Organizational Behavior, 12th Edition Solution Manual

Organizational Behavior, 12th Edition By Schermerhorn

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Organizational Behavior, 12e Instructor’s Resource Guide Chapter 1 INTRODUCING ORGANIZATIONAL BEHAVIOR STUDY QUESTIONS 1.

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What is organizational behavior and why is it important?

What are organizations like as work settings?

What is the nature of management and leadership in organizations?

How do we learn about organizational behavior?

OB IN ACTION Cases for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Trader Joe’s Management Training Dilemma My Best Manager My Best Job Graffiti Needs Assessment Sweet Tooth Student Leadership Practices Inventory Learning Styles Managerial Assumptions 21st Century Manager

CHAPTER OVERVIEW This chapter provides an introduction to the field of organizational behavior. Organizational behavior is important because virtually everyone works with other people in some organized capacity, whether for monetary gain or voluntarily. An understanding of the principles of organizational behavior will not only help people to become better employees and managers, but will also help people become more astute observers of the organizational world, in general, and the business world, in particular.

The chapter begins by defining organizational behavior, discussing its scientific foundations, and identifying contemporary workplace trends that are being reflected in organizational behavior theories, concepts, and applications. The chapter then describes organizations as work settings.

The meaning of “organization” is examined and put in the context of several important concepts, including: organizational culture, organizational climate, open systems, value chain, stakeholders, diversity and multiculturalism..

Next, the nature of managerial work is described. Emphasis is placed on the manager’s role in fostering two key results: task performance and job satisfaction, and how the managerial functions of planning, organizing, directing, and controlling contribute to achieving these results.

It continues by introducing organizational behavior as a field that offers many insights on managing individuals and teams towards high performance in today’s new working environment.

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The chapter also touches briefly on leadership in organizations with a special emphasis on ethical management and leadership.

The chapter concludes with a discussion of individual learning and organizational learning, placing emphasis on experiential learning within the context of organizational behavior.

CHAPTER OUTLINE INTRODUCING ORGANIZATIONAL BEHAVIOR Why Organizational Behavior is Important Scientific Foundations of Organizational Behavior Organizational Behavior in a Changing World ORGANIZATIONS AS WORK SETTINGS Organizational Behavior in Context Organizational Environments and Stakeholders Diversity and Multiculturalism MANAGEMENT AND LEADERSHIP Managerial Activities and Roles Managerial Skills Leadership in Organizations Ethical Management and Leadership LEARNING ABOUT ORGANIZATIONAL BEHAVIOR Learning From Experience Learning Styles Learning Guide to Organizational Behavior 12/E CHAPTER LECTURE NOTES The chapter opens with a vignette which looks at the mishaps made by NBC in the recent replacing of Jay Leno with Conan O’Brien and the subsequent firing of Conan O’Brien and the return of Jay Leno to his original time slot.

INTRODUCING ORGANIZATIONAL BEHAVIOR WHYORGANIZATIONAL BEHAVIOR IS IMPORTANT? Organizational behavior (OB) is the study of individuals and groups in organizations.

Organizational behavior is a multidisciplinary field devoted to understanding individual and group behavior, interpersonal processes, and organizational dynamics.

In this challenging ear of work and organizations, the body of knowledge we call “organizational behavior” offers many insights of great value. Learning about organizational behavior is

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important, since it can help you develop a better work-related understanding of yourself and others.

SCIENTIFIC FOUNDATIONS OF ORGANIZATIONAL BEHAVIOR Interdisciplinary Body of Knowledge Organizational behavior is an interdisciplinary body of knowledge with strong ties to the behavioral sciences of psychology, sociology, anthropology, and the allied social sciences such as economics and political science.

Use of Scientific Methods Organizational behavior uses scientific methods to develop and empirically test generalizations about behavior in organizations.

Models are simplified views of reality that attempt to explain real-world phenomenon.

Independent variables are presumed causes that influence dependent variables.

Dependent variables are outcome of practical value and interest that are influenced by independent variables.

Figure 1.1 from the textbook identifies the research methodologies that are commonly used in organizational behavior.

Scientific thinking is important to OB researchers and scholars for the following reasons • The process of data collection is controlled and systematic.

• Proposed explanations are carefully tested.

• Only explanations that can be rigorously verified are accepted.

Focus on Application Organizational behavior focuses on applications that can make a real difference in how organizations and people in them perform.

Contingency Thinking Organizational behavior uses contingency thinking in its search for ways to improve organizational outcomes.

The contingency approach tries to identify how different situations can be best understood and handled.

Important contingency variables include environment, technology, tasks, structure, and people.

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LECTURE ENHANCEMENT Ask students to describe examples of management practices that may work well in one organization, but poorly in another. For example, how would the management practices that might work to motivate newspaper photographers to be creative differ from those used to keep construction workers from deviating from blueprints?

ORGANIZATIONAL BEHAVIOR IN A CHANGING WORLD Progressive workplaces today look and act very differently from those of the past.

Trends occurring in modern workplaces include the following: • Commitment to ethical behavior.

• Broader views of leadership.

• Importance of human capital.

• Demise of “command and control.”

• Emphasis on teamwork.

• Pervasive influence of information technology.

• Respect for new workforce expectations.

• Changing concept of “careers”.

• Concern for sustainability.

LECTURE ENHANCEMENT Conduct a brainstorming session with students to identify recent examples of each of the preceding workplace trends. After generating a sufficient number of examples, focus class discussion on the implications of these examples for managerial and leadership activities.

ORGANIZATIONS AS WORK SETTINGS An organization is a collection of people working together to achieve a common purpose.

ORGANIZATIONAL BEHAVIOR IN CONTEXT Most people spend at least a third of their lives in organizations. Given how significant the workplace is in our lives, we need to think deeply about not only the effects of organizational behavior on us, but also how we can affect it.

The behavior of people in organizations is greatly affected by context.

One of the strongest contextual influences on OB is organizational culture, which is defined as the shared beliefs and values that influence the behavior of organizational members.

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How various organizational cultures affect people depends on something called “fit” which is the match of organizational culture and individual characteristics.

Another key contextual influence on behavior in organizations is managerial context. Just as organizations have cultures, they also have climates, which represent the shared perceptions among members regarding what the organization is like in terms of formal and informal management policies, practices, events and procedures.

LECTURE ENHANCEMENT Ask students to think about an organization they are familiar with and discuss the organization’s culture and climate and describe the type of individuals who they think best fit into that particular organization.

ORGANIZATIONAL ENVIRONMENTS AND STAKEHOLDERS Figure 1.2 from the textbook characterizes organizations as dynamic open systems that obtain resource inputs from the environment and transform them into finished goods or services that are returned to the environment as outputs.

A value chain is a sequence of activities that creates valued goods and services for customers.

The complex environment or organizations contains a variety of stakeholders. Stakeholders are the people, groups, and institutions that are affected by and thus have an interest or “stake” in an organization’s performance.

Customers, owners, employees, suppliers, regulators, and local communities are the key stakeholders of most organizations.

The interests of multiple stakeholders are sometimes conflicting.

DIVERSITY AND MULTICULTURALISM Workforce diversity describes how people differ on attributes such as age, race, ethnicity, gender, physical ability, and sexual orientation.

Multiculturalism refers to pluralism, and respect for diversity in the workplace.

Inclusion is the degree to which an organization’s culture respects and values diversity.

Success in the contemporary business world rests in part on valuing diversity, which refers to managing and working with others in full respect for their individual differences.

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MANGEMENT AND LEADERSHIP Managers are responsible for supporting the work efforts of other people.

An effective manager helps others achieve high levels of both performance and satisfaction.

This definition focuses on two key results in a manager’s daily work: • Task performance is the quantity and quality of work produced • Job satisfaction is a positive feeling about one’s work and work setting.

MANAGERIAL ACTVITIES AND ROLES The jobs of managers and team leaders can be described by the four functions of management, as shown in Figure 1.3 from the textbook. These four functions are as follows: • Planning ⎯ defining goals, setting specific performance objectives, and identifying the actions needed to achieve them.

• Organizing ⎯ creating work structures and systems, and arranging resources to accomplish goals and objectives.

• Leading ⎯ instilling enthusiasm by communicating with others, motivating them to work hard, and maintaining good interpersonal relations.

• Controlling ⎯ ensuring that things go well by monitoring performance and taking corrective action as necessary.

LECTURE ENHANCEMENT Divide students into discussion groups of five to six members. Have each group select a different campus organization to analyze. Each group should explore how planning, organizing, leading, and controlling are exhibited in the chosen campus organization.

Based on the work of Henry Mintzberg, Figure 1.4 from the textbook identifies the various interpersonal, informational, and decisional roles of effective managers.

Interpersonal roles involve working directly with other people and include the roles of figurehead, leader, and liaison.

Informational roles involve exchanging information with other people and include the roles of monitor, disseminator, and spokesperson.

Decisional roles involve making decisions that affect other people and include the roles of entrepreneur, disturbance handler, resource allocator, and negotiator.

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LECTURE ENHANCEMENT Have students draw on their work, educational, athletic team, or other extracurricular experiences to identify examples of how people in managerial and leadership positions enact the various interpersonal, informational, and decisional roles.

Good interpersonal relationships are essential to managerial success in each of these roles.

Managers and team leaders need to develop and maintain relationships and networks. Different types of networks include: • Task networks of specific job-related contacts • Career networks of career guidance and opportunity resources • Social networks of trustworthy friends and peers Managers must develop and maintain social capital in the form of relationships and networks that they can call upon to get work done through other people.

MANAGERIAL SKILLS A skill is an ability to translate knowledge into effective action.

Robert Katz divides essential managerial skills in three categories: technical, human, and conceptual.

• A technical skill is the ability to perform specialized tasks.

• A human skill is the ability to work well with other people. An important emphasis in human skills in emotional intelligence (EI), which is the ability to manage oneself and one’s relationships effectively. The core elements in emotional intelligence are: o Self-awareness—ability to understand your own moods and emotions o Self-regulation—ability to think before acting and to control bad impulses o Motivation—ability to work hard and persevere o Empathy—ability to understand the emotions of others o Social skill—ability to gain rapport with others and build good relationships • A conceptual skill is the ability to analyze and solve complex problems.

LECTURE ENHANCEMENT Have the students spend eight to ten minutes of class time writing a brief self-assessment essay regarding the extent to which they perceive themselves as having developed each the above components of emotional intelligence. Have the students, who are willing to do so, contribute their examples as you discuss the components of emotional intelligence.

Technical skills are more important at entry levels of management and conceptual skills are more important for senior executives. Human skills, which are strongly grounded in the foundations of organizational behavior, are important across all managerial levels.

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LECTURE ENHANCEMENT Have students discuss the roles that technical skills, human skills, and conceptual skills play in their professors’ performance of their jobs. Then have the students think of their own educational pursuits as a job. What roles do technical skills, human skills, and conceptual skills play in the students’ performance of their jobs?

LEADERSHIP IN ORGANIZATIONS Leaders are people who use influence to create change.

Leaders succeed when people follow them, not because they have to, but because they want to.

Organizations are full of leaders, managers and nonmanagers alike. These are people who get listened to by their peers, by their managers and by the people below and higher up in the organization.

LECTURE ENHANCEMENT Ask the students to look at the description of the characteristics and actions of a leader and provide examples of how they themselves have acted as leaders in the past. For example, how they have used their influence to create change?

ETHICAL MANAGEMENT AND LEADERSHIP Immoral managers do not subscribe to any ethical principles, making decisions and acting in any situation to simply take best personal advantage.

Amoral managers fail to consider the ethics of a decision or behavior. This manager acts unethically at times but does so unintentionally.

Moral managers incorporate ethics principles and goals into his or her personal behavior. For this manager, ethical behavior is a goal, a standard, and even a matter of routine.

Ethics mindfulness is an “enriched awareness” that causes one to behave with an ethical consciousness from one decision or behavioral event to another.

Figure 1.5 illustrates the “ethics center of gravity” and moral leadership.

LEARNING ABOUT ORGANIZATIONAL BEHAVIOR Learning is an enduring change in behavior that results from experience.

Lifelong learning involves learning continuously from day-to-day work experiences; conversations with colleagues and friends; counseling and advice provided by mentors, success models, training seminars, and workshops; and other daily opportunities.

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LEARNING FROM EXPERIENCE Figure 1.6 from the textbook shows how the content and activities of the typical OB course can fit together in an experiential learning cycle.

LEARNING STYLES The seven styles from the Learning Styles Inventory and their preferences are: • Visual learner—learns by watching and viewing images and diagrams • Print learner—learns by reading and writing things down • Auditory learner—learns by listening and repeating verbal presentations • Interactive learner—learns through conversation and sharing information • Haptic learner—learns hands-on by drawing and putting things together • Kinesthetic learner—learns by doing and active involvement • Olfactory learner—learns through associative senses of smell and taste LEARNING GUIDE TO ORGANIZATIONAL BEHAVIOR 12/E Part 1: The discipline and context of organizational behavior Part 2: Individual behavior and performance Part 3: Teams and Teamwork Part 4: Leadership and influence processes Part 5: Organizational context The final figure in the chapter shows that “organizational behavior is a knowledge base” “that helps people work together” “to improve the performance of organizations.”

CHAPTER STUDY GUIDE What is organizational behavior and why is it important?

• Organizational behavior is the study of individuals and groups in organizations.

• OB is an applied discipline based on scientific methods.

• OB uses a contingency approach, recognizing that management practices must fit the situation.

• Shifting paradigms of OB reflect a commitment to ethical behavior, the importance of human capital, emphasis on teams, the growing influence of information technology, new workforce expectations, and changing notions of careers.

What are organizations like as work settings?

• An organization is a collection of people working together in a division of labor for a common purpose.

• Organizations are open systems that interact with their environments to obtain resources and transform them into outputs returned to the environment for consumption.

• Key stakeholders in the external environments of organizations include customers, owners, suppliers, regulators, local communities, employees, and future generations.

• The organizational culture is the internal “personality” of the organization, including the beliefs and values that are shared by members.

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Positive organizational cultures place a high value on workforce diversity and multiculturalism, emphasizing respect and inclusiveness for all members.

What is the nature of management and leadership in organizations?

• Managers directly support the work effort of others; they are increasingly expected to act more like “coaches” and “facilitators” than like “bosses” and “controllers.”

• An effective manager is one whose work unit, team, or group accomplishes high levels of performance and job satisfaction that are sustainable over the long term.

• The four functions of management are planning—to set directions; organizing—to assemble resources and systems; leading—to create workforce enthusiasm; and controlling—to ensure desired results.

• Managers fulfill a variety of interpersonal, informational, and decisional roles while working with networks of people both inside and outside of the organization.

• Managerial performance is based on a combination of essential technical, human, and conceptual skills.

• Emotional intelligence is an important human skill that is an ability to recognize and manage emotions both personally and in relationships with others.

How do we learn about organizational behavior?

• Learning is an enduring change in behavior that results from experience.

• True learning about organizational behavior involves a commitment to continuous lifelong learning from one’s work and everyday experiences.

• Most organizational behavior courses use multiple methods and approaches that take advantage of the experiential learning cycle.

• People vary in their learning styles; an understanding of one’s style can help improve learning and course success.

KEY TERMS Amoral manager: fails to consider the ethics of a decision or behavior.

Conceptual skill: the ability to analyze and solve complex problems.

Contingency thinking: seeks ways to meet the needs of different management situations.

Controlling: ensuring that things go well by monitoring performance and taking corrective action as necessary.

Dependent variables: outcomes of practical value and interest that are influenced by independent variables.

Effective manager: helps other achieve high levels of both performance and satisfaction.

Emotional intelligence: the ability to manage oneself and one’s relationships effectively.

Ethics mindfulness: is an enriched awareness that causes one to consistently behave with ethical consciousness.

Evidence-based management: uses hard facts and empirical evidence to make decisions.

Human skills: the ability to work well with other people.

Immoral manager: chooses to behave unethically.

Inclusion: the degree to which an organization’s culture respects and values diversity.

Independent variables: presumed causes that influence dependent variables.

Job satisfaction: a positive feeling about one’s work and work setting.

Leading: instilling enthusiasm by communicating with others, motivating them to work hard, and maintaining good interpersonal relations.

