Organizational Behavior: Assumptions, Levels, Challenges and Opportunities, Emerging trends, System/Model, Outcomes

Fundamental Assumptions of Organizational Behavior (OB)

OB aims to improve organizational performance by understanding and controlling human behavior in organization. It works with human psychology, perception, attitude and behavior which are reflected in work place within group or team. Organization behavior is based under two fundamental assumption about nature of people and nature of organization.

Also read: Organizational Behavior: Concept, Characteristics, Importance, History, Contributing Disciplines

A. Assumption about nature of people

People i.e. employees are the main subject matter of study of OB. OB studies regarding way of thinking about any object and way of reacting to the situation or event. OB has following basic assumptions regarding nature of people:

1. Individual differences

OB assumes that each individual is different from each other. Body structure, mental maturity, way of perceiving event or object, way of reacting to event or object, intelligence, personality and other traits of each individual differ from others. Therefore, OB suggests that there could not be unique or single way of dealing to each employee working in organization. Managers should treat different individuals differently according to their nature.

2. Selective perception

Perception is a process of gathering, organizing and interpreting sensory impressions to distinguish from other common event or objects. As each individual is unique, each individual has a unique way of gathering information of event or object, organize and interpret things. Each person reacts on the basis of perception. This means that behavior of each person depends on the basis of selective perception rather than actual reality.

3. A whole person

OB assumes the individual presence in an organization as a whole person. Individual emotions cannot be separated from physical work settings. Family life and social settings directly affects to the organizational performance. Thus, OB cares about complete person to increase individual effectiveness.

4. Motivated behavior

OB assumes that the behavior of people are motivated which lead for individual as well as group effectiveness. Behaviors of people are motivated positively with satisfied needs. Thus, OB focuses on satisfying individual needs to motivate their behavior.

Also read: Personality in OB: Characteristics, Determinants, Attributes Influencing, International Values, Application

5. Desire of involvement

OB assumes that each individual desires to involve in task performance, role fulfillment, contribution for organization, mitigating challenges, etc. as per their capacity. Each person reserve special capabilities to involve in organizational activities so that they attain opportunities.

6. Human value

OB assumes that people are more valuable and different than non-living things. It believes on respecting individual dignity and respect.

Also read: Individual Behavior: Concept, Input Output System, Determinants , Mental Process

B. Assumption about nature of Organization

Nature of organization is another area of study of OB. Individual behaviors in group are supposed to be different according to nature of organization. OB has following assumptions about nature of organization:

1. Social system

OB assumes organization as open social systems. These systems affects behavior of individual. Different systems are interdependent. Formal and informal systems in the organization make the organizational environment more dynamic.

2. Mutuality of interest

OB assumes mutuality of interests in organizational participants i.e. people need organization and organization need people. Fulfillment of goals of each party assures the fulfillment of individual and organizational goals which affects on behavior of individual. Thus, OB suggests managers to fulfill individual goals in order to satisfy organization goals.

3. Ethical behavior

OB assumes ethical behavior in organization with moral issues and choices. Organization need to establish written codes of conduct regarding employee's behavior. Managers need to train employees for ethical behavior.

Also read: Perception in OB: Factor Affecting, Application, Principles, Theories, Perceptual Process 

Levels of Organizational Behavior (OB) Analysis

Organizational behavior concerns about what people do in organizations and how their behavior in the organization affect in organizational performance. It thus, has to analyze every aspect from very minutely. It estimates the individual behavior in group performance and then effect of group performance in organizational performance. Thus, OB study is focused in three consequential levels i.e. individual level, group level and organizational level.

A. Individual Level (Micro Level)

Each organization needs to appoint different people with diverse skills, knowledge and expertise. Along with these things, they differ in individual characteristics, thoughts, perception, learning and attitudes. Such differences in individual affects in group dynamism and hence the organizational performance.

Thus, OB involves in analyzing the behavior of individual employee towards organizational policies, procedures and practices. OB in this level studies employee perception, learning, motivation, values and attitudes and their development process with organizational policies, procedures and practices.

