Business Administration · Year 2 13 min read

Organizational Behavior & Leadership: People Are the System

Why some teams speak up and others go quiet, what actually moves people to work, and which famous findings about people at work did not survive being repeated.
The Default Library · What Each Major Knows · 53

Two teams get the same brief, the same budget and equally talented people. One ships, learns and enjoys it. The other argues in the corridor, nods in meetings and quietly fails. Nothing in the spreadsheet explains the difference. Anyone who has worked in both knows it is real.

Organizational behavior is the study of that difference: what moves people to work, how groups think, why some teams speak up and others don't, who gets listened to, and what it takes to lead. It is also a field that has had a rough decade. Several of its most famous findings did not survive being re-run. This piece teaches the parts that held up, and says plainly which famous ones did not.

The course in one box
Who takes it
Business students, usually in year 2, under names like Organizational Behavior, Management or Leadership. Management is part of Wharton's Business Fundamentals core, and leadership is part of the first-year Required Curriculum at Harvard Business School (see 00_MAJORS). Psychology and engineering students meet a lighter version.
What it is for
Understanding why people in organisations do what they do, so you can design work, run meetings and lead teams without relying on myths.
Comes after
Nothing in particular; it builds on ordinary life in groups.
Leads to
Strategy & Competition (34/54) and Entrepreneurship (34/56) in the Business Administration major; Marketing Management (34/57) lists it too, because marketing is teams and persuasion inside the firm. It links to Game Theory (34/45) for negotiation, Behavioral Economics (34/46) for biases, and Software Engineering (34/31) and Systems Engineering (34/22), where teams are the real system.
What this piece gives you
You will not become a coach or a CEO. You will know which claims about people at work are solid, which are folklore, and how to play a negotiation. Easier first reads: The Biases That Fool Everyone (17/02), Thinking in Systems (17/06) and Negotiation for Normal People (16/10).

Motivation: what holds up and what doesn't

Why do people work hard? The two theories with the most evidence behind them are less glamorous than the ones on posters.

Goal-setting theory comes from Edwin Locke and Gary Latham. Across decades of laboratory and field studies, people given a specific, difficult goal do better than people told to "do your best", provided they accept the goal, have the ability and get feedback. A 1981 review reported that about 90% of studies found the effect. It has limits: on a complex task you have never done, a specific performance target can backfire and a learning goal ("find three strategies") works better, and Ordonez and colleagues argued in 2009 that goals can narrow attention and invite cutting corners. Locke and Latham answered in print, and the debate continues.

Self-determination theory, from Edward Deci and Richard Ryan, says that people are most motivated and well when three needs are met: autonomy (acting from choice), competence (getting better) and relatedness (belonging). Its best-known result is that paying someone for something they already enjoy can reduce their interest afterwards: Deci found it for money in 1971, while praise did not hurt. How large and general that effect is remains argued, but the practical lesson, that control crushes interest and choice sustains it, is widely used.

What does not hold up is a surprisingly long list. Abraham Maslow's pyramid of needs is the clearest case: Maslow never drew a pyramid. It is credited to a 1960 article by Charles McDermid, and while later work supports universal human needs, the strict stair-step order is not supported. Power posing and ego depletion are the other famous casualties. Test yourself: for each classic claim, guess how it fared.

Interactive · Did it replicate?

Verdicts follow the sources listed at the end. "Holds up" means supported by several independent studies or reviews, not that it is settled for ever.

The habit this teaches is the main thing the course gives: when someone says "research shows", ask how big the study was, whether it was repeated by someone else, and who stands to gain from the claim.

Decisions in groups: groupthink, and the wisdom and madness of crowds

Groups feel wiser than individuals, and sometimes are. In 1907 Francis Galton collected about 800 guesses at a country fair in Plymouth for the weight of a slaughtered ox. The median was 1,207 pounds. The true weight was 1,198: within 1%. James Surowiecki's 2004 book The Wisdom of Crowds made the idea famous and named the conditions: diverse views, guesses made independently, and a question with a checkable answer. Averaging cancels errors that are random; it cannot cancel errors that everyone shares.

The opposite failure is Irving Janis's groupthink (1972, revised 1982): tight, insulated groups under stress that seek harmony over truth. He applied it to the Pearl Harbor warnings, the Bay of Pigs invasion and the escalation of the Vietnam War, and listed eight symptoms such as an illusion of invulnerability and pressure on dissenters. His remedies are still good practice: a designated devil's advocate, a leader who speaks last, outside experts, and independent sub-groups. As a scientific theory it has fared less well. Lab and field evidence is mixed, and later researchers (Kramer in 1998, Baron in 2005) questioned how Janis read his case studies. Treat it as a checklist of risks, not a law.

