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Effect Of Physical Environment On Organizational Behavior

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Table of contents

  1. Abstract
  2. How Does the Physical Environment Affect Organizational Behavior?
  3. References


Research into organizational behavior has shown there is a conflict between the needs of the individual and organizational demands. Research shows that the physical environment is a significant factor in organizational behavior. Psychologists have investigated basic individual needs and contend that satisfaction of these needs constitutes a motivating force that enhances desired behavioral patterns. Behavioralists have said that a basic and pervasive individual need is the culturally determined need for privacy. Anthropologists and environmental psychologists have shown that man's behavior is observable and predictable, and it changes in the physical environment or the way it is perceived. Research shows each of the disciplines have been reviewed and it shows that the physical environment is a significant factor in satisfying the needs of the individual organizational member, which has a significant influence on organizational behavior. A chart has been made to show the relationship between the physical setting and behavior to show the importance of making provisions within the physical setting for the attainment of a culturally determined optimal level of privacy. The physical setting has become a significant factor in reducing the conflict between the individual and the organization and makes for acceptable role behavior and the fulfillment of organizational goals.

How Does the Physical Environment Affect Organizational Behavior?

Forty years ago, in a formulating theory of aesthetics, John Dewey observed that 'life goes on in an environment; not merely in it but, through interaction with it. Far from being a mere fleeting reference or passing observation, his preoccupation with the concept of environment is evidenced by his further observation on human development and culture:

'As the developing growth of an individual from birth to maturity is the result of the interaction of organism with surroundings, so culture is a product not of efforts of men put forth in a void or just upon themselves, but of prolonged and cumulative interaction with the environment.' (Pecyna, 1979)

Dewey's recognition of the impact in the environment on human life, like how behavior was ignored, or the narrow definitions of the concept in the environment, that was disregarded as a pervasive influence of the culture and the blindness in the consistent patterns of behavior by both men and other animals in their use of space. By restricting the tendency of social scientists, especially psychologists, to regard man as a responder to the environment, thus treating the physical environment as an underdeveloped resource.

The physical environment of a company is one of the important factors that mainly affect business performance. Managers attempt to improve conditions in the workplace such as poor infrastructural design, unstable operations, and many other issues that significantly affect the growth of a company. Concerning with profitability, employee efficiency and relation plays very important role. Companies are focusing on training and education facilities with a motive to increase labor skills. According to Wagner and Hollenbeck (2014), it is said that the responsibility of the management is to check and create a suitable condition that safeguards the interest of the workers. The subject of internal surroundings and its effect on the organization`s development is a vital topic in the business world.

The relationship between activities, methods used, company objectives, and the framework are an integral part of a business environment (Ryu Lee and Gon Kim 2012). The report studies various factors in a workplace and takes into consideration the motivation and cultural trends of employees. So, to improve the conditions, an analysis on efficient conflict solving is also included. In order words to promote ideas and fulfill goals, companies aim to involve the employees in the practice of the strategy methods as well.

But the growth of the world and the business environment, there has been a noticeable rise in the internal physical factors that can lead to the downfall of a company. Despite of a good pay package, employee performance depends on a list of several factors. One of the methods used to motivate workers is the issue of incentives and bonuses. According to McShane and Von Glinow (2015), the quality of business and a smooth flow of communication at all levels of the management influences achievements. So, the attitude of employees towards their organization plays a major role in deciding the future growth. The company can be affected by an unstable relationship between the managers and employees. In order to implement a proper decision-making, collaboration and exchange of ideas proves to be beneficial.

According to Pinder (2014), the motivation of the employees is a much-needed factor for successful operation of a company. So, to influence the employees, the ambition of the leaders plays a very significant role in the prosperity of the business. Concerns about the financial factors, issuing bonuses increases the productivity of the workers. Having an inspiring workplace includes a clear understanding of the goals and the objectives along with a continuous flow of communication among the top, middle and lower level of the management structure. The ground level employees greatly depend on their management to help them in maximizing their skills and developing a sense of responsibility. Along with endangering loyalty, the top-level managers use the tool of praise to motivate workers (Bryson and White 2013).

