Organisational Behaviour

Module 1 — Comprehensive Study Notes

KTU | Organisational Behaviour Subject

Topics Covered in This Module

• 1. Definition of Organisational Behaviour
• 2. Evolution of the Concept of OB
• 3. Contributions to OB by Major Behavioural Science Disciplines
• 4. Challenges and Opportunities for OB Managers
• 5. Models of OB Study (Autocratic, Custodial, Supportive, Collegial, Human Value)

1. Definition of Organisational Behaviour

What is Organisational Behaviour (OB)?

Organisational Behaviour (OB) is the systematic study of human behaviour within organisational settings —
how individuals, groups, and structures influence and are influenced by each other and by the organisation
itself. The goal is to apply this knowledge to improve organisational effectiveness.

OB draws on psychology, sociology, anthropology, political science, and economics to understand and predict
human behaviour at work.

Key Definitions
Author / Source Definition
Stephen Robbins OB is a field of study that investigates the impact of individuals,
groups, and structures on behaviour within organisations, for the
purpose of applying such knowledge towards improving an
organisation's effectiveness.

Fred Luthans OB is directly concerned with the understanding, predicting, and

controlling of human behaviour in organisations.

Keith Davis OB is the study and application of knowledge about how people, as
individuals and as groups, act within organisations.

Newstrom & Davis OB is the systematic study of people's actions and attitudes in
organisations. Its goals are to explain, predict, and control behaviour.

Nature and Characteristics of OB

• Interdisciplinary: Integrates knowledge from multiple behavioural sciences.
• Applied Science: Knowledge is used to solve real-world organisational problems.
• Humanistic & Optimistic: Believes in the potential of people to grow and contribute.
• Goal-Oriented: Aims to improve organisational performance and employee well-being.
• Situational: Recognises that behaviour varies with context — there is no one-size-fits-all approach.
• Descriptive & Prescriptive: Describes what happens and prescribes how to improve outcomes.

Levels of Analysis in OB
Level Focus Examples
 Individual Level Personality, perception, motivation, Employee motivation, job
attitudes, learning satisfaction

Group Level Team dynamics, leadership, communication, Group decision-making, team

conflict performance

Organisational Level Structure, culture, change management, Organisational culture,

design change initiatives

2. Evolution of the Concept of OB

The field of OB has evolved through several distinct historical phases, each shaped by changing economic
conditions, technological advances, and shifting perspectives on management and human nature.

Phase 1: Pre-Scientific Management Era (Before 1880s)

• Management was based on personal experience and intuition — no scientific basis.
• Workers were treated as economic units; human factors were largely ignored.
• Industrial Revolution led to large-scale factories, creating the need for formal management.

Phase 2: Classical / Scientific Management Era (1880s – 1920s)

• Frederick Winslow Taylor (1856–1915) — Father of Scientific Management.
• Focused on efficiency, time-and-motion studies, standardisation, and division of labour.
• Assumed workers were motivated primarily by money (Economic Man concept).
• Henri Fayol developed 14 Principles of Management — planning, organising, commanding,
coordinating, and controlling.
• Max Weber proposed Bureaucratic Organisation — hierarchical authority, rules, and impersonality.
• Limitation: Ignored the social and psychological dimensions of work.

Phase 3: Human Relations Movement (1920s – 1950s)

• Elton Mayo and the Hawthorne Studies (1924–1932) at Western Electric Company.
• Key Finding: Social and psychological factors have a greater impact on productivity than physical
conditions.
• Workers are not merely economic beings — they are social beings motivated by belonging,
recognition, and group norms.
• Gave rise to the concept of informal organisations and the importance of interpersonal relations.
• Mary Parker Follett emphasised coordination, participation, and the integration of individual and
organisational goals.

Hawthorne Study Key Finding

Illumination Experiments Productivity improved regardless of lighting changes — workers
responded to being observed (Hawthorne Effect).

Relay Assembly Test Room Social relationships and group norms influenced output more than
physical conditions.