The crowd can also go mad when people see each other. Jan Lorenz and colleagues showed in a 2011 PNAS paper that letting people see others' estimates narrowed the spread of answers without making the average more accurate. You can reproduce the logic below: each simulated person starts with their own noisy guess of the ox's weight, then some of them move toward the running average of earlier guessers.

Interactive · Guess the ox
Crowd size
How much people lean on earlier answers

Illustrative model: each person's private guess is the true weight (1,198 lb) times a random factor with about 25% typical error, no shared bias. With influence w, a person's answer is (1 − w) × own guess + w × the average of all earlier answers. Not data from a real study.

Turn the influence up: the dots huddle together and the crowd looks sure, yet its average gets worse, because early guessers set the tone for everyone. Agreement is not evidence. That is why good decision processes collect opinions before discussion.

Teams: psychological safety

The most useful single idea in modern team research is Amy Edmondson's psychological safety: the shared belief that you can take an interpersonal risk, such as asking a question, admitting a mistake or disagreeing with the boss, without being punished or humiliated. She defined it in a 1999 study of work teams (Administrative Science Quarterly 44(2)) after a puzzle in hospitals: in an earlier study, units with better leadership appeared to make more errors. The explanation was that people on those units felt able to report them. Teams that report nothing are not safer, only quieter.

Google's internal Project Aristotle, begun around 2012, went looking for what made its own teams effective, expecting to find the right mix of skills and personalities. What it reported instead was that who was on the team mattered less than how members treated each other. Its write-up named five dynamics, with psychological safety the most important: then dependability, structure and clarity, meaning, and impact. Be careful about what that proves. It is one company's internal analysis, not a controlled experiment, and the safety link is correlational. Independent academic reviews do support a positive link between psychological safety and learning and performance, but "safe" does not mean "soft": the strongest teams also hold high standards.

P(hear it) = 1 − (1 − p)kk people notice a problem, each speaks up with chance p

Here is the simple arithmetic of a quiet team. Suppose one junior person spots a problem and would speak up only 30% of the time. The team hears about it 30% of the time: seven times in ten, the problem stays hidden. If three people notice it, each at 30%, the chance rises to about 66%. Safety is not niceness; it is the difference between a team that hears its own bad news and one that hears it from customers.

Interactive · Does the team hear about the problem?
Chance each person speaks up
People who noticed
Meetings before it is too late

A toy model: independent people, same chance every meeting. Real speaking-up is not independent (one person's silence teaches the next). Illustrative.

Power and influence

People often follow because they must, can be rewarded, admire someone or simply believe the person knows. In 1959 the social psychologists John French and Bertram Raven sorted this into five bases of power: legitimate (the role gives the right to ask), reward, coercive (the power to punish), expert (knowing more) and referent (being liked or admired). Raven later added a sixth, informational power. The list is a taxonomy, not a law, but it is a good diagnostic: the base decides how long the influence lasts and what it costs. Coercion works only while you are watching; expertise and admiration work when you are not.

Interactive · Name the base of power

Position in a network matters as much as rank: the person who connects two groups, or who everyone asks for help, has influence no title gives. And one popular shortcut did not survive: the idea that standing in a "power pose" changes your hormones and your behaviour. Co-author Dana Carney said in 2016 she no longer believed the effects were real. Looking confident may help how you feel; it does not rewrite your biology.

Culture: what gets rewarded is what you get

Edgar Schein, whose 1985 book on organizational culture is a standard text, described culture as three layers. On top are artifacts: dress, office layout, rituals, slogans. Beneath are espoused values: what the company says it believes. At the bottom are basic assumptions: the unspoken rules people actually follow, which you learn by watching what happens when values and targets collide. When the stated value is "safety first" and the bonus is paid on output, the assumption is output first.

Steven Kerr's 1975 article "On the Folly of Rewarding A, While Hoping for B" is the classic version: organisations announce teamwork and pay for individual results, announce quality and pay for volume, then wonder why people do what is paid for. The practical test of a culture is the answer to a few questions. Who got promoted last year? What was the last bad news someone delivered, and what happened to them? What would a new hire learn from the first week about what is tolerated? Culture is not a poster; it is what the reward system, the leaders' behaviour and the stories people tell all make rational.

