Organisational behaviour: Core Commerce Notes for B.Com (Hons)

Organisational Behaviour (OB) – Core Commerce Notes

(B.Com (Hons) – Core Commerce)

1. Simple Explanation

Organisational Behaviour (OB) is the scientific study of how people act, interact, and perform within an organisation. It blends psychology, sociology, economics, and management to understand and influence employee attitudes, behaviours, and performance, ultimately aiming to improve organisational effectiveness.

2. Key Points

#	Concept	Why it matters in commerce	Practical Significance
1	Definition & Scope	OB covers individual, group, and organisational levels.	Helps managers design policies that boost productivity.
2	Historical Evolution	From classical management to modern behavioural and contingency theories.	Shows how management styles adapt to changing markets.
3	Theoretical Foundations	• Classical & Scientific Management • Human Relations (Mayo) • Behavioural (Taylor, Fiedler) • Modern (Maslow, Herzberg, McGregor, Equity, Social Learning) • Contingency & Systems theories	Guides choice of leadership and motivation strategies.
4	Individual Factors	• Personality (Big Five) • Perception & Attribution • Attitudes & Job Satisfaction • Motivation (needs, expectancy, equity) • Learning & Cognitive styles	Directly impact performance, turnover, and innovation.
5	Group Dynamics	• Team formation (Tuckman) • Role conflict / ambiguity • Group cohesion & norms • Decision‐making & conflict • Power & politics	Influences teamwork, communication, and decision quality.
6	Organisational Factors	• Culture & sub‑cultures • Structure & design • Leadership styles (transactional vs. transformational) • Communication channels • Change & innovation management	Shapes the environment in which individuals and groups operate.
7	Motivation & Rewards	• Intrinsic vs extrinsic motivators • Reward systems (pay, recognition, career paths) • Performance appraisal & feedback	Drives employee engagement and organisational performance.
8	Communication & Information Flow	• Formal vs informal communication • Barriers (culture, hierarchy, noise) • Effective listening & feedback	Essential for coordination, clarity, and employee trust.
9	Decision Making	• Rational, bounded rationality, intuition, group decision	Impacts strategy, risk, and operational efficiency.
10	Change & Innovation	• Lewin’s change model • Resistance & overcoming it • Knowledge sharing & learning organisations	Enables firms to stay competitive in dynamic markets.
11	Ethics & Corporate Social Responsibility (CSR)	• Ethical frameworks (utilitarian, rights, fairness) • Stakeholder theory • CSR as part of organisational culture	Enhances reputation, customer loyalty, and long‑term sustainability.

3. Worked Example: Applying Herzberg’s Two‑Factor Theory to a Retail Chain

Scenario
A mid‑size retail chain, FashionMart, reports high employee turnover. Management suspects dissatisfaction with pay and benefits.

Step‑by‑Step Analysis

Step	Action	Herzberg Insight
1	Identify Factors	Interview employees → Hygiene factors: salary, job security, working conditions. Motivators: recognition, career growth, achievement.
2	Assess Hygiene Issues	Pay is below market; no bonus scheme; safety audits show outdated equipment.
3	Evaluate Motivators	Limited training; promotions are rare; no employee of the month program.
4	Develop Interventions	• Benchmark salary; introduce performance bonuses. • Upgrade equipment; conduct safety training. • Launch a “Star Employee” award; create clear career ladders.
5	Implementation Plan	- Quarterly salary review. - Annual safety audit and upgrade budget. - Monthly recognition ceremony + mentorship program.
6	Monitor & Evaluate	Track turnover, absenteeism, and employee survey scores pre‑ and post‑intervention.

Result
Within 12 months, turnover fell by 30 %, absenteeism dropped, and employee satisfaction scores improved by 25 %. This demonstrates how a sound OB theory can guide practical HR interventions.

4. Quick Revision Summary

OB = science of people in organisations.
Three levels: Individual, Group, Organisation.
Major theories: Classical, Human Relations, Behavioural, Modern (Maslow, Herzberg, McGregor, Equity), Contingency, Systems.
Key individual factors: Personality, perception, attitudes, motivation, learning.
Group dynamics: Team stages, cohesion, conflict, decision‑making.
Organisational factors: Culture, structure, leadership, communication, change.
Motivation: Intrinsic vs extrinsic, reward systems, performance appraisal.
Communication: Formal/informal, barriers, feedback loops.
Decision making: Rationality, intuition, group processes.
Change management: Lewin’s freeze–change–refreeze; managing resistance.
Ethics & CSR: Ethical frameworks, stakeholder theory, CSR as culture.

Tip for exams:

Remember the “why” – link each theory to practical business outcomes.
Use diagrams – e.g., Tuckman’s stages, Maslow’s pyramid, Herzberg’s two‑factor chart.
Practice case studies – analyse a real company’s OB issues and propose solutions.

*Good luck with your studies! The more you relate OB concepts to