Individual levels analysis consists for different outcomes like:

1. Attitudes and Stress

Study regarding how an employee evaluates the job with positive to negative perception. And to what extent and why employee show unpleasant psychological process in response to environmental pressure.

2. Task performance

Study regarding how effectively and efficiently and employee accomplish his/her responsibility.

3. Citizenship Behavior

Study regarding what level of attachment an employee shows towards work and working environment.

4. Withdrawal behavior

Study regarding at what extent and why an employee shows detaching behavior from job. In this level, different theories from personality, perception, learning, motivation and job satisfaction are importantly used. This is interpersonal analysis.

B. Group Level Analysis (Meso Level)

Individual employee in organization has to work in group with accepting group norms, roles and responsibilities. Task level, group, team, department, project, committee, etc. are such groups in which employees have to involve and work for collective goals and objectives.

Also read: Learning in OB: Importance, Process, Components, Theories, Factors Influencing, Principles 

Group performance is important for organizational performance. Thus, OB concerns about how groups get dynamism, what level of group cohesion can be attain with what factors and what level of performance can be attained with different efforts. This level of behavior analysis is known as the group level analysis. Communication, power, conflict, leadership style etc. are more important at this level. In this level, OB uses different theories from social psychology. Group level analysis consists of two important outcomes as:
  • Group Cohesion: Study of degree of group attachment of employees with greater shared group values, norms and attitudes. Group cohesiveness studies to what extent individual is interested to join the group. It explains the group bonding so that the group effectiveness and efficiency can be affected.
  • Group Functioning: This is the study of the quality and quantity of work group's output in organization. OB explains how do groups work and accomplish team goals in the presence of individual in the team. 

C. Organization Level Analysis (Macro Level)

Analysis of entire organization is the organizational level analysis of OB. At this level OB basically concerns with what level of productivity is improved with what organizational structure, culture, policies, processes and practices. At this level, OB uses different theories from sociology as OB studies the impact of Sociological factors on organizational effectiveness at organizational level. This level of analysis concerns mainly with:
  • Productivity: At this level, OB studies what level of effectiveness and efficiency attained in organization.
  • Organizational survival: At this level, OB studies to what extent the organization is making effective decisions to cope with environmental challenges to run and extent its business for long run. 
OB analysis should be the good composition of all level analysis as individual level affects in group level performance and effectiveness whereas group level outcomes affect the overall organizational level performance and effectiveness.

Organizational Behavior (OB) System/Organizational Behavior (OB) Model

Organizational behavior is a system composed by various interrelated and interacting components. It is open social system influenced by environment. OB system thus, is a unified whole of three subsystems as individuals subsystems, group subsystem and organizational structure and culture subsystem. It passes through input, processing and output phenomena at three levels.Individual subsystem is the set of individual employees which is characterized by individual indifference in biological features, working ability, interpersonal behaviors, attitude, values, beliefs, etc. Group subsystem is the set of attitudes and behavior of individual employees in group. So, group subsystem is characterized by group attitude, ability, cohesiveness, role, status, authority, size and norms. Likewise, organizational structure and culture subsystem is composed of structure and culture of the organization. Structure is formed with division of work which defines roles, responsibility and authority relationship. Culture subsystem is formed with organizational norms, values and beliefs. Such subsystems collectively influence the whole organization behavior.

Also read: Team in OB: Nature, Types, Building Effective, Processes


Inputs are the variables which lead to processes. Inputs of OB model are the variables like individual (diversity, personality and values), group (group structure, group roles and team responsibilities) and organization (structure and culture). Individual variables are more or less shaped with the birth of individual which can be little modified with childhood environment, learning and experience. Group variables are formed with the formation of group. Size, roles, structure, team responsibilities etc. are the subject matter of how the group is formed and leadership is developed. While organization variables in OB model is formed with the years of development processes and change management to form values and norms.


