BUS209 Study Guide

Unit 1: Organizations in Business

1a. Define organizational behavior (OB)

1. It's important to understand what organizational behavior is, and your understanding begins with your ability to define it.

  • Define organizational behavior in your own words in one or two sentences.
  • The study of organizational behavior is based on many traditional behavioral sciences. Identify these sciences, and explain how they are used in studies on how organizations behave.

Are you comfortable with your ability to state what organizational behavior is? Can you demonstrate how our understanding of organizational behavior draws on other, established behavioral sciences and why it is important in evaluating OB's current studies?

This is a good point to review What is Organizational Behavior?.

2. When studying any organization, we need to understand its structure. Think of the classic representation of an organization, which details the various levels such as president, vice presidents, directors, and so on down the ranks. Much of our discussion on OB will involve looking at these various levels and understanding how they influence and impact those above and/or below.

  • Find some examples of different organizational structures. Don't just look at public, for-profit firms, but also consider private and not-for-profit organizations. Write three to five sentences to discuss what organizational structure you would like to be a part of and why.
  • Now that you are looking at some companies, ask yourself why an understanding of OB matters? Firms spend a great deal of time and resources on this topic. Can you list some reasons why this understanding is important?
  • If you were about to invest your own time and money to launch a new business, are there some OB ideas that you would want to include as you build the business?

There are a few points made in this unit that you should review:

  • "People are definitely a company's greatest asset. It doesn't make any difference whether the product is cars or cosmetics. A company is only as good as the people it keeps." – Mary Kay Ash, founder of Mary Kay, Inc.
  • In its 2007 Job Outlook Survey, the National Association of Colleges and Employers (NACE) noted that employers sought these skills more than any others:
    1. Communication skills (verbal and written)
    2. Honesty/integrity
    3. Interpersonal skills (relates well to others)
    4. Motivation/initiative
    5. Strong work ethic
  • Healthy organizations, in terms of OB, exhibit role clarity, information sharing, and performance feedback. In these terms, 50% of business organizations today are "unhealthy".

3. We have discussed the importance of studying OB for the benefit of you, your employer, and the organization itself. But how do we actually go about conducting these 'studies'? As a consumer of thousands of products, you realize that the companies involved are constantly conducting studies to determine what you want, need, and what you are willing to pay for their products or services. We are interested in conducting studies to understand more about how organizations work, what can increase their effectiveness, what contributes to a more productive workforce, and any number of additional factors that can help improve the health of our organization.

  • Define each of the following forms of research: surveys, field studies, laboratory studies, case studies, and meta-analysis.
  • List an OB issue that can be addressed by each of these forms of study.
  • Consider the various measurements that may result from your studies.

Read Understanding How OB Research Is Done to answer the above questions and prepare for the final exam.


1b. Relate organizational behavior to organizational success

1. There has been a great deal of discussion over the years on the importance of employee engagement as a determinant of firm success. The higher the level of employee engagement, the higher the level of customer satisfaction, employee satisfaction, and financial return.

  • Define employee engagement.
  • Take a moment and think about when you were really happy with a job and a time when you were not so happy. What were some of the factors that contributed to how you felt in each of those situations?

To better understand the importance of employee engagement in firms today, see A Dialogue with Tim Clark and David Zinger.

2. Everyone can see the effects of technology on business. The rapid changes in technology have impacted how we communicate internally and externally, produce goods/services, and reach markets, both domestic and foreign.

  • Consider one technology that we are all familiar with, namely e-mail. Consider this: 100 million American adults used an email system at least once a day in 2006, and that same year, Internet users worldwide sent approximately 60 billion emails each day! And that was ten years ago!
  • Identify 5 benefits to this technology for a business.
  • Identify 5 disadvantages to this technology for a business.

3. In the past, technology was considered an entry barrier against competition. In other words, companies that invested heavily in various forms of technology made it more difficult for competitors to enter their markets. Now, this barrier has been lowered or eliminated.

  • See if you can identify three examples of firms that created a barrier to entry for their competitors in the past couple of decades.
  • Now, identify at least three new forms of technology that have made it easier for new companies (start-ups) to enter markets. Write a short paragraph on each, explaining how a company can benefit from using this technology.

4. The more we know about OB, the better managers and leaders we can become.

  • Watch Why, What, and How We Study Behavior in Organizations. What was one thing you learned about OB from Rotter's story about her weekend trip?
  • Let's assume that you are stepping into a new role as an executive of a local company. What specific behaviors would you like to see in this organization that you believe could help you be successful?


