Organizational Behavior and Development

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Author: Cheryl L. Noll
Editor: Burton S. Kaliski
Date: 2007
Encyclopedia of Business and Finance
From: Encyclopedia of Business and Finance(Vol. 2. 2nd ed.)
Publisher: Gale
Document Type: Topic overview
Pages: 5
Content Level: (Level 5)

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The discipline of organizational behavior is concerned with identifying and managing the attitudes and actions of individuals and groups, looking particularly at how people can be motivated to join and remain in the organization, how to get people to practice effective teamwork, how people can accomplish their jobs more efficiently, and how employees can be encouraged to be more flexible and innovative. Attention is brought to these attitudes and actions in order to help managers identify problems, determine how to correct them, and change behavior so that individual performance and ultimately organization effectiveness increase.

As a field of study, organizational behavior is built on a succession of approaches or ways of thinking about people. Since the early 1900s those who studied behavior in organizations have attempted to prescribe ways to effectively manage employees in order to achieve the organization's goals. The early approaches, referred to as the classical view, promoted increased management coordination of tasks, strict specialization and standardization of work tasks, a strict chain of command, and centralized decision making at the manager level. During the 1920s and 1930s the next new school of thought began to emerge, which was referred to as the human relations movement. By and large this movement began with the famous Hawthorne studies at the Western Electric plant that demonstrated how psychological and social processes could affect productivity and work behavior. This new way of thinking looked at organizational behavior by advocating a more people-oriented style of management that was more participative and oriented toward employee needs.

Contemporary organizational thought has shifted to a more integrative systems approach, which includes the consideration of external influences; the relationship of the organization with managers and employees; and organizational processes, which are the activities through which work gets accomplished. In other words, the best solution for the situation depends on many factors. The organization is depicted as a number of interrelated, interdependent, and interacting subsystems that are continually changing.

Those who managed by the classical approach emphasized the critical role of control and coordination in helping organizations to achieve goals. Those who managed by the human relations approach considered the risks of high levels of control and coordination, focusing instead on the need for flexibility. So where do today's managers fit in? A contemporary approach to managementPage 565  |  Top of Article recognizes that there is no one best way to manage. Instead, management approaches need to be tailored to fit the situation.

The manager's role is to effectively predict, explain, and manage behavior that occurs in organizations. Particularly, managers are interested in determining why people are more or less motivated or satisfied. Managers must have a capacity to observe and understand the behavior patterns of individuals, groups, and organizations; to predict what responses will be drawn out by managerial actions; and ultimately to use this understanding and eventual predictions to effectively manage employees. Behavior can be examined on three levels—the individual, the group, and the organization as a whole. Managers seek to learn more about what causes people, individually or collectively, to behave as they do in organizational settings. What motivates people? What makes some employees leaders and others not? How do people communicate and make decisions? How do organizations respond to changes in their external environments?

Although it may be said that the responsibility for studying organizational behavior rests with researchers, assessing and increasing organizational effectiveness is a primary responsibility of managers. They need to collect data about the environment in which people work and describe events, behaviors, and attitudes in order to develop plans for changing and improving behavior and attitudes. Managers can begin to understand organizational behavior by accurately describing events, behaviors, and attitudes. How can this be accomplished?

Data can be gathered by observing situations, surveying and interviewing employees, and looking at written documents. These methods help to objectively describe events, behaviors, and attitudes—a first step in determining their causes and then acting on them.

By direct observation, for example, managers can attend meetings and then describe what is happening, such as who talks most often, what topics are discussed, or how frequently those attending the meeting ask for the managers' viewpoint on the topic. In addition, survey questionnaires could be sent to employees; these might provide concrete data about the situation, proving more useful than relying solely on personal perception of events. Sending the same questionnaire to employees each year could provide some insight into changes in behavior and attitude over time. Employees could also be interviewed in order to examine attitudes in greater depth. Some valuable information about attitudes and opinions may also be gathered by talking informally with employees.

Finally, data could be gathered from organizational documents, including annual reports, department evaluations, memoranda, and other nonconfidential personnel files. An analysis of these documents might provide some insight into the attitudes of employees, the quality of management, group interactions, or other possible reasons behind the problems or situation.


Organizational development (OD) is a planned, ongoing effort by organizations to change in order to become more effective. The need for organizational change becomes apparent when a gap exists between what an organization is trying to do and what is actually being accomplished. OD processes include using a knowledge of behavioral science to encourage an organizational culture of continual examination and readiness for change. In that culture, emphasis is placed on interpersonal and group processes. The fact that OD links human processes such as leadership, decision making, and communication with organizational outcomes such as productivity and efficiency distinguishes it from other change strategies that may rely solely on the principles of accounting or finance.

