In a modern day organization’s behavior, employees and suppliers have as much impact on the

organization structure as customers and competitors have had in the past. Organizations are

viewed as open systems, continually interacting with their environment and in dynamic state of

temporary equilibrium as they adapt to environmental changes.

Successful organizations are in constant state of flux in response to their environment, many

companies are looking at media technologies as way to market their product and learn about their

competitors.

This presence could produce a large following depending on the interest in the content created

and information shared. The change stemmed from the speed at which information travel in the

media arena. In most cases, the information environment outside the organization is changing far

more rapidly than the information environment internally. Customers, partners, prospects, and

employees can find, access, and share information in a way that corporate infrastructure,

security, culture, and policies inhibit. Organizations are having a difficult time responding to or

taking advantage of – these new environments.

The path of information regarding the organization is no longer just the role of the marketing

department. Employees talk to customers, colleagues, and suppliers. They share their

experiences, impressions and expectations regarding their jobs, the organization and

management. The speed at which the information travels is beyond the control of the

organization. Every employee, customer and supplier has become a reflection on how the

organization functions and operates. The power has shifted from what the company wants to

relay to the public, to what employees, customers and suppliers say about the company—for

better or worse.

This transfer of power has affected organizations tremendously on all levels. Early adapters of

media have accepted the power shift and harnessed the influence of media to their advantage.

Today’s technology and business environment are forcing organizations to restructure their

processes and behavior. Social commerce is the new platform for doing business. Leadership and

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management need to embrace the change in order to succeed. New policies are needed to guide

employees and management on media best practices. Collaboration between departments is a

must to harness the power of media and to take advantage of the customer engagement.

In the following environmental scan we can see the role media (both social as well as other

forms) plays in influencing our perception and shaping the brand image of the organization. We

can see that how media portrays various concepts of organizational behavior and changes our

perceptions regarding certain concepts. It is clear that media, either in the form of news or blogs

or articles tends to enlighten the layman and educate him, albeit to a certain extent about the

management theories and concepts, and their analysis.

The following are the articles for seven articles along with the analysis.

Psychological contract:

Article:

Impact of psychological contract breach on employee behavior

Workplace Wisdom

By Mendiola Teng-Calleja

Philippine Daily Inquirer

6:40 pm | Sunday, September 1st, 2013

Organizations in the Philippines are almost always faced with the dilemma of having an

oversupply of candidates, and an undersupply of qualified job seekers. This disconnect leads

companies to engage in a war for talent.

To get the people that they need, organizations come up with attractive compensation packages,

promise opportunities for development and come up with enticing perks and benefits.  But what

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happens if, after some time, these precious talents think that the company did not live up to the

promises made during recruitment?   How will these perceived broken promises, called

psychological contract breach in organization literature, affect employee behavior?

 

The study

To determine possible outcomes of psychological contract breach (perceived unmet company

promises), a survey was conducted in 2007 among 162 employees and their supervisor-

executives in various pharmaceutical firms in the Philippines.  Results of the multilevel statistical

analyses showed that recruits’ feelings and perceptions of breach led to undesirable workplace

behavior.

Workplace deviant behavior:

Employees who experience psychological contract breach engaged in workplace deviant

behavior, or voluntary behavior that go against organizational policies and expectations. This is

especially true for individuals who view their relationship to the organization as more

transactional (‘entitled’ employees who focus more on the benefits that they get from the

employment relationship) than relational (‘benevolent’ employees who give more importance to

their relationship with the organization and its members). Entitled individuals who experience

psychological contract breach have the tendency to ‘even the score’ with the organization by

engaging in deviant behavior such as slacking-off, and starting rumors and conflict   that

negatively affect productivity and well-being of their co-employees.

Lack of organization citizenship

Correspondingly, employees who think that their company failed to meet commitments will not

demonstrate organization citizenship behavior (OCB), or actions that are beneficial to the

organization and its members. OCBs directed at co-employees include communicating important

work-related information or helping them with a heavy workload. OCBs aimed at the

organization include being updated with company developments and voluntarily participating in

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company activities. These findings show that employees who feel that the company was not able

to provide what was promised and therefore rightfully due to them will only do what is required

and will not do more for the organization.

How to avoid broken promises

In a collectivist society such as the Philippines, reciprocity is valued in order to maintain smooth

interpersonal relationships.  Committing psychological contract breach may mean failure or

refusal of the company to fulfill their obligations to the employee—hindi marunong tumupad sa

pangako. Though wrong, this breach of responsibility may consciously or unconsciously provide

justification to undesirable employee actions such as deviant behaviors and lack of organization

citizenship.

