Organizational behavior offers several ideas to management as to how the human factor should be properly emphasized to achieve organizational objectives. Barnard has observed that an organization is a conscious interaction of two or more people. This suggests that since an organization is the interaction of persons, they should be given adequate importance in managing the organization. Organizational behavior provides an opportunity for management to analyze human behavior and prescribe means for shaping it to a particular direction.


Organizational behavior provides understanding the human behavior in all direction in which the human beings interact. Thus organizational behavior can be understood at the individual level, international level, group level and inter-group level.

Organizational behavior helps to analyze 'why' and  'how' an individual behaves in a particular way. Human behavior is a complex phenomenon and is affected by a large number of factors including the psychological, social and cultural implications. Organizational behavior integrates these factors to provide simplicity in understanding the human behavior.

1. Human Behavior and Human Resources

Human resources play a crucial role in the development process of modern economics. Arthur Lewis observed, " there are great differences in development between countries which seem to have roughly equal resources, so it is necessary to enquire into the difference in human behavior." It is often felt that, though the exploitation of natural resources, availability of physical and financial resources and international aid play prominent roles in the growth of modern economies, nine of these factors is more significant than efficient and committed human resources. It is in fact, said that all development comes from the human behavior.

2. Human Behavior in the Nation's Well-being

A nation with an abundance of physical resources will not benefit itself unless human resources make use of them. In fact human resources are solely responsible for making use of national resources and for the transformation of traditional economies into the modern and industrial economies. Lack of organization of human resources is largely responsible for the backwardness of the nation. Countries are undeveloped because their people's behaviors are inappropriate for economic development. In essence, "the difference in the level of economic development of the countries is largely a reflection of the differences in the types of their behavior. The key element in this proportion is that the values, attitudes, commitment, aptitude, general orientation and quality of the people of a country determine its economic development. The shift from manufacturing to service and from service to knowledge and the increasing pace of technological up-gradation are making behavior the ingredient of the nation's well-being and growth.

3. Human Behavior and Organizational Performance

Organizational performance can be measured against organizational objectives like market share, rate of profit, product innovation, customer satisfaction and employee satisfaction. Appropriate human behavior contributes to the employees' commitment towards organizational goals. In effect, employee values, attitude and other behavioral issues shape the employee behavior that would be appropriate for achieving organizational performance. Thus, appropriate human behavior contributes for the organizational performance. Appropriate and adaptable human behavior enables the organization to develop employee commitment to the organizational strategies. In addition, appropriate behavior encourages the employees to acquire and develop required hard skills like technical skills, knowledge and competency. Organizations do also invest in the development of technical skills and knowledge of those employees whose behavior is quite appropriate for the achievement of organizational strategies.

4. Human Behavior and Strategic Advantages

Strategic advantages include achieving a low-cost advantage, high quality, superior customer service, innovations and superior speed in producing and delivering a product or service. Committed employees with appropriate technical skills contribute to achieving the highest human efficiency, which in turn makes the operations at the lowest cost. In addition, the committed minds contribute to innovation and other strategic advantages like superior customer service and superior speed. Thus, appropriate human behavior contributes for building up of strategic advantages of the firms.

5. Human Behavior and Efficient Human Resources Management

Appropriate human behavior helps for positive and efficient human resource management in terms of employee satisfaction, fair treatment of employees, training and continuous learning, performance management, employee counseling, mentoring, building teams, congenial superior-subordinate relations as well as human relations, sound salary and benefits. Thus appropriate behavior brings about efficient management of human resources.

Thus, appropriate human behavior helps not only efficient resources management but also envisages strategic management which ultimately leads to achieving a high level of organizational performance.