Organisational Behaviour and Culture

Organisational behaviour (OB) is the study of how people think, feel and act in organisations, at three levels: the individual (personality, perception, motivation), the group (teams, conflict, power, leadership) and the organisation (structure, culture, change). OB draws on psychology, sociology and anthropology and emphasises contingency: what works depends on the situation. HR practices such as selection, performance management, rewards and change management are applications of OB findings.

Personality is the relatively stable pattern of thoughts, feelings and behaviours that characterises a person.

The Big Five (five-factor model)

Each trait is a continuum, not a category. Validated Big Five-based instruments are used in selection and development alongside other methods. A related six-factor model, HEXACO, adds honesty–humility, which is relevant to integrity.

The Dark Triad: narcissism (grandiosity, entitlement), Machiavellianism (manipulation, cynicism about others) and psychopathy (lack of empathy, impulsivity). These traits are associated with counterproductive work behaviour and toxic leadership.

Myers-Briggs Type Indicator (MBTI), based on Carl Jung’s theory, classifies people into 16 types using four dichotomies: extraversion–introversion, sensing–intuition, thinking–feeling and judging–perceiving. It is widely used for team discussions and self-awareness, but research has found weak test–retest reliability (many people receive a different type when retested) and little evidence that type predicts job performance. It should not be used for selection or promotion decisions.

Other individual differences

Emotional intelligence. Daniel Goleman’s popular model (1995) describes five components: self-awareness, self-regulation, motivation, empathy and social skills. Peter Salovey and John Mayer’s earlier ability model treats EI as a set of measurable abilities. Research supports some link between EI and performance in emotionally demanding roles such as service and leadership, but popular claims that EI matters more than intelligence are overstated. Elements such as self-awareness and empathy can be developed through feedback and coaching.

The Johari Window (Joseph Luft and Harrington Ingham, 1955) divides self-knowledge into four areas: open (known to self and others), blind (known to others, not to self), hidden (known to self, not to others) and unknown. Feedback reduces the blind area and self-disclosure reduces the hidden area, which is the logic behind 360-degree feedback and coaching.

Values are enduring beliefs about what is desirable. Milton Rokeach distinguished terminal values (desired end states, such as a comfortable life or family security) from instrumental values (preferred ways of behaving, such as honesty or ambition). Value fit between employees and organisations affects attraction, satisfaction and retention (person–organisation fit, Chapter 1).

Attitudes are evaluations of people, objects or events. Key work attitudes are job satisfaction, organisational commitment and engagement (Chapter 5).

Organisational citizenship behaviour (OCB) is discretionary behaviour that is not part of formal job requirements but helps the organisation, such as helping colleagues, speaking well of the organisation and volunteering for extra tasks. Engaged employees show more OCB.

Cognitive dissonance (Leon Festinger, 1957) is the discomfort people feel when their attitudes and behaviour conflict; they reduce it by changing one or the other. Involving employees in designing a change, and therefore committing them publicly to it, can shift their attitudes towards the change.

Perception is the process of organising and interpreting sensory information. Because people perceive selectively, the same event can be seen differently.

Attribution theory

Harold Kelley proposed that people decide whether behaviour is caused internally (by the person’s ability or effort) or externally (by the situation) using three cues: consistency (does the person behave this way regularly?), distinctiveness (do they behave this way only in this situation?) and consensus (do others behave the same way in the same situation?). High consistency, low distinctiveness and low consensus suggest an internal cause.

Two systematic errors. The fundamental attribution error is the tendency to over-attribute others’ behaviour to their character and under-attribute it to the situation: a manager calls an operator “careless” when the machine guard is badly designed. The self-serving bias is the tendency to credit one’s successes to oneself and blame failures on circumstances.

Perceptual biases in HR decisions

Decision-making

Herbert Simon’s concept of bounded rationality holds that people cannot consider all options and information, so they satisfice: choose the first acceptable option. Daniel Kahneman and Amos Tversky showed that people rely on heuristics (mental shortcuts) that produce systematic biases:

Groupthink. Irving Janis described groupthink as a mode of thinking in cohesive groups in which the desire for agreement overrides realistic appraisal of alternatives. Symptoms include illusions of invulnerability and unanimity, pressure on dissenters, self-censorship and “mindguards” who shield the group from contrary information. Remedies include appointing a devil’s advocate, inviting outside experts, leaders withholding their own views until others have spoken, and separate subgroups working on the same problem.

De-biasing in HR processes: structured interviews and scorecards, diverse panels, independent judgements before discussion, calibration, clear criteria decided in advance, and analysis of decision outcomes by group.

Motivation is the set of processes that account for the intensity, direction and persistence of effort towards a goal.

Content theories: what motivates

Process theories: how motivation works

Daniel Pink’s Drive (2009) popularised the argument, based on self-determination research, that for complex, creative work, autonomy, mastery and purpose motivate more than contingent rewards.

Worked example (expectancy). A plant offers ₹2,000 for each month with zero rejected products. If operators believe the target is impossible with current machines, expectancy is near zero; if they believe payouts will be “adjusted” later, instrumentality is near zero. Either way the scheme fails, regardless of the amount.

A group is two or more people who interact to achieve shared objectives; a team is a group whose members’ efforts produce collective results greater than the sum of individual inputs, with shared accountability.

Tuckman’s stages (1965; the fifth added 1977): forming (orientation, politeness), storming (conflict over roles and approaches), norming (agreed norms and cohesion), performing (effective work) and adjourning (completion and disbanding). New project teams struggle in the early stages; facilitation and clear roles shorten them.

