The Importance of Organizational Behavior to Effectively Manage a Business

About this sample

About this sample


Words: 3956 |

Pages: 9|

20 min read

Published: Mar 17, 2023

Words: 3956|Pages: 9|20 min read

Published: Mar 17, 2023

Table of contents

  1. Introduction
  2. Organizational Behavior
  3. Organization Theory
    Organizational Design
    Management and Leadership
  4. Why is ethical leader behavior, decision-making and social responsibility needed in business organizations?
  5. What are the key elements related to employee motivation?
  6. System
    Human Resources
    Employee Behavior
    Intrinsic and Extrinsic Motivation
    Mechanistic and Organic Organizations
    Conflict Management
    Working Environments
  7. Conclusion
  8. Recommendations


In today’s competitive business market there are increased challenges related to workforce diversity, increased concerns about ethics and how to encourage workers to work together. There is a need to for a more balanced approach by organizational leaders, management teams, and human resource professionals to understand what behaviors affect organizations negatively or positively. Understanding organizational behavior is a subject that really needs to be discussed more in today competitive business market. The historical significance of organizational behavior should never be underestimated or ignored. It’s very important for business professionals to understand others behaviors and make others understand the goals of an organization. Organizations need to know how words impact people, make them feel, think, act and respond to feedback in the workplace. Organizational behavior can be defined as an approach to understand how to manage business performance, employee motivations, and organizational culture. Most managers are ineffective change agents because they fail to communicate with employees, focus on individual employee needs, use the correct motivational tools and forget to learn about the organizational culture within their departments. The focus of this research paper will be to explore the organizational components that revolve around organizational leadership, structure, employee motivation and their impact on business performance. In order to effectively and efficiently manage a business, the study of organizational behavior is very essential. Implementing and monitoring organizational behavior in the business environment of organizational isn't just about boosting business' operations. It’s about how do we improving morale, increase communication, align our structure and gain control over outside influences. According to Draft. (2016) a knowledgeable manager can shape an organizing and have a significant impact on their lives.

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Organizational Behavior

The study of organization behavior helps us understand like saints or sinners according to a person’s behavior pattern. It helps us understand employee better and control their behavior in the business environment. The financial success of every business is determined by employee performance, sound decision making based on data and consumer satisfaction. The following organizational principles of organization theory, design and management will further assist the reader in understanding the importance of organizational behavior.

Organization Theory

Organization theory’s main purpose is to analyze the nature of a business, determine if the right structure is in place, how to manage change and how different cultures operate in modern business. Research by Haveman and Wetts (2019) study social cohesion by Marx and Engels in regards to how individual social classes struggle with alienation and exploitation in the business sector. According to Haveman and Wetts (2019) organizations are a fundamental collection of people, visible assets, business resources, and information about people who share the same common goals. Organization theory says culture dominates every organization and shapes the way volatile behavior issues are communicated and handled by employees. Haveman and Wetts (2019) article reflects on social structure, demographics and cultural concepts associated with organizations. Organization theory also explains individual or group behaviors of people we interact with to accomplish internal and external business tasks. The authors believe human activities are best organized and managed by managers through rational decision making, clear goals, and defined standards.

Organizational Design

According to Draft (2016) organization design is an analysis of management concerns in regards to the external environment and structure of an organization. One thing we know for certain about businesses is that they continually change to remain competitive. Business or organization operation changes happen more frequently due to policy, strategy and performance adjustments. Whenever a design change happens it’s important to notified employees and ensure they understand the reason for the change. According to Vantrappen and Wirtz (2018) the challenge for managers is explaining that frequent change is normal and beneficial for the organization. Failure to properly convey your message to employees may cause cynicism and leave people confused. According to Vantrappen and Wirtz (2018) organization design is similar to a system of checks and balances that revolve around the concept of structure, processes, people, technology and culture that address organizational effectiveness and efficiency. During periods of changes managers need to apply a systematic approach that align resources, structures, processes and place people in the correct positions to positively impact operations and increase efficiency.

