Human Resources

Why Is Organizational Behavior Important?

Why Is Organizational Behavior Important?
Creating a secure organizational culture wherein employees can thrive is a crucial process for successful businesses. Image from
Marc Beschler profile
Marc Beschler November 8, 2022

Effective workplace culture requires an understanding of organizational behavior; this knowledge can subtly strengthen and enhance managerial authority.

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We’ve all heard employees described as “cogs in a machine.” The unsettling political and social ramifications of this term notwithstanding, it’s not an entirely negative concept. After all, a machine can’t function without cogs. Its individual components must fit together to operate effectively as designed.

Organizational behavior is a field of study that looks at how individuals fit together to advance—and sometimes impede—a business. The subject combines anthropology, social psychology, and sociology to examine how people behave within and react to work environments. The discipline is defined on the micro (individual), meso (group), and macro (organizational) levels, based on four factors: people, external environment, structure, and technology.

The COVID pandemic focused a spotlight on organizational behavior. First came the necessity of working from home, followed by a wide-scale attempt by employers to require employees to return to the workplace. This led to a rise in “quiet quitting”, the phenomenon of workers’ checking out of additional duties in subtle protest. COVID exposed many systemic failures in employers’ organizational behavior management practices.

Ethan S. Bernstein, of Harvard Business School indicated in the Harvard Gazette that many employers are settling for compromises—part-time at home, part-time at the office—without asking the actual purpose their of this new configuration. More conversation with all involved stakeholders might lead to better understanding of organizational goals, improved placement of individuals and groups within those goals, and enhanced utilization of time and resources. This conversation would include subjects such as organizational structure, company culture, employee engagement and employee motivation. Every topic listed affects job satisfaction and, thus, job performance and employee productivity.

In this article, we’ll take a look at many facets of organizational behavior, its benefits and drawbacks, and what careers to those in this discipline. We’ll cover:

  • Why is organizational behavior important?
  • How is organizational behavior used?
  • Benefits of organizational behavior
  • Drawbacks of organizational behavior
  • Careers in organizational behavior
  • Studying organizational behavior management

Why is organizational behavior important?

Many business experts believe that the lifeblood of a company is its organizational culture. This includes the thoughts, feelings, ideas, viewpoints, attitudes, and biases of the people who work there. These characteristics provide a lens through which people think about and react to their organization. Creating a secure organizational culture wherein employees can thrive is a crucial process for successful businesses.



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How is organizational behavior used?

The elements of organizational behavior manifest at three levels: the micro (individual), the meso (group) and the macro (organization). Organizational behavior studies first gather data concerning how the individual employees think and feel about their work environment, how motivated and appreciated they feel, and how dedicated they are to furthering the company’s mission. The better a company understands its employees, the easier it is to create a work culture in which they feel both welcome and valued. Gathering data allows a company to determine who belongs in which workgroup based on team members’ shared ideas, values, motivations, and communication methods.

The functions and operational habits of various groups within the company are then evaluated to find complementary aspects to utilize and redundant aspects to eliminate. A firm grasp of who is performing a task and why can shore up management’s confidence in employees. This reduces the need to micromanage, thus imbuing employees with the sense that the company trusts their judgment. The end result: more confident decision-making, increased innovation, improved group dynamics, and a reinforced notion of the value of teamwork.

Finally, the organization’s overall make-up and performance are assessed. The focus here is to locate weaknesses through strategic use of the talents of labor and management. This can also expose whether a business is better served by a top-down approach or whether employees respond positively to a flatter, more open operational structure. It also gives those inclined towards leadership positions a chance to stand out.

Benefits of organizational behavior

Human behavior unquestionably impacts the effectiveness of workplace environments. Human beings are who they are regardless of management’s wishes. Recognizing the value and importance of organizational behavior represents a significant step towards realizing potential for success. Taking the time to understand the people who are working to further a business’s goals can end up strengthening the operation in the following ways.

