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MGMT 330ORGANIZATIONAL BEHAVIOUR

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CHAPTER 1THE MEANING AND SCOPE OFORGANIZATIONAL BEHAVIOUR

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WHAT IS OB?• A study of human behaviour, attitudes and

performance in organization.

• Interaction between individual and organization

• An interdisciplinary – drawing on concepts from social and clinical psychology, sociology, cultural anthropology, industrial engineering and organizational psychology.

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UNIT OF ANALYSIS

• Individual

• Group

• Organization

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RELATIONSHIP BETWEEN OB AND MANAGEMENT

• Organizational behaviour:– Interaction between individual and organization

• Management:– A critical element in the economic growth of the

country– Essential in all organized effort– The dynamic, life giving element in every

organization

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WHY STUDY OB?

• Cherrington identified three main objectives in organizational behaviour:– Explain– Identify– Control

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CHAPTER 2THE BEGINNINGS OF STUDIES

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CLASSICAL SCHOOL OF MANAGEMENT• Consists of three streams of thought:– Bureaucratic organization• Max Webber

– Administrative management• How organizations should be managed and structured• Henri Fayol and Chester Bernard

– Scientific management• Application of scientific methods to increase individual

worker’s productivity• Frederick Winslow Taylor, Henri Gant and Frank and

Lillian Gilbreth

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HAWTHORNE STUDIES

• The Test Room Studies

• Interviewing Studies

• Observational Studies

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HUMAN RELATIONS SCHOOL

• Abraham Maslow– Motivation theory• Human needs • Human behaviour• Hierarchy of needs

• Douglas Mc Gregor– Theory X and Y

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EARLY BEHAVIOUR THEORY• Mary Parker Follett– Management is getting things done with and

through other people– Sharing of empowerment through working

together between employer and employee– Conflict solution through integration

• Hugo Munsterberg– Implement psychology approach in organization’s

problem– Psychology study is very relevant in organizational

behaviour

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DISCIPLINE OF ORGANIZATIONAL BEHAVIOUR

• Psychology

• Sociology

• Political science

• Economy

• Ecology

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CHALLENGES IN ORGAZATIONAL BEHAVIOUR

• Business and industry towards globalization and international

• Quality is more important

• Society is concern on management ethics

• Increase of diversity among employees

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CHAPTER 3BEHAVIOURAL THEORIES

OF ORGANIZATION

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PSYCHOLOGICAL PERSPECTIVE

• Psychology discipline is the most influent discipline in an organization

• Focus on understanding individual’s behaviour• Biographic• Talent• Personality• Learning• Motivation

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SOCIOLOGICAL PERSPECTIVE

• Focus on group behaviour

• Conflict and counselling

• Communication

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POLITICAL PERSPECTIVE

• Empowerment and authority are part of political discipline

• Distribution of power

• Direction of attempts to influence:– Upward– Downward– Laterally

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ECONOMICS PERSPECTIVE

• Economics perspective helps managers to make decision

• Techniques on problem solving

• Decision making:– Individual– Group

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ECOLOGICAL PERSPECTIVE

• Organization as a sub-system of society

• Environmental factors:– Suppliers– Distributors– Customers– Competitors

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CHAPTER 4INDIVIDUAL BEHAVIOUR

IN ORGANIZATION

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ATTITUDES• Reflects an individual’s background and

experiences

• Components of attitudes:– Affective component– Cognitive component– Behavioural component

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WORK ATTITUDES• Two key work attitudes:– Job satisfaction– Organizational commitment

• Job satisfaction:– Sources of job satisfaction– Relation to job behaviour

• Organizational commitment:– Sources of commitment– Relation to job behaviour

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PERCEPTION• The process by which people select, organize,

interpret and respond to information form the world around them

• Basic element in the perceptual process:– Environmental stimuli– Observation– Perceptual selection– Perceptual organization– Interpretation– Response

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PERCEPTUAL PROCESS• The perceptual process is a sequence of steps

that begins with the environment and leads to our perception of a stimulus and an action in response to the stimulus.

