Organisational Behaviour

MODULE – 1

Introducing
Organisational
Behaviour
MODULE

Introducing Organisational Behaviour

Module Description

The study of Organisational Behaviour (OB) is very interesting and challenging too. It
is related to individuals, group of people working together in teams. The study
becomes more challenging when situational factors interact. The study of
organisational behaviour relates to the expected behaviour of an individual in the
organisation. No two individuals are likely to behave in the same manner in a
particular work situation. There are no absolutes in human behaviour. Great
importance therefore must be attached to the study. Researchers, management
practitioners, psychologists, and social scientists must understand the very
credentials of an individual, his background, social framework, educational update,
impact of social groups and other situational factors on behaviour.

OB involves integration of studies undertaken relating to behavioural sciences like

psychology, sociology, anthropology, economics, social psychology and political
science. Therefore, organisational behaviour is a comprehensive field of study in
which individual, group and organisational structure is studied in relation to
organisational growth and organisational culture, in an environment where impact of
modern technology is great. The aim of the study is to ensure that the study of the
human behaviour contributes more towards growth of the organisation and greater
efficiency is achieved.

Unit 1.1

Introduction to Organisational Behaviour

Unit 1.2

Personality

Unit 1.3

Perception
Unit Table of Contents
Unit 1.1 Introduction to Organisational Behaviour

Topics Page No.

Learning Objectives
Learning Outcome
1.1.1 What is Organisational Behaviour (OB)?
1.1.2 Why does OB Matter?
1.1.3 Where does OB Knowledge Come from?
1.1.4 Research Methods in OB
1.1.5 Historical Perspectives of OB
Activity
Activity Answer Key
Summary
References
Introduction to Organisational Behaviour

Learning Objectives:

• Explain the history of management theory and the evolution of organisational

behaviour
• Analyse the individual and group behaviour
• Elaborate the organisational behaviour theories and its application in current
situation
• Understand the individual behaviour in organisation
• Relate the topics in organisational behaviour to the contemporary issues and
trends

Learning Outcome:

• Analyse the evolution of organisational behaviour

• Categorise the behaviour of individuals and groups in organisations
• Apply the organisational behaviour concepts, models and theories through
situational cases
• Compare the individual personalities and behaviours and its impacts on
individual perception and behaviour
• Analyse individual personality and behaviour impacts in the organisation

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Introduction to Organisational Behaviour

The organisational behaviour field deals with human behaviour in organisation. It is

the multidisciplinary in nature that searches and spreads the knowledge of
behaviour in all directions, in an organisation, either based on studying individual
or group or the organisational processes. In common, two individuals are not
expected to behave in the same manner and that too in a particular work situation. It
is the prediction skill of a manager about the expected behaviour of an individual.

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Introduction to Organisational Behaviour

1.1.1 What is Organisational Behaviour (OB)?

1.1.1.1 Introduction
The organisational behaviour field deals with human behaviour in organisation. It is
the multidisciplinary in nature that searches and spreads the knowledge of
behaviour in all directions, in an organisation, either based on studying individual
or group or the organisational processes. The study of individual behaviour would
be incomplete if the behaviour is affected by the people surrounding us as well as by
the organisation, in which they work. Studying only individuals or only
organisations would be of no use. It is essential to study both simultaneously.
Therefore the role and field of organisation behaviour is not only concerned with a
particular organisation, but also more concerned with the society.

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Introduction to Organisational Behaviour

1.1.1.2 Meaning and Definition of OB

The study of Organisational Behaviour (OB) is very appealing and challenging too. It
is related to individuals, group / teams of people working together in the
organisation. The study becomes more challenging when situational factors interact.
The study of organisational behaviour thus relates to the expected behaviour of an
individual in the organisation.

In common, two individuals are not expected to behave in the same manner and that
too in a particular work situation. It is the prediction skill of a manager about the
expected behaviour of an individual. There are no absolutes in human behaviour.

The definitions for OB are stated below:

• According to Fred Luthans, “Behaviour is directly concerned with the
understanding, prediction and control of human behaviour in organisations.”
• According to Davis and Newstram, “Organisational behaviour is the study and
application of knowledge about how people act within organisations.”

According to L. M. Prasad, “Organisational behaviour can be defined as the study and

application of knowledge about human behaviour related to other elements of an organisation
such as structure, technology and social systems.”

