Organizational Behavior 638 Slides Presentation

Organizational Organizational BehaviorBehavior

SchermerhornSchermerhorn, Hunt, and , Hunt, and OsbornOsbornOsbornOsborn

Prepared by

Michael K. McCuddy

Valparaiso University

Chapter 1 Study Questions

�What is organizational behavior and why is it important?

�What are organizations like as work

Organizational Behavior: Chapter 1 2

�What are organizations like as work settings?

�What is the nature of managerial work?

�How do we learn about organizational behavior?

Study Question 1: What is organizational behavior and why is it important?

�Workplace success depends on:

– Respect for people.

– Understanding of human behavior in complex


– Understanding of human behavior in complex organizational systems.

– Individual commitment to flexibility, creativity, and learning.

– Individual willingness to change.


�Organizations and their members are challenged to:– Simultaneously achieve high performance and


– Simultaneously achieve high performance and high quality of life.

– Embrace ethics and social responsibility.

– Respect the vast potential of demographic and cultural diversity among people.

– Recognize the impact of globalization.


�Organizational behavior.

– Study of human behavior in organizations.


organizations.

– A multidisciplinary field devoted to understanding individual and group behavior, interpersonal processes, and organizational dynamics.


Pick upFigure 1.1 from the textbook.



�Reasons for importance of scientific thinking.

– The process of data collection is controlled and systematic.


controlled and systematic.

– Proposed explanations are carefully tested.

– Only explanations that can be scientifically verified are accepted.


� Contingency approach.– Tries to identify how different situations can

be best understood and handled.

– Important contingency variables include:


– Important contingency variables include:• Environment.

• Technology.

• Tasks.

• Structure.

• People.


�Modern workplace trends.– Commitment to ethical behavior.– Importance of human capital.– Demise of “command and control.”


– Demise of “command and control.”– Emphasis on teamwork.– Pervasive influence of information

technology.– Respect for new workforce expectations.– Changing definition of “jobs” and “career.”

Study Question 2: What are organizations like as work settings?

�An organization is a collection of people working together in a division of labor to


working together in a division of labor to achieve a common purpose.


�The core purpose of an organization is the creation of goods and services.

�Missions and mission statements focus attention on the core purpose.


attention on the core purpose.

�Mission statements communicate:– A clear sense of the domain in which the

organization’s products and services fit.

– A vision and sense of future aspirations.


�A strategy is a comprehensive plan that guides organizations to operate in ways that allow them to outperform their competitors.


competitors.

�Key managerial responsibilities include strategy formulation and implementation.

�Knowledge of OB is essential to effectively strategy implementation.




�Stakeholders.– People, groups, and institutions having an

interest in an organization’s performance. – Customers, owners, employees, suppliers,


– Customers, owners, employees, suppliers, regulators, and local communities are key stakeholders.

– Interests of multiple stakeholders sometimes conflict.

– Executive leadership often focuses on balancing multiple stakeholder expectations.


� Organizational culture and diversity.– Organizational culture refers to the shared beliefs and

values that influence the behavior of organizational members.


members. – Positive organizational cultures:

• Have a high-performance orientation.• Emphasize teamwork.• Encourage risk taking.• Emphasize innovation..• Respect people and workforce diversity.

– Success in business world is tied to valuing diversity.


�Organizational effectiveness approaches.– Systems resource approach focuses on

inputs.


inputs.– Internal process approach focuses on the

transformation process.– Goal approach focuses on outputs.– Strategic contingencies approach

focuses on impact on key stakeholders.


�Longitudinal views of organizational effectiveness.– Short-run emphasis on goal accomplishment,


– Short-run emphasis on goal accomplishment, resource utilization, and stakeholder satisfaction.

– Intermediate-run emphasis on organization’s adaptability and development potential.

– Long-run emphasis on survival.

Study Question 3: What is the natureof managerial work?

�Managers perform jobs that involve

directly supporting the work efforts of


others.

�Managers assume roles such as

coordinator, coach, or team leader.


�The management process.– An effective manager is one whose

organizational unit, group, or team consistently achieves its goals while its


consistently achieves its goals while its members remain capable, committed, and enthusiastic.

– Key results of effective management:• Task performance.• Job satisfaction.




�The nature of managerial work.

– Managers work long hours.

– Managers are busy people.


– Managers are busy people.

– Managers are often interrupted.

– Managerial work is fragmented and variable.

– Managers work mostly with other people.

– Managers spend a lot of time communicating.




� Managerial mind-sets.

– Reflective mind-set — managing one’s self.

– Analytic mind-set — managing organizational


– Analytic mind-set — managing organizational

operations and decisions.

– Worldly mind-set — managing in a global context.

– Collaborative mind-set — managing relationships.

– Action mind-set — managing change.


�Managerial skills and competencies.

– A skill is an ability to translate knowledge into

action that results in a desired performance.


action that results in a desired performance.

– Categories of skills.

• Technical.

• Human.

• Conceptual.

Study Question 4: How do we learn about organizational behavior?

�Learning is an enduring change in behavior

that results from experience.


�Organizational learning is the process of

acquiring knowledge and utilizing

information to adapt successfully to

changing circumstances.


.





�What is a high-performance organization?�What is multiculturalism, and how can

workforce diversity be managed?


workforce diversity be managed?�How do ethics and social responsibility

influence human behavior in organizations?

�What are key OB transitions in the new workplace?

Study Question 1: What is a high-performance organization?

� High-performance organizations.– Value and empower people, and respect diversity.

– Mobilize the talents of self-directed work teams.

Use cutting-edge technologies to achieve success.


– Use cutting-edge technologies to achieve success.

– Thrive on learning and enable members to grow and develop.

– Are achievement-, quality-, and customer-oriented, as well as being sensitive to the external environment.


�Stakeholders.– The individuals, groups, and other

organizations affected by an


organizations affected by an organization’s performance.

�Value creation.– The extent to which an organization

satisfies the needs of strategic constituencies.




� Total quality management (TQM).– A total commitment to:

• High-quality results.

• Continuous improvement.


• Continuous improvement.

• Customer satisfaction.

– Meeting customers’ needs.

– Doing all tasks right the first time.

– Continuous improvement focuses on two questions: • Is it necessary?

• If so, can it be done better?


� Human capital. – The economic value of people with job-relevant

abilities, knowledge, ideas, energies, and commitments.


� Knowledge workers.– People whose minds rather than physical capabilities

create value for the organization.

� Intellectual capital.– The performance potential of the expertise,

competencies, creativity, and commitment within an organization’s workforce.


�Empowerment. – Allows people, individually and in groups, to

use their talents and knowledge to make


use their talents and knowledge to make decisions that affect their work.

�Social capital. – The performance potential represented in the

relationships maintained among people at work.


�Learning and high-performance cultures. – Uncertainty highlights the importance of

organizational learning.


organizational learning.

– High-performance organizations are designed for organizational learning.

– A learning organization has a culture that values human capital and invigorates learning for performance enhancement.



Study Question 2: What is multi-culturalism, and how can workforce diversity be managed?

� Workforce diversity. – Describes differences among people with respect to

age, race, ethnicity, gender, physical ability, and sexual orientation.


sexual orientation.

� Multiculturalism.– Refers to pluralism and respect for diversity and

individual differences in the workplace.

� Inclusivity. – The degree to which the organization’s culture

respects and values diversity.


�Diversity biases in the workplace. – Prejudice.

– Discrimination.


– Discrimination.

– The glass ceiling effect.

– Sexual harassment.

– Verbal abuse.

– Pay discrimination.




� Managing diversity. – Developing a work environment and organizational

culture that allows all organization members to reach their full potential.

� A diversity mature organization is created when:


� A diversity mature organization is created when: – Managers ensure the effective and efficient utilization

of employees in pursuit of the corporate mission.– Managers consider how their behaviors affect

diversity.

� Well-managed workforce diversity increases human capital.

Study question 3: How do ethics and social responsibility influence human behavior in organizations?

�Ethical behavior.– “Good” or “right” as opposed to “bad”


– “Good” or “right” as opposed to “bad” or “wrong” in a particular setting.

�The public demands that people in organizations act according to high moral standards.


� Immoral managers.– Do not subscribe to any ethical principles;

pursuit of self-interest.

Amoral managers.


�Amoral managers.– Ethics is simply not on this manager’s “radar

screen.”

�Moral managers.– Incorporate ethical principles and goals into

their personal behavior .




�Ways of thinking about ethical behavior.– Utilitarian view –– the greatest good for the

greatest number of people.


– Individualism view –– best serving long-term self-interests.

– Moral-rights view –– respects and protects the fundamental rights of all human beings.

– Justice view –– fair and impartial in the treatment of all people.


�Different types of justice.

– Procedural justice –– properly following rules and procedures in all cases.


and procedures in all cases.

– Distributive justice –– treating people the same under a policy, regardless of demographic differences.

– Interactional justice –– treating people affected by a decision with dignity and respect.


�Ethical dilemmas.

–Occur when someone must choose whether or not to pursue a course of


whether or not to pursue a course of action that, although offering the potential of personal or organizational benefit or both, may be considered unethical.


�Rationalizations for unethical behavior.– Pretending the behavior is not really unethical

or illegal.


or illegal.– Saying the behavior is really in the

organization’s or person’s best interest.– Assuming the behavior is acceptable if others

don’t find out about it.– Presuming that superiors will support and

protect you.


�Organizational social responsibility.– The obligation of organizations to behave in

ethical and moral ways as institutions of the broader society.


broader society.– Managers should commit organizations to:

• Pursuit of high productivity.• Corporate social responsibility.

– A whistleblower exposes others’ wrongdoings in order to preserve high ethical standards.

Study question 4: What are key OB transitions in the new workplace?

�Corporate governance and ethics leadership.– Society expects and demands ethical decisions


– Society expects and demands ethical decisions and actions from businesses and other social institutions.

– Corporate governance.• The active oversight of management decisions,

corporate strategy, and financial reporting by Boards of Directors.


�Corporate governance and ethics leadership (cont.).– Ethics leadership.

• Making business and organizational decisions with


• Making business and organizational decisions with high moral standards that meet the ethical test of being “good” and not “bad,” and of being “right” and not “wrong.” .

– Integrity.• Acting in ways that are always honest, credible,

and consistent in putting one’s values into practice.


�Positive organizational behavior.– Quality of work life.

• The overall quality of human experience in the


• The overall quality of human experience in the workplace.

• Commitment to quality of work life is an important value within organizational behavior.

• Theory Y provides the theoretical underpinnings for contemporary quality of work life concepts.


�Positive organizational behavior (cont.).– Positive organizational behavior focuses on

practices that value human capacities and encourage their full utilization.


encourage their full utilization. – Positive organizational behavior is based on

the core capacities of:• Confidence.• Hope.• Optimism.• Resilience.


�Globalization, job migration, and organizational transformation.– Globalization.


– Globalization.• The worldwide interdependence of resource flows,

product markets, and business competition.

– Job migration.• The shifting of jobs from one nation to another.


�Globalization, job migration, and organizational transformation (cont.).– Global outsourcing.


• Involves employers cutting back on domestic jobs and replacing them with contract workers in other nations.

– Job migration and global outsourcing have contributed to organizations redesigning themselves for high performance in a changed world.


�Personal management and career planning.

– Shamrock organizations.• Relatively small core group of permanent, full-time


• Relatively small core group of permanent, full-time employees with critical skills.

• Outside operators contracting to core group to perform essential daily activities.

• Part-timers hired by core group on an as-needed basis.


�Personal management and career planning (cont.).– Personal management.


• Understand one’s self, exercising initiative, accepting responsibility, working well with others, and continually learning from experience.

– Self-monitoring.• Observing and reflecting on one’s own behavior

and acting in ways that adapt to the situation.


�Why is globalization significant for organizational behavior?

�What is culture and how can we understand cultural differences?


What is culture and how can we understand cultural differences?

�How does cultural diversity affect people at work?

�What is a global view on organizational learning?

Study Question 1: Why is globalization significant for organizational behavior?

� Most organizations must achieve high

performance within a complex and competitive

global environment.


global environment.

� Globalization refers to the complex economic

networks of international competition, resource

suppliers, and product markets.


�Forces of globalization.– Rapid growth in information technology and

electronic communication.

– Movement of valuable skills and investments.


– Movement of valuable skills and investments.

– Increasing cultural diversity.

– Implications of immigration.

– Increasing job migration among nations.

– Impact of multicultural workforces.


�Globalization is contributing to the emergence of regional economic alliances.

� Important regional alliances.


– European Union (EU).

– North American Free Trade Agreement (NAFTA).

– Asia-Pacific Economic Co-operation Forum (APEC).


�Outsourcing.– Contracting out of work rather than accomplishing it

with a full-time permanent workforce.


�Off shoring.– Contracting out work to persons in other countries.

�Job migration.– Movement of jobs from one location or country to

another.


�Global managers.– Know how to conduct business in multiple

countries.

– Are culturally adaptable and often


– Are culturally adaptable and often multilingual.

– Think with a worldview and are able to map strategy in the global context.

– Have a global attitude.

– Have a global mindset.

Study Question 1: Why is globalization significant for organizational behavior?�Culture.

– The learned, shared way of doing things in a particular society.

– The “software of the mind.”


– The “software of the mind.”– Helps define boundaries between different

groups and affects how their members relate to one another.

– Cultural intelligence is the ability to identify, understand, and act with sensitivity and effectiveness in cross-cultural situations.

Study Question 2: What is culture and how can we understand cultural differences?

�Language.– Perhaps the most visible aspect of culture.

– Whorfian hypothesis — considers language as


– Whorfian hypothesis — considers language as a major determinant of thinking.

– Low-context cultures — the message is conveyed by the words used.

– High-context cultures — words convey only a limited part of the message.


�Time orientation.– Polychronic cultures.

• Circular view of time.


• Circular view of time.

• No pressure for immediate action or performance.

• Emphasis on the present.

– Monochronic cultures.• Linear view of time.

• Create pressure for action and performance.

• Long-range goals and planning are important.


�Use of space.– Proxemics.

• The study of how people use space to


• The study of how people use space to communicate.

• Reveals important cultural differences.

– Concept of personal space varies across cultures.

– Space is arranged differently in different cultures.


�Religion.

– A major element of culture.

– Can be a very visible aspect of culture.


– Can be a very visible aspect of culture.

– Influences codes of ethics and moral behavior.

– Influences conduct of economic matters.


�Values and national culture.– Cultures vary in underlying patterns of values

and attitudes.– Hofstede’s five dimensions of national culture:


– Hofstede’s five dimensions of national culture:• Power distance.• Uncertainty avoidance.• Individualism-collectivism.• Masculinity-femininity.• Long-term/short-term orientation.


�Power distance.– The willingness of a culture to accept status

and power differences among members.– Respect for hierarchy and rank in


– Respect for hierarchy and rank in organizations.

– Example of a high power distance culture —Indonesia.

– Example of a low power distance culture —Sweden.


�Uncertainty avoidance.– The cultural tendency toward discomfort with

risk and ambiguity.– Preference for structured versus unstructured


– Preference for structured versus unstructured organizational situations.

– Example of a high uncertainty avoidance culture — France.

– Example of a low uncertainty avoidance culture — Hong Kong.


� Individualism-collectivism.– The cultural tendency to emphasize individual

or group interests.


or group interests.

– Preferences for working individually or in groups.

– Example of an individualistic culture —United States.

– Example of a collectivist culture — Mexico.


�Masculinity-femininity.– The tendency of a culture to value

stereotypical masculine or feminine traits.


stereotypical masculine or feminine traits.

– Emphasizes competition/assertiveness versus interpersonal sensitivity/relationships.

– Example of a masculine culture — Japan.

– Example of a feminine culture — Thailand.


�Long-term/short-term orientation.– The tendency of a culture to emphasize future-

oriented values versus present-oriented values.– Adoption of long-term or short-term


– Adoption of long-term or short-term performance horizons.

– Example of a long-term orientation culture —South Korea.

– Example of a short-term orientation culture —United States.




�Understanding cultural differences helps in dealing with parochialism and ethnocentrism.

Parochialism — assuming that the ways of


– Parochialism — assuming that the ways of one’s own culture are the only ways of doing things.

– Ethnocentrism — assuming that the ways of one’s culture are the best ways of doing things.




�Cultural differences in handling relationships with other people.– Universalism versus particularism.


– Universalism versus particularism.• Relative emphasis on rules and consistency, or on

relationships and flexibility.

– Individualism versus collectivism.• Relative emphasis on individual freedom and

responsibility, or on group interests and consensus.


�Cultural differences in handling relationships with other people (cont.).– Neutral versus affective.


– Neutral versus affective.• Relative emphasis on objectivity and detachment,

or on emotion and expressed feelings.

– Specific versus diffuse.• Relative emphasis on focused and narrow

involvement, or on involvement with the whole person.


�Cultural differences in handling relationships with other people (cont.).– Achievement versus prescription.


– Achievement versus prescription.• Relative emphasis on performance-based and

earned status, or on ascribed status.


�Cultural differences in attitudes toward

time.

– Sequential view of time.


– Sequential view of time.

• Time is a passing series of events.

– Synchronic view of time.

• Time consists of an interrelated past, present, and

future.


�Cultural differences in attitudes toward the environment.– Inner-directed cultures.


– Inner-directed cultures.• Members view themselves as separate from nature

and believe they can control it.

– Outer-directed cultures.• Members view themselves as part of nature and

believe they must go along with it.

Study Question 3: How does cultural diversity affect people at work?

�Multinational corporation (MNC).– A business firm that has extensive

international operations in more than one foreign country.


foreign country.

– Have a total world view without allegiance to any one national home.

– Have enormous economic power and impact.

– Bring benefits and controversies to host countries.


�Multicultural workforces and expatriates.– Styles of leadership, motivation, decision

making, planning, organizing, and controlling vary from country to country.


vary from country to country.– Expatriates.

• People who live and work abroad for extended periods of time.

• Can be very costly for employers.• Progressive employers take supportive measures to

maximize potential for expatriate success.