Belbin’s team roles. Meredith Belbin identified nine roles people tend to play: Plant (creative), Resource Investigator (explores opportunities and contacts), Co-ordinator (clarifies goals, delegates), Shaper (drives action), Monitor Evaluator (critical analysis), Teamworker (supports cohesion), Implementer (turns ideas into plans), Completer Finisher (attention to detail) and Specialist (expert knowledge). Balanced teams cover the necessary roles.

Social loafing is the tendency to exert less effort when working in a group than alone, first observed by Max Ringelmann in rope-pulling experiments. It is reduced by making individual contributions identifiable, keeping teams small and setting shared goals.

Team effectiveness depends on clear goals, complementary skills, appropriate size, mutual accountability and psychological safety (Section 7.11). Virtual and hybrid teams need deliberate communication norms, trust-building and attention to fairness between remote and co-located members.

Conflict arises when one party perceives that another has negatively affected, or is about to affect, something it cares about. Task conflict (about the work) at moderate levels can improve decisions; relationship conflict (personal) is usually harmful.

Thomas–Kilmann conflict modes

Kenneth Thomas and Ralph Kilmann classified conflict-handling styles on two dimensions, assertiveness (satisfying one’s own concerns) and cooperativeness (satisfying the other party’s concerns):

No mode is best in all situations; skilled managers choose the mode to suit the issue.

Negotiation

Distributive negotiation divides a fixed amount (one side’s gain is the other’s loss); integrative negotiation seeks solutions that create value for both (Chapter 10 applies this to collective bargaining).

Roger Fisher and William Ury’s Getting to Yes (1981) set out principled negotiation: separate the people from the problem; focus on interests, not positions; invent options for mutual gain; and insist on objective criteria. Each party should know its BATNA, the best alternative to a negotiated agreement, which sets the point below which it should walk away.

Example. In a salary negotiation, the candidate’s position is “₹22 lakh”; the underlying interests may be compensating for an unvested bonus and a long commute. A joining bonus and a hybrid arrangement may meet those interests within the employer’s pay range.

John French and Bertram Raven (1959) identified five bases of power, to which Raven later added information:

Personal power (expert and referent) tends to produce commitment; position power used coercively tends to produce compliance or resistance. Effective influence tactics include rational persuasion, inspirational appeals and consultation; pressure and legitimating tactics are less effective. Organisational politics, the use of influence to pursue self-interest, increases when resources are scarce, criteria are unclear and trust is low; transparent processes reduce it.

Leadership and management. John Kotter distinguished management, which copes with complexity through planning, budgeting, organising and controlling, from leadership, which copes with change through setting direction, aligning people and motivating them. Organisations need both.

Example. Satya Nadella’s leadership at Microsoft from 2014 is often used to illustrate transformational leadership: a new direction (cloud first), and a culture reset from “know-it-alls” to “learn-it-alls”, reinforced by changes in performance management.

Definition. Organisational culture is the pattern of shared basic assumptions, values and norms that a group has learned and that guides how members perceive, think and behave. It shows in what is rewarded, tolerated and talked about.

Schein’s three levels

Edgar Schein described culture at three levels of depth:

When espoused values conflict with basic assumptions, people follow the assumptions. A company that espouses innovation but punishes failed experiments will not innovate.

How leaders embed culture. Schein identified primary mechanisms: what leaders pay attention to, measure and control; how they react to critical incidents and crises; how they allocate resources; what they role-model and teach; how they allocate rewards and status; and how they recruit, select, promote and remove people. These matter more than statements or posters.

Competing Values Framework

Kim Cameron and Robert Quinn’s Competing Values Framework classifies culture on two dimensions: internal focus versus external focus, and flexibility versus stability.

Organisations combine all four in different proportions. The Organizational Culture Assessment Instrument (OCAI) measures the current and preferred profiles, and the gap guides culture change. Typical tendencies: a cement plant leans towards hierarchy (safety and process), a sales-led FMCG company towards market, a start-up towards adhocracy, and a family-owned mid-sized firm towards clan.

National culture: Hofstede’s dimensions

Geert Hofstede’s research, originally on IBM employees in the 1960s and 1970s and later extended, describes six dimensions of national culture.

Caveats. The data are old, scores have been revised in later editions, the dimensions describe national averages rather than individuals, and India’s regional, generational and urban–rural diversity is large. Use the dimensions to explain why practices imported from other countries need adaptation, not to stereotype individuals.

Strong and weak cultures; culture change

A strong culture has widely shared and intensely held values; it guides behaviour without many rules but can resist necessary change. Culture change requires changing the experiences people have: what leaders model, measure and reward, whom the organisation hires and promotes, how decisions are made, and how failures are handled. It takes years, not months.

Examples. Netflix’s “freedom and responsibility” culture (high performance, candour, few rules); Microsoft’s growth-mindset culture after 2014; the Tata group’s emphasis on trust and community, codified in the Tata Code of Conduct.

Psychological safety (Amy Edmondson, 1999) is a shared belief that a team is safe for interpersonal risk-taking: people can ask questions, admit mistakes, raise concerns and challenge ideas without fear of embarrassment or punishment. Google’s Project Aristotle (2012–15) studied around 180 teams and found psychological safety to be the most important of five factors in team effectiveness, followed by dependability, structure and clarity, meaning and impact.

How leaders build it: framing work as learning, admitting their own mistakes, asking for input before giving their view, responding to bad news with curiosity rather than blame, and holding blameless reviews of incidents (including near-miss reporting in plants).

DEIB

Inclusion practices: structured and diverse hiring panels; pay-equity audits; transparent promotion criteria; flexible work; returnship programmes for women restarting careers; accessible workplaces and technology; employee resource groups; mentoring and sponsorship for under-represented groups; inclusive leadership training; and measuring inclusion through survey items, not only representation.