Bank Wiring Observation Room Workers restricted output to group norms, not management
standards — informal groups control behaviour.

Interview Programme Workers' morale and attitudes are shaped by social interactions and
how they feel about their work.
Phase 4: Behavioural Science Approach (1950s – 1960s)
• Moved beyond human relations to apply rigorous scientific methods to study human behaviour at
work.
• Abraham Maslow (Hierarchy of Needs), Douglas McGregor (Theory X & Y), and Frederick Herzberg
(Two-Factor Theory) made major contributions.
• Focus shifted to motivation, leadership, group dynamics, and organisational development.

Phase 5: Systems and Contingency Approach (1960s – 1980s)

• Systems Approach: Organisations are open systems interacting with their environment. All parts are
interdependent.
• Contingency Approach: There is no single best way to manage — the optimal approach depends on
the situation.
• Recognises the complexity of organisations and the need for adaptive management.

Phase 6: Modern OB — Globalisation, Technology & Diversity (1990s – Present)

• Focus on cross-cultural management, diversity and inclusion, emotional intelligence, and positive
psychology.
• Rapid technological change — remote work, AI, and digital transformation reshape organisational
dynamics.
• Emphasis on ethics, corporate social responsibility, and sustainable management.
• Evidence-based management: using data and research to make people decisions.

Summary: Evolution of OB
Era Key Focus Key Contributors
Pre-Scientific (before Experience, intuition —
1880)

Classical / Scientific Efficiency, standardisation Taylor, Fayol, Weber

(1880–1920)

Human Relations (1920– Social needs, group dynamics Mayo, Follett

1950)

Behavioural Science Motivation, leadership, personality Maslow, McGregor, Herzberg

(1950–1960)

Systems & Contingency Interdependence, situational factors Katz, Kahn, Lawrence

(1960–1980)

Modern OB (1990– Globalisation, diversity, technology, Multiple contributors

Present) ethics

3. Contributions to OB by Major Behavioural Science

Disciplines

OB is an interdisciplinary field that draws theories, methods, and findings from several social and behavioural
sciences. Each discipline contributes unique insights.
A. Psychology
Psychology is the study of the mind and human behaviour. It is the most direct contributor to OB at the
individual level of analysis.

Contribution Area Relevance to OB

Motivation Theory Understanding what drives individual performance and satisfaction
(Maslow, Herzberg, Vroom).

Learning & Conditioning How employees acquire skills, habits, and behaviours through
reinforcement (Pavlov, Skinner).

Personality How individual traits (Big Five Model) influence work behaviour and
team dynamics.

Perception & Attribution How people interpret workplace events and attribute causes to
behaviour (Attribution Theory).

Attitudes Job satisfaction, organisational commitment, and employee

engagement.

Stress & Well-being Work stress causes, consequences, and coping strategies.

Decision-Making Cognitive biases and heuristics that affect individual decision-making.

B. Sociology
Sociology studies social systems, group behaviour, and the structure of society. It contributes to OB at the
group and organisational levels.

Contribution Area Relevance to OB

Group Dynamics How groups form, develop norms, and influence individual behaviour.

Organisational Culture Shared values, beliefs, and norms that shape organisational
behaviour.

Power & Conflict Sources of power in organisations and how conflict arises and is
resolved.
Role Theory Formal and informal roles people play within organisations.

Bureaucracy Weber's model of formal hierarchical organisations and its

implications.

Socialisation How individuals learn and adapt to organisational norms and values.

C. Social Psychology
Social Psychology bridges psychology and sociology — it studies how individuals influence and are influenced
by others in social contexts.

Contribution Area Relevance to OB

Attitude Change How employee attitudes can be shaped through communication and
persuasion.

Communication Patterns Barriers to effective communication and ways to improve information

sharing.

Group Decision-Making Groupthink, group polarisation, and participative decision-making.

Leadership Influence How leaders shape follower attitudes and behaviour.

