MBA Leadership and Organisational Behaviour Course Guide Template

Course Guide: Leadership and Organisational Behaviour, [Course name and term]

A course guide for the leadership and organisational behaviour (OB) core of a leading MBA programme: individual differences, perception and decision biases, motivation, teams, power and influence, leadership theories, organisational culture, leading change and ethics in leadership. It gives a 13-session roadmap, a key-concepts table that links every card, an original mini-case at Tallow Creek Medical Center with exhibits and a teaching note, grading rubrics, an exam plan and a self-test. It is for incoming and current MBA students, and for managers who want the core of the course in one place. Source basis: the original works of the field (for example Kahneman and Tversky 1979; French and Raven 1959; Burns 1978; Bass 1985; Schein 1985; Hackman 2002; Kotter 1996), written up in original words. Every person, organisation and number in the mini-case is fictional and was computed in Python. Replace every [bracketed] value and every row marked Example.

Document control

Contents

• What the course is for
• Prerequisites
• Session roadmap
• Key concepts
• Core ideas by topic
• Mini-case: the emergency department at Tallow Creek
• Typical assignments and how they are graded
• Exam preparation plan
• Common struggles
• Reading list
• Self-test
• Answer key
• Teaching note for the mini-case

What the course is for

Most MBA graduates are hired for analytical skill and promoted, or not, for how well they lead people. The OB and leadership core gives you evidence-based models of why people and groups behave as they do at work, and practice in using them to diagnose situations and act. Unlike finance or accounting, there is rarely one right number; the skill being graded is the quality of diagnosis (which model fits, what the evidence says), the realism of the action plan and your own self-awareness as a leader.

The course builds the competencies that accreditation bodies and employers expect from graduate business education. As of October 2026, AACSB members ratified the Global Standards for Business Education on 20 April 2026, replacing the 2020 standards: nine standards grouped under Strategic Management, Learner Success and Pathways to Impact. AACSB describes 2026-27 as a pilot year, with the new standards required for continuous-improvement visits from 2027-28 (check https://www.aacsb.edu for the current text). The competency map below uses the common learning-goal areas set out for this library in mba/mba-core-curriculum-map.

Prerequisites

Session roadmap

Key concepts

Core ideas by topic

Individual differences

People differ in stable traits, abilities, values and preferences, and these differences predict behaviour at work modestly but reliably. The Big Five model is the most widely used trait framework. Barrick and Mount (1991) found in a meta-analysis that conscientiousness was a consistent predictor of job performance across occupations; other traits mattered for some jobs (extraversion for sales and management). Judge, Bono, Ilies and Gerhardt (2002) found extraversion the strongest Big Five correlate of leadership, with conscientiousness and openness also related. The practical lessons: use structured, job-related assessment rather than intuition in hiring, do not over-read type labels from popular instruments, and remember that situations often matter as much as traits.

Culture is a second source of difference. Hofstede (1980) described national cultural dimensions such as power distance and individualism; the GLOBE study (House et al. 2004) linked cultural values to preferred leadership attributes. These are averages for countries, not descriptions of individuals; use them as hypotheses to test, never as stereotypes.

Perception and decisions

Managers decide with limited time, information and attention. Simon (1955) called this bounded rationality: people "satisfice", choosing the first option that is good enough. Tversky and Kahneman (1974) showed that judgement relies on heuristics that cause predictable errors: availability (judging frequency by how easily examples come to mind), representativeness (judging probability by similarity to a stereotype, neglecting base rates) and anchoring (insufficient adjustment from a starting number). Prospect theory (Kahneman and Tversky 1979) describes choice under risk: people evaluate outcomes as gains or losses relative to a reference point, the value function is concave for gains and convex for losses, and losses weigh more than equal gains. The framing effect (Tversky and Kahneman 1981) follows: the same options described as gains lead to risk aversion, described as losses to risk seeking. Kahneman (2011) summarised the field in terms of a fast, intuitive System 1 and a slow, deliberate System 2.

