Organizational Behavior is the study of how people interact within groups. The purpose of the study is to apply the findings in an attempt to make businesses operate more effectively.

Organizational Behavior can be categorized in three ways:

1. Individuals in Organization (Micro Level): The first individual level, involves organizational psychology and understanding human behavior and incentives. 
2. Work Groups (Meso Level): The second level is groups, which involves social psychology and sociological insights into human interaction and group dynamics.
3. Organization Level (Macro Level): The top level is the organizational level, where organization theory and sociology come into play to undertake systems-level analysis and the study of how firms engage with one another in the marketplace.

Four Elements of Organizational Behavior:
The four elements of organizational behavior are;

• people,
• structure,
• technology, and
• the external environment

By understanding how these elements interact with one another, improvements can be made. While some factors are more easily controlled by the organization - such as its structure or people hired - it must be able to respond to external factors and changes in the economic environment.

Therefore, one can say that organizational behavior is the academic study of how people interact within groups, and its principles are applied primarily in attempts to make businesses operate more efficiently, it includes areas of research dedicated to;

• improving job performance,
• increasing job satisfaction,
• promoting innovation, and
• encouraging leadership and is a foundation of corporate human resources.

History of Organizational Behavior:
As a multi-disciplinary science, organizational behavior has been influenced by developments in a number of related disciplines, including sociology, industrial/organizational psychology, and economics. 

The study of organizational behavior has its roots in the late 1920s when the Western Electric Company launched a now-famous series of studies of the behavior of workers at its Hawthorne Works Plant in Cicero, Ill.

Researchers there set out to determine whether workers could be made to be more productive if their environment was upgraded with better lighting and other design improvements. To their surprise, the researchers found that the environment was less important than social factors. It was more important, for example, that people got along with their co-workers and felt their bosses appreciated them.

The Hawthorne Effect, which describes the way test subjects' behavior may change when they know they are being observed, is the best known study of organizational behavior.

Researchers are taught to consider whether or not (and to what degree) the Hawthorne Effect may skew their findings on human behavior.

Organizational behavior was not fully recognized by the American Psychological Association as a field of academic study until the 1970s. However, the Hawthorne research is credited for validating organizational behaviors as a legitimate field of study, and it is the foundation of the human resources profession as we know it these days.