To avoid psychological contract breach, it is critical for organizations to be cautious about

promises made to potential employees. Applicants must be given a realistic preview of the job

and the organization to clarify expectations and establish transparent and truthful parameters and

conditions of employment (such as salaries and benefits, work environment and opportunities for

growth among others). Companies must ensure honesty and transparency in describing the job

and company, and must re

Analysis:

Globalization and technology in the late 20th century shifted everything we knew about

organized work onto an entirely different level - especially in terms of complexity, rate of

change, connectivity and the mobility of people and activities.

The Psychological Contract offers insight and inspiration to explore and improve the very

structure of businesses and other employment organizations.

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The traditionally dominant and advantageous position of an employer compared to its workforce

means that the quality of the Psychological Contract is determined by the organizational

leadership rather than its followers. An individual worker could conceivably 'break' or abuse the

Psychological Contract, but workers and followers under normal circumstances are almost

always dependent on the organization's leadership for the quality of the Contract itself.

Also, several factors within the Psychological Contract - for example employee satisfaction,

tolerance, flexibility and well-being - are both causes and effects. Feelings and attitudes of

employees are at the same time expectations (or outcomes or rewards), and also potential

investments (or inputs or sacrifices).

This reflects the fact that employee's feelings and attitudes act on two levels:

1. Employee feelings and attitudes are strongly influenced by their treatment at work (an

aspect of the Psychological Contract), while at the same time,

2. Employee feelings and attitudes strongly influence how they see themselves and their

relationship with the employer, and their behavior towards the employer (also an aspect

of the Psychological Contract).

The simple message to employers is therefore to focus on helping employees to feel good and be

happy, because this produces a healthier view of the Contract and other positive consequences.

Less sensible employers who ignore the relevance of employee happiness - or the relevance of

the Contract itself - invariably find that the Psychological Contract is viewed more negatively,

and staff are generally less inclined to support and cooperate with the leadership.

We can apply the theory and thinking about the Psychological Contract in a potentially far-

reaching way:

to guide the way processes are used for fact-finding, analysis and people-management

(appraisals, staff surveys, job grading, pay plans, training and development, etc)

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to increase the use fairness as a chief leadership driver, along with related qualities like

honesty, objectivity, humanity, and integrity

and, where possible, to question and seek to improve the fundamental structure and

purpose of the organization

The article shows that psychological contract breach has significant impact on most work-related

outcomes, and that breach has a larger effect than met expectations on job satisfaction, turnover

intentions and in-role performance. It goes on to suggest that breach can be viewed as an

affective event, and affective reactions (including perceived violation and mistrust towards

management) are the proximal consequences of breach. It reports, further, that negative emotions

are a likely consequence of breach, that the effect size of mistrust is greater than that of

perceived violation, and that the consequences of breach on turnover were non-significant. In

management and organizational theory many employee attitudes such as trust, faith,

commitment, enthusiasm, and satisfaction depend heavily on a fair and balanced Psychological

Contract.

It shows when the Contract is regarded by employees to be broken or unfair, these vital yet

largely intangible ingredients of good organizational performance can evaporate very quickly.

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Mendiola, T. (2013, September 1). Impact of psychological contract breach on employee behavior.

Inquirer Business. Retrieved October 31, 2013, from http://business.inquirer.net/141205/impact-of-

psychological-contract-breach-on-employee-behavior

Perception and Attribution:

Organizational Behavior Perceptions & Attributesby Tara Duggan, Demand Media

People’s perceptions and attributions influence how they behave in their organization. Perception

describes the way people filter, organize and interpret sensory information. Attribution explains

how people act, determining how people react to the actions of others as well. Accurate

perception allows employees to interpret what they see and hear in the workplace effectively to

make decisions, complete tasks and act in ethical manner. Faulty perceptions lead to problems in

the organization, such as stereotyping, that lead people to erroneously make assumptions.

Managing Perceptions

When people in organizations find themselves in unfamiliar, ambiguous situations, they tend to

have difficulty coping. Effective business professionals handle objections to their ideas by

clearly stating the benefits of their position to all parties. By presenting a compelling case for

their ideas, these people get approval for their proposed strategy even if opposed by apathy or

confrontation. By actively recognizing people’s perceptions and attributions, effective leaders

build justifications for their approach and get support when needed.

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Handling Attributions

People commonly attribute success to skill, luck or chance. People tend to react to situations

based on what they think caused the event. Just as perceptions can be faulty, attributions can be

inaccurate as well. Organizations can ensure people attribute actions more effectively by

providing diversity training. This helps prevent a hostile work environment for people from

different cultures. By training people to make more accurate attributions, daily operations run

more smoothly. This helps reduce faulty attributions, such as managers who attribute exceptional

performance to chance as they resist assigning more challenging work to qualified individuals

they view as lucky.

Explaining Behavior

People tend to evaluate other people on their ability, effort or personality. They also attribute

luck or the difficulty of task to a success or failure. The attributions people make for their own

behavior also influence their performance in the organization. For example, successful workers

who succeed at tasks after completing training exercises usually increase their confidence levels.