 Conflict & Negotiation Approaches to conflict resolution and negotiation strategies.

D. Anthropology
Anthropology is the study of human societies, cultures, and their development. It contributes to OB primarily
through cross-cultural insights.

Contribution Area Relevance to OB

Organisational Culture Understanding the deep cultural roots of an organisation's values and
practices.

Cross-Cultural Management How national culture affects management practices, communication,

and work values (Hofstede).

Comparative Management Examining how management practices differ across societies and
industries.

Rituals & Symbols How organisational rituals, myths, and symbols create meaning and
reinforce culture.

E. Political Science
Political science studies the exercise of power, authority, and governance — concepts that are central to
understanding organisations.

Contribution Area Relevance to OB

Power & Influence Sources of power (French & Raven) and how power is exercised in
organisations.

Conflict of Interest How competing interests between individuals and groups are
managed.

Coalition Formation How groups form alliances to influence organisational decisions.

Organisational Politics Political behaviour, impression management, and organisational

manoeuvring.

F. Economics
Economics provides models of rational decision-making, incentive structures, and resource allocation that
inform OB thinking.

Contribution Area Relevance to OB

Incentive Design How pay structures, bonuses, and rewards align employee behaviour
with organisational goals.

Agency Theory Managing the relationship between principals (owners) and agents
(managers/employees).

Transaction Cost Theory Why organisations exist and how internal vs. market transactions are
managed.

Labour Markets Supply and demand for talent; wage setting and workforce planning.

Summary: Disciplinary Contributions to OB

 Discipline Level of Analysis Key Contribution
Psychology Individual Motivation, personality, learning, perception,
attitudes, stress

Sociology Group & Organisation Group dynamics, culture, power,

organisational structure

Social Psychology Individual & Group Attitude change, communication, group

decisions, leadership

Anthropology Organisation & Society Organisational culture, cross-cultural

management

Political Science Organisation Power, politics, conflict, coalition building

Economics Individual & Organisation Incentives, agency, labour markets, decision-

making

4. Challenges and Opportunities for OB Managers

The modern business environment presents OB managers with a range of significant challenges and
corresponding opportunities. Understanding and responding to these forces is essential for organisational
effectiveness.

1. Responding to Globalisation
• Organisations are increasingly operating across international borders, cultures, and time zones.
• Challenge: Managing culturally diverse workforces with different values, communication styles, and
expectations.
• Opportunity: Leveraging diverse perspectives for greater creativity and innovation.
• OB Managers must develop cross-cultural sensitivity and adapt management practices to different
cultural contexts.

2. Managing Workforce Diversity

• Workforces today are diverse in terms of gender, age, ethnicity, religion, disability, and sexual
orientation.
• Challenge: Avoiding discrimination, managing conflict arising from differences, and ensuring equity.
• Opportunity: Diverse teams bring broader perspectives, better problem-solving, and reflect diverse
customer bases.
• OB Managers must create inclusive environments where all employees can contribute and thrive.

3. Improving Quality and Productivity

• Organisations face relentless pressure to do more with less — improve quality while reducing costs.
• Total Quality Management (TQM) and continuous improvement require engaged, empowered
employees.
• Opportunity: OB knowledge of motivation, teamwork, and job design helps drive quality improvement.

4. Responding to the Labour Shortage and Talent War

• Skill gaps in key industries, ageing workforces in developed countries, and rising expectations of
employees.
• Challenge: Attracting, retaining, and developing top talent in competitive labour markets.
 • Opportunity: Strong organisational culture, career development, and employee well-being
programmes create a compelling employer brand.

5. Improving Customer Service

• Service industries require employees who are empathetic, responsive, and customer-focused.
• Challenge: Creating a customer-service culture across all levels of the organisation.
• Opportunity: OB insights into job satisfaction, motivation, and training can directly improve customer
interactions.

