The Six Fundamental Concepts of Organizational Behavior (OB)

Fundamental Concepts of Organizational Behavior

Organizational behavior is based on some fundamental concepts that revolve around the nature of people and the nature of organizations. There are six fundamental concepts of OB and when these concepts are considered together they create a holistic organizational behavior.

These six fundamental concepts or basic assumptions of OB can be studied under two categories – the nature of people and organizations.

1. The Nature of People

• Individual difference
• A whole person
• Caused behavior (motivation)
• Value of the person

2. The Nature of Organizations

• Social system
• Mutual interests

Result: Holistic Organizational Behavior

Now, let’s explore these fundamental concepts of OB and how they make up holistic organizational behavior:

Individual Differences

Every person is unique. From the moment we are born, various factors like genetics, upbringing, experiences, and environment shape who we are. In an organization, recognizing individual differences means understanding that each employee has distinct skills, perspectives, and motivations.

Imagine two employees, Sarah and John. Sarah excels in creative tasks and thrives in an unstructured environment, while John prefers clear guidelines and excels in analytical work. By recognizing these individual differences, a manager can assign tasks that align with each employee’s strengths, leading to higher job satisfaction and productivity.

Impact on OB: Understanding individual differences helps managers tailor their approach to meet the specific needs of each employee, enhancing performance and fostering a positive work environment.

A Whole Person

Employees bring their whole selves to work, not just their skills or knowledge. This concept recognizes that an individual’s personal life, emotions, and overall well-being impact their work performance. It emphasizes the importance of considering employees as complete beings with diverse needs.

Consider an employee, Lisa, who is going through a tough time at home due to a family illness. Her productivity might dip because her mind is occupied with personal concerns. A supportive manager who understands and offers flexibility or resources to help Lisa can boost her morale and loyalty to the company.

Impact on OB: Acknowledging the whole person promotes a supportive and empathetic work culture, leading to increased employee engagement and retention.

Caused Behavior (Motivation)

Behavior in the workplace is often driven by underlying motivations. Understanding what motivates employees – whether it’s financial rewards, recognition, or personal growth – can help managers inspire their teams effectively.

Tom, a sales representative, is highly motivated by recognition. When he hits his targets, public acknowledgment from his manager and an “Employee of the Month” award motivate him to continue performing well. On the other hand, Anna, another sales rep, is driven by bonuses and commissions. Tailoring incentives to what motivates each individual can lead to better performance.

Impact on OB: By identifying and leveraging the specific motivators for each employee, managers can foster a motivated and high-performing workforce.

Value of the Person

Every employee wants to be treated with respect and dignity. This concept emphasizes the inherent value of each person, advocating for fair and respectful treatment regardless of their role within the organization.

Consider a janitor named Mark, who ensures the workplace is clean and safe. When the CEO personally thanks Mark for his hard work and acknowledges his essential role in the organization, it boosts Mark’s self-esteem and reinforces his value to the company.

Impact on OB: Recognizing and valuing each employee’s contribution fosters a culture of respect and equality, enhancing overall job satisfaction and organizational loyalty.

Social System

Organizations function as social systems where relationships, roles, and social interactions significantly impact behavior. Both formal and informal social structures influence how employees work and interact.

In a tech company, there might be formal teams with designated roles. However, informal social groups, like a lunch group that meets every Friday, also play a crucial role in shaping the work environment. These informal networks can aid in collaboration, knowledge sharing, and providing emotional support.

Impact on OB: Understanding the social dynamics within an organization helps managers foster a positive and collaborative culture, where formal and informal interactions contribute to a cohesive work environment.

Mutual Interest

Organizations and employees have mutual interests. Employees seek to fulfill personal and professional goals, while organizations aim to achieve business objectives. Recognizing this mutual dependency is key to creating a harmonious work environment.

An employee, Jack, wants to enhance his skills and career prospects, while the company needs skilled personnel to drive its projects. By offering Jack opportunities for professional development and training, the company helps him grow while also benefiting from his enhanced capabilities.

Impact on OB: Aligning the goals of employees with those of the organization creates a win-win situation, fostering commitment and a shared sense of purpose.

Read More: Directing in Management

Integrating the Concepts

Understanding and integrating these six fundamental concepts of organizational behavior can lead to a more effective and harmonious workplace. Let’s see how they interconnect:

• Individual Differences and A Whole Person: Recognizing that each employee is unique and comes to work with their personal life and challenges allow managers to provide tailored support and resources.
• Caused Behavior (Motivation) and Value of the Person: Understanding what drives employees and treating them with respect can significantly boost motivation and productivity.
• Social System and Mutual Interest: Acknowledging the formal and informal social dynamics within the organization and aligning individual and organizational goals can enhance collaboration and create a cohesive work environment.

Read More: Business Environment – Definition

Holistic Organizational Behavior

Holistic Organizational Behavior (HOB) integrates six fundamental concepts – Individual Differences, A Whole Person, Caused Behavior (Motivation), Value of the Person, Social System, and Mutual Interest – into a comprehensive understanding of how people function within organizations. By viewing the organization as an interconnected system, HOB emphasizes the importance of considering all aspects of human behavior and organizational dynamics.

How These Concepts Create HOB:

• Individual Differences: Recognizing that each employee is unique helps tailor management approaches to fit diverse needs and strengths, fostering inclusivity and personal growth.
• A Whole Person: Acknowledging that employees bring their entire selves to work ensures that their well-being is considered alongside their professional contributions, promoting work-life balance.
• Caused Behavior (Motivation): Understanding what motivates employees allows for the creation of strategies that align individual and organizational goals, enhancing engagement and productivity.
• Value of the Person: Treating employees with respect and dignity reinforces their worth, building a culture of mutual respect and trust.
• Social System: Recognizing the formal and informal social structures within an organization aids in fostering effective communication and collaboration.
• Mutual Interest: Aligning the goals of employees and the organization ensures that both parties work towards common objectives, creating a harmonious and productive work environment.

Read More: Importance of Organizational Behavior

Benefits of Holistic Organizational Behavior:

• Enhanced Employee Engagement: Employees feel valued and understood, leading to higher engagement and commitment.
• Improved Performance: Tailored motivational strategies and supportive environments boost individual and team performance.
• Positive Work Culture: A respectful and inclusive culture attracts and retains talent.
• Better Collaboration: Understanding social dynamics enhances teamwork and cooperation.
• Goal Alignment: Mutual interest fosters a shared sense of purpose, driving organizational success.

Holistic Organizational Behavior offers a comprehensive framework that considers all facets of human and organizational dynamics. By integrating these fundamental concepts, organizations can create a more inclusive, motivated, and productive workplace, ultimately leading to sustained success and employee satisfaction.

Hence, these are the six fundamental concepts in OB and how they work.

Read Next: Fundamental Elements of OB