Processes are the actions that individual, group and organization take to transform inputs into outputs. These actions are oriented to get predetermined outcomes in the organization. Individual level process includes emotions and moods, motivation, perception, and decision making. These are individual behavior important in OB model. Likewise, group level processes are communication, leadership, power and politics, conflict and negotiation. These processes are important to carry on the group structure, rules and responsibilities into group cohesion and functioning. Organization level processes cover the whole organization under the scope of study. This level includes the entire human resource management and change management practices.


Outcomes are the end results desired to get from OB model. Outcomes can be in three levels as individual level, group level and organization citizenship behavior and withdrawal behavior are more interestingly studies to OB. In group level, group cohesion and functionality are desired outcomes whereas in organization level, productivity, organizational profitability and effectiveness are desired outcomes.

Outcomes of Organizational Behavior (OB) Model

Outcomes of OB model or system are the desired state of behavior or finding in organization. These outcomes, in other words, are the goals of OB. Outcomes of OB model can be studied under three levels as individual levels as individual level, group level and organization level. These outcomes are explained in brief as below:

1. Attitude and Stress

"Attitude is a learned predisposition to behave in a consistently favorable or unfavorable way with respect to a given object, people, situation or environment." Attitude is the result of behavior of individual. It is believed that more satisfied and fairly treated employees have more positive attitude. Employees are expected to think. 'This working environment is favorable to me', 'Supervision approach is not acceptable', 'I really think my job is great', 'My organization is the best among all around', etc. are some statement showing positive attitude.

Also read: Organizational Behavior (OB): Motivation Theories

Stress is an unpleasant psychological process that occurs in response to environmental pressures. Stress decreases the willingness to do job. This is found that stress causes for the diminishing productivity and efficiency of employees and hence the productivity and efficiency of overall organization. Managers need to concentrate in creating environment for less stress.

2. Task performance

Task performance is the combination of personal effectiveness and efficiency of employees. Task performance is directly related with core duties and responsibilities of a job, formal job description and job context. Thus, task performance of employees can be measured in different terms like task performance of a factory worker can be measured in terms of how many units of products an employee can produce within an hour within prescribed quality standard. Task performance of a waiter of a restaurant can be measured in terms of how many customers can be severed effectively within an hour. Task performance of a bank receptionist can be measured in terms of how many customers in her desk can be served within an hour. Organization expects higher level of task performance of each employee to increase the performance of organization.

3. Citizenship Behavior

Citizen behavior is the psychological state of employee who perform their best positive to the team and organization as thinking it is their prime responsibility. Citizenship behavior is the most desired psychological nd social environment in workplace so that each employee can assist the effort of team, avoid unnecessary conflict, accept the additional work load in necessity, gracefully tolerate the unnecessary conflict, accept the additional work load in necessity, gracefully tolerate the unnecessary evidence occurred in organization and work for improving organizational image. Every successful manager tries to build up strong citizenship behavior in the organization. It is one of the most desirable outcomes of OB. 

4. Withdrawal Behavior

Withdrawal behavior is the set of action of an employee to be separate from job and organization. Employee tend to be separated with different ways like reporting late, departing the job early, gossiping with friend at job time, ignoring meeting, frequent absenteeism and turnover. Withdrawal behavior is believed as the consequence of negative job attitude, emotions and moods, and negative interactions with co-workers and supervisors. Withdrawal behavior is accounted one of the serious problems to run the organization smoothly as it increases cost of recruitment, training and development and customer dissatisfaction.

5. Group Cohesion

Group cohesion is the tendency of attaching the group member for group effort and goals. It is group level outcome of OB. Group cohesion is the result of mutual trust, common belief for attaining group goals and logical division of roles, responsibility and authority. Cohesive groups are found more effective in goals attainment through different researches. OB is thus interested in increasing the group cohesion and suggests to the organizations to organize several ice breaking events like picnics, parties and outdoor adventure team retreats. Another important factor in increasing group cohesion is the selection of right person with complementary skills in the group.