• The process is continual but we do not spend time thinking about the actual process that occurs when we perceive many stimuli that surround us at any moment

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ENVIRONMENTAL STIMULI• Everything in our environment that has the

potential to be perceived

• Includes anything that can be seen, touched, tasted, smelled, heard, movements of the arms and legs or change in position of the body in relation to objects in the environment

• Objects and people in the immediate environment

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OBSERVATION• Taste

• Smell

• Hearing

• Sight

• Touch

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PERCEPTUAL SELECTION• Depends on several factors:– External factors:• Size• Intensity• Contrast• Motion• Repetition• Novelty and familiarity

– Internal factors:• Personality• Learning• Motivation

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PERCEPTUAL ORGANIZATION

• Perceptual organization– Continuity– Closure– Proximity– Similarity

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INTERPRETATION

• Perceptual errors– Perceptual defense– Stereotyping– Halo effect– Projection– Expectancy effects

• Attributions– Internal versus external causes– Causes for success and failure

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RESPONSE

• Convert– Attitudes– Motivations– Feelings

• Overt– Behaviour

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COGNITIVE DISSONANCE• Being used to describe the feeling of

discomfort that results from holding two conflicting beliefs

• Happens when an individual’s behaviour conflicts with beliefs that are integral to his or her self-identity

• How to reduce?– Focus– Reduce– Change

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PERSONALITY TRAITS/ TYPES

• Heredity

• Experience

• Environment

• Situation

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PERSONALITY TRAITS THAT INFLUENCE ORGANIZATIONAL BEHAVIOUR

• Locus of control

• Goal orientation

• Authoritarianism

• Machiavellianism

• Self-esteem

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CHAPTER 5GROUP BEHAVIOUR IN ORGANIZATION

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WHAT IS A GROUP?

• Members who share goals, communicate with one another over a period of time

• Group classification:– Formal group– Informal group

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FORMAL AND INFORMAL GROUPS• Formal groups– Functional group– Task group:• Permanent task group• Temporary task group

• Informal groups– Interest group– Friendship group

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WHY PEOPLE JOIN GROUPS?

• Generating ideas

• Networking

• Task completion– Accuracy– Speed– Creativity– Cost

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GROUP NORMS AND DYNAMICS

• Behavioural norms– Rules of behavioural that are shared by members– Main function is to regulate and standardize the

behaviours viewed as important to members

• Performance norms– Exists when three criteria have been met:• Standard of appropriate behaviour• Members must agree on the standard• Members must aware that group support the standard

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ROLE AND ROLE EXPECTATIONS• Role– Cluster of tasks and behaviours that a person

should perform• Role expectation – What are you expected to do depending on what

role you obtain• Example– If you are a police officer, then as your role as a

police officer you would expected to protect the country

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GROUP MEMBER ROLES• Task-oriented role– Involves facilitating and coordinating work-related

decision making– Initiating, seeking information, giving information,

coordinating and evaluating

• Relation-oriented role– Involves building team-centered feelings and social

interactions– Encouraging members, harmonizing, encouraging

participation, expressing, following

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GROUP MEMBER ROLES• Self-oriented role– Involves the person’s self-centered behaviours

that are at the expense of the team or group– Blocking progress, seeking recognition,

dominating, avoiding

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INFORMAL ORGANIZATION AND ITS IMPACT

• Informal organization is defined by the patterns, behaviours and interactions that stem from personal rather than official relationship

• Emphasis is on people and their relationships

• Workers may create an informal group to go bowling, form a union, discuss work challenges

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EFFECT OF DIVERSITY ON GROUP PERFORMANCE

• Poses a threat to the organization’s effective functioning

• Expressed discomfort with the dominant group’s values

• Members of the group want to become like the dominant

• Positive multiculturalism

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CHAPTER 6ORGANIZATIONAL STRUCTURE AND

ITS IMPACT ON OB

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WHAT IS ORGANIZATION?