The fact that OD is planned distinguishes it from the routine changes that occur in the organization, particularly through a more effective and collaborative management or organization culture with special emphasis on forming work teams. The focus on interpersonal and group processes to improve performance recognizes that organizational change affects all members and that their cooperation is necessary to implement change.

The forces compelling an organization to change can be found both inside and outside the organization. Internal forces toward change can affect changes in job technology, composition of the work force, organization structure, organizational culture, and goals of the organization. There are a variety of external forces that may require managerial action: changes in market conditions, changes in manufacturing technology, changes in laws governing current products or practices, and changes in resource availability.

An organization can focus OD change efforts in several areas: changes to structure, technology, and people using a variety of strategies for development. Some of the more common techniques for changing an organization's structure include changes in work design to permit more specialization or enrichment, clarification of job descriptions and job expectations, increase or decrease of the span of control, modification of policies or procedures, and changes in the power or authority structure. Another general approach to planned change involves modifications in the technology used as tools to accomplish work. The assumption behind enhancing technology is that improved technology or work methods will lead to more efficient operations, increased productivity, or improved working conditions. Examples of technological approaches to change include changing processes forPage 566  |  Top of Article doing work, introducing or updating computers or software, and modifying production methods. The third general approach to change focuses on the people in the organization. This approach is intended to improve employee skills, attitudes, or motivation and can take many forms, such as introducing training programs to enhance work skills, increasing communication effectiveness, developing decision-making skills, or modifying attitudes to increase work motivation.


Choosing the appropriate approach to organizational change depends on the nature of the problem, the objectives of the change, the people implementing the change, the people affected by the change, and the resources available. Several strategies are often thought of as effective techniques for organization development: reengineering, team building, total quality management, job enrichment, and survey feedback.

Reengineering is the sweeping redesign of organizational processes to achieve major improvements in efficiency, productivity, and quality. What makes reengineering so far reaching is that it goes beyond just modifying and altering existing jobs, structures, technology, or policies. This approach asks fundamental questions, such as: What is the purpose of our business? If this organization were being created today, what would it look like? Jobs, structure, technology, and policies are then redesigned according to the answers to these questions.

As part of the OD process, teams are used as a way of responding quickly to changing work processes and environments; they are encouraged and motivated to take the initiative in making suggestions for improving work processes and products. The term team can refer to intact work groups, new work units, or people from different parts of an organization who must work together to achieve a common goal. Often team building begins with a diagnostic session, held away from the workplace, where the team's members examine their strengths and weaknesses. The goal of team building is to improve the effectiveness of work teams by refining interpersonal interactions, improving communication, and clarifying goals and tasks in order to improve overall effectiveness in accomplishing goals. In ideal circumstances, team building is a continual process that includes periodic self-examination and development exercises. Managers must continually develop and maintain strategies for effective team performance by building trust and keeping lines of communication open.

Effective teams generally are attractive to others and are cohesive. The extent to which people want to belong to the team makes the team more attractive to others. If others see the team as cooperative and successful, they are more willing to belong. Teams are seen as less appealing if the group's members feel that unreasonable demands are made on them, if the group is dominated by a few members, or if competition exits within the group. A cohesive team exhibits strong interpersonal interaction among its members as well as, increased performance and goal accomplishments.

Reengineering efforts place a strong emphasis on teamwork with the intent of fostering collaboration to accomplish a goal, to resolve problems, and to explore alternatives. These teams can be traditionally managed by an appointed leader or manager or self-managed. Self-managed teams work without an official leader and therefore share responsibility for managing the work team. Managers continue to coach the team, develop strategies for improving performance, and provide resources even though they may not direct the daily activities of the team.

Total quality management (TQM) is the term used to describe comprehensive efforts to monitor and improve all aspects of quality within a firm. Teamwork plays a major role in quality improvement. Total quality management efforts could include employee training, identification and measurement of indicators of quality, increased attention to work processes, and an emphasis on preventing errors in production and service. What is the connection between TQM and OD? Both require a high degree of employee commitment, involvement, and teamwork. Many decisions must be made at the level where the work is accomplished, and managers must be willing to give employees this power. Managers empower employees to make decisions and take responsibility for their outcomes.

Job enrichment is often thought of as a technique of OD. It involves changing a job by adding additional tasks and by adding more responsibility. The widespread use of self-managed teams results in significant job enrichment. By the mere definition of self-managed teams, employees are now being asked to perform new tasks and exercise responsibilities within the team that they have not had to perform before.

