Rack BB3 — Organizational Behavior (Macro-Org/System)

TAOP Resources Library -- Aisle B (Theories)

Resources: Main Page | Research Methods (A) | Major Theories (B) | Issues and Contemporary Topics (C) | Professional Education (D)

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What is Organizational Behavior (OB) and Where Does the Behavior of Organizations and Systems Fit?

Organizational Behavior (OB) is a broad interdisciplinary field that explores how people interact within organizational settings. It examines the behavior of individuals and groups within organizational contexts and draws from multiple disciplines, including psychology, sociology, anthropology, economics, and management science, to understand how people think, feel, and act in workplace environments.

Because many of the classic texts we cover fall under OB’s broad umbrella, we saw fit to divide our episodes by levels of analysis. This rack contains resources devoted to understanding OB at the organization and system (macro) level while other racks cover the individual (micro) level and the groups and teams (meso) level.

This level of analysis looks at the whole organization or groups of organizations (such as an “industry”) and how they behave as full entities. Organizations very clearly desire to improve their own productivity and maintain their competitive advantages in the workplace. Researchers have been exploring how organizations set their workplace cultures, design organizations to improve cross-functional collaboration or manage their corporate knowledge base. And of course, organizational leaders continue to experience tremendous pressures to exercise change, so there is great interest in what contributes to successful change implementation and mitigating barriers to it.

Some (and only some) of the practical questions that OB studies at the meso-level might help answer include the following: How do organizations structure themselves? What are the political mechanisms within organization and how do they manage or distribute power? How do organizations undertake change (or how are they caught up in changes from outside) and adapt or transition? What is the organization’s culture — the way “we do things around here” — and how can that drive behaviors at the individual or group level?

What are Some OB Theories at Macro Level?

This is a short list. Several of these have already been covered in this program (Episodes are linked and also available in the resources below). Some overarching themes include the impacts of digital transformation on organizational structures.

Contingency Theory

This foundational theory argues that there is no “one best way” to organize or manage, and we have had numerous episodes on this theoretical stream. In this view, organizational effectiveness depends on matching the organization’s structure to its specific context. Some of the dimensions explored are environmental uncertainty (where more complex environments may require more flexible structures), technological impacts (where different technologies demand different organizational designs), size (where larger organizations may need more formalized structures), and strategies (where organizational designs must align with strategic objectives). Resources on contingency theory are available in Rack BC.

Institutional Theory

Explains how organizations are shaped by broader societal expectations and norms. Some of the core concepts include institutional Isomorphism (how organizations tend to become similar in order to survive), legitimacy (that organizations adopt practices to be seen as credible and acceptable), and mimetic processes (such that organizations copy successful models from their industry). For example, why do most banks look structurally similar? Institutional theory suggests they conform to societal expectations and proven organizational models, even though those models may actually not be the most effective in some circumstances.

Resource Dependency Theory

This theory focuses on how organizations manage critical resources and external dependencies in order to ensure their own survival. Key observations of this theory include that organizations are open systems relying on external resources, that power in inter-organizational relationships depends on resource control, and that organizations develop strategies to minimize external uncertainties. As an example, consider how organizations are constantly negotiating with stakeholders to ensure the flow of resources, or continuously engaging with customers to maintain demand. This theory helps describe and explain the complex interactions and motivations being exercised.

Population Ecology Theory

This theory examples organizational survival and evolution at an industry-wide level. The main principles are that organizations within an industry are competing for limited resources, only some organizational designs survive, evolutionary mechanisms ensure that environmental selection determines organizational success, and that there are roles for diversity and adaptation. In essence, organizations must adapt or face extinction, meaning that an organizational form will disappear.

Institutional Logics Perspective

This theory explores how broader societal institutions shape organizational behavior. There are traditionally four institutional logics at play in the organization’s external environment and these logics are not only imposing themselves on the organization (through various public or private actors), they compete with each other for dominance over societies as wholes. The logics are market (principally driven by competition and profits), bureaucracy or state (driven by regulatory compliance, public service, and conceptions of fairness and equity), professional (driven by expertise, knowledge, and ethical standards), and community (driven by social movement).

Organizational Learning Theory

This theory explains how organizations create, retain, and transfer knowledge. Some of the foundational concepts include single-loop learning (identification and correction of errors), double-loop learning (questioning and modifying underlying assumptions — perhaps as an outcomes of dealing with large quantities of errors), organizational memory (how to preserve and leverage an organization’s collective knowledge), and knowledge management systems (structures and technologies to formally capture and preserve such collective knowledge).

