Managing organizational behavior in today’s organizations is especially challenging for organizations which face many outstanding rapid changes in their external environment. These challenges can be grouped into four; which are;

1. increasing globalization
2. need to understand diverse workforce
3. advancing technology
4. managing ethical issues

These challenges should be addressed by organizations with increasing sensitivity for managing their human resources.

Challenge I. Increasing Globalization

Although globalization has many benefits (increase in sales due to activities in countries other than domestic country and reduction of costs, are the most outstanding ones), it also bring along some important risks in terms of OB. First, because the foreign managers might have different views about the organizational purposes and strategies, the coordination of global activities might arouse as a risk and the conflicts might occur due to inadequate communication. In order to manage the risks associated with this, the organizations rotate their managers to other countries in which they have operations; by this way, they can directly gain information about the problems and other necessary issues. These managers called as expatriate managers (also briefly called as ‘expat’), help the organizations to coordinate their activities in foreign countries with respect to organizational procedures and standards. On the other hand, global organizations should also consider the risks of terrorism; environmental disasters, such as hurricanes, earthquakes and other crises. Global organizations might become the targets for terrorist attacks due to their country of origin. The threat of terrorism has an important but negative effect on global operations. It is not only about damaging the foreign organizations’ property which is indicated as a symbol of the organization’s countryof-origin; but there is the threat of kidnapping or murdering organizations’ managers or employees. Furthermore, global organizations are also found to be responsible of environmental destruction (i.e. pollution, global warming). Besides to these, the challenge of managing an increasingly diverse workforce is related to globalization.

Challenge II. Need to Understand Diverse

Globalization created a competitive environment which organizations may respond with new products that meet the changing customer demands. Companies ensure the development of new ideas, through diversity. Diversity of workforce brings different perspectives, due to interaction of different skills, talents and experiences of employees, which is an important driver of creativity leading to innovation. New ideas and products develop as a result of multiple ideas. Being aware of this, organizations handle diversity management as an ongoing activity. On the other hand, a culturally diverse workforce helps organizations to overcome language and cultural barriers. In addition, organizations could also benefit from generational diversity, by creating mentorship and coaching programs for younger generations.

Challenge III. Advancing Technology

By increasing productivity, reducing production costs and prices, and helping to raise real wages, the process of innovation initiated by technological progress can help to transform economies and improve living standards. Recent technologies helped to increase effectiveness by product quality improvement and low-costs, and in addition, creativity and innovation also enhanced effectiveness. In accordance, advances of technology have tremendous effects on organizational behavior. First of all, the technological progress in all fields creates automation at workplace. This implies substantial transformations at workplace and changes for all employees. This means that an important portion of existing jobs would be lost and new jobs would be gained. This requires development of new skills for employees. Because new technology usage brings new skill requirements, continuous training is essential. Since technological change is so rapid, organizations should find ways for their employees to constantly make them learn and adapt these changes.

Challenge IV. Managing Ethical Issues

Ethics is important for OB because it can enhance or reduce the motivation, loyalty and well-being of employees. Concern for ethical issues increased due to major corporate scandals. Ethical norms and standards within the organization specify the actions of organizations for making profits, therefore it is necessary to document these principles as code of ethics. For fulfilling their actions ethically, organizations should establish an ethical code and create a system based on rewards and punishments for the enforcement of their ethical code. Developing ethical codes help organizations to protect their reputations. These codes are important for managers and employees to understand how to behave when faced with ethical issues. However, since the distinction between ethical and unethical behavior is not clear, ethical codes may not be comprehensive, and as a result organizations probably face ethical dilemmas.

As can be understood from the information, the correct answer is E. All of the following answer choices i.e. “increasing globalization”, “need to understand diverse workforce”, “advancing technology”  and “managing ethical issues” are the challenges for Organizational Behaviour in changing environment.