What Is Organizational Behavior and Why Is It Important?

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Team members brainstorm around a conference table.


What characteristics do effective business managers and employees exhibit in the workplace? What is the relationship between individual employees, groups and the organizations they work for? Business leaders who ask these questions — to better understand how they can improve their employees’ job satisfaction and work environment — are likely interested in the study of organizational behavior.

Organizational behavior is the study of the behavioral dynamics of individuals and groups in organizational settings, including corporate offices. To meet their short- and long-term goals, business leaders need to understand what motivates their employees and how they interact with each other. That information can help in a host of areas, including employee training and development, and innovation and collaboration.

Individuals wondering what is organizational behavior and why is it important? may consider earning an online Bachelor of Science in Business Administration degree to prepare for the role.

Organizational Behavior Defined

Organizational behavior has roots in psychology and sociology as well as business and is often a topic of interest for human relations specialists and business managers. According to Investopedia, “Organizational behavior is the academic study of the ways people act within groups. Its principles are applied primarily in attempts to make businesses operate more effectively.”

At its core, organizational behavior examines the behavioral tendencies of individuals within the context of various group settings. Researchers have discovered that organizational behavior relies on both social and environmental factors. The way individuals work together in groups has a significant impact on their overall productivity, ultimately affecting the competitiveness of their organization.

When analyzing what organizational behavior is and why it is important for businesses, managers should understand how various group dynamics can help a company define its organizational structure and achieve its goals. Employees behave in certain ways due to the structure and organization of their work settings, and they respond to different methods of communication. Understanding how individual employees react and respond to each other is essential to making an organization more productive and successful.

Why Understanding Organizational Behavior Matters

Business leaders can first use their understanding of organizational behavior to evaluate their own attitudes and behaviors as well as the company’s values, strategies and goals. Moreover, they can then use that understanding to identify employees who exhibit leadership and other key behaviors.

A keen understanding of organizational behavior can also help improve a manager’s ability to build teams and manage conflict. Managers and human resources personnel can shape organizational culture by the way they focus on their employees and work outcomes.

Employees naturally create subcultures within their organizations as they respond differently to authority and structure. Identifying these tendencies can help an organization build operational strategies that align with each employee’s behavioral strengths. This can have a positive impact on a company’s growth as well as employees’ job satisfaction.

As discussed, a deep understanding of what organizational behavior is and why it is important can contribute to an organization’s effectiveness. Leaders and business managers should have an awareness of how they can motivate employees, provide ongoing training, cultivate effective communication and establish reward systems. These core business concepts and skills can be learned by pursuing a Bachelor of Science in Business Administration degree.

Administrative Management and Organizational Behavior

With a key role in building relationships and corporate culture, administrative managers should lead the way in the study of organizational behavior. They may exhibit different types of organizational behavior in the workplace based on the knowledge they have. In the collegial model, for example, managers and leaders actively inspire employees and are not seen as autocratic. Employees have a personal stake in the company and an internal desire to reach their goals. In the supportive model, leaders have a firm understanding of what motivates their employees to better accomplish tasks. They support their employees through the process but also provide incentives for reaching goals.

The role of managers enables them to leverage their understanding of organizational behavior and promote positive activities in the company, such as luncheons and weekend retreats. These activities can contribute to an overall positive work environment that motivates employees and ultimately helps organizations succeed.

Pursue a Bachelor of Science in Business Administration

Administrative managers and organizational leaders can benefit from developing a foundation in organizational behavior. By modeling their organization’s beliefs, leaders can reinforce values and establish a strong work culture among employees. They can offer incentives to encourage the natural behaviors and motivations of their employees. By getting to know their employees, managers and administrators can better understand and communicate with employees who exhibit different personalities and behaviors.

If you are interested in what organizational behavior is and why it is important, consider exploring Rider University’s online Bachelor of Science in Business Administration program. Learn more about how the program can help you pursue your professional goals in business management and administration.

Recommended Readings

Business Development vs. Sales: Choosing a Business Career
Business Management Skills: Preparing for a Career in Business
How to Become a Management Analyst


Houston Chronicle, “How To Explain the Importance of Organizational Behaviors”
Houston Chronicle, “Impacts of Organizational Behavior in Business”
Houston Chronicle, “Types of Organizational Behavior in the Workplace”
Investopedia, “Organizational Behavior”
SHRM, Understanding and Developing Organizational Culture