Contemporary Research Areas

Macro-level OB research is highly active and there are many practical applications and concerns, including some of the “hot topics” in Aisle C. We have also covered several case studies where macro-OB has been applied.

The Diversity, Equity, and Inclusion (DEI) Ecosystem

Also see Rack CI. Moving beyond surface-level diversity initiatives, contemporary research in this area takes a sophisticated, multilayered approach to understanding organizational inclusivity. Researchers are developing nuanced frameworks that recognize the complex, interconnected nature of identity and organizational dynamics, moving beyond simplistic representation metrics. At the macro-level, there is considerable focus on how to systematically eliminate exclusionary and discriminatory behaviors in the workplace to make all feel welcome and able to contribute. The challenges are that some exclusionary practices are systemic and not the result of any individual’s actions — in fact, there may be no one doing anything intentional or unintentional, but the effect remains.

Research at the macro-level focuses heavily into the development, implementation, and assessments of comprehensive strategies for meaningful diversity and inclusion; identification and elimination of structural and systemic barriers to genuine workplace equity, and measuring and implementing meaningful organizational change.

Employee Well-being and Mental Health Frameworks

This research stream represents a holistic approach to understanding and improving the employee’s experiences with the organization, usually programmatically. Researchers are interested in how comprehensive mental health support strategies can be developed and implemented, more effective work-life integration models that recognize individual complexity, organizational approaches to psychological resilience, systemic interventions for preventing workplace burnout, and overall designing work environments that support psychological health. The research goes beyond traditional wellness programs, examining the fundamental relationship between organizational practices and individual psychological experiences.

Sustainability and Organizational Purpose

Also see Rack CS. Researchers are investigating how organizations can integrate broader societal and environmental considerations into their core strategic frameworks. These include alignment of organizational purpose with employee values, developing sustainable business practices that extend beyond traditional corporate social responsibility, and pursuing environmental consciousness as a strategic organizational competency. This research area recognizes that modern organizations should consider their broader societal and environmental impact as a fundamental aspect of their operational strategy, but it also recognizes that there may barriers (e.g., competing institutional logics) that must be overcome.

Organizational Integrity

Researchers are exploring the ethical dimensions of organizational behavior with increasing sophistication as organizational processes may encourage unethical or inappropriate behaviors among individuals. Thus, there is interest in examining macro-level ethical decision-making frameworks, the efficacy of leadership integrity and trust mechanisms, corporate governance frameworks, and accountability and transparency strategies. While ideally, organizational integrity would be tied to performance and workplace commitment, this is an open question and the decoupling of an organization’s official statements and its actions may impact its culture and climate, not to mention its stakeholder relationships.

Organizational Change Management

This is an important area of research as organization’s seek to be adaptive and responsive to the environment but implementing change is difficult. Scholars are developing advanced approaches to understanding organizational adaptability and a more nuanced approach to understanding resistance to change. Among the topics of interest are the increasing complexity of change management strategies, organizational responses to systemic disruption and uncertainties in the environment, agile and flexible organizational design principles, and addressing the psychological dimensions of organizational transitions.

Related TAOP Episodes, Events, and Notes

104: Social Structure & Organizations — Stinchcombe

In a famous chapter in James G. March’s 1965 book, Handbook of Organizations, Arthur L. Stinchcombe laid out a case for expanding the study of organizations outward to include social structure bringing attention to innovation as well as imprinting and inertia. He posited that societies had significant effects on how organizations emerge and operate and that organizations, in turn, impact relations among groups in society. He presented his arguments in three parts. First, that social structures had an imprinting effect on the formation of new organizations, such that these initial forms often persisted despite efforts to change them. Thus, to the second point, each type of organization reflected the history of its creation both in terms of the organization and social structures that dominated at the time. Finally, organizations also reflect the social divisions in society, such as between higher and lower classes.

60: Contingency Theory — Joan Woodward

Joan Woodward was a pioneer in organization theory, and in this episode we explore her seminal work Industrial Organization: Theory and Practice, originally published in 1965. The book presents the results of an extensive longitudinal study of the technologies, processes, and systems used by over one hundred industrial firms concentrated in southeast England over a ten year period.

58: Contingency Approach – AOM 2019 Workshop LIVE

This professional development workshop focuses on the contingency approach as exemplary of classic scholarship in organization and management theory. We focus on the historical context of the contingency approach, the main ideas of authors and traditions associated with it, and their connections with contemporary research.