UNIT

01 Introduction to Organisational
Behaviour

Names of Sub-Units

Introduction to Organisational Behaviour (OB), OB Model, Challenges and Opportunities for OB,
Application of OB in Organisations, Workforce Diversity, OB in Global Context

Overview

The unit begins by explaining the historical development of OB and OB model. Further, it discusses
challenges and opportunities for OB and application of OB in organisations. The unit explains the
workforce diversity and OB in global context.

Learning Objectives

In this unit, you will learn to:

 Explain the meaning and importance of OB
 Describe the historical development in OB
 Discuss the models of OB
 State the challenges and opportunities for OB
 Explain the application of OB in organisations
 Organisational Behaviour and Human Resources Management

Learning Outcomes

At the end of this unit, you would:

 Assess the importance of OB
 Evaluate the OB models
 Appraise the opportunities for OB
 Examine the challenges for OB
 Assess the application of OB in organisations

Pre-Unit Preparatory Material

 http://www.tmv.edu.in/pdf/Distance_education/BCA%20Books/BCA%20VI%20SEM/BCA -
629%20OB.pdf

1.1 INTRODUCTION
Employees are one of the most valuable assets for an organisation. With the increasing competition
in the market, it has become crucial for organisations to �ind and retain ef�icient people. For this,
organisations are required to understand the needs and aspirations of their employees. This is where
the role of ‘organisational behaviour’ comes into the picture.
Organisational behaviour is a discipline that focuses on analysing how people interact, behave and
perform in a complex work setting. This discipline does not depend upon gut feelings but attempts to
gather information regarding an issue in a scienti�ic manner to drive valuable insights.
Organisational behaviour helps in achieving organisational objectives by ensuring proper utilisation of
manpower. For instance, organisations such as Wipro, IBM and Google have employee-friendly policies,
which motivate their employees and affect their productivity positively.

1.2 INTRODUCTION TO ORGANISATIONAL BEHAVIOUR (OB)

People are the building blocks in the success of an organisation. Organisations that value their employees
are more likely to survive in the competitive business world and become successful in the long run. In an
organisation, every employee wants to feel respected and have job satisfaction. Therefore, it is pivotal
for organisations to study the dynamics of human behaviour in an organisation to gain insights into
the needs, aspirations, perceptions and emotional responses of employees. By doing so, a knowledge
base is created that enables organisations to make rational decisions at multiple levels, namely the
individual, team (including interpersonal) and organisation levels.
According to Stephen P. Robins, “Organisational Behaviour is a systematic study of the actions and
attitudes that people exhibit within organisation”.
Organisational behaviour is an approach that stresses on human processes within an organisation
rather than focusing on the functional or structural aspects of the organisation. It is applicable at three

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UNIT 01: Introduction to Organisational Behaviour

levels in an organisation. Each level has a unique set of rules, regulations, responsibilities and goals of
people. These levels are:
 Individual level: This level forms the base of the organisational behaviour and is related to each
working in the organisation. The areas of study at the individual level include perception, personality,
learning, motivation and attitudes of individuals.
 Group level: The next level in organisational behaviour is different teams in the organisations. The
areas of study at this level involve group formation, team con�lict, leadership, power and politics.
The study at this level helps in gaining information on how to improve the team work, motivate
employees, etc.
 Organisational level: The study undertaken at this level helps in analysing changes in organisation’s
culture, management and their effect on the group and individuals. The working conditions and
stress management techniques are also discussed at this level.

