Organizational Behavior and Culture: Understanding the Impact on Employee Motivation & Productivity

Organizational Behavior

Organizational behavior and culture are two concepts that are inextricably linked and significantly impact any organization’s success. Organizational behavior refers to the actions and attitudes of people and groups within a company. On the other hand, the shared ideas, beliefs, and practices that govern how an organization operates are referred to as organizational culture. 

These two concepts, when combined, affect how employees interact with one another, how they accomplish their tasks and the business performance overall.

Recognizing and managing corporate culture and behavior is imperative for any organization looking to boost employee engagement, productivity, and overall success.

This article will cover the important factors that influence organizational behavior and culture, their impact on employees and their work, and strategies for improving them.

What is Organizational Behavior?

Organizational Behavior (OB) refers to the study of the attitudes and behaviors of individuals and groups inside an organization. OB evaluates how employees interact with one another, perform their jobs, and react to various workplace events. Furthermore, OB also analyzes how aspects, such as leadership, communication, and organizational structure, impact the behavior of individuals and groups within an organization.

Organizations can improve employee motivation, productivity, and overall performance by understanding and managing organizational behavior. OB is an interdisciplinary field that draws on knowledge and methods from psychology, sociology, anthropology, and other social sciences to help organizations create a positive and productive work environment for their employees.

Improving employee motivation

Key Factors that shape Organizational Behavior

There are several vital factors that influence organizational behavior. Some of them are as follows:

  1. Leadership: Leaders actions and attitudes may significantly influence behavior of employees in an organization. Effective leaders lead by example, communicate effectively, and create a vision for the organization on which the employees can believe.
  2. Communication: How information is communicated inside an organization can influence an employee’s behavior. Clear and effective communication can help employees collaborate, understand and trust each other, whereas poor communication can lead to confusion and mistrust.
  3. Organizational Structure: An organizational structure refers to the arrangement of employees in various roles and the official and informal ties between those roles. Businesses can have centralized or decentralized structures. Businesses with centralized structure can have strict hierarchies leading to lack of employees autonomy whereas in a decentralized structure, employees have more autonomy and freedom.
  4. Power and Politics: Employee behavior may be influenced by workplace dynamics inside a company. Those with higher authority may have a more significant effect on organizational choices and the general culture of the company.
  5. Group Dynamics: Employee engagement has an effect on the organizational behavior. Organizations can improve employee engagement through employee cooperation and collaboration by forming groupings such as teams. However, group conflicts can cause stress and a lack of productivity among employees.
  6. Organizational Culture: It is a set of beliefs, expectations, and practices in an organization that guide and influence the actions of all team members. A positive work environment that recognizes and supports employee contributions may result in a more engaged and motivated workforce.
  7. External Influences: Customers, competition, the market, technology, political situations, and resources are all instances of external factors that could have an impact on organizational behavior. Business leaders should use environmental scanning to respond to the influences of internal and external factors.

Impact of Organizational Behavior on Employee Motivation and Productivity

Organizational behavior has a significant effect on employee productivity and engagement. It is also responsible for ensuring the smooth functioning of a company by providing it with a clear path.

OB involves the manner in which individuals interact within the organization and has a direct effect on the overall performance of the company. As employees are the backbone of any organization, their behavior and actions have a far-reaching impact on the workplace and all those involved.

Adhering to principles of organizational behavior can enhance employee motivation, build positive relationships with coworkers, and provide insights into the character and actions of individuals in the company.

Principles of Organizational Behavior

In a positive work environment, the employees are motivated, more productive, creative, and present at work. Employees that are demotivated and disengaged, on the other hand, are less productive, less creative, and have greater absenteeism.


Strategies for Improving Organizational Behavior

There are various strategies that organizations can implement to improve organizational behavior to create a healthy and positive work environment. Here are some of the top strategies:

