Organizational Behavior: What Is it and Why Is It Important for a Company?
The success of a company depends on the effectiveness of the relationship between management and employees. As a manager, you’ll have a better chance of motivating your employees if you understand the motives behind their behavior. Moreover, you must learn about the impact of their actions in a working environment.
Organizational behavior gives managers insights into how relationships between management, employees, and colleagues affect the dynamics of a company. It’s essential for business leaders to develop an understanding of what drives and motivates their employees. This way, they will be in a better position to know how to increase the value of the human resource in the organization.
Armed with such knowledge, managers and business leaders can predict and control employee behavior. As a result, they can find efficient ways to optimize human resources.
Organizational Behavior Explained
Organizational behavior is the study of individual or group behavior in an organizational setting. It involves studying how employees act individually and within a group. The primary objective of identifying organizational behavior is to help businesses operate more effectively. One can achieve such a goal by understanding the factors that influence the behavioral dynamics of individuals or groups in a company.
Fred Luthans, George Holmes Distinguished Professor of Management at the University of Nebraska, explained:
“Organizational behavior is directly concerned with the understanding, prediction, and control of human behavior in organizations.”
This field of study examines human behavior in a workplace environment. Moreover, it attempts to determine its impact on job performance, leadership, communication, employee collaboration, and organizational structure. For example, a dissatisfied worker may exhibit antisocial behavior that can be harmful to the organization. Such conduct has a direct impact on their job performance and how they deal with management.
Goals of Organizational Behavior
Organizational behavior helps managers to attain four main goals. These are:
- To describe: Managers gain the ability to describe how individuals behave under certain conditions.
- To understand: Managers will understand why individuals behave or respond in a particular manner when exposed to certain conditions.
- To predict: Organizational behavior gives managers the ability to predict the future outcome of employees based on their behaviors. For example, it's helpful to know whether or not workers are committed to the company. If not, what could be the root cause? How do you make them more loyal to the organization? How do you make your employees happy and prevent them from wanting to leave the organization?
- To control: The last goal of organizational behavior is to control how employees communicate with each other. This will help managers develop an amicable environment that can foster better work relationships. Teamwork is an important aspect of any business. The efficiency of your established organizational structure determines how they will interact, collaborate, and engage with each other for the common good of the company.
The Importance of Organizational Behavior
Employees want to work in a well-established organization that promotes a supportive culture and an environment of selflessness. When individuals are encouraged in the workplace, they feel more confident to share ideas that may eventually benefit the company. Generally, employees learn about an organization’s culture through socializing with colleagues and team members.
The most important aspect of organizational behavior lies in understanding human motives. What driving force stimulates particular conduct among employees, and how can one promote constructive organizational behavior? Once management recognizes such trends, they can find creative ways to integrate them into the work culture.
Here are the various reasons why organizational behavior is important for a company:
Business leaders can use their understanding of organizational behavior to identify individuals with leadership skills. Such skills, when nurtured, can contribute to the effectiveness of employee performance, and ultimately, the growth of the company.
The management can implement various training programs that allow employees to advance their skills or learn new skills. Several studies indicate that people who are made to feel part of the company perform better than those who don’t.
As discussed, organizational behavior helps leaders understand different motivational strategies that facilitate their employees to work at their best. Leaders should assess and analyze the work culture and formulate policies that serve the interest of their employees.
Managers can use various motivational tools like rewards, incentives, perks, promotions, and so on to make workers feel recognized and part of the decision-making process. Incentives and promotions increase employees’ morale and lead to employee job satisfaction.
Where there is job satisfaction, there’s reduced turnover, increased leverage for the recruitment of top talent, and eventually a boost in company performance and productivity.
Promotes a Positive Workplace Culture
The more an organization grows, the more difficult it becomes to maintain a sense of common purpose and unity of direction. Organizational behavior is useful for HR personnel who intend to develop proper communication channels and leadership structures that promote workplace culture.
As you employ new hires, you need to help them adapt to the company culture. Otherwise, they may have a hard time settling in the corporate environment. It's up to management to create a supportive work culture that makes sure the new hires feel welcome and part of the team. However, this process does not occur naturally. Human resource managers must devise ways to guide and help new and old employees to interact properly.
Organizational behavior allows business leaders to have a better understanding of their workers. With the proper data, managers can formulate policies and strategies that will cultivate the ideal company culture.
Develop a Good Team
Organizational behavior patterns not only help you to predict who among your employees can become a good leader. It also teaches you how to mold these individuals so they can utilize their skills to the fullest.
Since an organization is only as good as the weakest member of its team, you want everyone to work in unison and collaborate effectively towards the same goals. As a manager, having a grasp of the essential tools that influence human behavior puts you at the forefront of company success.
Impacts Decision Making
Effective communication allows managers, team leaders, and employees to understand the goals and circumstances of a company. It also encourages workers to participate in the decision-making process.
Once a manager gains the ability to predict human behavior, they can inspire and motivate employees to become a better version of themselves. After all, an organization’s goal is to work towards increasing its profitability ratio while effectively utilizing its various resources.
Enables Predictive Ability
As mentioned earlier, organizational behavior allows leaders to predict and manage the reactions of employees. This skill may come in handy when trying to implement new strategies since the manager can anticipate how people will react. In turn, they can develop several contingencies to mitigate a negative outcome.
By understanding the relationship between an organization and its employees, managers can develop efficient human resource strategies directed towards creating a better work environment.
The objectives of organizational behavior lead to one of the most important goals of any company. That is to achieve the highest productivity and to realize the organization’s visions and goals.
By understanding employee behavior and motives, you can develop strategies to help identify and alleviate conflicts that may affect a team’s performance. As a result, managers have a better chance of creating a strong team of performers and ensuring they collaborate well. Consequently, an organization stands to gain hugely from the input of employees.
If implemented properly, the organizational behavior principles can help motivate all workers to do their best.
Organizational behavior is the study that helps business leaders interpret people-organization relationships. In other words, it allows managers to learn how individuals or groups act within a company.
Its purpose is to help managers how to motivate their employees. It also helps in improving inter-personal relationships in the organization and allows managers to identify team leaders. It's an effective systemic approach that ensures all departments work in unity to help the company attain its goals.
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