Management and Leadership

Successful organizational change can only happen when there is transparency and honest two-way communication between managers and employees who are willing to devote an adequate amount of time and energy towards new goals. According to Draft (2016) transformational leadership, is well suited for leading change in today’s continually changing economic environment. Transformational leaders have the ability to delve into processes, explore what values impact the organization, experiment with risk-taking, and share ideas to find adequate solutions to improve performance. Leadership is a never-ending challenge for anyone who tries to motivate and inspire people. According to Koohborfardhaghighi and Altmann (2017) leadership is probably the most important factor responsible for shaping organizational success and guiding employees towards corporate goals. Koohborfardhaghighi and Altmann (2017) research also focuses on organizational learning and the need to establish a hierarchy of authority to set goals and direction within the organization. Managers are frequently tasked to apply these goals to different situations and required to learn how to gain a competitive advantage over other businesses. These advantages start with people being given the appropriate resources and training to perform their jobs. Knowledge management, communication, collaboration and information sharing are essential for the creation of new products and services to customers.

Why is ethical leader behavior, decision-making and social responsibility needed in business organizations?

An ethical leader is someone who treat everyone equally and is considered to be fair and just. Ethical leaders do the right thing when no one is looking and remain impartial when resolving conflicts among team members. When it comes to ethics, employees for leaders to take responsibility for both good and bad results. Someone who is kind, sympathetic, fair and easy to talk to. According to Sanders, Wisse, Van Yperen, and Rus (2018) there is a great need for business leaders to focus on employee welfare. All too often some leaders forget to focus on the interest of their employees due to their pride, personal interest and lack of humility. The unethical leaders are the ones we read about in the new and nowadays are caught in some type of corporate scandal. Sanders, Wisse, Van Yperen, and Rus (2018) research suggest unethical behavior by leaders negatively influences supporter’s behavior, the organization and culture.

However, leaders who communicate the importance of holding people accountable according to ethical standards outlined polices will always be respected and successful.

What are the key elements related to employee motivation?

Organizational leadership is defined as “a process of planning, organizing, leading and controlling the effort of team members and resources within an organization with the overall aim of achieving its objectives. Leaders are put into certain positions to get task done and motivate workers to be better. Organizational leader needs to be able to make decisions and resolve issue in order for them to be both effective and beneficial. According to Mikkelsen, Jacobsen, and Andersen (2017) an inspired employee is a valued asset, who can deliver great value to the organization in the form of revenue growth. Every organization strives to be successful and achieve long- lasting progress. Only a few organizations believe that the employees of the organization are its main assets. To enhance leadership understanding of employee motivation, managers must understand the constraints employee face in the workplace and differences in individual needs. Managers can gain a better understanding of employee motivation by reading Maslow Hierarchy of Needs. Maslow Hierarchy of Needs discusses employee growth needs, safety, love and esteem. Most employees are rewarded the bonuses or awards to boost employee morale and optimize performance. Employee perks, compensation, and recognition are a few of the key elements of employee motivation. The scripture of John 4:34 is the perfect example of motivation. This particular piece of scripture talks about how our motivation comes from God. We are here on earth to please God through obedience and following the law of the bible


Organizational behavior is looked at as a management that helps reduce to reduce absence, enhance efficiency, decrease employee turnover, enhance internal citizenship and employee job satisfaction. Organizational behavior is designed to teach managers how to effectively handle subordinate and employee behavior in the workplace. According to Gagné (2018) one successful way to control employee and subordinate behavior is through goal setting. Gagné (2018) explains in her research how employee behavior should be translated into goal attainment. These goals can be in the form of education, sports, life or work. The author also talks about how managers should focus on exploitation of intangible resources and human motivation in the pursuit of employee motivation. According to Gagné (2018) organizational goal pursuit is part of a business’s motivational model which is divided into two levels and two stages that ask the question what, why and how. The organizational and individual levels want to know what the goal of the employee and why this goal motivates them. The deliberation stage decides which goals should be pursed across an organization and implementation stage explains how the goal will be implemented, when and where in the organization. It’s important for managers to develop a strategy and timeline for the implementation of goals. The key to organizational success is developed through employees who are driven to always work towards the accomplishment of organizational goals.