Study Question 3: How does cultural diversity affect people at work?�Ethical behavior across cultures.

– Ethical challenges result from:• Cultural diversity.

• Variations in governments and legal systems.


• Variations in governments and legal systems.

– Prominent current issues.• Corruption and bribery.

• Poor working conditions.

• Child and prison labor.

• Business support of repressive governments.

• Sweatshops.




�Advice regarding cultural relativism and ethical absolutism.

– Multinational businesses should adopt core or


– Multinational businesses should adopt core or threshold values that respect and protect fundamental human rights.

– Beyond the threshold, businesses should adapt and tailor actions to respect the traditions, foundations, and needs of different cultures.

Study Question 4: What is a global view on organizational learning?�Organizational learning.

– The process of acquiring the knowledge

necessary to adapt to a changing

environment.


environment.

�Global organizational learning.

– The ability to gather from the world at large

the knowledge required for long-term

organizational adaptation.

Study Question 4: What is a global view on organizational learning?

�Are management theories universal?

– Answer is “no.”


– Cultural influences should be carefully

considered in transferring theories and their

applications across cultures.

Study Question 4: What is a global view on organizational learning?

�Best practices around the world.

– Global organizational learning should identify best practices around the world.


best practices around the world.

– Potential high-performance benchmarks exist throughout the world.

– Cultural diversity enriches global organization learning.


�What is personality?

�How do personalities differ?

�What are value and attitude differences


�What are value and attitude differences among individuals, and why are they important?

�What are individual differences and how are they related to workforce diversity?

Study Question 1: What is personality?

�Personality.– The overall profile or combination of

characteristics that capture the unique nature of a person as that person reacts and interacts with others.


with others.– Combines a set of physical and mental

characteristics that reflect how a person looks, thinks, acts, and feels.

– Predictable relationships are expected between people’s personalities and their behaviors.




� Heredity and environment.– Heredity sets the limits on the development of

personality characteristics.– Environment determines development within these

limits.– About a 50-50 heredity-environment split.


– About a 50-50 heredity-environment split.– Cultural values and norms play a substantial role in

the development of personality.– Social factors include family life, religion, and many

kinds of formal and informal groups.– Situational factors reflect the opportunities or

constraints imposed by the operational context.




�Personality and the self-concept.– Personality dynamics.

• The ways in which an individual integrates and organizes social traits, values and motives, personal conceptions, and emotional adjustments.


personal conceptions, and emotional adjustments.

– Self-concept.• The view individuals have of themselves as

physical, social, and spiritual or moral beings.

• Self-esteem.

• Self-efficacy.

Study Question 2: How do personalities differ?� “Big Five” personality dimensions.

– Extraversion• Being outgoing, sociable, assertive.

– Agreeableness.• Being good-natured, trusting, cooperative.


• Being good-natured, trusting, cooperative.

– Conscientiousness.• Being responsible, dependable, persistent.

– Emotional stability.• Being unworried, secure, relaxed.

– Openness to experience.• Being imaginative, curious, broad-minded.

Study Question 2: How do personalities differ?

�Social traits.

– Surface-level traits that reflect the way a

person appears to others when interacting in

various social settings.


various social settings.

– An important social trait is problem-solving

style.

• The way a person goes about gathering and

evaluating information in solving problems and

making decisions.


� Information gathering in problem solving.

– Getting and organizing data for use.

– Sensation-type individuals prefer routine and


– Sensation-type individuals prefer routine and

order and emphasize well-defined details in

gathering information.

– Intuitive-type individuals like new problems

and dislike routine.


� Information evaluation in problem solving.– Making judgments about how to deal with

information once it has been collected.

– Feeling-type individuals are oriented toward


– Feeling-type individuals are oriented toward conformity and try to accommodate themselves to other people.

– Thinking-type individuals use reason and intellect to deal with problems and downplay emotions.




�Personal conception traits.– The way individuals tend to think about their

social and physical settings as well as their major beliefs and personal orientation.


major beliefs and personal orientation.– Key traits.

• Locus of control.• Authoritarianism/dogmatism.• Machiavellianism.• Self-monitoring.


�Locus of control.– The extent to which a person feels able to

control his/her own life.– Externals.


– Externals.• More extraverted in their interpersonal

relationships and more oriented toward the world around them.

– Internals.• More introverted and more oriented towards their

own feelings and ideas.




�Authoritarianism/dogmatism.

– Authoritarianism.


• Tendency to adhere rigidly to conventional values

and to obey recognized authority.

– Dogmatism.

• Tendency to view the world as a threatening place.


� People with a high-Machiavellian personality:– Approach situations logically and

thoughtfully.– Are capable of lying to achieve personal goals.


– Are rarely swayed by loyalty, friendships, past promises, or others’ opinions.

– Are skilled at influencing others.– Try to exploit loosely structured situations.– Perform in a perfunctory or detached manner

in highly structured situations.


� People with a low-Machiavellian personality:

– Accept direction imposed by others in loosely structured situations.


structured situations.

– Work hard to do well in highly structured situations.

– Are strongly guided by ethical considerations.

– Are unlikely to lie or cheat.


�Self-monitoring.– A person’s ability to adjust his/her behavior to

external situational factors.

– High self-monitors.


– High self-monitors.• Sensitive to external cues.

• Behave differently in different situations.

– Low self-monitors.• Not sensitive to external cues.

• Not able to disguise their behaviors.


�Emotional adjustment traits.– How much an individual experiences distress

or displays unacceptable acts.

Type A orientation.


– Type A orientation.• Characterized by impatience, desire for

achievement, and perfectionism.

– Type B orientation.• Characterized as more easygoing and less

competitive in relation to daily events.

Study Question 3: What are value and attitude differences among individuals, and why are they important?

�Values.– Broad preferences concerning appropriate

courses of action or outcomes.

Values influence behavior and attitudes.


– Values influence behavior and attitudes.

– Parents, friends, teachers, and external reference groups can influence individual values.

– Values develop as a product of learning and experiences.





�Gordon Allport’s values categories.– Theoretical values.

– Economic values.


– Economic values.

– Aesthetic values.

– Social values.

– Political values.

– Religious values.


�Maglino’s categories of workplace values.

– Achievement.

– Helping and concern for others.


– Helping and concern for others.

– Honesty.

– Fairness.


�Attitudes.

– Are influenced by values and are acquired

from the same sources as values.


from the same sources as values.

– Are more specific and less stable than values.

– An attitude is a predisposition to respond in a

positive or negative way to someone or

something in one’s environment.




�The attitude-behavior relationship is

stronger when:


– Attitudes and behaviors are more specific.

– There is freedom to carry out the behavioral

intent.

– The person has experience with the attitude.


�Attitudes and cognitive consistency.– Cognitive dissonance.

• Describes a state of inconsistency between an


• Describes a state of inconsistency between an individual’s attitudes and his or her behavior.

– Cognitive dissonance can be reduced by:• Changing the underlying attitude.

• Changing future behavior.

• Developing new ways of explaining or rationalizing the inconsistency.


�Attitudes and cognitive consistency (cont.).

– Dissonance reduction choices are influenced


by:

• The degree of control a person has over the

situation.

• The magnitude of the rewards involved.

Study Question 4: What are individual differences and how are they related to workforce diversity?

�Workforce diversity.– The presence of individual human

characteristics that make people different


characteristics that make people different from one another.

�Challenge of workforce diversity.– Respecting individuals’ perspectives and

contributions and promoting a shared sense of organizational vision and identity.


�As workforce diversity increases, the

possibility of stereotyping and


discrimination increases.

– Demographic characteristics may serve as the

basis for stereotypes.


�Equal employment opportunity.

– Nondiscriminatory employment decisions.

• No intent to exclude or disadvantage legally


• No intent to exclude or disadvantage legally

protected groups.

– Affirmative action.

• Remedial actions for proven discrimination or

statistical imbalance in workforce.


� Demographic characteristics.– The background characteristics that help shape what a

person becomes.

� Important demographic characteristics for the


� Important demographic characteristics for the workplace.– Gender.– Age.– Able-bodiedness.– Race.– Ethnicity.


�Gender.– No consistent differences between men and

women in:• Problem-solving abilities.


• Problem-solving abilities.• Analytical skills.• Competitive drive.• Motivation.• Learning ability.• Sociability.


�Gender (cont.).

– As compared to men, women:


• Are more conforming.

• Have lower expectations of success.

• Have higher absenteeism.

• Are more democratic as leaders.


� Age.

– Aging workforce.

– Older workers are more susceptible to stereotyping.


– Older workers are more susceptible to stereotyping.

– Age discrimination lawsuits are increasingly common

in the United States.

– Small businesses tend to value older workers.

– Experienced workers, who are usually older, tend to

perform well, be absent less, and have low turnover.


�Able-bodiedness.

– Despite evidence of effective job performance,


most disabled persons are unemployed.

– Most disabled persons want to work.

– More firms are likely to hire disabled workers

in the future.


�Racial and ethnic groups.

– African Americans, Asian Americans, and Hispanic Americans make up an ever-increasing percentage of the American


increasing percentage of the American workforce.

– Potential for stereotypes and discrimination can adversely affect career opportunities.

– Race cannot be a BFOQ.


� Important lessons regarding demographic

characteristics.

– Respect and deal with the needs and concerns


– Respect and deal with the needs and concerns

of people with different demographics.

– Avoid linking demographics to stereotypes.

– Demography is not a good indicator of

individual-job fits.


�Aptitude.

– A person’s capability of learning something.


�Ability.

– A person’s existing capacity to perform the

various tasks needed for a given job.

– Includes relevant knowledge and skills.


�What is the perception process?

�What are common perceptual distortions?


distortions?

�How can perceptions be managed?

�What is attribution theory?

Study Question 1: What is the perception process?

�Perception.

– The process by which people select, organize,

interpret, retrieve, and respond to information.


interpret, retrieve, and respond to information.

– People process information inputs into

responses involving feeling and action.

– The quality or accuracy of a person’s

perceptions has a major impact on responses.








� Information attention and selection.

– Selective screening.• Lets in only a tiny portion all the information that


• Lets in only a tiny portion all the information that is available.

– Two types of selective screening.• Controlled processing.

• Screening without perceiver’s conscious awareness.


�Organization of information.– Schemas.

• Cognitive frameworks that represent organized knowledge about a given concept or stimulus


knowledge about a given concept or stimulus developed through experience.

– Types of schemas:• Self schemas.• Person schemas.• Script schemas.• Person-in-situation schemas.


� Information interpretation.

– Uncovering the reasons behind the ways


stimuli are grouped.

– People may interpret the same information

differently or make different attributions about

information.


� Information retrieval.

– Attention and selection, organization, and


– Attention and selection, organization, and

interpretation are part of memory.

– Information stored in memory must be

retrieved in order to be used.

Study Question 2: What are commonperceptual distortions?



�Stereotypes or prototypes.

– Combines information based on the category

or class to which a person, situation, or object


or class to which a person, situation, or object

belongs.

– Individual differences are obscured.

– Strong impact at the organization stage.


�Halo effects.

– Occur when one attribute of a person or

situation is used to develop an overall


situation is used to develop an overall

impression of the individual or situation.

– Likely to occur in the organization stage.

– Important in the performance appraisal

process.


� Selective perception.

– The tendency to single out those aspects of a situation, person, or object that are consistent


situation, person, or object that are consistent with one’s needs, values, or attitudes.

– Strongest impact is at the attention stage.

– Perception checking with other persons can help counter the adverse impact of selective perception.


�Projection.

– The assignment of one’s personal attributes to

other individuals.


other individuals.

– Especially likely to occur in interpretation

stage.

– Projection can be controlled through a high

degree of self-awareness and empathy.


�Contrast effects.

– Occur when an individual is compared to other


people on the same characteristics on which

the others rank higher or lower.

– People must be aware of the impact of contrast

effects in many work settings


�Self-fulfilling prophecy.– The tendency to create or find in another

situation or individual that which one expected


situation or individual that which one expected to find.

– Also called the “Pygmalion effect.”

– Can have either positive or negative outcomes.

– Managers should adopt positive and optimistic approaches to people at work.

Study Question 3: How can perceptions be managed?

� Impression management.– A person’s systematic attempt to behave in

ways that create and maintain desired


ways that create and maintain desired impressions in others’ eyes.

– Successful managers:• Use impression management to enhance their own

images.

• Are sensitive to other people’s use of impression management.

Study Question 3: How can perceptions be managed?

�Distortion management.

– Managers should:


• Balance automatic and controlled information

processing at the attention and selection stage.

• Broaden their schemas at the organizing stage.

• Be attuned to attributions at the interpretation

stage.

Study Question 4:What is attribution theory?

�Attribution theory aids in perceptual interpretation by focusing on how people attempt to:


attempt to:– Understand the causes of a certain event.

– Assess responsibility for the outcomes of the event.

– Evaluate the personal qualities of the people involved in the event.


�Factors influencing internal and external attributions.– Distinctiveness — consistency of a person’s


– Distinctiveness — consistency of a person’s behavior across situations.

– Consensus — likelihood of others responding in a similar way.

– Consistency — whether an individual responds the same way across time.


�Fundamental attribution error.

– Applies to the evaluation of someone’s else

behavior.


behavior.

– Attributing success to the influence of

situational factors.

– Attributing failure to the influence of personal

factors.


�Self-serving bias.

– Applies to the evaluation of our own behavior.


– Attributing success to the influence of

personal factors.

– Attributing failure to the influence of

situational factors.

Study Question 4:What is attribution theory?� Techniques for effectively managing perceptions

and attributions.– Be self-aware.

– Seek a wide range of differing information.


– Seek a wide range of differing information.

– Try to see a situation as others would.

– Be aware of different kinds of schemas.

– Be aware of perceptual distortions.

– Be aware of self and impression management.

– Be aware of attribution theory implications.


� What is motivation?

�What do the content theories suggest about individual needs and motivation?


individual needs and motivation?

�What do the process theories suggest about individual motivation?

�What are reinforcement theories and how are they linked to motivation?

Study Question 1:What is motivation?

� Motivation refers to forces within an individual

that account for the level, direction, and

persistence of effort expended at work.

– Direction — an individual’s choice when presented


– Direction — an individual’s choice when presented

with a number of possible alternatives.

– Level — the amount of effort a person puts forth.

– Persistence — the length of time a person stays with a

given action.

Study Question 1:What is motivation?

� Categories of motivation theories.

– Content theories.

• Focus on profiling the needs that people seek to

fulfill.


fulfill.

– Process theories.

• Focus on people’s thought or cognitive processes.

– Reinforcement theories.

• Emphasize controlling behavior by manipulating

its consequences.

Study Question 2: What do the content theories

suggest about individual needs and motivation?

� Content theories.– Motivation results from the individual’s attempts to

satisfy needs.

� Major content theories.


� Major content theories.– Hierarchy of needs theory.

– ERG theory.

– Acquired needs theory.

– Two-factor theory.

� Each theory offers a slightly different view.




Study Question 2: What do the content theories suggest about individual needs and motivation?

�ERG theory.

– Existence needs.• Desire for physiological and material well-being.


– Relatedness needs.• Desire for satisfying interpersonal relationships.

– Growth needs.• Desire for continued personal growth and

development.

Study Question 2: What do the content theories suggest about individual needs and motivation?

� Acquired needs theory.– Need for achievement (nAch).

• The desire to do something better or more efficiently, to solve problems, or to master complex tasks.

Need for affiliation (nAff).


– Need for affiliation (nAff).• The desire to establish and maintain friendly and warm

relations with others.

– Need for power (nPower).• The desire to control others, to influence their behavior, or to

be responsible for others.




Study Question 3: What do the process theories suggest about individual motivation?

�Process theories.– Focus on the thought processes through which

people choose among alternative courses of action.


action.

�The chapter focuses on two process theories:– Equity theory.

– Expectancy theory.


� Equity theory.

– People gauge the fairness of their work outcomes in

relation to others.

– Felt negative inequity.


– Felt negative inequity.

• Individual feels he/she has received relatively less

than others in proportion to work inputs.

– Felt positive inequity.

• Individual feels he/she has received relatively more

than others in proportion to work inputs.


�Equity restoration behaviors.– Change work inputs.

– Change the outcomes received.

Leave the situation.


– Leave the situation.

– Change the comparison person.

– Psychologically distort the comparisons.

– Take actions to change the inputs or outputs of the comparison person.


� Coping methods for dealing with equity

comparisons.– Recognize that equity comparisons are inevitable in the

workplace.


workplace.

– Anticipate felt negative inequities when rewards are given.

– Communicate clear evaluations for any rewards given.

– Communicate an appraisal of performance on which the reward

is based.

– Communicate comparison points that are appropriate in the

situation




� A person’s motivation is a multiplicative function of expectancy, instrumentality, and valence (M = E x I x V).

Motivational implications of expectancy theory.


� Motivational implications of expectancy theory.– Motivation is sharply reduced when, expectancy,

instrumentality, or valence approach zero.

– Motivation is high when expectancy and instrumentality are high and valence is strongly positive.


�Extrinsic rewards.– Positively valued work outcomes given to the

individual by some other person.


individual by some other person.

� Intrinsic rewards.– Positively valued work outcomes that the

individual receives directly as a result of task performance.


�Guidelines for the distribution of extrinsic rewards.– Clearly identify the desired behaviors.


– Clearly identify the desired behaviors.

– Maintain an inventory of rewards that have the potential to serve as positive reinforcers.

– Recognize individual differences in the rewards that will have a positive value for each person.


� Guidelines for the distribution of extrinsic rewards (cont.).– Let each person know exactly what must be done to

receive a desirable reward; set clear target antecedents and give performance feedback.


and give performance feedback.

– Allocate rewards contingently and immediately upon the appearance of the desired behaviors.

– Allocate rewards wisely in terms of scheduling the delivery of positive reinforcement.

Study Question 4: What are reinforcement theories and how are they linked to motivation?

�Reinforcement.

– The administration of a consequence as a

result of a behavior.


result of a behavior.