Organisational behaviour (OB) is the study of how people behave in organisational

settings. Its principles are applied with the goal of making organisations and the
people in them work more effectively together.

Study about individual behaviour, group behaviour and organisations give the
inferences about how different people react to different situations. It also guides
regarding the motivation styles and the leadership styles to be adopted for different
persons. Due to the individual differences, the diverse leadership styles, incentive
schemes, motivators and communication styles are to be applied.

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Introduction to Organisational Behaviour

1.1.1.3 Objectives of Organisational Behaviour

There are several objectives of organisational behaviour and some of them are briefly
stated here,
1. To establish a social system in the organisation.
2. To determine the motivation level of employees.
3. To encourage the employees, to work enthusiastically in the organisation.
4. To develop an effective group behaviour among the employees.
5. To identify the reasons for conflict and to resolve the conflict.
6. To trace out the reasons for dis-satisfaction. depression and thereby to reduce
or eliminate the reasons.
7. To increase the moral of employees of the organisation.
8. To maintain the organisational environment favourable for the work.
9. To find out the ways for effective organisational development.

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Introduction to Organisational Behaviour

1.1.1.4 Scope of Organisational

Organisational Behaviour is defined as the understanding, prediction
and management of human behaviour both individually or in a group that occurs
within an enterprise or organisation.
Fig 1.1.1: Scope of Organisational Behaviour
The elements of the internal organisation are as
below,

1. People
The people are the major force who constitutes
the internal social system of the organisation.
They consist of individuals and groups.
Groups may be in any form - small / large,
formal / informal, and official / unofficial. They
are always dynamic, because they form, change and disband. In general, people are
living, thinking and feeling as human being who created the organisation and they
try to achieve the objectives and goals. Thus, organisations exist to serve the people
and not the people who exist to serve the organisation.

2. Structure
Structure describes the sole relationship of people in the organisation. Different
people in the organisation are assigned different roles where they will have certain
relationship with others. Added, it leads to division of labour so that people can
perform their duties or work to accomplish the organisational goal.

3. Technology
Technology decides the physical, environmental and economic conditions in which
people work. The nature and temperament of technology depends more on the
nature of the organisation and hence, it influences the work and working conditions.
Thus, technology brings effectiveness in the areas of systems, process and even in
updating the people by themselves in various ways etc. are the scopes of having
updated technology in an organisation.

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Introduction to Organisational Behaviour

4. Social System
Social system provides external environment in which the organisation operates. It
influences the attitudes of people, their working conditions and above all provides
competition for resources and power.

OB is thus the study of human behaviour at work in organisations. Accordingly, the

scope of OB includes the study of concepts relating to Individual Behaviour,
Inter-individual Behaviour groups and Group Behaviour, which are explained
below,

a. Individual Behaviour
This relates to the study of individual’s personality, learning, attitudes, motivation,
and job satisfaction. It is about the interaction with others in order to study about
themselves and to make their own perception about them.

Example: The Observation of personality and attitude, made during interview round
happens, to check their skills, apart from those mentioned in the resume.

b. Inter-Individual Behaviour
It is the study of the employees and the communication between themselves as well
as between their subordinates in understanding people’s leadership qualities, group
dynamics, group conflicts, power and politics. Example: A class meeting to decide
upon the new leader.

c. Group Behaviour
Group behaviour generally, studies the formation of organisation, structure of
organisation and the effectiveness of the organisation. The group efforts directed
towards the achievement of organisation’s goal is called as group behaviour. In
short, it is the way how a group behaves. Example: Strike, rally etc

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1.1.1.5 Benefits of Studying OB