Learning: an enduring change in behavior that results from experience.

Lifelong learning: continuous learning from everyday experiences.

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Manager: someone whose job it is to directly support the work efforts of other people.

Models: simplified views of reality that attempts to explain real-world phenomena.

Moral manager: makes ethical behavior a personal goal.

Multiculturalism: refers to pluralism and respect for diversity in the workplace.

Open systems: systems that obtain resource inputs from the environment and transforms them into finished goods or services that are returned to the environment as outputs.

Organization: a collection of people working together in a division of labor to achieve a common purpose.

Organizational behavior: the study individuals and groups in organizations.

Organizational climate: represents shared perceptions of members regarding what the organization is like in terms of formal and informal management policies and practices.

Organizational culture: the shared beliefs and values that influence the behavior of organizational members.

Organizing: creating work structures and systems, and arranging resources to accomplish goals and objectives.

Planning: defining goals, setting specific performance objectives, and identifying the actions needed to achieve them.

Skill: is an ability to turn knowledge into effective action.

Social capital: is a capacity to get things done due to relationships with other people.

Stakeholders: the people, groups, and institutions that are affected by and thus have an interest or “stake” in an organization’s performance.

Task performance: the quality and quantity of the work produced or the services provided by the work unit as a whole.

Technical skill: the ability to perform specialized tasks.

Value chain: is a sequence of activities that creates valued goods and services for customers.

Workforce diversity: the presence of differences based on gender, race and ethnicity, age, ablebodiedness, and sexual orientation.

SPECIAL FEATURES Things Don’t Always Go As Planned The breakout vignette at the beginning of the chapter illustrates how organizational leaders who have had success in the past (in this case, Jeff Zucker, who had earlier success as the producer of the Today Show) can make subsequent mistakes when the people, organizational factors and circumstances change. In the latter case, a different time slot, not enough homework beforehand and passionate responses by fans of both shows led to a $195 million loss to NBC. Ask students to identify the different mishaps in the vignette. Have the students further discuss how these mishaps could have been avoided?

Research Insight A recent meta-analysis indicates that women may make better leaders than men do. The possible strengths of female leaders include being more transformational, good at mentoring, very inspiring, encouraging creativity, showing excitement about goals, and rewarding positive performance. The authors of the study suggest the reason women may make better leaders is because followers are more accepting of transformational leadership from women and that they style comes more easily to women. They also suggest that women’s skills may be more

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developed because they have had to work harder to succeed than men have. Ask students for other reasons women may be more highly rated as leaders.

The Facebook Generation Goes to Work The Facebook Generation, called “Generation F” are individuals heavily into the world of social media. Management scholar Gary Hamel says that managers who want to work well with Gen F have to face up to a new set of expectations. Have students comment on the impact of social media in organizations. Let them start by describing how social media has changed how workers interact and communicate with others and how they work in teams and complete tasks. What are the new expectations that managers have to face up to with Gen F workers?

Finding The Leader in You When we think of outstanding leaders we often think of heroes and celebrate their great accomplishments with national holidays. When City National Bank of Florida was sold, the bank’s CEO – Leonard Abess – became a hero to his employees and former employees. He became a hero when he distributed $60 million of the profits from the sale of the bank to them personally. Ask students if they think an organization’s profits should be shared with employees?

What are the advantages and disadvantages of doing so?

Ethics in OB In light of recent scandals and excesses by organization managers, the authors of a recent Harvard Business Review article are calling business schools to support making management a profession, governed by codes of conduct that “forge in implicit social contract with society. ” Students can debate the differing models of corporate social responsibility. Should managers try to satisfy the interests of many stakeholders or should managers act to maximize shareholder wealth?

OB in Popular Culture Many decisions in organizations are quite complicated and ethical components may be hard to sort out. In the movie, “John Q”, John Archibald (Denzel Washington) learns that his son Mike needs a heart transplant and he does not have sufficient insurance coverage. He decides to take the heart surgeon hostage in the hospital’s emergency room. During a lull, the hostages and medical staff discuss how managed care insurance practices and hospital policies result in treatment decisions that are not in the best interest of the patient. Have students debate the various decisions that can be made in the current situation and the impact these various decisions can have on the hospital’s various stakeholders.

Group Project Since this chapter kicks off the class, an OB-style ice breaker is good way to end class on the first day (or begin the second day). An easy ice breaker that can have implications for the rest of the semester is to have students get into groups of five and introduce themselves to each other. Each person in the group must tell at least five interesting things about him or herself (For example: hometown, major, hobbies, pets, summer activities, jobs). Then have each student introduce each member of the group and tell one of the interesting things about each person. Each person is introduced four times. This exercise has two benefits. First, it helps students make connections to

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each other such as discovering that they live in the same residence hall. Second, it assures that each student in the class will know at least four other students from the first day of class onward.

Organizational Behavior, 12e Instructor’s Resource Guide Chapter 2 INDIVIDUAL DIFFERENCES, VALUES, AND DIVERSITY STUDY QUESTIONS 1.

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What are individual differences and why are they important?

What is personality?

How are personality and stress related?

What are individual values?

Why is diversity important in the workplace?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Xerox What Do You Value in Work?

Prejudice in Our Lives How We View Differences Alligator River Story Personal Values Personality Type

CHAPTER OVERVIEW This chapter addresses the nature of individual differences and describes why understanding and valuing these differences is increasingly important in today’s workplace. The chapter begins with a description of individual differences and awareness of self and others. It describes self-concept as the view individuals have of themselves as physical, social, and spiritual or moral beings and discusses whether individuals develop based on heredity or on the environment.

Personality captures the combination of characteristics that represents the unique nature of an individual as that individual interacts with others. The chapter describes the Big Five personality traits of extraversion, agreeableness, conscientiousness, emotional stability, and openness to experience. It also provides a useful personality framework consisting of social traits (problem-solving styles), personal conception traits (locus of control, proactive personality, authoritarianism and dogmatism, Machiavellianism, and self-monitoring), emotional adjustment traits (Type A and Type B orientations), and personality dynamics, where each category represents one or more personality dimensions.

The chapter then moves to a discussion of stress and how it is related to personality.

Stress emerges when people experience tensions caused by extraordinary demands, constraints, or opportunities in their jobs. Two types of stressors – work and life – are discussed. The spillover effect results when forces in people’s personal lives “spillover” to affect them at work. Stress can be managed by prevention—such as making adjustments in work and nonwork factors; it can also be dealt with through coping mechanisms and personal wellness—taking steps to maintain a healthy body and mind capable of better withstanding stressful situations.

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Next the chapter discusses values as broad preferences concerning courses of action or outcomes. Different models for understanding values are presented including Rokeach’s terminal values (preferences concerning ends) and instrumental values (preferences concerning means); Meglino and associates values of achievement, helping and concern for others, honesty, and fairness; and Hofstede’s dimensions of national culture (power distance, individualism– collectivism, uncertainty avoidance, masculinity–femininity, and long-term/short-term orientation).

The chapter concludes with a discussion of diversity and why is it important in the workplace. The most commonly discussed types of diversity in the workplace are gender, racial/ethnic, age, disability, and sexual orientation. There have been two shifts in the diversity discussion in recent years. The first is from “managing” diversity to “valuing” diversity. The second is from a focus on diversity to a focus on retention and inclusion. This represents a need to emphasize not only recruitment but retention. Finally, the chapter describes social identity theory which suggests that many forms of discrimination are subtle but powerful, and may occur in subconscious psychological processes that individuals of out-groups perceive in the workplace.

CHAPTER OUTLINE WHAT ARE INDIVIDUAL DIFFERENCES AND WHY ARE THEY IMPORTANT? Self-Awareness and Awareness of Others Components of Self Nature Versus Nurture WHAT IS PERSONALITY? Big Five Personality Traits Social Traits Personal Conception Traits Emotional Adjustment Traits HOW ARE PERSONALITY AND STRESS RELATED? Sources of Stress Outcomes of Stress Managing Stress WHAT ARE INDIVIDUAL VALUES? Sources of Values PersonalValues Cultural Values WHY IS DIVERSITY IMPORTANT IN THE WORKPLACE? Importance of Diversity?

Types of Diversity Challenges in Managing Diversity CHAPTER LECTURE NOTES The chapter opens with a description of the two women who lead Xerox. Anne Mulcahy and Ursula Burns have a complex and sometimes contentious relationship. They are both unusual choices for their positions, but their success demonstrates the strength of diversity.

SELF-AWARENESS AND AWARENESS OF OTHERS

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Differences among people can make the ability to predict and understand behavior in organizations challenging.

• Individual differences are the ways in which people are similar and how they vary in their thinking, feeling, and behavior.

• Self-awareness means being aware of one’s own behaviors, preferences, styles, biases, personalities, and so on.

• Awareness of others is being aware of behaviors, preferences, styles, biases, personalities, etc., of others.

COMPONENTS OF SELF The self-concept is the view individuals have of themselves as physical, social, and spiritual or moral beings. Two aspects of the self-concept are self-esteem and self-efficacy.

• Self-esteem is a belief about one’s own worth based on an overall self-evaluation.

• Self-efficacy is an individual’s belief about the likelihood of successfully completing a specific task.

LECTURE ENHANCEMENT The book states that the left brain is sequential, logical and analytical; the right brain is nonlinear, intuitive and holistic. Ask students to discuss why, in the Industrial Age, the left brain ruled.

Also, why in today’s workplace, right brain and “whole brain” may be the keys to success. If needed, prod them to think about what job might have been available to them 50 or 100 years ago and what skills it would require vs. the jobs that are available to them now.

NATURE VERSUS NURTURE Personality is the overall combination of characteristics that capture the unique nature of a person as that person reacts and interacts with others.

Heredity or Environment?

Is personality determined by heredity or environment? Heredity sets the limits on just how much personality characteristics can be developed; environment determines development within these limits. There is about a 50-50 heredity environment split.

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Heredity consists of those factors that are determined at conception, including physical characteristics, gender, and personality factors.

Environment consists of cultural, social, and situational factors.

• Cultural values and norms play a substantial role in the development of personality.

• Social factors include family life, religion, and many kinds of formal and informal groups.

• Situational factors reflect the opportunities or constraints imposed by the context in which one operates.

Sometimes attempts are made to measure personality with questionnaires or special tests.

Frequently, personality can be inferred from behavior alone. Either way, personality is an

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important individual characteristic to understand. It helps us identify predictable interpalys between people’s individual differences and their tendencies to behave in certain ways.

LECTURE ENHANCEMENT Ask students if they have ever completed a personality and what was the purpose (job, club, sports team, etc.). Further have the students discuss what they believe are the advanatges and disadvantages of administering personality tests to individuals.

BIG FIVE PERSONALITY TRAITS Personality traits are enduring characteristics describing an individual’s behavior.

The Big Five personality dimensions have been distilled from extensive lists of specific personality traits. The Big Five traits are the following: • Extraversion ⎯ being outgoing, sociable, assertive.

• Agreeableness ⎯ being good-natured, trusting, cooperative.

• Conscientiousness ⎯ being responsible, dependable, persistent.

• Emotional stability ⎯ being unworried, secure, relaxed.

• Openness to experience ⎯ being imaginative, curious, broad-minded.

SOCIAL TRAITS Social traits are surface-level traits that reflect the way a person appears to others when interacting in various social settings.

Problem Solving Problem-solving style, based on the work of Carl Jung, reflects the way a person gathers and evaluates information when solving problems and making decisions.

The first component of problem solving is information gathering. Information gathering involves getting and organizing data for use. Styles of information-gathering vary from sensation to intuitive. Figure 2.1 in the textbook illustrates four problem-solving styles.

1. Sensation thinking 2. Sensation feeling 3. Intuitive thinking 4. Intuitive feeling These four problem-solving styles result from two dimensions: • Sensation-type individuals prefer routine and order and emphasize well-defined details in gathering information; they would rather work with known facts than look for possibilities.

• Intuitive-type individuals like new problems, dislike routine, and would rather look for possibilities than work with facts.

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The second component of problem solving is evaluation. Evaluation involves making judgments about how to deal with information once it has been collected. Styles of information evaluation vary from an emphasis on feeling to an emphasis on thinking.

• Feeling-type individuals are oriented toward conformity and try to accommodate themselves to other people; they try to avoid problems that may result in disagreements.

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

Problem-solving styles are most frequently measured with the (typically 100-item) Myers-Briggs Type Indicator (MBTI).

PERSONAL CONCEPTION TRAITS Personal conception traits represent individuals’ major benefits and personal orientation concerning a range of issues involving social and physical setting.

Personal conception traits include locus of control, proactive personality, authoritarianism and dogmatism, Machiavellianism, and self-monitoring.

Locus of Control Locus of control refers to the extent to which a person feels able to control his or her own life.

• Internals tend to be more introverted and are more oriented toward their own feelings and ideas. They believe that they control their own fate or destiny.

• Externals are more extraverted in their interpersonal relationships and are more oriented toward the world around them. They believe that much of what happens to them is beyond their control and is determined by environmental forces such as fate.

Figure 2.2 in the textbook describes how internals differ from externals regarding information processing; job satisfaction; performance; self-control, risk, and anxiety; motivation, expectancies, and results; and response to others.

LECTURE ENHANCEMENT Using Figure 2.2 a point of departure, have each student identify his or her internal/external locus of control orientation regarding information processing; job satisfaction; performance; selfcontrol, risk, and anxiety; motivation, expectancies, and results; and response to others.

Proactive Personality A proactive personality is the disposition that identifies whether or not individuals act to influence their environments.

• Individuals with high proactive personality identify opportunities and act on them, show initiative, take action, and persevere until meaningful change occurs. In contrast, people who are not proactive fail to identify— let alone seize—opportunities to change things.

• Less proactive individuals are passive and reactive, preferring to adapt to circumstances rather than change them.

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Authoritarianism/Dogmatism Authoritarianism/dogmatism: Both “authoritarianism” and “dogmatism” deal with the rigidity of a person’s beliefs.

• A person high in authoritarianism tends to adhere rigidly to conventional values and to obey recognized authority. This person is concerned with toughness and power and opposes the use of subjective feelings. Highly authoritarian individuals are so susceptible to authority that in their eagerness to comply they may behave unethically.

• An individual high in dogmatism sees the world as a threatening place. This person regards legitimate authority as absolute and accepts or rejects others according to how much they agree with accepted authority.

Machiavellianism Machiavellianism: The Machiavellian personality views and manipulates others purely for personal gain.

• A high-Mach personality approaches situations logically and thoughtfully and is even capable of lying to achieve personal goals; is rarely swayed by loyalty, friendships, past promises, or the opinions of others; is skilled at influencing others; tries to exploit loosely structured situations; and performs in a perfunctory manner in highly structured situations.

• A low-Mach personality accepts direction imposed by others in loosely structured situations; works hard to do well in highly structured situations; is guided more strongly by ethical considerations; and is less likely to lie or cheat.

Self-monitoring Self-monitoring reflects a person’s ability to adjust his or her behavior to external or situational (environmental) factors.

• High self-monitoring individuals are sensitive to external cues and tend to behave differently in different situations. High self-monitors can present a very different appearance from their true self.

• In contrast, low self-monitors, like their low-Mach counterparts, aren’t able to disguise their behaviors ⎯ “what you see is what you get.”

EMOTIONAL ADJUSTMENT TRAITS Emotional adjustment traits measure how much an individual experiences emotional distress or displays unacceptable acts.

Type A and Type B Orientation A frequently encountered emotional adjustment trait that is especially important for OB is the Type A/Type B orientation.

• Individuals with a Type A orientation are characterized by impatience, desire for achievement, and perfectionism.

• Individuals with a Type B orientation are characterized by as being more easy going and less competitive than Type A.

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LECTURE ENHANCEMENT As an outside assignment, have students write an essay describing themselves in terms of the Big Five personality traits, social traits, personal conception traits, and emotional adjustment traits that were discussed above. Also have them describe how their personality profile (in terms of these various dimensions) seems to influence their behavior.

PERSONALITY AND STRESS Stress is tension from extraordinary demands, constraints, or opportunities.

SOURCES OF STRESS Stressors are the wide variety of things that cause stress for individuals.

