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Organizational Behaviour is a field of study that investigates the impact that individuals,

groups, and structure have on behaviour within organizations for the purpose of applying
such knowledge towards improving an organization's effectiveness. Organizational
Behaviour also can be defined as the understanding, prediction and management of human
behaviour both individually or in a group that occur within an organization. Internal and
external perspectives are the two theories of how organizational behaviour can be viewed
from an organization’s point of view. The study of organizational behaviour includes areas of
research dedicated to improving job performance, increasing job satisfaction, promoting
innovation, and encouraging leadership. Each has its own recommended actions, such as
reorganizing groups, modifying compensation structures, or changing methods
of performance evaluation.

Why we study organizations behaviours?

1. OB is the study of learning how to predict human behaviour and, then, apply it in
some useful way to make the organization more effective. It helps in the effective
utilization of people working in the organization guarantees the success of the
2. OB helps the managers to understand the basis of motivation and what he should do
to motivate his subordinates.
3. OB helps to maintain cordial industrial relations which help to increase the overall
productivity of the industry.
4. It helps greatly in improving bur inter-personal relations in the organizations and it
also helps managers apply appropriate motivational techniques in accordance with the
nature of individual employees who exhibit a learning difference in many respects.
5. Once an organization sees a window for expansion, it begins to grow and thus alters
the economic equilibrium by catapulting itself forward. This expansion induces
changes not only in the organization’s infrastructure but also in competing
organizations and the economy as a whole.
6. One example of how development in organizational theory improves efficiency is in
factory production. Henry Ford created the assembly line, a system of organization
that enabled efficiency and drove both Ford and the U.S. economy forward
7. Improving industrial/ labour relations: Organisational Behaviour help in
understanding the cause of a problem, predict its future course and control its
consequences. As a result, managers are able to maintain better relations with their
employees by nipping any problem in the bud.
8. Effective utilisation of Human Resource: Knowledge of Organisational Behaviour
help managers to effectively and efficiently manage their employees, inspiring and
motivating them to higher efficiency and productivity through a better understanding
and analysis of human behaviour
9. Predicting human behaviour: This is probably the most important reason for studying
Organisational Behaviour in management. Knowledge of Organisational Behaviour
prepares students to become better managers by becoming a student of human
behaviour from a management perspective and thereby contributing to organisational
effectiveness and profitability.

2. The Multidisciplinary Anchor Organizational behaviour is a discipline and within its

theories and models of behaviour are developed. However, researchers in this discipline must
also scan a variety of other disciplines and draw from them relevant information and ideas.
Some these disciplines include psychology, anthropology, sociology. communications and
 The Systematic Research Anchor Researchers in the field of organizational
behaviour rely on scientific method in conducting studies. The systematic
research anchor dictates that organizations collect information and data in a
detailed and systematic way and that statements and assumptions be tested in
quantitative ways.
 The Contingency Anchor Different actions and decisions may have different
consequences in different settings. The contingency anchor requires an
awareness that no single solution will work in every situation and that
organizational solutions to problems need to take the specifics of a given
situation into account. There is a need to evaluate specific situations and select a
solution that fits the situation to which it is to be applied.
 The Multiple Levels of Analysis Anchor This anchor dictates that solutions be
evaluated from the perspectives of various organizational levels including that
of individuals, of functional teams or departments, of executives and of the
company as a whole. Many solutions when applied affect several or all levels of
the organization. Analysis of the effects at various levels is critical to success.
 The Open System Anchor Organizations do not exist in a vacuum. The
organization and the environment in which it exists are interconnected. The
open systems anchor supports a view of the organization that includes its
external environment including such factors as the culture in which it is located,
the needs of investors, the state of the economy, the political environment and
regulatory requirements. It also supports the internal view of items such as
communication systems, marketing needs, work processes and the interactions
of various subgroups.

MARS model of individual behavior is a model that seeks to elaborate individual behavior as
a result of internal and external factors or influences combined together. The name itself is an
acronym for individual Motivation, Abilities, Role Perception and Situational Factors.
These are marked as the four major factors in determining individual behavior and results.
The model can be implemented to a variety of situations, but is usually applied in
Management, Industrial Psychology or Organizational Behavior studies. This model
represents that these four factors have a mixed effect on individual performance. If any factor
weakens, performance will decrease.
Say for example, passionate salespeople who understand their duties and have enough
resources will not perform their jobs well if they lack sufficient knowledge and sales skill.
Therefore, the Container Store and other enterprises that excel in customer service pay
attention to all four factors in the MARS model.

Motivation is a process that explains the intensity of direction and persistence of effort to
achieve goals . Motivation is a condition that encourages or becomes the cause of a person
doing an act or activity, which takes place consciously. Although it is possible that a person
does an activity that he does not like, the forced activities will be ineffective and inefficient
.Motivation as the forces within a person affecting the direction, intensity, and persistence of
voluntary behaviour .There are three needs that encourage motivation: Need for achievement,
need for affiliation and need for power. The need for achievement, the need to be accepted by
the group, and the need to occupy a position encourage people to have high motivation in
carrying out the work.
Ability consists of both the natural aptitudes and learned capabilities required to successfully
complete a task. Ability is an important consideration when hiring job applicants because
performing required tasks demands the right knowledge and skills. Ability is also an
important factor in employee development. By identifying skill deficiencies, managers can
determine which training is required to improve employee performance. In addition to hiring
qualified applicants and training employees so they learn the required abilities, managers can
improve performance by redesigning the job so employees are given only tasks within their
capabilities. There are many physical and mental aptitudes, and our ability to acquire skills is
affected by these aptitudes. For example, finger dexterity is an aptitude by which individuals
learn more quickly and potentially achieve higher performance at picking up and handling
small objects with their fingers.