1.2.1 Importance of OB
Organisational behaviour is a human tool that aids organisations in understanding the cause for the
problem, predicting measures for action and controlling its consequences for human bene�it.
The job of a manager is to motivate employees to work harder, resolve con�licts and help them achieve
rewards.
Organisational behaviour helps in determining the nature of employees such as extrovert or introvert,
motivated, con�ident, dominating and more. It also aids in understanding the basis of motivation and
improving the inter-personal relationship. After gaining insights into the behaviour of the individuals
and the groups, it becomes easy for managers to facilitate effective decision making and communication
within the organisation

1.2.2 Historical Development in OB

Organisational behaviour gained importance with the development of new management concepts and
practices. The historical emergence of organisational behaviour started with the following:
 Industrial Revolution: With the advent of the Industrial Revolution in the nineteenth century, there
were a large number of individuals working together as manager-subordinate relationships. Prior
to the nineteenth century, there existed the military rule in large organisations wherein the authority
of the leader was supreme and practically unquestioned. It was easy to deal with behavioural
problems under these conditions.
 Scienti�ic management: The scienti�ic management movement came in after the Industrial
Revolution with a narrower operations perspective. The scienti�ic management focused on economic
ef�iciency, especially labour productivity. It stressed upon improving the ef�iciency of each individual
in the organisation.
 Human relations movement: The human relations movement for the organisational behaviour
theory began in the 1930s and continued until the 1950s. The important part of the movement was
the management, which emphasized the morale and cooperation of employees, which was the �irst
important step towards human relations.
In the words of Raymond Mills, “The approach to human relations was to treat people as human
beings (instead of machines in the productive process), acknowledge their needs to belong and to feel
important by listening to and heeding to their complaints where possible and by involving them in

3
 Organisational Behaviour and Human Resources Management

certain decisions concerning working conditions and other matters. Then morale would surely improve
and workers would cooperate with management in achieving good production.”

1.2.3 Contributing Disciplines to OB

The contributing disciplines to OB are psychology, social psychology, sociology, anthropology and
economics. Let us understand these in detail. Psychology is the scienti�ic study of mental processes
and behaviour of human beings. Human psychology helps in analysing the level of motivation at work,
interpersonal relationships, training needs and the effects of personality traits on behaviour. Social
psychology is the scienti�ic study to comprehend and delineate how individuals’ behaviour is affected by
the actual, imagined or implied presence of other human beings around them. Social psychology helps
to gain an understanding of group behaviour, social perception, prejudices, leadership, con�lict, etc.,
in a group. Sociology is the study of the structure, development and functioning of society. Sociology
helps in understanding the effect of industrialisation on the social behaviour of people. Anthropology
is the study of human cultures, beliefs, values, ideas, practices, etc., in the past and present. It is based
on the knowledge gained from social sciences, biological sciences, humanities and natural sciences.
Anthropology helps in understanding the effect of culture on organisational behaviour. Economics is
the study of the production, consumption and transfer of wealth. Economics helps in understanding the
process of deciding among alternatives, the effect of economic policies on the growth of the organisation,
allocation of resources, etc.

1.3 OB MODEL
There are �ive OB models, i.e., autocratic model, custodial model, supportive model, collegial model and
system model. The autocratic model is based on strength, power and formal authority. In this model,
the management or owners of the organisation who manage the tasks have formal authority to control
the employees who work under them. Management and owner do not invite any ideas and innovations.
The custodial model depends on the concept of providing economic security to the employees via wages
and other bene�its which develops employee’s loyalty and motivation. The supportive model aims to
aspire to leadership.
The supportive model is not based upon control and authority but instead, this model tries to motivate
staff through the manager-employee relationship and how employees are treated on daily basis. This
model motivates employees by creating a positive workplace by considering employee’s ideas and
suggestions.
The collegial model is focused on teamwork and every employee takes an active part in performing
activities. Every employee is encouraged to work together for making a better organisation and energetic
workplace. Managers in this model are considered as a coach.
The system model is the �inal organisational model wherein the management and organisation see the
overall structure and team environment and consider that each human resource has different goals,
teams and potential. The system model tries to balance the goals of individuals and organisation.

1.4 CHALLENGES AND OPPORTUNITIES FOR OB

The opportunities of organisational behaviour are continuously expanding owing to rapid changes in
the organisational set-up and the world economy. The study of human behaviour not only focuses on
how an individual behaves in a certain situation but also why he or she behaves so and what would be
the impact of his or her behaviour on other individuals, organisation and the society as a whole.