6. Group Functioning

Group functioning is the extent of quality and quantity of the task performance i.e. work output of group. Group functioning is the result of greater group cohesion. Since team members produce synergy effect in organization, thus the performance in team effort is always greater than the sum of individual performance. Effective teams are supposed to do different task like some work for core task of organization, for satisfying special customers, for accomplishment of project, for creating special business idea, etc. Whatever may be the assumptions and purpose of formation of group, effective group performs for greater output.

7. Productivity

Productivity is the state of performance in which greater output can be attained at lower input. An organization is said to be productive if it achieves its goals by transforming inputs into outputs at the lowest cost. Productivity thus, is the result of effectiveness and efficiency. Productivity is the organizational level analysis which is greatest at its level of organizational behavior.

Also read: Communication in OB: Functions, Process, Types, Network, Barriers, Overcoming, Issues

An organization can be said as effective if it successfully meets the needs of its customers. It is taken as efficient if it efficient if it satisfies its customers. It is taken as efficient if it satisfies its customer at low cost. Satisfying all the needs of customer of a telecommunication company like good connectivity, internet facility and more indicates the effectiveness of organization and providing this at lower cost of production indicates the efficiency. Service organization are required to attain both effectiveness and efficiency as the cause and effect relationship runs from employee attitudes and behavior to customer's attitudes and behaviors.

8. Organizational survival

Organizational survival is the degree to which an organization is able to overcome environmental constraints to exist and grow over the long term. It is the final OB outcome which not only measures the efficiency and effectiveness in terms of productivity but also the factors like extent of perceiving the market successfully, making good business decision about how and when to pursue opportunities and engaging in successful change management to adapt to new business conditions.

Confronting Critical Issues For Managers and Use of OB (Challenges and Opportunities for OB)

Getting different behavior of two or more people within an organizational setting is not surprising as same person may act differently at different time. Different people from different schooling and socio-economic background behave in different ways. Organizations are compelled to acquire employees from different race, cast and ethic group. Number of women employee is increasing day by day, cross national employees is increasing in one hand and in another hand; temporary work force and decreasing employee commitment are other burning issues for modern organizations. Managers need to understand such issues and formulate strategies at right time. Because of such confronting issues, managers need to use OB approaches in organizations.

1. Responding economic pressure

During boom economic period, almost all organizations earns good profit. Managers think about to satisfy and retain employees in the organization. But, during economic recession, managers need to think regarding the stress, fear and anxiety of employees. They have to retain the organizational performance with retaining employees where they may have to make employee firing policy as well. Managers, during tough economic pressure need to take help of OB to understand employee stress, dissatisfaction, frustration and accordingly they need to make policy.

2. Responding to globalization

All the organization are directly or indirectly affected by globalization. They get better market opportunity, opportunity for innovation and development, low cost resources, etc. because of globalization. At the same time, the level of competition gets intense because of which they have to compete with local as well as multinational companies. Managers need to hire human resources from different part of world in order to reduce production cost. Manager's job has been changed with globalization. Managers need to complete foreign assignment as well. They have to work with people from different socio-economic background. They need to satisfy the diverse needs of not only customers but employees as well. Economic and cultural integration is very difficult task. Globalization has increase the challenge of maintaining cost of production as it is significantly different in developed, developing and underdeveloped countries. In such circumstances, managers can be benefited with diverse application of OB.

Also read: Organizational Development in OB: Characteristics, Values, Objectives, Goals, Prerequisites, Process, Interventions

3. Managing workforce diversity

Workforce diversity is the degree of differences of employees working in an organization. Workforce diversity unlikely from globalization, covers the differences in employees from within the nation. Because of various reasons, organizations need to hire employees with diversity of race and ethnicity, physical or psychological abilities, age, etc. Number of female employees in the organization is significantly increased. Issue of inclusion is broadening with political changes. Such diverged groups of people possess different objectives, strengths and limitations. Managers need to understand their aspirations and plan accordingly. Attaining organizational goals with assurance of fulfillment of individual goals is really a challenging task. Managers need to leverage differences within groups for competitive advantages. They need to foster the cultural awareness in employees without lapsing into political correctness. OB is such cases facilities to understand the common and diverse areas of interest.