Other errors that matter in organisations are the fundamental attribution error (Ross 1977), in which we explain others' behaviour by their character and our own by the situation; escalation of commitment (Staw 1976) and the sunk cost effect (Arkes and Blumer 1985), in which past investment keeps a failing course alive; and overconfidence. Practical de-biasing tools: decide the decision criteria before seeing options, use outside-view base rates, ask "what would have to be true", run a pre-mortem, separate who proposes from who evaluates, and reframe a choice both as a gain and as a loss before deciding.

Motivation

See mba/mba-motivation-card. The key exam skill is matching the theory to the problem: job design when the work is thin, goals and expectancy when the path from effort to reward is unclear, equity and justice when people see the system as unfair, self-determination when control and growth are missing.

Teams

See mba/mba-team-dynamics-card: development over time, psychological safety, Hackman's five conditions, decision rules, groupthink, social loafing and conflict types, with a computed team-health survey.

Power, politics and influence

Power is the capacity to influence others. French and Raven (1959) identified five bases: reward (control over things people value), coercive (ability to punish), legitimate (authority of the role), referent (identification and respect) and expert (knowledge). Raven later added informational power. Positional bases (reward, coercive, legitimate) secure compliance; personal bases (referent, expert) more often secure commitment. Influence tactics turn power into action. Cialdini (1984) described principles of persuasion that operate across settings: reciprocity, commitment and consistency, social proof, liking, authority and scarcity; the 2021 edition added unity (shared identity). Use them to communicate a good case well; using them to manipulate is an ethical failure and usually backfires when discovered. Organisational politics is the use of influence outside formal channels; mapping who holds which power and who cares about an issue (the stakeholder map in mba/mba-change-management-card) is the practical tool.

Leadership theories

A useful exam answer does not pick one theory as true. It uses the trait and behavioural view to describe the leader, the contingency view to judge fit, and the transformational, authentic or servant view to propose how the leader could raise commitment, and it names the limits of each.

Organisational culture

Schein (1985, 1990) defined culture as the pattern of basic assumptions a group has learned while solving its problems, which has worked well enough to be taught to new members. He described three levels: artefacts (visible structures, processes, dress, language, rituals: easy to see, hard to decode), espoused beliefs and values (strategies, goals, stated philosophies) and basic underlying assumptions (taken-for-granted beliefs that actually drive behaviour). When espoused values and assumptions conflict ("we value speaking up" versus "people who raise problems get side-lined"), behaviour follows the assumptions. Leaders shape culture mainly through what they pay attention to, measure and control, how they react to crises, what they reward, and whom they hire, promote and remove.

Leading change

See mba/mba-change-management-card: force-field analysis, Kotter's eight stages, ADKAR barrier points, resistance, stakeholder mapping and a computed change plan.

Ethics in leadership

Brown, Treviño and Harrison (2005) defined ethical leadership as showing appropriate conduct personally and promoting it in followers through communication, reinforcement and decisions. Bazerman and Tenbrunsel (2011) argue that most unethical behaviour in organisations comes from ordinary people who do not see the ethical dimension of a decision (bounded ethicality), helped by goals, incentives and framing that hide it. Leaders reduce the risk by naming the ethical dimension of decisions, designing goals with guard-rails (mba/mba-motivation-card), protecting people who speak up, and acting visibly when standards are broken. See mba/mba-ethics-guide.

Mini-case: the emergency department at Tallow Creek

Situation

Daniel Mensah had been director of nursing for the emergency department (ED) at Tallow Creek Medical Center for five months when the chief nursing officer, Priya Raman, asked him for a 90-day plan. Tallow Creek is a 420-bed regional hospital. Its ED had long been proud of its speed, and the hospital's values statement, framed in every corridor, began with "Every voice keeps patients safe."

Daniel came from the hospital's intensive care unit, where he had led a stable, highly experienced team that preferred a hands-off manager. In the ED he found a different picture. Visits had grown every year (Exhibit 3), while the number of registered nurses actually employed had fallen (Exhibit 1). Agency nurses filled the gaps at almost twice the hourly cost of employed staff (USD 118 against USD 61). His predecessor had run the department through tight control: rotas and assignments were decided by the director and two day-shift charge nurses, and problems were dealt with in private.