By studying the principles of organisational behaviour, managers become adept at
the following key skills,
a. Understanding organisational behaviour is helpful for an individual to
understand his/her behaviour itself, which in turn will help the organisations
enrich their understanding about their employees, so as to help in getting
their work done properly.
b. Organisational behaviour helps in managing human resources and in
developing the work-related environments added with creating a motivated
atmosphere in the organisation.
c. Organisational behaviour helps in predicting the behaviour which in turns
helps attain effectiveness in an organisation resulting in increasing
productivity, escalating the effectiveness, efficiency etc.
d. Organisational behaviour also helps in reducing dysfunctional behaviour in
workplace like absenteeism, dissatisfaction and tardiness etc.
e. Organisational behaviour helps in enhancing managerial skills; it helps in
creating leaders.
f. Organisational behaviour helps managers and leaders to understand, describe
and modify an individual behaviour.
g. Organisational behaviour involves the study of attitude, perception, learning
and moral ethics at individuals point.
h. Managers should be ready to handle the unpredicted worker's outcome and
behaviours while seeking to make the temporary employees feel that they
have a chance to retain their jobs which is a motivating factor.
i. Organisational behaviour helps to respond to Globalisation interms of
technology and international relationships.
j. Managers must understand the religious backgrounds, socialisation units,
geographical aspects, and the cultural differences, working with people so as
to alter the management style to suit such people appropriately. People are
different so should they be handled differently.
k. Workforce diversity implies working with people from the same localities
with different personalities and opinions within the organisation. Managers
must understand how to handle the personalities to make sure that the
organisation's culture, mission, and visions are not comprised, by the
unbecoming act of an individual.

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Introduction to Organisational Behaviour

l. Every organisation should motivate their employees towards innovation,

invention and change through positivity, support, and tolerance.
m. Managers need to create proper Work-Life balance for employees so as to
keep positive about their work, which is done by means of understanding OB.

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1.1.1.6 Levels of Organisational Behaviour

OB can be defined as actions and behaviours of individuals and groups towards the
organisation’s overall functioning and performance. The three levels includes the
following,
Fig 1.1.2: Levels of Organisational Behaviour
1. Individual Level – Deals with the
concepts at the individual level.
Examples of individual-level include
the concepts like: learning,
perception, motivation , personality
and attitude.

2. Group Level – Deals with the concepts at the group level.

Examples of group-level concepts are team, conflict, leadership, power, and politics
etc., Group-level concepts may include how groups are formed, how to make
effective teams, how individually and collectively the group activities can be
improved etc.,.

3. Organisational Level – Deals with the concept that exists at the organisational
level.
Examples of organisational-level concepts are change management and
organisational culture. Other topics discussed at organisational level include the
concept of organisation, different organisational models, and organisational change
along with its impact and implementation.

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1.1.1.7 Models of Organisational Behaviour

The four major models or frameworks that operate in an organisations are,
Fig 1.1.3: Organisational Behaviour Models
1. Autocratic: The basis of this model is
power with a managerial orientation of
authority resulting in the employees
increased obedience and dependency on
the boss. The employee needs are met very
low. The performance result is minimal.

2. Custodial: The basic concept of this

model is economic resources with a managerial orientation of money. The
employees are concerned and oriented more towards security and benefits and they
dependent on the organisation. The performance result is passive cooperation.

3. Supportive: The basic notion of this supportive model is leadership with

support. The employees are thus expected to be oriented towards job performance
and participation. The employee need, meets its status and recognition. The
performance result is awakened drives.

4. Collegial: The basic concept of this collegial model is partnership with a

managerial orientation of teamwork. The employees in turn gets oriented towards
responsible behaviour and self-discipline. The employee need that is met is
self-actualisation. The performance result is moderate enthusiasm.

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1.1.2 Why does OB Matter?

Getting along smoothly with others, getting a great job successfully, deciding and
finalising effective decisions, working sincerely and effectively within a team
supporting the team etc are all concerned by knowing more about OB. Studying OB,
helps to tackle all issues by understanding the behaviour of individuals/ group,
which acts as the root cause for any problem.

Organisations have been set up to fulfil the needs of the people. In today’s
competitive world, it is mandatory for the organisations to be always
growth-oriented. This is feasible when productivity is ensured with quality and
quantity of products that are to be produced with zero errors. Additionally,
employee who absents frequently cannot contribute towards productivity and
growth of the organisation. In the same way, the employee turnover generally
causes increased production cost. Job satisfaction is a major factor to analyse
performance of an individual towards his work. Satisfied workers turn into highly
productive categories who contribute more in building an appropriate work culture
in the organisation.

OB can help in studying the following which matters lot to the growth and
advancement of any organisation,
i. Why people behave in a particular way?
ii. Why one person is more effective than the other?
iii. Why one group is more effective than the other?
iv. Why one individual is highly effective than the other, in an organisation?

The study of above things gives sound knowledge about human behaviour and this
knowledge can be applied in shaping the behaviour and taking various decisions
related to policy making in human resource management.