– Proper management of reinforcement can

change the direction, level, and persistence of

an individual’s behavior.




�Law of effect.

– Theoretical basis for manipulating consequences of behavior.


consequences of behavior.

– Behavior that results in a pleasant outcome is likely to be repeated while behavior that results in an unpleasant outcome is not likely to be repeated.




�Organizational behavior modification (OB Mod).– The systematic reinforcement of desirable

work behavior and the nonreinforcement or


work behavior and the nonreinforcement or punishment of unwanted work behavior.

– Uses four basic strategies:• Positive reinforcement.• Negative reinforcement.• Punishment.• Extinction.


�Positive reinforcement.– The administration of positive consequences

to increase the likelihood of repeating the


to increase the likelihood of repeating the desired behavior in similar settings.

– Rewards are not necessarily positive reinforcers.

– A reward is a positive reinforcer only if the behavior improves.


�Principles governing reinforcement.

– Law of contingent reinforcement.

• The reward must be delivered only if the desired


• The reward must be delivered only if the desired

behavior is exhibited.

– Law of immediate reinforcement.

• The reward must be given as soon as possible after

the desired behavior is exhibited.


�Scheduling reinforcement.

– Continuous reinforcement.• Administers a reward each time the desired


• Administers a reward each time the desired behavior occurs.

– Intermittent reinforcement.• Rewards behavior periodically — either on

the basis of time elapsed or the number of desired behaviors exhibited.




�Negative reinforcement.

– Also known as avoidance.


– The withdrawal of negative consequences to

increase the likelihood of repeating the desired

behavior in a similar setting.


�Punishment.

– The administration of negative consequences


or the withdrawal of positive consequences to

reduce the likelihood of repeating the behavior

in similar settings.


� Implications of using punishment.

– Punishing poor performance enhances performance without affecting satisfaction.


performance without affecting satisfaction.

– Arbitrary and capricious punishment leads to poor performance and low satisfaction.

– Punishment may be offset by positive reinforcement from another source.


�Extinction.– The withdrawal of the reinforcing

consequences for a given behavior.


consequences for a given behavior.

– The behavior is not unlearned; it simply is not exhibited.

– The behavior will reappear if it is reinforced again.




� Ethical issues with reinforcement usage.– Is improved performance really due to reinforcement?

– Is the use of reinforcement demeaning and dehumanizing?


dehumanizing?

– Will managers abuse their power by exerting external control over behavior?

– How can we ensure that the manipulation of consequences is done in a positive and constructive fashion?


�How are motivation, job satisfaction, and performance related?

�What are job-design approaches?


�What are job-design approaches?

�How are technology and job design related?

�What alternative work arrangements are used today?

Study Question 1: How are motivation, job satisfaction, and performance related?

�Job satisfaction.

– The degree to which individuals feel positively

or negatively about their jobs.


or negatively about their jobs.

– Job satisfaction can be assessed:

• By managerial observation and interpretation.

• Through use of job satisfaction questionnaires.


� Implications of key work decisions for job

satisfaction.

– Joining and remaining a member of an organization.


– Joining and remaining a member of an organization.

• Satisfied workers have better attendance and less turnover.

– Working hard in pursuit of high levels of task

performance.

• Three alternative relationships between performance and

satisfaction.


�Argument: satisfaction causes performance.– Managerial implication — to increase


– Managerial implication — to increase employees’ work performance, make them happy.

– Job satisfaction alone is not a consistent predictor of work performance.


�Argument: performance causes satisfaction.– Managerial implication — help people achieve

high performance, then satisfaction will


high performance, then satisfaction will follow.

– Performance in a given time period is related to satisfaction in a later time period.

– Rewards link performance with later satisfaction.


�Argument: rewards cause both satisfaction and performance.– Managerial implications.


– Managerial implications.• Proper allocation of rewards can positively

influence both satisfaction and performance.

• High job satisfaction and performance-contingent rewards influence a person’s work performance.

• Size and value of the reward should vary in proportion to the level of one’s performance.



Study question 2: What are job-design approaches?



�Scientific management.– Sought to improve work efficiency by creating

small, repetitive tasks and training workers to do these tasks well.


do these tasks well.– Job simplification.

• Standardizes work procedures and employs people in clearly defined and highly specialized tasks.

• Intent is to increase efficiency, but it may be decreased due to the motivational impact of unappealing jobs.


�Job enlargement and job rotation.– Job enlargement.

• Increases task variety by combining into one job two or more tasks that were previously assigned to


two or more tasks that were previously assigned to separate workers.

– Job rotation.• Increases task variety by periodically shifting

workers among jobs involving different tasks.

– Enlargement and rotation use horizontal loading to increase job breadth.


�Job enrichment.– The practice of enhancing job content by

building motivating factors such as


building motivating factors such as responsibility, achievement, recognition, and personal growth into the job.

– Adds planning and evaluating duties to the job content.

– Uses vertical loading to increase job depth.


�Ways to increase job depth.– Allow workers to plan.– Allow workers to control.– Maximize job freedom.


– Maximize job freedom.– Increase task difficulty.– Help workers become task experts.– Provide performance feedback.– Increase performance accountability.– Provide complete units of work.


�Concerns about job enrichment.

– Job enrichment can be very costly.

– Controversy concerning whether pay


– Controversy concerning whether pay

must be increased when jobs are

enriched.

• Herzberg’s argument regarding the impact

of competitive pay and enriched jobs.

Study question 3: What are the keys to designing motivating jobs?



� Core job characteristics.– Skill variety.

• Degree to which a job requires a variety of different activities and involves the use of a number of different skills and


and involves the use of a number of different skills and talents of the individual.

– Task identity.• Degree to which the job requires the completion of a “whole”

and identifiable piece of work; one that involves doing a job from beginning to end with a visible outcome.


� Core job characteristics (cont.).– Task significance.

• Degree to which the job is important and involves a meaningful contribution to the organization or society in


meaningful contribution to the organization or society in general.

– Autonomy.• Degree to which the job gives the employee substantial

freedom, independence, and discretion in scheduling the work and in determining the procedures used in carrying it out.


� Core job characteristics (cont.).

– Job feedback.• Degree to which carrying out the work activities provides


direct and clear information to the employee regarding how

well the job has been done..


�Motivating potential score.– Combined together, the core job

characteristics create a motivating potential


characteristics create a motivating potential score (MPS).

– MPS indicates the degree to which the job is capable of motivating people.

– A job’s MPS can be raised by enriching the core characteristics.


�Critical psychological states.– When the core characteristics are highly

enriched, three critical psychological states are positively influenced.


are positively influenced.• Experienced meaningfulness of work.• Experienced responsibility for work outcomes.• Knowledge of actual results of work activities.

– Positive psychological states create positive work outcomes.


�Enriched core job characteristics will create positive psychological states, which in turn will create positive work outcomes


in turn will create positive work outcomes only when:– Employee growth-need strength is high.

– The employee has the requisite knowledge and skill.

– Employee context satisfaction exists.


�Social information processing theory.– Social information in organizations influences

the way people perceive their jobs and respond


the way people perceive their jobs and respond to them.

– Research evidence shows that both social information and the core characteristics are important determinants of how people perceive their jobs.


�Managerial and global implications of

enriching jobs.


– Not everyone’s job should be enriched.

– Job enrichment can apply to groups.

– Culture has a substantial impact on job

enrichment.

Study Question 4: How are technologyand job design related?

�Sociotechnical systems.

– Reflects the importance of integrating people

and technology to create high-performance


and technology to create high-performance

work systems.

– Essential for new developments in job design,

given the impact of computers and information

technology in the modern workplace.


�Flexible manufacturing systems.– Adaptive computer-based technologies and

integrated job designs that are used to shift work easily and quickly among alternative


work easily and quickly among alternative products.

– Workers develop expertise across a wide range of functions.

– Jobs offer a wealth of potential for enriched core job characteristics.


�Workflow and process reengineering.

– Process reengineering is the analysis,

streamlining, and reconfiguration of actions


streamlining, and reconfiguration of actions

and tasks required to reach a work goal.

– This approach for improving workflows and

job designs is driven by one question:

• What is necessary and what else can be eliminated?

Study Question 5: What alternative work arrangements are used today?

�Compressed work weeks.

– Any scheduling of work that allows a full-time

job to be completed in fewer than the standard


job to be completed in fewer than the standard

five days.

– “4/40” is most common form.


� Compressed work weeks (cont.).– Advantages.

• For workers: added time off.• For organizations: lower absenteeism and


• For organizations: lower absenteeism and improved recruiting of new employees.

– Disadvantages.• For workers: increased fatigue and family

adjustment problems.• For organizations: work scheduling problems,

customer complaints, and possible union opposition.

Study Question 5: What alternative work arrangements are used today?� Flexible working hours.

– Gives individuals a daily choice in the timing of their work commitments.

– Advantages:


– Advantages:

• For workers: shorter commuting time, more leisure time, more job satisfaction, and greater sense of responsibility.

• For organizations: less absenteeism, tardiness, and

turnover; more commitment; and higher

performance.


�Job sharing.– One full-time job is assigned to two or more

persons who divide the work according to


persons who divide the work according to agreed-upon hours.

– Advantages.

• For workers: less burnout and higher energy level.

• For organizations; attracting talented people who

who would otherwise be unable to work.


�Work at home and the virtual office.– Telecommuting.

• Work done at home or in a remote location via use of computers and advanced communication


of computers and advanced communication linkages with a central office or other employment locations.

– Variants of telecommuting.• Flexiplace.• Hoteling.• Virtual office.


� Advantages of telecommuting.– For workers: flexibility, comforts of home, and choice

of work locations consistent with one’s lifestyle.


– For organizations: costs savings, efficiency, and improved employee satisfaction.

� Disadvantages of telecommuting.– For workers: isolation from co-workers, decreased

identification with work team, and technical difficulties with computer linkages.


�Part-time work.

– Temporary part-time work.• An employee is classified as temporary and works


• An employee is classified as temporary and works less than the standard 40-hour work week.

– Permanent part-time work.• An employee is classified as a permanent member

of the workforce and works less than the standard 40-hour work week.


� Advantages of part-time work.– For workers: appeals to people who want to

supplement other jobs or do not want full-time work.– For organizations: lower labor costs, ability to better


– For organizations: lower labor costs, ability to better accommodate peaks and valleys of business cycle, and better management of retention quality.

�Disadvantages of part-time work.– For workers: added stress and potentially diminished

performance if holding two jobs, failure to qualify for benefits, and lower pay rates than full-time counterparts.


�What is goal setting?

�What is performance appraisal?

�What are compensation and rewards?


�What are compensation and rewards?

�What are human resource development and person-job fit?

Study Question 1: What is goal setting?



�Goal setting guidelines.– Difficult goals are more likely to lead to

higher performance than are less difficult ones.

– Specific goals are more likely to lead to higher


– Specific goals are more likely to lead to higher performance than are no goals or vague or general ones.

– Task feedback, or knowledge of results, is likely to motivate people toward higher performance by encouraging the setting of higher performance goals.


�Goal setting guidelines (cont.).– Goals are most likely to lead to higher

performance when the people have the abilities and the feeling of self-efficacy


abilities and the feeling of self-efficacy required to accomplish them.

– Goals are most likely to motivate people toward higher performance when they are accepted and there is commitment to them.


�Goal setting and MBO.– Management by objectives (MBO) is a process

of joint goal setting between a supervisor and a subordinate.

– MBO is consistent with the goal setting


– MBO is consistent with the goal setting guidelines derived from the Locke and Latham model.

– MBO establishes performance goals consistent with higher level work unit and organizational objectives.




� Potential problems with MBO.– Too much paperwork. in documenting goals and

accomplishments.

– Too much emphasis on:


– Too much emphasis on:• Goal-oriented rewards and punishments.

• Top-down goals.

• Goals that are easily stated in objective terms.

• Individual goals instead of group goals.

– MBO may need to be implemented organization-wide.

Study Question 2: What is performance appraisal?

�Performance appraisal.

– Helps both the manager and subordinate

maintain the organization-job-employee


maintain the organization-job-employee

characteristics match

– The process of systematically evaluating

performance and providing feedback upon

which performance adjustments can be made.


�Functions of performance appraisal.– Define the specific job criteria against which

performance will be measured.


performance will be measured.

– Measure past job performance accurately.

– Justify rewards, thereby differentiating between high and low performance.

– Define ratee’s needed development experiences.


�Two general purposes of good

performance appraisal.

– Evaluation.


– Evaluation.

• Concerned with such issues as promotions,

transfers, terminations, and salary increases.

– Feedback and development.

• Let workers know their status relative to firm’s

expectations and performance objectives.


�Who does the performance appraisal?

– Traditionally done by ratee’s immediate superior.

People other than immediate superior may


– People other than immediate superior may have better information on certain aspects of ratee’s performance.

– 360-degree evaluation provides appraisal information from multiple perspectives.


�Performance appraisal dimensions and

standards.

– Output measures.


– Output measures.

• Quantity of work output.

• Quality of work output.

– Activity measures.

• Behavioral measures that are typically obtained

from the evaluator’s observation and rating.


�Comparative methods of performance appraisal.– Ranking.

• Raters rank order people from best to worst.


• Raters rank order people from best to worst.

– Paired comparisons.• Raters compare each person with every other

person.

– Forced distribution.• Raters place a specific proportion of employees

into each performance category.


� Absolute methods of performance appraisal.

– Graphic rating scales.

• Raters assign scores on a list of dimensions related

to high performance outcomes in a given job.


to high performance outcomes in a given job.

– Critical incident diary records.

• Rater records incidents of unusual success or

failure in a given performance aspect.

– Behaviorally anchored rating scales (BARS).

• Rater identifies observable job behaviors.


� Absolute methods of performance appraisal

(cont.).

– Behavioral observation scale (BOS).


• Rater rates each observable job behavior on a five-

point frequency scale.

– Management by objectives.

• Jointly established goals used as standards against

which the subordinate’s performance is evaluated.


� To be meaningful, an appraisal system must be:

– Reliable — provide consistent results across time.

– Valid — actually measure people on relevant job


– Valid — actually measure people on relevant job

content.

� Measurement errors can threaten the reliability or

validity of performance appraisals.


� Measurement errors in performance appraisal.– Halo errors.

• Raters evaluate on several different dimensions and give a similar rating for each dimension.


give a similar rating for each dimension.

– Leniency errors.• Raters tend to give everyone relatively high

ratings.

– Strictness errors.

• Raters tend to give everyone relatively low ratings.


� Measurement errors in performance appraisal (cont.).– Central tendency errors.

• Raters lump everyone together around the average


• Raters lump everyone together around the average or middle.

– Low differentiation errors .• Raters restrict themselves to a small part of the

rating scale.• Examples include leniency, strictness, and central

tendency errors.


� Measurement errors in performance appraisal (cont.).– Recency errors.

• Raters allow recent events to exercise undue influence on ratings.


influence on ratings. – Personal bias errors.

• Raters let personal biases, such as stereotypes, unduly influence the ratings.

– Cultural bias errors.• Raters allow cultural differences of employees to

influence the performance appraisal.


� Ways to reduce rating errors in performance appraisals.– Training raters to understand the evaluation process

and recognize errors.


and recognize errors.– Ensuring that raters observe ratees on an ongoing

basis.– Not having the rater evaluate too many ratees.– Ensuring the clarity and adequacy of performance

dimensions and standards.– Avoiding terms that have different meanings for

different raters.


�Guidelines for ensuring the legality of performance appraisal systems.– Base appraisal on job requirements as

reflected in performance standards.


reflected in performance standards.– Ensure that employees clearly understand the

performance standards.– Use clearly defined dimensions.– Use behaviorally-based dimensions supported

by observable evidence.


�Guidelines for ensuring the legality of performance appraisal systems (cont.).– Avoid abstract trait names.


– Ensure that scale anchors are brief and logically consistent.

– Ensure that the system is valid and psychometrically sound.

– Provide an appeal mechanism to handle appraisal disagreements.

Study Question 3: What are compensation and rewards?

�Pay as an extrinsic reward.– Pay can help organizations attract and retain

highly capable workers, and help satisfy and motivate these workers.


motivate these workers.– High levels of job performance must be

viewed as the path through which high pay can be achieved.

– Merit pay bases an individual’s salary or wage increase on the person’s performance.


�Pay as an extrinsic reward (cont.).– Merit pay should be based on realistic and

accurate measures of individual work


accurate measures of individual work performance.

– Some people argue that merit pay plans ignore the high degree of task interdependence among employees.


� Creative pay practices.– Skill-based pay.

• Rewards people for acquiring and developing job-relevant skills.


relevant skills.– Gain-sharing plans.

• Give workers an opportunity to share in productivity gains through increased earnings.

– Profit-sharing plans.• Reward employees based on the entire

organization’s performance


� Creative pay practices (cont.).– Employee stock ownership plans (ESOPs).

• Give company stock to employees or allow them to purchase it at a price below market value


purchase it at a price below market value– Lump-sum pay increases.

• Provide wage or salary increase in one or more lump-sum payments.

– Flexible benefit plans.• Allow workers to select benefits according to their

individual needs.

Study Question 4: What are human resource development and person-job fit?

�Human resource development (HRD) and the person-job fit.– HRD and the person-job fit are key

contributing activities in performance


contributing activities in performance management and rewards.

– Human resource strategic planning provides the foundation for HRD and the person-job fit.

– Staffing, training, and career planning and development are important functions in HRD and achieving a person-job fit.


�Job analysis.– The process and procedures used to collect

and classify information about tasks the


and classify information about tasks the organization needs to complete.

– Identifies the worker characteristics needed to perform the job.

– Forms the basis for a job description and job specifications.


� Recruitment.– The process of attracting the best qualified individuals

to apply for a given job.

– Typical recruitment steps.


– Typical recruitment steps.• Advertisement of a position vacancy.

• Preliminary contact with potential job candidates.

• Preliminary screening to obtain a pool of candidates.

– Recruitment approaches are external or internal.

– Realistic job previews.


