Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Slide 1-1 Chapter Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 1 What is Organizational Behavior?

Slide 1-2 Learning Goals  What is the definition of “organizational behavior” (OB)?  What are the two primary outcomes in studies of OB?  What factors affect the two primary OB outcomes?  Why might firms that are good at OB tend to be more profitable?  What is the role of theory in the scientific method?  How are correlations interpreted?

Slide 1-3 Discussion Questions  Think of the worst coworker you've ever had. What did that person do that was so bad?  Think of the best coworker you've ever had. What did that person do that was so good?

Slide 1-4 The Best of Coworkers, the Worst of Coworkers Table 1-1

Slide 1-5 Organizational Behavior Defined  Organizational behavior (OB)  Human resource management  Strategic management

Slide 1-6 OB Foundations  Theories and concepts in OB are drawn from a wide variety of disciplines  Industrial and organizational psychology  Social psychology  Sociology  Economics

Slide 1-7 Integrative Model of Organizational Behavior  Individual Outcomes  Individual Mechanisms  Individual Characteristics  Group Mechanisms  Organizational Mechanisms

Slide 1-8 Figure 1-1 Integrative Model of OB

Slide 1-9 Does Organizational Behavior Matter?  Resource-based view  Financial resources (revenue, equity)  Physical resources (buildings, machines, technology)  Knowledge, decision-making, culture, ability, wisdom  Image, culture, goodwill

Slide 1-10 Discussion Question  Is it really the people that make some companies more profitable than others?

Slide 1-11  Rare  Inimitable  History  Numerous small decisions  Socially complex resources What Makes a Resource Valuable?

Slide 1-12 Figure 1-2 What Makes a Resource Valuable?

Slide 1-13 Research Evidence  OB practices were associated with better firm performance  Firms that valued OB had a 19% higher survival rate than firms that did not value OB  Good people comprise a valuable resource for companies  There is no “magic bullet” OB practice – one thing that, in-and-of itself, can increase profitability  Rule of one-eighth

Slide 1-14 Survey Questions Designed to Assess High Performance Work Practices Table 1-2

Slide 1-15 Table 1-3 Some of the “100 Best Companies to Work For” in 2009

Slide 1-16 How Do We Know  Method of Experience  Method of Intuition  Method of Authority  Method of Science

Slide 1-17 Scientific Studies  Theory  Hypotheses  Correlation (r)

Slide 1-18 The Scientific Method Figure 1-3

Slide 1-19 Figure 1-4 Different Correlation Sizes

Slide 1-20 Social Recognition & Job Performance  How often does social recognition lead to higher job performance?  Burger King study  Correlation between social recognition and job performance was.28  Correlation between social recognition and retention rates was.20

Slide 1-21 Establishing Relationships  It turns out that making causal inferences — establishing that one variable really does cause another — requires establishing three things.

Slide 1-22 Notable Correlations Table 1-4

Slide 1-23 Meta-analysis  The best way to test a theory is to conduct many studies, each of which is as different as possible from the ones that preceded it.  Meta-analysis

Slide 1-24 Takeaways  Organizational behavior is a field of study devoted to understanding and explaining the attitudes and behaviors of individuals and groups in organizations. More simply, it focuses on why individuals and groups in organizations act the way they do.  The two primary outcomes - job performance and organizational commitment.  A number of factors affect performance and commitment, including individual mechanisms, individual characteristics, group mechanisms, and organizational mechanisms.

Slide 1-25 Takeaways, Cont’d  The effective management of organizational behavior can help a company become more profitable because good people are a valuable resource.  Rare  Hard to imitate  History that cannot be bought or copied  Make numerous small decisions that cannot be observed by competitors  Create socially complex resources such as culture, teamwork, trust, and reputation.

Slide 1-26 Takeaways, Cont’d  A theory is a collection of assertions, both verbal and symbolic, that specifies how and why variables are related, as well as the conditions in which they should (and should not) be related. Theories about organizational behavior are built from a combination of interviews, observation, research reviews, and reflection. Theories form the beginning point for the scientific method and inspire hypotheses that can be tested with data.  A correlation is a statistic that expresses the strength of a relationship between two variables (ranging from 0 to ± 1). In OB research, a.50 correlation is considered “strong,” a.30 correlation is considered “moderate,” and a.10 correlation is considered “weak.”