Organizational Behavior (OB) studies how people think, feel and act at work, and how that shapes results. It borrows from psychology, sociology, anthropology and economics, and it works at three levels: the individual, the group and the organisation. This first part covers the individual and the group; leadership, conflict, culture and change follow in Part II. The aim here is to revisit the key ideas, each with a real example.
1. Why OB matters
Managers get work done through people, so understanding behaviour is a core skill. OB has four goals: describe, understand, predict and control (influence) behaviour. A guiding idea is the contingency approach: there is rarely one best way, and the right action depends on the situation.
In the real world: the Hawthorne studies (Western Electric, 1920s–30s) began as lighting experiments. Output rose whatever was changed, and the lesson was that attention and social factors affect productivity. It is why a new metric or dashboard can change behaviour simply because people know they are watched.
2. Perception and attribution
Perception is how we select, organise and interpret what we sense. Two people can see the same situation differently because of their experience, expectations and interests. Common errors:
| Error | Meaning | Example |
|---|---|---|
| Halo effect | One good trait colours the whole judgement | Hiring a well-spoken candidate and assuming they are competent |
| Stereotyping | Judging by group membership | Assuming older staff resist technology |
| Selective perception | Noticing only what fits our view | Reading a report for facts that support our plan |
| Projection | Assigning our own traits to others | A careless manager assuming staff cut corners |
| Contrast and first-impression effects | Judging against the previous person, or by the opening minutes | An average interview after a poor one looks strong |
Attribution theory (Kelley) asks whether behaviour is caused by the person (internal) or the situation (external), using consistency, distinctiveness and consensus. The fundamental attribution error is overweighting personality when explaining others’ failures, while the self-serving bias credits ourselves for successes and blames the situation for failures.
In the real world: the Pygmalion effect (Rosenthal and Jacobson) found that when teachers expected certain pupils to bloom, those pupils did better. Managers’ expectations of a team member often turn into the result.
3. Personality
Personality is the stable pattern of traits that makes a person distinctive. It comes from heredity, environment and situation.
| Framework | Key idea |
|---|---|
| Big Five | Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism (emotional stability). Conscientiousness predicts job performance across many roles |
| MBTI | Four preference pairs (E/I, S/N, T/F, J/P); popular in training, but its test–retest reliability is criticised, so use it for conversation, not selection |
| Locus of control | Internals believe they control outcomes; externals credit luck or others |
| Type A and B | Type A is hurried and competitive; Type B is relaxed |
| Self-esteem, self-monitoring, Machiavellianism | Self-belief, adapting behaviour to the situation, using others for gain |
Emotional intelligence (Goleman) covers self-awareness, self-regulation, motivation, empathy and social skill. Person–job fit matters: a highly agreeable person may shine in customer support and struggle in tough negotiation.
4. Learning
Learning is a relatively permanent change in behaviour from experience. Three theories matter:
| Theory | Idea | Example |
|---|---|---|
| Classical conditioning (Pavlov) | A neutral cue becomes linked to a response | Staff feel anxious when the manager’s number appears |
| Operant conditioning (Skinner) | Behaviour is shaped by its consequences | A bonus for hitting a target |
| Social learning (Bandura) | We learn by watching models | New joiners copy the habits of senior colleagues |
Operant conditioning offers four tools:
- Positive reinforcement: add something pleasant (praise, bonus).
- Negative reinforcement: remove something unpleasant (relief from a tedious task once targets are met).
- Punishment: add an unpleasant consequence.
- Extinction: stop reinforcing a behaviour.
Reinforcement schedules (fixed or variable, ratio or interval) differ in strength: variable ratio is the most persistent, which is why slot machines and social feeds hold attention.
In the real world: the retail and app industries apply these ideas daily. Streaks on language apps, loyalty points and “ping” notifications are operant conditioning; a variable reward keeps people returning.
5. Attitudes and job satisfaction
An attitude has three parts: cognitive (belief), affective (feeling) and behavioural (intention). Cognitive dissonance (Festinger) is the discomfort of holding conflicting beliefs or acting against them, and people reduce it by changing the belief. Key work attitudes:
- Job satisfaction: how people feel about the job.
- Job involvement: how much the job defines them.
- Organisational commitment: affective (want to stay), continuance (need to stay) and normative (ought to stay).