• Organizations are formed so that people who share a common set of values or interest can work together towards achieving common objective

• Elements of organization:– People– Objectives– Structure

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WHAT IS ORGANIZATION?• Amitai Etzioni – Organization is a social unit or human grouping,

structured for the purpose of attaining specific goals

• Stoner– Organization is a pattern of relationships through

which people under direction of managers pursue their common goals

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WHAT IS ORGANIZATION?• Vision

• Mission

• Strategy

• Planning– Short term– Long term

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ORGANIZATIONAL STRUCTURE

• Distribution and segregation of work

• Organizational chart

• Key factors in organizational structure– Environmental factors– Strategic factors– Technological factors– Integrative framework

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ORGANIZATIONAL STRUCTURE

• Environmental factors– Suppliers– Distributors– Competitors– Customers

• Strategic factors– Low cost– Differentiation– Focused

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ORGANIZATIONAL STRUCTURE• Technological factors– Technology– Task interdependence• Pooled interdependence• Sequential interdependence• Reciprocal interdependence

• Integrative framework

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MECHANISTIC STRUCTURE

• Individuals and functions will behave in predictable ways

• Characteristic of mechanistic structure– Formal rules and regulations– Centralization of decision making– Defined job responsibilities– Rigid hierarchy of authority

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IMPACT OF MECHANISTIC STRUCTURE ON ORGANIZATIONAL BEHAVIOUR

• Tightly control the behaviour of employees

• Employees follow extensive impersonal rules and procedures in making decisions

• Each employee’s job involves specified area of expertise

• Employees are appointed and not elected

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ORGANIC STRUCTURE

• Characteristic of organic structure– Low to moderate use of formal rules and

regulations– Decentralized and shared decision making– Broadly defined job responsibilities– Flexible authority structure with fewer levels in

the hierarchy– Job specialization is low

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IMPACT OF ORGANIC STRUCTURE ON ORGANIZATIONAL BEHAVIOUR

• Emphasizes employee competence rather than employee’s formal position in the hierarchy

• Flexible hierarchy and empowers employees to make decision

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NEW FORMS OF ORGANIZATION

• Functional design– Involves creation of positions, teams and

departments on the basis of specialized activities• Place design– Involves establishing an organization’s primary

units geographically• Product design– Involves the establishment of self-contained units,

each capable of developing, producing, marketing and distributing its own goods or services

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NEW FORMS OF ORGANIZATION• Multidivisional design– Tasks are organized by division on the basis of

product/geographic markets• Multinational design– Produce and sell products/services in two or more

countries• Network design– Focuses on sharing authority, responsibility and

resources • Virtual design– Coordinate and link people from many different

locations

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CHAPTER 7UNDERSTANDING WORK TEAMS

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STAGES OF TEAM DEVELOPMENT• Forming stage

• Storming stage

• Norming stage

• Performing stage

• Adjourning stage

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FORMING STAGE• Focus on:– Defining or understanding goals– Developing procedures

• Involves getting acquainted and understanding leadership and other member roles

• Deal with members’ feelings

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STORMING STAGE• Manage conflict among members

• This stage may be shortened or can be avoided if members use a team-building process from the beginning

• Involves development of decision-making, interpersonal and technical capabilities

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NORMING STAGE• Sharing of information, acceptance of

different options

• Team members set rules by which the team will operate

• Developing of cooperation and sense of shared responsibility

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PERFORMING STAGE• Team members show how effectively and

efficiently they can achieve results together

• The roles of individual members are accepted and understood

• At this stage, teams may differ:– Continue to learn and develop from their

experiences– May perform only the level needed for survival

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ADJOURNING STAGE• Termination of work behaviours and

disengagement from social behaviours

• Normally happens when team has achieved their goals

• A problem-solving or a cross-functional team will investigate and report on specific issue within 6 months

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DIFFERENCE BETWEEN GROUPS AND TEAMS

• A group is two or more individuals who come into personal and meaningful contact on a continuing basis

• Example: departments, divisions and business units

• Teams are much smaller than organizational groups

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TYPES OF TEAMS• Functional teams

• Problem-solving teams

• Cross-functional teams

• Self-managed teams

• Virtual teams

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FUNCTIONAL TEAMS• Include individuals who work together daily

on similar tasks

• Exist within functional departments:– Marketing– Production– Finance– Human resource

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PROBLEM-SOLVING TEAMS• Focus on specific issues in their areas of

responsibility, develop potential solutions and empowered to take action within defined limits

• Members are employees from a specific department who meet at least once or twice a week for an hour or two