Work Stressors Work stressors can arise from many sources, including excessively high or low task demands, role conflicts or ambiguities, poor interpersonal relations, or career progress that is either to slow or too fast.

Common work stressors include the following: • Task demands • Role ambiguities • Role conflicts • Ethical dilemmas • Interpersonal problems • Career developments • Physical setting Life Stressors Life stressors occur as family events (e.g., the birth of a new child), economic difficulties (e.g., the sudden loss of a big investment), and personal affairs (e.g., a separation or divorce).

The spillover effect results when forces in people’s personal lives “spillover” to affect them at work.

LECTURE ENHANCEMENT Ask the students to identify the things that cause stress for them. Treating their role as a student as their work, have them identify the work, nonwork, and personal stressors in their lives.

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Outcomes of Stress Eustress or constructive stress, occurs at moderate levels and prompts increased work effort, stimulates creativity, and encourage greater diligence, thereby having a positive impact on performance.

Distress or destructive stress, is dysfunctional for both the individual and the organization. It occurs as low or high levels of stress.

Job burnout manifests as a loss of interest in and satisfaction with a job due to stressful working conditions.

Toxic workplaces exist when too much stress overloads and breaks down a person’s physical and mental systems resulting in absenteeism, turnover, errors, accidents, dissatisfaction, reduced performance, unethical behavior, and illness.

Stress and health Stress can impact a person’s health. Health problems associated with stress include heart attack, stroke, hypertension, migraine headache, ulcers, substance abuse, overeating, depression, and muscle aches.

Managers and team leaders should be alert to signs of excessive stress in themselves and their coworkers.

LECTURE ENHANCEMENT There are some startling statistics about workplace stress that have been published by the American Institute of Stress, available on the organization’s Web site at http://www.stress.org/.

The statistics are based on surveys of American employees and other American Institute of Stress research. These statistics may stimulate interesting classroom discussion.

MANAGING STRESS Coping Mechanisms Coping is a response or reaction to distress that has occurred or is threatened.

Problem-focused coping are coping mechanisms which manage the problem that is causing the distress.

Emotion-focused coping mechanism regulates emotions or distress.

MANAGING STRESS IN ORGANIZATIONS Stress prevention involves taking action to keep stress from reaching destructive levels in the first place.

Once stress has reached a destructive point, special techniques of stress management can be implemented.

Personal wellness involves the pursuit of one’s job and career goals with the support of a personal health promotion program.

LECTURE ENHANCEMENT Ask the students to identify the techniques that they use for managing stress. Common examples are likely to include both effective and ineffective coping mechanisms. Effective coping mechanisms could include exercise, listening to music, resting, visiting with friends, etc.

Ineffective coping mechanisms could include such actions as engaging in angry outbursts, becoming sullen, mistreating family or friends, excessive consumption of alcohol, etc.

VALUES Values are broad preferences concerning appropriate courses of action or outcomes. Values reflect a person’s sense of right and wrong or what “ought” to be.

Sources of values Sources of values are parents, friends, teachers, and external reference groups, and all influence individual values. At the national level, cultural value dimensions, such as those identified by Hofstede, tend to influence these sources.

Personal values • •

Terminal values reflect a person’s preferences concerning the “ends” to be achieved. They are the goals an individual would like to achieve during his or her lifetime.

Instrumental values reflect a person’s beliefs about the means for achieving desired ends.

They represent how you might go about achieving your important end states, depending on the relative importance you attached to the instrumental values.

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Figure 2.3 in the textbook summarizes 18 terminal values and 18 instrumental values.

LECTURE ENHANCEMENT Using Figure 2.3 as a point of departure, have each student identify the five most important terminal values and the five most important instrumental values for him or her. Divide the class into small groups to discuss the implications of their selected sets of values for how they might work together on a long-term group project.

Groups differ in the way they rank order the importance of these values A more recent values schema, developed by Bruce Meglino and associates, is aimed at people in the workplace: • Achievement—getting things done and working hard to accomplish difficult • things in life • Helping and concern for others—being concerned for other people and with • helping others • Honesty—telling the truth and doing what you feel is right • Fairness—being impartial and doing what is fair for all concerned Value congruence occurs when individuals express positive feelings upon encountering others who exhibit values similar to their own. When values differ, or are incongruent, conflicts over such things as goals and the means to achieve them may result.

CULTURAL VALUES Culture is the learned and shared way of thinking and acting among a group of people or society.

Geert Hofstede refers to culture as the “software of the mind.”

Since culture is shared among people, it helps to define the boundaries between different groups and affects how their members relate to one another.

LECTURE ENHANCEMENT If any of your students have lived or traveled abroad, ask them to describe their experiences and what they learned about different cultures.

VALUES AND NATIONAL CULTURES A framework offered by Geert Hofstede helps in understanding how value differences across national cultures can influence human behavior at work.

The five dimensions of national culture in Hofstede’s framework are as follows:

• • • • •

Power distance is the willingness of a culture to accept status and power differences among its members. It reflects the degree to which people are likely to respect hierarchy and rank in organizations.

Uncertainty avoidance is a cultural tendency toward discomfort with risk and ambiguity. It reflects the degree to which people are likely to prefer structured or unstructured organizational situations.

Individualism-collectivism is the tendency of a culture to emphasize individual versus group interests. It reflects the degree to which people are likely to prefer working as individuals or working together in groups.

Masculinity-femininity is the tendency of a culture to value stereotypical masculine or feminine traits. It reflects the degree to which organizations emphasize competition and assertiveness versus interpersonal sensitivity and concerns for relationships.

Long-term/short-term orientation is the tendency of a culture to emphasize values associated with the future, such as thrift and persistence, versus values that focus largely on the present.

It reflects the degree to which people and organizations adopt long-term or short-term performance horizons.

The five dimensions of Hofstede’s cultural framework are interrelated; consequently, national cultures may best understood in terms of cluster maps that combine multiple dimensions. Figure 2.4 from the textbook provides an example of a cluster map for the dimensions of individualismcollectivism and power distance.

DIVERSITY IMPORTANCE OF DIVERSITY Diversity in the workforce is increasing in the United States and other countries. It is important because of the benefits diverse backgrounds and perspectives can bring to the workplace.

Workforce diversity is the mix of people within a workforce who are considered to be, in some way, different from those in the prevailing constituency.

TYPES OF DIVERSITY Race and Ethnicity Racial and ethnic differences represent another prominent form of diversity in organizations. In the workplace, race and ethnicity are protected from discrimination by Title VII of the Civil Rights Act of 1964.

Title VII of the Civil Rights Act of 1964 protects individuals against employment discrimination on the basis of race and color, national origin, sex, and religion.

Gender In 2009, women comprised 46.3 percent of U.S. business and 50 percent of management, professional and related occupations. Despite this, women are still underrepresented at the highest levels of organizations.

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Leaking Pipeline Leaking pipeline is a phrase coined to describe how women have not reached the highest levels of organizations.

Stereotyping Stereotyping occurs when people make a generalization, usually exaggerated or oversimplified (and potentially offensive), that is used to describe or distinguish a group.

Catalyst research finds that women consistently identify gender stereotypes as a significant barrier to advancement. The research also found that both men and women saw women as better at stereotypically feminine “caretaking skills,” such as supporting and encouraging others, and men as excelling at more conventionally masculine “taking charge” skills, such as influencing superiors and problem solving—characteristics previously shown to be essential to leadership.

Sexual Orientation Although sexual orientation is not protected by the Equal Employment Opportunities Commission (EEOC), which addresses discrimination based on race, color, sex, religion, national origin, age, and disability,84 many states now have executive orders protecting the rights of gay and lesbian workers. Wisconsin was the first in 1982, and as of January 2008, thirteen states prohibit workplace discrimination against gay people and seven more have extended additional protection to LGB (lesbian, gay, bisexual) people.

The higher a company is on the Fortune 500 list, the more likely it is to have both domestic partner benefits and a written nondiscrimination policy covering sexual orientation.

Age Age, or more appropriately generational, diversity is affecting the workplace like never before.

There are four generations in the workforce: 1. Baby Boomers, born between 1946 and 1964, make up about 40 percent of today’s workforce.

2. Generation X, born between 1965 and 1980, make up about 36 percent of the workplace.

3. Millenials, born between roughly 1981 and 2000, make up about 16 percent of the workforce 4. Matures, born between 1922 and 1945, make up 8 percent of the workforce.

The generational mix provides an excellent example of diversity in action. For example, one thing Millenials can bring to the workplace is their appreciation for gender equality and sexual, cultural, and racial diversity—Millenials embrace these concepts more than any previous generation. Millenials also have an appreciation for community and collaboration. They can help create a more relaxed workplace that reduces some of the problems that come from too much focus on status and hierarchy.76 Boomers and Gen Xers bring a wealth of experience, dedication, and commitment that contribute to productivity, and a sense of professionalism that is benefiting their younger counterparts. Together, Millenials and Gen Xers may be able to satisfy the Gen X desire for work-life balance through greater demand for more flexible scheduling and virtual work. Accomplishing such changes will come when all the generations learn to understand, respect—and maybe even like—one another.

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Disability The Americans with Disabilities Act is a comprehensive federal civil-rights statute signed into law in 1990 to protect the rights of people with disabilities, and is parallel to acts previously established for women and racial, ethnic, and religious minorities. It prohibits discrimination and mandates that disabled Americans be accorded equality in pursuing jobs, goods, services, and other opportunities.

Disabilities include any form of impairment (loss or abnormality of psychological or anatomical structure or function), disability (any restriction or lack of ability to perform an activity in the manner or within the range considered normal for a human being), or handicap (a disadvantage resulting from an impairment or disability that limits or prevents the fulfillment of a role that is normal, depending on age, sex, social, and cultural factors, for that individual).

The most visible changes from the ADA have been in issues of “universal design”—the practice of designing products, buildings, public spaces, and programs to be usable by the greatest number of people.

Stigma is a phenomenon whereby an individual is rejected as a result of an attribute that is deeply discredited by his/her society.

CHALLENGES IN MANAGING DIVERSITY A Focus on Inclusion Instead of addressing the issue of racial and ethnic diversity from the standpoint of compliance, many organizations have begun to focus on inclusion. Inclusion is the focus of cultures that welcome and support all types and groups of people. The move from diversity to inclusion occurred primarily because employers began to learn that, although they were able to recruit diverse individuals, they were not able to retain them.

Social Identity Theory Social psychologists Henri Tajfel and John Turner developed social identity theory to understand the psychological basis of discrimination. It describes individuals as having not one but multiple “personal selves” that correspond with membership in different social groups. The mere act of categorizing oneself as a member of a group will lead an individual to have favoritism toward that group.

In-group occurs when individuals feel part of a group and experience favorable status and a sense of belonging.

Out-group occurs when one does not feel part of a group and experiences discomfort and low belongingness Valuing and Supporting Diversity The concept of valuing diversity in organizations emphasizes appreciation of differences in creating a setting where everyone feels valued and accepted. Valuing diversity assumes that groups will retain their own characteristics and will shape the firm as well as be shaped by it, creating a common set of values that will strengthen ties with customers, enhance recruitment, and contribute to organizations and society.

Creating an environment where diversity is valued includes: • Strong commitment to inclusion from the Board and Corporate Officers

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• • • • • •

Providing influential mentors and sponsors who can help provide career guidance and navigate politics Opportunities for networking with influential colleagues Role models from same gender, racial, or ethnic group Exposure through high visibility assignments An inclusive culture that values differences and does not require extensive adjustments to fit in Working to acknowledge and reduce subtle and subconscious stereotypes and stigmas

CHAPTER STUDY GUIDE What are individual differences and why are they important?

• The study of individual differences attempts to identify where behavioral tendencies are similar and where they are different to be able to more accurately predict how and why people behave as they do.

• For people to capitalize on individual differences they need to be aware of them.

• Self-awareness is being aware of our own behaviors, preferences, styles, biases, and personalities; and awareness of others means being aware of these same things in others.

• Self-concept is the view individuals have of themselves as physical, social, and spiritual or moral beings. It is a way of recognizing oneself as a distinct human being.

• The nature/nurture controversy addresses whether we are the way we are because of heredity, or because of the environments in which we have been raised and live.

What is personality?

• Personality captures the overall profile, or combination of characteristics, that represents the unique nature of an individual as that individual interacts with others.

• Personality is determined by both heredity and environment; across all personality characteristics, the mix of heredity and environment is about 50–50.The Big Five personality traits consist of extraversion, agreeableness, conscientiousness, emotional stability, and openness to experience.

• A useful personality framework consists of social traits, personal conception traits, emotional adjustment traits, and personality dynamics, where each category represents one or more personality dimensions.

How are personality and stress related?

• Stress emerges when people experience tensions caused by extraordinary demands, constraints, or opportunities in their jobs.

• Personal stressors derive from personality type, needs, and values; they can influence how stressful different situations become for different people.

• Work stressors arise from such things as excessive task demands, interpersonal problems, unclear roles, ethical dilemmas, and career disappointments.

• Nonwork stress can spill over to affect people at work; nonwork stressors may be traced to family situations, economic difficulties, and personal problems.

• Stress can be managed by prevention—such as making adjustments in work and nonwork factors; it can also be dealt with through coping mechanisms and personal wellness—taking steps to maintain a healthy body and mind capable of better withstanding stressful situations.

What are values and how do they vary across cultures?

• Values are broad preferences concerning courses of action or outcomes.

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• • •

Rokeach divides 18 values into terminal values (preferences concerning ends) and instrumental values (preferences concerning means).

Hofstede’s five national culture values dimensions are power distance, individualism– collectivism, uncertainty avoidance, masculinity–femininity, and long-term/short-term orientation.

Culture is the learned and shared way of doing things in a society; it represents deeply ingrained influences on the way people from different societies think, behave, and solve problems.

Why is diversity important in the workplace?

• Workforce diversity is increasing in the United States and other countries. It is important because of the benefits diverse backgrounds and perspectives can bring to the workplace.

• Rather than being something we have to “manage,” diversity should be something we value.

There are many reasons to value diversity, from resource and capacity building perspectives to social and legal responsibilities.

• There are many types of diversity, but the most commonly discussed in the workplace are gender, racial/ethnic, age, disability, and sexual orientation.

• In recent years there has been a shift from a focus on diversity to a focus on inclusion. This represents a need to emphasize not only recruitment but retention.

• Social identity theory suggests that many forms of discrimination are subtle but powerful, and may occur in subconscious psychological processes that individuals of out-groups perceive in the workplace.

• Companies can value diversity by promoting cultures of inclusion that implement policies and practices to help create a more equitable and opportunity-based environment for all.

KEY TERMS American with Disabilities Act: is a federal civil rights statute that protects the rights of people with disabilities.

Authoritarianism: a tendency to adhere rigidly to conventional values and to obey recognized authority.

Awareness of others: being aware of behaviors, preferences, styles, biases, personalities, etc., of others Coping: response or reaction to distress that has occurred or is threatened Culture: the learned and shared way of thinking and acting among a group of people or society.

Distress: a negative impact on both attitudes and performance.

Dogmatism: leads a person to see the world as a threatening place and to regard authority as absolute.

Emotion-focused coping: are mechanisms that regulate emotions or distress.

Emotional adjustment traits: traits related to how much an individual experiences emotional distress or displays unacceptable acts Eustress: stress that has a positive impact on both attitudes and performance.

Inclusion: A work environment in which all individuals are treated fairly and respectfully, have equal access to opportunities and resources, and can contribute fully to the organization’s success.

Individual differences: the ways in which people are similar and how they vary in their thinking, feeling, and behavior

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Individualism–collectivism: the tendency of members of a culture to emphasize individual selfinterests or group relationships.

In-group: occurs when individuals feel part of a group and experience favorable status and a sense of belonging.

Instrumental values: reflect a person’s beliefs about the means to achieve desired ends.

Job burnout: occurs as a loss of interest in and satisfaction with a job due to stressful working conditions.

Leaking pipeline: phrase coined to describe how women have not reached the highest levels of organizations.

Locus of control: the extent a person feels able to control his or her own life and is concerned with a person’s internal–external orientation.

Long-Term/Short-Term Orientation: the degree a culture emphasizes long-term or short-term thinking.

