What Are Some Theories of Organizational Behavior?

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Understanding how people and systems behave is vital to running a successful business as well as developing growing relationships with your employees and customers. Due to how relationships impact behavior, people tend to operate differently within a group or system than they do when they're all alone. Understanding this reality, as well as how to make it work for you rather than against you, can strengthen your business and help you reach your goals and projections more easily.

Organizational Behavior Defined

A good organizational behavior definition simply states that it's the study of how people behave and interact within groups. This includes studying group dynamics, job satisfaction, job performance, creativity, innovation and leadership. In studying organizational behavior, we want to find out what causes people and organizations to thrive and how to implement changes and new strategies to get businesses where they want to go.

While many managers and business leaders already think about these things on a regular basis, organizational behavior theories can help to speed up problem-solving and more quickly produce results. When your team is behind in meeting projections and you need a solid plan, it's a relief to know there's a solid body of knowledge there to help you craft a plan and proceed with confidence rather than trepidation.

Complexity Theory and Organizational Behavior

If you've ever sensed that your solutions and ideas about team structure are more rigid than reality, complexity theory could offer you an alternative way of doing things. An organizational behavior definition of complexity theory in business settings states that companies and workplace teams are more dynamic than rigid. Instead of functioning like a machine, they function as dynamic ecosystems, where every part impacts and is dependent on the other parts in order to be successful.

In this theory, when seeking to increase performance on a team, you'd consider each team member's relationship with one another as well as with the team as a whole. Your team members' level of engagement and role can shift over time with new projects, illnesses, the introduction of new team members, new policies and more. Instead of crafting rigid ideas about how the team must function forever, complexity theory leaves room for a certain level of dynamic flexibility and change.

French and Raven's Five Bases of Power

Most people who have ever worked in a corporate system or business have probably noticed that some people hold more influence than others in the organization, and the level of influence doesn't always correspond with their official title. An organizational behavior definition of power is often more dependent on relationships than titles.

In French and Raven's five bases of power, there are five identified sources of power that could help you figure out who has the most influence in your organization:

  • Legitimate: Those with legitimate power are those who actually do hold the titles of power within your organization. These are managers, team leaders and executives. How much power they have depends on whether they also gain power from the other sources listed here or team up with others who do. 

  • Reward: People who have this kind of power earn it through their ability to reward others for doing what they're supposed to do. Reward isn't always financial. Often, it comes in the form of positive reinforcement or cheering others on. 

  • Expert: Most professional settings have someone in the mix who's famous for being incredibly knowledgeable and skilled at what they do. When others need information, they go to the expert who helps them learn what they need to know in order to succeed. 

  • Referent: Referent power comes through the ability to relate with others and practice incredible relational skills in the workplace. These individuals are well liked and respected because of who they are, their personality and their ability to unify people across their differences. 

  • Coercive: People who have coercive power tend to be the company manipulators who don't always have the best people skills. In contrast to those who have power through reward, these characters accumulate power through emotional punishment of others. These are generally not the healthiest people to team up with in your leadership, although awareness of them is important to managing them so they don't stand in the way of those who hold more positive and helpful forms of power.

Hybrid Organization Theory

Hybrid organization theory argues that people no longer have to choose between being an altruistic nonprofit or being a for-profit enterprise. In the organizational behavior definition of a hybrid organization, a company can be both altruistic and make a profit, as can teams and individuals within an organization. This model for organizational development and behavior is becoming more common with companies like Toms, Sevenly and Pura Vida paving the way.

Even if your company isn't an official hybrid organization, you can include these principles into the strategies you employ for managing your team. Consider organizing a team effort to make a difference for homelessness, human trafficking or another cause. As you reach certain team goals, your reward can be the opportunity to give back together.

Informal Organizational Theory

Of all the organizational theories, the informal theory is the one that best recognizes that there are often hidden systems within formal company structures. These informal organizations are the friendships and relationships formed between people in the organization. Suzy in accounting might eat lunch with Joe the CEO and become best buddies with Erica in the legal department. The three of them end up going on vacation together or enjoying weekend fun. This is an informal organization within the company.

If Suzy has a legal question about accounting, Erica is likely to help her out and Joe will probably back up whatever decisions the two of them make together. As a business leader, it's important to take note of friendships and other alliances that form within your organization. These informal alliances can help you to better achieve your goals. They can also stand in the way of them when they're not healthy.

