How can OB help you in your organization as well as personal life? Current organizations have started posing human capital as a competitive advantage. Why should an organization give this a consideration?

Organizational behavior (OB) is defined as the systematic study and application of knowledge about how individuals and groups act within the organizations where they work, it refers to the study of individual, group performance, and activity within an organization, which specifically deals with how people and groups behave in organizations.

Organizational behavior shows the important key points as Regulatory, and Radical. Basically, Regulatory helps to draw what goes on in organizations, possibly to present minor changes that might improve them, but not to make any basic judgment about whether what happens is correct or incorrect. Radical tends to make judgments about the way that organizations ought to be and provide recommendations on how this could be accomplished. Traditional organization used to practice Regulatory while new modern organization tends to act Radical. To well organize in budget controlling, new modern organization in today doesn't willing to give a long time for bank credit card's salesperson to hit their sales target. New modern organizations urge to get the results from salesperson whereas the salesperson should hit their monthly sales on time and accurately, if the salesperson failed to hit the target continuously in few months, employers reserved the rights to terminate the employee. Conversely, traditional organizations used to act Regulatory whereas Hire and Fire policy will never be the options for a traditional organization to behave. Employers are patient enough and they're willing to spend times to educate, guide, and monitor an employee's performance.

Organizational Behavior (OB) is the study of human behavior at organizational settings, the interface between human behavior and the organization, and the organization itself. Organizational Behavior researchers study the behavior of individuals primarily in their organizational roles. Organizational Behavior has included two terms in it. Therefore, these two terms should be detailed first before diving into the title in question.

Organization is a group of people who are collected to work for a common goal with collective efforts. Organization works through two concepts i.e coordination and delegation among its group members. Delegation is necessary to allocate group members with equal work according to their capability, and coordination is required to achieve organizational goal with precision.

Behavior  is a verbal or physical response shown by a person as a consequence of the impact of his/her surroundings. Individual Behavior varies in accordance with their mental reactivity to particular circumstances because of their deeply imbibed morals and value system.

Organizational Behavior is the observation of individual and/or group Behavior in response to the other individuals or group as a whole. It studies Behavior of people or group to know their attitude towards particular circumstances.

Based on (Taylor, 1911: Fayol, 1949), the orthodox view in organization theory has been based predominantly on the metaphors of machine and organism. The metaphor of a machine underwrites the work of the classical management theorists. According to Figure 1, it draws the three concepts for understanding the nature and organization of social science, which is Paradigms, Metaphors, and Puzzle Solving. Metaphor plays an important role in organization behavior. Metaphor is frequently regarded as no more than a literary and descriptive device for embellishment, but more fundamentally is a creative form which generates its effect though a crossing of images.

Origin of Organizational Behavior can trace its roots back to Max Weber and earlier organizational studies. The Industrial Revolution is the period from approximately 1760 when new technologies resulted in the adoption of new manufacturing techniques, including increased mechanization. The industrial revolution led to significant social and cultural change, including new forms of organization. Analyzing these new organizational forms, sociologist Max Weber described bureaucracy as an ideal type of organization that rested on rational-legal principles and maximized technical efficiency .In the 1890’s; with the arrival of scientific management and Taylorism, Organizational Behavior Studies was forming it as an academic discipline. Failure of scientific management gave birth to the human relations movement which is characterized by a heavy emphasis on employee cooperation and morale.

Human Relations Movement from 1930’s to 1950’s contributed in shaping the Organizational Behavior studies.

Works of scholars like Elton Mayo, Chester Barnard, Henri Fayol, Mary Parker Follett, Frederick Herzberg, Abraham Mas low, David Mc Cellan and Victor Vroom contributed to the growth of Organizational Behaviour as a discipline.

Works of scholars like Elton Mayo, Chester Barnard, Henri Fayol, Mary Parker Follett, Frederick Herzberg, Abraham Maslow, David Mc Cellan and Victor Vroom contributed to the growth of Organizational Behaviour as a discipline. Herbert Simon’s Administrative Behavior introduced a number of important concepts to the study of organizational behavior, most notably decision making. Simon along with Chester Barnard; argued that people make decisions differently in organizations than outside of them. Simon was awarded the Nobel Prize in Economics for his work on organizational decision making. In the 1960s and 1970s, the field became more quantitative and produced such ideas as the informal organization, and resource dependence. Contingency theory, institutional theory, and organizational ecology also enraged.

Starting in the 1980s, cultural explanations of organizations and organizational change became areas of study. Informed by anthropology, psychology, and sociology, qualitative research became more acceptable in OB.

The behavior of the customer helps the organization to decide what products and services to be offered. When an organization builds a strong connection with the customer, an organization will get an idea about the customer needs. With the help of OB we can understand the behavior of customers. OB helps employee as well as customer reviews on a regular basis to discuss the improvements. With the better knowledge of OB, managers can use various organizational behavioral skills to better perform their duties and responsibilities. OB helps to managers to maintain a professional dignity between his staff and himself.  

Time Management helps the managers to establish department goals and determine the objectives to reach those goals on deadline. OB helps the manager on effective time management. There should be a regular communication between the managers and employees. Managers should have the learning skills in order to see career progression with the organization. Organizations are mix of people in terms of age, gender and race etc. Managers have to deal with the groups and the employees belongs to the different cultures. They have to exercise control and channelize the behavior in every direction. OB helps in better management as it helps in improving the skills. OB helps the management ensure that employees do everything to satisfy the customer needs.

