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Why organisational behaviour is important for a company?


Organisational behaviour refers to the study of individual, group performance, and activity within an organisation. It is an attempt to create the business organisation in a creative manner. It helps to provide an understanding to examine the factors that are necessary to create an effective organisation.

Importance of Organisational Behaviour


It is very important to study the Organisational behaviour. It gives the direction to an organisation and also helps to understand the organizational life. Let’s discuss the importance of Organisational behaviour:

skill development

Helps to develop the skills of the employees and gain of knowledge to enhance the performance of the employees. Employees should remain up to date with new technology and use existing one in a better way. Training also improves the required skills of the employees and teach them to perform the tasks independently.

Understanding customer behaviour

The behaviour of the customer helps the organisation to decide what products and services to be offered. When an organisation builds a strong connection with the customer, an organisation will get an idea about the customer needs. For understanding the customer behaviour the organisation must conduct surveys and one on one interviews.

Employee Motivation

Motivating your employees is not a big task. In fact, itschedule to have a conversation with them. It is the level of energy, commitment and the creativity that helps the organisation. Use employee reviews on a regular basis to discuss the improvements.

Goals of Organisational behaviour

Every organisation uses a structure that will help to promote the business performance. The organisation guru Drucker has identified 8 key elements which will explain the goals of organisation behaviour briefly. The elements are:


Innovation means the positive change in the implementation of organisation by providing the relevant solutions to the customers or full fill their needs in the unique ways.


Productivity is “anything that makes an organisation function better.” It is one of the most important goal, i.e. to produce the large output with small inputs. It requires the active participation between the employer and employee on a regular basis.

Development and the management performance

Management training is important because it is the key to organisational success. Most of the activities within the company are organised for the development of an employee and organisation. Some companies provide special training programs to the managers. IBM organises 15 days training management program every year.

Models of organizational behaviour



This model depends on power. Power is given to the employees those who complete their task on time. The penalty is charged for not completing the task on time. Those who are in command have the power to say “you do it or else.”

  • Depends on power
  • Employees result is depended on the boss
  • Employee need is subsistence
  • Performance result is minimal


This model depends upon economic resources. The employees are oriented towards the benefits, security and depend upon the organisation. In this, employees won’t work as a team.

  • -Depends on economic resource
  • -Employee orientation is security and benefit
  • -Employees are self-dependent
  • -Performance result is passive cooperation


This model depends on leadership. Managers motivate their employees to perform better. They spend time with their employees in order to understand them in a better way.

  • Depends on leadership
  • Employee orientation is security and benefit
  • Employee result in participation
  • Employee needs status and recognition


In this model, employees are dependent on each other and work as team management.

  • Depends upon partnership
  • Employee orientation is responsible behaviour
  • Employee needs is self-actualization
  • Performance result is moderate enthusiasm


This model is based on the performance and on the trust factor. It reflects the values where managers focus their attention to help the employees by developing the feelings of hope and courage.

  • Depends upon trust and understanding
  • Employee orientation is ownership
  • Employee result is self-motivation
  • Performance result is passion and organisational goal

Relation of models to human needs

  • These five models are related to human needs
  • Each model performance is connected with each other

List of organisational behaviour concepts


The main concepts of organisational behaviour are:-

  • -The nature of the people
  • -The nature of organisation

The nature of the people includes

Individual differences:

Individual difference is the reality that makes every individual different from another individual. The difference can take place in many ways for example likes, dislikes, physical appearance, interest, etc.

Example- Manager should not judge anyone apart from their work, and all the employees   should be equally treated.


Perception tells about their behaviour in the organisation. It helps in noticing the information and categorizing this information. After categorizing apply this information within the framework.

Example- Rohit thinks that late night parties will spoil the youth. Whereas, Neha thinks that late night parties are a way of making new friends. Here you can see that both Rohit and Neha

Motivational behaviour

It is the force which helps the employees to achieve the goals. Managers should apply motivational techniques to help the employees in achieving the desired goals.

The motivational behaviour approaches are:

Intrinsic Approach

In this, the employees enjoy their work. Employees enjoy their job’s challenges because they get personal satisfaction out of it.

Extrinsic Approach

In this, employees participate in an activity for reward. These rewards are the benefits which are provided to the workers in return for work.


Employees should be valued and appreciated for their skills. So, it is important to pay attention and actively look for the opportunity to reward all the employees.

Nature of organisation

Organisations include different types of activities to achieve organisational goals and objectives. In an organisation, work is assigned to every individual according to their skills and efficiency.

The nature of organisation includes-

Social System

It is a system in which human interaction takes place in different ways. A system which interacts with the surrounding.

Types of social system

  • Organisation, in which the job of each employee is clearly defined.
  • Focuses on work experience
  • Purpose is to fulfill the ultimate objectives of the organisation
  • -Example- Success party after getting a job

Organisation formed within the formal organisation as network of relationship. In this people interact with each other.

  • Focuses on personal relationships
  • Purpose is to satisfy their social and psychological needs
  • Example- Birthday party

Mutual Interest

 It is a coordination which takes place between the organisation and employees. Every organisation needs employees or vice-versa. So, it’s a mutual understanding between organisation and employees, that helps the organisation to achieve respective goals and objectives.