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UNIT 01: Introduction to Organisational Behaviour

Following are the challenges and opportunities of organisational behaviour:

 Improve Peoples’ Skills
 Improve Quality and Productivity
 Implement Total Quality Management (TQM)
 Manage Workforce Diversity
 Respond to Globalisation
 Empower People
 Cope with Temporariness
 Stimulate Innovation and Change
 Emergence of E-Organisation and E-Commerce
 Improve Ethical Behaviour
 Improve Customer Service
 Help Employees Balance Work-Life Con�licts
 Flatten World
Figure 1 shows the emerging aspects of OB:

Changing
Managing
Demographics
Diversity
of Workforce

Changed
Ethical
Employee
Behaviour
Expectations

Technology OB
Globalization
Challenges

Figure 1: Emerging Aspects of OB

Source: https://www.indiaassignmenthelp.com/organisational-behaviour-assignment-help-india

1.5 APPLICATION OF OB IN ORGANISATIONS

Managers are accountable entities who are directly responsible for the functioning of an organisation.
Managers must �ind organisational effectiveness at individual, group and organisational levels by
understanding human behaviour in work settings. Managers usually remain in close contact with
employees. They must scrutinise the behaviour of employees closely and understand the complexities
involved in interpersonal relations when co-workers interact. It is valuable for managers to examine

5
 Organisational Behaviour and Human Resources Management

the dynamics of relationship in both formal and informal groups to coordinate their effort for better
results.
OB helps to inculcate positive work attitudes and productive behaviour in their employees using basic
managerial skills. Application of OB helps in the following ways:
 Effective communication: A good workforce should be able to communicate effectively with
the employer and workers, achieve the level of understanding through various channels in an
organisation, and appropriately make use of written, oral and other communication media.
 Decision making: A pro�icient manager should be able to make effective and timely decisions and
recommendations within the organisation.
 Technical skills: Supervisor should be able to use different technical tools, procedures or techniques
and guide employees. This is very crucial for supervisors and executives because they are in direct
contact with employees performing work activities with them.

We all know that organisational behaviour plays a key role in the management of a business as it applies
knowledge from various disciplines to make an organisation work more effectively. In managerial
practices, the implications of organisation behaviour are as follows:
 Motivation: Motivating employees to perform to the best of their abilities is one of the main skills of
a manager. Employees get motivated only when they are rewarded equitably with the efforts, they
put in. Therefore, managers must reward employees fairly to motivate them to work harder.
 Culture: Every time, a new employee enters an organisation, his/ her behaviour is affected by the
organisational culture. For instance, if an organisation has an encouraging culture, employees can
easily speak up without fear of reprisal. An open and healthy organisational culture also helps new
employees to become comfortable and con�ident in expressing their ideas.
 Decision making: Organisational behaviour plays a crucial role in decisions taken by the people
of an organisation. To make informed decisions, managers need to understand the context of the
business by following effective communication.
 Team work: A group consists of two or more people that interact with each other to achieve speci�ic
or common goals. To bring cohesiveness among team members, a manager needs to gain insight
into the needs and aspirations each individual in the team.
 Leadership: It is de�ined as a process of in�luencing, motivating, inspiring and directing people
to attain organisation goals. It is also an important managerial skill that requires organisational
behaviour to facilitate change and continuous improvement by in�luencing the employees to work
towards a common goal.

1.6 WORkFORCE DIVERSITy

According to Moorhead and Grif�in “Workforce diversity is concerned with the similarities and
differences in such characteristics as age, gender, ethnic heritage, physical abilities and disabilities,
race and sexual orientation, among the employees of organisations.”
Workforce diversity shows both challenges and some opportunities for businesses. An increase in the
numbers of progressive organisations has developed a need for valuing diversity in the workforce. This
helps in ensuring the strategic utilisation of employees for the accomplishing of strategic goals.
Workforce diversity refers to the varied personal characteristics which make the workforce of an
organisation heterogeneous (not the same).

