Chapter 1 Introduction to the Field of Organizational Behaviour
Organizational behaviour (OB) = the study of what people think, feel, and do in and around organization
Looks at employee behaviour, decisions, perceptions, and emotional responses
Examines how individuals and teams relate to each other and to others in other organizations
How organizations interact with their external environments
Organizations = Groups of people who work interdependently toward some purpose
Collective entity
Members have a collective sense of purpose
Organizational effectiveness = the “ultimate dependent variable”; a broad concept represented by several perspectives, including the organization’s fit with the external environment, internal-subsystems configuration for high performance, emphasis on organizational learning, and ability to satisfy the needs of key stakeholders
1. Open systems  leadership and organizational change; transformation process = job design, organizational structure, relations between subunits in terms of conflict, and power and influence
2. Organizational learning  communication, creativity, employee involvement, decision making
3. High-performance work practices  team dynamics, employee motivation, rewards, individual-level topics
4. Stakeholders values and ethics, organizational culture, decision making
Open systems perspective = a perspective which holds that organizations depend on the external environment for resources, affect that environment through their output, and consist of internal subsystems that transform inputs into outputs
Organizations are effective when they maintain a good “fit” with their external environment
Good fit exists when the organization puts resources where they are most useful to adapt to and align with the needs of the external environment
Anticipate change in the environment and fluidly reconfigure subsystems to be more consistent
Organizational efficiency = common indicator of internal transformation process (internal subsystems effectiveness); the amount of outputs relative to inputs in the organization’s transformation process
Efficient with more goods or services with less labour, materials, and energy
Have more adaptive and innovative transformation processes
Communication is vital
Organizational learning perspective aka knowledge management = organizational effectiveness depends on the organization’s capacity to acquire, share, use, and store valuable knowledge
Knowledge acquisition = includes extracting information and ideas from the external environment as well as through insight
One of the fastest and most powerful was is by hiring individuals or acquiring entire companies i.e. grafting
When employees learn from external sources
Experimentation – research and creative processes
Knowledge sharing = involves distributing knowledge to others across the organization
Occurs through structured and informal communication; observation, experience, training, practice
Knowledge use = competitive advantage comes from applying it in ways that add value to the organization and its stakeholders
Employees must realize that knowledge is available and that they have enough autonomy to apply it; culture that supports the learning process
Knowledge storage = any means by which knowledge is held for later retrieval; process that creates organizational memory
Exhibit 1.2 Four Organizational Learning Processes

Knowledge Sharing
- Communication
- Training
- Information systems
- Observation

Knowledge Acquisition
- Environment scanning
- Individual learning
- Grafting
- Experimentation

Knowledge Use
- Knowledge awareness
- Sensemaking
- Autonomy
- Empowerment

Knowledge Storage
- Human memory
- Documentation
- Databases
- Practices/habits

Absorptive capacity = the ability to recognize the value of new information, assimilate it, and use it for value-added activities
Intellectual capital = A company’s stock of knowledge, including human