It is therefore important for all employees to possess a positive approach towards

OB. It is also important for managers to develop an appropriate work culture. Hence
the understanding of OB matters a lot in an organisation for their continuous success
and growth.

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Introduction to Organisational Behaviour

1.1.3 Where does OB Knowledge Come from?

The one best way where people learn about organisational behaviour is: By
becoming a part/ an element of any organisation. Usually, the learning by
observing helps us to know what goes on around us in the organisation. For
example, the existence of a hierarchy and the expectations of the organisation,
describes us clearly about the organisation. Knowledge, exposures and
generalisations from these experiences, helps us to form our own ideas about the
concept of organisational behaviour. As employees, it is a great chance for most of us
to learn our life in the workplace, either by some process/ or by observations and
interactions.

In the sense to have a good understanding about the concepts, ideas and theories of
organisational behaviour, a theoretical grounding and experience with organisations
is the very much necessary. The sources from where the knowledge can be adopted
are as follows,

a. Multidisciplinary Anchor
In general, the organisational behaviour is anchored around the idea that the field
should develop from knowledge from various other disciplines and not only from its
own field.

Added, sociologists have contributed so much about the basic knowledge of team
dynamics, organisational power, organisational etc. In view of this point, already OB
knowledge has been benefited from knowledge in emerging fields such as
communications, marketing, and information systems. Thus, in this concern, the
organisational behaviour has thrived through its diversity of knowledge from other
fields of study.

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Introduction to Organisational Behaviour

b. Systemic Research Anchor

A significant feature of OB knowledge is that it is based on systematic research,
which naturally involves framing research questions, collecting the data
systematically, and then testing hypotheses against those data etc with a research
process.

When the research is found theoretically and conducted systematically, the results
are highly reliable so as to aid in making decisions and taking corrective actions, as
based on research evidence.

c. Contingency Anchor
People and their work environments are literally complex in nature, and so the field
of organisational behaviour recognises this with particular actions and reactions,
which may have different consequences in different situations. In additional words,
it is strongly accepted that no single solution is best in all circumstances.

d. Multiple Level of Analysis Anchor

The individual level consists of the characteristics and behaviours of employees as
well as the thought provoking processes that are attributed to them, such as
personalities, perceptions, attitudes, motivation and values. In general, the team
looks at the way that the people interact. Thus it can be stated that the multi level
analysis includes leadership, power, team dynamics, communication organisational
politics, conflict etc.

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1.1.4 Research Methods in OB

OB researchers have many tools to discover how individuals, groups, and

organisations behave. Researchers have worked on the hypotheses, based on their
own self observations, readings on the subject, and by getting information from
individuals within the organisations. Based on these ideas, they try to understand
the relationship that exists among different variables. There are a number of
different research methods that researchers use, which are to be discussed below,
Fig 1.1.4: Research Methods
a. Surveys
Surveys are one of the
most primary methods
used by the management
researchers to learn more
about OB and its concepts.
The basic survey
comprises a number of
questions asking
individuals to respond.
The questions can be
open-ended or close-ended. Today, everyone is finding it very easy to create an
online survey that quickly compiles the result automatically and rapidly. There are
even several survey tools available in online too.

An example for an open-ended question to employees: How do you feel about goal
setting with respect to productivity? Then this answer can be summarise with
findings.

b. Field Studies
Field studies, on other hand, are very effective to learn about the facts that are going
on within organisations. There are survey field studies and more compelling
evidence comes from field studies that employ an experimental design.

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Introduction to Organisational Behaviour

c. Laboratory Studies
OB researchers are often interested in taking the basic research questions. The
researchers usually conduct a lab study in which one group is allocated under one
condition while the other group is allocated under the control conditions (generally
the control condition involves no change at all).

One of the most important concept, to be understand with lab studies is that: they
provide the researchers with a great opportunity of control over the environment in
which they are studying, which is a less “realistic” way, since they are not studying
real employees in real work settings.

d. Case Studies
Case studies are in-depth descriptions of a company. Case writers typically employ a
systematic approach to gather data and explain a situation in detail. The advantage
of case study is that they provide enormous information for portraying the
conclusions about the circumstances and the people involved in this.

e. Meta-Analysis
Meta-analysis is a method used by researchers to summarise and sketch what other
researchers have found on a particular topic. The benefit of this meta-analysis is that
it gives a more definitive answer to a question than a single study ever could. The
disadvantage is that meta-analysis is only possible if sufficient research has been
done on the topic in question.

