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Organizational Behavior (OB) is the study of human behavior in organizational settings, the interface
between human behavior and the organization, and the organization itself. Organizational behavior is
the study of both group and individual performance and activity within an organization.
This area of study examines human behavior in a work environment and determines its impact on job
structure, performance, communication, motivation, leadership, etc.
“Organizational behavior is directly concerned with the understanding, prediction, and control of
human behavior in organizations.”
— Fred Luthans.


 A Separate Field of Study and not a Discipline Only.

 An Interdisciplinary Approach.
 Applied Science.
 A Normative Science.
 A Humanistic and Optimistic Approach.
 A Total System Approach.


1. Job Satisfaction.
2. Finding the Right People.
3. Organizational Culture.
4. Leadership and Conflict Resolution.
5. Understanding the Employees Better.
6. Understand how to Develop Good Leaders.
7. Develop a Good Team.
8. Higher Productivity.


1. Improving Peoples’ Skills.

2. Improving Quality and Productivity.
3. Total Quality Management (TQM).
4. Managing Workforce Diversity.
5. Responding to Globalization.
6. Empowering People.
7. Coping with Temporariness.
8. Stimulating Innovation and Change.
9. Emergence of E-Organisation & E-Commerce.
10. Improving Ethical Behavior.
11. Improving Customer Service.
12. Helping Employees Balance Work-Life Conflicts.
13. Flattening World.

 Behavioral Bias.
 The Law of Diminishing Returns.
 Unethical Manipulation of People.

Psychology deals with studying human behaviour that seeks to explain and sometimes change the
behaviour of humans and other animals.
Psychologists are primarily interested in predicting the behaviour of individuals to a great extent by
observing the dynamics of personal factors.
Those who have contributed and continued to add to the knowledge of OB are teaching theorists,
personality theorists, counseling psychologists and primary, industrial and organizational

Understanding Psychological principles and its models help significantly in gaining the knowledge of
determinants of individual behavior such as

 the learning process,

 motivation techniques,
 personality determinants and development,
 perceptual process and its implications,
 training process,
 leadership effectiveness,
 job satisfaction,
 individual decision making,
 performance appraisal,
 attitude measurement,
 employee selection,
 job design and work stress.

The major focus of sociologists is on studying the social systems in which individuals fill their roles.
The focus is on group dynamics.
They have made their greatest contribution to OB through their study of group behavior in
organization, particularly formal and sophisticated organizations.
Sociological concepts, theories, models, and techniques help significantly to understand better the
group dynamics, organizational culture, formal organization theory and structure, corporate
technology, bureaucracy, communications, power, conflict, and intergroup behavior.

Key concepts of Sociology are;

Most sociologists today identify the discipline by using one of the three statements:

 Sociology deals with human interaction arid this communication are the key influencing factor
among people in social settings.
 Sociology is a study of plural behavior. Two or more interacting individuals constitute a plurality
pattern of behavior
 Sociology is the systematic study of social systems:

A social system is an operational social unit that is structured to serve a purpose.

It consists of two or more persons of different status with various roles playing a part in a pattern that
is sustained by a physical and cultural base.
When analyzing organizing as a social system, the following elements exist:

 People or actors
 Acts or Behavior
 Ends or Goals
 Norms, rules, or regulation controlling conduct or behavior
 Beliefs held by people as actors
 Status and status relationships
 Authority or power to influence other actors
 Role expectations, role performances, and role relationships.

Therefore, organizations are viewed by sociologies as consists of a variety of people with different
roles, status, and degree of authority.
The organization attempts to achieve certain generalized and specific objectives.
To attain some of the abstract ends such as the development of company loyalty, the organization’s
leaders appeal to the shared cultural base.

Social Psychology
It has been defined as the scientific investigation of how the thoughts, feelings, and behavior of
individuals are influenced by the actual, imagined or implied the presence of others.
It deals with how people are affected by other individuals who are physically present or who are
imagined to be present or even whose presence is implied.

Social Psychology deals with many of the same phenomena but seeks to explain whole individual
human interaction and human cognition influences culture and is influenced by culture.
The unit of analysis is the individual within the group.