Dissatisfaction shows up as exit, voice, loyalty or neglect. High satisfaction links modestly to performance and strongly to lower absence and turnover.
6. Motivation
Motivation is the intensity, direction and persistence of effort. The classic theories split into content (what motivates) and process (how it works) groups.
| Theory | Core idea | Practical use |
|---|---|---|
| Maslow’s hierarchy | Physiological, safety, social, esteem, self-actualisation; unmet lower needs dominate | Check basics (pay, safety) before growth |
| Alderfer’s ERG | Existence, relatedness, growth; people can regress | Offer other outlets when growth is blocked |
| Herzberg’s two-factor | Hygiene factors (pay, policy) prevent dissatisfaction; motivators (achievement, recognition) create satisfaction | Enrich jobs, not just pay |
| McClelland | Needs for achievement, power and affiliation | Match roles: achievers in sales, power-seekers in leadership |
| McGregor’s X and Y | Assume people avoid work (control) or seek it (empower) | Style of supervision |
| Vroom’s expectancy | Motivation = expectancy × instrumentality × valence | Make effort, performance and reward visibly linked |
| Adams’s equity | People compare their input/outcome ratio with others | Keep pay fair and transparent |
| Locke’s goal-setting | Specific, challenging, accepted goals with feedback raise performance | SMART goals, OKRs |
Job design puts these into practice: job enlargement (more tasks), job rotation, and job enrichment (more autonomy and responsibility), summarised in Hackman and Oldham’s job characteristics model (skill variety, task identity, task significance, autonomy, feedback).
In the real world: a raise often fails to retain a bored high performer, which is Herzberg’s point. Tata Steel’s long-standing welfare and township model and Infosys’s stock-option culture of the 2000s are both attempts to address hygiene and motivator needs together. Goal-setting is behind the OKRs popularised at Intel and Google.
7. Groups and teams
A group is two or more people interacting to reach a goal; a team adds shared accountability and complementary skills. Tuckman’s stages: forming, storming, norming, performing, adjourning.
| Concept | Meaning |
|---|---|
| Roles and norms | Expected behaviours and unwritten rules |
| Cohesiveness | Attraction to the group; raises performance only if group norms support the goals |
| Social loafing | Individuals exert less in groups, mitigated by clear individual accountability |
| Groupthink (Janis) | A cohesive group suppresses dissent and decides badly |
| Conformity (Asch) | People go along with a wrong majority |
| Belbin team roles | A balanced team needs ideas, coordination, implementing, finishing and so on |
| Group decision-making | Brainstorming, nominal group technique, Delphi |
In the real world: Google’s Project Aristotle studied hundreds of its teams and found that psychological safety, the belief that one can speak up without being punished, mattered more than who was on the team. The Bay of Pigs decision is Janis’s textbook case of groupthink, and Amazon’s two-pizza team rule is a modern response to social loafing.
8. Communication in organisations
Communication is a loop: sender → encoding → channel → decoding → receiver → feedback, disturbed by noise. Direction matters too: downward (instructions), upward (reports), horizontal (coordination) and the informal grapevine. Barriers include filtering, selective perception, information overload, jargon, status differences and emotions. Good practice: use feedback, simple language, active listening, and the right channel for the message (face to face for sensitive news).
One-minute recap
| Topic | Key idea | Where you meet it |
|---|---|---|
| OB and Hawthorne | Behaviour depends on people and situation; observation changes behaviour | New metrics, dashboards, reviews |
| Perception | Halo, stereotyping, attribution errors | Hiring, appraisals |
| Personality | Big Five, locus of control, emotional intelligence | Role fit, team building |
| Learning | Conditioning, reinforcement, social learning | Incentives, onboarding, app design |
| Attitudes | Satisfaction, commitment, dissonance | Retention, engagement surveys |
| Motivation | Maslow, Herzberg, Vroom, Adams, Locke | Pay design, OKRs, job design |
| Groups and teams | Tuckman, groupthink, social loafing, safety | Team design, meetings |
| Communication | Loop, barriers, feedback | Everyday management |
Next in MBA Revisited: Managerial Economics.
Written by Claude, Anthropic’s AI assistant, as part of MBA Revisited, a quick refresher of the PGDM subjects one at a time.