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CROSS-FUNCTIONAL TEAMS• Bring together people from various work areas

to identify and solve mutual problems

• Effective in situations that require innovation, speed and focus on responding to customer needs

• Members from several specialties or functions and deal with problems

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SELF-MANAGED TEAMS

• Consist of employees who must work together effectively daily to manufacture an entire product or service to customers

• The teams are empowered (potency, meaningfulness, autonomy and impact)

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VIRTUAL TEAMS• A group of individuals who collaborate

through various information technologies on one or more projects while being at two or more locations

• Work primarily across distance, time and organizational boundaries

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BUILDING HIGH-PERFORMANCE TEAMS

• Clear goals• Clear communication• Clear role• Members’ behaviour• Proper decision-making procedure• Involvement by all members• Rules and regulations of the team• Know the complete process of a team

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WHY TEAMS FAIL?

• Conflict exist

• Lack of resources

• Different personality, experience and value

• Unsuitable goals

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CHAPTER 8LEADERSHIP AS INFLUENCING THE

BEHAVIOUR OF OTHERS

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MANAGERS AND LEADERS• Managers:– Direct the work of others and is responsible for

the results– Effective managers bring a degree of order and

consistency to the work for their employees• Leaders:– Exhibits the attributes of leadership (ideas, vision,

values, influencing others and making decisions)– Do no perform management functions (planning,

organizing, leading and controling)

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TYPES OF LEADERS• Transactional leaders– Involves motivating and directing followers

through contingent reward-based practices– Three components to achieve performance goals• Contingent rewards• Active management by exception• Passive management by exception

• Charismatic leaders– Emphasizes shared vision and values– Promotes shared identity– Exhibits desired behaviours– Reflects strength

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TYPES OF LEADERS• Transformational leaders– Anticipating future trends – Inspiring followers to understand and embrace a

new vision of possibilities – Developing others to be leaders or better leaders– Building organization or group into a community

of challenged and rewarded learners

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LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR

• Hersey and Blanchard’s Situational Model– Based on the amount of relationship and task

behaviour that a leader provides to subordinates in a situation

– The amount of relationship and task behaviour is based on the readiness of the followers to perform needed tasks

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HERSEY AND BLANCHARD’S SITUATIONAL MODEL

Participating Style Selling Style

Delegating Style Telling Style

High

Low High

Low

Task Behaviour

Rela

tions

hip

Beha

viou

r

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LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR

• Vroom-Jago Leadership Model– Developed by Victor Vroom, in collaboration with

Phillip Yetton and later Arthur Jago– Focuses on the leadership role in decision-making

situations– Prescribers a leader’s choices among five

leadership styles based on seven situational factors, recognizing the time requirements and costs associated with each style

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VROOM-JAGO LEADERSHIP MODEL

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LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR

• Theory X and Theory Y– Developed by Douglas McGregor in 1957– Theory X is a composite of propositions and

underlying beliefs that take a command and control view of management based on a negative view of human nature

– Theory Y is a composite of propositions and beliefs that take a leadership and empowering view of management based on a positive view of human nature

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LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR

• Managerial Grid – Developed by Robert Blake and Jane Mouton– Identifies five leadership styles that combine

different degrees of concern for production and concern for people• Impoverished style• Country club• Produce or perish• Middle of the road• Team

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BLAKE MOUTON MANAGERIAL GRID

LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR

LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR

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BEHAVIOURAL APPROACH TO LEADERSHIP AND AUTHORITY

• Visionary

• Trustworthy

• Considerate

• Confident

• Thoughtful

• Charismatic and ethical

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CHANGING LEADERSHIP REQUIREMENTS• Assess current leadership talent• Create leadership strategy• Review and align talent management system• Develop comprehensive approach to

leadership development• Offer specific courses in leadership • Provide individual coaching • Assist senior leadership in combining

organizational change and leadership development

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CHAPTER 9COMMUNICATION AS THE

LIFE BLOOD OF THE ORGANIZATION

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WHAT IS COMMUNICATION?