Social Psychologists study an enormous range of topics relevant to the organizational behavior field
are behavioral change, attitude change, communication, group process and group decision making.
Social psychologists making significant contributions to measuring, understanding and improving
attitudes, communication patterns how groups can satisfy individual needs and group decision-making

The main aim of anthropology is to acquire a better understanding of the relationship between the
human being and the environment. Adaptations to surroundings constitute culture. The manner in
which people view their surroundings is a part of the culture.
Culture includes those ideas shared by groups of individuals and languages by which these ideas are
communicated. In essence, culture is a system of learned behavior.
Their work on culture and environment has helped us to understand differences in fundamental
values, attitudes, and behavior among people in different countries and within different organizations.
The world is the laboratory of anthropologists, and human beings must be studied in the natural
habitat. Understanding the importance of studying man in natural settings over time enables one to
grasp the range of anthropology.
Familiarity within some of the cultural differences of employees can lead to a greater managerial
objectivity and depth in the interpretation of behavior and performance.
Anthropologists contribute to study some aspects of organizational settings – similar values,
comparative attitudes, cross-cultural analysis between or among the employees.

Political Sciences
Contributions of political scientist are significant to the understanding of behavior in organizations.
Political scientists study the behavior of individuals and groups within a political environment.
They contribute to understanding the dynamics of power centers, structuring of conflict and conflict
resolutions tactics, allocation of power and how people manipulate power for individual self-interest.
In a business field, organizations wanted to attain supremacy in their field and indulge in politicking
activities to gain maximum advantages by following certain tasks like Machiavellianism, coalition
formation, malpractices, etc.
The knowledge of political science can be utilized in the study the behavior of employees, executives
at micro as well as macro level.

Factors Influencing Individual Behavior

Abilities: Abilities of a person are the natural or learnt traits. Abilities can be classified into mental
and physical abilities and different task requires different level of the two. Mental abilities represent
the intelligence, person’s deductive reasoning, and memory, analytical and verbal comprehension.
Physical abilities include muscular strength, stamina, body coordination and motor skills. An
individual’s self awareness of his own abilities determines how he feels about the task, while the
manager’s perception of his abilities determines the kind of task he assigns to the individual.

Gender: Although, research concludes that men and women are equal in their mental abilities and
job performance, society does emphasize differences. However, absenteeism is one area where
differences are found and can be attributed to being primary caregiver to children. However, this
creates a difference in self perception of one’s abilities, personal values and social behavior.
Similarly, a manager’s personal values might influence how he considers gender as factor in his task
assignment and evaluation.

Race: Race and culture exert significant influence when both workplace and society have
considerable diversity. Stereotyping and attributing behavior based on race and culture are
common mistakes that influence individual behavior. It is important for both management and the
staff of diverse workforce to learn about different cultures, their values, common artifacts and
communication protocols. This would create a more comfortable corporate culture and would
subdue behaviors that might be perceived as insensitive and offensive.

Perception: Perception is the basic cognitive process that transforms sensory stimuli into
meaningful information. Most real life problems are multidimensional and the rational approach is
often entwined with the gut feeling, resulting in individual perception. This quells the famous notion
that reality is objective and thus everyone must perceive it the same way. Both managers and
subordinates must recognize that perceptual differences exist and often are the reason for mutual
Stereotyping: It is categorization of individuals on basis of single attribute, it ends up creating a
generalized and simplified belief that do not take into account other significant characteristics. Age,
race and sex are the three most common basis of stereotyping; not only they are unethical but can
cost missing resources. In general, stereotyping leads to decisions that are based on inaccurate data
that can result in unfair performance evaluations, job design or promotion.
Selective Perception: It is the process of selecting only the information that supports our pre-
existing belief system, thereby eliminating the discomforting information. Selective perception acts
like a catalyst to stereotyping because people tend to notice things that fit their existing notion and
not notice things that don’t.
Both stereotyping and selective perception can be beneficial only by chance since they are based on
partial information. The specific situations in which they can be positively exploited cannot be used
as reliable methods.

Attribution: Attribution is the process of observing behavior and then determining its cause based on
individual’s personality or situation. Attribution based on personality is due to internal causes and is
termed as dispositional attribution. It includes personality traits like shyness, arrogance,
intelligence, etc. Attribution based on external influences and situations that are outside the control
of individual are termed as situational attribution. The basic attribution framework uses three
criteria mentioned below.
Consensus: It is the extent to which other people in the same situation might respond
similarly. When behavior is attributed to consensus, the individual is not rewarded or penalized due
his personality.
Distinctiveness: It is the extent to which the individual’s behavior can be attributed to situations or
to his personality. If the person behaves the same way in seemingly different situations, then his
behavior will be attributed to his personality.
Consistency: It is the measure of the frequency of the observed behavior, how often does the
behavior occurs? High consistency is linked to dispositional attribution while low consistency is
linked to situational attribution.