�Selection.– A series of steps from initial applicant

screening to final hiring of the new employee.– Selection process.


– Selection process.• Completing application materials.• Conducting an interview.• Completing any necessary tests.• Doing a background investigation.• Deciding to hire or not to hire.


�Socialization.– Process that adapts employees to the

organization’s culture.

– Occurs during and after completion of the


– Occurs during and after completion of the staffing process.

– Phases of socialization.• Anticipatory socialization.

• Encounter.

• Change and acquisition.


�Training.– A set of activities that provides the

opportunity to acquire and improve job-related skills.


skills.– Types of training.

• On-the-job training involves job instruction while performing the job in the actual workplace.

• Off-the-job training commonly involves lectures, videos, and simulations, and increasingly is done through e-training.




� Adult life cycle and career stages.– The different problems and prospects of the adult life

cycle affect people’s work and careers. – Career stages reflect the different responsibilities and

achievements associated with people’s working lives.


achievements associated with people’s working lives.– Life cycle and career stages.

• Entry and establishment or the provisional adulthood stage.

• Advancement or the first adulthood stage.• Maintenance, withdrawal, and retirement or the

second adulthood stage.

.


�What is the nature of groups in

organizations?

�What are the stages of group development?


�What are the stages of group development?

�What are the foundations of group

performance?

�How do groups make decisions?

Study Question 1: What is the nature of groups in organizations?

�A group is a collection of two or more people who work with one another regularly to achieve common goals. In a true group, members are mutually


� In a true group, members are mutually dependent on one another and interact with one another.

�Hot groups thrive in conditions of crisis and competition.


� Effective groups achieve high levels of:– Task performance.

• Members attain performance goals regarding quantity, quality, and timeliness of work results.


quality, and timeliness of work results.

– Members satisfaction.• Members believe that their participation and experiences are

positive and meet important personal needs.

– Team viability.• Members are sufficiently satisfied to continue working

together on an ongoing basis.


�How groups help organizations– Groups are good for people.

– Groups can improve creativity.


– Groups can improve creativity.

– Groups can make better decisions.

– Groups can increase commitments to action.

– Groups help control their members.

– Groups help offset large organization size.


�Situations in which groups are superior to individuals.– When there is no clear expert in a particular


– When there is no clear expert in a particular problem or task.

– When problem solving can be handled by a division of labor and the sharing of information.

– When creativity and innovation are needed.


� Potential benefits for group members.– People learn from each other and share job skills and

knowledge.

– Groups are important sources of need satisfaction for


– Groups are important sources of need satisfaction for their members.

– Members can provide emotional support for each other in times of crisis or pressure.

– Members’ contributions can help them experience self-esteem and personal involvement.


�Social loafing.– The tendency of people to work less hard in a

group than they would individually.


group than they would individually.

– Reasons for social loafing.• Individual contributions are less noticeable in the

group context.

• Some individuals prefer to see others carry the workload.


�Ways of preventing social loafing.

– Define member roles and tasks to maximize individual interests.


– Raise accountability by identifying individuals’ performance contributions to the group.

– Link individual rewards to performance contributions to the group.


�Social facilitation.

– The tendency for a person’s behavior to be

influenced by the presence of others.


influenced by the presence of others.

– Positively affects performance when a person

is proficient on the task.

– Negatively affects task performance when the

task is not well-learned.

Study Question 1: What is the nature of groups in organizations?�Formal groups.

– Officially designated to serve a specific organizational purpose.

– The head of a formal group is responsible for


– The head of a formal group is responsible for the group’s performance and serves a “linking-pin” role.

– May be permanent or temporary.• Permanent work groups are command

groups.• Temporary work groups are task groups.


�Types of formal groups.– Cross-functional teams or task forces.

• Engage in special problem-solving efforts drawing on input of the functional areas.


drawing on input of the functional areas.– Project teams.

• Formed to complete a specific task with a well-defined end point.

– Virtual group.• Members work together via computers.


� Informal groups.

– Emerge without being officially designated by

the organization.


the organization.

– Types of informal groups.

• Friendship groups.

• Interest groups.


�Effects of informal groups.

– Can help people get their jobs done.

– Can speed up workflow by supplementing


– Can speed up workflow by supplementing formal lines of authority.

– Can satisfy needs that are thwarted or unmet by the formal group.

– Can provide members with social satisfaction, security, and a sense of belonging.

Study Question 2: What are the stages of group development?



�Forming stage.

– Initial entry of members to a group.

– Member challenges.


– Member challenges.• Getting to know each other.

• Discovering what is considered acceptable behavior.

• Determining the group’s real task.

• Defining group rules.


�Storming stage.– A period of high emotionality and tension

among group members.

– Member challenges.


– Member challenges.• Hostility and infighting.• Formation of coalitions and cliques.• Clarification of members’ expectations.• Giving attention to obstacles to group goals.• Understanding one another’s interpersonal styles.• Finding ways to accomplish group goals while

satisfying individual needs.


�Norming stage.– The point at which the group really begins to

come together as a coordinated unit.


come together as a coordinated unit.

– Member challenges.• Holding group together by maintaining a positive

balance.

• Letting the desire for group harmony obscure group problems.

• Being mistaken about reaching ultimate maturity .


�Performing stage.– Marks the emergence of a mature, organized,

and well-functioning group.– Member challenges.


– Member challenges.• Meeting complex tasks and conflicts in creative

ways.• Being motivated by group goals and achieving

satisfaction.• Continuing to improve relationships and

performance.• Adapting to changing opportunities and demands.




�Adjourning stage.

– A well-integrated group is:


• Able to disband when its work is finished.

• Willing to work together in the future.

– Particularly important for temporary groups.

Study Question 3: What are the foundations of group performance?



�Tasks.

– Technical demands of a task.

• Routineness, difficulty, and information


• Routineness, difficulty, and information

requirements.

– Tasks that are complex in technical demands

require unique solutions and more information

processing.


�Tasks (cont.).

– Social demands of a task.

• Relations, ego involvement, and controversies over


• Relations, ego involvement, and controversies over

ends and means.

– Tasks that are complex in social demands

involve difficulties in reaching agreement on

goals or methods for accomplishing them.

Study Question 3: What are the foundations of group performance?� Goals, rewards, and resources.

– Long-term performance relies on:• Appropriate goals.

• Well-designed reward systems.


• Well-designed reward systems.

• Adequate resources.

– A group’s performance can suffer when:• Goals are unclear, unchallenging, or arbitrarily imposed.

• Goals are focused too much on individuals.

• Adequate budgets, facilities, good work methods and procedures, and the best technologies are not available.


�Technology.

– Provides the means to get work accomplished.


– The right technology must be available for the

task at hand.

– Workflow technology can affect the way

group members interact.


�Membership characteristics.– A group must have the right skills and

competencies available for task performance and problem solving.


and problem solving.• Homogeneous groups may not perform well if they

lack the requisite experiences, skills, and competencies.

• Heterogeneous groups may perform well if they effectively utilize a variety of experiences, skills, and competencies.


�Membership characteristics (cont.).

– Diversity-consensus dilemma.

• Increasing diversity among group members makes


• Increasing diversity among group members makes

it harder for group members to work together, even

though the diversity itself expands the skills and

perspectives available for problem solving.


�Membership characteristics (cont.).– FIRO-B theory.

• Identifies individual differences in how people relate to one another in groups.


relate to one another in groups.• Based on needs to express and receive feelings of

inclusion, control, and affection.• Groups whose members have compatible

characteristics are likely to be moreeffective.• Groups whose members have incompatible

characteristics are likely to be lesseffective.


�Membership characteristics (cont.).– Status.

• A person’s relative rank, prestige, or standing in a group.


group.

– Status congruence.• Occurs when a person’s position within the group

is equivalent in status to positions held outside the group.

• When status incongruence is present, problems will likely occur.


�Group size.– Can make a difference in a group’s

effectiveness. – As group size increases, performance and


– As group size increases, performance and member satisfaction increase up to a point.

– As a group size continues to grow, communication and coordination problems often set in, and performance and satisfaction may decline.

– Problem-solving groups should have 5 to 7 members.


�Group dynamics concern the forces operating within groups that affect the way members relate to and work with one


members relate to and work with one another.

�From a systems perspective, the throughputs for a group or team are group dynamics.


�What goes on within groups.

– Work group behaviors.

Required behaviors — those that are formally


• Required behaviors — those that are formally

defined and expected by the organization.

• Emergent behaviors — those that group members

display in addition to what the organization asks of

them.


�What goes on within groups.

– Member relationships.• Activities — the things people do or the actions


• Activities — the things people do or the actions they take.

• Interactions — interpersonal communications and contacts.

• Sentiments — the feelings, attitudes, beliefs, or values held by group members.

Study Question 3: What are the foundations of group performance?�What goes on between groups.

– Intergroup dynamics.• The dynamics that take place between two or more

groups.


groups.

– Ways to achieve positive intergroup dynamics.• Refocusing members on a common enemy or goal.• Negotiating directly.• Training members to work more cooperatively.• Refocusing rewards on contributions to the total

organization and how much groups help each other.



Study Question 4: How do groups make decisions?� How groups make decisions.

– Decision by lack of response.• One idea after another is suggested without any discussion-

taking place; when the group finally accepts the idea, all others have been bypassed and discarded by simple lack of


others have been bypassed and discarded by simple lack of response rather than by critical evaluation.

– Decision by authority rule.• The chairperson, manager, or leader makes a decision for the

group.

– Decision by minority rule.• Two or three people are able to dominate or “railroad” the

group into making a decision to which they agree.

Study Question 4: How do groups make decisions?� How groups make decisions (cont.).

– Decision by majority rule.• Formal voting may take place, or members may be polled to

find the majority viewpoint.


find the majority viewpoint.

– Decision by consensus.• Discussion leads to one alternative being favored by most

members and the other members agree to support it.

– Decision by unanimity.• All group members agree totally on the course of action to be

taken.

Study Question 4: How do groups make decisions?�Potential advantages of group decision

making.– More knowledge and expertise is applied to

solve the problem.


solve the problem.– A greater number of alternatives are

examined.– The final decision is better understood and

accepted by all group members.– More commitment among all group members

to make the final decision work.

Study Question 4: How do groups make decisions?

�Potential disadvantages of group decision making.

– Individuals may feel compelled to conform to


– Individuals may feel compelled to conform to the apparent wishes of the group.

– The group’s decision may be dominated by one individual or a small coalition.

– Group decisions usually take longer to make.

Study Question 4: How do groups make decisions?�Ways to avoid groupthink.

– Assign the role of critical evaluator to each group member.

– Have the leader avoid seeming partial to one


– Have the leader avoid seeming partial to one course of action.

– Create subgroups that each work on the same problem.

– Have group members discuss issues with outsiders and report back.

Study Question 4: How do groups make decisions?�Ways to avoid groupthink (cont.).

– Invite outside experts to observe and react to group processes.

– Assign someone to be a “devil’s advocate” at


– Assign someone to be a “devil’s advocate” at each meeting.

– Write alternative scenarios for the intentions of competing groups.

– Hold “second-chance” meetings after consensus is apparently achieved.


�How to improve group decisions.– Brainstorming.

• Group members actively generate as many ideas and alternatives as possible, and they do so


and alternatives as possible, and they do so relatively quickly and without inhibitions.

– Nominal group technique.• Puts people in small groups of six to seven

members and asks everyone to respond individually and in writing to a “nominal” question.


�How to improve group decisions (cont.).

– Delphi technique.

• Involves generating decision-making alternatives


• Involves generating decision-making alternatives

through a series of survey questionnaires.

– Computer-mediated decision making.

• Group decision making takes place across great

distances with the aid of group decision support

systems.


� What is a the nature of teams and teamwork?

�What is team building?


�What is team building?

�How does team building improve performance?

�How do teams contribute to the high-performance workplace?

Study Question 1: What is the nature of team and teamwork?

�A team is a small group of people with complementary skills, who work actively together to achieve a common purpose for


together to achieve a common purpose for which they hold themselves collectively accountable.

�Teams are one of the major forces behind revolutionary changes in contemporary organizations.


�Types of teams.– Teams that recommend things.

• Established to study specific problems and recommend solutions to them.


recommend solutions to them.

– Teams that run things.• Have formal responsibility for leading other

groups.

– Teams that make or do things.• Functional groups that perform ongoing tasks.


�Teamwork occurs when group members

actively work together in such a way that


actively work together in such a way that

all their respective skills are well utilized

to achieve a common purpose.


�Characteristics of high performance teams.

– They have strong core values.

– They turn a general sense of purpose into


– They turn a general sense of purpose into

specific performance objectives.

– They have the right mix of skills.

– They possess creativity.


� Characteristics of teams with homogeneous

membership.

– Members are similar with respect to such variables as


– Members are similar with respect to such variables as

age, gender, race, experience, ethnicity, and culture.

– Members can quickly build social relations and

engage in the interactions needed for teamwork.

– Homogeneity may limit the team in terms of ideas,

viewpoints, and creativity.


� Characteristics of teams with heterogeneous membership.– Members are diverse in demography, experiences, life


styles, and cultures, among other variables.

– Diversity can help improve team problem solving and increase creativity.

– Diversity among team members may create performance difficulties early in the team’s life or stage of development.


� Characteristics of teams with heterogeneous membership (cont.).– Enhanced performance potential is possible once


short-run struggles are resolved.

– Diversity can provide great advantages for high-performance organizations.

Study Question 2: What is team building?

� Work groups and teams must master challenges as they pass through the various stages of group development.


� Team building is a sequence of planned activities designed to gather and analyze data on the functioning of a group and to initiate changes designed to improve teamwork and increase group effectiveness.




�Approaches to team building.– Formal retreat approach.

• Team building occurs during an offsite retreat.

Continuous improvement approach.


– Continuous improvement approach.• The manager, team leader, or members take

responsibility for ongoing team building.

– Outdoor experience approach.• Members engage in physically challenging

situations that require teamwork.

Study Question 3: How does team building improve performance?

�New members are concerned about issues of:– Participation.


– Participation.

– Goals.

– Control.

– Relationships.


�Behavior profiles of coping with individual entry problems.

– Tough battler.


– Tough battler.

– Friendly helper.

– Objective thinker.


� Task and maintenance leadership.

– Sustained high performance requires meeting both

task needs and maintenance needs.


task needs and maintenance needs.

– High-performance teams require distributed

leadership.

– Distributive leadership is the sharing among team

members of the responsibilities for task and

maintenance contributions.




� Groups members should avoid the following disruptive behaviors:– Being overly aggressive toward other members.


– Withdrawing and refusing to cooperate with others.

– Horsing around when there is work to be done.

– Using the group as a forum for self-confession.

– Talking too much about irrelevant matters.

– Trying to compete for attention and recognition.


�Roles and role dynamics.– A role is a set of expectations associated with

a job or position on a team.– Role ambiguity — occurs when a person is


– Role ambiguity — occurs when a person is uncertain about his/her role.

– Role overload — occurs when too much is expected and the person feels overwhelmed with work.

– Role underload — occurs when too little is expected and the person feels underutilized.


�Roles and role dynamics (cont.).– Role conflict — occurs when a person is

unable to meet conflicting expectations.


unable to meet conflicting expectations.

– Forms of role conflict.• Intrasender role conflict.

• Intersender role conflict.

• Person-role conflict.

• Interrole conflict.




�Norms represent beliefs about how group

or team members are expected to behave.

�Norms are rules or standards of conduct.


�Norms are rules or standards of conduct.

�Managers and leaders should help their

groups adopt positive norms that support

organizational goals.


�Key norms that can have positive or negative implications.– Performance norms.


– Ethics norms.– Organizational and personal pride norms.– High-achievement norms.– Support and helpfulness norms.– Improvement and change norms.


� Cohesiveness is the degree to which members are attached to and motivated to remain a part of the team

� High team cohesiveness occurs when:


� High team cohesiveness occurs when:– Members are similar in age, attitudes, needs, and backgrounds.– Group size is small.– Members respect each others’ competencies.– Members agree on common goals.– Members work on interdependent tasks.– Groups are physically isolated from others. – Groups experience performance success or crisis.





Study Question 4: How do teams contribute to the high-performance workplace?

�Problem-solving teams.– Employee involvements teams include a wide

variety of teams whose members meet regularly to collectively examine important


regularly to collectively examine important workplace issues.

– Quality circle.• A special type of employee involvement team.• Team meets periodically to address problems

relating to quality, productivity, or cost.


�Cross-functional teams.

– Consist of members representing different functional departments or work units.


functional departments or work units.

– Used to overcome functional silos problem.

– Used to solve problems with a positive combination of functional expertise and integrative systems thinking.


�Advantages of virtual teams.– Cost-effectiveness and speed where members

are unable to meet easily face-to-face.– Computer power fulfills typical team needs for


– Computer power fulfills typical team needs for information processing and decision making.

– Communication is possible among people separated by great distances.

– Interaction and decision making are focused on facts and objective information rather than emotional considerations.

– .


�Disadvantages of virtual teams.

– The lack of personal contact between team


– The lack of personal contact between team

members.

– Group decisions are made in a limited social

context.




�Advantages of self-managing teams.– Productivity and quality improvements.

– Production flexibility and faster response to


– Production flexibility and faster response to technological change.

– Reduced absenteeism and turnover.

– Improved work attitudes and quality of work life.


� Disadvantages of self-managing teams.

– Structural changes in job classifications and

management levels eliminate the need for first-line


supervisors.

– Managers must learn to deal with teams rather than

individuals.

– Supervisors who are displaced by self-managing

teams may feel threatened.


�What is leadership and how does it differ from management?

�What are situational contingency approaches to leadership ?


approaches to leadership ?�What are attributional approaches to

leadership?�What are some emerging leadership

perspectives and why are they especially important in today’s organizations?

Study Question 1: What is leadership and how does it differ from management?

� Management promotes stability or enables the

organization to run smoothly.

� Leadership promotes adaptive or useful changes.


� Leadership promotes adaptive or useful changes.

� Persons in managerial positions may be involved

with both management and leadership.