Resource Dependence Theory

Most product-based industries are well acquainted with the resource dependence theory. This theory states that performance is often influenced by the availability of outside resources. For instance, the toy manufacturer relies on toy wheels from China to manufacture its toy cars. This can even be an issue in service professions like when quality internet signals determine whether or not a life coach can meet with clients on Zoom.

Some organizational behavior professionals also consider customers to be a resource. Without customers, your business can't thrive, so to ensure you're thriving, it's vital to maintain several streams for acquiring and retaining customers. When there are multiple sources available for attaining the resources needed for a business to thrive, this creates the security necessary for the people within the system to thrive.

Team Management Flexibility

No matter what organizational behavior theories you subscribe to, it's important to lead your team intentionally with focus and heart. If you find that one theory isn't helpful in your setting or isn't producing results, look into incorporating multiple theories into your leadership approach. For instance, some of the best managers recognize that there are internal systems (informal organization theory), outside influences (resource dependence theory), differing sources of power (French and Raven's five bases of power), ways to make a social difference (hybrid organization theory) and that things are always in flux (complexity theory).

Understanding Systems with Mintzberg's Organigraph

When attempting to use more than one theory of organizational behavior and understand how the complex systems in your business work, one of the most helpful tools could be Mintzberg's organigraph. Unlike organizational diagrams that only picture the hierarchical structure of the company, an organigraph also shows relationships, dynamics and patterns of communication between departments, teams, individuals and even outside suppliers.

In other words, instead of drawing the company's structure, when you create an organigraph you show how it actually works. For instance, in the engineering department of a telecommunications company, an organigraph would use hubs and webs to show how planning engineers interact with field engineers, upper management, customers and even that they go out to lunch with suppliers. If someone from the sales department wants information on suppliers, this organigraph would show them that the best person to call would be a planning engineer. A traditional organizational chart wouldn't show any of this.

Five Functions of Management

The study of organizational behavior recognizes the important role of management in leading their teams to success. You can incorporate organization behavior theories as you go about the five functions most essential to managing your team:

  • Planning: In this stage of organizational behavior management, you're surveying the situation and dynamic while coordinating with others to determine which theories or tools would best help you lead your team to success. 

  • Organizing: During the organizational stage of managing your team, your job is to ensure the necessary tools, resources, systems and financial support are in place to affect the necessary changes. 

  • Commanding: Commanding isn't about shouting out orders but rather clearly conveying the plan and how things are going to work moving forward. In this stage, you're also answering employee questions and ensuring everyone is on the same page. 

  • Coordinating: During the coordination stage, you're responsible for tending to group dynamics in such a way that creates momentum and ensures everyone is moving in the same direction. 

  • Controlling: The controlling stage isn't about controlling others but rather controlling outcomes. During this stage, you ensure expectations are realistic, examine results and make any changes necessary to improve outcomes. 

Organizational Behavior and Management Style

Whether you're commanding or shy, bubbly or down to business, the concepts and principles of human behavior in an organization setting, as well as the five functions of management, can apply to you. As long as you understand where your own strengths and growth areas are as a leader, you can plan around them and incorporate others on your team who make up for your deficits. Remember that management and organizational behavior is about relationships most of all, so keep your relational skills sharp and you're more likely to navigate the road to change with grace.

When to Seek Outside Help

While understanding your team and the organization behavior dynamics that are at play within your company can help you lead your team to success, sometimes outside help is needed. If you've tried your best but things aren't improving, consider looking for an organizational behavior specialist. Someone in your company's human resources department could be trained in this or you could hire an outside consultant to come in and analyze the dynamics in your organization and craft a plan to help you move forward.

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About the Author

Anne Kinsey is an entrepreneur and business pioneer, who has ranked in the top 1% of the direct sales industry, growing a large team and earning the title of Senior Team Manager during her time with Jamberry. She is the nonprofit founder and executive director of Love Powered Life, as well as a Certified Trauma Recovery Coach, certified HRV biofeedback practitioner and freelance writer who has written for publications like Working Mother, the San Francisco Chronicle, the Houston Chronicle and Our Everyday Life. Anne works from her home office in rural North Carolina, where she resides with her husband and three children.