6
UNIT 01: Introduction to Organisational Behaviour

Diversity based on religion, race, caste, language, gender, etc., among the human resource is to be duly
identi�ied and managed. Dimensions of workforce diversity include primary dimensions and secondary
dimensions.
Primary dimensions, such as gender, age, race, ethnicity, sexual orientation and physical abilities,
show those components which are inborn or exert extra in�luence on early socialisation. The primary
dimensions describe the essence of who we are as a human and de�ine us to other people and make
other people react accordingly.
The secondary dimension shows those elements which people learn throughout their lives, such
as education, marital status, religious beliefs and language. This dimension adds an extra layer of
complexity to the manner a person sees himself or herself and others.
Following are the factors that increase workforce diversity:
 Expansion of the service sector (banking, tourism, retailing, etc.)
 Interaction of the world economies, i.e., globalisation
 Teamwork requirement for implementing business strategies
 Mergers and alliances
 Rules, regulations and laws of the government
 Changes in the labour market

1.6.1 Importance of Interpersonal Skills

Interpersonal skill refers to a person’s ability to communicate, build trust-based relationships and work
well with others. Interpersonal skills help in building the following abilities:
 Communication expertise both spoken and written
 Strong positive approach and strong work ethics and positive approach
 Ability of people to be effective and highly productive team players
Following are the types of interpersonal skills:
 Communication skills (verbal and non-verbal, listening skill)
 Emotional intelligence
 Teamwork
 Negotiation skills
 Con�lict resolution and decision making
Let us understand the importance of interpersonal skills:
 It helps in developing the power of effective communication
 It helps in appreciating people by recognising the positive aspect
 It makes the positive body language and positive attitude
 It develops leadership and con�lict resolution
 It enables building meaningful leaderships
 It acts as a life management tool

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 Organisational Behaviour and Human Resources Management

 It improves employment potential

 It makes a business successful

1.6.2 Dynamics of Diversity

Organisational diversity is an old concept. Diversity is increasingly being identi�ied that a diverse
workforce and leadership team are not only important but are also considered as strategic assets.
Workplace diversity has been initiated to support the equal opportunities and anti-discrimination
legislation from which it arose. The ‘business case’ for diversity has become powerful.
It has varied from data showing correlations between ethnic, social and gender diversity as well as
improved company performance, to conceptual support.
This is required for different perspectives for increasing creativity and divergent thinking. It is believed
that diverse teams are a competitive differentiator as well as a factor in recruitment success and
employee retention.
Following are the key factors in the success of diversity initiatives:
 Leadership commitment
 Promoting organisation-wide cultural awareness
 Planning diversity initiatives
 Prioritisation of the diversity agenda as a business imperative and executive accountability

1.7 OB IN GLOBAL CONTEXT

Some of the economic dimensions of globalisation are expansion of international trade, cross-border
labour migration, cross-border �low of investments, etc.
From the OB point of view, the biggest concern for globalisation is the impact and in�luence of
multinational and transnational companies. Participation of these companies in trade, investment, and
production, expanded international communication and imported various cross-cultural issues.
Nowadays, even to operate locally, Indian organisations need to track these issues and regularly renew
their business practices, changing the mind-sets of their people. Globalisation has many dimensions.
The most general is economic globalisation.
OB studies are now increasingly becoming complex due to the effect of globalisation. Some of the
important areas of concern are changing technology with a sharp increase in cross-border technology
transfers, the mobility of organisations and people in the global world, the competition for markets and
customers on a global scale, etc.

Conclusion 1.8 CONCLUSION

 OB is the study of human behaviour in work settings to understand the social and behavioural issues
that are confronted while managing the people and organisational system.
 OB deals with how employees behave in the organisation and how their intentions impact the
productivity of the organisation.