Those who fail may consider themselves unlucky or blame others. People’s perceptions and

judgment of another person’s action depend on if reactions occur consistently or inconsistently.

Recognizing that people have cultural beliefs, motives and intentions helps explain behavior and

helps rectify non-productive situations. By understanding the common causes of behavior,

individuals can react more appropriately.

Minimizing Bias

Minimizing biases that distort attribution can help foster effective team work. Using tips,

techniques, tools and resources available from websites such as the Cultural Navigator site,

organizations can reduce the rate at which people selectively interpret events based on their

experience, background and attitudes. Edward Thorndike, an American psychologist, observed

that perception of one trait is influenced by other traits. Known as the halo effect, this bias causes

people to judge people they find attractive as smart. Providing training to managers to make

more accurate perceptions helps them conduct more effective employment interviews,

performance reviews and daily management tasks.

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Analysis:

Behavior in the workplace is based on people’s perception of the workplace. There are many

factors that influence how something is perceived. For instance, factors pertaining to the

perceiver can involve the person’s attitudes, motives, interests, experience and expectations.

Factors associated with the context can involve time, work setting and social setting. Finally,

factors related to the actual target can involve novelty, motion, sounds, size, background and

proximity.

Well, there are various ways that a person can perceive a situation in the work environment that

can lead to problems. For example, the following can occur among employees in the workplace

on a daily basis:

Primacy -- One’s perception is dominated by first impression of another person

Stereotyping -- The tendency to judge someone on the basis of the perception of a group

to which that person belongs

Halo effect -- The tendency to draw a general impression about an individual based on a

single characteristic

Recency -- One’s perception is dominated by recent interaction with another person

Central Tendency -- The tendency to avoid extreme judgments and rate everything as

average

The way a person perceives a job applicant during an interview can affect an organization. For

example, interviewers may like one aspect of the interviewee, and then pursuant to the halo

effect, assume the interviewee is entirely a good fit with the company because of that one

characteristic. Or interviewers may learn they have one thing in common with the interviewee

and project that they are similar to the interviewee in every way, making a good fit for the

organization.

On the other hand, an employee may not get a promotion because an employer has formed a

negative impression about the employee simply because that person belongs to a particular

religious group. This is stereotyping and is clearly contrary to human rights legislation, but given

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one’s nature’s tendency to gather things and people into groups and make general impressions, it

may happen more often than one might think.

As well, an employee may be considered to be disloyal or not putting enough effort into a

project. These characteristics are subjectively judged based on an employer’s perceptions. For

example, one supervisor may consider an employee to be loyal, while another supervisor may

consider that same employee to be too conforming and insincere.

What employees perceive from their work situation influences their productivity most.

Therefore, to influence productivity, it is necessary for employers to assess how workers

perceive their jobs.

Likewise, absenteeism, turnover and job satisfaction have more to do with an employee’s

perception of the job. Those individuals who perceive their jobs as negative are likely to have

increased absenteeism, more frequent turnover and less job satisfaction. The only way to

influence these variables is to understand how an employee subjectively perceives the

workplace.

Consequently, perception influences decision-making within an organization. For example

within the first few minutes of the interview, the interviewer has learned some information about

the interviewee and has formed an impression based on various perceptions. The interviewer

then decides whether the candidate is a good fit with the company. The remaining time in the

interview is typically spent asking select information that supports the initial decision.

Though we are all human and have a background and a particular perspective on which we rely

when perceiving things in the work setting, it is important to be aware of the various factors that

influence our perceptions, especially when making important decisions that affect the

organization. It may be a good idea to have a few decision makers provide an opinion when

making big decisions to ensure that various perceptions are considered.

Attribution:

Analysis:

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Attribution is the process of attaching meaning to behavior.

There are two general types of attributions that people make: dispositional attributions and

situational attributions. In dispositional attribution a person attributes his behavior to internal

factors such ability and effort etc. In situational attributions, a person attributes his behavior to

external factors such as quality of materials or machines used or social influence.

1. People seek to make sense of the world.

2. People attribute actions to either internal or external causes.

3. Attribution is done in fairly logical ways.

Attribution is concerned with the relationship between personal perception, social

perception and interpersonal behavior. Attribution theory are many but they share the

following assumptions.

Behavior differs from person to person based on his beliefs about the forces that

dominate in a particular situation.

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Duggan, T. (n.d.). Organizational Behavior Perceptions & Attributes. Small Business. Retrieved October

31, 2013, from http://smallbusiness.chron.com/organizational-behavior-perceptions-attributes-

10835.html

Personality:

Article:

Importance of Different Personalities in a Workplace

By Kate McFarlin, Demand Media

No two people are identical; certain personality traits can make people similar or dissimilar to others. The

importance of different personalities in the workplace can be traced to several different factors. A team

made up of several different compatible personalities that complement one another can be more

productive than a team made up of those who are so similar they cannot work productively together.