Stronger operational structure

Knowing who your employees are and how they react to work culture—both in terms of their co-workers and the overall organization—enables you to place them effectively for maximum efficiency and return. Well-applied organizational behavior principles help employees feel appreciated, providing a strong incentive to contribute to an organization’s core mission. It also improves conflict resolution processes, cross-team collaboration, and employee retention

More efficient hiring practices

Understanding the needs of your organization and what sort of employees best fit those needs are essential to human resource management. Organizational behavior helps human resource management identify the correct candidate for each role.

Improved diversity

The current emphasis on diversity isn’t about meeting quotas. It’s about recognizing the value of different backgrounds, experiences, and viewpoints in creating a well-rounded organization. When management has a better understanding of its people, it can foster improved understanding among employees. This impacts employee behavior—and subsequently group behavior—leading to positive organizational change.

Drawbacks of organizational behavior

As with all tools, organizational behavior is only as useful as the person using it. Potential drawbacks to its utilization include:

Overemphasizing employee satisfaction

Taking your employees into consideration is important, but it isn’t the actual function of the organization. If you are creating a culture that is welcoming but isn’t paying professional dividends, you’ve lost the reason for organizational behavior management.

Operational stasis

Just because you’ve figured out what works today doesn’t necessarily mean that it will work tomorrow. Tactics can become habitual rather than helpful, possibly hindering progress. Persistent vigilance with regard to productive workplace culture is paramount.

Potential for manipulation

It’s one thing to use a tool incorrectly because you don’t know any better; it’s another to use it in bad faith. There is always the chance that the information gleaned through organizational behavior will be used to trick people into behaving in ways which serve a personal agenda rather than promote the core mission of the company.

Careers in organizational behavior

Organizational behavior is a complex and interesting topic with many potential professional benefits. The study can be applied to any situation requiring a variety of people to interact towards a common goal, which is why it offers numerous job opportunities. Below are some of the positions you may qualify for with a degree in organizational behavior on your resumé.

Training and development manager (TDM)

The job of a TDM entails conceiving, planning, and implementing programs around a company’s core mission and the skills and knowledge required to realize it. Training and development management is a broad field that can potentially benefit any organization. The median annual salary for a TDM in the U.S. is $128,080 per year.

Human resources manager (HRM)

Organizational behavior is particularly important for HRMs as it informs what kind of hire should be placed in which position or working group. HRMs assess candidates based on strengths, attitudes, professional habits, and other attributes. It is particularly useful in preventing disruption during organization-wide change. The median annual salary for an HRM in the U.S. is $111,975 per year.

Compensation and benefits manager (CBM)

CBMs monitor how employees are paid and otherwise rewarded for their work. Given the significant role that job satisfaction plays in organizational behavior, the more a CBM understands about the employees under their charge, the greater their ability to make sure that they are fairly compensated and sufficiently recognized for their contributions. The median annual salary for a CBM in the U.S. is $129,194 per year.

Project manager (PM)

A PM is the central operational figure of a production plan, from conception to realization and beyond. PMs must have detailed knowledge of the various teams under their supervision, how they operate internally, and how they interact with one another. One could say that organizational behavior is the key tool in a PM’s toolbox, as it affords them a wealth of understanding regarding the ins and outs of the entire company. This allows firmer control over operations and the ability to foresee where difficulty may arise. The median annual salary for a PM in the U.S. is $77,327 per year.

Studying organizational behavior management

You can learn organizational behavior management through certificate programs, degree programs, and individual courses. Programs focusing on organizational behavior can be found in schools of social work and psychology along with business schools.

Within your chosen program you can find specialized topics within organizational behavior or broader areas of study, such as:

  • Dynamics of change
  • Influence of social movements on markets
  • Markets
  • Power of social networks
  • Relationship between organizations and their environments
  • Social systems

Top master’s degree programs with organizational behavior programs, according to U.S. News and World Report, include Indiana University – Bloomington, The University of Texas at Dallas, Michigan State University, American University, and Saint Vincent College.

The study of organizational behavior provides proven tools to make workplaces successful. It enables managers to leverage incentives and other motivational tools to optimize performance and create a happy, productive workplace.

(Last Updated on February 26, 2024)

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About the Editor

Tom Meltzer spent over 20 years writing and teaching for The Princeton Review, where he was lead author of the company's popular guide to colleges, before joining Noodle.

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