As the years past the business framework has effectively made it to the list of physical factors that directly affect business. The cost and intricate designs affect the profitability but also the smooth functioning of a firm. If there is a negative perception of the framework it can lead to a decrease in the productivity and cause high-stress levels. So, the organizational design is one of the most important factors that will affect employee behavior. As stated by Eden and Ackermann (2013), an appropriate workplace is comprised of a properly built workplace that best suits employees. So, in addition to increasing efficiency, opening the organization design it will aim to enhance the flow of mobile communication along with reducing setting up costs.

So, the physical environment factors can add up to the influence in an anatomical structure. So, to gain the stability and to fill in the differences between the employee, perception managers focus on matching the firm`s objectives with capabilities of the individuals. According to Hill, Jones and Schilling (2014), a detailed study of the present issues is exercised to evaluate the degree of exposure and its effects on the business. The management in extraordinary situations can involve the employees in redesigning the workplace, newly designed tools and work towards a sustainability of the company environment.

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With so many employees in the modern industrialized world work in office settings, some of the organizational behavior researchers have been slow to see how important it is to study the effects of the physical work environment on office workers as well. So, we do not have a clear understanding of what the connection between the workplace physical environment and office workers' behaviors and the outcomes. So, we need to seek some of the broad issues, including the effects of major characteristics of the physical environment of work—like personal space and spatial density, personalization and identity, territoriality, conflict, and emotions that can also help to advance our knowledge in this field. As we focus on the open plan of the office settings and suggest that this physical environment constitutes a source of “affective events” that, in turn, shapes the office workers' behaviors and attitudes. (Jehn, 2014)

Some research includes findings from four studies conducted in the field and the laboratory. The 1st study, shows how the researchers manipulated the expansiveness of workspaces in the lab and tested whether “incidentally” expanded bodies — shaped organically by one’s environment — could led to a more dishonesty on a test. The 2nd experiment examined whether participants that were in a more expansive driver’s seat would they be more likely to “hit and run” when incentivized to go fast in a video-game driving simulation. The research indicates that while individuals may pay very little attention to ordinary and seemingly innocuous shifts in bodily posture, these subtle postural shifts can have a tremendous impact on our thoughts, feelings and behavior. (Carney, 2013)

Physical environments can play a big role in facilitating and constraining of organizational action. It can range from efficient manufacture of computer chips to the research and development of different potato chips can be affected by design and arrangement of the machinery, workspaces, environmental controls and the equipment. But since physical environments involve large objects fixes and long-lasting arrangements, and installations, the design decisions need to be made carefully and requires a lot of understanding on the effects of physical environment in the organizations and their members.

In the organizational environment, they have internal and external environmental factors influencing organizational activates and decision making. All organizations, whether it’s a business or non-business, has its environment. The organizational environment is always dynamic and ever-changing. Changes today are so frequent, and every change brings so many challenges that the managers and the leaders of the organization need to be vigilant about the environmental changes. In the environment of the organization it consist of its surroundings and anything that affects its operations, favorably or unfavorably. The strategy-makers need to analyze the trends in the natural environment of the country where it is operating its business. There are issues in the natural environment that strategy-makers need to consider include the availability of raw materials and other inputs, changes in the cost of energy, levels of environmental pollution, and the changing role of government ‘in environmental protection.

For half of the century, experts have investigated the direct predictors of individual behavior and their performance. The earliest formula was performance = person × situation, where a person includes the individual characteristics and the situation represents external influences on that person’s behavior. Another frequently mentioned formula is performance = ability × motivation. Also known as the “skill-and-will” model, this formula elaborates two specific characteristics within the person that influence individual performance. Having the ability, motivation, and situation are by far the most commonly mentioned direct predictors of individual behavior and performance, but in the 1960s some researchers identified a fourth key factor: role perceptions (the individual’s expected role obligations). There are four variables—motivation, ability, role perceptions, and situational factors—which are represented by the acronym MARS. All four factors are the critical influences on the individual’s voluntary behavior and performance; if any one of them is low in each situation, the employee would perform the task poorly. Motivation, ability, and role perceptions are clustered together in the model because they are located within the person. Situational factors are external to the individual but still affect his or her behavior and their performance. The four MARS variables are the direct predictors of employee performance, customer service, coworker collegiality, ethical behavior, and all other forms of voluntary behavior in the workplace. (McShane) Most of the organizational behavior theories and concepts have been contingencies: Ideas that work well in one situation might not work as well in another situation. This contingency approach is certainly relevant when choosing the most appropriate organizational structure. (McShane)