  1. Establish clear objectives and expectations: Once employees are onboarded, organizations must properly communicate their goals and expectations to employees so that there are no discrepancies.
  2. Encourage open communication: Business leaders need to create a business environment where employees can freely voice their thoughts and concerns. This can be done by holding regular team meetings, employee surveys, and having an open-door policy.
  3. Offer development and training opportunities: No employee wants to stay static. So, to help employees upskill and advance in their careers, organizations must provide opportunities. This can be done through training programs, coaching, and tuition reimbursement.
  4. Promote a positive work culture: Every organization should strive to create a healthy work environment that rewards employee accomplishments, promotes creativity, and actively supports team work.
  5. Recognize and reward good work: One of the most effective methods to make your employees feel valued, reinforce great behaviors, retain your best talent, and increase engagement is through recognition and rewards. Recognize their efforts and reward them where required.
  6. Encourage employee engagement: Business leaders can boost employee engagement by offering them incentives, benefits and autonomy over their jobs.
  7. Implement fair and consistent practices: Business leaders need to fair and consistent practices to ensure everyone is held to the same standards. All employees need to be treated fairly.
  8. Encourage employee feedback: Business leaders need to create a comfortable environment where employees can offer their feedback and take it into consideration when making decisions. This will boost employee engagement and productivity.

Improving organizational behavior is not a one-time exercise. It is a continuous effort that requires commitment from both higher management and employees. By implementing these strategies, organizations can establish a positive work environment that increases employee engagement, productivity, and satisfaction.

What is Organizational Culture?

Organizational culture refers to an organization’s shared values, beliefs, customs, practices, and social behavior. It is how things are done within an organization and includes unwritten rules and expectations, as well as the overall atmosphere created by the organization’s mission, vision, and values.

Organizational Culture

Organizational culture can be shaped by various factors, including the organization’s history, its leaders’ personalities, and its employees’ values and expectations. It can also be influenced by external factors such as the industry in which the organization operates, the company’s size, and the company’s location.

Organizational culture can significantly impact the behavior and performance of employees and the organization’s overall success. A strong, positive culture can foster employee engagement, creativity, and productivity, while a negative culture can lead to low morale, high turnover, and poor performance.


Key Factors that shape Organizational Culture

Understanding the organizational culture can sometimes be complicated, as its shaped by dynamic and complex concepts. Knowing and understanding some of the key factors that shape organizational culture can help organizations create cultures that are aligned with their goals and values.

Let’s have a look at some of these key factors as below:

  1. Leadership: Leadership may be the single most important factor influencing organizational culture. A company’s management and executive team have a significant effect on how the work environment feels and operates.
  2. History and Tradition: The history and tradition of an organization can also affect the organizational culture. Any organization that has existed for a long time will have a culture with deep rooted history and tradition.
  3. Industry & Market: An organization’s culture is also affected by the industry and market where it operates. For example, a company may highly focus on risk management and compliance if it operates in a highly regulated market.
  4. Size and Structure: The structure and size of an organization has an equal impact on its culture. For instance, a smaller company may have a culture that values flexibility and creativity, while a large company might have a culture that prioritizes bureaucracy and hierarchy.
  5. Location: As for the location, companies located in larger metropolitan cities have a culture that’s fast paced and has high-pressure deadlines. On the other hand, in the rural area, companies will have a culture that’s more relaxed and runs on a slower pace. Thus, location also has an equal impact in determining the culture of the company.
  6. Demographics: The composition of the organization’s workforce could also have an influence its culture. An organization with a diverse staff may have a culture that values inclusiveness and respects differing viewpoints.
  7. Communication: Organizational culture can also be shaped by the way employees communicates with each other as well with the management. An open and communicative culture that encourages the exchange of ideas is more likely to be successful compared to one that is closed-off.

Impact of Organizational Culture on Employee Motivation and Productivity

The culture of an organization can have a profound influence on employee motivation and productivity. A culture that is positive and encourages employee involvement as well as creativity and autonomy can result in high levels of motivation among employees as well as higher productivity. Contrarily, a negative culture defined with low morale, high levels of turnover and low performance could result in low motivation levels among employees and lead to lower productivity.

Organizational Culture on Employee Motivation and Productivity

In addition, the culture of an organization can also influence how employees perceive their work and their company, which in turn impact their motivation and productivity. A culture that encourages employees to have a sense of belongingness, purpose and fairness can result in an increase in productivity and motivation within the company. However, a culture that lacks trust or has lack of communication and inability to hold people accountable leads to decline in productivity and motivation among the workers.