Machiavellianism: causes someone to view and manipulate others purely for personal gain.

Masculinity-Femininity: the degree a society values assertiveness or relationships.

Out-group: Occurs when one does not feel part of a group and experiences discomfort and low belongingness.

Personal Conception Trait: represents individuals’ major beliefs and personal orientation concerning a range of issues involving social and physical setting.

Personal wellness: involves the pursuit of one’s job and career goals with the support of a personal health promotion program.

Personality: the overall combination of characteristics that captures the unique nature of a person as that person reacts and interacts with others.

Personality traits: are enduring characteristics describing an individual’s behavior.

Power distance: a culture’s acceptance of the status and power differences among its members.

Proactive personality: is the disposition that identifies whether or not individuals act to influence their environments.

Problem-solving style: reflects the way a person gathers and evaluates information when solving problems and making decisions.

Problem-focused coping: mechanisms which manage the problem that is causing the distress.

Self-awareness: being aware of one’s own behaviors, preferences, styles, biases, personalities, etc.

Self-concept: the view individuals have of themselves as physical, social, spiritual, or moral beings.

Self- efficacy: is an individual’s belief about the likelihood of successfully completing a specific task.

Self-esteem: is a belief about one’s own worth based on an overall self-evaluation.

Self-monitoring: a person’s ability to adjust his or her behavior to external situational (environmental) factors.

Social identity theory: theory developed to understand the psychological basis of discrimination.

Social traits: surface-level traits that reflect the way a person appears to others when interacting in social settings.

Stereotyping: occurs when people make a generalization, usually exaggerated or over simplified (and potentially offensive) that is used to describe or distinguish a group.

Stigma: phenomenon whereby an individual is rejected as a result of an attribute that is deeply discredited by his/her society.

Stress: tension from extraordinary demands, constraints, or opportunities.

Terminal values: reflect a person’s preferences concerning the “ends” to be achieved.

Title VII of the Civil Rights Act of 1964: protects individuals against employment discrimination on the basis of race and color, as well as national origin, sex and religion.

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Type A orientation: characterized by impatience, desire for achievement, and a less competitive nature than Type B. Type B orientation: characterized by an easygoing and less competitive nature than Type A. Uncertainty avoidance: the cultural tendency to be uncomfortable with uncertainty and risk in everyday life.

Universal design: the practice of designing products, buildings, public spaces, and programs to be usable by the greatest number of people.

Value congruence: occurs when individuals express positive feelings upon encountering others who exhibit values similar to their own.

Values: broad preferences concerning appropriate courses of action or outcomes.

Workforce diversity: a mix of people within a workforce who are considered to be, in some way, different from those in the prevailing constituency.

SPECIAL FEATURES Xerox – A Dynamic Duo In 1999 Xerox made a surprise announcement that Anne Mulcahy, a relative newcomer, would be their new CEO. Mulcahy selected Ursula Burns to partner with her in running the business. In 2009, Mulcahy retired and Burns took over as CEO, marking the first transition of power from one woman to another at a large public company, and the first to be run by a black woman.

Mulcahy and Burns’ partnership shows how individual differences can build a strong team. They were able to save Xerox in a major turnaround by learning to share power and forging a highly successful leadership collaboration. Ask students if they have ever had relationships with individuals that were different from them that they also worked well with. Ask the students further why did they think the different personalities worked?

Research Insight – Twin Studies: Nature or Nurture In examining the nature vs. nurture controversy, a study of twins finds that heredity has an important link to leadership role occupancy. Family experience and work experience were also related to leadership role occupancy with work experiences being more powerful. The study concludes that while much is determined by our heredity, developmental experiences are also important in helping men and women move into leadership roles. Ask students to reflect on their own personalities and comment on what extent they think nature or nurture has shaped their own personality?

OB in Popular Culture – Personality and Shrek Personality refers to the unique set of characteristics that determine how an individual reacts and responds to the environment. When Shrek sets out on his quest to rescue Princess Fiona from the dragon for King Farquaad, he is accompanied by newfound “friend” Donkey. Donkey still does not understand the mysterious ogre and is questioning why he would set out on this quest in the first place. The analogy is useful when it comes to understanding anyone. In a world reduced to sound bites and stereotypes, we all want to size up other people quickly. The truth is human beings are more complicated than a single individual characteristic. You do not have to look any farther than personality to realize this. Have students talk about how they misunderstood someone’s personality at first and what led them to change their perspective on their assessment of that person’s personality?

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Ethics in OB – Personality Testing Companies using computerized tests to assess personality and integrity are discovering that the Internet allows applicants to cheat. Applicants can look up answers on the Internet where other test takers have posted answer keys containing what to expect and how to answer. This problem could lead to a productive class discussion on several issues around testing. First, how might organizations get creative to keep their questions from getting out? Second, what should organizations do about cheaters? Third, many students share tests and some campus organizations such as sororities and fraternities create “test banks” of old tests. Ask students how these banks are detrimental to students, professors, the college and society.

Mastering Management: Achievement-Striving and Learning to Say “No” For employees who are high in achievement striving, it is common to be overwhelmed by good opportunities. This can lead to situations where you end up overcommitted and, perhaps, less successful in the long run. A key element of managing stress is learning to say “No.” The following are tips to follow when saying no: • Focus on what matters most • Weigh the yes-to-stress ratio • Take guilt out of the equation • Sleep on it • Just say no • Be brief • Be honest • Be respectful • Be ready to repeat Leaders on Leadership This breakout describes the life and work of Stephen Hawking, who cannot speak or use his motor skills, but is renowned for his work in theoretical physics and manages an extensive program of travel, public lectures, and television appearances. Hawking has inspired many to see that disability is not inability. Ask students what they find inspirational about Hawking. Do Hawking’s extreme physical challenges give them different insights on others with disabilities?

Group Project Assign each group a country to research and report back to the class “indicators” of the country’s Hofstede dimensions. For example, the Japanese saying “The nail that stands up gets hammered down” is an indicator of their collectivist culture. One very good source of this type of information is the International Business Center. Its web page offers tips to international business travelers about the attire and etiquette in many countries. The tips are available under links to each country on their web page: http://geert-hofstede.international-business-center.com/.

Alternatively, the instructor could print out the etiquette rules for several countries and then allow students to pick through them for indicators of cultural dimensions. For example, for countries in which the etiquette rules recommend that visitors call people by their titles such as Doctor or Professors, student might conclude that the country has high power distance.

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Organizational Behavior, 12e Instructor’s Resource Guide Chapter 3 EMOTIONS, ATTITUDES, AND JOB SATISFACTION

STUDY QUESTIONS 1.

2.

2.

3.

What are emotions and moods?

How do emotions and moods influence behavior?

What are attitudes and how do they influence behavior?

What is job satisfaction and why is it important?

OB IN ACTION Case for Critical Thinking Experiential Exercises

Self-Assessment Portfolio

Management Training Dilemma Interrogatories My Asset Base Prejudice in Our Lives What Do You Value in Your Work?

Learning Style Inventory Student Leadership Practices Inventory 21st Century Manager Global Readiness Index

CHAPTER OVERVIEW This chapter focuses on emotions, moods, attitudes and job satisfaction. It begins with the foundations of emotions and moods. The functions served by emotions are covered as well as the major emotions and their subcategories. The difference between self-conscious and social emotions is explored and then positive and negative affectivity is discussed.

The second part of the chapter explores how emotions and moods influence behavior in organizations. Emotional contagion and emotional labor provide the starting point for this section.

Affective Events Theory ties the section together and extends understanding of people’s emotional reaction on the job and how these reactions influence those people.

The third section covers attitudes. An attitude is a predisposition to respond in a certain way to people and things. Types of job attitudes include job satisfaction, job involvement, organizational commitment and employee engagement. The chapter concludes with a discussion of job satisfaction and it implications. Job satisfaction is the degree to which individuals feel positively or negatively about their jobs.

CHAPTER OUTLINE UNDERSTANDING EMOTIONS AND MOODS The Nature of Emotions Emotional Intelligence Types of Emotions The Nature of Moods HOW EMOTIONS AND MOODS INFLUENCE BEHAVIOR Emotion and Mood Contagion Emotional Labor Cultural Aspects of Emotions and Moods Emotions and Moods as Affective Events HOWATTITUDES INFLUENCE BEHAVIOR Components of Attitudes Linking Attitudes and Behavior Attitudes and Cognitive Consistency Types of Job Attitudes JOB SATISFACTION AND IT’S IMPORTANCE Components of Job Satisfaction Job Satisfaction Trends How Job Satisfaction Influences Work Behavior Linking Job Satisfaction and Job Performance

CHAPTER LECTURE NOTES The chapter opens with the story of Lisa Druxman, a fitness expert who wanted it all. Since graduating from college, the fitness expert had been pursuing a career in exercise and nutrition.

After the birth of her first child, Lisa was eager to both get in shape and get back to work. With no time to hit the gym, she developed a series of exercises she could perform while out walking her baby. As a fitness instructor, it was natural for her to teach the workouts to fellow new moms, and Stroller Strides was born. Since then, her baby has grown by leaps and bounds. In its first year, Stroller Strides expanded to coach more than 300 moms in 12 locations. Today, the company boasts more than 300 franchisees teaching in over 1,200 locations.

FOUNDATIONS OF EMOTIONS AND MOODS Affect is the range of feelings in the form of emotions and moods that people experience.

THE NATURE OF EMOTIONS Emotions are strong positive or negative feelings that are directed at someone or something.

Emotions are usually intense, not long-lasting, and always associated with a source—someone or something that makes us feel the way we do.

EMOTIONAL INTELLIGENCE Emotional intelligence is an ability to understand emotions and manage relationships effectively.

The concept of emotional intelligence is that we perform better when we are good at recognizing and dealing with emotions in ourselves and others.

Figure 3.1 from the textbook identifies four essential emotional intelligence competencies that can and should be developed for leadership success and success more generally in all types of interpersonal situations.

1. Self-awareness is the ability to understand our emotions and their impact on us and others.

2. Social awareness is the ability to empathize and understand the emotions of others.

3. Self-management is the ability to think before acting and control disruptive impulses.

4. Relationship management is the ability to establish rapport with others to build good relationships.

TYPES OF EMOTIONS Researchers have identified six major categories of emotions, each of which generally include some subcategories. These categories are anger, fear, joy, love, sadness, and surprise.

Self-conscious emotions come from internal sources. Shame, guilt, embarrassment, and pride are the internal emotions.

Social emotions come from external sources. They include pity, envy, and jealousy.

THE NATURE OF MOODS Moods are less intense as compared with emotions, and frequently, although not always, lack a contextual stimulus. Moods are generalized positive and negative feelings or states of mind.

Figure 3.2 in the textbook shows how emotions and moods are different, but can also influence one another.

EMOTIONS AND MOODS IN THE WORKPLACE EMOTION AND MOOD CONTAGION Emotion and mood contagion is the spillover of one’s emotions and mood onto others.

Evidence shows that positive and negative emotions are “contagious” in much the same ways, even though the tendency may be under-recognized in work settings.

EMOTIONAL LABOR Emotional labor is a situation where a person displays organizationally desired emotions in a job.

Emotional dissonance is the discrepancy between the emotions we feel and emotions we project.

Deep acting is someone tries to modify their feelings to better fit the situation.

Surface acting is hiding your inner feelings and forgoing emotional expression as a response to display rules.

CULTURAL ASPECTS OF EMOTIONS AND MOODS The frequency, tendency, and norms of expression of emotions vary across cultures.

Display rules govern the degree to which it is appropriate to display emotions.

EMOTIONS AND MOODS AS AFFECTIVE EVENTS Figure 3.3 in the textbook illustrates Affective Events Theory which ties together and extends understanding of people’s emotional reactions on the job and how these reactions influence those people.

The basic notion of the theory is that our emotions and moods are influenced by events involving other people and situations, and these emotions and moods, in turn, influence the work performance and satisfaction of us and others.

HOW ATTITUDES INFLUENCE BEHAVIOR An attitude is a predisposition to respond in a positive or negative way to someone or something in one’s environment.

COMPONENTS OF ATTITUDES Figure 3.4 in the textbook displays the three components of attitudes: cognitive, affective and behavioral The cognitive component reflects the beliefs, opinions, knowledge, or information a person possesses and values of an attitude.

The affective component of an attitude is a specific feeling regarding the personal impact of the antecedents.

The behavioral component is an intention to behave in a certain way based on you specific feelings or attitudes.

LINKING ATTITUDES AND BEHAVIOR An attitude results in an intended behavior that may or may not be carried out in a given circumstance.

The more specific attitudes and behaviors are, the stronger the relationship.

ATTITUDES AND COGNITIVE CONSISTENCY

Cognitive dissonance describes a state of inconsistency between and individual’s attitude and behavior. It is predicted that such inconsistencies result in discomfort and a desire to reduce or eliminate them by: 1. changing the underlying attitude 2. changing future behavior 3. developing new ways of explaining or rationalizing the inconsistency TYPES OF JOB ATTITUDES Even though attitudes do not always predict behavior, the link between attitudes and potential or intended behavior is important for managers to understand. It is not uncommon to hear concerns expressed about someone’s “bad attitude.”

Job satisfaction is the degree to which an individual feels positive or negative about a job.

Job involvement is the extent to which an individual is dedicated to a job.

Organizational commitment is the loyalty of an individual to the organization.

Employee engagement is a strong sense of connection with the organization and passion for one’s job.

JOB SATISFACTION AND IT’S IMPORTANCE COMPONENTS OF JOB SATISFACTION Job satisfaction of other people may be inferred from careful observation of what they say and do while performing their jobs.

The Minnesota Satisfaction Questionnaire (MSQ) and the Job Descriptive Index (JDI) are two popular questionnaires that can be used for assessing job satisfaction. Both address important aspects of job satisfaction.

The five facets of job satisfaction measured by the JDI are: • The work itself—responsibility, interest, and growth • Quality of supervision—technical help and social support • Relationships with co-workers—social harmony and respect • Promotion opportunities—chances for further advancement • Pay—adequacy of pay and perceived equity vis-à-vis others.

LECTURE ENHANCEMENT Ask those students who have been gainfully employed to describe what they found to be satisfying about their jobs. Also ask them to discuss how those things affected their work behavior.

JOB SATISFACTION TRENDS A recent survey found about 61 percent of American workers are at least somewhat satisfied with their jobs even during a time of economic downturn.

Job satisfaction: • has been declining for a dozen years or more • tends to be higher in small firms and lower in large ones • tends to be lower among the youngest workers HOW JOB SATISFACTION INFLUENCES WORK BEHAVIOR How does job satisfaction impact job behaviors and performance?

Withdrawal Behaviors There is a strong relationship between job satisfaction and physical withdrawal behaviors like absenteeism and turnover as well as between job satisfaction and psychological withdrawal behaviors such as daydreaming, cyber loafing, excessive socializing, and even just giving the appearance of being busy when you’re not.

Organizational Citizenship Organizational citizenship behaviors are the extras people do to go the extra mile in their work.

Counterproductive work behaviors intentionally disrupt relationships or performance at work.

At Home Affect Job satisfaction is also known to have positive and negative spillover influence on at home affect.

Research finds that people with higher daily job satisfaction show more positive after-work home affect.

Spotting Counterproductive or Deviant Workplace Behavior Deviant behaviours harm the work, the people, and the organizational culture. Here are some things to look for: • • • •

Personal aggression—sexual harassment, verbal abuse, physical abuse, intimidation, humiliation Production deviance—wasting resources, avoiding work, disrupting workflow, making deliberate work errors Political deviance—spreading harmful rumors, gossiping, using bad language, lacking civility in relationships Property deviance—destroying or sabotaging facilities and equipment, stealing money and other resources

LINKING JOB SATISFACTION AND JOB PERFORMANCE The importance of job satisfaction can be viewed in the context of two decisions people make about their work: a decision to belong and a decision to perform.

The decision to belong concerns an individual’s attendance and longevity at work. Satisfied workers have more regular attendance and are less likely to quit their jobs.

The decision to perform is not as clear as the decision to belong. This is due to three possible alternative relationships between job satisfaction and performance.