4. Improving customer service

Service sector is fast growing sector. Customers become loyal only when they get satisfied. Managers should plan for customized world class service to their valued customers. They have to increase the horizon to service to the customer at a hand and at the other hand they to design low cost of production and supply chain. All the managers as well as supporting staff to be truck driver, logistics managers, accountants, decision makers, etc. need to design and deliver the service to their customers. For effective planning and execution of service to the customers, managers not only to understand the needs of customers but they also have to understand and monitor the attitudes and behavior of employees. Employee's attitude and behavior directly affect to the customer satisfaction.

5. Improving people skills

Employee's skills in their respective job responsibilities are more important to reduce the cost of production, improve the productivity and efficiency as well as to satisfy the customers. Training and development to improve the hard and soft skills are most important. But, because of low commitment of the employees, managers need to face challenges. Enhancing skills for listening and communication, handling customer grievances, team formation and team work, etc. are challenging job to the manages. OB facilities to understand employee psychology, behavior and attitude to cope with above mentioned challenges.

6. Stimulating innovation and change

Organization with poor performance cannot succeed in today's global competition. To improve organizational performance, innovation and development in must. Change in organizational structure, job responsibilities, working procedures, level of technology, etc. has no option to sustain in the market. Many organization have increased their size, product lines, added auxiliary product (services) with main products, adopted the latest technology, line-organization structures are changed into project organization. For this, managers should analyze the technology, employee's creativity as well as the tolerance for change. Managers should make organization ready to accept change in organizational structure; capital structure and technology at the same time they make employee ready to accept change in responsibilities. Organizations should turn into learning organizations. OB helps to understand the psychology of employees towards change and helps to adapt motivational tools to motivate employees for change.

7. Coping with temporary workforce

Globalization has increased the career opportunities to both managers and operating level employees. Organizations at the other hand need to be fast and flexible to change the mode of business. Thus, organizations as well employees want to work into temporary basis. Employees update their knowledge to handle the new job responsibilities. Job rotation and hiring at contract basis have weakening the predictability of day and production amount. But, managers need to supply the market demand instantly otherwise they have to lose the market opportunity. In this situation, managers must be ready to cope with temporariness, flexibility, spontaneity and unpredictability. OB helps managers to understand these concepts and increase the productivity.

8. Working in networked organization

Extending business opportunities have changed the job responsibilities of managers. Today's managers are not confined only to their office, not only to their territory but they have to coordinate, cooperate and communicate to other people of same and other organizations. They have to work with the help of internet, e-mail, chat, video conferences, and software applications. They have to work in project organizational structure with varieties of job responsibilities. Laptops and internet have changed the concept of office. The compulsion of being physically present in office is reduced. Managers must develop their skills to be more effective and efficient. OB helps them by providing valuable insight to gain such knowledge.

9. Helping employees balance work life conflicts

Balancing work and life of employees is one of the increasing issues in human relations in organization. As the number of women worker is increasing significantly who are bearing dual responsibility i.e. home responsibility and job responsibility, married employees need to pay more attention to their partner, and employees with child need to pay more attention to their child as well as partner along with the job. Because of these reasons, internal consumerism is increasing towards peak. Recent researches suggest that employees want the jobs which provide flexibility in their work schedules. So, managers try to manage the jobs at different shifts. OB suggests managers in different ways for designing job workplaces and schedules.

10. Creating positive work environment

Positive work environment is the work environment where job responsibilities are designed as per the interest and knowledge of employees. Managers must try to exploit the strengths of talents of employees. For this, managers need to create such convenient work environment in which employees become ready to contribute as volunteer in knowledge network. OB provides various techniques on the basis of various research studies for developing human strengths, fostering vitality and resilience and unlocks their potential.

11. Improving ethical behavior

Ethical behavior are the act of right conduct. Managers need to improve the ethical behavior by just increasing the right conduct or ethical practices in comparison to previous day. All the employees whether they personally like or not should follow the ethical codes of conduct. Managers on behalf of their organization should be responsible to any unethical conduct either to the consumer or to the government. Thus, managers need to convince all employees to behave ethically. Organizations should prepare and distribute codes of ethics in written from to their employees. Seminars, workshops and training program can be beneficial to improve ethical behavior. OB helps managers to identify, understand and change unethical behavior of employees.