Team Diversity

Ideally, a team is composed of the six major personality types: driver, adventurer, energizer, cheerleader,

stabilizer and perfectionist. Each person has a dominant personality type and a latent personality type. By

combining all of these personalities on the same team, you have the ingredients for success in a project.

The driver and the energizer keep the rest of the team on task, the stabilizer helps smooth over any

disagreements, the cheerleader improves morale, the adventurer helps the team take risks that it might not

otherwise take and the perfectionist helps ensure that the project is done precisely. Take away one of

these personalities, and the team may lose direction.

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Motivation

Different personalities can motivate one another, while similar personalities may actually prove to be

detrimental in a workplace environment. If you have too many adventurers, the team may take too many

risks. If you lack stabilizers and cheerleaders, teams and employees can experience infighting and a lack

of motivation. Every different personality helps motivate others by its distinct traits. Managers typically

need to be of the driver personality type because they are the ones capable of motivating the other

personalities.

Creativity and Analysis

Not to be forgotten in the overall scheme of personalities are the two archetypes -- creative and analytical.

Creative team members are vital to helping companies find new ways of doing business, marketing or

designing new products. Analytical personalities are necessary for the everyday tasks and making sure

projects stay on time and on budget. By mixing the two archetypes, you may have disagreements, but

overall, the company will be better for the combination.

Employee Morale

Employee morale is a serious issue within any company. Workers with a hard driving personality type

typically get their jobs done and encourage others to the same. Laid-back stablizers may not have the

focus and the drive to stay on task and can get distracted, dragging others with them. By keeping your

workforce full of diverse personalities, you can be assured that morale is high while distractions are low.

Analysis:

Personality plays a key role in organizational behavior because the way that people think, feel,

and behave affects many aspects of the workplace. People's personalities influence their behavior

in groups, their attitudes, and the way they make decisions. Interpersonal skills hugely affect the

way that people act and react to things during work. In the workplace, personality also affects

such things as motivation, leadership, performance, and conflict. The more that managers

understand how personality in organizational behavior works, the better equipped they are to be

effective and accomplish their goals.

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People have many different views of the world that affect their personalities. When a situation

arises, an individual will handle it based upon his or her personal values, beliefs, and personality

traits. These traits are developed throughout a person's lifetime and cannot be easily changed, so

it is more helpful for managers to attempt to understand this rather than to fight it.

Traits such as openness, emotional stability, and agreeableness all predict that an individual will

have less conflict, work better in teams, and have positive attitudes about his or her work. People

with this type of personality should be placed in situations where they would be working with or

leading others. Those who do not have these traits will have less motivation and be more

negative when they are placed in these same situations.

Positive interpersonal skills is a personality trait that greatly affects the workplace. Individuals

who exhibit this trait generally enjoy working with other people, and they have the empathy and

sensitivity that enables them to get along well with others. People with this trait are often placed

in roles where they work with customers, manage employees, or mediate problems.

Decision-making and independence are greatly affected by personality. Personality traits such as

self-efficacy, conscientiousness, and pro-activity contribute to good decision-making under

pressure and independence, while traits such as neuroticism and not being open do not. Managers

can place individuals with these traits in appropriate positions to do their best work. A culture in

which leaders did not tolerate questions was a reason for Germany's defeat in World War II. On

the other hand, Conrad Hilton's strong work ethic and attention to detail was imprinted into the

corporate culture of his hotel chain. This has led to the success Hilton hotels across the world

enjoy today.

Placing individuals with certain characteristics in jobs that best suit them raises their levels of

motivation. It also affects their overall job performance because they are happier on a daily basis.

This affects the overall productivity of the workplace because more is getting accomplished due

to better attitudes and happier employees.

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McFarlin, K. (n.d.). Importance of Different Personalities in a Workplace. Small Business. Retrieved

October 31, 2013, from http://smallbusiness.chron.com/importance-different-personalities-workplace-

10733.html

Learning:

Article:

High-Performance Learning Organizations' Boost Business Results: StudyOakland, California-based research firm Bersin & Associates says companies with a sophisticated approach to employee development averaged three times higher revenue growth from 2008 to 2011. Garry Kranz

November 6, 2012

Companies with high-impact learning functions outperform their competition by a wide margin,

a recent study shows.

The research, produced by Oakland, California-based research firm Bersin & Associates, says

companies with a sophisticated approach to employee development averaged three times higher

revenue growth from 2008 to 2011.

High-performance learning organizations also are eight times more likely to be viewed as

strategically valuable by executives and three times more likely to align learning-and-

development initiatives with overarching corporate goals, according to the study.

