rganizational Behavior (OB) is the study of human behavior in organizational

settings, the interface between human behavior and the organization, and the
organization itself.
Decision making is an important process in organizational set up. It involves identifying and
choosing other solutions that result in desired action. Decision making is not fully explained
field. It includes diverse processes that are all intermediate steps between thought and action.
They are the antecedents to behavior. Organizational decision-making is a precise decision-
making of an intellectual entity composed with autonomous elements. Decisions making in
organization occurs at all levels. In all organizations, managers make decisions using both
rational and intuitive processes, but organization-level decisions are not usually made by a single
manager. Many organizational decisions involve several managers. Problem identification and
problem solution involve many departments, multiple viewpoints, and even other organizations,
which are beyond the scope of an individual manager. Organizational decision making is the
process by which one or more organizational units make a decision on behalf of the organization
(Huber, 1980).

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Numerous factors influence while taking good decisions in organizations particularly the
organizations own internal structures as well as the degree of stability or instability of the
external environments. Nutt (2001) argued that a manager could improve decision making
process by personally managing decision-making, searching for understanding, establishing the
direction with an objective, and managing the social and political forces that can present
challenges. From an organizational viewpoint, Nutt (2001) also offered some prescriptions to
make better decisions. Objectives should be set to overcome a bias toward action and fear of
being indecisive. Lastly, intervention is needed to ensure performance with the decision. By
broadening the search for solutions and avoid becoming defensive gives better decisions result.

Organizational structure defines how tasks are divided, grouped, and coordinated in

organizations. Every organization has a structure that clarifies the roles
that organizational members perform, so that everyone understands their responsibilities to the
group.

Running a small business often means the buck starts and stops with you. But if you want to attract and keep

qualified employees to help spread out responsibilities, you need an organizational hierarchy that promotes

communication, defines the chain of command and shows employees how to advance their careers up the

ladder.

Traditional organizational structures come in four general types – functional, divisional, matrix and flat – but

with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business
models. Before you establish an innovative way to manage your enterprise, take some time to understand the

old mold – then blaze a trail.

Functional Organization Structure

Under a functional organization structure, people who do similar tasks are grouped together based on specialty.

So all the accountants are placed in the finance department and so on for the marketing, operations, senior

management and human resources departments.

The advantages of this kind of structure include quick decision making, because the group members can easily

communicate. They can also learn from each other, since they already possess similar skill sets and interests.

Divisional Structure Based on Products

In a divisional structure, your company groups workers into teams based on the products or projects that meet

the needs of a certain type of customer. For example, a bakery with a catering operation might structure the

workforce based on key clientele, such as a wedding department and a wholesale-retail department. The

division of labor in this kind of structure ensures workers making similar products can achieve greater

efficiency and higher output.

Matrix Structure Combines Functional and Divisional Models

A matrix structure combines elements of the functional and divisional models, so it’s more complex. It groups

people into functional departments of specialization, then further separates them into divisional projects and

products.

In a matrix structure the team members are given more autonomy and expected to take on more responsibility

for their work. This increases the productivity of the team, fosters greater innovation and creativity, and allows

managers to cooperatively solve decision-making problems through group interaction. This type of

organizational structure takes lots of planning and effort, making it appropriate for large companies that have

the resources to devote to managing a complex business framework.

Flat Organizational Structure

A flat organizational structure attempts to disrupt the traditional top-down management system of most

companies. Management is decentralized so there is no everyday “boss.” Each employee is the boss of

themselves, eliminating bureaucracy and red tape and improving direct communication.
For example, an employee who has an idea doesn’t have to wade through three levels of upper managers to get

the idea to the key person making the decision. The employee simply communicates directly with the target on

a peer-based level.

A company adopting this type of structure for everyday purposes typically establishes a special top-down

management system for temporary projects or events.