6. Stimulating Innovation and Change

• Rapidly changing markets require organisations to continuously innovate — in products, processes,
and business models.
• Challenge: Overcoming resistance to change and creating a culture of experimentation and learning.
• Opportunity: OB provides tools for managing change, building creative teams, and leading
transformational initiatives.

7. Coping with 'Temporariness'

• Constant change means organisations must be agile — structures, roles, and strategies must adapt
quickly.
• Employees face job insecurity, role ambiguity, and frequent reorganisations.
• Challenge: Managing anxiety and maintaining commitment in a constantly shifting environment.
• Opportunity: Building resilient, adaptable employees and flexible organisational structures.

8. Working in Networked Organisations

• Technology enables virtual teams, remote work, and distributed organisational structures.
• Challenge: Managing relationships, coordination, and trust without face-to-face interaction.
• Opportunity: Access to global talent pools; greater flexibility and work-life balance.
• OB Managers must develop skills in virtual leadership and digital communication.

9. Helping Employees Balance Work–Life Conflicts

• Long working hours, always-on communication technology, and dual-income households create work-
life tension.
• Challenge: Preventing burnout and maintaining employee health and productivity.
• Opportunity: Flexible working arrangements, wellness programmes, and supportive cultures improve
retention and engagement.

10. Creating a Positive Work Environment

• Positive Organisational Behaviour (POB) focuses on building strengths rather than fixing weaknesses.
• Psychological Capital (PsyCap): Hope, efficacy, resilience, and optimism as work-related strengths.
• Opportunity: Creating cultures of appreciation, strengths-based management, and psychological
safety.

11. Improving Ethical Behaviour

• Corporate scandals, corruption, and misuse of power have heightened focus on ethics and
governance.
• Challenge: Creating an ethical climate where employees make the right decisions under pressure.
 • Opportunity: Clear codes of conduct, ethical leadership, and strong organisational values build trust
and reputation.

Summary: Challenges & Opportunities for OB Managers

Challenge OB Opportunity
Globalisation Cross-cultural competence, diverse perspectives

Workforce Diversity Inclusive cultures, broader innovation

Quality & Productivity Motivation, teamwork, job design

Talent Shortages Employer branding, retention strategies

Customer Service Job satisfaction, training, service culture

Innovation & Change Change management, creative team leadership

Temporariness Resilience, flexibility, agile structures

Virtual/Networked Orgs Virtual leadership, digital communication

Work-Life Balance Flexible work, wellness, supportive culture

Positive Environment Strengths-based management, PsyCap

Ethical Behaviour Ethical leadership, codes of conduct

5. Models of OB Study

OB models represent the beliefs and assumptions that managers hold about people at work, and these beliefs
shape their management approach. These models have evolved over time, reflecting changing management
philosophies. The five key models are:

Model 1: Autocratic Model

Dimension Details
Basis Power and authority — the manager has the right to give orders and
employees must comply.

Managerial Orientation Authority — managers exercise control and direct all activities.

Employee Orientation Obedience — employees follow orders without question.

Employee Psychological Dependence on the boss for direction and livelihood.

Result

Employee Needs Met Subsistence needs (survival) — basic pay to meet physiological
needs.

Performance Outcome Minimal; employees do just enough to avoid punishment.

When Appropriate Crisis situations, unskilled labour contexts, military environments.

Limitation Creates fear, resentment, and low morale; does not tap human
potential.

Model 2: Custodial Model

 Dimension Details
Basis Economic resources — organisations provide security and benefits to
gain employee loyalty.

Managerial Orientation Money — using financial rewards, benefits, and job security to retain
employees.

Employee Orientation Security and benefits — employees are motivated by stable

employment and perks.

Employee Psychological Dependence on the organisation — employees stay for security, not
Result commitment.

Employee Needs Met Security needs (Maslow's second level) — job security, pensions,
insurance.

Performance Outcome Passive cooperation — employees do what is required but show little
initiative.

When Appropriate Stable environments; useful for reducing turnover in low-skill sectors.