Morals and Ethics

They are the principles concerned with group, individual and organisation. Leaders use ethics in an organisation to manage employees. Leaders use code of ethics to determine discipline procedures and acceptable behaviour for all workers in organisation.

Theories of Observational Behaviour

Observational behaviour includes different types of theories. Each theory has its own importance and functions.

Theories of Personality

Personality type A and B

The theory describes the two different personality types.

Type A

That’s why they are not able to relax properly and they make sure that everything is done properly.

Type B

Type B is totally different from the type A. At the time of competition their focus is not on loosing or winning the task, their focus is to enjoy the task.

Predicting job performance

There is two criticism which takes place. The important factors predicting the job performances are leadership, creativity, attendance and cooperation. But every organisation demands different performances. Some organisation wants the employees to be creative and liable while social firms require creativity.

Theories of Intelligence

Emotional intelligence theory:

Emotional intelligence is the ability to understand and manage emotions of yourself and the people around you. It is a way of identifying and choosing the way we think and react. The aim of the leader is to finish the task successfully.

One general Theory

It is the ability of a person to perform the certain tasks and skills. The other general factor which Sperman developed is the concept of the G factor which underlies all intelligent behaviour.

Theory of Multiple Intelligence

According to Gardener

We can improve education by addressing the intelligence of our students. An intelligence is a process to information that can be activated in cultural setting to solve problems.

Theories of Motivation

Common Sense Theory

It is believed that every individual has a different perception of doing the job and earning money.

Common Sense Approach 1
  • Trust factor is not there
  • If they are not controlled, they will pursue their own goals
  • They are lazy or unreasonable
Common Sense Approach 2
  • They are independent and creative in their work
  • They work for the betterment of the organisation

Goal setting theory

It is a technique used to increase the incentives for the employees to complete the work quickly and effectively. It results in the better performance of the employees by increasing motivation and the efforts.

Herzberg’s Two Factor Theory

The theory states that some factors cause job satisfaction and other cause dissatisfaction. According to Herzberg, intrinsic motivators and extrinsic motivators have an inverse relationship.

Theory of Attitude and Behaviour

Organisational Behaviour Modification

It is the system used to improve the performances of individuals and group in organisations.

Five steps of Organisational Behaviour Modification are:


Identify the task which is related to the behaviour performed; critical behaviour is observed and measured.


After identification, the next step for a manager is to measure the frequency of critical behaviour over time.


After measurement, the manager has to do an analysis of the behaviour which requires the modification.


After analysis, the manager will develop an effective strategy. As there are many strategies which can be used at this stage. But the strategy will depend upon the type of situation.


The last step is to evaluate whether the strategies are working properly or not.

Single loop learning

In this, the organisation basically modifies its result in order to achieve the desired outcomes. In this, if we are facing problems then we can add up our own ideas and actions to improve the situation accordingly.

Double loop learning

In this, you are forced to think about your actions. This is an important thing because we need to start and analyze our own processes. It will lead you to deeply understand and analyze your work.

Benefits of observational behaviour

The study of observational behaviour is beneficial in many ways

  • It encourages the social interaction within their
  • Helps in improving the functional behaviour within the organisation. Helps in achieving the higher productivity.
  • Helps in motivating the people in the organisation
  • Observation behaviour implies the effective management of human resources
  • Observation behaviour delivers the job satisfaction to employees and creates the positive environment in the organisation.
  • Observational behaviour develops the interaction between the individual and organisation.
  • It maintains the relationships between the individual and organisational

Why study Organisational behaviour

Study of observational behaviour is important to understand how to build and maintain a strong and cooperative work force. It is not only important for the organisation but also for the students and managers perspective also.

Let’s just discuss it

Why managers require the knowledge of organisational behaviour

Managers in the organisation have different and important roles. That’s why manager must have organisation skills to run the department smoothly.

Time Management

Time Management helps the managers to establish department goals and determine the objectives to reach those goals on deadline. There are “Three Ps” for the effective time management. They are planning, and procrastination with the help of these three Ps. Managers can divide their task. The “to-do list” is also important to keep the records and to priorities the task accordingly. He must ensure that goal has been achieved efficiently to the business standards.

Professional development

The managers should maintain a professional decorum between his staff and himself. The rules and regulators should be the same for everyone. The manager should interact with employees on a regular basis to provide the feedback to help them. He must be aware of his responsibilities.

Communicate with executive leadership

There should be a regular communication between the managers and employees. Managers should have the learning skills in order to see career progression with the company. Communication will also help the organisation to convey the status and contribution made to an overall business.

Importance of organizational behavior in management

Organisational behaviour provides solutions as well the challenges which are faced by organisations. The importances are:

  • Organisations are mix of people in terms of age, gender and race etc. Managers have to deal with the groups and the employees belongs to the different cultures. They have to exercise control and channelize the behaviour in each direction.
  • Organisations behaviour helps in better management as it helps in improving the skills.
  • Organisational behaviour helps the management to become flexible and enable to execute the organization on global scale.
  • Management has to ensure that employees do everything to satisfy the customer needs.
  • Management has to effectively deal with work force by promoting its awareness.

Many organisational behaviour projects are available online. Students can take help from these projects. Many times the student gets such projects in their school and colleges. These organisational practices will help you in job fit purposes as well. So, with the help of these projects they can complete their organisational behaviour revision notes and lecture notes.