WHAT IS EFFECTIVE ORGANIZATIONAL BEHAVIOR: TWO APPROACHES
In our journey through the theories and practices of organizational behavior, we will explore behavior at three interdependent levels of analysis: Individual, Interpersonal, and Organizational. Each level depends to some degree on the others and each influences the others.
At each level, we’ll ask what is effective OB. A behavior or action is effective if it creates a desired effect or accomplishes a desired goal or outcome. Your belief about whether a particular approach to OB is effective will depend on which effects or outcomes you value. This book thus challenges you to examine the underlying assumptions behind OB theory and practice and to decide for yourself what it means for a person, group, and organization to behave effectively. For example, what are key overarching goals that organizational members should strive to accomplish? What does Mike Duke, CEO of Walmart, mean when he asserts “More will be expected from market leaders and globally successful companies, and those companies who are most involved will be most successful, creating an upward spiral.”[i] Does he mean more profits, or that there is more to being an effective organization than simply maximizing profits? Should the decisions and behaviors of organizational leaders and members reflect a concern for other outcomes, such as employee well-being or environmental impact?
To one person, behavior that results in optimal task performance is effective, whereas behavior that merely results in job satisfaction is not. Someone else might believe the reverse. Do team members believe their team operating effectively when no one disagrees with anyone else, or when members are free to share their diverse views? The meaning of effectiveness also may vary depending on the type of organization being considered. For a community-run soup kitchen, effectiveness may mean providing needy people with nourishing food in a way that enhances their dignity. A business might define effectiveness as maximizing profitability, while for a government agency it may mean serving the public in a timely fashion. In learning about OB, effectiveness is an important issue that deserves our attention.
[i] Bonini S. and Mendonca, L. (2011). Doing good by doing well: Shaping a sustainable future. McKinsey & Company. http://mckinseyonsociety.com/downloads/articles/Social-Innovation/MOS_030311_Doing_Good_V8.pdf
Two Approaches
This book presents two approaches to organizational behavior (OB), the conventional approach with its rich history, and an emerging sustainable approach that builds upon and stretches the boundaries of the conventional approach. Conventional OB tends to emphasize what contributes to financial well-being and the interests of a narrow range of stakeholders, whereas sustainable OB emphasizes what contributes to multiple forms of well-being (financial, social, ecological, spiritual) for a broad range of stakeholders.
The work of German sociologist Max Weber provides a conceptual framework that helps us to think more carefully about what constitutes “effective” OB. From a conventional perspective, effective OB is primarily about maximizing material or financial benefits for ourselves or a narrow range of stakeholders. The logic behind this view is captured in the popular interpretation of Adam Smith’s “invisible hand” metaphor, which suggests that the good of the community is assured when every individual is permitted to pursue his or her own self-interested goals.
Weber acknowledges that this conventional approach has contributed greatly to unprecedented productivity and the creation of financial wealth. Even so, he argues that it ultimately renders a disservice to humankind.[i] In what has become one of the most famous metaphors in all the social sciences, he argues that this approach leaves humankind trapped in an “iron cage,” focusing on a narrow set of materialist-individualist considerations that trump other forms of well-being. He laments that such a focus weakens the human spirit and limits human flourishing.
Sustainable OB draws attention to Adam Smith’s earlier, though less famous, work, The Theory of Moral Sentiments.[ii] When Smith says everyone should be “perfectly free to pursue his [or her] own interest,” he assumes this pursuit takes into account virtues like benevolence (love), practical wisdom (prudence), fairness (justice), and self-control (temperance).[iii] Put differently, Smith’s “invisible hand” is effective only if it is attached to a “virtuous arm.”
Sustainable theory and practice rest on several conceptual and philosophical bases.[iv] We will ground them in Aristotle’s virtue theory,[v] because it is an appropriate and highly regarded perspective that has stood the test of time. From an Aristotelian perspective, the purpose of human behavior is not simply to maximize performance, predictability, and short-term profitability, nor is it to maximize self-interest. Rather, the purpose of human behavior is to maximize people’s happiness, which Aristotle called the “supreme good.” Happiness is achieved by practicing virtues in community.[vi] From a virtue theory approach, sustainable OB is all about modeling and facilitating organizational members’ practice of four cardinal virtues: practical wisdom, self-control, courage, and justice. In short, sustainable OB seeks to nurture community and happiness by modeling and enabling the practice of virtues in financially viable organizations.
Table 1.1 provides an overview of the priorities associated with conventional and sustainable OB. The differences in priorities between the two approaches to OB are consistent with differences in the philosophical assumptions described above. Of course, as we will see in the following pages, these priorities are important for understanding and practicing OB.
Table 1.1: Understanding Key Priorities
| Conventional OB Priorities | Sustainable OB Priorities |
| Personal – focus on self-interest | Community – focus on community interests |
| Performance – focus on job, group, and organizational performance | |
| Predictability – focus on what is stable and can be explained | Creativity – focus on what is dynamic and difficult to explain |
| Commitment – focus on bonds among people, actions, and organizations | |
| Short-term Profits – focus on relatively immediate productivity and profit | Long-term Consequences – focus on relatively long-term consequences |
The OB priorities in Table 1-1 are signs indicating which outcomes are relatively more important than others. Of course, as illustrated in Figure 1.2, these approaches overlap to some extent. For example, performance and commitment are important to both conventional and sustainable OB, with subtle differences. However, performance may be defined more narrowly or specifically from a conventional point of view, whereas performance from a sustainable point of view may include a broader set of less specific and measurable contributions. Further, commitment based on obligations or shared values may be equally attractive from a conventional perspective, whereas a sustainable perspective decidedly favors commitment based on shared values.