� Both management and leadership are needed for

organizational success.


�Leadership is a special case of interpersonal influence that gets an individual or group to do what the leader or


individual or group to do what the leader or manager wants done.

�Forms of leadership.

– Formal leadership.

– Informal leadership.


�Approaches to leadership.

– Trait and behavioral perspectives.


– Situational contingency perspectives.

– Attributional perspectives.

– New leadership perspectives.


�Trait theories.– Assume that traits play a key role in:

• Differentiating between leaders and nonleaders.


• Differentiating between leaders and nonleaders.

• Predicting leader or organizational outcomes.

– Great person-trait approach.• Earliest approach in studying leadership.

• Tried to determine the traits that characterized great leaders.





�Behavioral theories.– Assume that leader behaviors are crucial for

explaining performance and other organizational outcomes.


organizational outcomes. – Focus on leader behaviors rather than traits. – Major behavioral theories.

• Michigan leadership studies.• Ohio State leadership studies.• Leadership Grid.• Leader-Member Exchange (LMX) theory.


�Michigan leadership studies.– Employee-centered supervisors.

• Place strong emphasis on subordinate’s welfare.


• Place strong emphasis on subordinate’s welfare.

– Production-centered supervisors.• Place strong emphasis on getting the work done.

– Employee-centered supervisors have more productive work groups than production-centered supervisors.


�Ohio State leadership studies.– Consideration.

• Concerned with people’s feelings and making things pleasant for the followers.


things pleasant for the followers.

– Initiating structure.• Concerned with defining task requirements and

other aspects of the work agenda.

– Effective leaders should be high on both consideration and initiating structure.


�Leadership Grid.– Developed by Robert Blake and Jane Mouton.

– Built on dual emphasis of consideration and


– Built on dual emphasis of consideration and initiating structure.

– A 9 x 9 Grid (matrix) reflecting levels of concern for people and concern for task.

• 1 reflects minimum concern.

• 9 reflects maximum concern.


�Leadership Grid (cont.).– Five key Grid combinations.

• 1/1 — low concern for production, low concern for people.


people.• 1/9 — low concern for production, high concern

for people.• 9/1 — high concern for production, low concern

for people.• 5/5 — moderate concern for production, moderate

concern for people.• 9/9 — high concern for production, high concern

for people.


�Leader-Member Exchange (LMX) theory.– Focuses on the quality of the working

relationship between leaders and followers.


relationship between leaders and followers.

– LMX dimensions determine followers’ membership in leader’s “in group” or “out group.”

– Different relationships with “in group” and “out group.”

Study Question 2: What are situational contingency approaches to leadership?

� Leader traits and behaviors can act in conjunction with situational contingencies.

� The effects of leader traits are enhanced by their relevance to situational contingencies.


relevance to situational contingencies.� Major situational contingency theories.

– Fiedler’s leadership contingency theory.– Fiedler’s cognitive resource theory.– House’s path-goal theory of leadership.– Hersey and Blanchard’s situational leadership model.

Study Question 2: What are the situational contingency approaches to leadership?

�Key variables in Fiedler’s contingency model.– Situational control.


• The extent to which a leader can determine what his or her group is going to do as well as the outcomes of the group’s actions and decisions.

• Is a function of:– Leader-member relations.– Task structure.– Position power.


�Key variables in Fiedler’s contingency

model (cont.).

– Least preferred co-worker (LPC) score reflects


– Least preferred co-worker (LPC) score reflects

a person’s leadership style.

• High-LPC leaders have a relationship-motivated

style.

• Low-LPC leaders have a task-motivated style.




�Fiedler’s cognitive resource theory.– A leader’s use of directive or nondirective

behavior depends on:• The leader’s or subordinate group members’ ability

or competency.


or competency.• Stress.• Experience.• Group support of the leader.

– Leader directiveness is most helpful for performance when the leader is competent, relaxed, and supported.


�House’s path-goal theory of leadership.

– Rooted in the expectancy model of motivation.


– Emphasizes how a leader influences

subordinates’ perceptions of both work goals

and personal goals and the links, or paths,

found between these two sets of goals.




�Path-goal theory predictions.– Directive leadership will have a positive

impact on subordinates when tasks are ambiguous and the opposite effect when tasks


ambiguous and the opposite effect when tasks are clear.

– Supportive leadership will increase the satisfaction of subordinates who work on tasks that are highly repetitive, unpleasant, stressful, or frustrating.


�Path-goal theory predictions (cont.).– Achievement-oriented leadership will

encourage subordinates to strive for higher performance standards and to have more


performance standards and to have more confidence in their ability to meet challenging goals when subordinates are working at ambiguous, nonrepetitive tasks.

– Participative leadership will promote satisfaction on nonrepetitive tasks that allow for the ego involvement of subordinates.





Study Question 3: What are attributional approaches to leadership?

� Attribution theory provides a competing

perspective to the traditional leadership theory

assumption that leadership and its substantive


effects can be identified and measured

objectively.

� Attribution theory suggests that leadership is

influenced by attempts to understand causes of

and assess responsibilities for behavior.


�Leadership prototypes.– People’s mental image of what a model leader

should look like.– Mix of specific and general characteristics.


– Mix of specific and general characteristics.– Prototypes may differ by country and national

culture.– The closer that a leader’s behavior matches the

prototype held by the followers, the more favorable the leader’s relations and key outcomes.


�Exaggeration of the leadership difference.

– Top leaders of organizations have little impact on profits and effectiveness compared to


on profits and effectiveness compared to environmental and industry forces.

– Much of the impact of top leaders is symbolic.

– The romance of leadership refers to people attributing romantic, almost magical, qualities to leadership.

Study Question 4: What are some emerging leadership perspectives and why are they especially important in today’s organizations?

�Charismatic approaches to leadership.– Charismatic leaders, by force of their personal

abilities, can have a profound and


abilities, can have a profound and extraordinary effect on followers.

– Characteristics of charismatic leaders include:• High need for power.

• High feelings of self-efficacy.

• Conviction in the moral rightness of their beliefs.


�Dark side versus bright side of charismatic leadership.– Dark side.


– Dark side.• Emphasizes personalized power.

• Leaders focus on themselves.

– Bright side.• Emphasizes socialized power.

• Leaders empower followers.


� Conger and Kanungo’s three-stage charismatic

leadership model.

Stage 1: the leader critically evaluates the status quo.


– Stage 1: the leader critically evaluates the status quo.

– Stage 2: the leader formulates and articulates future

goals and a idealized future vision.

– Stage 3: the leader shows how the goals and vision

can be achieved.




�Transactional leadership.– Involves leader-follower exchanges necessary

for achieving routine performance that is agreed upon by leaders and followers.


agreed upon by leaders and followers.– Leader-follower exchanges involve:

• Use of contingent rewards.• Active management by exception.• Passive management by exception.• Abdicating responsibilities and avoiding decisions.


�Transformational leadership.– Leaders broaden and elevate followers’

interests, generate awareness and acceptance of the group’s mission, and stir followers to


of the group’s mission, and stir followers to look beyond self-interests.

– Dimensions of transformational leadership.• Charisma.• Inspiration.• Intellectual stimulation.• Individualized consideration.


� Leadership in self-managing work teams.– Leaders provide resources or act as liaisons with other

units but without the trappings of authority associated with traditional first-line supervisors.


with traditional first-line supervisors.

– Conditions for creating and maintaining team performance.

• Efficient, goal-directed effort.

• Adequate resources.

• Competent, motivated performance.

• A productive, supportive climate.

• Commitment to continuous improvement and adaptation.


�Can people be trained in the new leadership?

– People can be trained to adopt new leadership


– People can be trained to adopt new leadership approaches.

– Leaders can devise improvement programs to address their weaknesses and work with trainers to develop their leadership skills.

– Leaders can be trained in charismatic skills.


� Is new leadership always good?– Not always good.

– Dark-side charismatics can have negative effects on followers.


effects on followers.

– Not always needed.

– Needs to be used in conjunction with traditional leadership.

– Applies at all levels of organizational leadership.


�What are power and influence in an

organization?

�How are power, obedience, and formal


�How are power, obedience, and formal

authority intertwined in an organization?

�What is empowerment?

�What is organizational politics?

Study Question 1: What are power and influence in an organization?

�Power.– The ability to get someone to do something

you want done.


you want done.

– The ability to make things happen in the way you want.

� Influence.– Expressed by others’ behavioral response to

your exercise of power.


� Position power derives from a person’s position in the organizational hierarchy.

� Types of position power.


– Reward power.

– Coercive power.

– Legitimate power.

– Process power.

– Information power.

– Representative power.


� Reward power.

– The extent to which a manager can use extrinsic and

intrinsic rewards to control other people.


intrinsic rewards to control other people.

� Coercive power.

– The extent to which a manager can deny desired

rewards and administer punishment to control other

people.


� Legitimate power.

– The extent to which a manager can use subordinates’

internalized values or beliefs that the boss has the


“right of command” to control other people.

� Process power.

– The control over methods of production and analysis

that a manager has due to being in a position to

influence how inputs are transformed into outputs.


� Information power.

– The access to and/or control of information. .

� Representative power.


� Representative power.

– The formal right conferred by the firm to speak for a

potentially important group composed of individuals

across departments or outside the firm.


�Personal power derives from individual

sources.


�Types of personal power.

– Expert power.

– Rational persuasion.

– Referent power.

Study Question 1: What are power and influence in an organization?� Expert power.

– The ability to control another person’s behavior

through the possession of knowledge, experience, or

judgment that the other person does not have but


judgment that the other person does not have but

needs.

� Rational persuasion.

– The ability to control another person’s behavior by

convincing the other person of the desirability of a

goal and a reasonable way of achieving it.


� Referent power.

– The ability to control another’s behavior because the

person wants to identify with the power source.


person wants to identify with the power source.




�Ways to build position power.

– Demonstrating work unit relevance to organizational goals and needs.


organizational goals and needs.

– Increasing task relevance of one’s own activities and work unit’s activities.

– Attempting to define tasks so they are difficult to evaluate.

Study Question 1: What are power and influence in an organization?�Ways to build personal power.

– Building expertise.• Advanced training and education, participation in

professional associations, and project involvement.


professional associations, and project involvement.

– Learning political savvy.• Learning ways to negotiate, persuade, and

understand goals and means that others accept.

– Enhancing likeability.• Pleasant personality characteristics, agreeable

behavior patterns, and attractive personal appearance.


�Ways that managers increase the visibility of their job performance.– Expanding contacts with senior people.


– Expanding contacts with senior people.

– Making oral presentations of written work.

– Participating in problem-solving task forces.

– Sending out notices of accomplishment.

– Seeking opportunities to increase name recognition.


�Controlling decision premises.– Executives attempt to control, or at least

influence, decision premises.


influence, decision premises.

– A decision premise is a basis for defining the problem and for selecting among alternatives.

– Executives who want to increase their power will make their goals and needs clear and bargain effectively.


�Common techniques for exercising relational influence.– Reason.– Friendliness.


– Friendliness.– Coalition.– Bargaining.– Assertiveness.– Higher authority.– Sanctions.

Study Question 2: How are power, obedience, and formal authority intertwined in an organization?

� Important practical issues in the exercise of power and formal authority.

– Why should subordinates respond to a


– Why should subordinates respond to a manager’s authority (or “right to command”)?

– Given that subordinates are willing to obey, what determines the limits of obedience?


� The Milgram experiments.– Designed to determine the extent to which people

obey the commands of an authority figure, even if they believe they are endangering the life of another


they believe they are endangering the life of another person.

– The results indicated that the majority of the experimental subjects would obey the commands of the authority figure.

– Basic conclusion was that people tend to comply with and be obedient to authority.


� For a directive from a superior to be accepted as authoritative, the subordinate:– Can and must understand it.


– Must feel mentally and physically capable of carrying it out.

– Must believe that it is consistent with the organization’s purpose.

– Must believe that it is consistent with his or her personal interests.


�Zone of indifference.– In exchange for certain inducements,

subordinates recognize the authority of the organization and its managers to direct their


organization and its managers to direct their behavior in certain ways.

– A zone of indifference is the range of authoritative requests to which a subordinate is willing to respond without subjecting the directives to critical evaluation or judgment.



Study Question 3: What is empowerment?

�Empowerment.

– The process by which managers help others to acquire and use the power needed to make decisions affecting themselves and their work.


decisions affecting themselves and their work.

– Provides the foundation for self-managing work teams and other employee involvement groups.

– Empowerment emphasizes the ability to make things happen.


�Changing position power.

– Moving power down the hierarchy alters the

existing pattern of position power.

– Changing this pattern raises the following


– Changing this pattern raises the following

important questions:

• Can “empowered” individuals give rewards and

sanctions based on task accomplishment?

• Has their new right to act been legitimized with

formal authority?


�Expanding the zone of indifference.

– Management needs to recognize the current

zone of indifference and systematically move


zone of indifference and systematically move

to expand it.

– Management should show how empowerment

will benefit people and provide the needed

inducement.

– .


�Power as an expanding pie.

– Employees need to be trained to expand their

power and their new influence potential.


power and their new influence potential.

– The key is to change from a view stressing

power over others to one emphasizing the use

of power to get things done.


�Power as an expanding pie.

– Clearer definition of roles and responsibilities

helps managers empower others.


– All mangers need to emphasize different ways

of exercising influence.

– Special support may be needed for individuals

to become comfortable.

Study Question 4: What is organizational politics?

�Machiavellian tradition of organizational politics.– Emphasizes self-interest and the use of

nonsanctioned means.


nonsanctioned means.– Organizational politics is defined as the

management of influence to obtain ends not sanctioned by the organization or to obtain sanctioned ends through nonsanctioned influence means.


�Alternate tradition of organizational politics.– Politics is a necessary function resulting from

differences in the self-interests of individuals.


differences in the self-interests of individuals.– Politics is the art of creative compromise

among competing interests.– Politics is the use of power to develop socially

acceptable ends and means that balance individual and collective interests.




�Subunit power.– Line units are typically more powerful than

are staff groups.– Units toward the top of the organizational


– Units toward the top of the organizational hierarchy are often more powerful than those toward the bottom.

– Power differentials are not as pronounced among units at or near the same level in an organization.


�Political actions for influencing lateral, intergroup relationships.– Workflow linkages.


– Workflow linkages.

– Service linkages.

– Advisory linkages.

– Auditing linkages.

– Approval linkages.


� Important aspects of corporate political strategy.

– Absence of a political strategy can be damaging.

– Corporate political strategy should be targeted toward


– Corporate political strategy should be targeted toward

turning the government from a regulator against

industry to a protector of it.

– Need to make decisions about when and how to get

involved in the public policy processes.


� Avoidance is quite common where the employee must risk being wrong or where actions may yield a sanction.

Common techniques for avoiding action and risk


� Common techniques for avoiding action and risk taking.– Working to the rules.

– Playing dumb.

– Depersonalization.

– Stalling.


� Common techniques for redirecting accountability and responsibility.– Passing the buck.

– Buffing (or rigorous documentation).


– Buffing (or rigorous documentation).

– Preparing a blind memo.

– Rewriting history.

– Redirecting.• Scapegoating.

• Blaming the problem on uncontrollable events.

• Escalating commitment.


� Defending turf.

– Defending turf is a time-honored tradition in most

large organizations.


large organizations.

– Defending turf results when:

• Managers seek to increase their power by expanding the jobs

their groups perform.

• Competing interests exist among various departments and

groups.


�Agency theory.

– An important power problem arises from the

separation of owners and managers.


separation of owners and managers.

– Managers are “agents” of the owners.

– Public corporations can function effectively

even though its managers are self-interested.


�Key arguments of agency theory.

– By protecting stockholder interests, all the

interests of society are served.


interests of society are served.

– Stockholders have a clear interest in greater

returns.

– Managers are self-interested and must be

controlled.


�Types of controls instituted for agents.

– Pay plan incentives that align the interests of

management and stockholders.


management and stockholders.

– The establishment of a strong, independent

board of directors.

– Stockholders with a large stake in the firm

taking an active role on the board.


� Resource dependencies.– The firm’s need for resources that are controlled by

others.

� The resource dependence of an organization


� The resource dependence of an organization increases as: – Needed resources become more scarce.

– Outsiders have more control over needed resources.

– There are fewer substitutes for a particular type of resource controlled by a limited number of outsiders.


� Organizational governance.– The pattern of authority, influence, and acceptable

managerial behavior established at the top of the organization.


– Organizational governance establishes the following:

• What is important.

• How issues will be defined.

• Who should and should not be involved in key choices

• Boundaries for acceptable implementation.


�Negative views of organizational governance.– Unbalanced organizational governance by

some United States corporations may limit


some United States corporations may limit their ability to manage global operations effectively.

– Organizational governance is too closely tied to the short-term interests of stockholders and the pay of the CEO.


� Positive views of organizational governance.– The governance of U.S. firms extends well beyond the

limited interests of the owners.

– Organization governance should be based on three


– Organization governance should be based on three ethical criteria.

– When the three ethical criteria cannot be fulfilled, the criterion of overwhelming factors should be invoked.

– Choosing to be ethical often involves considerable personal sacrifice.


� What is the nature of communication in

organizations?

� What are the essentials of interpersonal

communication?


communication?

� What are the barriers to effective

communication?

� What are current issues in organizational

communication?

Study Question 1: What is the nature of communication in organizations?



�Feedback and communication.– Feedback is the process through which the

receiver communicates with the sender by


receiver communicates with the sender by returning another message.

– Giving feedback often is associated with one or more persons communicating an evaluation of what another person has said or done.

– 360-degree feedback.


� Guidelines for effective constructive feedback.– Give feedback directly and in a spirit of mutual trust.

– Be specific, not general; use clear examples.

Give feedback when the receiver is most ready to


– Give feedback when the receiver is most ready to accept it.

– Be accurate; check validity with others.

– Focus on things that the receiver can control.

– Limit how much feedback the receiver gets at one time.

Study Question 1: What is the nature of communication in organizations?�Communication channels.

