Behavior is a function of a continuous, multidirectional interaction between the person and the situation.

The situation consists of the environment the person operates in, and it can include things like the organization, the work group, personal life situation, job characteristics, and many other environmental influences.
The ability to understand behavior is a prerequisite for effectively managing an organization. But to fully understand behavior at both the organizational and individual levels, one must use the science of behavior analysis.
Human behavior in organizations is complex and often difficult to understand. People vary in many characteristics, including cognitive, affective, motivational, and skill factors, which are changed by situations and change situations. Individuals are unique in terms of their skills, abilities, personalities, perceptions, attitudes, values, and ethics. Individual differences represent the essence of the challenge of management. A complete understanding of organizational behavior requires both an understanding of human behavior and an understanding of the organizational context within which human behavior is acted out.
The fact that human beings make up a vital part of any organization is no secret. Indeed, organizational behavior provides a challenge. Much has been learned, and much more remains to be learned. The future portends even more change, even more challenges, even more complexity. Behavioral study provides performance feedback and insight into why employees behave a certain way and their informal social interactions.
Organizations are open systems consisting of people, technology, structure, and purpose, which interact with elements in the organization’s environment. They face innumerable challenges on several fronts in their efforts to remain competitive. The correct application of organizational behavior, besides being interesting and practical, allows managers to identify workers who are extremely productive or especially unproductive and to comprehend why such differences exist and helps managers understand the complexity within organizations, identify problems, and determine the best way to correct them.
For a company to be efficient, it needs to do more than just manage its assets and assign tasks to its personnel. Rather, it needs to adopt a holistic approach to organizational behavior which is humanistic. Organizational behavior has manifold implications for various managerial, organizational, and global challenges. It is the study of individual behavior and group dynamics in organizational settings which focuses on motivation, leadership, teamwork, and communication. Moreover, it also encompasses contemporary issues in organizations.
Managers are concerned with the quantity and quality of the work their employees are performing. They must consider personal and environmental factors to understand fully how people behave in organizations and to help them grow to be all they can be. They should learn as much as possible about psychology in order to understand their employees. Four challenges for managers are the global environment, the workplace, ethical issues at work, and technological innovation. In addition, they must continually upgrade their knowledge about all aspects of their businesses, especially the human side of the organization.
Reality reflects what is going on in all types of organizations -- public and private, large and small, product and service-oriented. It also reflects the themes of globalization, diversity, technology, and ethics.
Challenges provide opportunities for us to grow and develop both as individuals and organizations. Challenge and opportunity are watchwords in organizations during these challenging times. Managers and employees alike are challenged to positively and optimistically meet change in how work gets done, change in psychological and legal interactions between individuals and organizations, change in personnel, and change in the basis for organization.
As organizational behavior deals with understanding and managing people in the workplace, it is important to note that a successful organization makes use of the various kinds of expertise it possesses in order to enhance performance and pursues goals in a changing environment by adapting its behavior according to its knowledge about itself and the world it operates in. Moreover, it is skilled at creating, acquiring, organizing, and sharing knowledge, and at applying this knowledge to create its workplace culture.
In general, most successful managers have a strong combination of technical, interpersonal, conceptual, and diagnostic skills. Managers of the future need to develop special skills to deal with the turbulence of change, and one of these important skills is the ability to promote creativity in organizations. The organization is successful to the extent that it mobilizes its resources effectively in the pursuit of organizational and human goals.
Human behavior influences key areas of management and is a means to an end for an organization to achieve its goals. The challenge of organizational behavior is to establish a mechanism for broad-scale performance improvement (quantity, quality, customer satisfaction, and systems analysis) and organizational change so that the employees will be more productive and happy, and as a result organizations will be more effective and efficient in achieving their goals by producing significant and measurable outcomes.