Organizational behavior refers to the to the buying behavior of organizations that buy products for business use, resell or to make other products.Organizations consist of business, industries, retailers, government, and non-government organizations.
- Business and industries buy products for business use or to produce other products.
- Resellers buy products to resell at a profit.
- Government buys products for use in offices and development projects or to provide service to people.
- Non-government organizations buy products to provide service to their clients. They can be hospitals, educational institutions, political parties, religious and social organizations.
Features:
- Buyers: Fewer buyers buy large volume in geographically concentrate areas.
- Demand: The total demand is inelastic. It is not affected by price changes. The demand is derived from the demand for consumer goods. The demand is known as Derived Demand. It keeps on fluctuating because a small change in consumer demand results in major shift in organizational demand.
- Relationship: The relationship between supplier and customer is close. This is due to few and large customers.
- Professionalism: Professional and trained people make purchase. Purchase policies require buying instruments like quotations, tenders, contracts etc.
- Channel: Organizations generally buy direct from manufacturers. Purchasing agents are also used.
- Buying Influences: More participants influence buying decisions. Buying committees and evaluation committees are used. Personal selling is important.
- Rationality: Buyers are informed and are more rational in making buying decisions. The buying criteria can be value, quality or service.
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One of the features of organizational behavior is that it is a Separate Field of Study and not a Discipline Only.
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