Organisational behaviour is a chief component of any business school core curriculum because it sets out to help students comprehend how human beings deal with being part of organisations, large or small, working in teams and so forth. It is, fundamentally, the study of the ‘soft’ end of business.  The theories derive from a diversity of disciplines including sociology and psychology. It disquiets itself with the problematical patterns of individual and group working. Thus the apparent aim of the study of organisational behaviour is to understand why people work in positive ways and then working out how to use this knowledge to improve the use of resources.

Every organization exists in some context; no organization is an island in itself. Each must continually interact with other organizations and individuals- the consumers, suppliers, unions, shareholders, government and many more. Each organization has goals and responsibilities related to each other in the environment. The present day environment is dynamic and will continue to be dynamic. Changes in social, political, economic, technology, and legal environment force organizations to change themselves. Such changes may result in organizational changes like major functions production process, labour-management relations, nature of competitions, economic constraints, organizational methods etc. In order to survive in the changing environment, organization must change. How the change in various environmental, organizations, must change. How the changes in various environmental factors necessitate change in the organization may be seen in following context:-

Since every organization exports its outputs to the environment, an organization has to face competition in the market. There may be two types of forces which may affect the competitive position of an organization -other organizations supplying the same products and, buyers who are not buying the product. Any changes in these forces may require suitable changes in the in the organization. For example, when Indian economy was liberalized, there were many foreign organizations that entered the Indian market. This forced many Indian organizations to realign themselves with the new situations. The result in that there have been many cases of divesting the business and concentrating on the core business, acquiring core business, and developing competitive competence to face competitive threats. Similarly, there may be changes in buyers in terms of their needs, liking -disliking and income disposal for a product. These changes are from the organizations to bring those products which meet buyer’s requirement.

Political and legal factors broadly define the activities which an oganisation can undertake and the methods which will be followed by it in accomplishing those activities. Any changes in these political and legal factors may affect the organization operation.

Conflict exists in every organization and to a certain extent indicates a healthy exchange of ideas and creativity. However, counter-productive conflict can result in employee dissatisfaction, reduced productivity, poor service to clients, absenteeism and increased employee turnover, increased work-related stress or, worse case scenario, litigation based on claims of harassment or a hostile work environment.

The physical capacity of an individual to do something can be termed as ability. Skill can be defined as the ability to act in a way that allows a person to perform well. The individual behavior and performance is highly influenced by ability and skills. A person can perform well in the organisation if his abilities and skills are matched with the job requirement.

Besides environmental changes there is a change in managerial personnel. Old managers are replaced by new mangers, which necessitated because of retirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way of working in the organization. The relationships more in the organization, the relationships more particularly informal ones, changes because of changes in managerial personnel. Moreover, attitude of the personnel change even though there is no changes in them. The result in that an organization has to change accordingly.

The nature of work force has changed over a passage of time. Different work values have been expressed by different generations. Workers who are in the age group of 50 plus value loyalty to their employers. Workers in their mid thirties to forties are loyal to themselves only. The youngest generation of workers is loyal to their career. The profile of the workforce is also changing fast. The new generation of workers has better educational; they place greater emphasis on human values and questions authority of managers. Their behaviour has also become very complex and leading them towards organizational goals is a challenge for the managers. The employee turnover is also very high which again put strain on the management.

Changes to psychological contract of hurricane are arising as a result of business pressure. Dramatically changes in the global economy including the development of low cost, high quality and now also services in China and India are accompanied by ever-fast changes in technology, liberalisation of market and changing consumer expectations. As organisation is pushed to innovate, increase markets and customers responsiveness and reduce cost, they are being forced to bring about equally dramatic changes in work practices and in turn employee behaviour.

The impact and the nature of changes are described well by Hamel when he says

“We now stand on the threshold of new age- the age revolution. In our mind we now the new age have already arrived; in our bellies we’re not sure we like it… for change has changed. No longer it is additive. No longer does it move in straight lines. In the twenty first century change is discontinuous, abrupt, seditious ….Today we live in world that is all punctuation and no equilibrium.”

Recent research by the UK chartered Institute of Personal Development add weight to the conclusion that broad change are taking place in the psychological contract operated across different organisation in the UK. At a headline level the research suggest that organisations are now more successful in delivering against the board expectation they encourage employees to believe: they are fulfilling their sides of psychological contract more than before. CIPD conclude that employees today seek one of three types of psychological contract with their employees:

Traditional: those who seek long term tenure and work long hours.

Disengaged: those for whom work is not a central life interest and seek no emotional tie to their employer.

Independent: those who are well qualified, and seek short tenure and high rewards.

When the psychological contract was relatively straightforward and stable, as in bureaucratic organisations, it was less important to understand others’ expectation as these become apparent over time and day misunderstanding could be dealt with gradually.

Is your company going through a period of change right now? If you’re managing that change, one of the key things to consider is how this will impact on the unwritten rules. When you’re in the driving seat it’s difficult to see beyond the logistics of making the decision a reality; you have myriad strategic deliberations, struggles with theoretical alternatives and challenges to overcome complex problems. When you finally communicate the vision for the future, you may not fully anticipate the strength of resistance to what is, after all, the best way forward for the company.

Some of the causes for resistance are obvious, in fundamental change this could be job loss, increased work load, change of location etc while others are less tangible like fear of damage to prestige, working relationships or job satisfaction. The impact of this resistance is very real causing disengagement, reduced performance, increased turnover and sometimes even wilful sabotage of the new way of working.

A major step you can take in reducing resistance is unearthing those hidden reasons that could cause problems. Try this little exercise: think about the main 5 things you value in your job (e.g. being empowered to make decisions, the challenge and variety of your role) and then consider how you would feel if your company removed these; it could be that a new level of management is brought in above you meaning decisions have to be authorised or perhaps some of your more enjoyable duties are delegated elsewhere.

These 5 things are likely to be clauses in your psychological contract; they may not comprise your actual employment contract but are the unwritten expectations you have of your employer – the ‘real deal’ [Although you need to be careful here, for instance, significant changes to status could be a legitimate reason for an aggrieved employee to leave and claim constructive dismissal]. In exchange, you provide your employer with unwritten benefits such as being very loyal and committed. If your employer proposes a new way of working which breaks these unwritten clauses, you are unlikely to welcome such a change.

Have a think about the transformation you are undergoing or planning and how they might affect the values your staff hold dear.  Psychological contracts are highly subjective and differ from individual to individual; managers are more likely to know their teams’ underlying beliefs and can help to manage the process by taking them into account. Of course, you can’t avoid violating the psychological contract in every or even most cases, but what you can do is demonstrate understanding of what the implications are going to mean, clarify what the psychological contract involves and engage people in shaping or implementing the change wherever possible.