Limitation Employees become comfortable and complacent; does not inspire

high performance.

Model 3: Supportive Model

Dimension Details
Basis Leadership — managers support and encourage employees to
perform, grow, and achieve.

Managerial Orientation Support — providing guidance, encouragement, and development

opportunities.

Employee Orientation Job performance and participation — employees are motivated to

perform and contribute.

Employee Psychological Participation and involvement — employees feel part of the

Result organisation's mission.

Employee Needs Met Status and recognition needs (Maslow's Esteem level) — feeling
valued and appreciated.

Performance Outcome Awakened drives — employees take initiative and strive to contribute
more.

When Appropriate Knowledge workers, professional environments, creative industries.

Key Insight It is not the organisation's resources that count, but management's
supportive behaviour.

Model 4: Collegial Model

Dimension Details
Basis Partnership — managers and employees work as partners toward
shared goals.

Managerial Orientation Teamwork — building a culture of collaboration, mutual respect, and

shared responsibility.

Employee Orientation Responsibility — employees take ownership of their work and team
outcomes.

Employee Psychological Self-discipline — employees regulate their own behaviour out of

Result responsibility, not fear.
Employee Needs Met Self-actualisation needs (Maslow's highest level) — fulfilling potential
and making a difference.

Performance Outcome Moderate enthusiasm — employees are committed to team success

and quality output.

When Appropriate R&D teams, professional service firms, collaborative project

environments.

Limitation Requires high levels of trust and maturity; may not work in directive
cultures.

Model 5: System / Human Value Model

Dimension Details
Basis Caring for the whole person — recognising employees as complete
human beings with aspirations and potential.

Managerial Orientation Holistic concern for employees — well-being, growth, purpose, and
dignity.

Employee Orientation Self-motivation and commitment — employees are intrinsically

motivated to contribute.
Employee Psychological Deep engagement and passion — employees find meaning and
Result fulfilment in their work.

Employee Needs Met All levels of Maslow's hierarchy, with emphasis on self-actualisation
and purpose.

Performance Outcome High drive and passion — employees go beyond expectations

because they care about the work.

When Appropriate Innovative, purpose-driven organisations; the most advanced

management philosophy.

Key Insight This model builds on the collegial model and adds explicit attention to
human dignity and psychological well-being.

Comparative Overview: Five Models of OB

Human
Feature Autocratic Custodial Supportive Collegial
Value
Basis Power Economic Leadership Partnership Caring /
Resources Dignity

Mgr. Orientation Authority Money Support Teamwork Holistic

concern

Employee Obedience Security Performance Responsibility Commitment

Orientation

Psych. Result Dependence Dependence Participation Self-discipline Engagement /

on boss on org. Passion

Needs Met Physiological Safety/ Esteem Self- All needs +

Security actualisation Purpose

Performance Minimal Passive Awakened Enthusiasm High drive &

drives passion
Quick Revision Summary — Module 1

• Definition: OB is the study of individual, group, and structural behaviour in organisations to improve
effectiveness.
• Levels: Individual (motivation, personality), Group (teams, conflict), Organisation (culture, structure).
• Evolution: Scientific Management → Human Relations → Behavioural Science →
Systems/Contingency → Modern OB.
• Key Historical Event: Hawthorne Studies proved social factors outweigh physical conditions in
influencing productivity.
• Disciplines: Psychology (individual), Sociology (group/org), Social Psychology (individual-group
interface), Anthropology (culture), Political Science (power), Economics (incentives).
• Challenges: Globalisation, diversity, quality, talent, ethics, innovation, work-life balance, virtual work.
• Autocratic Model: Authority/obedience → minimal performance.
• Custodial Model: Economic resources/security → passive compliance.
• Supportive Model: Leadership/support → awakened drives.
• Collegial Model: Partnership/responsibility → enthusiasm.
• Human Value Model: Caring/dignity → high passion and engagement.

KTU | Organisational Behaviour — Module 1: Introduction to OB | Study Notes