ORGANISATIONAL BEHAVIOUR

Unit 2: Foundation of Individual Behaviour

2.1 Personal, Environmental & Organizational Factors
Individual behaviour in an organization is shaped by three major groups of factors:

A. Personal Factors
These are internal, individual-level factors that influence how a person behaves.
• Age
Younger employees may be more flexible and tech-savvy; older employees bring
experience and stability.
• Gender
Work styles and expectations may differ, though both genders are equally capable.
• Education & Skills
Higher education often leads to better problem-solving and adaptability.
• Experience
Past work experience shapes habits, confidence, and decision-making.
• Personality & Attitude
Positive attitude leads to better performance; negative attitude causes conflict.
• Intelligence & Abilities
Cognitive and physical abilities affect job performance.
📌 Example: A 25-year-old software engineer fresh out of college may learn new tools faster
but may lack the experience to handle a crisis project — that's the impact of personal factors
like age and experience.

B. Environmental Factors
These are external factors outside the organization that affect behaviour.
• Family Background
A supportive family increases an employee's focus and motivation.
• Culture & Society
Social norms, traditions, and beliefs shape values and work ethic.
• Economic Conditions
Inflation, unemployment rates affect employee expectations and job satisfaction.
• Technological Changes
Rapid tech changes require employees to continuously upskill.
• Political & Legal Environment
Government policies on labour laws, minimum wages affect both employer and
employee behaviour.
📌 Example: During COVID-19, the economic uncertainty (environmental factor) caused
many employees to work harder out of fear of job loss — behaviour directly influenced by the
external environment.
C. Organizational Systems & Resources
These are internal, company-level factors that shape how employees behave.
• Organizational Culture
The shared values and norms of a company. A positive culture boosts morale.
• Leadership Style
A supportive leader encourages creativity; an autocratic leader may create fear.
• Reward & Recognition System
Bonuses, promotions, and praise motivate employees to perform better.
• Communication Systems
Clear communication reduces confusion and conflict.
• Work Design & Structure
Well-defined roles and tasks improve efficiency.
• Resources Available
Access to tools, technology, and training affects productivity.
📌 Example: A company like Google provides free meals, flexible hours, and creative
workspaces (organizational resources) — this shapes employee behaviour to be more
innovative and loyal.
2.2 Personality
Definition: Personality is the combination of characteristics and qualities that form an
individual's unique character. It determines how a person thinks, feels, and behaves.

Determinants of Personality
Personality is determined by multiple factors:

1. Heredity (Biological Factors)

• Traits inherited from parents through genes.
• Physical features, temperament, energy level are genetically influenced.
📌 Example: A child born to calm, patient parents may naturally inherit a composed
personality.

2. Family & Social Environment

• Parents, siblings, friends shape early personality.
• Love, discipline, support from family builds confidence or insecurity.
📌 Example: A child raised in a supportive, encouraging home develops a confident and
outgoing personality.

3. Culture
• Cultural values, traditions, and norms define acceptable behaviour.
• Japanese culture promotes collectivism; Western cultures value individualism.
📌 Example: An Indian student raised with values of respect for elders will behave differently
in the workplace compared to someone raised in a different cultural context.

4. Situation
• Different situations bring out different personality traits.
• A person may be reserved at home but expressive at work.
📌 Example: During a crisis, an introvert may step up and show leadership — the situation
triggers behaviour.

5. Education
• Schooling builds thinking patterns, discipline, and social skills.
• Higher education often develops analytical and critical thinking personalities.

Personality & OB (Organisational Behaviour)

Personality plays a key role in how employees behave at work:
• Personality-job fit: Job Fit
Matching personality with job role increases satisfaction. Example: An extrovert thrives
in sales.
 • Team Dynamics: Teamwork
Understanding personalities helps in forming balanced teams.
• Conflict Management: Conflict
Clashing personalities cause workplace conflicts; awareness reduces them.
• Leadership Behaviour: Leadership
A leader's personality directly affects team motivation and culture.
• Employee Performance: Performance
Conscientious (responsible, disciplined) employees tend to perform better.
📌 Example: MBTI (Myers-Briggs Type Indicator) is a personality test used by companies
like Deloitte to understand employee personalities and place them in suitable roles.

2.3 Perception
Definition: Perception is the process by which individuals select, organize, and interpret
sensory information to give meaning to their environment. In simple words — how we see
and understand things.