1c. Identify and analyze current trends in organizational behavior

1. Regulations for environmental protection have a massive impact on the business community, and this is reflected in products and services that support the ideas of sustainability and "going green".

  • Define sustainability, and provide an example of how this has been integrated into a business.
  • What does the term 'going green' mean to you? List a few companies following this program, and provide examples from their product/service offerings.

2. One topic that has generated a large amount of research and discussion is the clash in cultures between the older generation and Millennials. The differences in generations can be a huge benefit to firms and/or a source of conflict.

  • How would you define Baby Boomers?
  • How would you define Millennials?
  • List some of the benefits and concerns that Baby Boomers bring into your company, and do the same for Millennials. If this was your company, what would you do to emphasize the benefits and reduce the conflicts?

3. We are now participants in a truly global economy. The good news is that you have access to more markets and customers than ever before. The bad news is that you are faced with more competition than ever before. This needs to be a part of any business's strategic plan.

  • There is plenty of discussion about outsourcing, both positive and negative. Let's start by defining this term.
  • No discussion of the global economy would be complete without some reference to offshoring. How would you define this activity?
  • Discuss how you feel about these two activities. Would you consider them to be beneficial to the firm? What about the company's employees? Are there any ethical issues you can identify with these practices?

Review Trends and Changes to learn about globalization, multiple generations in the workforce, environment, sustainability, and technology in the workplace.


1d. Differentiate among different types of diversity and the benefits of each to organizations

1. No discussion on OB can occur without including the issue of a diverse workforce, customer base, or management team.

  • How would you define diversity? Explain the benefits that come from a diversified organization.
  • As a business executive, what would you do to encourage diversity in your company?

2. Companies today recognize the benefits that they can realize from having a culture that supports diversity. However, it is not always so easy to achieve diversity.

  • What steps might you take to ensure that everyone in your company sees the benefits of diversity and integrates diversity into the company culture?
  • There are many benefits to diversity for a business. These include increased creativity, better customer service, improved employee satisfaction, better financial performance, and lower legal costs. Create a chart that provides examples of each of these benefits, using research on different companies.

As you can see from your readings and research, diversity has real benefits for business in many ways. However, recognizing the benefits and actually achieving diversity are two very different topics. Diversity will not just occur in the normal conduct of business but results from an organization's leaders being proactive in pursuing a truly diverse firm.


1e. Discuss globalization and the cross-cultural challenges of the workplace

1. We have already discussed globalization and the implications that a global marketplace can have on any business. Part of improving our understanding of the issue is recognizing that the world is made up of many cultures that are quite different from one another. We now have a new area to consider in our diversity plans.

  • This chart summarizes some basic differences that exist between various cultures. Review the definitions of individualism, collectivism, power distances, uncertainty avoidance, masculinity, and femininity.
  • If you have traveled to any foreign countries, can you recall any instances when you observed these differences? If you haven't traveled outside of your home country, do some research on this topic so that you can feel comfortable with the issue?
  • Now that you have gained an appreciation for some of the cross-cultural challenges, can you discuss how you would address these challenges in your company?

Many companies today, both large and small, are going to be conducting business around the globe. If your company has a dynamic, positive, and effective global strategy, you will need specific plans for addressing cultural diversity. A very interesting way to compare cultural attributes is available at Hofstede Cultural Framework.


Unit 1 Vocabulary

This vocabulary list includes terms that might help you answer some of the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

  • affirmative action
  • ethnocentrism
  • organizational behavior
  • attitude
  • experimental design
  • outsourcing
  • case studies
  • faultline (diversity)
  • power distance
  • causation
  • field studies
  • reliability
  • collectivistic cultures
  • flat organizations
  • similarity-attraction phenomenon
  • control groups
  • glass ceiling
  • stereotypes
  • correlations
  • human capital
  • surface-level diversity
  • cross-functional
  • hypothesis
  • surveys
  • cultural intelligence
  • individualistic cultures
  • sustainability
  • culture
  • interpersonal skills
  • treatment group
  • deep-level diversity
  • laboratory studies
  • uncertainty avoidance
  • diversity
  • meta-analysis
  • validity
  • earnings gap
  • millennials
  • variables
  • employee engagement
  • motivation
  • ethics
  • offshoring