Leadership: what the evidence says

The oldest leadership experiment is Kurt Lewin, Ronald Lippitt and Ralph White's 1939 study of children's clubs led in autocratic, democratic and laissez-faire styles. It popularised the three styles and the finding that democratic groups were generally more satisfied. It was small, and adults were acting out styles; it is a landmark, not a proof of a best style.

Later research moved on. Trait searches (are leaders taller, more extroverted, more intelligent?) found modest links at best. Contingency theories, such as Fred Fiedler's of the 1960s, argued that the best style depends on the situation. The model with the most research behind it is transformational leadership, from James MacGregor Burns and Bernard Bass: leaders who inspire a shared vision, consider individuals and challenge assumptions. Meta-analyses such as Judge and Piccolo's (2004) find it linked to followers' satisfaction and to leaders' rated effectiveness, though contingent reward, a "transactional" practice of clear rewards for results, also shows positive links. Critics (including Daan van Knippenberg and Sim Sitkin, 2013) point to a problem in the measures, which overlap with the outcomes they predict, and to the difficulty of showing that the style causes the result rather than following success.

What a reader can safely carry away: leaders matter, but less than heroic stories suggest; clear direction, fairness, support and honest feedback have the most consistent backing; and people credit leaders for results they only partly controlled, a bias James Meindl and colleagues called the "romance of leadership" in 1985.

Negotiation basics: know your BATNA

In 1981 Roger Fisher and William Ury, of the Harvard Negotiation Project, published Getting to Yes. Its central tools are three. Separate people from the problem. Focus on interests (why you want something) rather than positions (what you say you want). And know your BATNA: your Best Alternative To a Negotiated Agreement, the best thing you can do if the talks fail. The idea echoes the "disagreement point" in John Nash's bargaining theory.

Your BATNA is your real power, and also your walk-away line: never accept less than it. Your reservation price is the worst deal you would take; the other side has theirs. If your reservation price is below theirs, a zone of possible agreement (ZOPA) exists between the two, and the negotiation is about how to divide it. If not, no deal is available and the right move is to walk. Research on anchoring (Galinsky and Mussweiler, 2001) finds that whoever makes the first offer often pulls the final price their way, which is why preparation matters.

Interactive · Sell the car
Your asking price

A teaching model. The buyer has a hidden limit between $4,000 and $7,000. Each round the buyer closes 30% of the gap to that limit, and accepts any ask up to halfway between its bid and its limit. Real buyers are less predictable. Illustrative.

Play it a few times. The best asks sit just under the buyer's limit but not above it, which you can only judge from how the bids move, and sometimes the buyer's limit is below your dealer's price, so the winning move is to leave. Negotiation is mostly preparation: knowing your alternative before the conversation starts.

What a graduate just sees

Where it shows up next

If you want to go deeper

The takeaway

People at work are moved by choice, competence and belonging more than by pyramids and poses. Groups are wise when members think independently and foolish when they copy each other. Teams learn when it is safe to speak. Culture is what gets rewarded. Lead with clarity and fairness, and walk into any negotiation knowing your alternative. Trust the findings that have been repeated, and be wary of the ones that made a good story.

Try this: at your next meeting, write down your view before anyone speaks, and ask two others to do the same. Compare. Notice how much of the later discussion simply moved toward the first confident voice.

Sources & Further Reading

Sources. Goal setting: Locke & Latham, "Building a practically useful theory of goal setting and task motivation", American Psychologist (2002); Ordonez et al., "Goals Gone Wild" (2009). Self-determination theory: Deci (1971); Deci & Ryan (1985). Maslow's pyramid: attributed to McDermid, Business Horizons (1960); Tay & Diener (2011). Power posing: Carney, Cuddy & Yap (2010); Ranehill et al. (2015); Carney's 2016 statement. Ego depletion: Hagger et al. (2016); Vohs et al. (2021). Groupthink: Janis (1972, 1982); Kramer (1998); Baron (2005). Crowds: Galton (1907); Surowiecki (2004); Lorenz et al., PNAS (2011). Psychological safety: Edmondson, ASQ 44(2), 1999; Google re:Work on Project Aristotle. Bases of power: French & Raven (1959). Culture: Schein (1985); Kerr, Academy of Management Journal (1975). Leadership: Lewin, Lippitt & White (1939); Burns (1978); Bass (1985); Judge & Piccolo (2004); Meindl, Ehrlich & Dukerich (1985). Negotiation: Fisher & Ury (1981); Galinsky & Mussweiler (2001). Replication facts were checked against the Wikipedia summaries of these studies, which cite the papers. Interactive numbers were computed and checked in code; the data are illustrative.