Organisational behaviour (OB) is formally defined as the study of individuals and groups in organisations. In today’s dynamic environment, new workplace realities are impacting all areas of organisations: the work force is changing, the work organisation is changing, customer expectations are changing, organisations are changing, the definition of the workplace is changing and managers, too, must change.

The study of OB begins with understanding the nature of organisations. An organisation is a collection of people working together in a division of labour to achieve a common purpose, usually to produce goods or services. As open systems, organisations interact with their environments as they create product outputs from resource inputs (human and material). Division of labour specifically is the process of breaking the work to be done into specialised tasks that individuals or groups can perform.

An effective manager is defined as someone whose work unit achieves high levels of both task accomplishment and human resource maintenance. The latter is often neglected but it is a vital concern for OB and is essential for long-term maintenance of performance. An effective manager must be concerned with productivity, which is a summary measure of the quantity and quality of work performance with resource utilisation considered. The manager’s challenge is the position of being held both accountable to higher-level supervisors for work unit results and dependent on the efforts of subordinates and other team members to make these results possible. In the new workplace, managers need to add value by increasing productivity and bottom-line performance.

The manager’s job involves planning, leading, organising and controlling. Managers of today are faced with a rapidly changing and dynamic environment. Managers must be willing and able to deal with these circumstances and must help others to do the same. These circumstances centre around the increasing globalisation of work, the requirement for human rights in the workplace, rapid and continuous developments in information technologies, the need for ongoing organisational transitions, and new ways of organising. Managers may experience ‘future shock’, the discomfort experienced in times of continual and constant change. There are new types of organisational forms such as the shamrock organisation, virtual corporations, virtual workplaces and upside-down pyramids which affect the way in which managers and employees will behave and react to their work environments.

Organisations are becoming increasingly global, which has implications for the way managers operate and the diversity of the work forces they manage. As the workforce becomes increasingly diverse in terms of race, ethnicity, age, gender, and culture, organisations and managers are faced with the challenge of interpersonal sensitivity and understanding, as well as responsive business practices. There are also implications for the labour market with ageing populations, workforce mobility and changing skill bases.

Managers must also consider the ethics and moral standards of their actions and decisions and may face ethical dilemmas in their roles. Ethical behaviour (that which is morally accepted as ‘good’ and ‘right’ as opposed to ‘bad’ and ‘wrong’ in a particular social context) is the responsibility of everyone throughout the organisation. Justice must be considered in both procedural (through rules and policies) and distributive (equality in treatment) contexts.

Corporations, too, are obliged to act in ethical and moral ways with both the external environment (including the physical environment and the societies in which they operate) and their organisational members. Socially-responsible organisations are concerned with helping members achieve high levels of job satisfaction through quality of work life (QWL). This includes ensuring a healthy psychological contract between the organisation and each member of the organisation. The psychological contract describes the expectations the individual and the organisation have of each other in the course of their working relationship. It can be seen as 'healthy' when inducements from the organisation to the individual are in balance with the contributions that the individual makes to the organisation. One aspect of the new workplace is the need to manage new work options with greater emphasis on flexibility to suit different employee circumstances and needs.

In a climate of constant change, managers must learn to change too and to become lifelong learners (continuously learning from all experiences and opportunities). They need to have an appreciation of the history of OB as a discipline and understand the scientific basis of OB research. Such lifelong learning will help to keep managers alert and receptive to understanding managerial demands and issues.

OB is an area of study with scientific foundations that enables the development of empirically tested generalisations about behaviour. While generalisations are applied, a contingency approach enables understanding to be considered in relation to the unique circumstances of any particular situation.