Attitude: An attitude is the abstract learnt response of an individual’s entire cognitive process over
a period of time. It is experienced as a quick response to a familiar situation without any deep
reasoning; it forms the basis of biases and attribution errors. As an example, an individual who has
worked in various organizations might develop an attitude of indifference towards organizational
Personality: Personality is the relatively stable set of psychological attributes that distinguishes one
individual from another. The `integrated individual behavior model’ proposed above, is a
framework to understand the process by which the personality develops over a period of time.

Concept of Learning

Learning is a permanent change in behaviour due to experience or training.

Learning has a major impact on individual behaviour as it influences abilities, role perceptions and

Classical conditioning: is based on the principle that a physical event referred as a stimulus that
originally does not elicit a particular response and gradually acquires the capacity to elicit that
response as a result of repeated pairing with a stimulus that elicits a reaction. This category of
learning of is relatively common and has an important role in such reactions as strong fears, taste
aversions, some aspects of sexual behaviour and even racial or ethnic prejudice. The first model,
classical conditioning, was initially recognized by Pavlov in the salivation reflex of dogs. Salivation is
an innate reflex, or unconditioned response, to the presentation of food, an unconditioned stimulus.
Pavlov demonstrated that dogs could be conditioned to salivate merely to the sound of a buzzer (a
conditioned stimulus), after it was sounded a number of times in conjunction with the presentation
of food. Learning is said to occur because salivation has been conditioned to a new stimulus that did
not elicit it initially. The pairing of food with the buzzer acts to reinforce the buzzer as the prominent

operant conditioning: also known as instrumental conditioning denotes to the process that
people's behaviour produces certain consequences. If actions of people have pleasant effects, then
they will be more likely to repeat them in the future. If, however, their actions have unpleasant effects,
they are less likely to repeat them in the future. Therefore, this theory showed that behaviour is the
function of its consequences. The well-known Skinner box verified operant conditioning by placing a
rat in a box in which the pressing of a small bar produces food. Skinner displayed that the rat
eventually learns to press the bar regularly in order to obtain food. Besides reinforcement, punishment
produces avoidance behaviour, which appears to weaken learning but not curtail it. In both types of
conditioning, stimulus generalization occurs that is the conditioned response may be elicited by
stimuli similar to the original conditioned stimulus but not used in the original training. Stimulus
generalization has huge practical significance, because it allows for the application of learned
behaviours across different contexts. Behaviour alteration is a type of treatment resulting from these
stimulus/response models of learning. It operates under the assumption that if behaviour can be
learned, it can also be unlearned Operant conditioning emphasizes voluntary behaviours.

Cognitive theory: of learning presupposes that the human being learns the significance of various
objects and event and learned responses depending on the meaning assigned to stimuli.
WolfgangKohler demonstrated that a protracted process of trial-and-error may be replaced by a
sudden understanding that grasps the interrelationships of a problem. This process, called insight, is
more similar to piecing together a puzzle than responding to a stimulus. Edward Tolman (1930)
showed that unrewarded rats learned the layout of a maze, yet this was not apparent until they were
later rewarded with food. Tolman referred to this latent learning, and it has been recommended that
the rats developed cognitive maps of the maze that they were able to apply immediately when a
reward was offered. The cognitive theory of learning is applicable in the modern managerial practices.
Many motivation theories centre on the concept of cognition. Expectations, attributions and locus of
control are all cognitive concepts requiring attention while encouraging workers.

Social learning theory: This theory is also referred as observational learning, social learning
theory, highlights the capability of an individual to learn by observing others. The central models may
include parents, teachers, peers, motion pictures, TV artists, and bosses. An individual obtains new
knowledge by observing what happens to his or her model. This is commonly known as vicarious
learning. A learner acquires unspoken knowledge and skills through vicarious learning. Social
learning has significant relevance in organizational behaviour. A great deal of what is learned about
how to behave in organizations can be explained as the result of the process of observational learning.
A new hire obtains job skills by observing what an experienced employee does. Observational
learning also occurs in a very informal and in unarticulated manner.

It is concluded that learning in organization draws more appeal from the assumption that
organizations are capable of intelligent behaviour, and that learning is an instrument for intelligence,
though sometimes an attractively unreliable one. The basic image is that organizations collect
experiences, draw inferences, and encode inferences in repositories of organizational knowledge, such
as formal rules and informal practices.