– Formal channels.• Follow the chain of command established by an

organization’s hierarchy of authority.


organization’s hierarchy of authority.

– Informal channels.• Do not follow an organization’s hierarchy of

authority.

• The grapevine is an informal channel through which rumors and unofficial information pass.


� Channel richness.

– The capacity of a communication channel to convey

information effectively.


information effectively.

– Richest channels — face-to-face communication.

– Moderately rich channels — telephone, electronic chat

rooms, E-mail, written memos, and letters.

– Leanest channels — posted notices and bulletins.


�Organizational communication is the specific process through which information moves and is exchanged throughout an


moves and is exchanged throughout an organization.

� Information flows:

– Through formal and informal structures.

– Downward, upward, and laterally.



Study Question 2: What are the essentials of interpersonal communication?

�Effective and efficient communication.

– Effective communication.

• The accuracy of communication.


• The accuracy of communication.

– Efficient communication.

• The cost of communication.

– Effectiveness does not guarantee efficiency or

vice versa.


� Nonverbal communication.– Occurs through facial expressions, body

position, eye contact, and other physical gestures.


gestures.– Gives clues to what a person is really thinking.– Two important aspects of nonverbal

communication.• Kinesics the study of gestures and body

postures. • Proxemics the study of how space is utilized.


�Active listening.

– Ability to listen well is a distinct asset.

– Everyone needs to develop good skills in


– Everyone needs to develop good skills in

active listening.

– Active listening is the ability to help the

source of a message say what he or she really

means.


�Guidelines for active listening.

– Listen for content.

– Listen for feelings.


– Listen for feelings.

– Respond to feelings.

– Note all cues.

– Reflect back.


�Cross-cultural communication.– Ethnocentrism.

• The tendency to believe that one’s culture and its values are superior to those of others.


values are superior to those of others.

– Cross-cultural communication challenges.• Language differences.• Use of gestures.

– One of the best ways to understand cultural differences is to learn some of the language.

Study Question 3: What are the barriers to effective communication?

�Physical distractions.

– Any aspect of the physical setting in which


communication takes place.

– Can interfere with communication

effectiveness.


�Semantic problems.

– Involves a poor choice or use of words.


– Involves a poor choice or use of words.

– Use the KISS principle of communication.

• “Keep it short and simple.”


�Mixed messages.

– Occur when a person’s words communicate

one thing while actions or body language


one thing while actions or body language

communicates another.

– Nonverbals add important insights in face-to-

face meetings.

Study Question 3: What are the barriers to effective communication?�Absence of feedback.

– One-way communication flows from sender to receiver only, with no direct and immediate feedback.


feedback.

– Two-way communication goes from sender to receiver and back again.

– Two-way communication is more effective than one-way communication.


� Status effects.– Status differences create potential communication

barriers between persons of higher and lower ranks .

– Mum effect.


– Mum effect.

• Occurs when people are reluctant to transmit bad news.

– Management by wandering around (MBWA).

• Getting out of the office to directly communicate with others as they do their jobs.

Study Question 4: What are current issues in organizational communication?

� Advances in information technologies enable organizations to:– Distribute information much faster.– Make more information available.


– Make more information available.– Allow broader and more immediate access to

information.– Encourage participation in the sharing and use of

information.– Integrate systems and functions, and use information

to link with the environment.


�Potential disadvantages of electronic communications.– Technologies are impersonal.


– Technologies are impersonal.

– Nonverbal communication is removed from situation.

– Can unduly influence the emotional aspects of communication.

– Information overload.


�Communication and social context.

– Mean and women are socialized into different communication styles.


communication styles.• Women are socialized to be more sensitive to

interpersonal relationships in communication.

• Men are socialized to be competitive, aggressive, and individualistic, which may cause communication problems.


�What is the decision-making process in

organizations?

�What are the useful decision-making

models?


models?

�How do intuition, judgment, and creativity

affect decision making?

Chapter 14 Study Questions (cont.)

�How do you manage the decision-making

process?

�What are some of the current issues in


decision making?

�How do you infuse ethics into the decision-

making process?

Study Question 1: What is the decision-making process in organizations?� Decision making is the process of choosing a

course of action for dealing with a problem or opportunity.

� Steps in systematic decision making.


� Steps in systematic decision making.– Recognize and define the problem or opportunity.

– Identify and analyze alternative courses of action, and estimate their effects on the problem or opportunity.

– Choose a preferred course of action.

– Implement the preferred course of action.

– Evaluate the results and follow up as necessary.

Study Question 1: What is the decision-making process in organizations?

� Certain decision environments.

– Exist when information is sufficient to predict the

results of each alternative in advance of

implementation.


implementation.

� Risk decision environments.

– Exist when decision makers lack complete certainty

regarding the outcomes of various courses of action,

but they are aware of the probabilities associated with

their occurrence.


� Uncertain decision environments.

– Exist when managers have so little information on

hand that they cannot even assign probabilities to

various alternatives and their possible outcomes.


various alternatives and their possible outcomes.

– Described as a rapidly changing setting in terms of:

• External conditions.

• The information technology requirements needed for

analyzing and making decisions.

• The people who influence problem and choice definitions.


�Uncertain decision environments (cont.).

– Can be described in terms of types of risks

encountered by the organization.


• Strategic risks are threats to overall business

success.

• Operational risks are threats inherent in the

technologies used to reach business success.

• Reputation risks are threats to a brand or to the

firm’s reputation


�Types of decisions.

– Programmed decisions.

• Involve routine problems that arise regularly and


• Involve routine problems that arise regularly and

can be addressed through standard responses.

– Nonprogrammed decisions.

• Involve nonroutine problems that require solutions

specifically tailored to the situation at hand.

Study Question 2:What are the usefuldecision-making models?



�Classical decision theory assumes the manager faces a clearly defined problem, knows all possible action alternatives and


knows all possible action alternatives and their consequences, and then chooses the optimum solution.

�Widespread application of classical decision theory is restricted by bounded rationality.


�Classical decision theory does not appear to fit well in the modern business world, though it can be used toward the bottom of many firms.


many firms.�Behavioral decision theory accepts the

notion of bounded rationality. It assumes the manager acts only in terms of what is perceived about a given situation, and then chooses a satisficing solution.


�The garbage can model.– A model of decision making that views

problems, solutions, participants, and choice situations as mixed together in the “garbage


situations as mixed together in the “garbage can” of the organization.

– The garbage can model highlights two important organizational facts of life.

• Different individuals may do choice making and implementation.

• Many problems go unsolved.


�Decision making realities.

– Decision making information may not be

available.


available.

– Bounded rationality and cognitive limitations

affect the way people define problems,

identify alternatives, and choose preferred

solutions.


�Decision making realities (cont.).

– Most decision making in organizations goes

beyond step-by-step rational choice.


beyond step-by-step rational choice.

– Decisions must be made under risk and

uncertainty.

– Decisions should be ethical.

Study Question 3: How do intuition, judgment, and creativity affect decision making?

� Intuition.

– The ability to know or recognize quickly and


readily the possibilities of a given situation.

– A key element of decision making under risk

and uncertainty.


�Judgmental heuristics.

– Simplifying strategies or “rules of thumb”


used to make decisions.

– Make it easier to to deal with uncertainty and

limited information.


�Types of heuristics.– Availability heuristic.

• Bases a decision on similarity to past occurrences that are easily remembered.


– Representativeness heuristic.• Bases a decision on similarities between an event

and stereotypes of similar occurrences.

– Anchoring and adjustment heuristic.• Bases a decision on incremental adjustments to an

initial value determined by historical precedent or some reference point.


�General judgmental biases in decision making.– Confirmation trap.


• The tendency to seek confirmation for what is already thought to be true and to not search for disconfirming information.

– Hindsight trap.• The tendency to overestimate the degree to which

an event that has already taken place could have been predicted.


�Stages in the creative thinking process.

– Preparation.

– Concentration.


– Concentration.

– Incubation.

– Illumination

– Verification.


� Ways of fostering creativity.– Diversifying teams to include members with different

backgrounds, training, and perspectives.

– Encouraging analogical reasoning.


– Encouraging analogical reasoning.

– Stressing periods of silent reflection.

– Recording all ideas so that the same ones are not rediscovered.

– Establishing high expectations for creativity.

– Developing a physical space that encourages fun, divergent ideas.


�Creativity is higher when:

– Linguistic ability, willingness to engage in divergent thinking, and intelligence are present.


present.

– Individuals are motivated by and derive satisfaction from task accomplishment.

– There are opportunities for creativity, as many constraints as possible are eliminated, and rewards are provided for creative efforts.


�Creativity is higher when (cont.):

– The decision maker emphasizes engagement in the creative process and counsels individuals


to share their ideas with others.

– The decision maker encourages subordinates to recognize ambiguity, contact others with different views, and be prepared to make considerable changes.

Study Question 4: How do you manage the decision-making process?

� In choosing problems to address, ask and

answer the following questions:

– Is the problem easy to deal with?


– Is the problem easy to deal with?

– Might the problem resolve itself?

– Is this my decision to make?

– Is this a solvable problem within the context of

the organization?


� Reasons for decision making failure.– Managers too often copy others’ choices and try to sell

them to subordinates.


– Subordinates may believe the manager is imposing his or her will rather than working for everyone’s interests.

– Managers may focus on the problems they see rather than the outcomes they want.

– Managers use participation too infrequently.




� Key problem attributes in the Vroom, Yetton, and Jago decision making framework.– The required quality of the decision.

– The commitment needed from subordinates.


– The commitment needed from subordinates.

– The amount of information the leader has.

– Commitment probability.

– Goal congruence.

– Subordinate conflict.

– Subordinate information.


� Authority decisions in the Vroom, Yetton, and Jago decision making framework.– Manager or team leader uses information that he or

she possesses and decides what to do without


she possesses and decides what to do without involving others.

– Variant 1 manager solves the problem or makes the decision alone.

– Variant 2 manager obtains the necessary information from others and then decides.


� Consultative decisions in the Vroom, Yetton, and Jago decision making framework.– Manager or team leader solicits input from other

people and then, based on this information and its


people and then, based on this information and its interpretation, makes a final choice.

– Variant 1 manager seeks input from others individually and then makes a decision.

– Variant 2 manager seeks input from others collectively and then makes a decision.


�Group decisions in the Vroom, Yetton, and Jago decision making framework.


– Manager or team leader consults with others and allows them to help make the final choice.

Study Question 4: How do you manage the decision-making process?� Knowing when to quit.

– The natural desire to continue on a selected course of action reinforces escalating commitment.

– Escalating commitment is the tendency to continue


– Escalating commitment is the tendency to continue and renew effort on a previously chosen course of action, even though it is not working.

– Tendency to escalate commitments often outweighs the willingness to disengage from them.

– Good decision makers are willing to reverse previous decisions.

Study Question 5: What are some of the current issues in decision making?�Workplace trends affecting organizational

decision makers.– Business units are becoming smaller in size.– New, more flexible, and adaptable


– New, more flexible, and adaptable organizational forms.

– Multifunctional understanding is increasingly important.

– Workers with both technical knowledge and team skills are increasingly desirable.

– The nature of “work” is in a state of flux.

Study Question 5: What are some of the current issues in decision making?

� Information technology and decision making.

– Artificial intelligence is the study of how


– Artificial intelligence is the study of how computers can be programmed to think like human beings.

– Expert systems support decision making by following “either-or” rules to make deductions.


� Information technology and decision making (cont.).

– Fuzzy logic and neural networks reason


– Fuzzy logic and neural networks reason inductively.

– Computer support for decision making.

– Information technology does not deal with issues raised by the garbage can model.


� Cultural factors and decision making.– Culture is “the way in which a group of people solves

problems.”

– North American culture stresses decisiveness, speed,


– North American culture stresses decisiveness, speed, and the individual selection of alternatives.

– Other cultures place less emphasis on individual choice than on developing implementations that work.

– The most important impact of culture on decision making concerns which issues are elevated to the status of problems solvable within the firm.

Study Question 6: How do you infuse ethics into the decision-making process?

�Ways to infuse ethics into decision making.– Develop a code of ethics and follow it.– Establish procedures for reporting violations.


– Establish procedures for reporting violations.– Involve employees in identifying ethical

issues.– Monitor ethical performance.– Reward ethical behavior.– Publicize ethical efforts.

Study Question 6: How do you infuse ethics into the decision-making process?� Morality is involved in:

– Choosing problems.

– Deciding who should be involved in making decisions.


decisions.

– Estimating the impacts of decision alternatives.

– Selecting an alternative for implementation.

� An effective decision needs to solve a problem as well as match moral values and help others.


�What is conflict?

�How can conflict be managed

successfully?


successfully?

�What is negotiation?

�What are the different strategies involved

in negotiation?

Study Question 1: What is conflict?

�Conflict occurs whenever:

– Disagreements exist in a social situation over


issues of substance.

– Emotional antagonisms cause frictions

between individuals or groups.


�Types of conflict.

– Substantive conflict.• A fundamental disagreement over ends or goals to

be pursued and the means for their


be pursued and the means for their accomplishment.

– Emotional conflict.• Interpersonal difficulties that arise over feelings of

anger, mistrust, dislike, fear, resentment, etc.


�Levels of conflict.

– Intrapersonal conflicts.

• Actual or perceived pressures from incompatible


goals or expectations.

• Approach-approach conflict.

• Avoidance-avoidance conflict.

• Approach-avoidance conflict.


�Levels of conflict (cont.).

– Interpersonal conflict.• Occurs between two or more individuals who are


• Occurs between two or more individuals who are in opposition to one another.

– Intergroup conflict.• Occurs among members of different teams or

groups.


�Levels of conflict (cont.).

– Interorganizational conflict.

• Commonly refers to the competition and rivalry


• Commonly refers to the competition and rivalry

that characterize firms operating in the same

markets.

• Encompasses disagreements that exist between any

two or more organizations.




�Potential benefits of functional conflict.

– Surfaces important problems so they can be addressed.

Causes careful consideration of decisions.


– Causes careful consideration of decisions.

– Causes reconsideration of decisions.

– Increases information available for decision making.

– Provides opportunities for creativity.


�Potential disadvantages of dysfunctional conflict.– Diverts energies.– Harms group cohesion.


– Harms group cohesion.– Promotes interpersonal hostilities.– Creates overall negative environment. – Can decrease work productivity and job

satisfaction.– Can contribute to absenteeism and job

turnover.


�Culture and conflict.

– Culture and cultural differences must be considered for their conflict potential.

– Individuals who are not able to recognize and


– Individuals who are not able to recognize and respect the impact of culture may contribute to emergence of dysfunctional situations

– Cross-cultural sensitivity helps defuse dysfunctional conflict and capture advantages that constructive conflict may offer.

Study Question 2: How can conflict bemanaged successfully?



�Causes of conflict.– Vertical conflict.

• Occurs between hierarchical levels.

Horizontal conflict.


– Horizontal conflict.• Occurs between persons or groups at the same

hierarchical level.

– Line-staff conflict.• Involves disagreements over who has authority and

control over specific matters.


�Causes of conflict (cont.).– Role conflicts.

• Occur when the communication of task expectations proves inadequate or upsetting.


expectations proves inadequate or upsetting.

– Workflow interdependencies.• Occur when people or units are required to

cooperate to meet challenging goals.

– Domain ambiguities.• Occur as misunderstandings over such things as

customer jurisdiction or scope of authority .


�Causes of conflict (cont.). – Resource scarcity.

• When resources are scarce, working relationships


• When resources are scarce, working relationships are likely to suffer.

– Power or value asymmetries.• Occur when interdependent people or groups differ

substantially from one another in status and influence or in values.


� Indirect conflict management approaches.

– Reduced interdependence.

• Adjusting the level of interdependency among


units or individuals when workflow conflicts exist.

• Decoupling, buffering, and linking pin roles.

– Appeal to common goals.

• Focusing the attention of potentially conflicting

parties on one mutually desirable conclusion.


� Indirect conflict management approaches (cont.).

– Hierarchical referral.


• Problems are referred up the hierarchy for more senior managers to reconcile.

– Altering scripts and myths.• Superficial management of conflict by using

behavioral routines that become part of the organization’s culture.




�Lose-lose conflict.– Avoidance.

• Everyone simply pretends that the conflict does not really exist and hopes that it will go away.


really exist and hopes that it will go away.

– Accommodation or smoothing.• Involves playing down differences among the

conflicting parties and highlighting similarities and areas of agreement.

– Compromise.• Each party gives up something of value, but neither

party’s desires are fully satisfied


�Win-lose conflict.

– Competition.

• One party achieves a victory through the use of


• One party achieves a victory through the use of

force, superior skills, or domination.

– Authoritative command.

• Use of formal authority to dictate a solution and

specify who gains what and who loses what.


�Win-win conflict.

– Collaboration or problem solving.

• Recognition by all conflicting parties that


something is wrong and needs attention, and it

stresses gathering and evaluating information in

solving disputes and making choices.

• Collaboration and problem solving are preferred to

gain true conflict resolution when time and cost

permit.


�Win-win solutions should:

– Achieve each other’s goals.


– Be acceptable to both parties.

– Establish a process whereby both parties see a

responsibility to be open and honest about

facts and feelings.


�Potential disadvantages of collaboration.

– Collaboration requires time and energy.

– Both parties to the conflict need to be assertive


– Both parties to the conflict need to be assertive

and cooperative.

– Collaboration may not be feasible if the

organization’s culture does not value

cooperation.

Study Question 3: What is negotiation?

�Negotiation goals and outcomes.

– Substance goals.

• Outcomes that relate to content issues.


• Outcomes that relate to content issues.

– Relationship goals.

• Outcomes that relate to how well people involved

in the negotiations and any constituencies they

represent are able to work with one another once

the process is concluded.


�Effective negotiation.

– Occurs when substance issues are resolved and working relationships are maintained or improved.


improved.

– Criteria for an effective negotiation.• Quality.

• Harmony.

• Efficiency.


� Ethical aspects of negotiation.

– To maintain good working relationships, negotiators

should strive for high ethical standards.

