Organizations are social inventions for accomplishing common goals through group effort. Organizational behaviour is concerned with the attitudes and behaviours of individuals and groups in organizations and can be understood in terms of three levels of analysis: the individual, the group, and the organization.

Organizational behaviour is important, in part, because it can influence an organization's effectiveness by providing it with a competitive advantage. Many of the factors that differentiate the 35 best companies to work for in Canada have to do with issues in organizational behaviour and the three main goals of organizational behaviour: prediction, explanation, and management.

Understanding the influence of the external environment of organizations is facilitated by the depiction of organizations as open systems that exchange resources with their environment. Ultimately, organizational performance is measured by a resource exchange that enables the resources retained by the organization to grow. This depends upon a synergistic arrangement of the internal resources.

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The external environment is comprised of components - both formal and informal - that have resource interactions which directly or indirectly affect the organization. These components and their interactions are collectively called environmental factors. This module discusses these factors and how the organization should rank their importance for the purpose of environmental monitoring and adaptation.

The extent of the challenge posed by the environment resides in two of its attributes, complexity and turbulence (its propensity to change). Understanding the different types and degrees of these two attributes informs the process by which an organization can adapt.

Organizations exist in an environment that is constantly changing. As a result, they must become flexible enough to respond to these changes in order to remain successful and to survive. Some of the major changes facing organizations today include domestic and international competition and increasing diversity in the workplace. Organizational behaviour can help organizations respond to these changes by understanding differences in cultural values, managing diversity, and improving the quality of goods and services.