Human Resources

Every organizations have a human resources specialist housed in their departments. Human resource specialist where hired to help managers improve employee satisfaction and motivation. Motivation in today’s society is much different than twenty years ago. There is a constant need to identified what motivates young and old employees since our workforce is so diversified. According to Rožman, Treven, and Čančer (2017) businesses today operate in a competitive environment at a worldwide level and are obligatory to improve productivity to remain competitive. It’s imperative that managers keep the workplace satisfied to reduce employee turnover and poor employee performance. It is crucial that management makes employee satisfaction priority number one in their organization. Organization that are able implement corporate strategy successfully and satisfy employee motivation are considered to be very effective and efficient organizations. Research by Rožman, Treven, and Čančer (2017) determined that employees’ motivation can be satisfied easily if the following factors are satisfied. Employee’s want organizations to provide flexible work hours, ensure work is distributed fairly, adequate compensations, training and possibilities for advancement. If these needs are meet, so is employee motivation and satisfaction.

Employee Behavior

Employee behavior can be defined as the way employees conduct themselves in the workplace during business operations. How employees respond to conflict, decisions, and implementation of organizational policies. Employee behavior can damage or help an organization. Employee behavior is shaped in the workplace from beliefs, values, culture and expectations. Customer demands, organizational citizenship, job tasks, technology and internal culture also effect employee behavior. According to Li, Chiaburu, and Kirkman (2017) positive leadership can have a profound impact on employee behavior. Positive leadership is needed in the workplace nowadays as employee expectations change since theirs’s job uncertainty in society due to increased global competition. When managers identify issue with employees try not to fix all the issues at once to avoid overwhelming the employee. Choose a few things to prioritize and work on. Lastly organization need to work on treating employees with dignity and respect. When employees feel disrespected they move on to other jobs and you lose your skilled work and knowledge they brought to the team. Productivity and efficiency will eventually suffer due to the loss of the employee.

Intrinsic and Extrinsic Motivation

As we have discussed previously business success depends on employee motivation which is based on job satisfaction and rewards of some sort. Business’s wants their employees to be viewed as pleasant, experienced, considerate and responsive to the needs of consumers. Managers should be continually encouraging employees to reach personal and organizational goals to make the workplace more productive and exciting. A sharp decline in employee retention has increased organizational demands on human resource specialist to find the best and brightest due to significant advances in technology and decline in product quality. The study of organizational behavior looks at intrinsic and extrinsic behavior of motivation from a micro level within an organization. Research by Kuvaas, Buch, Weibel, Dysvik, and Nerstad (2017) looks at the differt characteristics of intrinsic and extrinsic motivation. The authors examine a top-down reward system developed on positive workplace engagement, employee productivity and task identification. There may be some intangible and tangible incentives that go along with intrinsic and extrinsic motivation. The authors also investigate several outcomes related work performance, turnover intention, attitudes, burnout and work–family conflict to provide a broad perspective on the relationship between the two types of motivation and outcomes. An individual who finds pleasure and inherent satisfaction in a task they perform is considered to be motivated by Intrinsic motivation. An individual however, who performs well due to an incentive or to avoid some sort of negative consequences is motivated by extrinsic motivation. Research has also found that most intrinsic and extrinsic motivated employee want to be included in organizational decision making. Kuvaas et al., (2017) research found the following:

It is important that employees are invited to participate in decision-making, that managers listen to them and are able to take their perspectives, that employees are offered choices within structures, and that they receive both positive feedback when they take initiative and nonjudgmental feedback when they have problems. (p. 244)

While intrinsic and extrinsic motivation can coexist for different individuals in relation to certain task, they are inherently separate motivational measurements, and the impact of one will probably dominate the other. When managers look at control employee behavior through intrinsic and extrinsic motivation the job performance of the task can be improved with incentives such as a bonus or time off.