• Exchange of information and ideas to create understanding between two parties

• Not limited to only verbal communication

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IMPORTANCE OF COMMUNICATION TO ORGANIZATION

• To carry out the thoughts and visions of an organization to the people

• To convey directions and provide synchronization

• Through phone, fax, email, letter, website, social networking websites

• More crucial when we are on a mission or need to fulfill a goal

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COMMUNICATION FLOWS IN ORGANIZATION

• Downward channels

• Upward channels

• Horizontal channels

• Grapevine

• External networking

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COMMUNICATION PROCESS• Sender (encoder)– Sender is the source of information and the initiator

of the communication process– Encoding is the process of translating thoughts or

feelings into a medium (writing, visual or spoken) that conveys the meaning intended

– Five principles of communication:• Relevancy• Simplicity• Organization• Repetition• Focus

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COMMUNICATION PROCESS

• Receiver (decoder)– Receiver is the person who receives and decodes the

sender’s message– Decoding is translating messages into a form that

has meaning to the receiver

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COMMUNICATION PROCESS

• Sender has an idea• Sender encodes the idea• Sender transmits the message to the sender• Receiver gets the message• Receiver decodes the message• Receiver sends feedback• Noise

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TYPES OF COMMUNICATION

• Interpersonal

• Formal and informal

• Internal and external

• Non-verbal

• Active listening

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GRAPEVINE• Organization’s informal communication system• Main features:– Exist in every organization– Difficult to eliminate or control– Spontaneous in nature– Travels very fast

• Types of chains– Single-strand chain– Cluster chain– Gossip chain

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COMMUNICATIONS NETWORKS AND THEIR EFFECTIVENESS

• Star network

• Y network

• Chain network

• Circle network

• All-channel network

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COMMUNICATIONS NETWORKS AND THEIR EFFECTIVENESS

FactorTYPE OF COMMUNICATION NETWORK

Star Y Chain Circle All-ChannelDegree of centralization

Very high High Moderate Low Very low

Leadership predictability

Very high High Moderate Low Very low

Average group satisfaction Low Low Moderate Moderate High

Range in individual member satisfaction

High High Moderate Low Very low

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COMMON BARRIERS TO EFFECTIVE COMMUNICATION

• Noise• Semantics• Language routines• Lying and distortion• Perceptual differences• Language differences• Filtering of information• Poor listening• Information overload

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CROSS-CULTURAL COMMUNICATION

• Open communication

• Dialogue

• Crisis communication

• Feedback

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HOW TO IMPROVE COMMUNICATION

• Understand the communication process

• Able to talk and listen

• Respect the receiver

• Establish rapport

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CHAPTER 10UNDERSTANDING

DECISION-MAKING BEHAVIOUR

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DECISION-MAKING (HEART OF MANAGEMENT)

• Conscious process of making choices among one or more alternatives for getting the desired outcome

• Includes defining problems, gathering information, generating alternatives and choosing a course of action

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RATIONAL DECISION-MAKING PROCESS

• Identify the problem or opportunity

• Think of alternative solutions

• Evaluate alternatives and select solution

• Implement and evaluate solution chosen

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NON-RATIONAL DECISION-MAKING PROCESS

• Problem not clearly defined

• Knowledge is limited to possible alternatives

• Choice of a satisfying alternative

• Managerial action

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LIMITS TO RATIONALITY

• Satisficing

• Limited search

• Inadequate information and control

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DECISION MAKING PROCESS• Define and diagnose the problem• Set goals• Search for alternative solutions• Compare and evaluate alternative solutions• Choose among alternative solutions• Implement the solution selected• Follow up and control the results

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DECISION PREMISES• Factual premises

• Value premises

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PARTICIPATION IN DECISION-MAKING• Known as participative management

• Lighten the burden of the manager

• Makes the employees feel accepted and appreciated

• Will increase motivation, innovation and performance

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PARTICIPATION IN DECISION-MAKING• Factors that can help participative management:– Top management is continually involved– Middle and supervisory managers are supportive– Employees trust managers– Employees are ready– Employees do not work in interdependent jobs– Participative management is implemented with TQM

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BUILDING DECISION-MAKING SKILLS• Create a constructive environment

• Generate good alternatives

• Explore these alternatives

• Choose the best alternatives

• Check your decision

• Communicate your decision and take action

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CHAPTER 11MOTIVATION PEOPLE FORINCREASED PRODUCTIVITY

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WHY MOTIVATE?• Motivation is a psychological state that exist

whenever internal and / or external forces stimulate, direct or maintain behaviours