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Bersin & Associates defines high-performance learning organizations, referred to as "HILOs," as

those that excel at building organization wide capabilities that drive business growth. Released in

August, the report includes findings based on Bersin's analysis of the learning function at nearly

300 organizations.

Having an effectively trained workforce is one of the most pressing challenges facing companies,

says David Mallon, a vice president at Bersin & Associates and co-author of the report. They are

squeezed between two economic realities: Companies need to develop a lean, high-performing

workforce while they shave operating expenses and break into new markets.

"We know that, for whatever reason, some training departments do a better job of moving the

needle than others. This research tries to establish what they do that results in positive,

measurable change for their companies," Mallon says.

However, simply ramping up new training programs won't necessarily enable an organization to

dramatically improve its financial performance, Mallon says. In fact, high-performing companies

have shifted from employee training to a broader focus on building organizational capability,

which encompasses training as well as other factors that affect the learning function.

Now in its third year, Bersin's study examines 15 different aspects of corporate learning

departments, ranging from organizational structure, staffing levels, program design, governance

and others.

Among those various elements, three common traits are shared by high-performance learning

organizations, Mallon says.

First, they use sophisticated techniques to measure and evaluate learning. Second, they focus less

on training and more on creating an organization wide "culture of learning." Lastly, they have

well-developed strategies to create, harness and organize an increasing volume of learning

content.

Those three factors usually are the strongest predictors of success of learning organizations,

Mallon says.

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The best organizations, in fact, place lots of stock in the notion of measurement of learning.

Global banking firm Credit Suisse Group has connected the dots to demonstrate that career

development boosts retention of top performers, leading to higher customer satisfaction and

stronger financial performance, Mallon says. "They can string together those variables in a way

that proves how career learning ultimately affects Credit Suisse's profitability."

Other factors are crucial, too, such as how a learning organization is structured, its use of

learning technologies or the presence of a chief learning officer. Those items help set the stage,

but usually aren't huge differentiators for companies, Mallon says. "They get companies to a

certain plateau, but to get beyond that plateau, they need to master things like measurement,

content, culture, performance consulting and so on."

Bersin announced the results in tandem with its HILO Maturity Model, a trademarked

assessment tool. The model helps organizations evaluate the effectiveness of their learning

function based on objective measures, and provides a road map for making improvements.

Analysis:

It is critical in today's global competitive marketplace for an organization to maintain its position

in a rapidly changing environment. A learning organization can acquire and apply knowledge

faster than the competition and therefore maintain a leading edge. The need to survive in a

changing economy has pushed organization learning to the fastest growing intervention in

organizational development.

Most employees recognize that much of what they need to perform better, improve their skills

and gain more knowledge is around them all the time: learning by observing colleagues,

receiving coaching from a supervisor, having access to proven ideas and best practices, as well

as simply getting on-the-job experience every day. The challenge for companies is to transform

the inherently ad hoc nature of this informal learning into something with more structure and

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rigor. That’s where social networking and collaboration technologies are now beginning to create

learning opportunities.

Learning activities on different levels are important in an organization in order to develop and

succeed, but it’s also emphasized by that organizations need to be clear of their learning strategy

since individuals in general have “limited capacity to acquire, store and process knowledge”.

However, there are certain types of organizations that do not live by the logic of emphasizing

different kinds of learning levels or are clear about their overall and individual learning strategy

or even include learning as an important factor for success and continuous development. For

example, efficiency-focused businesses, often consisting of mainly routine-based activities, are

in general aiming at improving performance and achieving high levels of outcome as a primary

objective and thus not mainly intended at creating a competitive advantage through developing

higher or better forms of learning. Call centers are a typical example of this type of organization.

Call centers are structured around the premise that by standardizing work tasks and customer

enquiries into predetermined scripts which call center agents are required to follow, then both

high and consistent levels of service and also a high level of efficiency can be maintained.

In this article many of the high-performance learning organizations implement adaptive learning.

Adaptive learning is the learning process that aims for acquiring the knowledge that is necessary

in order to execute a task and to enable performing the work correctly. At this learning level,

organizations focus on short-term incremental changes of the individuals and aims for sustaining

efficiency rather than questioning the fundamental rules that govern the functional rationality.

Generative learning on the other hand is considered to be a second-level learning approach that

more explicitly is supposed to result in enhanced individual capabilities in improving work

quality, which is carried out through developing a new framework. It is critical that organizations

who want to succeed as learning organization implement both forms of learning.

At the same time the organization must ensure that it employs a diverse workforce of all four

types namely: converging, diverging, assimilating, and accommodating to create a highly

effective learning environment.

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Learning is not without risks—some perceived but some very real: leaked information, learning

programs that might be inconsistent and contradictory, productivity losses and a candor in

exchanges that may not always be productive. Properly designed and managed, however,

learning tools have great potential to harness the experiential dimension of the workplace to

deliver relevant learning experiences that reflect both proven expertise within a function or

industry and timely access to an organization’s best thinking, wherever it might be.