Perceptual Process
The perceptual process has 4 steps:
• Step 1 — Stimulus / Input
We receive information through our senses (sight, sound, touch, etc.).
Example: You see your manager walking fast towards your desk.
• Step 2 — Selection
Our brain selects only relevant information and ignores the rest.
Example: Out of 100 emails, you first open the one from your boss.
• Step 3 — Organisation
Selected information is arranged in a meaningful pattern.
Example: You notice the manager's expression is serious.
• Step 4 — Interpretation
We give meaning to the organised information based on past experience.
Example: You conclude the manager is angry and may give bad news.
📌 Example: Two employees see the same manager frowning. Employee A (who made a
mistake) thinks 'I'm in trouble.' Employee B (who finished a project) thinks 'He must be
having a tough day.' Same event — different perception!

Attitude
Definition: Attitude is a person's positive, negative, or neutral feeling towards an object,
person, or situation. It has 3 components:
 • Cognitive Component
What we think or believe. Example: 'I believe my job is important.'
• Affective Component
What we feel. Example: 'I love coming to work every day.'
• Behavioural Component
How we act. Example: 'I always come to office on time.'

Attitude & OB
• Positive attitudes lead to higher productivity, teamwork, and job satisfaction.
• Negative attitudes cause absenteeism, low morale, and conflicts.
• Managers try to build positive attitudes through praise, fair treatment, and good work
culture.
📌 Example: An employee who has a positive attitude towards customer service will handle
complaints patiently — improving the company's reputation.

Values
Definition: Values are fundamental beliefs that guide a person's behaviour and decisions.
They represent what a person considers important in life.

• Personal Values: Honesty, loyalty, family, respect.

• Work Values: Teamwork, punctuality, dedication, integrity.
• Cultural Values: Vary by religion, region, upbringing.

Values & OB
• Employees with strong work values are more committed and responsible.
• Value conflicts between employee and organization cause stress and turnover.
• Organizations define core values (like 'Customer First') to align employee behaviour.
📌 Example: Tata Group's core value is 'integrity in everything we do' — employees are
expected to be honest in all dealings, and this value shapes their behaviour across all
departments.

2.4 Motivation
Definition: Motivation is the internal force that drives a person to take action towards
achieving a goal. It is the 'why' behind a person's behaviour.

Nature of Motivation
• It is an internal feeling — comes from within a person.
• It is goal-directed — always aimed at fulfilling a need.
 • It is continuous — needs change, so motivation is never permanently achieved.
• It can be positive (reward-based) or negative (fear-based).
• It is dynamic and complex — different people are motivated by different things.

Importance of Motivation
• Increases Productivity: Motivated employees work harder and smarter.
• Reduces Absenteeism: Happy, motivated workers show up regularly.
• Improves Job Satisfaction: Employees feel fulfilled in their roles.
• Reduces Turnover: Motivated employees stay longer in the organization.
• Encourages Creativity: Motivated workers innovate and suggest new ideas.
• Builds Team Spirit: Shared motivation creates a collaborative environment.
📌 Example: A sales employee motivated by monthly bonuses consistently exceeds targets
— motivation directly boosts organizational performance.

A. Maslow's Hierarchy of Needs Theory

Proposed by Abraham Maslow in 1943. He said human needs are arranged in a pyramid of 5
levels. A person moves to the next level only after the lower level is satisfied.

Level Need Description Workplace Example

5 (Top) Self-Actualisation Reaching full potential, Challenging projects,
creative work creativity
4 Esteem Needs Respect, recognition, status, Awards, promotions,
achievement praise
3 Social Needs Love, friendship, belonging, Team activities,
teamwork friendly culture
2 Safety Needs Job security, safe workplace, Health insurance,
stability permanent job
1 (Base) Physiological Needs Food, water, shelter, rest, Minimum wage, lunch
salary breaks

Key Points
• Lower needs must be satisfied before higher needs motivate.
• Most people in developing countries are at Level 1-2.
• Top performers in good companies aim for Level 4-5.
📌 Example: A new employee first needs a salary (Level 1), then job security (Level 2), then
friendships at work (Level 3), then a promotion (Level 4), and finally meaningful work (Level
5).
B. Herzberg's Two-Factor Theory
Proposed by Frederick Herzberg. He said there are TWO types of factors that affect employee
satisfaction:

Hygiene Factors (Dissatisfiers) Motivators (Satisfiers)

These do NOT motivate but their ABSENCE These ACTIVELY motivate employees to perform
causes dissatisfaction. better.
• Salary • Recognition & praise
• Company policies • Achievement & success
• Job security • Responsibility
• Working conditions • Growth & advancement
• Supervision quality • Interesting work

Key Insight
• Removing dissatisfaction (fixing hygiene factors) does NOT create motivation.
• True motivation comes from motivators — meaningful, challenging work.
📌 Example: An employee given a salary hike (hygiene factor) may stop complaining — but
won't work harder. However, when given a leadership role (motivator), the same employee
becomes highly productive and engaged.