In his second month, Daniel agreed with the ED medical director, Dr. Lucía Ferreira, to introduce a split-flow model in which lower-acuity patients are seen in a separate stream. It was a sound idea with good evidence from other hospitals. Daniel announced it by e-mail with a three-week start date, attaching a 30-page protocol. Day-shift staff had been part of the design group; the night shift had not. Two weeks after the launch, two senior night nurses resigned. Daniel told Priya that they "had never been team players".

Tomasz Wójcik, the longest-serving night charge nurse, was widely respected: new nurses asked him rather than the protocol what to do. He told Daniel in a corridor that the night shift felt "managed by e-mail". He also mentioned that a medication near-miss two weeks earlier had not been reported until a patient's daughter complained; the nurse involved said she "did not want to be the next person written up".

The pulse survey (Exhibit 2) arrived in the same week. The ED scored below the hospital average on every item, most of all on recommending the ED as a place to work.

The chief financial officer, Grace Liu, proposed renewing the agency contract for two years to lock in the current rate. Daniel had signed the agency expansion a year earlier and had defended it at two budget meetings. An alternative came from the nurses' practice council: a USD 450,000 retention programme (self-scheduling, a night-shift preceptor role, protected education time and a clear clinical ladder). Grace's memo described it as "a gamble that could add USD 450,000 to a budget that is already over"; the council's memo described the same programme as "the only option that could save more than USD 600,000 a year". Exhibit 4 sets out the numbers both memos used.

Priya was clear about what she needed: "I want a plan that fixes staffing and makes the ED safe to speak up in. And I want to know what you will do differently as a leader."

Exhibit 1: ED registered nurse staffing (fictional)

Exhibit 2: Pulse survey, mean scores on a 1 to 5 scale (fictional)

Exhibit 3: Patient flow (fictional)

From FY2024 to FY2026, visits rose 12.6% (=68900/61200-1) while employed RNs fell 10.2% (=79/88-1).

Exhibit 4: The retention decision, as both memos used it (fictional)

Status quo for FY2027 assumes FY2026 repeats. The programme costs USD 450,000. The council estimates a 60% chance that it works, cutting leavers to 14 and agency hours to 15,000; if it fails, FY2026 costs repeat plus the programme cost.

The finance memo framed the programme as a possible USD 450,000 loss; the council memo framed it as a possible USD 617,200 saving (=2650200-2033000). Both are correct descriptions of the same gamble.

Discussion questions

1. Use Exhibits 1 and 3 to describe the ED's situation in three sentences. What is cause and what is symptom?
2. How did Daniel explain the two resignations, and which attribution error might he be making? What other explanations do the exhibits and the situation support?
3. Compute the expected saving of the retention programme and the probability of success at which it breaks even. How do framing and Daniel's earlier commitment to the agency expansion shape the decision?
4. Analyse the ED's culture with Schein's three levels. Which basic assumption explains the unreported near-miss?
5. Diagnose Daniel's leadership with a situational and a transformational lens. Which power bases does he rely on, and which does Tomasz hold?
6. Draft Daniel's 90-day plan: three actions on staffing, three on psychological safety and one on his own leadership, each with a measure.

Typical assignments and how they are graded

Rubric for a case write-up (Example).

Exam preparation plan

Exam technique for case-based OB exams: spend the first 15% of the time reading and diagnosing, state the problem in one sentence, choose two or three models that fit, use at least two numbers from the exhibits, and finish with a sequenced action plan with measures.

Common struggles

1. "It is just common sense." Many findings contradict intuition (contingent rewards and interest, task conflict on average, the illusion of unanimity). Know the evidence, not just the label.
2. Name-dropping models. Graders reward applying one model well over listing five.
3. Ignoring the numbers. OB cases have exhibits; turnover, engagement and cost data make a diagnosis credible.
4. Blaming individuals. Look at the situation, the system and the leader's own part first (attribution error).
5. Generic recommendations. "Improve communication" earns little; "weekly night-shift huddle led by the director for 8 weeks, measured by the speak-up survey item" earns a lot.
6. Reflection papers without evidence. Use 360 feedback, specific incidents and what you will do differently.
7. Treating culture as values statements. Culture is in the assumptions that drive behaviour.
8. Under-preparing for participation. Prepare two or three specific points per case and track them.