• By understanding employee motivation, managers can increase productive behaviours, enables managers to decrease disruptive behaviours such as tardiness, theft and loafing

• Motivating employees are important to ensure a productive and harmonious work environment

• Can affect organizational climate

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HOW TO MOTIVATE?• Through job design– Motivator factors– Hygiene factors

• Through performance expectations– Expectancy model

• Through equity

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STICK AND CARROT APPROACH• Idiom that refers to a policy of offering a

combination of rewards and punishment to induce behaviour

• Sometimes it takes both a carrot (goal) and a stick (motivator) to overcome procrastination and get the job done

• Most people, rewards work better than penalties

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MANIPULATING WORKERS• Most managers engage in some form of

manipulation to get employees to do their best

• An employer may use inappropriate manipulation to coerce an employee into doing something he doesn’t want to do by threatening or implying some manner of punishment

• Example: threats, fear, bribery, pressure, deceit, charm

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EXTRINSIC MOTIVATORS• Factors external to the job

• Includes company policy and administration, technical supervision, salary, fringe benefits, working conditions and interpersonal relations

• These factors are associated with an individual’s negative feelings about job and are related to the environment in which the job is performed

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INTRINSIC MOTIVATORS

• Directly related to the job and are largely internal to the individual

• Includes the work itself, recognition, advancement and responsibility

• These positive feelings are associated with the individual’s experiences of achievement, recognition and responsibility

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WORK DESIGN• Determined by factors that cannot be easily

changed without changing the technology or the structure of an entire work unit

• Enriched jobs are more motivating than jobs that are narrow in scope

• Example:– Job enlargement– Job enrichment– Team management

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REWARDS SYSTEM

• The ability of rewards to motivate individuals or team depends on six factors:– Availability– Timeliness– Performance contingency– Durability– Equity– Visibility

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MANAGERS’ PERCEPTION

• High internal work motivation

• High-quality work performance

• High satisfaction with the work

• Low absenteeism and turnover

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SATISFIER AND DISSTISFIER• Herzberg’s Two-Factor Theory– Relationship between job satisfaction and

motivation is a complicated one– He discovered that the presence of a particular job

characteristic, such as responsibility might increase job satisfaction

– Lack of responsibility didn’t necessarily produce dissatisfaction

• Hygiene factors• Motivator factors

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MASLOW’S HIERARCHY OF NEEDS• Abraham H. Maslow suggested that people have

a complex set of exceptionally strong needs, which can be arranged in a hierarchy

• Five types of needs:– Physiological– Security– Affiliation– Esteem– Self-actualization

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EXPECTANCY THEORY• Work effort is directed toward behaviour that is

believed to produce desired outcomes

• Effort is employee’s actual exertion of energy and motivation

• Three concepts of effort level:– Expectancy– Instrumentality– Valence

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CHAPTER 12UNDERSTANDING ORGANIZATIONAL

CONFLICT AND POLITICS

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ORGANIZATIONAL CONFLICT• Conflict refers to a process in which one party

perceives that its interests are being opposed or negatively affected by another party

• Negative outcomes:– Loss of skilled employees– Sabotage– Low quality of work

• Positive outcomes:– Creative alternatives– Increased motivation and commitment

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ORGANIZATIONAL POLITICS• When employees are in group, there will be an

individual who will practice power to influence others in the group

• Influence tactics to gain power that others perceive to be self-serving behaviour to gain self-interests

• Can be minimized by providing clear rules for resource allocation

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WHY CONTROL ORGANIZATIONAL CONFLICT AND POLITICS?