1. Satisfaction causes performance: This alternative suggests that managers should focus on increasing employees’ job satisfaction in order to increase their performance. Research indicates that no simple and direct link exists between individual job satisfaction at one point in time and work performance at a later point.

2. Performance causes satisfaction: This alternative suggests that managers should focus on increasing employees’ job performance and as a result job satisfaction should increase.

Research indicates an empirical relationship between individual performance measured at a certain time period and later job satisfaction. Rewards that equitably distributed serve to strengthen the linkage between performance and subsequent satisfaction.

3. Rewards cause both satisfaction and performance: The proper allocation of rewards can positively influence both performance and satisfaction. Research indicates that people who receive high rewards report high job satisfaction and that performance-contingent rewards influence a person’s work performance. The size and value of the reward should vary in proportion to the level of one’s performance accomplishment.

CHAPTER STUDY GUIDE What are emotions and moods?

• Affect is a generic term that covers a broad range of feelings that individuals express as emotions and moods.

• Emotions are strong feelings directed at someone or something that influence behavior, often with intensity and for short periods of time.

• Moods are generalized positive or negative states of mind that can be persistent influences on one’s behavior.

• Emotional Intelligence is the ability to detect and manage emotional cues and information.

Four emotional intelligence skills or competencies are self-awareness, self-management, social awareness, and relationship management.

How do emotions and moods influence behavior in organizations?

• •

Emotional contagion involves the spillover effects onto others of one’s emotions and moods; in other words emotions and moods can spread from person to person.

Emotional labor is a situation where a person displays organizationally desired emotions while performing a job.

• •

Emotional dissonance is the discrepancy between true feelings and organizationally desired emotions; it is linked with deep acting to try to modify true inner feelings, and surface acting to hide one’s true inner feelings.

Affective Events Theory (AET) relates characteristics of the work environment and daily hassles and uplifts to positive and negative emotional reactions and, ultimately, job satisfaction.

What are attitudes and how do they influence behavior in organizations?

• An attitude is a predisposition to respond in a certain way to people and things.

• Attitudes have three components-affective cognitive, and behavioral components.

• Although attitudes predispose individuals toward certain behaviors they do not guarantee that such behaviors will take place.

• Individuals desire consistency between their attitudes and their behaviors, and cognitive dissonance occurs when a person’s attitude and behavior are inconsistent.

• Job satisfaction is an attitude toward one’s job, co-workers, and workplace.

• Job involvement is a positive attitude that shows up in the extent to which an individual is dedicated to a job.

• Organizational commitment is a positive attitude that shows up in the loyalty of an individual to the organization.

What is job satisfaction and why is it important?

• Five components of job satisfaction are the work itself, quality of supervision, relationships with co-workers, promotion opportunities, and pay.

• Job satisfaction influences withdrawal behaviors such as absenteeism, turnover, day dreaming and cyber loafing.

• Job satisfaction is linked with organizational citizenship behaviors that are both interpersonalsuch as doing extra work for a sick teammate, and organizational-such as always speaking positively about the organization.

• A lack of job satisfaction may be reflected in counterproductive work behaviors such as purposely performing with low quality, avoiding work, acting violent at work, or even engaging in workplace theft.

• Three possibilities in the job satisfaction and performance relationship are: satisfaction causes performance, performance causes satisfaction, and rewards cause both performance and satisfaction.

KEY TERMS Affect: the range of feelings in the form of emotions and moods that people experience in their life context.

Attitude: is a predisposition to respond positively or negatively to someone or something.

Cognitive dissonance: experienced inconsistency between one’s attitudes and or between attitudes and behavior.

Counterproductive work behaviors: intentionally disrupt relationships or performance at work.

Display rules: govern the degree to which it is appropriate to display emotions.

Emotion and mood contagion: the spillover of one’s emotions and mood onto others.

Emotional dissonance: inconsistency between emotions we feel and those we try to project.

Emotional intelligence: an ability to understand emotions and manage relationships effectively.

Emotional labor: situation where a person displays organizationally desired emotions in their job.

Emotions: strong positive or negative feelings directed toward someone or something.

Employee engagement: strong sense of connection with the organization and passion for one’s job.

Job involvement: the extent to which an individual is dedicated to a job Job satisfaction: the degree to which an individual feels positive or negative about a job.

Moods: generalized positive and negative feelings or states of mind.

Organizational citizenship behavior: the extras people do to go the extra mile in their work.

Organizational commitment: the loyalty of and individual to the organization.

Relationship management: the ability to establish rapport with others to build good relationships.

Self-awareness: the ability to understand our emotions and their impact on us and others.

Self-conscious emotions: help individuals stay aware of and regulate their relationships with others.

Self-Management: the ability to think before acting and control disruptive impulses.

Social awareness: the ability to empathize and understand the emotions of others.

Social emotions: emotions derived from external sources.

SPECIAL FEATURES Balance Through Fitness Ten years ago, Lisa Druxman wanted it all. Since graduating from college, the fitness expert had been pursuing a career in exercise and nutrition. After the birth of her first child, Lisa was eager to both get in shape and get back to work. With no time to hit the gym, she developed a series of exercises she could perform while out walking her baby. As a fitness instructor, it was natural for her to teach the workouts to fellow new moms, and Stroller Strides was born. Druxman’s tips for success include: you create the vision, delegate, partner up, work smart and get spousal support.

Have students identify other real life entrepreneurs who have pursued their passion to open a successful business (examples could include: Mary Kay cosmetics, Bill Gates, Steve Jobs, Mrs. Fields with her cookies). Further have students look at the tips for success that Lisa Druxman has recommended, are there other tips for success the students can identify?

Ethics in OB Facebook is fun, but if you put the wrong things on it – the wrong photo, a snide comment, and complaints about your boss – you can be fired or worse yet, not be hired by a future employer.

Ask students if they think it is ethical that potential employers access current employees’/potential employees’ social media profile? Does it matter if the employee is a current versus a potential employee?

Leaders on Leadership The “Finding the Leader in You” profile looks at Don Thompson, President and COO of McDonald’s strange career path. Thompson was an engineer who was frustrated because he wanted to have an impact on decisions.” He moved into the operations side of business and advanced through restaurant operations, franchisee relations and strategic management.

Thompson’s negative affect could have derailed his career. Instead, with the help of a mentor, he

made a change that made a difference to his career success. Have students look at this breakout exercise in the chapter, answering the questions at the end of the exercise. Allow the students to cite specific examples in their own lives when answering the questions.

Mastering Management Executive coach Catherine Sandler says the ways managers deal with emotions and moods might be as important as the actual decisions they make. She advises managers to contain anxieties and help others feel safe while following these guidelines: • Take quick and considered action • Communicate honestly and consistently • Make an emotional connection with everyone • Be sure to inspire Research Insight A recent study found workers with high work-family role integration (“little distinction between their work and family roles”) showed a stronger relationship between daily job satisfaction and positive affect at home versus those with low work-family role integration. In fact, workers with low work-family integration, those that tended to segment work and family roles, positive home affect actually declined as job satisfaction increased. How can the findings for the low-work family integration group be explained? How can the findings for the high-work family integration group be explained?

Group Project “Dirty workers” are those workers whose occupations are frequently perceived as disgusting or degrading but necessary to the functioning of society. The tasks these workers – such as garbage collectors – perform leads to the workers’ stigmatization by the very society that needs them. One might expect these workers to have a negative self-image, but research finds these workers have surprisingly positive self-identities and solidarity with one another that negates the stigmatization of society.

Break students into groups and assign each group a “dirty work” profession. Then ask students to apply the text sections on attitudes and job satisfaction to their assigned profession. A few seed questions might be: How might certain attitudes lead workers to a positive self-identity in dirty work?

How do attitudes link to the behaviors required of “dirty workers?”

How do the five facets of job satisfaction apply to “dirty workers?”

How might the complex relationship between job satisfaction and performance work for “dirty workers?”

Some “dirty work” professions to assign to groups include garbage collectors, coal miners, oil drillers, funeral directors, butchers, janitors, exterminators, prison guards, and bill collectors.

Source of dirty work research: Ashford, B.E. and Kreiner, G.E. 1999. “How Can You Do It?”: Dirty Work and the Challenge of Constructing a Positive Identity, The Academy of Management Review 24(3): 413-434.

Organizational Behavior, 12e Instructor’s Resource Guide Chapter 4 PERCEPTION, ATTRIBUTION, AND LEARNING STUDY QUESTIONS 1.

2.

3.

4.

What is perception and why is it important?

What are common perceptual distortions?

What is the link between perception, attribution and social learning?

What is involved in learning by reinforcement?

OB IN ACTION Cases for Critical Thinking Teams and Experiential Exercises

Self-Assessment Portfolio

Magrec, Inc. Decode How We View Differences Alligator River Story Expatriate Assignments Cultural Cues Turbulence Tolerance Test Global Readiness Index Intolerance for Ambiguity

CHAPTER OVERVIEW This chapter focuses on perception and attribution. The chapter begins with a discussion of the perceptual process and the factors that influence that process. Because people tend to perceive things differently, the same situation may be interpreted and responded to differently by different people. The roles of the perceiver, the setting, and the perceived in the perceptual process are discussed. The specific stages of the perceptual process ⎯ attention and selection, organization, interpretation, and retrieval ⎯ are examined. Perception as it relates to the world of social media is also discussed. The chapter then moves on to review common perceptual distortions, including stereotypes or prototypes, halo effects, selective perception, projection, and contrast effects.

The second half of the chapter focuses on attribution theory, which is an insightful approach to understanding human behavior. Attribution theory addresses the interpretation stage of the perception process where tendencies are to view events or behaviors as primarily the results of external causes or internal causes. The nature and importance of attributions are explored and two attribution errors ⎯ the fundamental attribution error and the self-serving bias ⎯ are discussed. Social learning theory links perception and attribution by recognizing how learning is achieved through the reciprocal interactions among people, behavior, and environment. The chapter concludes with a discussion of reinforcement. Reinforcement theory recognizes that human behavior is influenced by environmental consequences.

CHAPTER OUTLINE WHAT IS THE PERCEPTION? Factors Influencing Perception Information Processing and the Perception Process Perception, Impression Management and Social Media WHAT ARE THE COMMON PERCEPTUAL DISTORTIONS? Stereotypes Halo Effects Selective Perception Projection Contrast Effects Self-Fulfilling Prophecies WHAT IS THE LINK BETWEEN PERCEPTION,ATTRIBUTION AND SOCIAL LEARNING? Importance of Attributions Attribution Errors Attribution and Social Learning WHAT IS INVOLVED IN LEARNING BY REINFORCEMENT? Operant Conditioning and the Law of Effect Positive Reinforcement Negative Reinforcement Punishment Extinction Reinforcement Pros and Cons

CHAPTER LECTURE NOTES The chapter opens with the story about “Just in Time Learning” the idea of acquiring just enough knowledge to get by, where and when you need it. That’s the spirit behind Head First Labs, a series of irreverent tech tutorial books designed to help readers learn—and remember—new and complicated information by incorporating storytelling, unexpected images, and hands-on projects.

The core of Head First’s philosophy is this: Sometimes you have to trick your brain. Because its primary goal is to keep you safe and out of trouble, your grey matter tends to favor the important stuff (Danger! Fire! Angry boss!) over what it thinks is trivial. The solution: Couple the information you need now with enough unusual images, piquant captions, and unexpected elements to kick those neurons into learning mode. The idea is that the information acquired is focused and being immediately applied, resulting in reduced training costs, less downtime and improving employees’ productivity..

THE PERCEPTION PROCESS Perception is the process through which people receive and interpret information from the environment.

Through perception, people process information inputs into responses involving feeling and action. The quality or accuracy of a person’s perceptions, therefore, has a major impact on his or her responses to a given situation.

Figure 4.1 from the textbook shows how the perceptions of the performance appraisal interview differ between managers and subordinates.

LECTURE ENHANCEMENT To generate an interesting, and perhaps quite animated, discussion of differing perceptions of the same situation, ask students to describe how they perceive one or more of the following situations: • Cutting costs by sending American jobs overseas.

• Downsizing of companies.

• Providing organizationally funded fringe benefits to same sex partners.

• Restricting trade with nations that are known for human rights abuses.

• Peer evaluations of performance.

• Self-management practices in businesses.

• Drug testing in the workplace.

• Electronic surveillance of employees.

FACTORS INFLUENCING PERCEPTIONS The factors that contribute to perceptual differences and the perceptual process among people at work are summarized below: The factors include characteristics of the perceiver, the setting, and the perceived.

• The perceiver ⎯ a person’s past experiences, needs or motives, personality, and values and attitudes may all influence the perceptual process • The setting ⎯ the physical, social, and organizational context of the perceptual setting also can influence the perceptual process.

• The perceived ⎯ characteristics of the perceived person, object, or event, such as contrast, intensity, figure-ground separation, size, motion, and repetition or novelty, are also important in the perceptual process. Figure 4.2 is the figure-ground illustration.

INFORMATION PROCESSING ANDTHE PERCEPTION PROCESS Figure 43from the textbook depicts the various stages of perception. They include the information processing that takes place during perception, the stages of attention and selection, organization, interpretation, and retrieval.

Attention and Selection Our senses are constantly bombarded with so much information that if we don’t screen it, we quickly become incapacitated with information overload.

Selective screening lets in only a tiny portion of all the information available. Selective screening can occur through controlled processing, which reflects a conscious decision regarding what information to pay attention to and what to ignore. Selective screening can also occur without the perceiver’s conscious awareness.

LECTURE ENHANCEMENT In order to illustrate selective screening, while in the middle of your lecture for the day insert a sentence stating that the next exam or paper has been cancelled. Discuss the students’ reaction.

Organization Even though selective screening takes place in the attention stage, it is still necessary to find ways to organize the information efficiently. This is accomplished through the use of schemas.

Schemas are cognitive frameworks that represent organized knowledge about a given concept or stimulus developed through experience. A self schema contains information about a person’s own appearance, behavior, and personality. Person schemas refer to the way individuals sort others into categories, such as types or groups, in terms of similar perceived features.

A prototype, or stereotype, is often used to represent person schemas. A prototype is an abstract set of features commonly associated with members of that category. Once the prototype is formed, it is stored in long-term memory; it is retrieved when it is needed for a comparison of how well a person matches the prototype’s feature.

A script schema is a knowledge framework that describes the appropriate sequence of events in a given situation.

Person-in situation schemas combine schemas built around persons (self and person schemas) and events (script schemas).

Interpretation Once one’s attention has been drawn to certain stimuli and this information has been grouped or organized, reasons behind the actions need to be uncovered since people interpret information differently or make different attributions about what they have perceived.

Retrieval Each of the previous stages forms part of a person’s memory and contribute to the information stored there. In the final stage, this stored information must be retrieved if it is to be used.

PERCEPTION, IMPRESSION MANAGEMENT AND SOCIAL MEDIA Impression management is the systematic attempt to influence how others perceive us.

The right social networks can create the right impression. We practice a lot of impression management as a matter of routine in everyday life.

COMMON PERCEPTUAL DISTORTIONS Common perceptual distortions that influence the various stages of the perceptual process include stereotype/prototype, halo effect, selective perception, projection, contrast effects and selffulfilling prophecy.

STEREOTYPES Stereotypes are useful ways of combining information to deal with information overload, but they can cause inaccuracies in retrieving information and can obscure individual differences.

Stereotypes are most likely to occur in the organization stage of perception.

Both managers and employees need to be sensitive to stereotypes and their potential impact.

Some of the most common stereotypes, at work and in life in general, relate to such factors as gender, age, race, and physical ability.

LECTURE ENHANCEMENT Are all stereotypes inaccurate? Are stereotypes ever useful? Have students discuss and debate these questions. If a stereotype is positive, is it still harmful?

HALO EFFECTS A halo effect occurs when one attribute of a person or situation is used to develop an overall impression of the individual or situation.

Halo effects are most likely to occur in the organization stage of perception.

Halo effects are particularly important in the performance appraisal process because they can influence a manager’s evaluations of subordinates’ work performance.

LECTURE ENHANCEMENT Many students work while attending college. Encourage students to identify examples of the halo effect where they work or in the classroom.

SELECTIVE PERCEPTION Selective perception is the tendency to single out for attention those aspects of a situation or person that are consistent with one’s existing attitudes, values, and needs.