Reading list

• Barrick, M. R., and Mount, M. K. (1991). The Big Five personality dimensions and job performance: a meta-analysis. Personnel Psychology, 44(1), 1-26.
• Judge, T. A., Bono, J. E., Ilies, R., and Gerhardt, M. W. (2002). Personality and leadership: a qualitative and quantitative review. Journal of Applied Psychology, 87(4), 765-780.
• Hofstede, G. (1980). Culture's Consequences. Sage. House, R. J., et al. (eds.) (2004). Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies. Sage.
• Simon, H. A. (1955). A behavioral model of rational choice. Quarterly Journal of Economics, 69(1), 99-118.
• Tversky, A., and Kahneman, D. (1974). Judgment under uncertainty: heuristics and biases. Science, 185(4157), 1124-1131.
• Kahneman, D., and Tversky, A. (1979). Prospect theory: an analysis of decision under risk. Econometrica, 47(2), 263-291.
• Tversky, A., and Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211(4481), 453-458.
• Tversky, A., and Kahneman, D. (1992). Advances in prospect theory: cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(4), 297-323.
• Kahneman, D. (2011). Thinking, Fast and Slow. Farrar, Straus and Giroux.
• Ross, L. (1977). The intuitive psychologist and his shortcomings: distortions in the attribution process. Advances in Experimental Social Psychology, 10, 173-220.
• Staw, B. M. (1976). Knee-deep in the big muddy: a study of escalating commitment to a chosen course of action. Organizational Behavior and Human Performance, 16(1), 27-44.
• Arkes, H. R., and Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35(1), 124-140.
• French, J. R. P., and Raven, B. (1959). The bases of social power. In D. Cartwright (ed.), Studies in Social Power. Institute for Social Research, University of Michigan.
• Cialdini, R. B. (1984). Influence: The Psychology of Persuasion. William Morrow. New and expanded edition (2021), Harper Business.
• Stogdill, R. M. (1948). Personal factors associated with leadership: a survey of the literature. Journal of Psychology, 25(1), 35-71.
• Judge, T. A., Piccolo, R. F., and Ilies, R. (2004). The forgotten ones? The validity of consideration and initiating structure in leadership research. Journal of Applied Psychology, 89(1), 36-51.
• Fiedler, F. E. (1967). A Theory of Leadership Effectiveness. McGraw-Hill.
• Hersey, P., and Blanchard, K. H. (1969). Life cycle theory of leadership. Training and Development Journal.
• House, R. J. (1971). A path goal theory of leader effectiveness. Administrative Science Quarterly, 16(3), 321-339.
• Burns, J. M. (1978). Leadership. Harper and Row.
• Bass, B. M. (1985). Leadership and Performance Beyond Expectations. Free Press.
• Judge, T. A., and Piccolo, R. F. (2004). Transformational and transactional leadership: a meta-analytic test of their relative validity. Journal of Applied Psychology, 89(5), 755-768.
• Avolio, B. J., and Gardner, W. L. (2005). Authentic leadership development: getting to the root of positive forms of leadership. The Leadership Quarterly, 16(3), 315-338.
• Walumbwa, F. O., Avolio, B. J., Gardner, W. L., Wernsing, T. S., and Peterson, S. J. (2008). Authentic leadership: development and validation of a theory-based measure. Journal of Management, 34(1), 89-126.
• Greenleaf, R. K. (1977). Servant Leadership. Paulist Press.
• Eva, N., Robin, M., Sendjaya, S., van Dierendonck, D., and Liden, R. C. (2019). Servant leadership: a systematic review and call for future research. The Leadership Quarterly, 30(1), 111-132.
• Schein, E. H. (1985). Organizational Culture and Leadership. Jossey-Bass. Schein, E. H. (1990). Organizational culture. American Psychologist, 45(2), 109-119.
• Brown, M. E., Treviño, L. K., and Harrison, D. A. (2005). Ethical leadership: a social learning perspective for construct development and testing. Organizational Behavior and Human Decision Processes, 97(2), 117-134.
• Bazerman, M. H., and Tenbrunsel, A. E. (2011). Blind Spots: Why We Fail to Do What's Right and What to Do about It. Princeton University Press.
• Motivation, teams and change: see the sources in mba/mba-motivation-card, mba/mba-team-dynamics-card and mba/mba-change-management-card.
• Textbooks, by name only: Robbins, S. P., and Judge, T. A., Organizational Behavior (Pearson); Yukl, G., Leadership in Organizations (Pearson); Northouse, P. G., Leadership: Theory and Practice (Sage); Bazerman, M. H., and Moore, D. A., Judgment in Managerial Decision Making (Wiley).
• Open resource: OpenStax, Organizational Behavior (CC BY-NC-SA 4.0), https://openstax.org/details/books/organizational-behavior.

