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PART 1: Understanding Organisational Behaviour
Meaning, goals, features, scientific foundation, psychological contract and citizenship
Imagine two companies with the same office, the same salary, even the same software. One has people who love coming to work. The other has people counting the hours until Friday. Why the difference? Not the building, not the laptops. It is the behaviour of people. Organisational Behaviour (OB) is the subject that tries to explain this, and, more importantly, tries to improve it.
1.1 What is Organisational Behaviour?
Organisational Behaviour is the study of how individuals and groups behave inside organisations, and how that behaviour affects the performance of the organisation.
In Stephen Robbins’ words, it is a field of study that investigates the impact that individuals, groups and structure have on behaviour within organisations, in order to apply this knowledge to improve an organisation’s effectiveness.
Break the word down and it becomes simple. Organisation = a group of people working together towards common goals. Behaviour = what people do, say and feel. So OB asks: why do people act the way they do at work, and what can managers do about it?
Easy definition for the exam
OB is an applied behavioural science that studies the behaviour of individuals and groups in organisations, to understand, predict and improve that behaviour for organisational effectiveness.
Why should a manager study OB?
- Managers get work done through people, so understanding people is the core skill.
- It helps in motivating employees, resolving conflict and building teams.
- It improves communication, leadership and decision-making.
- It reduces absenteeism, turnover and stress.
- It helps organisations adapt to change, diversity and technology.
Real-world spotlight: the Hawthorne studies
In the 1920s–30s, researchers (including Elton Mayo) studied workers at the Hawthorne plant of Western Electric in the USA. They first thought lighting and rest breaks decided output. They found that attention, group belonging and the feeling of being valued mattered just as much. This discovery is often seen as the starting point of the human-relations movement, which later grew into OB.
1.2 Goals of Organisational Behaviour
OB has four connected goals. Think of them as four steps, one leading to the next.
| Goal | Meaning | Example |
| Describe | Systematically describe how people behave under different conditions. | Noticing that sales staff are late every Monday. |
| Understand | Find out why people behave that way. | Finding out that Monday targets are announced late and stress is high. |
| Predict | Forecast future behaviour from what we know. | Predicting that unfair appraisals will lead to resignations. |
| Control / Improve | Influence and direct behaviour to improve results (not to manipulate people). | Changing the target process and reward system so punctuality improves. |
Some books add a fifth practical goal: to improve organisational effectiveness and employee well-being together. Good OB tries to help both the company and the person.
1.3 Features (Nature) of Organisational Behaviour
| Feature | What it means |
| Interdisciplinary | Borrows ideas from psychology, sociology, anthropology, economics and political science. |
| Applied science | Its findings are used to solve real problems at work, not only to build theory. |
| Human-centred | Focuses on people, their needs, feelings and relationships, not on machines or money alone. |
| Three levels of analysis | Studies individuals, groups and the organisation as a whole. |
| Contingency (situational) approach | There is no “one best way”. The right action depends on the situation. “It depends” is the OB answer. |
| Both art and science | Science because it uses research and evidence; art because applying it needs judgement and people skills. |
| Systems approach | An organisation is a system of connected parts. A change in one part (say pay) affects the others (morale, performance). |
| Goal-oriented | Aims at organisational effectiveness and employee satisfaction. |
| Normative and positive | Describes what is, and also suggests what ought to be done. |
| Evidence-based | Prefers research and data over gut feeling and popular myths. |
Levels of OB
- Individual level: perception, personality, attitudes, motivation, learning, values. (Most of this unit.)
- Group level: communication, group dynamics, leadership, teams, conflict.
- Organisation level: structure, culture, change, HR policies, power and politics.
1.4 Scientific Foundation of OB
OB is not just common sense. It stands on several older sciences. Each one adds a different piece to the puzzle:
| Discipline | Focus | Contribution to OB |
| Psychology | Behaviour of the individual | Learning, motivation, personality, perception, attitudes, job satisfaction, stress. |
| Sociology | People in relation to their social environment | Group dynamics, roles, organisational culture, communication, status, power. |
| Social psychology | How people influence each other | Attitude change, group decision-making, communication, behaviour change. |
| Anthropology | Culture and human societies | Cultural differences, values, comparing behaviour across countries and organisations. |
| Political science | Power and politics | Conflict, power, office politics, distribution of resources. |
| Economics | Production, incentives and choices | Pay and incentives, labour market, decision-making, productivity. |
The scientific method in OB
Because OB is an applied science, it follows the scientific way of thinking: observe a problem, form a hypothesis, collect data, test it, draw a conclusion, and revise. Common research methods are case studies, surveys and questionnaires, field studies, laboratory experiments and meta-analysis (combining many studies). This is why modern managers talk about evidence-based management: use the best available research and data, instead of relying only on intuition.