Every business organization has some sort of reporting structure for its employees. Business organizations need structure just like the military chain of command to be build strong to ensure sound decisions are being made about future of an organization. Organizations need a centralized or decentralized control system. The two most talked about systems are mechanistic and organic organizations. These systems can be affected negatively or positively by culture and internal conflict within an organization. Within the healthcare industry each department carry’s out specific tasks and functions that satisfy the needs of patients. Doctors, nurses, and admin staff all have responsible functions to complete in a hospital setting. These departments or professional would not be able to complete their various functions without a reporting structure and open lines of communication. When structure is not aligned correctly the needs of the patients, goals and performance of the organization suffers. Acts 20:28 teaches Christians to look out for people. Acts 20:28 tells readers of the word to “pay careful attention to yourselves and to all the flock, in which the Holy Spirit has made you overseers, to care for the church of God, which he obtained with his own blood” (ESV). God instructs the pastor or CEO to guide people, look over his or her congregation, save the souls of non-believers and employees.

Mechanistic and Organic Organizations

Businesses around the world have a system of power, governance and authority. Developing an appropriate design structure will allow an organization to implement operating and decision-making procedures that will help an organization accomplish its goals. Hospital and retail manufacturers are examples of structures that choose organization structures that are appropriate for their individual needs and allow the companies to react, adapt to uncertainties and changes in their environment. Most business functions are managed through either a mechanistic or organic design structure. Mechanistic and organic design evolved the past functions of bureaucratic design. According to Draft (2016) a mechanistic design means that an organization has a clear hierarchy of authority, standardized rules and written procedures. An organic design has looser control, no written rules, is free flowing and adaptive to change in its environment. Structure, organization, communication and hierarchy are important parts associated with each design. Research by Kessler, Nixon, and Nord (2017) identified Burns and Stalker’s contingency theory as a widely cited piece of management literature about discusses the relationship between organic and mechanistic structures. Each structure depends on the following variables: organization; centralization; structural complexity, planning, training, information flows, and culture. According to Kessler, Nixon, and Nord (2017) some managers engage unethical behaviors and make bad decisions that impede the purpose of organic and mechanistic structures.

The military and airline industry are perfect examples organizations that have a distinct hierarchy, rules and guidelines that rarely change. After reading and analyzing the data in the article it’s fair to say that mechanistic structures favor upper management decisions-makers and organic views the individual worker being more important.


Every nation, race and business corporation have its very own personality, symbols, shared values, beliefs, and brand of culture that influence organizational decisions and actions. Changes in economic globalization and tradition have forced companies to rethink how they conduct business. Most positive or negative business outcomes are a direct result of culture within an organization. According to Draft (2017) organizational development is one method used by managers to quickly change organizational culture and balance diversity in the workforce. Organizations should always be thinking about change and have their sights on the future. Our workforce is so diversified and part of multi-national companies where people speak different languages and share opposite beliefs. According to Mathew (2019) there is a rise scholars and corporations wanting to understand organizational culture. Organizational cultures effectiveness is driven by the assumption that performance is measured on the four dimensions of mission, consistency, involvement and adaptability. Under these dimensions performance and revenue have increased according to the Matthews (2019) research. According to Farrell (2019) small societies for example like a library have an effective set of behaviors with unique patterns, values, and culture of communication. Effective leaders need to learn the operational framework of their organization in order to be successful, change culture and fully support strategic goals. It also a long-term process that requires continues adaptation to change.

Conflict Management

Conflict between individuals and co-workers will always develop in any organization. Managers, supervisors and ordinary workers need to learn how to deal with conflict when it arises and before it happens. There are number of cultural differences in that effect harmony in the workplace such as language, dress appearance, and different nationalities, race and ethnicity. These differences also appear in society among different social classes, people with disabilities, gender, and political and religious affiliations. According to Hwang and Chung (2018) it’s important to develop positive business relationships to avoid conflict and provide employees a conflict free climate to work. Hwang and Chung (2018) believe the most effective way to manage conflict, is to make sure you have the right people employed in your organization.

Working Environments

Positive working environments are essential for owners and managers to provider to employees. Employees who work in a clean and conflict free environment work harder and less likely to quit. A great work environment promotes productivity, performance and organizational sustainability. According to Lee and Ha‐Brookshire (2018) there are major dimensions of diversity and religion in the workplace. Organizational citizenship behavior is another behavioral component that shapes the personality of organizations. Employee who feel valued will work hard and for the benefit of a company. Philippians 3:20 talks about citizenship. Philippians 3:20 say “our citizenship is in heaven, and from it we await a Savior, the Lord Jesus Christ” (ESV). The piece of scripture talks about our relationship with God and fellowship inside the church under the rules outlined in the bible.