8
UNIT 01: Introduction to Organisational Behaviour

 The scope of organisational behaviour is continuously expanding owing to the rapid changes in the
organisational setup and the world economy.
 OB is being applied to all areas that deal with human behaviour.
 There are �ive OB models, i.e., autocratic model, custodial model, supportive model, collegial model
and system model.
 OB plays a key role in the management of a business as it applies knowledge from various disciplines
to make organisation work more effectively.
 OB is valuable for managers to examine the dynamics of relationships in both formal and informal
groups to coordinate their efforts for better results.

1.9 GLOSSARy

 Anthropology: The study of human cultures, beliefs, values, ideas, practices, etc.
 Autocratic model: The model based on strength, power and formal authority
 Workforce diversity: The varied personal characteristics which make the workforce of an
organisation heterogeneous (not the same)
 Sociology: The study of social systems that include individuals in different roles

1.10 CASE STUDy: THE REGENCy GRAND HOTEL EMPLOyEES AND NEED FOR
ORGANISATIONAL BEHAVIOUR
Case Objective
This case study shows the signi�icance of understanding employee behaviour in achieving
organisational objectives.
The Regency Grand Hotel, one of the most prestigious hotels in Bangkok with more than 700 employees
and a provider of the best salary package in the industry, was sold to a renowned hotel chain of America
as an outcome of the strategic decision taken by the owner. The on-chair general manager also retired
and Mr. John Becker was appointed as the new general manager of the hotel. A well-experienced
management professional, Mr. Becker implemented a new style of business operations of the hotel.
Earlier, the hotel employees were used to carry out their job responsibilities as per the instructions
of their managers. Now, Mr. Becker changed the way of doing work, he asked employees to go beyond
the instructions of their managers and make decisions independently as per situational demands. Mr.
Becker turned his ideas into actions, and the organisational process got revived in such a way that the
lower-level employees need not take the help or guidance of their superiors for making various day- to-
day decisions and resolving minor issues. Mr. Becker directed the employees to reach out to their
superiors for guidance only in case of major organisational issues. Gradually, a lot of issues started
occurring in the work procedures of the Hotel. The major problems faced were as follows:
 Practically, the employees found it dif�icult to identify whether an issue was minor or major.
 Employees remain confused about taking the guidance of their superiors.
 The superiors often dismissed the decisions taken by their juniors by saying that the decision taken
should be moved forward to the upper level of management as the issue seemed major to superiors.
This created a chaotic situation in the organisation. The employees felt discouraged and started
doubting their ability to make correct and effective organisational decisions.

9
 Organisational Behaviour and Human Resources Management

 Mutual trust and respect for each other also started diminishing among employees.
 The number of customer complaints increased regarding the inappropriate performance of the
employees of the hotel.
Earlier, employees used to work under the supervision of superiors, managers and departmental heads.
They had a habit of acting as per the orders of superiors. They never got an opportunity of showing
their decision-making abilities. The autocratic leadership style and the culture of strict adherence to
instructions were adopted in the hotel. However, at that time, employees were better able to maintain
and deliver services at the acceptable level of performance standard. The overall work environment and
organisational behaviour took a turn as the new general manager joined. He adopted the democratic
style of leadership and wanted to empower employees. He also wanted to ensure that employees need
to re�lect innovative thinking for making organisational decisions. Analysing the situation with the
team, the general manager found that it was the failure of the top management in understanding the
strengths and weaknesses of employees and assigning them responsibilities accordingly. To resolve the
emerging issues, the hotel took the following measures:
 It would be the duty of the top management to de�ine the responsibility of every employee of the
organisation.
 A pre-de�ined list of decisions would be provided by the top management, which would categorically
depict which organisational decisions are to be taken by the lower-level employees and for which
decisions the lower-level employees need to seek suggestions from their superiors.
 The top management also took steps towards boosting employee motivation, thereby enhancing
employee productivity and facilitating employee retention.
 Appropriate training and development sessions were also designed for employees to hone their
decision-making skills.
 Group and team interests were focussed instead of individual interests.
(Source: https://assignment�irm.com/sample-assignment/report-writing-organizational-behavior.php)