The best structure for any organization depends on its external environment. The external environment includes anything outside the organization, including most stakeholders’ resources, and the competitors. Four characteristics of the influence of the external environment are the type of organizational structure best suited to a situation: dynamism, complexity, diversity, and hostility. Larger organizations have different structures than the smaller organizations, for a good reason. As the number of employees increases, job specialization increases due to a greater division of labor. As the greater division of labor requires more elaborate coordinating mechanisms. So, does the larger firms who make greater use of standardization to coordinate work activities.

These coordinating mechanisms can create an administrative hierarchy and a greater formalization. Larger organizations make up less use of informal communication as a coordinating mechanism. But, the emerging information of technology and the increased emphasis on the empowerment they have caused informal communication to regain its importance in the larger firms. Larger organizations also tend to be more decentralized than smaller organizations. Executives have don’t enough time nor expertise to the process of all the decisions that significantly influence the business as it grows. So, the decision-making authority is pushed down to the lower levels, where employees can make the decisions on some issues within their narrower range of responsibility.

An organizational strategy refers to the way the organization positions itself in its relation to its stakeholders, given the organization’s resources, capabilities, and mission. So, the strategy represents the decisions and the actions applied to achieve the organization’s goals. Although size, technology, and environment influence the optimal organizational structure, these contingencies don’t necessarily determine the structure. But corporate leaders formulate and implement strategies that shape both the characteristics of these contingencies as well as the organization’s resulting structure. Organizational leaders decide how large to grow and which technologies they need to use. They also take steps to define and manipulate their environments, rather than let the organization’s fate be entirely determined by the external influences. So, the organizational structures don’t evolve as a natural response to the environmental conditions; they result from conscious human decisions. Thus, organizational strategy influences are both the contingencies of structure and the structure itself. So, if the company’s strategy is to compete through innovation, then a more organic structure would be preferred because it’s easier for the employees to share the knowledge and be more creative. If a company chooses a low-cost strategy, a mechanistic structure is preferred because it can maximize production and service efficiency. So, it is now apparent that organizational structure is influenced by size, technology, and environment, but the organization’s strategy may reshape these elements and loosen their connection to the organizational structure.

A team-based organizational structure is built around self-directed teams that complete an entire piece of work, such as manufacturing a product or developing an electronic game. This type of structure is usually organic. There are wide spans of control because teams operate with minimal supervision. The team structures are highly decentralized because of the day-to-day decisions that are made by team members rather than someone who is further up the organizational ladder. Some team-based structures also have a low formalization because the teams are given relatively a few rules about how to organize their work. Instead, executives assign quality and quantity output targets, and are often the productivity improvement goals, to each team. Teams are then encouraged to use available resources and their own initiative to achieve those objectives.

Team-based structures are usually found within the manufacturing or the service operations of the larger divisional structures. The team-based structure has gained popularity because it tends to be more flexible and responsive in turbulent environments. It tends to reduce costs because teams have less reliance on formal supervision. The cross-functional team structure improves communication and cooperation across the traditional boundaries. With greater autonomy, this structure allows for a quicker and more informed decision-making.

Contrasted with these benefits, the team-based structure can be costly to maintain due to the need for ongoing interpersonal skills training. Teamwork potentially takes more time to coordinate than formal hierarchy during the early stages of the team development. Employees may experience more stress due to increased ambiguity in their roles. Team leaders also experience more stress due to increased conflict, the loss of functional power, and the unclear career progression ladders. So, team structures suffer from the duplication of the resources and the potential competition teams.


  1. McShane, S., Glinow, M. V. M: Organizational Behavior. [Bookshelf Ambassadored]. Retrieved from
  4. Wright, T. A. (2014) Understanding the physical environment of work and employee behavior: An affective events perspective, J. Organize. Behave., 35, pages 1169– 1184. doi: 10.1002/job.1973.
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