Strategies for creating a positive Organizational Culture

Below are few ways to create a positive workplace culture in your organization:

  1. Communicate the company’s vision and values clearly: Communicating the company’s vision and values clearly may help to align employees with the organization’s goals and create a feeling of purpose.
  2. Promote open communication: Promoting open communication and transparency among employees can help to establish trust and good relationships.
  3. Lead by Example: Leaders should set a positive example by exhibiting desirable behaviors and values that align with the company’s vision and goals.
  4. Promote employee engagement: Employee engagement initiatives may help in the creation of a culture centered on continued progress and employee well-being.
  5. Acknowledge and reward positive behavior: To enhance motivation and productivity, business leaders need to acknowledge and reward positive behavior.
  6. Foster Diversity and Inclusion: Foster a diverse and inclusive work environment to make the workplace more welcoming and accommodating for employees of all backgrounds.
  7. Empower Employees: Give your employees a voice in decision-making and ownership of their work to encourage creativity and innovation.
  8. Prioritize Work-Life Balance: Prioritize work-life balance to create a culture that values employee well-being, health, and satisfaction.

Establishing a positive organizational culture is an ongoing process that will require continuous commitment and focus from the top-level leadership as well as the employees. It is also important to check the company culture on a frequent basis and make changes as and when required.

Organizational Behavior and Culture in Practice

Though there are many known real world examples of corporations implementing Organizational behavior and culture, here are few of them for your quick reference:

Google: This tech giant is well known for its imaginative and creative work culture, where the organization puts a lot of emphasis on its employee autonomy and empowerment. Employees here are free to take risks and bring in new ideas, which has helped the company to succeed in the tech industry.

Organizational Behavior in Google

Zappos: Founded by Late Tony Hsieh, who’s the author of the famous book “Delivering Happiness”, the corporate culture of this company is very much focused on happiness of those around you while achieving success of the team and the organization as a whole.

The company’s culture is built on the core values of providing a wow experience to its employees by embracing change, being adventurous, having an open and transparent workspace while at the same time also creating a positive and engaging work environment for its employees.

Patagonia: Patagonia is well-known for its dedication to environmental sustainability and ethical business practices. The company’s culture is based on a strong set of ideals centered on environmental preservation and enhancing the lives of its employees. This culture has contributed to the company’s success in the outdoor apparel business by instilling a strong sense of purpose and drive in its employees.

The Ritz Carlton: The Ritz Carlton is world famous luxury brand popular for its excellent customer service. The company’s culture is based on a strong set of basic principles that are focused on providing guests with unique experiences. This culture has contributed to the company’s success in the hotel and hospitality business by instilling a strong sense of purpose and motivation in its employees.



In conclusion, organizational behavior and culture are two important factors that plays a key role in determining the success of any organization. Companies can create a positive and productive environment by understanding and managing the interactions between employees, leaders, and the overall organizational culture. This will help to create a positive and productive environment in the workplace that will drive employee motivation and ultimately enhances productivity.

To improve employee engagement and productivity, organizations could employ a variety of initiatives and strategies to improve both organizational behavior and culture. This will result in a more positive and productive work environment that benefits both employees and the business.

Frequently Asked Questions

What is organizational behavior and why is it important?

Organizational behavior refers to the actions and attitudes of employees and their groups within an organization. It is important since it may have a significant impact on employee motivation and productivity, as well as the overall performance of the organization.

How does organizational culture affect employee motivation and productivity?

A strong and healthy workplace culture that encourages open communication, demonstrates respect, and establishes a feeling of community will be able to achieve increased employee motivation and productivity. On the other hand, a toxic or negative culture, might result in poor morale and decreased productivity, generating a ripple effect across the organization.

How can a company improve its organizational behavior and culture?

A company that wants to strengthen its organizational behavior and culture should prioritize open lines of communication, foster a strong feeling of community among employees, and providing employees a meaningful involvement in making decisions.

What are some examples of companies with strong organizational culture?

As mentioned previously in the above article, companies with strong organizational cultures includes Google, Zappos, Patagonia, and The Ritz Carlton. Some other companies are Facebook, Nike, Adobe, SquareSpace, etc.

What is the difference between organizational behavior and organizational culture?

Organizational behavior refers to the behaviors and attitudes of people and groups inside an organization, whereas organizational culture refers to the common values, beliefs, and customs that determine how an organization functions.

Merin is an HR professional with an MBA in Human Resource. She likes doing a lot of research and study in the field of Human Resource and can't help but share her knowledge on the same in this platform. She is also a great cook and during her free times she keeps experimenting with new dishes. Know more about Merin by clicking here.
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