Survey feedback involves collecting data from organizational members; these data are then shared with the members during meetings. In these meetings suggestions for formulating change are made based on the trends that emerge from the data. Survey feedback is similar to team building; however, the survey strategy places more emphasis on collecting valid data than on the interpersonal processes of work teams.

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The success or failure of planned change depends not only on the correct identification of the problem but also on recognition of possible resistance to change. It is critical to the successful achievement of organizational development efforts for the manager to recognize the need for change, diagnose the extent of the problems that create this need, and implement the most effective change strategy. Successful OD efforts require an accurate analysis of the needed changes and an identification of the potential resistance to the proposed changes. Two critical points should be addressed concerning the areas in which organizations can introduce change. First, changes made in one area often trigger changes in other areas as well. Managers and those proposing the change must be aware of this systemic nature of change. Second, changes in goals, strategies, technology, structure, process, and job design require that people change. Serious attention must be given to the reactions of employees and possible resistance to changes in these areas.

People may be resistant to change for a number of reasons. They may feel that they will lose status, power, or even their jobs. People react differently to change; even if no obvious threat to their jobs exist, some people's personalities make them more uncomfortable than others with changes in established routines. The reasons for the change or the exact change that will take place may not be understood. However, even if the reasons for the change are understood, employees may not have a high level of trust in the motives of those proposing the change. Also, those who are the targets of the change may genuinely feel that the proposed change is not necessary.

Organizational culture could also influence people's reactions to OD efforts. Organizational culture can be thought of as the organization's personality. The culture is defined by the shared beliefs, values, and patterns behaviors that exist in the organization. In other words, "the way we do things around here." Some organizational cultures may even reward stability and tradition while treating those who advocate change as outsiders. Sometimes the definition and strength of an organization's culture are not evident until it undergoes change.

How can managers deal with resistance to change? An individual's low tolerance for change is largely a personal matter and can often be overcome with support and patience. Open communication can go a long way toward overcoming resistance to change based on misunderstanding, lack of trust, or different viewpoints. Those who will be affected by the change must be identified, and the reasons for and details about the change must be conveyed accurately to them. Keeping this information secret is bound to cause resistance. Also, the people who are the targets of the change should be involved in the change process. This is particularly important when true commitment to, or ownership of, the change is critical and those affected have unique knowledge about the processes or jobs that may be altered.


Genuine efforts at organizational development require an investment of time, human effort, and money. Do the benefits of OD outweigh these costs? Reviews of a wide variety of OD techniques indicate that they tend to have a positive impact on productivity, job satisfaction, and other work attitudes. These reviews have also pointed out that OD efforts seem to work better for supervisors and managers than for blue-collar workers and that changes that use more than one technique seem to have more impact. There are several factors that increase the likelihood of successful OD efforts:

  • Recognition of organization problems and influences. Before changes can be proposed, correct identification of the gaps between what an organization is trying to do and what is actually being accomplished must be made.
  • Strong support from top-level managers. If managers at the higher levels in the organization do not provide obvious and open support for the OD efforts, the program is likely to fail.
  • Action research that provides facts, not opinions, for decision making. Action research includes an identification of the attitudes and behaviors of employees and is part of an ongoing assessment of organizational behavior.
  • Communication of what OD is and is not and awareness of why it is being used. The culture of the organization should be such that employees are aware of what organizational development is and is not so that it is not seen as a threat.

To thrive in the business environment of the twenty-first century characterized by a dynamic work force, rapid changes in technology, and the increasing volatility of the global environment, organizational development must be an ongoing effort. Encouraging continual examination and readiness for change must be part of the organization's culture.


Conner, Daryl R. (1998). Managing at the Speed of Change: How Resilient Managers Succeed and Prosper Where Others Fail. New York: John Wiley & Sons.

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Hammer, Michael, and Champy, James (2003). Reengineering the Corporation: A Manifesto for Business Revolution. New York: HarperBusiness Essentials.

Hunt, V. Daniel (1996). Process Mapping: How to Reengineer Your Business Processes. New York: Wiley.

Johns, Gary (1996). Organizational Behavior: Understanding and Managing Life at Work (4th ed.). New York: HarperCollins College.

Kotter, John P. (1996). Leading Change. Boston, MA: Harvard Business School Press.

Schein, Edgar H. (1999). The Corporate Culture Survival Guide: Sense and Nonsense About Culture Change. San Francisco: Jossey-Bass.

Senge, Peter M. (1999). The Dance of Change: The Challenges of Sustaining Momentum in Learning Organizations. New York: Currency/Doubleday.

Cheryl L. Noll

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Source Citation   

Gale Document Number: GALE|CX1552100241