[i] Weber (1958, pp. 181 and 182).
[ii] Smith, Adam (1982) [1759] The theory of moral sentiments. D.D. Raphael and A.L. Macfie, eds. Glasgow Edition (Liberty Press, Indianapolis, IN.)
[iii] Page 237 in Smith (1982): “The man who acts according to the rules of perfect prudence, of strict justice, and of proper benevolence, may be said to be perfectly virtuous. But the most perfect knowledge of those rules will not alone enable him to act in this manner: his own passions are very apt to mislead him; sometimes to drive him and sometimes to seduce him to violate all the rules which he himself, in all his sober and cool hours, approves of. The most perfect knowledge, if it is not supported by the most perfect self-command, will not always enable him to do his duty.”
[iv] For example, perspectives like corporate social responsibility and stakeholder theory offer a counter-point to conventional’s focus maximizing the self-interests of shareholders.
[v] E.F. Schumacher, in his cleverly sub-titled book Small is Beautiful: A Study of Economics as if People Mattered, argues that there are many classic moral-points-of-view that could be used to underpin an alternative to the Conventional approach. In particular, he suggests that “there is perhaps no body of teaching which is more relevant and appropriate to the modern predicament than the marvelously subtle and realistic doctrines of the Four Cardinal Virtues – prudential [practical wisdom], justitia [justice], fortitudo [courage], and temperentia [self-control]” (pages 248-249 in Schumacher, E.F. (1973) Small is Beautiful: A Study of Economics as if People Mattered. London, England: Blond & Briggs Ltd). This section draws from Dyck, B., & Kleysen, R. (2001). Aristotle’s virtues and management thought: An empirical exploration of an integrative pedagogy. Business Ethics Quarterly, 11(4, 561-574. Of course, the challenge that others have raised (e.g., Hartman, Edwin M. (1998). The role of character in business ethics. Business Ethics Quarterly, 8,547-59; MacIntyre, A. (1981) After virtue: A study in moral theory. Notre Dame, Indiana: University of Notre Dame Press; Neubert M. (2011). Introduction: The value of virtue to management and organizational theory and practice. Canadian Journal of Administrative Sciences, 28(3), 227-230.), and which informs this textbook, is to make virtues observable in management practice and a relevant guiding framework for management theory.
[vi] Aristotle (1962) Nichomachean Ethics (trans. M. Oswald). New York. MacMillan Publishing.
While a conventional approach to OB has a long and rich history, as we will see in chapter 2, this history also includes research and practices consistent with a sustainable approach. Many scholars and practitioners have long placed higher priority on improving the multi-dimensional well-being of humankind than on merely maximizing the financial wealth of their organizations.[i] However, to meet the complex challenges of the future, evidence suggests that the number of practitioners and scholars practicing and promoting a sustainable approach to OB is growing
[i] Dyck, B., K. Walker, K., Starke, F., & Uggerslev, K. (2011). Addressing concerns raised by critics of business schools by teaching multiple approach to management. Business and Society Review, 116, 1-27.
Implications of Two Approaches
Both conventional and sustainable approaches offer compelling ideas and examples worth careful consideration. Each is an ideal type (i.e., fundamental model or theoretical extreme), which does not mean they are the best or “ideal” way of managing, but rather that together they help us think critically about what OB means and how we can apply it. Throughout the chapters we will provide conceptual tools and examples to allow you to compare conventional OB and sustainable OB, making up your own mind about what is effective. Discussing two “ideal types” has at least four implications.
First, allowing the sustainable and conventional approaches to act as two end points can help us better understand the position that we, and others, occupy on a continuum. Just as we would expect to find very few people to be examples of “pure” extraverts or introverts, we would also expect to find very few “pure” examples of the conventional or sustainable approach. Dan Sanders, whose behavior was the focus of the opening case, sometimes exhibits behavior that is consistent with sustainable OB and at other times his behavior is more conventional. The same is true for other people we highlight in this book.
Second, understanding one ideal type helps to better understand a second ideal type. We develop a richer understanding of extraversion when we contrast and compare it to introversion. We have a better understanding of “bitter” when we contrast and compare it to “sweet.” Similarly, we have a deeper understanding of conventional OB if we contrast and compare it with sustainable OB, and vice-versa.
Third, learning two ideal-types of OB adds more complexity and can create tension, but mastering the ability to resist simple answers and explore and integrate opposing ideas or viewpoints is the mark of outstanding managers.[i] In other words, learning two approaches to OB enhances critical thinking, an important skill for business students.[ii] In practice, OB is complex and filled with challenges to balance different ideas and values. As is discussed in the OB in Action box, our approach helps you develop essential critical thinking skills that are highly valued in organizations.
[i] Martin, R. (2007). How successful managers think. Harvard Business Review, 85(6): 60-67.
[ii] Dyck, B., K. Walker, F. Starke, K. Uggerslev, (2012). Enhancing critical thinking by teaching two distinct approaches to management. Journal of Education for Business,87(6), 343-357.