When dealing with employees OB looks at the whole employee, their needs, financial compensation, skills, motivations, circumstances, training, home lives, quality of work-life balance, and so on. Likewise, when looking at an organization in a holistic manner OB will look at all aspects that may affect behavior within the organization.

The culture of an organization is essentially the collective personality of those who work there. The assumptions, values, norms, and practices will all cumulate to display a unified organizational character. Employees and organizations have come to realize that for people to be productive and effective on the job, they must have a balance between work life and personal life. More and more organizations have come to realize that workplace stress leads to low productivity. Numerous studies have been done which indicate that workplace stress leads to higher incidences of employee turnaround, mental and physical illness, high absenteeism, lack of creative thinking, low motivation, decreased job satisfaction, and even violence and substance abuse.

OB helps to recognize the negative effects of stress on the job. Some of these factors are directly related to personal issues that are unique to the employee; however, this is the exception rather than the rule. With the help of OB various programs and human resource interventions have been developed to help workers deal with stress before it becomes a serious issue. Organizational restructuring and rethinking management and culture styles has also given way for the improvement of stress on the job.

Some of the most talented and desirable employees will choose to work for an organization over another if the organization has taken into consideration the importance of family and personal lives of employees. These companies are more satisfying to work for as they tend to encourage whole person growth and job satisfaction. In fact many companies call these policies work-life balance programs as they can be applied to those with or without families.

With better understanding of OB, organization can achieve its goal in effective manner with the support of the human capital.

These days Human Capital is considered most important element of competitive advantage in organization. It is not just one of the organization’s intangible assets; it is basically all of the competencies of the people within an organization. These competencies are various skills, education, experience, potential and capacity. It is believed that if a company know how its human capital contributes to their success, it than can be measured and managed effectively.

The competitors of the firm always try to employ better peoples for the job, so firms should constantly evaluate the human factor. The ability to create unique team is the most cost effective way to create sustainable advantage. The strategic human resources management or the human capital is mean of gaining competitive advantage through one of the most important asset: its people.

These days Human Capital is considered most important element of competitive advantage in most of the organizations. In is just one of the organization's intangible assets; it is basically all of the competencies of the people within an organization. These competencies are various skills, education, and experience, potential and capacity. It is believed that if a company know how its human capital contributes to their success, it than can be measured and managed effectively. Developing human capital in the organization is the major challenge for the leaders for formulating future competitive strategies. “Dynamic and complex competitive landscape has created considerable uncertainty for firms, however conditions of uncertainty also present opportunities” (Hittet al 1998). “The competitors of the firm always try to employ better peoples for the job, so firms should constantly evaluate the human factor. (Eric D. brown 2007) he also concluded that the ability to create unique team is the most cost effective ways to create sustainable advantage”. The way in which the organizations manage its peoples can influence its performance (Peter & Watermann 1982). “The employee participation empowerment and job design, including team based production system, extensive employee training and performance contingent incentive are widely believed to improve the performance of organization” (Pfeffer 1994). “The strategic human resources management or the human capital is mean of gaining competitive advantage through one of the most important asset: its people” (Richard.W 2001). “The other sources of competitive advantage, like technology and physical resources are comparatively easier to emulate and transfer.

Therefore, the crucial differentiating factor between companies can be how human resources are developed and nurtured in particular organization” (Yazdani 2008).The human capital can become key source of competitive advantage, if it has worth, continue to be hard to emulate and is exceptional. “Human capital has long been argued as a critical resource in most companies and recent research suggest that human capital attributes like education, experience and skills and the effect of leadership affect the firms performance” (Hittet al 2001) “The human element has grown in importance because knowledge has become a critical ingredient to gain  competitive advantage, particularly in the new economy landscape” (Grant, 1996).

Survey after survey has found that executives believe finding and developing the right talent should be one of their top priorities, and that their company’s human capital is one of their most important assets. Yet few corporations are designed to operate in ways that recognize the importance of human capital. Most companies understand how to leverage financial capital, machinery and equipment, but when it comes to human capital, it is a very different story. Jobs are designed to follow a simplified, standardized approach to the execution of work processes, and individuals are controlled through well-defined hierarchical reporting relationships, budgets and close supervision. Rather than encouraging people to be important contributors, most of the systems in organizations are designed to control their behavior. If we really took human capital seriously, we’d run companies in a very different way. Yes, we would treat people well and say they are important, but we would do much more. We would design organizations so that people are a source of competitive advantage. Hiring some highly talented individuals won’t do it! Training programs won’t do it, either! Even being a best place to work won’t do it. Making human capital a source of competitive advantage requires much more than making some quick fixes to a control-focused organization. It requires attracting and retaining the right people as well as organizing and managing them effectively. Attracting and retaining the right people is not easy, but most organizations can get it done if they devote enough resources to it. Actually developing and employing organizational structures and operating systems that lead to an organization’s human capital being a source or the source of competitive advantage is another story. It requires the right managerial behaviors as well as the right design of most of an organization’s major operating systems in order to create a Human Capital centric (HC-centric) organization. What does a company that’s truly built to leverage its human capital look like? First, it has corporate board members armed with sufficient expertise and information to advise on human capital and organizational effectiveness issues. In fact, the board would regularly receive the kind of detailed information about the condition of the organization’s human capital as it does about its financial situation. Second, it would develop executives who practice shared leadership and are committed to developing leaders throughout their organization. Third, it would consider the human resources (HR) function its most important staff group. HR’s ranks would be filled with individuals who understand the business as well as know the intricacies of human capital management systems. Finally, it would have information systems that report accurately on the strategically important competencies and capabilities of the organization and of each employee.