less visible or that their lack of effort will be
offset by others.
6. Punctuated-Equilibrium Model: Unlike the linear Five-Stage Model, the Punctuated-
Equilibrium Model suggests that temporary groups go through long periods of inertia
punctuated by a brief revolutionary change triggered by a realization of time and deadlines.
This transition occurs almost exactly at the halfway point between the first meeting and the
official deadline.
7. Personal Power: The two types of personal power are expert power and referent power.
Expert power is influence based on special skills or knowledge, while referent power is
based on identification with a person who has desirable resources or personal traits.
8. Affective Events Theory (AET): AET proposes that employees react emotionally to
things that happen to them at work, and these emotional reactions influence their
subsequent job performance and satisfaction. It highlights that even minor daily hassles or
uplifts can accumulate and significantly impact employee behavior.
9. Surface-Level vs. Deep-Level Diversity: Surface-level diversity refers to easily
observable characteristics such as age, race, gender, and physical abilities that may trigger
certain stereotypes but do not necessarily reflect how people think. Deep-level diversity
consists of differences in values, personality, and work preferences that become more
important as people get to know one another.
10. Mechanistic vs. Organic Models: The mechanistic model is characterized by high
specialization, rigid departmentalization, a clear chain of command, and high
formalization. In contrast, the organic model is a loose structure that uses cross-functional
and cross-hierarchical teams, has a free flow of information, and features low formalization
and decentralization.

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Part III: Essay Questions

Instructions: Use the provided course materials to develop detailed outlines or full responses for
the following questions.
 1. The Strategy-Structure Relationship: Analyze how an organization's chosen strategy
(Innovation, Cost Minimization, or Imitation) dictates its structural requirements. Compare
the effectiveness of mechanistic and organic designs for each strategy type.
2. The Competing Values Framework of Culture: Discuss the four types of organizational
culture (Clan, Adhocracy, Market, and Hierarchy). How do the "means" and "ends" of each
type differ in terms of their focus on flexibility versus control and internal versus external
orientation?
3. The Dynamics of Group Decision-Making: Evaluate the advantages and disadvantages
of group decision-making. Compare and contrast Interacting Groups, Brainstorming, and
the Nominal Group Technique in terms of their ability to mitigate social pressure and
generate high-quality ideas.
4. Managing Workplace Stress: Using the Demands-Resources Model, discuss how
organizational factors contribute to stress. Propose a comprehensive stress-management
program that includes both individual approaches (like time management) and
organizational strategies (like job redesign and wellness programs).
5. Inclusion and Effective Diversity Management: Explain why focusing on inclusion is
more effective than focusing solely on diversity. Detail the specific organizational practices
that can be used to attract, select, and retain a diverse workforce while minimizing the
impact of stereotype threat.

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Part IV: Glossary of Key Terms

Term Definition
Individual differences in the strength with which people experience
Affect Intensity
their emotions.
Affective Events Theory A model suggesting that workplace events cause emotional reactions
(AET) in employees, which then influence workplace attitudes and behaviors.
When individuals from different areas or departments need to regularly
Boundary Spanning
interact to coordinate tasks.
An organizational structure characterized by highly routine operating
Bureaucracy
tasks, very formalized rules, and centralized authority.
The degree to which decision-making is concentrated at a single point
Centralization
in the organization.
An emotion regulation technique that involves re-evaluating the
Cognitive Reappraisal
meaning of an event to change its emotional impact.
The degree to which group members are attracted to each other and
Cohesiveness
motivated to stay in the group.
A group process that uses a series of questionnaires to anonymously
Delphi Technique
generate ideas or judgments from physically dispersed experts.
The basis by which jobs in an organization are grouped together (e.g.,
Departmentalization
by function, product, or geography).
 Inconsistencies between the emotions people feel and the emotions
Emotional Dissonance
they project to others.
Emotional Intelligence The ability to detect and manage emotional cues and information in
(EI) oneself and others.
The degree to which jobs within the organization are standardized and
Formalization
guided by rules and regulations.
A phenomenon in which group pressures for conformity prevent the
Groupthink
group from critically appraising unusual or unpopular views.
An organizational structure that creates dual lines of authority and
Matrix Structure
combines functional and product departmentalization.
Emotions that have moral implications because of an instant judgment
Moral Emotions
of the situation that evokes them (e.g., guilt, anger at injustice).
A group decision-making method in which individual members meet
Nominal Group
face-to-face to pool their judgments in a systematic but independent
Technique
fashion.
The shared perceptions organizational members have about their
Organizational Climate
organization and work environment.
A system of shared meaning held by members that distinguishes the
Organizational Culture
organization from other organizations.
An unwritten agreement that sets out what management expects from
Psychological Contract
an employee and vice versa.
A situation in which an individual is confronted by divergent and
Role Conflict
contradictory role expectations.
A perspective that considers when and why individuals consider
Social Identity Theory
themselves members of specific groups.
The number of subordinates a manager can efficiently and effectively
Span of Control
direct.
The degree to which we internally agree with the generally negative
Stereotype Threat
stereotyped perceptions of our groups.
The degree to which activities in the organization are subdivided into
Work Specialization
separate jobs.
The recognition that people have an inner life that is nourished by
Workplace Spirituality
meaningful work and a sense of community.