Reinforcement is a process to develop or strengthen pleasing behaviour. Reinforcement hypothesis is

the method of shaping behaviour by controlling the consequences of the behaviour. In reinforcement
theory a combination of rewards and/or punishments is used to strengthen desired behaviour or put
out unwanted behaviour. Any behaviour that elicits a consequence is called operant behaviour,
because the individual operates on his or her environment. Reinforcement theory focuses on the
relationship between the operant behaviour and the related consequences, and is also called as operant
conditioning. Major contributor of this theory was B.F. Skinner who developed modern ideas about
reinforcement theory. Skinner argued that the internal needs and drives of individuals can be ignored
because people learn to exhibit certain behaviors based on what happens to them as a result of their
behaviour. Management team must always try to shape employee behaviours to get better
contributions to the company. This can involve supporting positive behaviours or reducing negative

There are many types of reinforcement: positive and negative.

1. Positive reinforcement strengthens and enhances behaviour by the presentation of positive

reinforcers. There are primary reinforcers and secondary reinforcers. Primary reinforcers
satisfy basic biological needs and include food and water. However, primary reinforcers do
not always reinforce. For instance, food may not be a reinforcer to someone who has just
completed a five course meal. Most behaviours in organizations are influenced by secondary
reinforcers. These include benefits in organizational set up. Positive reinforcement defines
and communicates expected behaviours and strengthens the connection between high
performance and rewards. It reinforces an employee's behaviour immediately after learning a
new technique and promotes quick, thorough learning. It motivates effective workers to
continue to do good work. Lack of reinforcement leads to job dissatisfaction. It increases
productivity by rewarding workers who conserve time and materials. Employees who are
rewarded after they successfully perform feel self-confident and become eager to learn new
techniques, take advanced training, and accept more responsibility.

Rewarding employees who suggest improved work procedures will produce more innovation, it
creates a relaxed work environment, reward new ideas and tolerate innovative failures.

2. In negative reinforcement, a disagreeable event that precedes a behaviour is removed

when the desired behaviour occurs. This process increases the likelihood that the desired
behaviour will occur. Just as there are positive reinforcers, there are the stimuli that
strengthen responses that permit an organism to avoid or escape from their presence. Some
negative reinforcers such as intense heat, extreme cold, or electric shock, exert their effects
the first time they are encountered, whereas others acquire their impact through repeated
3. Punishment: Punishment is an undesirable outcome a worker receives for bad behaviour.
This can involve actions such as demoting the employee or suspending the employee. A
manager may put an employee on trial pending a change in behaviour. Additionally, the
employee may lose overtime privileges or consideration for raises.
4. Extinction: Extinction is the elimination of a behaviour. This type of behaviour
modification should be reserved for the most damaging behaviours. When individual want an
immediate and complete stop to unwanted actions, such as smoking on the job or using sexual
innuendo, offer the most severe punishment, such as firing, if person see any more of the
behaviour. Managers should make the consequences clear and make sure employees know
there will be zero tolerance.

Schedules of reinforcement:

Reinforcement schedule is the timing of the behavioural consequences that follow a given behaviour.
Fundamentally, there are two types of reinforcement schedules that include continuous and
1. If a behaviour is reinforced each time it occurs, it is called continuous reinforcement.
Theoretical studies have demonstrated that continuous reinforcement is the best way to
establish new behaviours or to eliminate undesired behaviours. However, this type of
reinforcement is generally not practical in an organizational setting.
2. Intermittent reinforcement means that each instance of a desired behaviour is not
reinforced. There are at least four types of intermittent reinforcement schedules: fixed
interval, fixed ratio, variable interval, and variable ratio.

 Fixed interval schedules of reinforcement take place when desired behaviours are reinforced
after set periods of time. In organization, a fixed interval schedule is a weekly paycheque. A
fixed interval schedule of reinforcement does not appear to be a particularly strong way to
elicit desired behaviour, and behaviour learned in this way may be subject to rapid extinction.
 The fixed ratio schedule of reinforcement applies the reinforcer after a set number of
occurrences of the desired behaviours. An organizational example of this schedule is a sales
commission based on number of units sold. Like the fixed interval schedule, the fixed ratio
schedule may not produce consistent, long-lasting, behavioural change.
 Variable interval reinforcement schedules are used when desired behaviours are reinforced
after varying periods of time. For example, there would be special recognition for successful
performance and promotions to higher-level positions. This reinforcement schedule appears to
elicit desired behavioural change that is resistant to extinction.
 Lastly, the variable ratio reinforcement schedule applies the reinforcer after a number of
desired behaviours have occurred, with the number changing from situation to situation. In
organization, variable ratio schedules are bonuses or special awards that are applied after
varying numbers of desired behaviours occur. Variable ratio schedules appear to produce
desired behavioural change that is reliable and very resistant to extinction.

