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INTRODUCTION
“Organizational psychology is the study of human behavior in
organizations; the behaviors of interest contribute to the effectiveness of
organizational functioning, the satisfaction and well-being of those who
populate the organizations, or both. These behaviors and the people who
exhibit them exist in a dynamic open system.”1
Behaviors observed in the present are influence by past behaviors and
conditions, as well as by the anticipation of future ones. Individuals are
systems nested within other systems—such as teams and work groups—
that are nested under larger organizational systems. All of these systems
are open to the outside through connections to family members,
customers, and multiple other potential sources of influence on
organizational members’ behavior.
“What is the difference between organizational psychology and
organizational behavior? In all honesty, these two fields are much more
similar than different so much so, in fact, that many faculties who teach
organizational behavior in business schools received their training in
departments of psychology. Though less common, some faculty who
teach organizational psychology received their training in business
schools.”2
Organizational behavior is the study and application of knowledge about
how people, individuals, and groups act in organizations.3 Organizational
1
Katz & Kahn, 1978
2
Steve M. Jex, Organizational Psychology John Willey and Sons, New York p.3
3
Robbins, Article about Organizational Behavior p.9
behavior helps build better relationships by achieving human objectives,
organizational objective and social objective.
Organizational psychology is a field that utilizes scientific methodology to
better under-stand the behavior of individuals in organizational settings.
This knowledge is also applied, in a variety of ways, to help organizations
function more effectively. This is important because effective
organizations are typically more productive, often provide higher-quality
services, and are usually more financially successful than less effective
organizations.4
The core of any organization is its personnel and our success depends on
our people. The goal of this company is to increase our profitability,
increase growth and innovation, and introduce new values and culture
into the organization. In order for us to remain competitive, we need to
have "maximum quality, minimum cost, and [maintain peak
performance].5
The study of the way people think and behave is called psychology. The
field of psychology has a number of sub-disciplines devoted to the study
of the different levels and contexts of human thought and behavior. Social
psychology, for example, deals with human thought and action in a social
context, while physiological psychology is concerned with thought and
behavior at the level of neurology. Another division of psychology,
comparative psychology compares the thought and behavior of humans
with that of other species. Abnormal psychology studies atypical thought
and action. Psychology is an interdisciplinary science. Social psychology,
for example, involves both sociology and anthropology. Abnormal
psychology has much in common with psychiatry, while physiological

4
Steve M. Jex (2002) Organizational Psychology, John Willey and Sons, New York
5
Ahls, B. Organizational behavior: A model for cultural change. Industrial Management (2001,
July-August).
psychology builds on the techniques and methods of neurology and
physiology. It is evident that psychological methods are being
increasingly used in daily events. Employment for example, in Europe
more companies are subjecting potential personnel to psychological
profile checks and psychological tests during interviews. Even our social
lives are becoming affected. People who are seeking the right partner are
using psychological techniques to establish the emotional state of their
potential partners. As psychology becomes more and more accessible and
understandable to more people, we feel that it will begin to influence our
lifestyles more.
The behavior of employees within any organization is essential for
success of one organization in today’s global economy. The study of
organizational behavior is a science with its own vocabulary and
terminology.
Academic field of study concerned with human behavior in organizations;
also called organizational psychology. It covers topics such as motivation,
group dynamics, leadership, organization structure, decision making,
careers, conflict resolution, and organizational development. When this
subject is taught in business schools, it is called organizational behavior;
when it is taught in psychology departments, it is called organizational
psychology.6
Organizations are social arrangements, constructed by people who can
also change them. Organizations can be repressive and stifling, but they
can also be designed to provide opportunities for self-fulfillment and
individual expression. The point is that human consequences depend on
how organizations are designed and run.7

6
http://www.answers.com
7
Buchanan, D. & Huczynski, A. (1997) Organizational Behavior:
An Introductory Text 3rd , Prentice Hall, London(1997)
 “An organization is, simply, a body of people organized for some specific
purpose”.8 According to Hunt & Osborn organizational behavior is taking a
look at the way humans behave within a company9 . The United States
Navy, and perhaps all military branches, has, in some respects, a unique
organizational behavior. The behavior of its employees is governed by a
strict set of rules and regulations. One prime example of this is the
Uniform Code of Military Justice. There is no other organization that can
legally imprison an employee for not obeying his or her supervisor or for
not being where he or she is supposed to be. A civilian organization will
just fire that employee there are no legal ramifications.

A major challenge for organizational psychology is to develop theories

that do not just passively regurgitate romantic prejudices that pass for
'common sense'. Indeed, when this interrogative perspective is adopted,
one would argue that established beliefs bear little correspondence to
processes of true leadership as it is practiced and experienced. Moreover,
because they serve largely to accentuate the division between would-be
leaders and their would-be followers, they can actually undermine the
very thing they would create: a productive, healthy and invigorated
organization.

