Human beings adapt to their environment, whether it is about adjusting to the changing weather or to new social cultures and norms. Similarly, employees adapt to the work culture of an organization, the people working there and their expectations. 

This interaction between the organization and its employees is known as the organizational behavior theory. The theory explains how we react and respond to different work styles, situations and working environments.

An organization is often likened to the human brain, or a well-oiled machine or an organism with a beating heart. These metaphors basically signify that an organization is built upon factors like interpersonal skills, communication and interdependence.

Let’s explore the concept of organizational theory and behavior to understand its importance in today’s world.

Understanding Organizational Behavior Theory

Organizational behavior theory is a broad, well-studied concept in management that talks about how individuals or groups behave or respond to others. Many experts like Henri Fayol have reflected on organizational behavior in the context of human activities and motivation.


Here are four critical aspects of organizational behavior in management:

  1. People

People make up an organization—whether as individuals or in groups. In the first instance, how people interact with the organization and each other determines their group dynamic. This dynamic has an impact on the organization and its functioning. Individuals and groups in an organization work collectively toward accomplishing long-term goals. Human behavior is one of the most important characteristics of organizational behavior.  

  1. Organizational Structure

Organizational structure determines the relationships among individuals and groups—the way they interact and engage with each other. Organizational structures may be formal (based on hierarchy) or informal (flat organizations with flexible decision-making). Each workplace functions differently and employees have to get accustomed to their work structure for improved performance. 

  1. Technology

Technology constitutes the system, process and resources that enable employees to work in an organization. This determines the efficacy of a well-functioning organization. 

  1. External Environment

Organizations are not independent of the external environment. They are affected by the political, social and economic landscape in which they operate. So, any change in government policies, market performance and social norms has a role to play in the context of organizational behavior. 

It’s also important to understand group dynamics and the theory of leadership in organizational behavior if you want to navigate different leadership styles and power structures at the workplace.

The Theory Of Leadership In Organizational Behavior

There’s no one-size-fits-all solution when it comes to organizational leadership theories. A leader is as effective as the people and the organization. You have to understand the people you work with to guide and lead them to success. 

Under organizational leadership theory, there are three unique leadership styles:

  1. Autocratic Leadership

The autocratic leadership style is most prevalent in traditional organizations with a hierarchical, top-down approach. Leaders and senior management make decisions without taking inputs from their employees. This is most effective in a high-pressure, high-stakes environment. However, it may discourage employees from taking initiative or from focusing on teamwork. 

  1. Democratic Leadership

A democratic leadership style is most suitable in organizations where teamwork is encouraged. When leaders need to work together with everyone, they prefer to work in a free and informal manner. Each member is entitled to their opinion—and they’re motivated to follow their own business strategies. But it can be difficult to collaborate with different work styles, especially if everyone wants to have a say in how things work. 

  1. Laissez-faire Leadership

In a highly-skilled work environment, the laissez-faire leadership style is most effective. This is where leaders give complete autonomy to their employees to make their own decisions. However, it’s not always ideal to have this style of leadership because it can lead to inconclusive results.

There’s a lot more to organizational behavior than leadership styles or work styles. How we interact with our coworkers, our efforts towards team building and how we navigate conflicts within and outside our work domain also form part of organizational behavior.

Workplace Impact With Organizational Behavior

You can learn more about identifying the right work culture. We often overlook organizational structures and values when looking for a job. This may be because a lot is at stake and we take the first job that comes along. But if you can assess where you’ll fit in with your skills, values and experience in any organization, you’ll have a more fulfilling professional life.

Enroll in Harappa Education’s Navigating Workplaces course to find out your fit in an organization. You’ll gain in-depth knowledge of organizational behavior and understand how to manage different types of powers people hold. Add value to your professional life with insightful observations and a complete understanding of how organizations work!

Explore topics such as Stakeholder ManagementStakeholder AnalysisTypes of Stakeholders & Importance of Organizational Behavior from Harappa Diaries and learn to navigate professional relationships better.

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