Major function of the laws of reinforcement theory to organizational set up is behavioural

modification, or behavioural contingency management. Characteristically, a behavioural modification
program comprises of four steps:

1. Specifying the desired behaviour as objectively as possible.

2. Measuring the current incidence of desired behaviour.
3. Providing behavioural consequences that reinforce desired behaviour.
4. Determining the effectiveness of the program by systematically assessing behavioural change.

Organization's management style can integrate each style of reinforcement. However, contemporary
organization theories generally advocate a focus on positive reinforcement, which encourages
employee development and empowerment by nurturing pioneering and proactive behaviour. On the
contrary, management styles that focus on negative reinforcement tend to be controlling because
supervisors must confirm compliance before removing negative stimuli, which requires heavy control
and observation.

Reinforcement theory is significant in changing the behaviour of employees in organizational

environment as it explains how people learn behaviour. It is regularly applied to organizational
settings in the situation of a behavioural modification program. The theory of reinforcement theory is
disapproved for its principles that offer important insight into individual learning and motivation. It
can be concluded that workers should be encouraged when they have a chance to perform a
challenging task in the dissimilar situation in which performance depends on the skills and feedback is
given regarding the performance. Reinforcement theory assists how individual or employee progress
their learning skills and improve their self-confidence to attain their goals and contribute in the
organization's growth.
an event.
Personality trait is basically influenced by two major features −
1. Inherited Characteristics
The features an individual acquires from their parents or forefathers, in other words the gifted
features an individual possesses by birth is considered as inherited characteristics. It consists of the
following features −
 Color of a person’s eye
 Religion/Race of a person
 Shape of the nose
 Shape of earlobes
2. Learned Characteristics
Nobody learns everything by birth. First, our school is our home, then our society, followed by
educational institutes. The characteristics an individual acquires by observing, practicing, and
learning from others and the surroundings is known as learned characteristics.
Learned characteristics includes the following features −
 Perception − Result of different senses like feeling, hearing etc.
 Values − Influences perception of a situation, decision making process.
 Personality − Patterns of thinking, feeling, understanding and behaving.
 Attitude − Positive or negative attitude like expressing one’s thought.

Traits of Personality
Personality traits are the enduring features that define an individual’s behavior. A personality trait is
a unique feature in an individual. Psychologists resolved that there are five major personality traits
and every individual can be categorized into at least one of them. These five personality traits are −

Major Personality Attributes

Following are the five major personality attributes that influence OB −
 Locus of Control
Locus of control is the center of control of an individual’s code of conduct. People can be grouped
into two categories i.e., internals and externals respectively.
People who consider themselves as the masters of their own fates are known as internals, while,
those who affirm that their lives are controlled by outside forces known as externals.
Before making any decision, internals actively search for information, they are achievement driven,
and want to command their environment. Thus, internals do well on jobs that craves complex
information processing, taking initiative and independent action.
Externals, on the other hand, are more compliant, more willing to follow instructions, so, they do
well in structured, routine jobs.
 Machiavellianism
Machiavellianism is being practical, emotionally distant, and believing that ends justify means.
Machiavellians are always wanting to win and are great persuaders. Here are the significant features
of a high-mach individuals −
High-Machs prefer precise interactions rather than beating about the bush.
High-Machs tend to improvise; they do not necessarily abide by rules and regulations all the time.
High-Machs get distracted by emotional details that are irrelevant to the outcome of a project.
 Self-esteem
It is the extent up to which people either like or dislike themselves. Self-Esteem is directly related to
the expectations of success and on-the-job satisfaction.
Individuals with high self-esteem think that they have what it takes to succeed. So, they take more
challenges while selecting a job.
On the other hand, individuals with low self-esteem are more susceptible to external distractions.
So, they are more likely to seek the approval of others and to adapt the beliefs and behaviors of
those they respect.
 Self-monitoring
Self-monitoring is the capability of regulating one’s behavior according to social situations.
Individuals with high self-monitoring skill easily adjust their behavior according to external,
situational factors. Their impulsive talents allow them to present public personae which are
completely different from their private personalities.
However, people with low self-monitoring skills cannot cover themselves. Regardless of any
situation, they are always themselves. They have an attitude of, “what you see is what you get.”
 Risk taking
Generally, managers are reluctant on taking risks. However, individual risk-taking inclination affects
the bulk of information required by the managers and how long it takes them to make decisions.
Thus, it is very important to recognize these differences and align risk-taking propensity with precise
job demands that can make sense.