What is Organizational Behavior and Why is it Important

Working in an organization entails more than just having great skills and relevant experiences. Ever wondered what makes a company bustle? Organizational behavior makes that happen.

What is Organizational Behavior?

Organizational Behavior (OB) is the study of how individuals and the various departments within an organization interact and how it affects the company’s success. 

Most organizations are usually divided into three-tiered levels. At the top, you’ve got the owners who call the shots. In the middle, there are the managers who ensure office operations run smoothly, while the employees doing the bulk of the work are at the lowest level.

Organizational behavior encompasses three layers of analysis: individual behavior—how each person behaves; inter-individual behavior—how they get along with others; and organizational behavior—how the whole company behaves as one. These levels of organizational behavior are relevant for productive teamwork. So, let’s dig in and explore the concept and importance of organizational behavior.

Characteristics of Organizational Behavior

  • Studying organizational behavior helps to understand and predict organizational life.
  • It also helps to understand the viewpoints and activities of people in an organization.
  • It has great need and significance to motivate employees and maintain interrelationships in the organization. 
  • Organizational behavior serves as the foundation for managers to learn how they can produce the best quality work out of their business or organization.
  • Through it, business owners can analyze the behavior of individual employees and direct their work ethic in a productive direction.
  • It covers a wide array of human resources, like behavior, training and development, change management, leadership, and teams.
  • It determines employee’s attitudes toward work principles. It draws a clear picture of how to make your workplace psychologically safe.
  • It helps managers identify the peculiar behavior of employees and manage it.

Read Also: Leadership vs. Management in the Workplace: How Employers Can Understand The Difference and Strike a Balance

Importance of Organizational Behavior

1. Effective Decision-Making

When every employee’s behavior is in check and understood, decision-making becomes easier. Teams are more coordinated and comfortable with their specific roles and responsibilities.

Each team member knows exactly what they should do, and they can take the lead without any problems. Additionally, management can swiftly give out tasks, match them to people’s abilities, and keep an eye on progress without any difficulties.

2. Understanding Employee’s Behaviors

Organizational behavior study helps management understand people, what motivates them, and their skills and abilities. In a team of different people with different perspectives, management needs to understand the subtle differences in work styles if they want to encourage teamwork.

Every team member has personal goals that almost fit into the larger picture of the organization’s goals. The secret sauce for achieving the best results is having a smart organizational structure in place. It’s easier to track progress and fulfill employee needs for the best results.

3. Navigating Workplace Conflicts

An organization works effectively if there is good communication, openness, and trust. The importance of organizational behavior is that it helps teams function with minimal conflict. There’s accountability at every step because tasks are interdependent. 

Organizations also have a code of conduct and certain values that employees must abide by. This regulates the work environment, keeping everyone focused on larger goals.

4. Improved Performance

Motivating employees, giving incentives, and acknowledging their achievements after a work well done are the pillars of organizational behavior. This helps improve work performance because employees are inspired to put their best foot forward and are likely to work harder when they feel valuable to the organization. 

Management must ensure that employees, regardless of their various make-ups, never feel left out to encourage them toward achieving short-term and long-term goals.

5. Healthy Work Environment

The significance of organizational behavior can be understood in the context of a healthy work environment—one where team members trust each other and work in tandem with each other. 

Being on good terms with your coworkers means that you can work together to achieve your objectives. Mutual respect across departments and levels constitutes an effective organizational behavior strategy.

The importance of organizational behavior isn’t restricted to how well employees perform; it also determines the smooth functioning of the day-to-day activities within an organization.

Ultimately, organizational behavior is used to streamline efficiency, improve productivity, and spark innovation to give firms a competitive edge. Hence, management should aspire to create a harmonious, flexible, and accessible work environment.

Models of Organizational Behavior 

1. Autocratic Model

Autocratic leadership is a management style wherein one person controls all the decisions and takes very little input from other group members. Autocratic leaders make choices or decisions based on their own perspectives. There is hardly any teamwork in the organization.