Real-world spotlight: myth versus evidence
Many managers believe “a happy worker is always a productive worker”. Research shows the link exists but is only moderate. That evidence changes how a manager behaves: they care about satisfaction for its own sake and for retention, but do not expect it to fix productivity alone.
Contemporary challenges and opportunities for OB
- Globalisation and diversity: teams across countries, languages, genders and generations.
- Technology and AI: remote work, automation, digital monitoring, upskilling.
- Work–life balance and well-being: burnout, flexibility, mental health.
- Ethics: fairness, privacy, social responsibility.
- Gig and flexible work: delivery partners, freelancers, contract staff, who need different motivation and engagement approaches.
1.5 Psychological Contract
Every job has two contracts. One is written: the appointment letter with salary, hours and duties. The other is never written, but everybody feels it. That is the psychological contract.
A psychological contract is the set of unwritten, mutual expectations and beliefs between an employee and the employer about what each will give and receive. The term was used by Chris Argyris (1960) and Edgar Schein, and developed in detail by Denise Rousseau, who stressed that it is about the perceived promises each side believes were made.
| What employees expect from the organisation | What the organisation expects from employees |
| Fair pay and recognition | Good effort and quality work |
| Job security (or employability) | Loyalty and commitment |
| Learning and career growth | Flexibility and willingness to adapt |
| Respectful treatment and fairness | Honesty and ethical behaviour |
| Reasonable workload and work–life balance | Representing the company well |
Types
- Transactional contract: short-term, specific and economic, for example a fixed-term contract where “I do this task, you pay me this”.
- Relational contract: long-term, built on trust, loyalty and mutual care, for example a long-serving employee supported through hard times by the employer.
Breach and its effects
When one side feels the other has broken the unwritten promises, the result is a psychological contract breach. If the feeling is strong, it becomes emotional (anger, betrayal) and is sometimes called a violation. Typical effects: lower trust, lower commitment, reduced effort, more absenteeism, higher turnover, and less citizenship behaviour.
Real-world spotlight
A fresher is told during hiring that they will get a “learning-rich environment and quick growth”. Six months later they are doing only data entry with no training. Nothing in the written contract was violated, but the psychological contract is broken, and the employee starts looking for another job.
Another example: a company promises hybrid work during hiring and later calls everyone to the office full-time without discussion. Employees feel the deal has changed, and engagement drops.
How managers keep the contract healthy
- Be honest and realistic during hiring (no over-promising).
- Communicate changes early and explain the reason.
- Deliver on commitments, or explain openly if you cannot.
- Check regularly what employees expect.
1.6 Organisational Citizenship Behaviour (OCB)
Think of the colleague who stays ten minutes extra to help a new joiner, tidies the shared pantry, or speaks well of the company to outsiders, though nobody asked and no one will reward them for it. That is organisational citizenship.
OCB (Dennis Organ, 1988) is discretionary behaviour that is not part of the formal job requirement and is not directly rewarded, but promotes the effective functioning of the organisation.
Five dimensions (Organ)
| Dimension | Meaning | Example |
| Altruism (helping) | Voluntarily helping colleagues with work-related problems. | Teaching a new colleague how to use the billing software. |
| Conscientiousness | Going well beyond minimum requirements. | Never wasting time, following rules even when unsupervised. |
| Sportsmanship | Tolerating inconveniences without complaining. | Accepting a schedule change calmly. |
| Courtesy | Preventing problems by informing and consulting others. | Informing the team before changing a shared file. |
| Civic virtue | Taking an active interest in the life of the organisation. | Attending optional meetings, giving suggestions. |
In-role versus extra-role behaviour
| In-role behaviour | Extra-role behaviour (OCB) |
| Part of the job description. | Beyond the job description. |
| Formally rewarded or required. | Voluntary and not formally rewarded. |
| Failure may bring punishment. | Absence is not punished. |
What encourages OCB?
- Job satisfaction and fair treatment.
- A supportive, trusted leader.
- Strong commitment to the organisation.
- A healthy psychological contract.
Benefits and a warning
OCB improves teamwork, saves managerial time, helps new members settle and makes the organisation more flexible. Warning: if the same people are always expected to “volunteer”, it can turn into overload and burnout, sometimes called citizenship fatigue. Managers should recognise OCB and not quietly turn it into a compulsory duty.
Link between the two ideas
A healthy psychological contract (fair deal, trust) makes employees more willing to show OCB. A broken contract usually reduces it.