“Organizational behavior is directly concerned with the understanding,

prediction, and control of human behavior in organizations.” — Fred Luthans.
Organizational behavior is the study of both group and individual performance
and activity within an organization.
This area of study examines human behavior in a work environment and
determines its impact on job structure, performance, communication,
motivation, leadership, etc.
It is the systematic study and application of knowledge about how individuals
and groups act within the organizations where they work. OB draws from
other disciplines to create a unique field.
For example, when we review topics such as personality and motivation, we
will again review studies from the field of psychology. The topic of team
processes relies heavily on the field of sociology.
When we study power and influence in organizations, we borrow heavily from
political sciences.
Even medical science contributes to the field of Organizational Behavior,
particularly in the study of stress and its effects on individuals.
There is increasing agreement as to the components or topics that constitute
the subject area of OB.
Although there is still considerable debate as to the relative importance of
change, there appears to be general agreement that OB includes the core
topics of motivation, leader behavior, and power, interpersonal
communication, group structure and processes, learning, attitude
development and perception, change processes, conflict, work design, and
work stress.
Features of Organizational Behavior
Organizational Behavior is the study and application of knowledge about how
people, individuals, and groups act in organizations. It does this by taking a
system approach.
That is, it interprets people-organization relationships in terms of the whole
person, the whole group, the whole organization, and the whole social system.
Its purpose is to build better relationships by achieving human objectives,
organizational objectives, and social objectives.
Organizational Behavior is;

 A Separate Field of Study and not a Discipline Only.

 An Interdisciplinary Approach.
 Applied Science.
 A Normative Science.
 A Humanistic and Optimistic Approach.
 A Total System Approach.

These 6 features or characteristics shows the nature of Organizational

Behavior that is the study of understanding and control behavior within the
organization.
Objectives of Organizational Behavior
The organizations in which people work have an effect on their thoughts,
feelings, and actions. These thoughts, feelings, and actions, in turn, affect the
organization itself.
Organizational behavior studies the mechanisms governing these interactions,
seeking to identify and foster behaviors conducive to the survival and
effectiveness of the organization.

1. Job Satisfaction.
2. Finding the Right People.
3. Organizational Culture.
4. Leadership and Conflict Resolution.
5. Understanding the Employees Better.
6. Understand how to Develop Good Leaders.
7. Develop a Good Team.
8. Higher Productivity.

These 8 objectives of organizational behavior show that OB is concerned

with people within the organization, how they are interacting, what is the level
of their satisfaction, the level of motivation, and find ways to improve it in a
way the yields most productivity.
Fundamental Concepts of Organizational
Behavior
Fundamental Concepts of Organizational Behavior.
Organization Behavior is based on a few fundamental concepts which revolve
around the nature of people and organizations.
 Individual Differences.
 Perception.
 A whole Person.
 Motivated Behavior.
 The desire for Involvement.
 The value of the Person.
 Human Dignity.
 Organizations are Social System.
 Mutuality of Interest.
 Holistic Concept.

Main Challenges and Opportunities of

Organizational Behavior

Challenges and opportunities of organizational behavior are massive and

rapidly changing for improving productivity and meeting business goals.

1. Improving Peoples’ Skills.

2. Improving Quality and Productivity.
3. Total Quality Management (TQM).
4. Managing Workforce Diversity.
5. Responding to Globalization.
6. Empowering People.
7. Coping with Temporariness.
8. Stimulating Innovation and Change.
9. Emergence of E-Organisation & E-Commerce.
10. Improving Ethical Behavior.
11. Improving Customer Service.
12. Helping Employees Balance Work-Life Conflicts.
13. Flattening World.

Read more about 13 Challenges and Opportunities of Organizational

Behavior.
Limitations of Organizational Behavior

Recognize the limitations of organizational behavior. Organizational Behavior

will not abolish conflict and frustration; it can only reduce them. It is a way to
improve, not an absolute answer to problems.
Furthermore, it is but part of the whole cloth of an organization.
We can discuss organizational behavior as a separate subject, but to apply it,
we must tie it to the whole reality. Improved organizational behavior will not
solve unemployment.
Organizational Behavior will not make up for our deficiencies, cannot
substitute for poor planning, inept organizing, or inadequate controls. It is only
one of the many systems operating within a larger social system.
3 major limitations of OB are;

 Behavioral Bias.
 The Law of Diminishing Returns.
 Unethical Manipulation of People.

Learn how these organizational behavior limitations work.

Organizational Behavior Model

The OB model Shows the 3 levels, Individual level, Group level, and
Organization System level and how they impact the elements of human
output.
The above figure presents the skeleton on which constructed OB model.
It proposes that there are three levels of analysis in OB and that, as we move
from the individual level to the organization systems level, we add
systematically to our understanding of behavior in organizations.
The three basic levels are analogous to building blocks; each level is
constructed on the previous level.
Group concepts grow out of the foundation laid in the individual section; we
overlay constraints on the individual and group in order to arrive at
organizational behavior.
Key Forces Affecting Organizational