Due to the expansion and challenges associated with globalization its more important than ever for managers to become involved in organizational change. Organizational behavior requires a large amount of interaction people from different backgrounds, cultures, beliefs and values. Manager who are able to engage employees, improve work relations, set realistic expectations and reduce employee work stress have proven to be more successful and productive. Organization behavioral has proven to be very challenging business concept and is relevant in all organizations. It important for managers to learn and control human behavior inside and outside the organization. Hopefully this paper familiarizes the reader with concepts related to organization behavior. In addition, readers should have gained a better understanding about culture, organization design, employee motivation, and citizenship behavior. According to Foss (2019) organization can achieve their mission systematically if all structures, processes, people and practices are properly aligned.

According to Groen, Wilderom, and Wouters (2017) employee commitment is an important job performance measure that can be increased when employees are allowed to provide feedback on measures that affect their job. This will lead to high scores on organization surveys that measure job satisfaction and employee motivation. There will be a major shift in thinking of organizational leaders and managers in the coming years as people learn to adapt to new technology and growing business competition across borders. Managers that can embrace diversity and inclusion have the ability to breakdown cultural barriers and increase social awareness among employees. Employees should feel obligated to perform and trust their leaders to take care of their needs. Researchers argue that citizenship behavior should be the focal point for any individual or organization's sustainable success. According to Burton and Obel (2018) a good organization should be designed from empirical evidence found through decades of research. The organizations design should address modes of communication, control, and methods of decision making. Foss (2019) believe these organizations should have a hierarchy of top-down leadership that understands the cost and benefits of business.


Some preliminary recommendations for any organization that experience high or low performance or productivity would be for manager to become more engage in their organizations. Eliminate conflicts by effectively sharing information, provide rewards and encourage knowledge sharing. Managers need to work on increasing employee retention and find different ways to boost morale. Ensure employees are aligned with organizational policies that build a culture of inclusiveness.

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  • Focus on a two-way communication system so workers can express their views and ideas.
  • Provided an organic culture or environment that supports innovation and provides professional growth opportunities
  • Reward and recognition policy must be implemented to encourage the workforce excellence.
  • It is recommended that managers take on challenging leadership jobs that embrace diversity.
  • Organization should develop mentorship programs that improve the overall experience of employees and managers.
  • Implement program that promote work life balance.
  • Employee should be required to complete cultural diversity awareness training annually.
  • I would recommend that managers hold quarterly training on performance management.
  • I would recommend that human resource promote intrinsic and extrinsic motivation in employee workspaces.
  • I would suggest that obsolete policies and procedure be review and canceled if they are no longer applicable to the organization.
  • Tuition assistance should be offered to employee who wish get advance degree’s that will benefit the organization.
  • I would recommend organizational structure be studied and like services be combined on a new organizational chart.
  • Personality test should be administered to new hires to determine if they are a good fit for the organization.
  • Put checks and balances in place that hold the organization and employee’s accountable for performance.

There is a great deal of theories, special training and solutions to help increase employee motivation, productivity, and control employee behavior. According to Dedahanov, Rhee, and Yoon (2017) organizations should become engage in activities that develop employee competencies. This innovate behavior will excite ideas from employees that will help companies outperform their competition and satisfy customer expectation. Research by Giacosa, Mazzoleni, and Usai (2018) believe business process management should be considered when looking at technological, organizational and administrative innovation. The study of organizational behavior is an effective and reliable management tool that can help organizations improve team work, decision-making and provide manager with best techniques to businesses into the future.

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The Importance of Organizational Behavior to Effectively Manage a Business. (2023, March 17). GradesFixer. Retrieved July 15, 2024, from
“The Importance of Organizational Behavior to Effectively Manage a Business.” GradesFixer, 17 Mar. 2023,
The Importance of Organizational Behavior to Effectively Manage a Business. [online]. Available at: <> [Accessed 15 Jul. 2024].
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