The Fundamental Elements of Organizational Behavior (OB)

Updated Oct 10, 2022.
Elements of Organizational Behavior

Humans are dynamic beings with various characteristics, attitudes, and behaviors displayed in various ways under different circumstances.

Organizational behavior involves carefully studying and understanding people's behaviors or employees working within an organization. 

Without the knowledge of organizational behavior, managers and owners of organizations will not fully understand the people's behaviors in their organizations. They will struggle to optimize employees for the business goals and maximize the enterprise valuation.

This article discusses how the four elements of organizational behavior influence productivity and organizational performance. 

Let’s get started.

Key Elements of Organizational Behavior

Organizational behavior focuses on increasing the productivity level of a company's employees and establishing a work-friendly, safe and positive environment for staff and customers.

The aim is to create an efficient workflow, improve communication, and promote job satisfaction among staff members. 

Organizational behavior is part of the business management process, which focuses on enhancing organizations' performance through understanding and controlling human behavior. 

All the key elements in organizational behavior are jointly knitted and interrelated. They include people, structure, technology, and the business environment where the organization operates.

When people combine to execute tasks and duties, there is a need for a proper structure in the workplace. With the help of technology, the work is carried out with ease and precision. The organization is also largely influenced by its external environment. 

Elements of Organizational Environment
Source: iEduNote

1. People

There is no organization without people. Despite the strong influence of robotics and Artificial Intelligence in most organizations, human resources are indispensable. Every organization is a social environment that requires people to function as they ought to.

People comprise the internal social system of every organization and consist of various individuals and groups. There are no social systems without people. 

People are dynamic with multiple sides, behaviors, and preferences as they interact. They influence each other's opinions and attitudes. People are the employees working in groups or as individuals within an organization, forming the whole working structure.

A group can be in the form of a formal or an informal system, interrelated or complete, and small or large. Groups have the tendency to be formed, change, and eventually dissolve. 

The key difference between a group and a team is that the former share common characteristics while the latter share a common goal. 

People's efforts ensure that the organizations keep functioning. Organizations exist to serve people within their sphere of influence rather than people existing to serve organizations in which they are employed.

The employees in every organization are made up of people and are referred to by different names and titles. Each organization's employees either work alone (individually) or in groups to form the organization's working structure.

Employees are important resources in every company. No company can function effectively without the right employees. Employees help companies to achieve their financial goals and remain productive and relevant in their industry.

Employee Retention statistics
Source: TonerBuzz

Every organization must ensure its employees are managed and treated well to keep functioning optimally. Doing this will ensure the organization can effectively achieve its goals and targets.

Managers must understand and study their employees' nature to enhance their relationships and effectively manage them, enabling them to work better together.

2. Structure

For any entity to function effectively, there has to be a structure. Structures help to define the formal relationships of people within an organization. An organizational structure involves the roles and relationships of various individuals working in an organization.

A simple example of a structure is the human body, with various members and parts required to work together to ensure that the body functions optimally.

In an organization, a structure defines the roles and relationships of every employee. Structures make the division of labor feasible because every individual is vested with specific roles and responsibilities to be carried out.

Organizational Structure
Source: Creately

Some people may perform executive roles, and others may be assistants, supervisors, and basic workers. An organization's structure helps prevent confusion in the work processes and ensures that the right person is assigned to carry out specific tasks.

The structure clarifies the hierarchy, responsibilities, and relationships within the organization. Four basic organizational structures exist: functional, divisional, matrix, and futarchy.

Four Key Types of Organizational Structures
Source: FourWeekMBA

A working structure enables everyone's work in the organization to be directed toward the overall objective and goal. Focus on each employee or group's different jobs and implement different techniques to accomplish the organization's goal and purpose. 

3. Technology 

Technology makes work easy and achievable. Technological advancements have significantly influenced organizations' activities, such as working relationships, staffing, and human resource management.

The great benefit of technology is that it helps to provide both economic and physical resources to enhance work-based activities and make people's work easier and more productive.

Technology is useful for training employees to carry out their duties more excellently. Through technology, employees are provided with machines, tools, resources, and methods designed to enhance their work and decision-making.

Conversely, using technology for organization-related activities can limit employees' liberty and creativity. Using technology to enhance workplace activities requires various terms and conditions that are expected to be followed strictly.

Since technology makes work in organizations easier and more effective than when done manually, employees are likely to get used to such systems and find it difficult to do manual work in their absence.

Technology is important and necessary for work, but its use largely depends on the type of the organization's work and the scale of operations. There are complex tasks that only certain technologies can solve. 

The use of technology has helped various organizations to effectively reduce the cost of production and significantly improve the quality of work done. It also restricts people in various ways while carrying out their designated jobs.

Organizations use business software tools to perform their activities efficiently.

4. External Environment

The external environment is a vital factor that significantly influences organizational behavior. All organizations operate in an external environment which makes them subject to certain external factors.

An organization functions and carries out its activities in a larger social system and is significantly influenced by its external environment, which consists of economic, social-cultural, political, technological, legal, and geographical forces.

Enternal Environment
Source: Vendor-CNX

An organization consists of individuals who play major roles and responsibilities to ensure that the organization runs smoothly. 

Environmental forces influence people's attitudes, motives, and working conditions. On the other hand, the organization also greatly influences its environment. It imports inputs from the environment and exports output to the environment.

The environment plays a vital role in organizational behavior. You can divide the environment into two major aspects: the external and internal environment. These types of environments uniquely influence organizational behavior significantly. 

Every organization is a vital part of a larger system that can influence its activities and vice versa.

An organization is not designed to exist in isolation. Still, it is a major part of a complex system that includes various elements such as the family, governments, societal traditions, and other organizations. All these factors mutually influence each other.  

The internal environment of an organization includes its culture, structure, and resources. 

On the other hand, the external environment of an organization is largely influenced by factors such as the economy, politics, technology, social factors, and culture. All these factors play major distinct roles in influencing the operations and function of an organization.

Each of these factors has its different ways in which they influence organizational behavior to a significant extent. For example, the external environment can influence job satisfaction, employee retention, increased productivity, motivation, and work quality.   

Goals of Organizational Behavior

Organizational behavior has different goals which it aims to achieve.

1. To Effectively Describe Behavior

The primary goal of understanding human behavior is to describe how people behave under different circumstances, situations, and conditions. Through organizational behaviors, managers can acquire and communicate the varied aspects of human behavior.

Organizational behaviors help to effectively define and analyze people's behavior while carrying out their various workplace activities under various organizational conditions.

2. To Understand Human Behavior

Understanding human behavior is the second vital objective of organizations. The aim is to critically assess why people behave in certain ways under specific working conditions in an organization.

Organizational behavior aims to determine the reason for various human behaviors within an organization.

3. To Predict Behavior

Organizational behavior helps to accurately predict the future working behavior of employees within an organization.

Through previously acquired data and information based on organizational behavior, managers can know which employees perform their tasks as they are supposed to and which are not productive.

Based on the information acquired, managers can make informed decisions to increase the efficiency of detecting and eliminating employees that are not performing up to expectation or are not non-sincere and unproductive.

4. To Significantly Control Behavior

With the knowledge of organizational behavior, managers can significantly control employees' behavior to ensure that they perform optimally.

Managers are guided on how best to motivate their employees and prevent them from being worn out due to work, enhance teamwork, reduce stress levels, and develop good friendly relations within the work environment.

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Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.