Selective perception is strongest in the attention stage of the perceptual process.

LECTURE ENHANCEMENT Have students identify examples of the selective perception that they have encountered at work or in the classroom.

PROJECTION Projection is the assignment of one’s personal attributes to other individuals.

Projection is especially likely to occur in the interpretation stage of perception.

Projection can be controlled through a high degree of self-awareness and empathy.

LECTURE ENHANCEMENT Discuss the idea that as cultural diversity increases in the workplace, projection is often inappropriate.

CONTRAST EFFECTS Contrast effects occur when the meaning of something that takes place is based on a contrast with another recent event or situation.

We can expect a contrast effect to occur when an individual’s characteristics are contrasted with those of others recently encountered who rank higher or lower on the same characteristics.

LECTURE ENHANCEMENT Have students to identify examples of the contrast effect that they have experienced or witnessed at work or in the classroom.

SELF-FULFILLING PROPHECY The self-fulfilling prophecy is the tendency to create or find in another situation or individual that which you expected to find in the first place.

The self-fulfilling prophecy is sometimes referred to as the “Pygmalion effect.”

The self-fulfilling prophecy can have both positive and negative results for managers in that subordinates are likely to “perform up to” or “perform down to” the expectations managers set for them.

LECTURE ENHANCEMENT Have the students provide examples of how the self-fulfilling prophecy works in the classroom.

PERCEPTION,ATTRIBUTION AND SOCIAL LEARNING Attribution is the process of creating explanations for events.

IMPORTANCE OF ATTRIBUTIONS Attribution theory aids in perceptual interpretation by focusing on how people attempt to do the following: • Understand the cause(s) of a certain event.

• Assess responsibility for the outcomes of the event.

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

Attribution theory is concerned with the question of whether one’s behavior has been internally or externally caused. Internal causes are believed to under an individual’s control, whereas external causes are seen as outside a person’s control.

Three factors influence whether a person’s behavior is attributed to internal or external causes.

These factors are: distinctiveness, consensus, and consistency.

• Distinctiveness considers how consistent a person’s behavior is across different situations.

• Consensus takes into account how likely all those facing a similar situation are to respond in the same way.

• Consistency concerns whether an individual responds the same way across time.

ATTRIBUTION ERRORS The fundamental attribution error is the tendency to underestimate the influence of situational factors and to overestimate the influence of personal factors in evaluating someone else’s behavior.

A self-serving bias is the tendency to deny personal responsibility for performance problems but to accept personal responsibility for performance success.

Figure 4.4 in the textbook illustrates health care managers’ attributions of causes for poor performance.

LECTURE ENHANCEMENT Students can probably relate to the self-serving bias. Have students provide examples of this bias that they have observed.

ATTRIBUTION AND SOCIAL LEARNING Social learning theory describes how learning occurs through interactions among people, behavior, and environment.

Figure 4.5 in the textbook illustrates this social learning theory as drawn from the work of Albert Bandura. The figure shows how the individual uses modeling or vicarious learning to acquire behavior by observing and imitating others. The person then attempts to acquire these behaviors by modeling them through practice.

Self-efficacy – a person’s belief that she or he is capable of performing a task – is an important aspect of self control.

LEARNING BY REINFORCEMENT Reinforcement is the administration of a consequence as a result of behavior.

OPERANT CONDITIONING AND THE LAW OF EFFECT Figure 4.6 in the textbook illustrates the differences between classical and operant conditioning approaches for a boss and subordinate.

• Classical conditioning is a form of learning through association that involves the manipulation of stimuli to influence behavior. A stimulus is something that incites action.

• Operant conditioning is the process of controlling behavior by manipulating, or “operating” on, its consequences.

Classical and operant conditioning differ in two important ways: 1. Control in operant conditioning is via manipulation of consequences.

2. Operant conditioning calls for examining antecedents, behavior, and consequences.

Law of effect is the observation that behavior resulting in a pleasing outcome is likely to be repeated; behavior that results in an unpleasant outcome is not likely to be repeated.

Extrinsic rewards, such as pay and praise, are positively valued work outcomes that are given to the individual by some other person. They become external reinforcers or environmental consequences that can substantially influence a person’s work behaviors through the law of effect.

Figure 4.7 in the textbook provides a sample of contrived and natural extrinsic rewards that can be allocated by managers.

Organizational behavior modification (OB Mod) is the systematic reinforcement of desirable work behavior and the non-reinforcement or punishment of unwanted work behavior.

POSITIVE REINFORCEMENT Positive reinforcement is the administration of positive consequences that tend to increase the likelihood or repeating the behavior in similar settings.

Law of contingent reinforcement is the view that for a reward to have maximum reinforcing value, it must be delivered only if the desired behavior is exhibited.

Law of immediate reinforcement states the more immediate the delivery of a reward after the occurrence of a desirable behavior, the greater the reinforcing effect on behavior.

Shaping Shaping is the creation of a new behavior by the positive reinforcement of successive approximation to the desired behavior.

Scheduling positive reinforcement Continuous reinforcement is a reinforcement schedule that administers a reward each time a desired behavior occurs.

Intermittent reinforcement is a reinforcement schedule that rewards behavior only periodically.

Figure 4.8 in the textbook illustrates the four types of intermittent reinforcement schedules: • Fixed-ratio schedules: • Fixed-interval schedules • Variable-interval schedules • Variable-ratio schedules NEGATIVE REINFORCEMENT Negative reinforcement is the withdrawal of negative consequences, which tends to increase the likelihood of repeating the behavior in a similar setting. This strategy is also sometimes called avoidance learning because its intent is for the person to avoid the negative consequence by performing the desired behavior.

PUNISHMENT Punishment is the administration of negative consequences or the withdrawal of positive consequence to reduce the likelihood of behavior being repeated.

There is evidence that punishment administered for poor performance can lead to better performance without a significant effect on satisfaction. But, punishment seen by workers as arbitrary and capricious leads to low satisfaction as well as low performance.

EXTINCTION Extinction is the withdrawal of reinforcing consequences for a given behavior.

Extinction is intended to weaken and eliminate undesirable behavior.

REINFORCEMENT PROS AND CONS Some criticisms of the use of reinforcement include: • Some reports on the “success” of specific reinforcement programs involve isolated cases that have not been well analyzed.

• Some maintain that the systematic use of reinforcement strategies leads to a demeaning and dehumanizing view of people that stunts human growth and development.

• Some believe managers abuse the power of their position and knowledge by exerting external control over individual behavior.

LECTURE ENHANCEMENT Ask students to discuss the criticism of reinforcement. Is it dehumanizing to try to control people through consequences? Is it an abuse of managerial power?

CHAPTER STUDY GUIDE What is perception and why is it important?

• Individuals use the perception process to pay attention to select, organize, interpret, and retrieve information from the world around them.

• Perception acts as a filter through which all communication passes as it travels from one person to the next.

• Because people tend to perceive things differently, the same situation may be interpreted and responded to differently by different people.

• Factors influencing perceptions include characteristics of the perceiver, the setting, and the perceived.

What are the common perceptual distortions?

•

Stereotypes occur when a person is identified with a category and is assumed to display characteristics otherwise associated with members of that category.

• • • •

Halo effects occur when one attribute of a person or situation is used to develop an overall impression of the person or situation.

Selective perception is the tendency to single out for attention those aspects of a situation or person that reinforce or emerge and are consistent with existing beliefs, values, and needs.

Projection involves the assignment of personal attributes to other individuals.

Contrast effects occur when an individual’s characteristics are contrasted with those of others recently encountered who rank higher or lower on the same characteristics.

What is the link between perception, attribution and social learning?

• • • • •

Attribution theory addresses the interpretation stage of the perception process where tendencies are to view events or behaviors as primarily the results of external causes or internal causes.

Three factors that influence the attribution of external or internal causation are distinctiveness, consensus, and consistency.

Fundamental attribution error occurs when we blame others for performance problems while excluding possible external causes.

Self-serving bias occurs when, in judging our own performance, we take personal credit for successes and blame failures on external factors.

Social learning theory links perception and attribution by recognizing how learning is achieved through the reciprocal interactions among people, behavior, and environment.

What is involved in learning by reinforcement?

• • • • • • •

Reinforcement theory recognizes that human behavior is influenced by environmental consequences.

The law of effect states that behavior followed by a pleasant consequence is likely to be repeated; behavior followed by an unpleasant consequence is unlikely to be repeated.

Positive reinforcement is the administration of positive consequences that tend to increase the likelihood of a person’s repeating a behavior in similar settings.

Positive reinforcement should be contingent and immediate, and it can be scheduled continuously or intermittently depending on resources and desired outcomes.

Negative reinforcement, avoidance learning, is used to encourage desirable behavior through the withdrawal of negative consequences for previously undesirable behavior.

Punishment is the administration of negative consequences or the withdrawal of positive consequences, to reduce the likelihood of an undesirable behavior being repeated.

Extinction is the withdrawal of reinforcing consequences to weaken or eliminate an undesirable behavior.

KEY TERMS Attribution: the process of developing explanations or assigning perceived causes for events.

Continuous reinforcement: a reinforcement schedule that administers a reward each time a desired behavior occurs.

Contrast effect: a perceptual distortion that occurs when an individual’s characteristics are contrasted with those of others recently encountered who rank higher or lower on the same characteristics.

Extrinsic rewards: are positively valued work outcomes that are given to the individual by some other person.

Extinction: the withdrawal of the reinforcing consequences for a given behavior.

Fundamental attribution error: the tendency to underestimate the influence of situational factors and to overestimate the influence of personal factors in evaluating someone else’s behavior.

Halo effect: a perceptual distortion that occurs when one attribute of a person or situation is used to develop an overall impression of the individual or situation.

Impression management: the systematic attempt to behave in ways that will create and maintain desired impressions in the eyes of others.

Intermittent reinforcement: a reinforcement schedule that rewards behavior only periodically.

Law of contingent reinforcement: states a reward should only be given when the desired behavior occurs.

Law of effect: the observation that behavior resulting in a pleasing outcome is likely to be repeated; behavior that results in an unpleasant outcome is not likely to be repeated.

Law of immediate reinforcement: states a reward should be given as soon as possible after the desired behavior occurs.

Negative reinforcement: the withdrawal of negative consequences, which tends to increase the likelihood of repeating the behavior in a similar setting; it is also known as avoidance.

Operant conditioning: the process of controlling behavior by manipulating its consequences.

Organizational behavior modification (OB mod): the administration of positive consequences that tend to increase the likelihood of repeating the desirable behavior in similar settings Perception: the process through which people select, organize, interpret, retrieve, and respond to information from their environment.

Positive reinforcement: the administration of positive consequences that tend to increase the likelihood of repeating the behavior in similar settings.

Projection: a perceptual distortion involving the assignment of one’s personal attributes to other individuals.

Punishment: the administration of negative consequences that tend to reduce the likelihood of repeating the behavior in similar settings.

Reinforcement: is the delivery of a consequence as a result of behavior.

Schemas: a cognitive framework that represents organized knowledge about a given concept or stimulus developed through experience.

Selective perception: a perceptual distortion involving the tendency to single out for attention those aspects of a situation or person that are consistent with one’s existing beliefs, values, and needs.

Selective screening: allows only a portion of available information to enter our perceptions.

Self-efficacy: the person’s belief that he or she can perform adequately in a situation.

Self-fulfilling prophecy: a perceptual distortion involving the tendency to create or find in another situation or individual that which you expected to find in the first place.

Self-serving bias: the tendency to deny personal responsibility for performance problems but to accept personal responsibility for performance success.

Shaping: the creation of a new behavior by the positive reinforcement of successive approximations to the desired behavior.

Social learning theory: describes how learning occurs through interactions among people, behavior, and environment.

Stereotype: occurs when we identify someone with a group or category, and the use the attributes perceived to be associated with the group or category to describe the individual.

SPECIAL FEATURES Just in Time Saves The Day Right about now, you’re starting to panic. You’re in your first post-college job, and your boss has a request: The web designer is on maternity leave. You’re good with computers, so can you edit some pages on the company’s web site? What do you do? Cross your fingers and dive in head first. That’s the spirit behind Head First Labs, a series of irreverent tech tutorial books designed to help readers learn—and remember—new and complicated information by incorporating storytelling, unexpected images, and hands-on projects. Published by O’Reilly Media, the books emphasize just-in-time learning, the idea of acquiring just enough knowledge to get by, where and when you need it. Ask students to identify what are the advantages and disadvantages of “Just in Time Learning?”

Brand Building and Impression Management in Social Networks Don’t let your social media presence get out of control. Impression management counts online as well as face-to-face, and here are some things to help you make it work for you: • Ask: How do I want to be viewed?

• Ask: What am I communicating?, • Ask: Before I post this, is it something that I want others to see?

• Do: Choose a respectable username.

• Do: Profile yourself only as you really would like to be known to others.

• Do: View your online persona as a “brand”.

• Do: Post and participate only in ways that meet your goals for your personal brand.

Research Insight Recent research links perceptions of interactional justice during recruitment interviews with effects on long term employment relationships. The injustice applicants feel during a negotiation in the recruitment process affects an employee’s turnover intentions with the hiring organization.

This interaction can set the tone for the future employment relationship. The researchers suggest that perceived injustice in recruiting when jobs are plentiful may lead to applicants making alternative job choices, while such injustice when jobs are scarce may result employees accepting the jobs but harboring intents to leave when the opportunity permits. Ask students about job interviews they felt were unjust or contained tricky questions. How did that color their view of the organization?

Ethics in OB Data from a survey conducted for Deloitte & Touche USA finds 42 percent of workers say the behavior of their managers is a major influence on an ethical workplace. What can be done to strengthen people’s confidence in their own ethical frameworks so that even bad management won’t result in unethical practices?

Four Ways to Build or Enhance Self-Efficacy

Scholars generally recognize the following four ways of building or enhancing our selfefficacy:

1.

2.

3.

4.

Enactive mastery—gaining confidence through positive experience.

Vicarious modeling—gaining confidence by observing others.

Verbal persuasion—gaining confidence from someone telling us or encouraging us that we can perform the task.

Emotional arousal—gaining confidence when we are highly stimulated or energized to perform well in a situation.

Have students cite specific examples in their past (from wok, school, as a part of a team) when they have built self-efficacy, sharing these examples with the class.

Leaders on Leadership Sir Richard Branson, well-known founder of Virgin Group, believes in positive reinforcement.

He believes that good leaders have personalities that care about people. By caring about people, he says, you can bring out the best in them. Using reinforcement theory, ask students to take Branson’s measure of “caring for people” and examine positive reinforcement, punishment, negative reinforcement and extinction. Do all enactments of reinforcement theory meet Branson’s requirement that a leader cares for people?

Group Project In small groups, give students the mission statement of your university. Ask students to detail how their perceptions of what the university values might be different from what the university states in its mission statement. Ask how stereotypes, the halo effect, selective perception and project might lead to the difference between the mission and perceptions. How could the university do a better job of bringing student perceptions in line with the stated mission? Another possibility is to pass out the mission statement of a company about which the students may have developed perceptions, such as Google, Nike, or Phillip Morris.

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Organizational Behavior, 12e Instructor’s Resource Guide

Chapter 5 MOTIVATION THEORIES STUDY QUESTIONS 1.

2.

3.

4.

5.

What is motivation?

What can we learn from the needs theories of motivation?

Why is the Equity Theory of motivation important?

What are the insights of the Expectancy Theory of motivation?

How does Goal-Setting influence motivation?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

It Isn’t Fair What Do You Value in Work?

Teamwork and Motivation Downside of Punishment Annual Pay Raises Managerial Assumptions Two-Factor Profile

CHAPTER OVERVIEW This chapter provides a review of employee motivation in the workplace. The chapter begins with a definition of “motivation,” a description of the differences between the content and process theories of motivation, and how motivation differs across cultures. The chapter then covers the slightly different approaches of the needs theories: the hierarchy of needs theory, the ERG theory, the acquired needs theory and the two-factor theory. The equity theory of motivation is then covered through social comparisons, the predictions of the theory and the link to organizational justice. The expectancy theory of motivation and the goal-setting theory of motivation also are explored and their implications discussed.