Role Perceptions
Employees who feel engaged in their jobs not only have the necessary motivation and
competencies to perform their work but also understand the specific tasks assigned to them,
the relative importance of those tasks, and the preferred behaviours to accomplish those tasks.
In other words, they have clear role perceptions . The most basic way to improve these role
perceptions is for staff to receive a job description and ongoing coaching. Employees also
clarify their role perceptions as they work together over time and receive frequent and
meaningful performance feedback. Three components of role perception concept
1. Employees have accurate role perceptions when they understand the specific tasks
assigned to them, that is when they know the specific duties or consequences for which they
are accountable.
2. People have accurate role perceptions when they understand the priority of their various
tasks and performance expectations.
3. Understanding the preferred behaviours or procedures for accomplishing the assigned

Situational Factors
This include conditions beyond the employee’s immediate control that constrain or facilitate
behaviour and performance. Situational factors is the only external determining factor of
behaviour and performance. It encompasses all those external conditions and situations that
can either facilitate or deter the superior execution of a work. These situations are beyond an
employee’s control, and hence while performance evaluation, presence or influence of these
factors should be duly considered but an employee should never be held accountable for
outcomes caused by these factors. In an organization, situational factors can include allocated
budget, time, availability of efficient resources, facilities present, cooperation from external
sources etc.


Task Performance

Task performance refers to goal-directed behaviours under the individual's control that
support organisational objectives. Task performance behaviours transform raw materials into
goods and services, or support and maintain technical activities. For example, foreign
exchange traders at the Bank of New Zealand make decisions and take actions to exchange
currencies. Employees in most jobs have more than one performance dimension. Foreign
exchange traders must be able to identify profitable trades, work cooperatively with clients
and coworkers in a stressful environment, assist in training new staff and work on special
telecommunications equipment without error. Some of these performance dimensions are
more important than others, but only by considering all of them can we fully evaluate an
employee's contribution to the organisation.

Organisational Citizenship

Companies could not effectively compete, transform resources or serve the needs of their
stakeholders if employees performed only their formal job duties. Employees also need to
engage in organisational citizenship behaviours (OCBs) Various forms of cooperation and
helpfulness to others that support the organisation's social and psychological context.—
various forms of cooperation and helpfulness to others that support the organisation's social
and psychological context.60 In other words, companies require contextual performance (i.e.
OCBs) along with task performance.
Counterproductive Work Behaviours

Organisational behaviour is interested in all workplace behaviours, including those on the

‘dark side’, collectively known as counterproductive work behaviours (CWBs) Voluntary
behaviours that have the potential to directly or indirectly harm the organisation.. CWBs are
voluntary behaviours that have the potential to directly or indirectly harm the organisation.
They include abuse of others (e.g. insults and nasty comments), threats (threatening harm),
work avoidance (e.g. tardiness), work sabotage (doing work incorrectly) and overt acts
(theft). CWBs are not minor concerns. One Australian study found that units of a fast-food
restaurant chain with higher CWBs had a significantly worse performance, whereas
organisational citizenship had a relatively minor benefit.

Joining and Staying with the Organisation

Task performance, organisational citizenship and the lack of counterproductive work

behaviours are obviously important, but if qualified people don't join and stay with the
organisation, none of these performance-related behaviours will occur. Although staff
shortages vary as the economy rises and falls, it appears that some employers never seem to
get enough qualified staff. During the most recent economic recession, for example, one
Australian newspaper published stories of employers who didn't have any qualified applicants
in spite of rising unemployment. (Most employers filled their vacancies after the stories were
reported.) The effects of staff shortages are apparent in Wittlesea, Victoria, where a chronic
shortage of paramedics has resulted in cancellation of some ambulance services. The shortage
has also placed a heavy strain on existing staff, some of whom are regularly (and reluctantly)
working fourteen-hour days without a lunch break, and also covering other shifts on their
days off. ‘The paramedics are exhausted and each patient is then forced to wait longer for
treatment,’ says the union representing paramedics.

Companies survive and thrive not just by hiring people with talent or potential; they also
need to ensure that these employees stay with the company. Companies with high turnover
suffer because of the high cost of replacing people who leave. More important, as mentioned
earlier in this chapter, much of an organisation's intellectual capital is the knowledge carried
around in employees' heads. When people leave, some of this vital knowledge is lost, often
resulting in inefficiencies, inferior customer service and so forth. This threat is not trivial:
One large-scale survey revealed that nearly two-thirds of Indonesian employees plan to move
to a different employer even though the position, area of work and remuneration are the
same. During the recent mining boom, a survey of thirteen mining operations across Australia
reported an average turnover rate of 24 per cent, with some mining sites experiencing annual
employee turnover approaching 60 per cent.

Maintaining Work Attendance

Along with attracting and retaining employees, organisations need everyone to show up for
work at scheduled times. Situational factors—such as severe weather or car breakdown—
explain some work absences. Motivation is another factor. Employees who experience job
dissatisfaction or work-related stress are more likely to be absent or late for work because
taking time off is a way to temporarily withdraw from stressful or dissatisfying conditions.
Absenteeism is also higher in organisations with generous sick leave because this benefit
limits the negative financial impact of taking time away from work. Studies have found that
absenteeism is also higher in teams with strong absence norms, meaning that team members
tolerate and even expect coworkers to take time off. One study of Queensland government
employees discovered that absenteeism rates changed over time, and that these changing
absence levels may be due to changing norms about how much unscheduled time off team
members should take.