Organizational Behavior (OB): Definition, Importance & Limitations


What Is Organizational Behavior

Organizational Behavior has included two terms in it. Therefore, these two terms should be detailed first before diving into the title in question.

→ Organization: It is a group of people who are collected to work for a common goal with collective efforts. Organization works through two concepts i.e coordination and delegation among its group members. Delegation is necessary to allocate group members with equal work according to their capability, and coordination is required to achieve organizational goal with precision.

→ Behavior: It is a verbal or physical response shown by a person as a consequence of the impact of his/her surroundings. Individual Behavior varies in accordance with their mental reactivity to particular circumstances because of their deeply imbibed morals and value system.

→ Organizational Behavior: Organizational Behavior is the observation of individual and/or group Behavior in response to the other individuals or group as a whole. It studies Behavior of people or group to know their attitude towards particular circumstances.

∗ Fundamental Aspects Of Organizational Behavior: There are various aspects of Organizational Behavior which it has to deal with, to know the soul of particular Organization. Below mentioned are some of the fundamental aspects of Organizational Behavior-

1) People: This element is the soul of the Organization because people work to achieve the target of Organization and Organization works to fulfill the needs of individual or group of individuals. The word ‘people’ can be anyone who is working inside the Organization, like employees or any external person like supplier, customer, auditor, or any government official.

2) Structure: It is the body of the Organization which is to be taken care of to bring coordination between different levels of Organization, because Organization does not work aloof and is dependent on people which again work on the concept of division of labor. So, there is always a hierarchy in Organization which if not properly dealt with can mess the system because of nil scrutiny and flow of control.


3) Technology: Organizations work on technologies to help people in efficiently doing their work. Same technology does not apply to each Organization but different Organizations demand different technologies for their different line of businesses e.g bank needs mediating technology which connects customers and bankers, Manufacturing companies need long linked technology because of their assembly line process, and hospitals work on intensive technology because of their responsibility to provide specialized services in terms of doctors and medical equipments.

4) Environment: Organizations are influenced by the environment in which they work, at a substantial level. Environment is important to Organizations because of the following factors:

# Supply and demand comes from this environment.

# Human resource, competitors, government agencies, unions, and political parties comes from environment in which Organization is surviving.

# The Organizations have to follow rules and regulations fostered by this environment.

Importance of Organizational Behavior:

  1. It builds better relationship by achieving people’s, organizational, and social objectives.
  2. It covers a wide array of human resource like behavior, training and development, change management, leadership, teams etc.
  3. It brings coordination which is the essence of management.
  4. It improves goodwill of the organization.
  5. It helps to achieve objectives quickly.
  6. It makes optimum utilization of resources.
  7. It facilitates motivation.
  8. It leads to higher efficiency.
  9. It improves relations in the organization.
  10. It is multidisciplinary, in the sense that applies different techniques, methods, and theories to evaluate the performances.


Limitations of Organizational Behavior:

  1. Behavioral bias: It further causes dependence, dis-contentment, indiscipline, and irresponsibility.
  2. Law of diminishing returns: It says that beyond a certain point, there is a decline in output even after each additional good or positive factor.
  3. Unethical practices and manipulation of people: Knowledge of motivation and communication acquired can be used to exploit subordinates in an Organization by the manipulative managers.