Every officegoer is quite familiar with the term ‘office politics’. Everyone knows about that employee, the favourite of the powers that be, who is given the important assignments, the smooth-talking colleague who has the ear of the higher-ups, the meeting where everybody knows that the boss is wrong, but nobody points that out, the person who somehow gets all the important information before others.
Management research has a term for employees’ perception of it – perceived organisational politics. It is a belief that self-interest, relationships and informal power are influencing decisions and rewards.
And according to research in India, the price of this perception is heavy for employers. A study of Indian managers discovered that employee engagement, willingness to innovate were impacted, while the intention to quit increased in organisations where nepotism, favouritism and unfair decisions were believed to exist. This is important because office politics alters employee behaviour.
A study published in IIMB Management Review in 2025, involving over 450 working women, found that perceived office politics negatively affected workplace wellbeing. This was partly because it impacted their willingness to speak up. This could prove to be costly for a company, as employees can just stop sharing information with it.
A related Indian survey involving over 450 employees in IT, banking and insurance sectors revealed that exclusion and isolation at the workplace increased defensive silence and had an adverse impact on creativity.
Imagine the scenario in an actual company. A junior employee stumbles upon a problem but chooses not to inform the manager about it. Someone has a brilliant idea but does not share it, because everyone knows who walks away with the credit. A team is not happy with a decision but approves it when asked for an opinion. The company continues operating, meetings continue, and everything appears to be running smoothly. However, a crucial change has occurred. The upward flow of useful information has stopped.
Then office politics turns into a productivity issue. And the company pays the price when employees withhold information, as this could slow down and, at times, even impede decision-making.
Politics can have one more adverse side-effect. In another IIMB Management Review study, involving over 600 employees from Indian companies, it was found that employees’ perception of high levels of office politics diminished the positive impact of workplace inclusion on their wellbeing.
This helps explain why merely announcing values is not enough. Employees observe how a company actually functions. Who seems to be the favourite employee of the managers? Whose mistakes are frequently condoned? Who appears to be friendlier to the seniors? Whose ideas are taken a bit more seriously? Who has relatively easier access to senior leaders? Who disagrees with the bosses without any apparent apprehension?
These signals reveal much more about the nature of an organisation than its proclaimed values. Of course, a workplace cannot be expected to be completely free of politics. It is, after all, a human institution. The opportunities are few, so there is competition and people tend to build influence. Effectively navigating an organisation does require some political skill.
The problem arises when employees begin to feel that proximity to the bosses matters more than performance. And once that conclusion is reached, the employee may respond by trying to cultivate the right relationships, withhold information and avoid pointing out mistakes rather than improving efficiency. And when such behaviour becomes widespread, one can only imagine its impact on an organisation.