Kranz, G. (2012, November 6). Top Stories. 'High-Performance Learning Organizations' Boost Business

Results: Study. Retrieved October 31, 2013, from http://www.workforce.com/articles/high-

performance-learning-organizations-boost-business-results-study

Cummings, T. G. & Worley, C. G. (1993). ... A model for diagnosing organizational behavior.

Organizational Dynamics, Autumn, 35-51. Nelson, L., & Burns, F. L. (1984)

Communication:

This is a memo written by Former Nokia CEO Stephen Elop to Nokia’s employees. This was in

the light of Nokia facing stiff competition from Google, Apple etc. in the smartphone market.

This memo was e-mailed to all the employees across Nokia offices across the world.

The memo was as follows:

There is a pertinent story about a man who was working on an oil platform in the North Sea. He

woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In

mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his

way out of the chaos to the platform’s edge. When he looked down over the edge, all he could

see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform,

and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the

freezing waters. The man was standing upon a “burning platform,” and he needed to make a

choice.

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He decided to jump. It was unexpected. In ordinary circumstances, the man would never

consider plunging into icy waters. But these were not ordinary times – his platform was on fire.

The man survived the fall and the waters. After he was rescued, he noted that a “burning

platform” caused a radical change in his behavior. We too, are standing on a “burning platform,”

and we must decide how we are going to change our behavior.

Over the past few months, I’ve shared with you what I’ve heard from our shareholders,

operators, developers, suppliers and from you. Today, I’m going to share what I’ve learned and

what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion – we have multiple points of scorching heat that are

fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever

expected. Apple disrupted the market by redefining the smartphone and attracting developers to a

closed, but very powerful ecosystem.

In 2008, Apple’s market share in the $300+ price range was 25 percent; by 2010 it escalated to

61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth

year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a

high-priced phone with a great experience and developers would build applications. They

changed the game, and today, Apple owns the high-end range. And then, there is Android. In

about two years, Android created a platform that attracts application developers, service

providers and hardware manufacturers. Android came in at the high-end, they are now winning

the mid-range, and quickly they are going downstream to phones under €100. Google has

become a gravitational force, drawing much of the industry’s innovation to its core.

Let’s not forget about the low-end price range. In 2008, MediaTek supplied complete reference

designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to

produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more

than one third of the phones sold globally – taking share from us in emerging markets.

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While competitors poured flames on our market share, what happened at Nokia? We fell behind,

we missed big trends, and we lost time. At that time, we thought we were making the right

decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don’t have a product that is close to their

experience. Android came on the scene just over 2 years ago, and this week they took our

leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market

fast enough. We thought MeeGo would be a platform for winning high-end smartphones.

However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like

North America. Additionally, Symbian is proving to be an increasingly difficult environment in

which to develop to meet the continuously expanding consumer requirements, leading to

slowness in product development and also creating a disadvantage when we seek to take

advantage of new hardware platforms. As a result, if we continue like before, we will get further

and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one

Nokia employee said only partially in jest, “the time that it takes us to polish a PowerPoint

presentation.” They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we’re not even fighting with the right weapons. We are

still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only

the hardware and software of the device, but developers, applications, ecommerce, advertising,

search, social applications, location-based services, unified communications and many other

things. Our competitors aren’t taking our market share with devices; they are taking our market

share with an entire ecosystem. This means we’re going to have to decide how we either build,

catalyze or join an ecosystem. This is one of the decisions we need to make. In the meantime,

we’ve lost market share, we’ve lost mind share and we’ve lost time.

21

On Tuesday, Standard & Poor’s informed that they will put our A long term and A-1 short term

ratings on negative credit watch. This is a similar rating action to the one that Moody’s took last

week. Basically it means that during the next few weeks they will make an analysis of Nokia,

and decide on a possible credit rating downgrade. Why are these credit agencies contemplating

these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped

to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the

UK prefer Nokia to other brands. It’s also down in the other markets, which are traditionally our

strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our

attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have

lacked accountability and leadership to align and direct the company through these disruptive

times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not

collaborating internally.

Nokia, our platform is burning.

We are working on a path forward — a path to rebuild our market leadership. When we share the

new strategy on February 11, it will be a huge effort to transform our company. But, I believe

that together, we can face the challenges ahead of us. Together, we can choose to define our

future.

The burning platform, upon which the man found himself, caused the man to shift his behavior,

and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we

have a great opportunity to do the same.

