What Is Organisational Behaviour? (Examples And Advantages)

By Indeed Editorial Team

Published 25 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organisational behaviour (OB) is the study of human behaviour in an organisational setting. As every business is unique and differs by industry, most businesses share a goal of having a positive and productive organisation balanced with employee satisfaction. Often, leaders use organisational behaviour to understand how teams work and how individuals perform and act in a workplace. In this article, we answer 'What is organisational behaviour?', explore the advantages and disadvantages of OB, understand some examples and discover factors affecting OB.

What Is Organisational Behaviour?

The answer to the question 'What is organisational behaviour?' is that it is a multidisciplinary study of employee interaction and organisational processes that helps create an efficient and cohesive organisation. The field of OB focuses on how an individual behaves within an organisation, how teams work together and how these aspects interconnect and impact each other. It describes the behavioural dynamics between employees and teams in an organisational setting. Interestingly, OB considers the cultural aspect, such as gender, race and workplace socialisation.

Applying the principles of organisational behaviour can help employees clarify their personal goals and understand the factors affecting them. You can study organisational behaviour practically and academically because it takes inspiration from psychology, anthropology and leadership studies. Using these fields, a company can create models and methods to discover innovative ways to improve the workplace experience. When studying OB, you are likely to study negotiations, stereotyping, decision-making and other related topics. These topics give an overview of the company's culture and help predict employee behaviour.

Related: What Is Organisational Culture?

What Is The Goal Of Organisational Behaviour?

Organisational behaviour theories serve as a roadmap for leaders and managers to improve various aspects of the organisation, such as:

  • Finding the right employees

  • Ensuring job satisfaction

  • Understanding employees in a better way

  • Developing organisational culture

  • Building a good team

  • Developing great leaders

  • Ensuring higher productivity

  • Promoting innovation

  • Encouraging ethical behaviour

  • Creating a positive work environment

Depending upon the challenges occurring in the workplace, a manager might use various strategies, such as changing workplace evaluation methods, altering compensation structure and reorganising the workplace to improve organisational behaviour.

What Are The Advantages Of Organisational Behaviour?

Human resource (HR) professionals can apply findings from organisational behaviour research to hire the right people in the right position. A comprehensive organisational model can improve a company's culture, enable HR professionals to hire qualified candidates and educate managers on how workplace culture contributes to employee performance. Also, OB may help a manager understand what motivates employees to work efficiently. This can help leaders reorganise companies' pay structure, improve performance evaluations and enhance workplace ethics. When leaders motivate their employees, it translates to increased profitability and productivity.

Some other advantages of organisational behaviour are:

  • Managing workplace diversity

  • Empowering employees

  • Stimulating innovation and changes

  • Improving ethical behaviour

  • Enhancing customer service

  • Helping employees create a work-life balance

  • Enhancing people's skills

The outcome of organisational behaviour might vary, as each organisation has employees with diversified personalities. Most organisations provide a healthy and productive work environment that inspires an employee to stay long in the organisation.

Disadvantages Of Organisational Behaviour

Each company can apply the principles and ideas of organisational behaviour differently, resulting in different outcomes. This can cause occasional disadvantages, such as:

Short-term thinking

When applying organisational behaviour to the workplace, managers may focus too much on the short-term benefits of improving the current work environment instead of considering their long-term organisational goals. It's important to consider the purpose of OB and how you can apply it to achieve outcomes for the organisation instead of simply choosing arbitrary aspects of organisational behaviour to target. By educating the team about OB theories and ensuring everyone understands the objective of changes in organisational behaviour, you can apply more effective long-term strategies.

Unethical applications

Organisational behaviour provides valuable information that helps employees grow within an organisation, but it's important to have oversight when applying these ideas. If you don't have a system in place to ensure the ethical application of organisational behaviour theories, some people may use these ideas for their own purposes instead of using them to support the organisation. By creating policies about how to implement OB initiatives and regularly auditing leaders who oversee OB programmes, you can help ensure ethical oversight on your team.