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1.1.5 Historical Perspectives of OB

It is an accepted fact that the origin of Organisational Behaviour and its study can
trace its roots back to Max Weber. While, the previous organisational studies, was
considered to have its origin from the academic discipline with the advent of
scientific management in 1890's, with Taylorism representing the peak of the
movement. Thus, it was Fredrick Winslow Taylor who introduced the systematic use
of goal setting and rewards to motivate employees that could be considered as the
starting of the academic discipline of Organisational Behaviour.

The historical development of Organisational behaviour are stated below,

Fig 1.1.5: Historical Development of Organisational Behaviour
a. Scientific Management Approach
Scientific management approach was
developed by F.W. Taylor at the
beginning of the 20th century. This
theory has thus supported its use by -
scientifically studying each and every
element of the job, in selecting and
training the best workers for the job
arid then lastly in making sure that the
workers follow the prescribed method
of doing the job. It provided a scientific rationale for job specialisation and mass
production. The assumption of F.W. Taylor was to motivate the employees largely
by money and thereby to make the workers to work more efficiently to increase the
output.

Over the other side, this theory was criticised by many employers and workers.
Workers objected to take up extra pressures of work, as being felt harder and faster.
Criticisms bothered much that this method took the humanity out of labour,
reducing workers to machines responding to management incentives. Therefore,
Taylor's view has now considered inadequate and narrow based on the points given
by the critics.

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b. Bureaucratic Approach
While scientific management focused on the interaction between workers and the
task, the researchers studied the structure of the organisation more effectively. This
bureaucratic approach theory has the tendency to derive the works from each
employee more efficiently. Hence, this classical organisation theory sought to be the
most effective among the overall organisational structure for workers and managers.

This theory's which was proposed by the most prominent advocate, Max Weber,
designed a 'bureaucratic form' of structure, in which he thought the work for all
organisations. The Management Gurus like: Henry Fayol and Frederick W. Taylor,
the early management pioneers, thus has recognised the behavioural side of
management. However, they did not emphasise the human dimensions.

c. Hawthorne Studies
The real beginning of organisational behaviour started with Hawthorne
Experiments, in the year 1924. A group of professors started to enquire about the
human aspects of work and working conditions at the Hawthorne plant of Western
Electric Company, located in Chicago. The findings of these studies, with many
experiments, were given a new name as 'human relations' and the studies brought
out a number of findings to the limelight, with relevant factors and proof to
understand the human behaviours at work. Thus the Human element in the
workplace was considered more important. The workers were also influenced by
social factors and the behaviour of each individual worker was determined by the
group.

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Introduction to Organisational Behaviour

1.1.6 Conclusion

This chapter is thus designed to get familiarise with the various concepts of
organisational behaviour, like benefits of learning OB, its models, issues related to the
way people behave at work, in teams etc. In addition, with the large number of
factors, both within an individual and within the environment, that influences a
person’s behaviours and attitudes.

Thus, OB studies enhances an organisation’s ability to cope with any issues and to
create an environment that is mutually beneficial to the company as well as its
employees. Hence forth, the study of organisational behaviour, gives us an insight on
how employees behave and perform in the workplace. Added, it also aids in
developing and understanding the factors that can motivate the employees to
increase their performance and thereby help the organisations to establish a strong
and trusting relationship with their employees.

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Summary

o Organisational behaviour (OB) is the systematic study and application

of knowledge about how individuals and groups act within the
organisations where they work.
o Individual Behaviour is the study of individual’s personality, learning,
attitudes, motivation, and job satisfaction.
o Group behaviour studies the formation of organisation, structure of
organisation and effectiveness of organisation. The group efforts made
towards the achievement of organisation’s goal is group behaviour.
o There are four major models or frameworks that organisations operate
which includes autocratic, custodial, supportive, collegial models.
o Organisational behaviour helps in managing human resources; it helps
in developing work-related environment in an organisation. It helps in
creating a motivated atmosphere in any organisation.
o OB is multidisciplinary in approach where it also helps to study the
behavioural changes, attitude changes, and ways of communication,
group processes and group decision making powers of the individuals
in a group