Analysis:

This e-mail was both criticized and applauded by media and business pundits alike. This e-mail

shows the desperation for Nokia’s success. The mode of communication was a formal, top down

22

approach to address the problem. Nokia was facing a serious downfall as the top manufacturers

of smartphones and cellphones. Eventually, the lack of innovation and inspiration led to Nokia’s

demise. The communication model followed here is linear, with the speaker able to convey

his/her thoughts and the receiver simply processing the information. However, the information

that was being conveyed was an inspirational message which also highlighted Nokia’s position

compared to the competition. The approach followed by the CEO does not produce the desired

effect in my opinion, as the fervor and intensity of thee message gets watered down due to the

formal, linear approach. An interactive approach needs to be followed when addressing issues

pertaining to lack of innovation and current market position. This would prompt more of a

discussion and able to suggest different options to approach the problem instead of simply

highlighting the problem. Clearly, the message did not have an impact that was intended. This

was because the fidelity of the system broke down. The position of the speaker in sociocultural

system of the organization and his attitude to address the problem had an adverse effect on the

situation. For mass communication it is important that simultaneous channels be used to enhance

the effectiveness of the message. While the method chosen ensures that no noise is added to the

message to skew the intent. Words don’t have an effect anywhere near to hearing and seeing.

Recipients often respond well to seeing and hearing. The message delivered by Mr. Elop would

have had a better effect if it were delivered through various channels and speakers at different

levels of the company. In the end, the message did not have the desired effect and Nokia was

taken over by Microsoft in 2013.

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Edwards, J. (2013, September 3). All Microsoft Employees Should Read Stephen Elop's 'Burning Platform'

Memo Right Now. Business Insider. Retrieved October 31, 2013, from

http://www.businessinsider.com/stephen-elops-burning-platform-memo-2013-9#ixzz2j2nmB9gu

Motivation:

Analysis:

Organizations and their managers are understandably concerned about motivation. Motivated

employees are happy, productive and loyal, and that's what companies want. Although

motivating employees can be challenging, a number of theories about motivation at work can be

used as a basis for creating practices, procedures and processes to affect employee motivation.

Maslow's Hierarchy of Needs

Maslow proposed a hierarchy of needs that indicates how people in general achieve a sense of

satisfaction. This hierarchy is often used in business settings to explain employee motivation.

Maslow proposed that needs are satisfied in a certain order and that higher-level needs can only

be satisfied once lower-level needs are met. The needs are, from bottom to top of the hierarchy:

physiological (the need for food and water), safety and security, social, esteem and status, and

the need for self-actualization, or living up to one's full potential. In the workplace, most

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employees' physiological needs are met. Safety then becomes an issue, with certain types of jobs

having more safety challenges than others (manufacturing jobs, for instance). Given that they

feel safe, employees will be concerned about satisfying their needs for social interaction and

about receiving positive feedback and support (esteem) for their work. With all of these needs

met, employees can stay motivated to do their best work.

Internal vs. External Control

It refers to the degree to which people believe they control their own destiny versus believing

they are controlled by others. In the workplace, this refers to the difference between employees

who believe they can exercise control over their work and their environment through their own

actions--employees who are more or less self-reliant. Those with an internal locus of control tend

to be self-motivated and need less external approval and reward. Those with a higher external

locus of control respond more readily to external praise.

Equity Theory

It suggests that employees become more or less motivated based on the degree to which they

believe they are being treated equitably (or fairly) by those around them--particularly their

supervisors and managers in workplace settings. For instance, employees who feel they are

putting in more effort than their peers, yet do not believe they are being appropriately rewarded

for that effort, are likely to be unmotivated. Similarly, employees who feel their level of pay is

not equitable either internally or externally (compared to other employees or other companies)

are likely to lack motivation.

Need for Achievement

McClelland proposed the n-ach theory, or the need for achievement, as a way to explain the

common tendency of people to seek higher and higher rewards for their actions. McClelland

suggested that people move from lower to higher levels of achievement as they continue to move

toward the highest level of achievement.

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The memo sent by Mr. Elop was sent with the intent that it will motivate and inspire Nokia’s

employees to come up with new innovative solutions that could stand up to competition and

make up on the lost ground. The theory I would apply here in terms of the theory Mr. Elop was

following is Herzberg’s two-factor theory. The memo addresses both extrinsic as well intrinsic

factors. Intrinsic factors being need for innovation, need to excel, and the extrinsic factors being

market pressure, position of the company, profits/losses. Some of the factors for motivation

being:

- Status

- Opportunity for advancement

- Gaining recognition

- Responsibility

- Challenging / stimulating work

- Sense of achievement

There is some similarity between Herzberg's and Maslow's models. They both suggest that needs

have to be satisfied for the employee to be motivated.

Applying Hertzberg's model to de-motivated workers

The following is the evidence of de-motivated Nokia employees in the business.

- Low productivity

- Poor production or service quality

-Lack of self-belief

What we can see here is that Mr. Elop tries to motivate the employees to accomplish the tasks

that lie ahead of Nokia. Apparently, the effect of the memo was far than effective since Nokia

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collectively failed to be inspired and come up with anything substantial. We all know all the

eventuality that was awaiting Nokia in 2013. In this case, the social recognition and position of

the company is the prime motivator instead of money. The memo clearly compares the company

with the likes of Google and Apple to use it as prime motivator and instill self-belief by

highlighting the previous position of the company.