Self-test

1. Name the five bases of power in French and Raven (1959). Which ones tend to produce commitment rather than compliance?
2. What does prospect theory predict about choices framed as gains and as losses? Give the evidence from Tversky and Kahneman (1981).
3. Explain the difference between transactional and transformational leadership, with the originators.
4. Name Schein's three levels of culture and give one ED example of each from the mini-case.
5. Using Exhibit 1, compute the FY2025 turnover rate and vacancy rate with the Excel formulas.
6. Using Exhibit 4, compute the programme's expected saving and its break-even probability of success.
7. Which Big Five trait most consistently predicts job performance (Barrick and Mount 1991), and which is most strongly related to leadership (Judge et al. 2002)?
8. What is the main criticism of situational leadership (Hersey and Blanchard 1969)?
9. Define bounded ethicality and give one leadership practice that reduces it.
10. Give three de-biasing techniques a leader can build into a team's decision process.

Answer key

1. Reward, coercive, legitimate, referent, expert. Referent and expert power tend to produce commitment; positional bases tend to produce compliance.
2. With gains, people prefer the sure option (risk averse); with losses, they prefer the gamble (risk seeking). Tversky and Kahneman (1981) showed that an equivalent pair of programmes described in terms of lives saved led most people to the sure option, while the same programmes described in terms of deaths led most to the risky option.
3. Transactional leadership exchanges rewards for performance; transformational leadership raises followers' goals and motivation beyond self-interest through vision, intellectual stimulation, individual attention and example. Burns (1978) introduced the distinction; Bass (1985) developed it for organisations and its measurement.
4. Artefacts: the framed values statement, rotas decided by the director, near-misses handled in private. Espoused value: "every voice keeps patients safe". Basic assumption: "raising a problem gets you written up", which explains the unreported near-miss.
5. Turnover 19 / 84 = 22.6% (=C6/C3); vacancy rate (96 - 84) / 96 = 12.5% (=(C2-C3)/C2).
6. Expected saving = 2,650,200 - 2,459,880 = USD 190,320 (=2650200-(0.6*2033000+0.4*3100200)). Break-even probability p solves p x 617,200 = (1 - p) x 450,000, so p = 450,000 / 1,067,200 = 42.2% (=450000/(617200+450000)).
7. Conscientiousness for job performance; extraversion for leadership.
8. Limited and mixed empirical support, and questions about how follower readiness is defined and measured; it is intuitive and popular in training more than it is validated.
9. Bounded ethicality: systematic limits that stop ordinary people from seeing the ethical dimension of their own decisions. Practices: name the ethical question explicitly in decisions, add guard-rails to goals, reward people who raise concerns.
10. Any three: set criteria before seeing options; collect views in writing before discussion; assign a devil's advocate; run a pre-mortem; use base rates from comparable cases; reframe the choice as both gain and loss; separate proposal from evaluation.

Teaching note for the mini-case

Teaching objectives. Apply attribution, framing and escalation concepts to a real-feeling people decision; read staffing and survey data; diagnose culture with Schein's levels; connect leadership style, psychological safety and change management; produce a 90-day plan with measures.