Emerging Trends in Organizational Behavior (OB)

Organizational behavior is the study of human perception, attitudes and behaviors within the organizational work setting. Globalization has integrated the whole world in terms of politics, economy, technology and culture. Globalization increased competition. Organization are now compelled to think in different ways. Organizational behavior is shifting from its initial orientation. Following are some emerging trends in OB.

1. Human centric

Without people, no organization can be assumed. Whatever may be the level of technology and amount of capital, human resources are supposed to mobilize to attain organizational goals. In OB, human resources are taken at the core concept and hence, development of human competencies and potentiality are kept in priority. OB studies about the ways to enhance competencies of employees to increase the overall organizational productivity. Psychology, motivation, behavior, attitude, etc. are the area of study of OB. Negative way of analyzing employee perception, attitude and behavior of employees is replaced by positive way of thinking. 

2. Contingency approach

OB studies the psychology i.e. attitude, behavior, etc. of employees. These factors do not remain fixed at all the situations. OB believes in varieties of practices to cope with problems in different social setting. Thus, before making any conclusion, OB analyzes the situation at the first.

Also read: Leadership in OB: Nature, Qualities, Style, Emerging Approaches, Issues

3. System perspectives

Organizations conduct their activities in open social system. Within the organizations as well, employees works in the social system. Each system is composed with interacting and interrelated sub-systems which collectively help to attain organizational goals. In the same fashion, behavioral relationships are also interacting and interrelated in terms of whole person, whole group and whole organization. This creates synergy effect in organization. 

4. Employee empowerment

In current trend, OB has focused in employee empowerment through authority decentralization and delegation. Self managed teams are highly encouraged. Greater job autonomy and flexible work schedule is recommended in the organization for employee motivation and commitment. Thus, through OB motives, organizational structure, work flow, work design, authority relationship, leadership style, etc. are getting changed. 

5. Goal integration

Nowadays, organizations give priority to the employee's goals as well. Goal integration rather than goal sub-ordination is prioritized. OB has worked a lot for creating employee job fit environment. Job security, career advancement, self managed teams etc. are some of the outputs of OB regarding goal integration. OB currently is in the position that if employees are not convinced for attaining their personal goals, they cannot be motivated to attain the organizational goals. 

6. Focus on intrinsic motivation

Intrinsic motivation is the self induced intensity, direction and persistence of efforts towards attaining goals. This can be different in different individual. Job satisfaction provides basis for intrinsic motivation. In current situation, OB has given emphasis to the intrinsic motivation. OB has focused in team work, flexible work schedule, job rotation, job of self interest, assurance of goal attainment, power decentralization, formation of knowledge network, learning organizations, etc. provide the basis of intrinsic motivation. 

7. Shifting role of managers

In current trend, OB has changed the role manager from powered autocratic administrator to collegial partner. It has emphasized the partner role of manager in the group which should facilitate subordinates rather than ruling directors. Managers delegate the authority on the basis of responsibility of employees.

Also read: Conflict in OB: Outcomes or Consequences, Nature, Transitions, Process, Sources, Types, Dynamics, Approaches

8. Focus on ethical behavior

OB has given emphasis to the ethical behavior. Increasing interest of consumerism, legal compliance, environmental concern, etc. have increased the pressure to managers. OB thus, has focused to the ethical behavior of each individual working in the organization. It suggests for written codes of conduct in the organization. Self discipline is emphasized to regulate employees.

Also read: Change in OB: Process, Planned and Unplanned, Magnitude, Forces, Resistance, Approaches to Managing

9. Managing change

Globalization work force diversity, technological advancement, etc. have forced to adopt different changes in organization. Organizational structure, job responsibilities, technology, etc. need to be changed but employee may not be ready to accept such change. OB has focused for change management.

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