Edwards, J. (2013, September 3). All Microsoft Employees Should Read Stephen Elop's

'Burning Platform' Memo Right Now. Business Insider. Retrieved October 31, 2013, from

http://www.businessinsider.com/stephen-elops-burning-platform-memo-2013-9#ixzz2j2nmB9gu

Management Theory:

Management theories are implemented to help increase organizational productivity and service

quality. Not many managers use a singular theory or concept when implementing strategies in

the workplace: They commonly use a combination of a number of theories, depending on the

workplace, purpose and workforce. Contingency theory, chaos theory and systems theory are

popular management theories. Theory X and Y, which addresses management strategies for

workforce motivation, is also implemented to help increase worker productivity.

Contingency Approach:

This theory asserts that managers make decisions based on the situation at hand rather than a

"one size fits all" method. A manager takes appropriate action based on aspects most important

to the current situation. Managers in a university may want to utilize a leadership approach that

includes participation from workers, while a leader in the army may want to use an autocratic

approach.

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Open Systems Theory:

Managers who understand systems theory recognize how different systems affect a worker and

how a worker affects the systems around them. A system is made up of a variety of parts that

work together to achieve a goal. Systems theory is a broad perspective that allows managers to

examine patterns and events in the workplace. This helps managers to coordinate programs to

work as a collective whole for the overall goal or mission of the organization rather than for

isolated departments.

Theory X and Theory Y

The management theory an individual chooses to utilize is strongly influenced by beliefs about

worker attitudes. Managers who believe workers naturally lack ambition and need incentives to

increase productivity lean toward the Theory X management style. Theory Y believes that

workers are naturally driven and take responsibility. While managers who believe in Theory X

values often use an authoritarian style of leadership, Theory Y leaders encourage participation

from workers.

Conclusion:

Managing is one of the most important human activities. From the time human beings began

forming social organizations to accomplish aims and objectives they could not accomplish as

individuals, managing has been essential to ensure the coordination of individual efforts. As

society continuously relied on group effort, and as many organized groups have become large,

the task of managers has been increasing in importance and complexity. Henceforth, managerial

theory has become crucial in the way managers manage complex organizations. The central

thesis of this paper is that although some managers in different parts of the world could have

achieved managerial success without having basic theoretical knowledge in management, it has

to be unequivocally emphasized that those managers who have mixed management theory in

their day-to-day practice, have had better chances of managing their organizations more

efficiently and effectively to achieve both individual and organizational objectives. Therefore,

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managers of contemporary organizations ought to appreciate the important role they play in their

respective organizations if they are to achieve set goals. Secondly, there is need to promote

excellence among all persons in organizations, especially among managers themselves.

Organizational theory and management theory is used in many aspects of a working business.

Many people strive to adhere to the theory to help them become better at their jobs or more

successful in life, although this may lead to them having to sacrifice some of their personal

principles in order to succeed Theoretical concepts in the workplace determine the company

culture of an office or place of business. Concepts should be conscious decisions by company

management and executives, and should be clearly communicated to employees so there is no

confusion. Theoretical concepts in the workplace range from how employees work, dress or act,

as well as any other concept that affects the working environment in a workplace.

Workplace concepts relates to the behavior of employees in the workplace. Communication is an

important part of any workplace. Executives should decide how employees will communicate

with each other in the workplace. Technology has created a number of ways to communicate by

email, phone calls, instant messaging and online forums. These methods often replace the most

traditional form of communication -- face to face conversation -- for many companies.

Improving the Management Operations Management

The field of management has stressed the need for the development of positive organizational

culture and organizational learning. The management environment today and in the future will

provide new challenges and organizational responses. The management literature has been

sensitive to this need and been quite responsive. Management must also acknowledge the need

for organizational learning and the importance of a positive organizational climate to effective

operations. Possibly more executive education would support the increasing interdependence

between the various departments, the business community, and various operations.

This exercise has led me to do a lot of research and has encouraged me to as a few questions

about:

Use of management theories

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Impact of management theories

Limitations of existing measures of use

Sound management theories can form the foundation of a successful business. Leaders in any

kind of organization can learn from the tried and tested management concepts.

However, a flexible approach and combining old and new management theories can prove to be

very effective. Organizational effectiveness can only truly be considered if we focus on both

quantitative measures of success of actions properly linked to each other to achieve important

goals and the qualitative measures inherent in the organization’s sense of values, purpose,

meaning, and vision. Management theories are instrumental in achieving this. Such

amalgamation of different perspectives of behavior along with strategy is essential for managers

who have to deal with managing resources and delivering services.

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