• Organizational control comprises formal policies, rules, procedures and records for preventing or correcting deviations form plans and for achieving desired goals

• Power in conflict management– Reward power– Coercive power– Legitimate power– Expert power– Referent power

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INSTRUMENTS OF CONTROL• Preventive Control– Mechanisms intended to reduce errors and thereby

minimize the need for corrective action

• Corrective Control– Mechanisms intended to reduce or eliminate

unwanted behaviours or results and thereby achieve conformity with the organization’s regulations and standards

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CORRECTIVE CONTROL MODEL• Define the system• Identify key characteristics• Set standards• Collect information• Make comparisons– If okay, continue– If deviations, next step

• Diagnose and correct problems

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CHAPTER 13ORGANIZATIONAL RESISTANCE

TO CHANGE

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NEED FOR ORGANIZATIONAL CHANGE• Organizational change refers to any

transformation in the design or functioning of an organization

• Degree of change– Radical change• Occurs when organizations make major innovations in the

ways they do business– Incremental change• An ongoing process of evolution over time, during which

many small adjustments occur routinely

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NEED FOR ORGANIZATIONAL CHANGE• Timing of change– Reactive change• Occurs when an organization is forced to change in

response to some event in the external or internal environment

– Anticipatory change• Occurs when managers make organizational modifications

based on forecasts of upcoming events or early in the cycle of a new trend

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CHANGE PROCESS

• Assess the environment• Determine the performance gap• Diagnose organizational problems• Articulate and communicate a vision for the

future• Develop and implement an action plan• Anticipate resistance and take action to reduce

it• The monitor changes

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RESISTANCE OF CHANGE

• Individual resistance– Perceptions– Personality– Habit– Threats to power and influence– Fear of the unknown– Economic reasons

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RESISTANCE OF CHANGE

• Organizational resistance– Organization design– Organizational culture– Resource limitations– Fixed investments– Inter-organizational agreements

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MAKING CHANGES IN THE ORGANIZATION

• Individuals• Teams• Leadership• Organizational systems• Reward systems• Organization design• Culture

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ORGANIZATIONAL DEVELOPMENT• Management of change and development of

organization

• Comprehensive approach to planned change that is aimed at improving the overall effectiveness of organization

• Three methods of OD:– Focus group– Survey feedback– Team building

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CHAPTER 14IMPACT OF CHANGING ENVIRONMENT

ON ORGANIZATIONAL BEHAVIOUR

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IMPORTANCE OF CULTURE • Culture is the unique pattern of shared

assumptions, values and norms that shape the socialization, symbols, language, narratives and practices of a group of people

• Elements of a culture– Assumptions– Values and norms– Socialization– Symbols– Language– Narratives– Practices

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IMPACT OF TECHNOLOGY AND INFORMATION AGE

• Technological change– Involves incremental adjustments or radical

innovations that affect work-flows, production methods, materials and information system

• Information technology– Comprises complex networks of computers,

telecommunications systems and remote-controlled devices

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INCREASED CONCERN WITH QUALITY

• Quality control process– Inputs– Transformation operations– Outputs

• Importance of quality– Positive company image– Lower costs and higher market share– Decreased liability

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ENVIRONMENT OF UNCERTAINTY

• Uncertainty avoidance is the extent to which members of a culture rely on social norms, procedures and organizations to avoid ambiguity, unpredictability and risk

• With high uncertainty avoidance, individuals seek orderliness, consistency, structure, formalized procedures and laws to cover situations in their daily lives

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IMPORTANCE OF ETHICS AND SOCIAL RESPONSIBILITY

• Ethics is a set of values and rules that define right and wrong conduct

• These values and rules indicate when behaviour is acceptable and when it is unacceptable

• Four basic forces that influence the ethical conduct of individuals and organizations– Cultural forces, legal and regulatory forces,

organizational forces, individual forces

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IMPORTANCE OF ETHICS AND SOCIAL RESPONSIBILITY

• Social responsibility holds that managers and other employees have obligations to identifiable groups that are affected by or can affect the achievement of an organization’s goals

• Protecting the natural environment

• Finding win-win solutions

• Evaluating social performance

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MANAGING DIVERSITY

• Categories of diversity– Primary categories– Secondary categories

• Changing workforce• Gender• Race and ethnicity• Age

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CHAPTER 15MANAGING INDIVIDUAL STRESS

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NATURE OF STRESS• Stress is the excitement, feeling of anxiety and

physical tension that occurs when the demand placed on an individual are thought to exceed his ability to cope

• Stressor is the physical or psychological demands from the environment that cause stress

• Stressor create stress or potential for stress when an individual perceives them as representing a demand that may exceed that person’s ability to respond

