Organisational behaviour: What it is and why you should care.

Author: Chris Swan

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Organisational behaviour refers to the actions and interactions of individuals within an organised system. This is an important distinction, as often people take organisational behaviour to mean the behaviour of an autonomous entity.

While the definition of an organisation may vary, it generally refers to a structured system, designed to achieve a specific objective by organising people and resources in a deliberate manner. The particular structure adopted is formulated based on how the organisation intends to manage its people and resources.

Organisational behaviour thereafter is the response of individuals to these structures and systems, which can vary greatly based on an individuals personality, values, motivations, experience, and other factors.

With this clearer understanding of organisational behaviour, we may wonder about its practical value and how we can utilise this understanding in practice.

As an example, imagine you enter an organisation for the first time and witness a range of activities taking place - employees conversing, some engaging in debate, others appearing disinterested, and still others participating in team problem-solving or training sessions.

At first glance, these activities may seem random and disorganised, but they are in fact explainable observations - provided you can leverage an understanding of organisational behaviour principles.

This means to engage in the study, observation and assessment of people's thoughts, emotions, and actions within an organisational setting. It is a crucial discipline for managers and leaders, as it provides insights into employee behaviour and can help practitioners influence and direct such behaviours towards the achievement of organisational objectives. By gaining a deeper understanding of employees, managers and leaders can leverage this knowledge to improve organisational performance and foster a positive workplace culture.

For thousands of years, individuals in power have sought to understand and coordinate the behaviour of those under their authority within organisations. Even ancient civilisations like Egypt (dating back to 4000 BC) recognised the importance of planning, controlling, and organising village life and social behaviours through structured systems.

George (1972) explains that, many ancient civilisations made notable contributions to management practices that closely resemble modern organisational behaviour techniques. For example, the Egyptian empire decentralised its management of peripheral territories and villages (2600 BC), giving greater decision-making power and control to local authorities, thus empowering autonomous behaviours. The Babylonians (1800 BC) promoted the concept of responsibility by holding those in power accountable for the behaviour of their subordinates, while Hebrew society (1500 BC) implemented a management by exception approach that gave individuals behavioural control up to the point where this freedom created a significant deviation from planned objectives.

Later, Nebuchadnezzar (600 BC), the Babylonian king, introduced wage incentives to elicit desired behaviours from workers and subjects, while the Chinese (500 BC) utilised workers' individual skills and aptitudes through job specialisation to create more efficient and effective work behaviours. Even the Roman senator and historian, Cato (175 BC), advocated for job descriptions to give greater structure to worker behaviour.

In sum, this timeline illustrates how the study of organisational behaviour has a long and rich history that dates back to ancient civilisations, with many of the techniques and practices used then still relevant today.

We have already established that understanding organisational behaviour can help an organisation achieve its objectives, but it makes several other important contributions. One of the most significant is improving employee welfare, development, and satisfaction.

As humans, we have an innate desire to understand the actions of ourselves and those around us. When we encounter a behaviour we don't comprehend, we often react defensively - classifying that behaviour (or the person responsible for it) as crazy, irrational, or even dangerous.

However, if we take the time to understand the underlying reasons for that behaviour, we may be able to develop a picture or explanation of why it occurred and how we can position ourselves to engage further with that person. This is extremely valuable in an organisational context, as it can help recognise potentially harmful employee behaviours before they occur or at least limit their impact.

Understanding employees also provides an opportunity to design an environment that challenges, delights, and engages them. By doing so, organisations can create a more productive workforce.

Consider how organisational behaviour might be able to impact factors which we would commonly consider to be important to organisational success.

1. Employee productivity is influenced by various factors beyond financial rewards. Engagement and interest in the work, as well as psychological well-being, also play a significant role in maintaining high levels of productivity. Organisations must understand how these factors affect their employees and work to create an environment that promotes productive behaviours.

2. Organisational buy-in is essential for achieving the company's objectives. Employees must commit themselves to the organisation's betterment and work within its rules and culture. To achieve this, managers and executives must understand employee motivations, values, personality, team and group formation, organisational development, and leadership.

3. High levels of absenteeism and turnover are costly for organisations and affect productivity. Absenteeism leads to inefficiencies in resource allocation and work flow, while turnover creates negative perceptions of the organisation. Organisational behaviour concepts can help identify the root cause of absenteeism and turnover and address the problem.

4. Job satisfaction is a significant factor that affects productivity, organisational buy-in, and absenteeism/turnover. Employee job satisfaction is influenced by the difficulty and variance of tasks, learning opportunities, and challenges that align with their interests. Organisational behaviour can help design jobs that engage employees and create a stimulating and productive work environment.

A significant challenge however for managers and leaders in today's organisations, is keeping up with and reconciling the differences in what has and will influence organisational behaviours.

Organisations are deeply intertwined with the societies they are a part of, and as societies evolve, so do the organisations. This means that changing organisations will result in changes to employee behaviour. Let's examine some of the major trends driving this change.

1. Globalisation has been a feature of civilisation for thousands of years, but its extent has rapidly increased due to advancements in technology, reductions in international trade barriers, and changing social attitudes. Organisations operating in this new world have had to keep up or risk being left behind, and employees have had to develop new skills, perceptions, and attitudes to compete in the global marketplace. For example, global business operations may require organisations to monitor and act on information received from multiple foreign suppliers with different expectations and regulations, requiring employees to exhibit flexibility and openness to change.

2. Labour market preferences are central to organisational behaviour, as the labour pool is a cross section of society - and so in is comprised of different attitudes, values, and perceptions about employment and relationships between employee and employer. Organisations must be aware of the diverse expectations that stem from cultural, geographic, and generational differences when recruiting employees from the labour market. Some notable changes in labour market preferences include work/life separation and flexible working arrangements. Something that organisations have had to quickly adapt to off the back of the pandemic.

3. Social values and priorities are constantly evolving, and organisations have a great impact on these constructs. Social expectations of organisations have shifted towards responsible behaviour and the betterment of society. Organisations are now under pressure to exhibit a level of authentic corporate social responsibility, including valuing sustainable resource use, treating employees and host communities equitably, and giving back to society through charitable efforts.

Utilising organisational behaviour principles may seem daunting, but it is a worthwhile pursuit.

With careful consideration, research, and a deeper understanding of organisational behaviour, positive contributions can be made towards enhancing employee satisfaction and increasing organisational productivity. Even a small amount of attention paid to organisational behaviour can yield significant benefits.

Rather than imposing or dictating expected behaviours upon employees, a measured approach that takes into account the context is more likely to succeed. People want to feel valued and recognised, and taking the time to understand and manage individual and group behaviours shows that their unique contributions are appreciated.

Building upon this recognition can lead to a deeper understanding of the underlying reasons behind organisational behaviour, resulting in improved member behaviour and performance.

Reference source – George, C 1972, The History of Management Thought, 2nd edn, Prentice Hall, Edgewood Cliffs

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Chris Swan is the Director (Owner) of Swan Consultancy.

If you would like further information on organisational behaviour, Chris Swan is available for consultation and coaching on this and other business and management issues.