Organizational culture is created by the individuality and sometimes the

commonness of the employees within the organization. “Organizational
culture is a pattern of knowledge, belief, and behavior…it is the form,
beliefs, norms, social patterns, the way things are done, the symbols and
rituals”10.

8
Magazine Communication 2005
9
Hunt & Osborn, Schermerhorn, 2005,p.17
10
Burton, Lauridsen, & Obel, Strategic Organizational Diagnosis and Design: The Dynamics of
Fit, 3rd Edition, Kluwer Academic Publishers 2004
In the nineteenth century, it was possible at the beginning of the
industrial revolution to consider the individual as a part or a component.
Essentially without life and character, and in order to be produced for the
‘mass.’ It has taken many decades for humanity to recover what it
possessed in the eighteenth century but lost in the nineteenth -
individuality. The twentieth century saw this renaissance initially
expressed in shadows such as ‘percentiles’ in which we sought to capture
first the physical ‘measure of man’ only to be followed by its cognate
companion.

Each person is much like everyone else in many important ways. Our
biological systems are all quite similar, as is our basic appearance. Each
person is also very different from everyone else. The ways we think, the
ways we interpret our environment, and the ways we respond to that
environment are unique. We call this set of factors individual differences.
At the beginning of the 21st century, individual differences in
performance are still not being included in workplace design. Most often
they are ignored, minimized or not considered at all.

“The past twenty-five years have been witness to celebration of all things
organizational in organization and management research. Profound
changes in both the global economy and information technology
produced new organizational forms and pushed us to focus on
competitiveness and wealth creation. To be sure, anyone who set foot in
an organization knew that people matter, but our scholarly attention was
diverted. We might even go so far as to say that individuals caught our
attention only in times of failure. We are reminded of the University of
Michigan hockey fans who stand up, point to the opposing goalie, and
chant “It’s all your fault. . . it’s all your fault. . . it’s all your fault!”
whenever Michigan scores. People mattered most when we made person
attributions for failure.”11
“The study of leadership has a natural home in organizational psychology.
Businesses can thrive or perish largely due to the quality of organizational
leadership. Organizational psychology places the study of leadership very
high on its agenda.”12 It is important to underline that this research field
that generates an enormous amount of literature spanning the complete
range from weighty research tomes to fast moving self-help books. In
recent years organizational psychologists have paid particular attention to
transformational leadership and the role of charisma. Charismatic leaders
are able to motivate followers to work for collective goals that transcend
self-interest and transform organizations
“This focus on "charisma" is particularly evident in "new leadership"
research which proposes that effective leaders should be proactive,
change-oriented, innovative, motivating and inspiring, and have a vision
or mission with which they infuse the group. They should also be
interested in others, and be able to create commitment to the group, and
extract extra effort from and empower members of the group.”13
Organizational psychology can and should be viewed as a science.
“Organizational psychology, however, is also concerned with the
application of scientific knowledge to enhance the effectiveness of
organizations. The scientist-practitioner model captures this interaction
between generating scientific knowledge and the application of that
knowledge for some practical purpose. At a very general level, the

11
James P., Article Walsh University of Michigan 2004 p.xi
12
Bass, B. M., & Avolio, B. J. (1993). Transformational leadership: Leadership theory and
research: Perspectives and directions (pp. 49-80). London: Academic Press.
13
Bums, J. M. (1978). Leadership. New York: Harper & Row
scientist-practitioner model states that science and practice are not
independent and, in fact, often “feed off” each other.”14

GROUP

Organizational structure is the formal system of task and reporting

relationships that controls, coordinates, and motivates employees so that
they cooperate and work together to achieve the organization’s goals”. 15
The importance of structure can’t be stressed enough. Having an
organizational structure ensures that each member of the organization has
the correct goals of their particular department set. A good structure will give
people the motivation needed to achieve those goals, and enhance their
performance.
In order to encourage work, cooperation, and the drive needed from
employees, an organization should have some sort of organizational
structure. Whether a functional structure, a divisional structure, a network
structure, or even a matrix structure, every corporation must have one type
to achieve the directives set forth by their mission statement. A strong
structure essentially changes the way people work, and the results of their
work ethics will produce quality work.

Rosabeth Moss Kanter argues that ‘one way or another, the innovating
organization accomplishes a high proportion of its productive changes
through participation’. High proportion of productive changes in an
organization can be achieved through group and team work.

14
Steve M. Jex (2002) Organizational Psychology, John Willey and Sons, New York p.5
15
George et al, 2002