C. Theory X and Theory Y

Proposed by Douglas McGregor. He described TWO different assumptions managers make
about their employees:

Theory X (Negative View) Theory Y (Positive View)

Employees are lazy and dislike work Employees enjoy work and find it natural
Must be controlled, threatened & forced Employees are self-motivated and self-directed
Avoid responsibility; prefer to be told Seek responsibility and challenges willingly
No ambition; only care about security Are creative, innovative, and ambitious
Manager uses strict control (Autocratic) Manager uses trust and delegation (Democratic)

Which Theory is Better?

• Theory Y leads to better morale, innovation, and performance.
• Theory X can be useful in strict, rule-based environments (military, factories).
• Most modern organizations follow Theory Y approach.
📌 Example: A startup (Theory Y) gives employees freedom to experiment — resulting in
innovation. A traditional factory (Theory X) enforces strict rules and supervision to maintain
discipline and output.
 2.5 Leadership & Types
Definition: Leadership is the ability to influence and guide individuals or a group towards the
achievement of goals. A leader inspires, motivates, and directs others.

Key Qualities of a Good Leader

• Vision: Ability to see the big picture and set direction.
• Communication: Clear, open, and effective communication with team.
• Confidence: Believes in self and inspires belief in others.
• Integrity: Honest and ethical in all dealings.
• Empathy: Understands and cares about team members.
• Decision-Making: Makes timely and sound decisions.
• Motivating Ability: Keeps the team energised and focused.

Types of Leadership
1. Autocratic Leadership (Authoritarian)
• Leader takes all decisions alone — no team input.
• Gives direct orders; expects full obedience.
• Little or no freedom given to employees.
Advantages: Fast decisions; good for crisis situations.
Disadvantages: Low morale; kills creativity; high turnover.
📌 Example: An army general ordering troops in a battlefield — no time for discussion,
decisions must be quick and obeyed immediately.

2. Democratic Leadership (Participative)

• Leader involves team members in decision-making.
• Encourages open discussion, ideas, and feedback.
• Final decision still rests with the leader.
Advantages: High morale; creativity; team satisfaction.
Disadvantages: Time-consuming; may cause confusion.
📌 Example: A product manager at a tech company holds weekly brainstorming sessions
where the whole team shares ideas before finalising the product roadmap.

3. Laissez-Faire Leadership (Free-Rein)

• Leader gives complete freedom to employees.
• Minimal supervision or guidance provided.
• Employees set their own goals and methods.
Advantages: Great for highly skilled, motivated teams; promotes creativity.
Disadvantages: Lack of direction; poor performance with unskilled teams.
 📌 Example: At universities, professors (researchers) are mostly given freedom to choose
their own research topics and timelines — this is laissez-faire in action.

4. Transformational Leadership
• Leader inspires and motivates through a compelling vision.
• Focuses on long-term change and growth.
• Builds strong emotional connections with followers.
📌 Example: Ratan Tata transformed Tata Group into a global brand by inspiring employees
with a bold vision and values — a classic transformational leader.

5. Transactional Leadership
• Leadership based on reward and punishment system.
• Good performance = reward; poor performance = punishment.
• Focuses on routine tasks and short-term goals.
📌 Example: A sales manager who gives bonuses for hitting targets and penalises those
who miss them is following transactional leadership.

6. Servant Leadership
• Leader puts the needs of the team FIRST.
• Focus is on serving, supporting, and developing employees.
• Builds strong trust, loyalty, and team engagement.
📌 Example: Mahatma Gandhi — served his people before himself; empowered them to act
independently — the ultimate servant leader.

Leadership Type Best Used When Real-World Example

Autocratic Crisis or emergency situations Military, Emergency Services
Democratic Creative, team-based projects IT Companies, Marketing Teams
Laissez-Faire Highly skilled expert teams Research Labs, Universities
Transformational Need for change and Ratan Tata, Elon Musk
inspiration
Transactional Sales / target-based roles Sales Departments, Call Centers
Servant Building long-term team loyalty NGOs, Community Organisations

— End of Unit 2 Notes —

Best of luck with your exams!