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PERSONALITY AND STRESS

• Many personality traits are related to stress

• Example:– Individuals with low self-esteem is more likely to

experience stress in demanding work situations than is a person with high self-esteem

– Individuals with high internal locus of control may take more effective action, more quickly in coping with a sudden emergency than might individuals with high external locus of control

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SOURCES OF STRESS• Workload

• Job conditions

• Role conflict and ambiguity

• Career development

• Interpersonal relations

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EFFECTS OF STRESS

• Impacts on health

• Impacts on performance

• Impacts on job burnout

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MANAGING STRESS

• Individual initiatives– Control the sources of stress– Be able to cope with stress

• Organizational initiatives– Reducing work stressors– Modifying behaviours– Creating wellness programs

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CHAPTER 16CULTIVATING

ORGANIZATIONAL CULTURE

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DYNAMICS OF ORGANIZATIONAL CULTURE

• Organizational culture:- represents a complex pattern of beliefs, expectations, ideas, values, attitudes and behaviors shared by members of organization- includes:- routine ways of communicating- norms shared by individuals and teams

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DYNAMICS OF ORGANIZATIONAL CULTURE

• Organizational culture:- includes:

- dominant values held by organization- philosophy that guides management- rules for getting along in organization- feeling in the organization

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HOW CULTURES EMERGE• Top management– Agrees on shared assumptions of human behaviour– Develops a shared vision of cultural values

• Behaviours– Employees behave in ways that are consistent with

shared values and assumptions

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HOW CULTURES EMERGE• Results– Financial performance– Market share– Employee commitment

• Culture– Strong culture emerges– Traditions are maintained– Socialization practices for new employees

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TYPES OF ORGANIZATIONAL CULTURE

• Bureaucratic culture

• Clan culture

• Entrepreneurial culture

• Market culture

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BUREAUCRATIC CULTURE• Values formality, rules, standard operating

procedures and hierarchical coordination

• Its members highly value standardized goods and customer service

• Managers view their roles as being good coordinators, organizers and enforces of written rules and standards

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CLAN CULTURE• Tradition, loyalty, personal commitment,

extensive socialization, teamwork, self-management and social influence

• Its members recognize an obligation beyond the simple exchange of labour for a salary

• Members have strong sense of identification and recognize their common fate in organization

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ENTREPRENEURIAL CULTURE• High levels of risk taking, dynamism and creativity

• Commitment to experimentation, innovation and being on the leading edge

• Not only quickly react to changes in the environment but it creates change

• Provide new and unique products and rapid growth

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MARKET CULTURE• Achievement of measurable and demanding

goals, especially those that are financial and market-based (sales growth, profitability and market share)

• Hard-driving competitiveness and a profit orientation prevail throughout the organization

• Relationship between individual and organization is contractual

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ETHICAL BEHAVIOUR AND ORGANIZATIONAL CULTURE

• Impact of culture– Organizational culture involves a complex interplay

of formal and informal systems that may support either ethical or unethical behaviour.

– An important concept linking organizational culture to ethical behaviour is principled organizational dissent, by which individuals in an organization protest, on ethical grounds, some practice or policy

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ETHICAL BEHAVIOUR AND ORGANIZATIONAL CULTURE

• Whistle-blowing– Disclosure by current of former employees of illegal,

immoral or illegitimate organizational practices to people or organizations that may be able to change the practice

– The whistle-blower lacks the power to change the undesirable practice directly and so appeals to other either inside or outside the organization

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FOSTERING CULTURAL DIVERSITY• Challenges• Characteristics of effective diversity culture– Managers and employees must understand that a

diverse workforce will embody different perspectives and approaches to work

– Managers must recognize learning opportunities and challenges

– Organizational culture must create an expectation of high standards of performance and ethics

– Organizational culture must stimulate personal development

– Organizational culture must encourage openness

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SOCIALIZATION OF NEW EMPLOYEES• Organizational socialization is the systematic

process by which an organization brings new employees into its culture.

• Steps in socialization– Careful selection– Challenging early work assignments– Training to develop capabilities with culture– Rewards that sustain culture– Adoption of cultural value policies– Ritual, taboos, rites and stories to reinforce culture– Role model to sustain culture