An autocratic organization believes in using power and authority to control its employees. It doesn’t tolerate mistakes or expect disobedience. This model is advisable because employees are even more prone to making mistakes.

2. Custodial Model

The custodial model provides for employees’ dependence on the organization rather than dependence on employers. The model emphasizes economic reward, security, organizational dependence, and maintenance factors. 

The custodial approach leads to employee’s dependence on the organization. Most custodians offer related services such as account administration, distribution of dividends, interest payments, tax support, and foreign exchange management. 

Read Also: What Hiring Managers and Employers Should Know About Job Analysis

3. Supportive Model

The supportive model of organizational behavior seeks to create a supportive work environment and motivate employees to perform well in their jobs. The basis of this model is leadership with a managerial orientation toward support. 

The supportive model depends on effective leadership Examples of supportive models include counselling and therapy that help individuals deal with emotional, psychological, or behavioral issues.

4. Collegial Model

This scheme develops the structure of an organization in such a way that there are no bosses or subordinates; instead, all employees work as colleagues on a team. Each of the employees has to participate and coordinate with each other to achieve the target rate. 

An example of a Collegial model is when employers offer benefits packages such as healthcare, retirement plans, and other incentives. 

5. System Model

The systems model is a process-oriented representation that emphasizes the influences, or flow, of information between modules. A systems model describes how processes interact and what operations these processes perform, but it does not go into details as to how these processes are implemented.

Three Levels of Organizational Behavior 

1. Micro (the Individual Level)

Micro-level organizational behavior focuses predominately on an individual- and group-level processes and phenomena in organizational contexts. It is rooted primarily in the field of psychology. The individual level involves our attitudes, values, and beliefs, particularly toward stereotypes and prejudices. The individual level shapes our perceptions of exercise, sport, and physical activity (socialization).

2. Meso (the group level)

Topics at this level also include communication, leadership, power and politics, and conflict. A group consists of two or more individuals who come together to achieve a similar goal. Groups can be formal or informal. 

The meso level of analysis examines a midrange-sized population. Different communities and organizations of people will also present a range of perspectives on peace, conflict, and violence. The problems of any given city or tribe, for example, may be generalized to issues impacting larger populations or local events.

3. Macro (the organizational level)

At the macro level, organizational behaviorists study how strategies and structures guide organizations and how they adapt. Some of the issues studied at the macro-level are how organizations work within their market and how policies regarding employees and leadership affect the entire organization. 

Two perspectives drive the broad macro campaign: functionalism and conflict theory.

Read Also: Talent Management: How Employers Should Manage Employees Talent in the Workplace

Goals of Organizational Behavior

  • One of the major goals of organizational behavior is to determine the behavior of employees and understand why they act the way they do.
  • Rewarding employees’ hard work motivates them, which helps organizations evaluate and control performance.
  • Another important goal is that it helps management understand employee’s actions first before taking decisions. For example, as a manager, I will have to find out the reason why the junior employee is coming late and going earlier before I take any action against him as per company rules.
  • Predicting the future behavior of employees is another goal of organizational behavior. Usually, managers can predict whether employees are committed to the organization or not.
  • Finally, organizational behavior controls and develops a friendly atmosphere for the organization. Since managers are responsible for the overall performance of an organization, they must develop workers’ teamwork, skills, and commitment. Managers should take the necessary action for themselves.


Organizational behavior is essential for effective staff management. It helps organizations manage and coordinate operations properly. Employees and employers must understand and adopt the principle of organizational behavior for seamless communication in an organization; job seekers shouldn’t be left out of the equation as well.

Finally, collaboration amongst team players is enhanced, and instead of predicting, you can confidently work towards getting a desired outcome or result. To achieve a striving business, organizational behavior should come into play.


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Oluwatitofunmi Olumuwagun
Oluwatitofunmi Olumuwagun
I am Oluwatitofunmi Olumuwagun , an accomplished writer with a unique blend of expertise in human resource management and other niches. With a career spanning several years, I have honed my skills in crafting impactful content that combines professional insights with a touch of creativity.

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