– Negotiators’ rationalizations for questionable ethical


– Negotiators’ rationalizations for questionable ethical

behavior are offset by long-run negative

consequences.

– The unethical negotiator may be targeted for revenge.

– Unethical negotiating actions may become habitual.


�Organizational settings for negotiation.

– Two-party negotiation.

• Manager negotiates directly with one other person.


• Manager negotiates directly with one other person.

– Group negotiation.

• Manager is part of a group whose members are

negotiating.


� Organizational settings for negotiation (cont.).

– Intergroup negotiation.

• Manager is part of a group that is negotiating with


another group.

– Constituency negotiation.

• Manager is involved in negotiation with other

persons, with each party representing a broader

constituency.

Study Question 4: What are the different strategies involved in negotiation?

� Distributive negotiation.– Focuses on positions staked out or declared by the

conflicting parties.


– Parties try to claim certain portions of the existing pie.

� Integrative negotiation.– Sometimes called principled negotiation.

– Focuses on the merits of the issues.

– Parties try to enlarge the available pie.


�Distributive negotiation.– The key question is: “Who is going to get this

resource?”


resource?”

– “Hard” distributive negotiation.• Each party holds out to get its own way.

– “Soft” distributive negotiation.• One party is willing to make concessions to the

other party to get things over.


� Integrative negotiation.

– The key question is: “How can the resource best be utilized?”


best be utilized?”

– Is less confrontational than distributive negotiation, and permits a broader range of alternative solutions to be considered.

– Opportunity for a true win-win solution.


�Attitudinal foundations of integrative

agreements.

– Willingness to trust the other party.


– Willingness to trust the other party.

– Willingness to share information with the

other party.

– Willingness to ask concrete questions of the

other party.


� Behavioral foundations of integrative agreements.– Ability to separate the people from the problem.

– Ability to focus on interests rather than positions.


– Ability to focus on interests rather than positions.

– Ability to avoid making premature judgments.

– Ability to keep alternative creation separate from evaluation.

– Ability to judge possible agreements on an objective set of criteria or standards.


� Information foundations of integrative agreements.

– Each party must know what he or she will do


if an agreement can’t be reached.

– Each party must determine what is personally important in the situation.

– Each party must achieve an understanding of what the other party values.


�Common negotiation pitfalls.– Myth of the fixed pie.

– Possibility of escalating commitment.

Negotiators often develop overconfidence in


– Negotiators often develop overconfidence in their positions.

– Communication problems can cause difficulties during a negotiation.

• Telling problem.

• Hearing problem.


�Third-party roles in negotiation.– Alternative dispute resolution.

• A neutral third party works with persons involved in a negotiation to help them


involved in a negotiation to help them resolve impasses and settle disputes.

– Arbitration.

• A third party acts as a “judge” and has the power to issue a decision that is binding on all disputing parties.


�Third-party roles in negotiation (cont.).

– Mediation.

• A neutral third party tries to engage


• A neutral third party tries to engage

disputing parties in a negotiated solution

through persuasion and rational argument.


�What is organizational change?

�What change strategies are used in

organizations?


�How is resistance to change best managed?

�How do organizations innovate?

�How does stress affect people in change

environments?

Study Question 1: What is organizational change?

�Transformational change.– Results in a major overhaul of the organization

or its component systems.


or its component systems.

– Described as radical change or frame-breaking change.

– Organizations experiencing transformational change undergo a significant shift in basic characteristic features.


� Incremental change or frame-bending change.– Part of the organization’s natural evolution in

building on the existing ways of operating to


building on the existing ways of operating to enhance or extend them in new directions.

– Introduction of new products, new technologies, and new systems and processes.

– Continuous improvement through incremental change is an important asset.


�Change agents.– Individuals and groups who take responsibility

for changing the existing behavior patterns of


for changing the existing behavior patterns of another person or social system.

– Success of change efforts depends in part on change agents.

– Being an effective change agent means being a great change leader.


�Unplanned change.

– Occurs spontaneously and without a change

agent’s direction, and such change may be


agent’s direction, and such change may be

disruptive.

– Appropriate goal is to act quickly to minimize

the negative consequences and maximize any

possible benefits.

Study Question 1: What is organizational change?�Planned change.

– The result of specific efforts by a change agent.

– Direct response to someone’s perception of a


– Direct response to someone’s perception of a performance gap.

• A performance gap is the discrepancy between the desired and actual state of affairs.

• Performance gaps represent problems to be resolved or opportunities to be explored.


�Organizational forces for change.

– Organization-environment relationships.


– Organization-environment relationships.

– Organizational life cycle.

– Political nature of organizations.




� Reasons for failure of transformational change.– No sense of urgency.

– No powerful guiding coalition.

No compelling vision.


– No compelling vision.

– Failure to communicate the vision.

– Failure to empower others to act.

– Failure to celebrate short-term wins.

– Failure to build on accomplishments.

– Failure to institutionalize results.


�Phases of planned change.– Unfreezing.

• Preparing a situation for change by disconfirming existing attitudes and behaviors.


existing attitudes and behaviors.

– Changing.• Taking action to modify a situation by altering the

targets of change.

– Refreezing.• Maintaining momentum and eventually

institutionalizing the change.

Study Question 2: What change strategies are used in organizations?


Study Question 3: How is resistance to change best managed?

�Resistance to change.– Any attitude or behavior that indicates

unwillingness to make or support a desired


unwillingness to make or support a desired change.

– Alternative views of resistance.• Something that must be overcome for change to be

successful.

• Feedback that can be used to facilitate achieving change objectives.


� Why people resist change.– Fear of the unknown.

– Lack of good information.

Fear for loss of security.


– Fear for loss of security.

– No reasons to change.

– Fear for loss of power.

– Lack of resources.

– Bad timing.

– Habit.


� Resistance to the change itself.– People may reject a change because they believe it is

not worth their time, effort, or attention.

– To deal with resistance to the change itself, all those


– To deal with resistance to the change itself, all those affected should know how it satisfies the following criteria:

• Benefit.

• Compatibility.

• Complexity.

• Triability.

Study Question 3: How is resistance to change best managed?� Resistance to the change strategy.

– Force-coercion strategy.

• Likely resistance among individuals who resent management

by “command” or the use of threatened punishment.


by “command” or the use of threatened punishment.

– Rational persuasion strategy.

• Likely resistance when the data are suspect or the expertise of

advocates is unclear.

– Shared-power strategy.

• Likely resistance if it appears manipulative and insincere.


�Resistance to the change agent.

– Resistance to the change agent is directed at


– Resistance to the change agent is directed at

the person implementing the change and often

involves personality and other differences.


�How to deal with resistance.– Education and communication.

– Participation and support.


– Participation and support.

– Facilitation and support.

– Negotiation and agreement.

– Manipulation and cooptation.

– Explicit and implicit coercion.



Study Question 4: How do organizations innovate?

� Innovation.– The process of creating new ideas and putting them

into practice.

� Product innovations.


� Product innovations.– The introduction of new or improved goods or

services to better meet customer needs.

� Process innovations.– The introduction of new and better work methods and

operations.




�Features of innovative organizations.

– Strategies and cultures that are built around a commitment to innovation.


commitment to innovation.

– Structures that support innovation.

– Staffing with a clear commitment to innovation.

– Top-management support for innovation.

Study Question 5: How does stress affect people in change environments?

�Stress.

– A state of tension experienced by individuals


– A state of tension experienced by individuals

facing extraordinary demands, constraints, or

opportunities.


�Source of stress.

– Stressors.

• The wide variety of things that cause stress for


• The wide variety of things that cause stress for

individuals.

– Types of stressors.

• Work-related stressors.

• Life stressors.


�Work-related stressors.– Task demands.– Role ambiguities.


– Role conflicts.– Ethical dilemmas.– Interpersonal problems.– Career developments.– Physical setting.


�Life stressors.

– Family events.

– Economic difficulties.


– Economic difficulties.

– Personal affairs.

– Individual’s needs.

– Individual’s capabilities.

– Individual’s personality.


�Stress and performance.– Constructive stress (or eustress).

• Moderate levels of stress act in a positive way for both individuals and organization.


both individuals and organization.

– Destructive stress (or distress).• Low and especially high levels of stress act in a

negative way for both individuals and organization.

– Job burnout.• A loss of interest in and satisfaction with a job due

to stressful working conditions.


� Stress and health.– Stress can harm people’s physical and psychological

health.– Health problems associated with stress.

• Heart attack.• Stroke.


• Stroke.• Hypertension.• Migraine headache.• Ulcers.• Substance abuse.• Overeating.• Depression.• Muscle aches.

– Managers and team leaders should be alert to signs of excessive stress.

Study Question 5: How does stress affect people in change environments?�Stress management.

– Stress prevention.• Taking action to keep stress from reaching

destructive levels in the first place.


– Once stress has reached a destructive point, special techniques of stress management can be implemented.

– Stress management.• Begins with the recognition of stress symptoms

and continues with actions to maintain a positive performance edge.


�Stress management (cont.).

– Personal wellness.• Pursuit of one’s job and career goals with the


• Pursuit of one’s job and career goals with the support of a personal health promotion program.

– Employee assistance programs.• Provide help for employees who are experiencing

personal problems and related stress.


�What is strategy and how is it linked to

different types of organizational goals?

�What are the basic attributes of

organizations?


organizations?

�How is work organized and coordinated?

�What are bureaucracies and what are the

common structures?

Study Question 1: What is strategy and how is it linked to different types of organizational goals?

�Strategy.

– The process of positioning the organization in the competitive environment and


the competitive environment and implementing actions to compete successfully.

– A pattern in a stream of decisions.• Choices regarding goals and the way the firm

organizes to accomplish them.


�Elements of conventional strategy decisions.


– Choosing the types of contributions the firm intends to make to society.

– Precisely whom the firm will serve.

– Exactly what the firm will provide to others.

Study Question 1: What is strategy and how is it linked to different types of organizational goals?� Societal goals.

– Reflect an organization’s intended contributions to the

broader society.


– Enable organizations to gain legitimacy, a social right

to operate, and more discretion for their non-societal

goals and operating practices.

– Enable organizations to make legitimate claims over

resources, individuals, markets, and products.


�Societal contributions and mission statements.– A firm’s societal contribution is often part of


– A firm’s societal contribution is often part of its mission statement.

• A written statement of organizational purpose.

– A good mission statement identifies whom the firm will serve and how it will go about accomplishing its societal purpose.


�Output goals.

– Define the type of business the organization is

pursuing.


pursuing.

– Provide some substance to the more general

aspects of mission statements.


� Systems goals.– Concerned with the conditions within the organization

that are expected to increase the organization’s survival potential.


survival potential.

– Typical systems goals include growth, productivity, stability, harmony, flexibility, prestige, and human resource maintenance.

– Systems goals must often be balanced against one another.


�Well-defined systems goals can:– Focus managers’ attention on what needs to be

done.


done.

– Provide flexibility in devising ways to meet important targets.

– Be used to balance the demands, constraints, and opportunities facing the firm.

– Form a basis for dividing the work of the firm.

Study Question 2: What are the basic attributes of organizations?

� Successful organizations develop a structure consistent with the pattern of goals established by senior management.

The formal structure shows the planned


� The formal structure shows the planned configuration of positions, job duties, and the lines of authority among different parts of the organization.

� The formal structure of the firm is also known as the division of labor.

Study Question 2: What are the basic attributes of organizations?� Vertical specialization.

– A hierarchical division of labor that distributes formal

authority and establishes where and how critical

decisions are to be made.


decisions are to be made.

– Creates a hierarchy of authority.

• An arrangement of work positions in order of increasing

authority.

– Organization charts are diagrams that depict the

formal structures of organizations.




� Chain of command.– A listing of who reports to whom up and down the

organization.


� Unity of command.– Each person has only one boss and each unit one

leader.

� Span of control.– The number individuals reporting to a supervisor.


�Line units.– Work groups that conduct the major business

of the organization.


of the organization.

�Staff units. – Work groups that assist the line units by

providing specialized expertise and services to the organization.

Study Question 2: What are the basic attributes of organizations?� Internal versus external units.

– Internal line units.• Transform raw materials and information into products and

services.

External line units.


– External line units.• Maintain outside linkages.

– Internal staff units.• Assist the line units in performing their functions.

– External staff units.• Assist the line units with outside linkages and act to buffer

internal operations.




� Some firms are outsourcing many of their staff functions.

� Use of information technology to streamline


operations and reduce staff.

� Most organizations use a variety of means to specialize the vertical division of labor.

� Best pattern of vertical specialization depends on environment, size, technology, and goals.


�Control.

– The set of mechanisms used to keep actions or

outputs within predetermined limits.


outputs within predetermined limits.

– Deals with:

• Setting standards.

• Measuring results against standards.

• Instituting corrective action.


�Output controls.– Focus on desired targets and allow managers

to use their own methods to reach defined


to use their own methods to reach defined targets.

– Part of overall method of managing by exception.

– Promote flexibility and creativity.


�Process controls.

– Specify the manner in which tasks are

accomplished.


accomplished.

– Types of process controls.

• Policies, procedures, and rules.

• Formalization and standardization.

• Total quality management controls.


�Policies, procedures, and rules.– Policies.

• Guidelines for action that outline important


• Guidelines for action that outline important objectives and broadly indicate how activities are to be carried out.

– Procedures.• Identify the best method for performing a task,

show which aspects of a task are most important, or outline how an individual is to be rewarded.


�Policies, procedures, and rules (cont.).– Rules.

• Describe in detail how a task or a series of tasks is


• Describe in detail how a task or a series of tasks is to be performed, or indicate what cannot be done.

– Policies, procedures, and rules are often used as substitutes for direct managerial supervision.


�Formalization.

– The written documentation of policies, procedures, and rules to guide behavior and


decision making.

�Standardization.

– The degree to which the range of allowable actions in a job or series of jobs is limited so that uniform actions occur.

Study Question 2: What are the basic attributes of organizations?� Deming’s 14 points for achieving total quality

management.– Create a consistency of purpose in the company to

innovate; put resources into research and education,


innovate; put resources into research and education, and into maintaining equipment and new production aids.

– Learn a new philosophy of quality to improve every system.

– Require statistical evidence of process control and eliminate financial controls on production.


management (cont.).– Require statistical evidence of control in purchasing

parts.


parts.

– Use statistical methods to isolate the sources of trouble.

– Institute modern on-the-job training.

– Improve supervision to develop inspired leaders.

– Drive out fear and instill learning.

– Break down barriers between departments.


management (cont.).– Eliminate numerical goals and slogans.

– Constantly revamp work methods.


– Constantly revamp work methods.

– Institute massive training programs for employees in statistical methods.

– Retrain people in new skills.

– Create a structure that will push, every day, on the above 13 points.


�Centralization and decentralization.

– Centralization.• Degree to which the authority to make decisions is


• Degree to which the authority to make decisions is restricted to higher levels of management.

– Decentralization.• Degree to which the authority to make decisions is

given to lower levels in an organization’s hierarchy.


�Benefits of decentralization.

– Higher subordinate satisfaction.

– Quicker response to a series of unrelated


– Quicker response to a series of unrelated problems.

– Assists in on-the-job training of subordinates for higher-level positions

– Encourages participation in decision making.

Study Question 3: How is work organized and coordinated?

�Horizontal specialization.

– A division of labor that establishes specific work units or groups within an organization.


– Often referred to as departmentation.

– Whenever managers divide tasks and group similar types of skills and resources together, they must also be concerned with coordination.








�Coordination.– The set of mechanisms that an organization

uses to link the actions of its units into a consistent pattern.


consistent pattern.– Within a unit, much of the coordination is

handled by its manager.– Smaller organizations rely on management

hierarchy for coordination.– As the organization grows, more efficient and

effective methods of coordination are required.


� Personal methods of coordination.– Produce synergy by promoting dialogue, discussion,

innovation, creativity, and learning, both within and across units.


across units.

– Common personal methods of coordination are direct contact between and among organizational members and committee memberships.

– Mix of personal coordination methods should be tailored to subordinates, skills, abilities, and experiences.


� Impersonal methods of coordination.– Produce synergy by stressing consistency and

standardization so that individual pieces fit together.

– Often are refinements and extensions of process


– Often are refinements and extensions of process controls.

– Historical use of specialized departments to coordinate across units.

– Contemporary use of matrix departmentation and management information systems for coordination.

Study Question 4: What are bureaucracies and what are the common structures?

�Bureaucracy.

– An ideal form of organization, the characteristics of which were defined by the


German sociologist Max Weber.

– Relies on a division of labor, hierarchical control, promotion by merit with career opportunities for employees, and administration by rule.




�Mechanistic type of bureaucracy (machine bureaucracy).

– Emphasizes vertical specialization and control.


– Emphasizes vertical specialization and control.

– Stresses rules, policies, and procedures; specifies techniques for decision making; and use well-documented control systems.

– Often used with a low cost leader strategy.


� Benefits of the mechanistic type.– Efficiency.

� Limitations of the mechanistic type.


– Employees dislike rigid designs, which makes work motivation problematic.

– Unions may further solidify rigid designs.

– Key employees may leave.

– Hinders organization’s capacity to adjust to subtle environmental changes or new technologies.


�Organic type of bureaucracy (professional bureaucracy).– Horizontal specialization.


– Procedures are minimal, and those that do

exist are not highly formalized.

– Used to pursue strategies that emphasize

product quality, quick response to customers,

or innovation.


� Benefits of the organic type.– Good for problem solving and serving individual

customer needs.– Centralized direction by senior management is less

intense.


intense.– Good at detecting external changes and adjusting to

new technologies.

� Limitations of the organic type.– Less efficient than mechanistic type.– Restricted capacity to respond to central management

direction.


�Common types of hybrid structures.

– Divisional firm.• Composed of quasi-independent divisions so that


• Composed of quasi-independent divisions so that different divisions can be more or less organic or mechanistic.

– Conglomerate.• A single corporation that contains a number of

unrelated businesses.