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Activity

Read and Answer the following question

The case “Rise and Fall of Chanda Kochhar” looks at the series of allegations against
ICICI Bank’s former MD and CEO Chanda Kochhar (Kochhar) that eventually led to
her unceremonious exit from the bank after an illustrious career of 34 years. Kochhar
joined ICICI Limited in 1984 and played an important role in establishing ICICI Bank
during the 1990s. She served as head of infrastructure finance and corporate banking
business during the period. Kochhar became a member of the Board of Directors of
ICICI Bank in 2001. She led the bank’s corporate and international banking
businesses during 2005-07. The bank promoted her to Joint Managing Director and
Chief Financial Officer in 2007. Kochhar was promoted to the top position at ICICI
Bank as Managing Director and CEO in 2009. She oversaw the bank’s operations in
India and abroad. She also chaired the boards of most of the bank’s principal
subsidiaries.

In 2016, Kochhar came under the lens of multiple revenue and law enforcement
agencies after allegations of corruption and misconduct surfaced against her,
beginning with a complaint from Arvind Gupta (Gupta), an investor in both ICICI
Bank and the Videocon Group. Gupta sought an inquiry into the dealings between
Kochhar’s husband Deepak Kochhar (Deepak) and Videocon Group promoter
Venugopal Dhoot (Dhoot). The allegation came into the limelight in April 2018 with
an investigation by The Indian Express confirming a web of transactions between
Deepak and Dhoot. Initially, the ICICI Bank’s Board of Directors gave Kochhar a
clean chit.

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Following a whistleblower’s complaint and a letter written by Deepak to the Board

confirming his dealings with Dhoot, the bank’s board set up an enquiry committee
under B. N. Srikrishna. Amidst the allegations, Kochhar resigned as CEO and exited
the Board of Directors of ICICI Bank's subsidiaries in October 2018, much before the
bank received the Enquiry Report from B. N. Srikrishna. Following the receipt of the
Enquiry Report on January 30, 2019, the Board of Directors of ICICI Bank treated the
separation of Kochhar as a ‘Termination for Cause’ under the Bank’s internal policies,
schemes, and Code of Conduct, with all attendant consequences, including
revocation of all her existing and future entitlements.

The Income Tax department, the Serious Fraud Investigation Office, the Central
Bureau of Investigation and the Directorate of Enforcement also sought details of the
loans disbursed during Kochhar’s tenure as MD and CEO and sought the bank’s
response on the alleged non-compliance with disclosure norms in dealings with the
Videocon Group. Kochhar denied the allegations and said that she and her husband
Deepak did not share any business details with each other and that she was not
aware of his clients. She admitted to the Board that she had come to know about her
husband’s business dealings only later. She also stated that the loan given to
Videocon was based purely on merit. She later challenged the bank’s decision to
treat her separation as a termination rather than as a resignation.

Questions
1. Gain knowledge on types of power in an organisation.
2. Understand the different circumstances in an organisation that lead to conflict
of interest
3. Learn about the compliance challenges of the Board of Directors of an
organisation.

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Activity Answer Key

1. There are many types of power in an organisation, say:

• Legitimate power.
• Information power.
• Expert power.
• Reward power
• Coercive power.
• Referent power. But here, in this case, legitimate power was used to
handle the allegations in that occurred in areas of: internal policies,
code of conduct etc.,

2. The different circumstances that prevailed in the organisation that lead to

conflict are: Corruption, Misconduct, and the complaints and allegations
registered against Kochhar, due to his fraudulent act.

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Bibliography

E-References
1. Larry A. Samovar & Richard E. Porter, "Understanding culture: Alternative
views of reality," ch. 02 in Communication Between Cultures (2004).

2. Alan Bryman and Emma Bell, Business Research methods, 3rd Edition,Oxford

External Resources

• http://www.economicsdiscussion.net/management/organisational-behaviour/

31869

• https://ebrary.net/2810/management/nature_scope_features_organiational_be

haviour

• https://www.civilservicegurukul.com/scope-of-organisation-behaviour/

• https://www.enotes.com/homework-help/discuss-two-ways-peolple-learn-ab

out-353720

• https://relivingmbadays.wordpress.com/2012/08/01/anchors-of-organizational

-behavior-knowledge/

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