Organizational behavior is the study and application of knowledge about how people, individuals, and groups act in organizations. It does this by taking a living system approach. That is, it interprets people-organization relationships in terms of the whole person, whole group, whole organization, and whole social system. Its purpose is to build better relationships by achieving human, organizational, and social objectives. .
Study of organizational behavior helps us gain knowledge about individuals, groups and the organization. It is helpful to know behaviors of the people involved in an organization. This knowledge will help us to make an organization work more effectively and efficiently. How people behave in an organization will affect the performance of the organizations. This is not an analogy as perceived by many people. Instead it is a reality. .
When we study organizations we often think of the important role that management plays in achieving the organization's goals. There are four functions that management must follow in order to keep the organization effective and efficient. The first function of management, which is planning, defines the goals of the organization. It also coordinates activities within an organization. .
The second function of management is organizing. This function gives structure to an organization. Management decides who does what, how is it done, and what needs to be done. In this function management also determines who reports to whom. Where decisions are made is another part of this important function. .
The third function, leading, direct and coordinate people within an organization. The final function of management is controlling. This function is very different than what one might perceive it to be. This is not meant to say controlling the people but instead controlling the performance. Comparing performance from previous years on set goals will help management determine and decide what actions need to be taken to improve performance.