Decreased outputs over time

The law of diminishing returns is an economic theory that predicts that, after reaching a certain optimal point or equilibrium, adding additional factors can result in a decreased output. When the law of diminishing return applies to OB, it states that changing a company's policies or altering performance-based assessments might result in declining productivity after a certain point. After reaching the optimal point, adding more incentives or perks can create an imbalance that hampers the work environment. It's important to continually evaluate the organisational behaviour on your team to prevent policies from becoming ineffective.

Examples Of Organisational Behaviour

Often, the HR department uses organisation behaviour to understand the business culture and how that culture affects workplace productivity. Some examples of organisational behaviour are:


An employee's personality plays a critical role in deciding their workplace behaviour and interaction. It also decides an employee's ability to produce high-quality work. Using the OB, companies can understand a candidate's personality and determine whether they are compatible with a company's culture. It can help hire candidates who are a good fit for the organisation and value the organisational culture, value and mission.


Leadership is the ability of a manager or leader to make informed decisions and inspire others to perform. It is the process of directing the behaviour or personality of employees towards achieving a goal. Leadership is an essential aspect of OB because leadership can be focused, centralised, decision-oriented or intrinsic in a person's personality or a position of authority.

Related: 10 Common Leadership Styles

Power and authority

Understanding the connection between authority, power and politics is essential for running a cohesive business. Knowing how an organisation uses these elements can help create unbiased workplace rules and ethical guidelines. When a workplace is free from politics and authority, it increases workplace productivity and fosters a positive business environment.

Factors Affecting Organisational Behaviour

Several factors in the workplace can motivate and discourage employees. Some factors affecting OB are:


The people within an organisation are the ones that primary influences the OB. Interaction between different employees is the central area of study within the field of OB. Various personal traits that influence organisational behaviour include the level of employee's education, background, abilities and beliefs.


A company's structure refers to how a company organises employees in various roles. For instance, some organisations follow a rigid hierarchical structure, whereas others follow a simple organisational structure. The number of levels in the organisation can influence the company's OB. For instance, in a company with many levels, an mid-level employee may feel they have a moderate stake and say in the organisation. They might feel that the company values their opinion and input.


Technology is another important factor that affects organisational behaviour. Technological changes can affect OB because it empowers companies to allow employees to work from home and connect geographically separated employees through video or teleconferencing. For instance, employees in one company might feel comfortable communicating via email, while employees in another company might prefer face-to-face interaction.

Related: What Is An Information Technologist? (A Complete Guide)


Both external and internal sources influence organisational behaviour. A highly regulated business might have a structured culture because they conform to external factors such as adhering to laws and regulations. Various internal factors might affect the OB. For instance, a start-up company has a different OB than an established and growing company.

Levels Of Organisational Behaviour

There are three levels of OB, these are:

  • Individual level: The individual level suggests organisational psychology and includes the characteristics and behaviour of employees. Examples of individual-level concepts include perception, motivation, personality, learning and attitude.

  • Group level: This level involves social psychology and gives sociological insights into group dynamics and social interaction. Examples of group-level concepts include team, power, authority, conflict and politics.

  • Organisational level: The organisational level studies how companies engage in the marketplace. Examples of organisational level concepts include change management and organisational culture.

Models Of Organisational Behaviour

Models of organisational behaviour can help create strategies that help employees perform in the workplace. The five OB management models are:

  • Autocratic model: This model puts the manager or supervisor in charge of everything and it is essential for employees to follow and obey their managers. Such a workplace considers the salary a reward and rarely implements other incentives.

  • Custodian model: A manager takes care of employees' personal needs in a custodian model. Organisations achieve this by offering various benefits packages like retirement plans, insurance and health benefits.

  • Supportive model: This model understands what motivates employees. Managers ask employees about their professional goals and work with them to achieve those goals.

  • System model: In a system model, the goal of a manager is much more than getting the work completed. Managers are caring and sensitive towards their team members.

  • Collegial model: In a collegial model, the managers work like coaches and employees are the team members. It is the entire team's responsibility to achieve organisational goals.


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