CHAPTER OUTLINE WHAT IS MOTIVATION? Motivation Defined Types of Motivation Theories NEEDS THEORIES OF MOTIVATION Hierarchy of Needs Theory ERG Theory Acquired Needs Theory

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Two-Factor Theory EQUITY THEORY OF MOTIVATION Equity and Social Comparisons Equity Theory Predictions and Findings Equity and Organizational Justice EXPECTANCY THEORY OF MOTIVATION Expectancy Terms and Concepts Expectancy Theory Predictions Expectancy Implications and Research GOAL-SETTING THEORY OF MOTIVATION Motivational Properties of Goals Goal-Setting Guidelines Goal Setting and the Management Process

CHAPTER LECTURE NOTES The chapter opens with a description of Feeding America. With more than 200 locations, the nation’s largest network of food banks feeds more than 37 million Americans each year by acquiring and distributing more than 2.5 billion pounds of food and grocery products annually.

The Chicago-based charity procures donations from corporations, the food and grocery industries, individuals, government agencies, and other organizations. They distribute the food and groceries to member food banks, which in turn store and hand out the products to individuals in need.

Employees and volunteers alike often cite a powerful desire to end hunger as their motivation for engaging with Feeding America, a desire sometimes influenced by a first hand understanding of what it means to go without food. This opening demonstrates clearly the idea of how an individual can be motivated.

WHAT IS MOTIVATION? MOTIVATION DEFINED Motivation refers to forces within an individual that account for the level, direction, and persistence of effort expended at work.

Direction refers to an individual’s choice when presented with a number of possible alternatives (e.g., whether to exert effort toward product quality or toward product quantity).

Level refers to the amount of effort a person puts forth (e.g., a lot or a little).

Persistence refers to the length of time a person sticks with a given action (e.g., to try to achieve product quantity and give up when it is found difficult to attain).

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TYPES OF MOTIVATION THEORIES Content theories profile different needs that may motivate individual behavior.

Process theories focus on the thought or cognitive processes that take place within the minds of people and influence their behavior.

NEEDS THEORIES OF MOTIVATION HIERARCHY OF NEEDS THEORY Abraham Maslow’s hierarchy of needs theory, as shown in Figure 5.1 in the textbook, identifies five distinct levels of individual needs: from self-actualization and esteem at the top, to social, safety, and physiological at the bottom.

Lower order needs include physiological, safety, and social needs.

Higher order needs include esteem and self-actualization.

Maslow assumes that some needs are more important than others and must be satisfied before the other needs can serve as motivators.

Maslow’s view is quite popular in U.S. firms because it appears easily implemented. Research does not support the existence of a precise five-step hierarchy of needs. The needs more likely operate in a flexible hierarchy. Some research suggests that higher-order needs become more important than lower-order needs as people move up the organizational hierarchy.

LECTURE ENHANCEMENT You can generate discussion by asking students to identify the types of rewards that could be used to satisfy the various needs.

ERG THEORY Clayton Alderfer’s ERG theory differs from Maslow’s theory in three basic respects.

ERG theory collapses Maslow’s five need categories into three: existence needs, relatedness needs, and growth needs.

Existence needs are the desires for physiological and material well-being.

Relatedness needs refer to the desire for satisfying interpersonal relationships.

Growth needs refer to the desire for continued personal growth and development.

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Whereas Maslow’s theory argues that individuals progress up the “needs” hierarchy, ERG theory emphasizes a unique frustration-regression component wherein an already satisfied need can be activated when a higher need level cannot be satisfied.

Unlike Maslow’s theory, ERG theory contends that more than one need may be activated at the same time.

The supporting evidence on ERG theory is encouraging, particularly with regard to the frustration-regression component.

AQUIRED NEEDS THEORY Using the Thematic Apperception Test (TAT), David McClelland identified three needs that he believed are important for understanding human behavior: need for achievement, need for affiliation, and need for power.

Need for achievement (nAch) is the desire to do something better or more efficiently, to solve problems, or to master complex tasks.

Need for affiliation (nAff) is the desire to establish and maintain friendly and warm relations with others.

Need for power (nPower) is the desire to control others, to influence their behavior, or to be responsible for others.

LECTURE ENHANCEMENT McClelland uses a Thematic Apperception Test (TAT) to measure the strengths of the needs for achievement, power, and affiliation. The Thematic Apperception Test (TAT) is based on need interpretations of descriptions of various stimulus situations. To help students understand how this works, describe the following scenario: In one case, McClelland tested three executives using a photograph that showed a man sitting down and looking at family photos arranged on his work desk. One executive wrote of an engineer who was daydreaming about a family outing scheduled for the next day (nAff). Another described a designer who had picked up an idea for a new gadget from remarks made by his family (nPow). The third saw an engineer who was intently working on a bridge-stress problem that he seemed sure to solve because of his confident look (nAch).

McClelland posits that these three needs are acquired over time, as a result of life experiences.

Managers should create work environments that are responsive to the respective need profiles.

• People with high nAch will prefer individual responsibilities, challenging goals, and performance feedback.

• People with high nAff like interpersonal relationships and opportunities for communication.

• People with high nPow seek influence over others and like attention and recognition.

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LECTURE ENHANCEMENT Which occupations would be best suited for individuals with a high need for achievement? For individuals with a high need for affiliation? For individuals with a high need for power?

Matching the motivational needs of the individual with the situation is important not only for the employer, but also for the individual.

TWO-FACTOR THEORY As shown in Figure 5.2 from the text, Frederick Herzberg’s two-factor theory focuses on two sets of factors ⎯ one set identifies sources of job dissatisfaction (hygienes) and the other set identifies sources of job satisfaction (motivators).

LECTURE ENHANCEMENT For those students who have held jobs, ask them to identify work situations where they experienced satisfaction and work situations where they experienced dissatisfaction. For those students who have not held any jobs, have them identify educational situations where they have experienced satisfaction or dissatisfaction. Have the students share their examples while you record them on the chalkboard, whiteboard, or a flipchart. After all the examples have been recorded, have the class compare the satisfying and dissatisfying situations to Herzberg’s hygiene factors and satisfier factors.

Hygiene factors are sources of job dissatisfaction that are associated with the job context or work setting. Hygiene factors relate more to the environment in which people work and include organizational policies, quality of supervision, working conditions, base wage or salary, relationships with peers, relationships with subordinates, status, and security.

Motivator factors are sources of satisfaction that are associated with job content ⎯ what people actually do in their work. Motivator factors include achievement, recognition, work itself, responsibility, advancement, and growth.

According to two-factor theory, job satisfaction and job dissatisfaction are totally separate dimensions. Therefore, improving a hygiene factor will not make people satisfied with their work; it will only prevent them from being dissatisfied. People will be satisfied only by improving the motivator factors.

Two-factor theory is difficult to confirm through empirical research.

EQUITY THEORY OF MOTIVATION

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J. Stacy Adam’s equity theory posits that people will gauge the fairness of their work outcomes relative to others, and will act to eliminate any felt inequity in the rewards they receive for their work.

EQUITY AND SOCIAL COMPARISONS The basic foundation of equity theory is social comparison.

According to equity theory, motivation is a function of how one evaluates rewards received relative to efforts made, and as compared to the rewards received by others relative to their efforts made. A key word in this comparison is “fairness.” Any feelings of unfairness or perceived inequity are uncomfortable. They create a state of mind we are motivated to eliminate.

EQUITY THEORY PREDICTIONS AND FINDINGS Felt negative inequity exists when an individual feels that he or she has received relatively less than others have in proportion to work inputs.

Felt positive inequity exists when an individual feels that he or she has received relatively more than others have.

LECTURE ENHANCEMENT Ask students to think about a job they have held or currently hold. Next, ask them if they feel they were rewarded fairly. Many are likely to say that they were not paid enough, or that the work was not challenging enough. Be sure to ask them how they responded to the inequity. In nearly all cases, students will indicate that they exhibited one of the responses to perceived inequity that are listed below.

When either feeling exists, the individual will likely engage in one or more of the following behaviors to restore a sense of equity.

• Reduce work inputs.

• Change the outcomes (rewards) received.

• Leave the situation.

• Change the comparison person.

• Psychologically distort things.

• Try to change efforts of the comparison person.

Research indicates that people who feel they are overpaid (perceived positive inequity) increase the quantity or quality of their work, whereas those who feel they are underpaid (perceived negative inequity) decrease the quantity or quality of their work.

EQUITY AND ORGANIZATIONAL JUSTICE

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One of the basic elements of equity theory is the fairness with which people perceive they are being treated. This raises an issue in organizational behavior known as organizational justice— how fair and equitable people view the practices of their workplace. In respect to equity theory, justice notions may enter social comparisons in four ways: 1. Procedural justice is the degree to which rules are always properly followed to implement policies.

2. Distributive justice is the degree to which all people are treated the same under a policy.

3. Interactional justice is the degree to which the people are treated with dignity and respect in decision affecting them.

4. Commutative justice is the degree to which exchanges and transactions are considered fair.

EXPECTANCY THEORY OF MOTIVATION Victor Vroom’s expectancy theory posits that motivation is a result of a rational calculation reflecting the degree to which a person believes that effort will yield acceptable performance, performance will be rewarded, and the value of the rewards is highly positive.

EXPECTANCY TERMS AND CONCEPTS As shown in Figure 5.3 of the textbook, the three beliefs of expectancy theory are identified as expectancy, instrumentality, and valence.

Expectancy is the probability assigned by an individual that a given level of achieved task performance will follow work effort.

Instrumentality is the probability assigned by the individual that a given level of achieved task performance will lead to various work outcomes.

Valence is the value attached by the individual to various work outcomes.

Expectancy, instrumentality, and valence combine multiplicatively to determine the level of motivation (Motivation = E x I x V). Thus, for a given outcome to have a strong, positive motivational impact, expectancy and instrumentality must be high and valence must be highly positive.

LECTURE ENHANCEMENT A useful way to help students understand the multiplier effect of expectancy theory is to relate it to their own academic experiences. Ask students to think about their motivation in their various classes. Do they believe that if they work hard, they will be able to achieve a high level of performance (expectancy)? If they succeed in performing well, do they expect to be rewarded with a high grade (instrumentality)? Finally, do they value a high grade (valence)? If the answer to any of these questions is “no,” their motivation will suffer.

EXPECTANCY THEORY PREDICTIONS

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Expectancy logic argues that a manger must try to intervene actively in work situations to maximize work expectancies, instrumentalities, and valences that support organizational objectives.

Expectancy theory predicts that motivation to work hard to earn a reward will be low if the worker feels he or she cannot achieve the performance level necessary for the reward and/or if the worker is not confident a high level of task performance will result in the reward and/or if the worker puts little value on the reward.

EXPECTANCY IMPLICATIONS AND RESEARCH To influence expectancies: select people with proper abilities, train them well, support them with needed resources, and identify clear performance goals.

To influence instrumentality: clarify performance-reward relationships and then to confirm them when rewards are given for performance accomplishments.

To influence valences: identify the needs that are important to each individual and then try to adjust available rewards to match.

LECTURE ENHANCEMENT A nice way to involve students in the discussion of work-related rewards is to ask them to identify as many different types of rewards as possible that managers can use to motivate subordinates. While students are typically able to quickly list a large variety of rewards, they also usually overlook some more subtle rewards such as an enriched job or training opportunities. You may want to wrap up this discussion by presenting the following table and complimenting the students on the number of rewards they named.

Intrinsic Rewards: Participation in decision making Increased responsibility Opportunities for personal growth Greater job freedom and discretion More interesting work Diversity of activities Training opportunities

Extrinsic Rewards: Performance bonuses Overtime and holiday premiums Profit sharing Stock options Impressive titles Preferred work assignments Praise and recognition

GOAL-SETTING THEORY OF MOTIVATION MOTIVATIONAL PROPERTIES OF GOALS Goal setting is the process of developing, negotiating, and formalizing the targets or objectives that a person is responsible for accomplishing.

The authors of goal setting theory say “Purposeful activity is the essence of living action. If the purpose is neither clear nor challenging, very little gets accomplished.”

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GOAL-SETTING GUIDELINES • • • • •

Difficult goals are more likely to lead to higher performance than are less difficulty ones.

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

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

Goals are most likely to lead to higher performance when people have the abilities and the feelings of self-efficacy required to accomplish them.

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

GOAL SETTING AND THE MANAGEMENT PROCESS Management by Objectives (MBO) is a process of joint goal setting between a supervisor and a subordinate.

Figure 5.4 shows a comprehensive view of MBO in which the supervisor and subordinate jointly establish performance goals, individually act, and then jointly evaluate results and recycle the MBO process.

CHAPTER STUDY GUIDE What is motivation?

• • •

Motivation is an internal force that accounts for the level, direction, and persistence of effort expended at work.

Content theories—including the work of Maslow, Alderfer, McClelland, and Herzberg— focus on locating individual needs that influence behavior in the workplace.

Process theories, such as equity theory and expectancy theory, examine the thought processes that affect decisions people make about their work efforts.

What can we learn from the needs theories of motivation?

• • • •

Maslow’s hierarchy of needs theory views human needs as activated in a five-step hierarchy ranging from physiological (lowest), to safety, to social, to esteem, to self-actualization (highest).

Alderfer’s ERG theory collapses the five needs into three: existence, relatedness, and growth; it maintains that more than one need can be activated at a time.

McClelland’s acquired needs theory focuses on the needs for achievement, affiliation, and power, and it views needs as developed over time through experience and training.

Herzberg’s two-factor theory links job satisfaction to motivator factors, such as responsibility and challenge, associated with job content; it links job dissatisfaction to hygiene factors, such as pay and working conditions, associated with job context.

Why is the equity theory of motivation important?

• Equity theory points out that social comparison takes place when people receive rewards.

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• • •

Any felt inequity in social comparison will motivate people to behave in ways that restore a sense of perceived equity to the situation.

When felt inequity is negative—that is, when the individual feels unfairly treated—he or she may decide to work less hard in the future or to quit a job for other, more attractive opportunities.

Organizational justice is an issue of how fair and equitable people view workplace practices; it is described in respect to distributive, procedural, interactive and commutative justice.

What are the insights of the expectancy theory of motivation?

• Vroom’s expectancy theory describes motivation as a function of an individual’s beliefs concerning effort-performance relationships (expectancy), work-outcome relationships (instrumentality), and the desirability of various work outcomes (valence).

• Expectancy theory states that Motivation _ Expectancy _ Instrumentality _ Valence, and argues that managers should make each factor positive in order to ensure high levels of motivation.

How does goal-setting influence motivation?

• • •

Goal setting is the process of developing, negotiating, and formalizing performance targets or objectives.

Research supports predictions that the most motivational goals are challenging and specific, allow for feedback on results, and create commitment and acceptance.

Management by objectives is a process of joint goal setting between team leader and team member and a way of applying goal-setting theory in day-to-day management practice and on an organization-wide basis.

KEY TERMS Commutative justice: is the degree to which exchanges and transactions are considered fair.

Content theories: focus primarily on individual needs-physiological and psychological deficiencies that we feel a compulsion to reduce or eliminate.

Distributive justice: the degree to which all people are treated the same under a policy.

Equity theory: posits that people will act to eliminate any felt inequity in the rewards they receive for their work in comparison with others.

ERG theory: collapses Maslow’s five need categories into three: existence needs, relatedness needs, and growth needs.

Existence needs: in Alderfer’s ERG theory, the desires for physiological and material well-being.

Expectancy: the probability assigned by an individual that a given level of achieved task performance will follow work effort.

Expectancy theory: posits that motivation is a result of a rational calculation reflecting the degree to which a person believes that (1) effort will yield acceptable performance, (2) performance will be rewarded, and (3) the value of the rewards is highly positive.

Goal Setting: is the process of setting performance targets.

Growth needs: in Alderfer’s ERG theory, the desire for continued personal growth and development.

Hierarchy of needs theory: a content theory of motivation that identifies five distinct levels of individual needs: from self-actualization and esteem at the top, to social, safety, and physiological at the bottom.

Higher order needs: the esteem and self-actualization needs of Maslow’s need hierarchy.

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Hygiene factors: sources of job dissatisfaction that are associated with the job context or work setting.