Questions
1. What should have been the strategy of the new general manager of the Regency Grand Hotel before
implementing the democratic style of leadership for employee empowerment?
(Hint: He should have stressed understanding behaviours and aspirations of employees before
assigning them the responsibility of decision-making.)
2. Was the thought of the new general manager of the hotel to empower employees right or wrong?
Why or why not?
(Hint: The thought of employee empowerment was right because this was a trajectory to make
employees more responsible, productive and good decision-makers.)
3. What steps were taken to resolve emergency issues?
(Hint: Appropriate training and development sessions, Group and team interests)
4. Describe autocratic leadership style.
(Hint: Strong control, no sharing of ideas and suggestions)
5. How employees were treated earlier?
(Hint: Work under the supervision of superiors, act as per the orders of superiors)

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UNIT 01: Introduction to Organisational Behaviour

1.11 SELF-ASSESSMENT QUESTIONS

A. Essay Type Questions

1. What do you mean by organisational behaviour?
2. Explain the history of organisational behaviour.
3. Describe the models of organisational behaviour.
4. De�ine workforce diversity.
5. List the importance of interpersonal skills.

1.12 ANSWERS AND HINTS FOR SELF-ASSESSMENT QUESTIONS

A. Hints for Essay Type Questions

1. Organisational behaviour is an approach that stresses human processes within an organisation
rather than focusing on the functional or structural aspects of the organisation. It is applicable at
three levels in an organisation. Refer to Section Introduction to Organisational Behaviour (OB)
2. Organisational behaviour gained importance with the development of new management concepts
and practices. The historical emergence of organisational behaviour started with the following:
 Industrial Revolution: With the advent of the Industrial Revolution in the nineteenth
century, there were a large number of individuals working together as manager-subordinate
relationships. Prior to the nineteenth century, there existed military rule in large organisations
wherein the authority of the leader was supreme and practically unquestioned. It was easy to
deal with behavioural problems under these conditions.
 Scienti�ic management: The scienti�ic management movement came in after the Industrial
Revolution with a narrower operations perspective. The scienti�ic management focused on
economic ef�iciency, especially labour productivity. It stressed improving the ef�iciency of each
individual in the organisation.
 Human relations movement: The human relations movement for the organisational behaviour
theory began in the 1930s and continued until the 1950s. The important part of the movement
was the management, which emphasized the morale and cooperation of employees, which was
the �irst important step towards human relations.
Refer to Section Introduction to Organisational Behaviour (OB)
3. There are �ive OB models, i.e., autocratic model, custodial model, supportive model, collegial model
and system model. The autocratic model is based on strength, power and formal authority. The
custodial model depends on the concept of providing economic security to the employees via wages
and other bene�its which develops employee’s loyalty and motivation. The supportive model aims
to aspire to leadership. The collegial model is focused on teamwork and every employee takes an
active part in performing activities. The system model tries to balance the goals of individuals and
organisation. Refer to Section OB Model
4. Workforce diversity shows both challenges and some opportunities for businesses. An increase in the
numbers of progressive organisations has developed a need for valuing diversity in the workforce.

11
 Organisational Behaviour and Human Resources Management
This helps in ensuring the strategic utilisation of employees for the accomplishing of strategic goals.
Workforce diversity refers to the varied personal characteristics which make the workforce of an
organisation heterogeneous (not the same). Refer to Section Workforce Diversity
5. Interpersonal skills help in developing the power of effective communication, recognising the positive
aspect of people, developing leadership and con�lict resolution, etc. Refer to Section Workforce
Diversity

@ 1.13 POST-UNIT READING MATERIAL

 http://www.simplinotes.com/organisational-behaviour-concept/
 https://www.talentlyft.com/en/resources/what-is-workplace-diversity

1.14 TOPICS FOR DISCUSSION FORUMS

 Discuss how organisational behaviour helps organisations in improving their ef�iciency and overall
performance.

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