�The conglomerate simultaneously illustrates three key points that will be the focus of Chapter 18.– All structures are combinations of the basic


– All structures are combinations of the basic elements.

– There is no one best structure.

– The firm does not stand alone but is part of a larger network of firms that compete against other networks.


� What is organizational design and how is it

linked to strategy?

� What is information technology and how is it

used?


used?

� Can the design of the firm co-evolve with the

environment?

� How does a firm learn and continue to learn over

time?

Study question 1: What is organizational design and how is it linked to strategy?

�Organizational design.– The process of choosing and implementing a

structural configuration.– The choice of an appropriate organizational


– The choice of an appropriate organizational design depends on the firm’s:

• Size.• Operations and information technology.• Environment.• Strategy for growth and survival.


� The structural configuration of organizations

should:

– Enable senior executives to emphasize the skills and


– Enable senior executives to emphasize the skills and

abilities that their firms need to compete, and to

remain agile and dynamic in a rapidly changing world.

– Allow individuals to experiment, grow, and develop

competencies so that the strategy of the firm can

evolve.


�Co-evolution.– The firm can adjust to external changes even

as it shapes some of the challenges facing it.


as it shapes some of the challenges facing it.

– Shaping capabilities via the organization’s design is a dynamic aspect of co-evolution.

– Even with co-evolution, managers must maintain a recognizable pattern of choices in organizational design.


�Organizational size.

– As the number of employees increase, the

possible interconnections among them

increase even more.


increase even more.

– The design of small firms is directly

influenced by core operations technology.

– Larger firms have many core operations

technologies in a variety of specialized units.


� The simple design for smaller units and firms.

– A configuration involving one or two ways of

specializing individuals and units.


specializing individuals and units.

– Vertical specialization and control emphasize levels of

supervision without elaborate formal mechanisms.

– Appropriate for many smaller firms because of

simplicity, flexibility, and responsiveness to a central

manager.


� Organizational design must be adjusted to fit

technological opportunities and requirements.

– Operations technology.


• The combination of resources, knowledge, and techniques

that creates a product or service output.

– Information technology.

• The combination of machines, artifacts, procedures, and

systems used to gather, store, analyze, and disseminate

information for translating it into knowledge.


�Thomson’s view of technology.

– Technologies classified according to the

degree of specification and degree of


degree of specification and degree of

interdependence of work units.

– Intensive technology.

• Uncertainty as to how to produce desired

outcomes.


�Thomson’s view of technology (cont.).

– Mediating technology.


• Links parties that want to become interdependent.

– Long-linked technology.

• The way to produce desired outcomes is known

and broken down into a number of sequential steps.

Study question 1: What is organizational design and how is it linked to strategy?� Woodward’s view of technology.

– Small-batch production.

• The organization tailor makes a variety of custom products to fit customer specifications.


products to fit customer specifications.

– Mass production.

• The organization produces one or a few products through an assembly line system.

– Continuous-process technology.

• The organization produces a few products using considerable automation.

Study question 1: What is organizational design and how is it linked to strategy?�Woodward’s view of technology (cont.).

– The proper matching of structure and technology is critical to organizational success.


success. • Successful small-batch and continuous-process

plants have flexible structures with small work groups at the bottom.

• Successful mass production operations are rigidly structured and have large work groups at the bottom.


�Adhocracy.

– An appropriate structural design when


managers and employees do not know the

appropriate way to service a client or produce

a particular product.


�An adhocracy is characterized by:

– Few rules, policies, and procedures.

– Substantial decentralization.


– Substantial decentralization.

– Shared decision making among members.

– Extreme horizontal specialization.

– Few levels of management.

– Virtually no formal controls.


�An adhocracy is useful when:

– The tasks facing the firm vary considerably


– The tasks facing the firm vary considerably

and provide many exceptions.

– Problems are difficult to define and solve.

Study Question 2:What is information technology and how is it used?

�Why IT makes a difference.– IT provides a partial substitute for:

• Some operations.


• Some operations.

• Some process controls.

• Some impersonal methods of coordination.

– IT provides a strategic capability.

– IT provides a capability for transforming information to knowledge for learning.


� Information technology as a substitute.– Initial implementation of IT often displaced

routine, highly specified, and repetitious jobs.• Did not alter fundamental character or design of


• Did not alter fundamental character or design of the organization.

– A second wave of substitution replaced process controls and informal coordination mechanisms with IT.

• Brought some marginal changes in organizational design.


� Information technology as a strategic capability.

– IT has been used to improve the efficiency, speed of

responsiveness, and effectiveness of operations.


responsiveness, and effectiveness of operations.

– IT provides individuals the information they need to

plan, make choices, coordinate with others, and

control their own operations.

– This new strategic IT capability resulted from IT

being broadly available to everyone.


� IT and learning.

– IT systems empower individuals and expand

their jobs.


their jobs.

– IT encourages the development of a “virtual”

network.

– IT transforms how people manage.


� IT and e-business.– Many dot-com firms adopted some variation

of adhocracy.


of adhocracy.

– As the dot-coms grew, the adhocracy design became problematic.

• Limits on the size of an effective adhocracy.

• Actual delivery of products and services rested more on responsiveness to clients and maintaining efficiency than on continual innovation.

Study Question 3: Can the design of the firm co-evolve with the environment?

� Understanding the environment is important because an organization is an open system.

� General environment.– The set of cultural, economic, legal-political, and


– The set of cultural, economic, legal-political, and educational conditions found in the areas in which the organization operates.

� Specific environment.– The owners, suppliers, distributors, government

agencies, and competitors with which an organization must interact to grow and survive.

Study Question 3: Can the design of the firm co-evolve with the environment?�Environmental complexity.

– The magnitude of problems and opportunities in the organization’s environment, as reflected in:


in:• Degree of richness.

• Degree of interdependence.

• Degree of uncertainty.

– More complex environments provide more problems and opportunities.


�Environmental richness.– The environment is richer when:

• The economy is growing.

Individuals are improving their education.


• Individuals are improving their education.

• Those on whom the organization relies are prospering.

– A rich environment has more opportunities and dynamism.

– The opposite of richness is decline.


�Environmental interdependence.

– Linkage between environmental independence

and organization design may be subtle and


and organization design may be subtle and

indirect.

• Organization may co-opt powerful outsiders.

• Organization may absorb or buffer demands of

powerful external elements.


�Environmental uncertainty.

– Uncertainty and volatility can be particularly damaging to large bureaucracies.


– A more organic form is the appropriate organizational design response to uncertainty and volatility.

– Adhocracy may be needed extreme uncertainty and volatility.


� In a complex global economy, firms must

learn to co-evolve by altering their

environment.


environment.

�Two important ways of co-evolution:

– Management of networks.

– Development of alliances.


�Networks and alliances around the world.– Informal combines or cartels exist in Europe

but are illegal in the United States except in rare cases.


rare cases.

– Networks are called keiretsu in Japan.• Bank-centered keiretsu.

• Vertical keiretsu.

– In the United States, outsourcing is developing as a specialized form of network organization.


� Interfirm alliances.– Announced cooperative agreements or joint

ventures between two independent firms.

– Alliances are quite common in high


– Alliances are quite common in high technology industries.

– Since firms cooperate rather than compete; consequently, both the alliance managers and sponsoring executives must be patient, flexible, and creative in pursuing goals.


�Virtual organization.

– An ever-shifting constellation of firms, with a

lead corporation, that pool skills, resources,


lead corporation, that pool skills, resources,

and experiences to thrive jointly.

– A design option when internal and external

contingencies are changing quickly.


� Key to making a virtual organization work.– The production system needs to be in a partner

network bound together by mutual trust and survival.

– The partner network needs to develop and maintain an


– The partner network needs to develop and maintain an advanced IT, trust and cross-owning of problems and solutions, and a common shared culture.

– The lead firm must take responsibility for the whole network and coordinate member firm actions.

– The lead corporation and the partners need to rethink how they are internally organized and managed.


�Boundaryless organization.

– A design option that eliminates vertical, horizontal, external, and geographic barriers that block desired action.


that block desired action.

– Actions to create a boundaryless organization.• Executives should systematically examine the

organization and its processes.

• Organization members should initiate a process of improving their cooperation.

Study Question 4: How does a firm learn and continue to learn over time?

� Organizational learning.

– Process of knowledge acquisition, information

distribution, information interpretation, and


information retention in adapting successfully to

changing circumstances.

– Adjustment of organization’s and individual’s actions

based on experience.

– The key to successful co-evolution.


�Mimicry.– Occurs when managers copy what they believe

are the successful practices of others– Is important to new firms.


– Is important to new firms.• Provides workable, if not ideal, solutions to many

problems.• Reduces the number of decisions that need to be

analyzed separately.• Establishes legitimacy or acceptance and narrows

the choices requiring detailed explanation.


�Experience.

– A primary way to acquire knowledge.

– Besides learning by doing, managers can also


systematically embark on structured programs to capture the lessons to be learned.

– The major problem with emphasizing learning by doing is the inability to precisely forecast changes.




�Scanning.

– Involves looking outside the firm and bringing

back useful solutions.


back useful solutions.

�Grafting.

– The process of acquiring individuals, units, or

firms to bring in useful knowledge.


�Common problems in information interpretation.– Self-serving interpretations.

• People seeing what they want to see, rather than


• People seeing what they want to see, rather than seeing what is.

– Managerial scripts.• A series of well-known routines for problem

identification and alternative generation and analysis that are commonly used by a firm’s managers.


�Organizational myths.

– Commonly held cause-effect relationships or assertions that cannot be empirically


supported.

– Common myths.� Single organizational truth.

� Presumption of competence.

� Denial of tradeoffs.


� Information retention mechanisms.– Individuals.

– Organizational culture.

Transformation mechanisms.


– Transformation mechanisms.

– Formal organizational structures.

– Ecology.

– External archives.

– Internal information technologies.


�Deficit cycles.

– A pattern of deteriorating performance that is followed by even further deterioration.


followed by even further deterioration.

– Factors associated with deficit cycles.• Organizational inertia.

• Hubris.

• Detachment.


�Benefit cycles.

– A pattern of successful adjustment followed

by further improvements.


by further improvements.

– Firms can successfully co-evolve by initiating

a benefit cycle.

– The firm develops adequate mechanisms for

learning.


�What is organizational culture?

�How do you understand an organizational

culture?


�How can the organizational culture be

managed?

�How can you use organizational

development to improve the firm?

Study Question 1: What is organizational culture?

�Organizational culture.

– The system of shared actions, values, and beliefs that develops within an organization


beliefs that develops within an organization and guides the behavior of its members.

– Called corporate culture in the business setting.

– No two organizational cultures are identical.

Study Question 1: What is organizational culture?�External adaptation.

– Involves reaching goals and dealing with outsiders regarding tasks to be accomplished, methods used to achieve the goals, and


methods used to achieve the goals, and methods of coping with success and failure.

– Important aspects of external adaptation. • Separating eternal forces based on importance.

• Developing ways to measure accomplishments.

• Creating explanations for not meeting goals.

Study Question 1: What is organizational culture?� External adaptation involves answering important

goal-related questions regarding coping with reality.– What is the real mission?– How do we contribute?


– How do we contribute?– What are our goals?– How do we reach our goals?– What external forces are important?– How do we measure results?– What do we do if specific targets are not met?– How do we tell others how good we are?– When do we quit?


� Internal integration.– Deals with the creation of a collective identity

and with finding ways of matching methods of working and living together.


working and living together.

– Important aspects of working together.• Deciding who is a member and who is not.

• Developing an understanding of acceptable and unacceptable behavior.

• Separating friends from enemies.


� Internal integration involves answering important questions associated with living together.– What is our unique identity?


– How do we view the world?

– Who is a member?

– How do we allocate power, status, and authority?

– How do we communicate?

– What is the basis for friendship?


�Subculture.– A group of individuals with a unique pattern

of values and philosophy that are not inconsistent with the organization’s dominant


inconsistent with the organization’s dominant values and philosophy.

�Counterculture.– A group of individuals with a pattern of values

and philosophy that outwardly reject the surrounding culture.


� Problems associated with subcultural divisions

within the larger culture.

– Subordinate groups are likely to form into a


– Subordinate groups are likely to form into a

counterculture pursuing self-interests.

– The firm may encounter extreme difficulty in coping

with broader cultural changes.

– Embracing natural divisions from the larger culture

may lead to difficulty in international operations.


� Taylor Cox’s five step program.– Step 1: The organization should develop pluralism.– Step 2: The organization should fully integrate its

structure.


structure.– Step 3: The organization must integrate the informal

networks.– Step 4: The organization should break the linkage

between naturally occurring group identity and organizational identity.

– Step 5: The organization must actively work to eliminate identity-based interpersonal conflict.

Study Question 2: How do you understand an organizational culture?


Study Question 2: How do you understand an organizational culture?� Sagas.

– Heroic accounts of organizational accomplishments.

� Rites.– Standardized and recurring activities that are used at


– Standardized and recurring activities that are used at special times to influence organizational members.

� Rituals.– Systems of rites.

� Cultural symbols.– Any object, act, or event that serves to transmit

cultural meaning.


�Culture often specifies rules and roles.

– Rules.


• The various types of actions that are appropriate.

– Roles.

• Where individual members stand in the social

system.


�Shared values.

– Help turn routine activities into valuable and important actions.


important actions.

– Tie the organization to the important values of society.

– May provide a very distinctive source of competitive advantage.


�Characteristics of strong corporate cultures. – A widely shared real understanding of what

the firm stands for, often embodied in slogans.


the firm stands for, often embodied in slogans.– A concern for individuals over rules, policies,

procedures, and adherence to job duties.– A recognition of heroes whose actions

illustrate the company’s shared philosophy and concerns.


�Characteristics of strong corporate cultures (cont.). – A belief in ritual and ceremony as important to

members and to building a common identity.


members and to building a common identity.– A well-understood sense of the informal rules

and expectations so that employees and managers know what is expected of them.

– A belief that what employees and managers do is important and that it is essential to share information and ideas.


�Organizational myths.– Unproven and often unstated beliefs that are

accepted uncritically.


accepted uncritically.

– Myths enable managers to redefine impossible problems.

– Myths can facilitate experimentation and creativity.

– Myths allow managers to govern.


�National culture influences.

– Widely held common assumptions may be

traced to the larger culture of the host society.


traced to the larger culture of the host society.

– National cultural values may become

embedded in expectations of organization

members.

Study Question 3: How can the organizational culture be managed?

�Strategies for managing corporate culture.

– Managers help modify observable culture,

shared values, and common assumptions


shared values, and common assumptions

directly.

– Use of organizational development techniques

to modify specific elements of the culture.


�Why a well-developed management philosophy is important.– Establishes generally understood boundaries


– Establishes generally understood boundaries on all members of the firm.

– Provides a consistent way for approaching new and novel situations.

– Helps hold individuals together by showing them a known path to success.


� Strategies for building, reinforcing, and changing organizational culture.– Directly modifying the visible aspects of culture.


– Changing the lessons to be drawn from common stories.

– Setting the tone for a culture and for cultural change.

– Fostering a culture that addresses questions of external adaptation and internal integration.

Study Question 3: How can the organizational culture be managed?� Mistakes that managers can make in building,

reinforcing, and changing culture.– Trying to change people’s values from the top

down:


down:

• While keeping the ways in which the organization operates the same.

• Without recognizing the importance of individuals.

– Attempting to revitalize an organization by dictating major changes and ignoring shared values.

Study Question 4: How can you use organization development to improve the firm?

�Organization development (OD).

– The application of behavioral science

knowledge in a long-range effort to improve


knowledge in a long-range effort to improve

an organization’s ability to cope with change

in its external environment and to increase its

internal problem-solving capabilities.

Study Question 4: How can you use organization development to improve the firm?

�Organizational development.

– Designed to work on both issues of external

adaptation and internal integration.


adaptation and internal integration.

– Used to improve organizational performance.

– Seeks to achieve change so the organization’s

members maintain the culture and longer-run

organizational effectiveness.

Study Question 4: How can you useorganization development to improve the firm?

� Underlying assumptions of OD.

– Individual level.

• Respect for people and their capabilities.

– Group level.


– Group level.

• Belief that groups can be good for both people and

organizations.

– Organizational level.

• Respect for the complexity of an organization as a

system of interdependent parts.


�Organization development goals.

– Outcome goals.


• Mainly deal with issues of external adaptation.

– Process goals.

• Mainly deal with issues of internal integration.


� In pursuing outcome and process goals, OD helps by:– Creating an open problem solving climate.

– Supplementing formal authority with knowledge and competence.


competence.

– Moving decision making where relevant information is available.

– Building trust and maximizing collaboration.

– Increasing the sense of organizational ownership.

– Allowing people to exercise self-direction and self-control.


�Action research.

– The process of systematically collecting data

on an organization, feeding it back to the


on an organization, feeding it back to the

members for action planning, and evaluating

results by collecting and reflecting on more

data after the planned actions have been taken.






�Organizationwide OD interventions.– Survey feedback.

• Collection and feedback of data to organization


• Collection and feedback of data to organization members for action planning purposes.

– Confrontation meetings.• Activities for quickly determining how an

organization can be improved and taking initial actions for betterment.


�Organizationwide OD interventions (cont.).– Structural redesign.


– Structural redesign.• Realigning the organization’s structure or major

subsystems.

– Collateral organization.• Using representative organizational members in

periodic small group problem-solving sessions.


�Group and intergroup OD interventions.– Team building.

• Activities to improve the functioning of a group.

Process consultation.


– Process consultation.• Activities to improve the functioning of key group

processes.

– Intergroup team building.• Activities to improve the functioning or two or

more groups.


� Individual OD interventions.– Role negotiation.

• Clarifying expectations in working relationships.

Job redesign.


– Job redesign.• Creating long-term congruence between individual

goals and organizational career opportunities.

– Career planning.• Structured opportunities for individuals to work

with managers or staff experts on career issues.

Thank You

www.bookfiesta4u.comwww.bookfiesta4u.com

Organizational Behavior: Chapter 1

www.bookfiesta4u.com

638