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Organizational Behavior Study Guide

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* THE RULE OF 1/8
“One must bear in mind that 1/2 of organizations won’t believe the connection between how they manage their people and the profits they earn. 1/2 of those who do see the connection will do what many organizations have done--try to make a single change to solve their problems, not realizing that the effective management of people requires a more comprehensive and systematic approach. Of the firms that make comprehensive changes, probably only about 1/2 will persist with their practices long enough to actually derive economic benefits.”

THE RULE OF 1/8
“One must bear in mind that 1/2 of organizations won’t believe the connection between how they manage their people and the profits they earn. 1/2 of those who do see the connection will do what many organizations have done--try to make a single change to solve their problems, not realizing that the effective management of people requires a more comprehensive and systematic approach. Of the firms that make comprehensive changes, probably only about 1/2 will persist with their practices long enough to actually derive economic benefits.”

Organizational behavior (OB) is the field of study devoted to understanding, explaining, and ultimately improving the attitudes and behaviors of individuals and groups in organizations.

* Strategic management focuses on the “product choices and industry characteristics” that affect an organization's profitability.

Study 1: 968 publicly held firms with 100 or more employees * OB practices were associated with better firm performance 1) 7% decrease in turnover 2) $27,000 more in sales per employee 3) $18,000 more in market value

4) $ 3,800 more in profit
Study 2: 136 nonfinancial companies that made initial public offering(IPOs) in 1988. * HOW DO WE MAKE DECISIONS? * Method of Experience – People hold firmly

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