Question 1: the situation. Visits grew 12.6% in two years while employed RNs fell 10.2%, so visits per employed nurse rose from 695 to 872 (+25.4%, =(68900/79)/(61200/88)-1). Turnover nearly doubled (15.9% to 30.4%) and vacancies more than doubled (8 to 19). The flow measures (door-to-provider from 34 to 52 minutes, 3,307 patients leaving unseen) are symptoms of capacity strain; workload (survey 2.1) and the loss of experienced nurses are the mechanism. Agency staffing is a cost symptom, not the cause, and can worsen the cause if permanent staff carry more of the orientation and the hardest patients.

Question 2: attribution. Daniel explains the resignations by the leavers' character ("never team players"), the fundamental attribution error. The situation offers stronger explanations: the night shift was left out of the design, the change was announced by e-mail with three weeks' notice, workload was already the lowest-rated item, and the department's history punished people who raised problems. The same facts would lead an observer to expect more resignations unless the situation changes.

Question 3: framing and escalation. The expected saving is USD 190,320 and the break-even probability is 42.2%, so on the council's own estimate (60%) the programme is worth funding, with a margin for error. The finance memo frames it as a loss relative to the budget, which invites risk aversion; the council frames it as a gain, which invites enthusiasm. A disciplined approach states both outcomes, the probabilities and the expected value, and asks what evidence would update the 60% (results from comparable hospitals, a pilot on nights first). Daniel's prior public defence of the agency expansion creates a risk of escalation of commitment: the money already spent on agency staff is sunk and should not count in the choice. Under prospect theory, if Daniel treats the current budget overrun as a loss already suffered, he might even prefer risky options he would normally avoid; naming the reference point explicitly helps.

Question 4: culture. Artefacts: the framed values statement, decisions by the director and two day-shift charges, problems handled privately, change announced by e-mail. Espoused value: "every voice keeps patients safe". Underlying assumption: "speaking up is risky and decisions come from the top", learned under the previous director and confirmed by Daniel's e-mail launch. The unreported near-miss is the assumption in action. Changing the poster will not help; leaders must change what they attend to and reward, for example thanking the first nurse who reports a near-miss in a huddle and showing what changed as a result.

Question 5: leadership and power. Daniel's ICU style (hands-off with experts) and his e-mail launch (directive without explanation) both misfit an under-staffed, distrustful team facing change; a situational lens calls for more direction on the new process combined with much more support and explanation. A transformational lens points to what is missing: individual consideration (especially for nights) and a shared purpose framed with the staff. Daniel relies on legitimate power; Tomasz holds referent and expert power. A leader who recruits Tomasz as a co-designer and messenger gains influence that no memo can give. Servant-leadership moves (removing obstacles on nights, being present on night shifts) fit the survey's lowest items.

Question 6: a strong 90-day plan (Example).

Common weak answers. Recommending the agency renewal "because it is certain" without the expected-value comparison; proposing "better communication" without specifying channel, frequency and owner; ignoring the near-miss or treating it as an individual nurse's failure; and blaming Daniel entirely without proposing what he should do.

Closing point for discussion. The case is not about choosing between finance and nursing. It is about a leader recognising how his own attributions, framing and earlier commitments shape what he sees, and changing the conditions so that the team can tell him what he needs to hear.

Revision history

Standard and licence note

Based on the original works of organisational behaviour and leadership research cited in the reading list (for example Kahneman and Tversky 1979; French and Raven 1959; Burns 1978; Bass 1985; Schein 1985) and on the AACSB 2026 Global Standards for Business Education as described on aacsb.edu in October 2026 for the competency framing. The text, roadmap, rubric, mini-case, exhibits, questions and teaching note are original; no published case, survey instrument or textbook text is reproduced, and Tallow Creek Medical Center and everyone in the case are fictional. This guide is independent and not affiliated with or endorsed by any business school, accreditation body or publisher. Check your own syllabus and the current AACSB text before you rely on it. Template licence: MIT.