Instrumentality: the probability assigned by the individual that a given level of achieved task performance will lead to various work outcomes.

Interactional justice: the degree to which the people affected by a decision are treated with dignity and respect.

Job enrichment: tries to build more motivator factors into job content.

Lower-order needs: the physiological, safety and social needs of Maslow’s need hierarchy.

Management by objectives (MBO): a process of joint goal setting between a supervisor and a subordinate.

Motivation: forces within an individual that account for the level, direction, and persistence of effort expended at work.

Motivator factors: sources of satisfaction that are associated with job content ⎯ what people actually do in their work.

Need for achievement (nAch): the desire to do something better or more efficiently, to solve problems, or to master complex tasks.

Need for affiliation (nAff): the desire to establish and maintain friendly and warm relations with others.

Need for power (nPower): the desire to control others, to influence their behavior, or to be responsible for others.

Organizational justice: an issue of how fair and equitable people view workplace practices; Perceived inequity: is feeling under-rewarded or over-rewarded in comparison with others.

Procedural justice: the degree to which the rules and procedures specified by policies are properly followed in all cases to which they are applied.

Process theories: focus on the thought or cognitive processes that take place within the minds of people and influence their behavior.

Relatedness needs: in Alderfer’s ERG theory, desires for satisfying interpersonal relationships.

Two-factor theory: focuses on two sets of factors ⎯ one set identifies sources of job dissatisfaction (hygienes) and the other set identifies sources of job satisfaction (motivators).

Valence: the value attached by the individual to various work outcomes.

SPECIAL FEATURES Hungry to Succeed One in six Americans go hungry and Feeding America wants to do something about it. With more than 200 locations, the nation’s largest network of food banks feeds more than 37 million Americans each year by acquiring and distributing more than 2.5 billion pounds of food and grocery products annually. The Chicago-based charity procures donations from corporations, the food and grocery industries, individuals, government agencies, and other organizations. They distribute the food and groceries to member food banks, which in turn store and hand out the products to individuals in need. On its web site, Feeding America says that “feeding serves a double meaning – both providing food and enriching lives.” The essence of charitable organizations often serve multiple purposes for all involved – the volunteers, the citizens who are served and the larger community. Ask students what they think are the benefits to organizations who engage in such charitable/social engagements?

Leaders on Leadership

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Lorraine Monroe’s book on leadership begins with this advice: “The job of the leader is to uplift her people—not just as members of and contributors to the organization, but as individuals of infinite worth in their own right.” Monroe believes that leaders should be vision-driven and follower-centered.

Ask student how Monroe might motivate employees to join her vision?

OB in Popular Culture Equity theory tells us that employees are motivated to eliminate perceived inequity, the feeling that steams from unfair distributions of rewards. These perceptions develop when employees receive outcomes as a result of their work effort and then make comparisons with similar others, known as referents. Ally Bank has a number of child-themed commercials to depict unfair practices in the banking industry. The commercials resonate with viewers because we all have a fundamental understanding of what is fair and what is not. In one particular commercial, two girls are sitting at a table with a man. The first girl is given a toy pony, while the second girl is given a real pony, after they are each asked if they would like a pony by the male. While the first girl was initially quite happy with the pony she had received, she becomes upset, understandably so, when the second girl receives a real pony. The commercial illustrates equity theory and shows that we evaluate rewards within the context in which they are given. Ask students if they remember a time they felt they were being treated unfairly compared to someone else? Challenge them to examine specific details of the incident. Further ask them what they did/thought of doing to rectify their “inequity” in that particular situation?

Ethics in OB A worker opens the top of the office photocopier and finds a document someone has left behind.

It is a list of performance evaluations, pay and bonuses for 80 co-workers. She reads the document. Lo and behold, someone considered a “nonstarter” is getting paid more than others regarded as “super workers”. New hires are brought in at substantially higher pay and bonuses than are paid to existing staff. To make matters worse, the worker who finds the document is in the middle of the field and not at the top, where she thought she would be. As students what they would do if they were this worker? Students should analyze the legal and ethical implications of the action they are proposing. Finally students should be asked to address what punishment (if any) should the employee who left the document on the printer receive?

Mastering Management The Mastering Management provides the following tips on making goal setting work for you: - Setting challenging goals - Set specific goals - Provide feedback on goal accomplishment - Build goal acceptance and commitment - Clarify goal priorities - Reward goal accomplishment

Research Insight Goal setting theory has been widely studied, but only conscious goals have been examined. The researchers in this study attempted to link the findings on conscious goals to a body of literature in social psychology concerned with subconscious goal motivation. The overall conclusions of

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the research suggest that when both types of goals are used together, their motivational impact is increased.

Group Project Have students break into groups and integrate the competencies from “Mastering Management” with the chapter information on goal setting. In other words, have students set goals for building their competencies before graduation. In groups, have students brainstorm ideas about where the opportunities for competency building are available on campus (and off-campus). Ideas can be shared with the class and each student can write out a personal plan for building competencies.

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Organizational Behavior, 12e Instructor’s Resource Guide Chapter 6 MOTIVATION AND PERFORMANCE

STUDY QUESTIONS 1.

2.

3.

4.

What is the link between motivation, rewards, and performance?

What are the essentials of performance management?

How do job designs influence motivation and performance?

What are the motivational opportunities of alternative work arrangements?

OB IN ACTION Cases For Critical Thinking Experiential Exercises

Self-Assessment Portfolio

Perfect Pizzeria Hovey and Beard My Fantasy Job My Best Job Tinkertoys Job Design Preferences Personal Values Are You Cosmopolitan?

Managerial Assumptions 21st Century Manager

CHAPTER OVERVIEW The chapter begins with the link between motivation, performance, and rewards, including an integrated model of motivation, intrinsic and extrinsic rewards, pay for performance, and pay for skills. The chapter then turns to the essentials of performance management, including the performance management process, performance measurement methods, and performance measurement errors.

The next section of the chapter focuses on job design and a description of the various job-design approaches, including scientific management, job enlargement, job rotation, and job enrichment.

The chapter concludes with a discussion of alternative work schedules, including compressed workweeks, flexible working hours, job sharing, telecommuting, and part-time work. Progressive companies are using these alternative work schedules to reshape existing schedules of work hours to better meet the needs of employees.

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CHAPTER OUTLINE MOTIVATION AND REWARDS Integrated Model of Motivation Intrinsic and Extrinsic Rewards Pay for Performance MOTIVATION AND PERFORMANCE MANAGEMENT Performance Management Process Performance Measurement Methods Performance Measurement Errors MOTIVATION AND JOB DESIGN Scientific Management Job Enlargement and Job Rotation Job Enrichment Job Characteristics Model ALTERNATIVE WORK SCHEDULES Compressed Work Weeks Flexible Working Hours Job Sharing Telecommuting Part-Time Work CHAPTER LECTURE NOTES The chapter opens with a description of Luis Urzua, shift leader for the 33 miners and subcontractors trapped underground for 69 days. On August 26, 2010, thirty-three miners and subcontractors were trapped three miles underground in a collapsed mine near Copiapó, Chile.

Shift leader Luis Urzúa quickly organized the men into three groups working 12-hour shifts to set up camp, look for escape routes, and make the best of their unforeseen accommodations.

Psychologists credit the men’s active participation in their own survival, as well as Urzúa’s leadership, for keeping relative peace and solidarity during their 69 days in the mine.

MOTIVATION, PERFORMANCE AND REWARDS INTEGRATED MODEL OF MOTIVATION Motivation accounts for the level and persistence of a person’s effort expended at work.

Figure 6.1 in the textbook illustrates an integrated model of individual motivation to work.

INTRINSIC AND EXTRINSIC REWARDS Intrinsic rewards are positively valued work outcomes that the individual receives directly as a result of task performance; they do not require the participation of another person or source.

Extrinsic rewards are positively valued work outcomes that are given to an individual or group by some other person or source in the work setting.

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The typical reward systems in organizations emphasize a mix of intrinsic and extrinsic rewards.

PAY FOR PERFORMANCE Pay is the most obvious and most important extrinsic reward for many workers. It also is very complex. Research indicates that for pay to work as a motivator, high levels of job performance must be viewed as the path through which high pay can be achieved.

Motivation was defined in Chapter 5 as forces within the individual that account for the level and persistence of an effort expended at work. In other words, motivation predicts effort.

The essence of performance-contingent pay is that you earn more when you produce more and earn less when you produce less.

Merit pay Merit pay links an individual’s salary or wage increase directly to measures of performance accomplishment.

To work well, a merit pay plan should: • Create a belief among employees that the way to achieve high pay is to perform at high levels • Be based on realistic and accurate measures of individual work performance • Be able to clearly discriminate between high and low performers in the amount of pay increases awarded • Not be confused with across-the-board “cost-of-living” adjustments.

Merit pay plans can be criticized when the plans: • Cause problems when they emphasize individual achievements and fail to recognize the high degree of task interdependence that is common in many organizations today • Are not consistent with overall organization strategies and environmental challenges Bonuses Cash bonuses are extra pay for performance.

Bonuses are especially common in the higher executive ranks but there is a trend to extend such opportunities to employees at lower levels in organizations.

Gainsharing and Profit Sharing Gainsharing rewards employees by giving them shares of any productivity gains that they help to create.

Profit sharing rewards employees in some proportion to changes in organizational profits.

Stock Options and Employee Ownership Stock options give the right to purchase shares at a fixed price in the future.

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Employee stock ownership plans give stock to employees or allow them to purchase stock at special prices.

Skill-Based Pay Skill-based pay rewards people for acquiring and developing job-relevant skills. It is one of the fastest-growing pay innovations in the United States.

Advantages include flexibility, employee cross-training, fewer supervisors, and more individual control over compensation.

Disadvantages include possible higher pay and training costs that are not offset by greater productivity and the possible difficulty of deciding on appropriate monetary values for each skill.

LECTURE ENHANCEMENT Ask students about their own pay at the organization they are working at or have worked at – what is their pay based on? Ask them further what determines the pay of their managers/supervisors and the CEO of the company? Further ask them to describe how they believe different pay methods are employed to motivate employees at different levels and responsibilities in an organization.

MOTIVATION AND PERFORMANCE MANAGEMENT Figure 6.2 in the textbook describes the four steps of performance management: 1. Identify and set clear and measurable performance goals 2. Measure performance to assess programs 3. Provide feedback and coaching on performance results 4. Use performance assessment for human resource management decisions such as pay, promotions, transfers, terminations, training, and career development.

PERFORMANCE MANAGEMENT PROCESS Performance management serves an evaluation purpose when it lets people know where their actual performance stands relative to objectives and standards and it serves a developmental purpose when it provides insights into individual strengths and weaknesses that can be used to plan helpful training and career development activities.

People will do what they know is going to be measured so managers are well advised to always make sure they are measuring the right things in the right ways in the performance management process. Both output measures and activity measures are in common use.

• Output measures of performance assess what is accomplished in respect to concrete work results.

• Activity measures of performance assess work inputs in respect to activities tried and efforts expended.

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PERFORMANCE MEASUREMENT METHODS Performance appraisal is the formal procedure for measuring and documenting a person’s work performance.

Comparative Methods Comparative methods of performance appraisal seek to identify one worker’s standing relative to others.

• Ranking is the simplest approach and is done by rank ordering each individual from best to worst on overall performance or on specific performance dimensions.

• Paired comparison directly compares each person with every other person being rated. Each person’s final ranking is determined by the number of pairs for which they emerged the “winner.”

• Forced distribution forces a set percentage of all persons being evaluated into pre-determined performance categories such as outstanding, good, average, and poor.

Rating Scales Graphic rating scales list a variety of performance dimensions that are thought to be related to high-performance outcomes for a given job that the individual is accordingly expected to exhibit, including cooperation, initiative, and attendance. Figure 6.3 in the textbook illustrates a sample six month performance reviews using graphic rating scale.

The behaviorally anchored rating scale (BARS) adds more sophistication by linking ratings to specific and observable job-relevant behaviors. Figure 6.4 in the textbook illustrates a sample BARS for a retail department manager.

Critical Incident Diary Critical incident diaries are written records that give examples of a person’s work behavior that leads to either unusual performance success or failure. The incidents are typically recorded in a diary-type log that is kept daily or weekly under predetermined dimensions.

360 degree evaluations use a combination of evaluations from a person’s bosses, peers, and subordinates, as well as internal and external customers and self-ratings.

PERFORMANCE MEASUREMENT ERRORS Regardless of the method being employed, any performance appraisal system should meet two criteria: • Reliability—providing consistent results each time it is used for the same person and situation, and • Validity—actually measuring people on dimensions with direct relevance to job performance.

Measurement errors that can reduce the reliability or validity of performance appraisals include: • Halo error—results when one person rates another person on several different dimensions and gives a similar rating for each dimension.

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• • • •

Leniency error—some managers tend to give relatively high ratings to virtually everyone under their supervision; the opposite is strictness error—giving everyone a low rating.

Central tendency error—occurs when managers lump everyone together around the average, or middle, category Recency error—occurs when a rater allows recent events to influence a performance rating over earlier events Personal bias error—displays expectations and prejudices that fail to give the job-holder complete respect, such as showing racial bias in ratings.

MOTIVATION AND JOB-DESIGN Good person-job fit occurs when job requirements fit well with individual abilities and needs.

Job design is the process through which managers plan and specify job tasks and the work arrangements that allow them to be accomplished.

Figure 6.5 in the textbook shows three major alternative job design approaches and indicates how they differ in the way required tasks are defined and in the motivation provided for the worker.

SCIENTIFIC MANAGEMENT Scholarly interest in job design can be traced in part to Frederick Taylor’s work with scientific management in the early 1900s.

Taylor’s principles of scientific management can be summarized as follows: 1. Develop a “science” for each job that covers rules of motion, standard work tools, and supportive work conditions.

2. Hire workers with the right abilities for the job.

3. Train and motivate workers to do their jobs according to the science.

4. Support workers by planning and assisting their work using the job science.

Job simplification, which grows out of the scientific management tradition, is the approach of standardizing work procedures and employing people in clearly defined and highly specialized tasks.

Job simplification has the potential advantages of increasing operating efficiency by reducing the skills required to do a job, being able to hire low-cost labor, and minimizing the need for training.

Job simplification has the potential disadvantages of loss of efficiency due to lower quality, high rates of absenteeism and turnover, and demand for higher wages to compensate for unappealing jobs.

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LECTURE ENHANCEMENT To reinforce the job simplification strategy, ask students if they have ever had a job in which this strategy was employed. If any respond yes, ask them to describe their job. You can use one of these jobs to illustrate the characteristics of this strategy. Next, ask these students what they thought of their jobs and, if they no longer hold them, why they don’t. Students will typically respond that they found the job to be boring so they quit. Responses such as these reflect the problems of boredom and turnover that are commonly associated with job simplification.

JOB ENLARGEMENT AND JOB ROTATION Job enlargement increases task variety by combining into one job two or more tasks that were previously assigned to separate workers.

Job enlargement is one form of horizontal loading.

Horizontal loading increases job breadth by having the worker perform more and different tasks, but all at the same level of responsibility and challenge.

Job rotation increases task variety by periodically shifting workers among jobs involving different tasks.

Job rotation is another form of horizontal loading.

Training is an important benefit of job rotation.

LECTURE ENHANCEMENT Ask students what they think of the job rotation and job enlargement strategies. Usually, they respond that while these strategies may reduce some of the monotony of highly simplified jobs, their benefits are likely to be limited. In the words of Frederick Herzberg, “Why should a worker become motivated when one or more ‘meaningless’ tasks are added to previously existing ones or when work assignments are rotated among equally ‘meaningless’ tasks?” This point leads nicely into the material on job enrichment that follows.

JOB ENRICHMENT Herzberg’s two-factor theory of motivation (see Chapter 5) suggests that high levels of motivation should not be expected from jobs designed on the basis of simplification, enlargement, or rotation. To generate high levels of motivation, Herzberg advocates the use of job enrichment.

Job enrichment is the practice of enhancing job content by building into it more motivating factors such as responsibility, achievement, recognition, and personal growth.

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Job enrichment increases job content by giving workers more responsibility for planning and evaluating duties.

Job enrichment involves vertical loading to increase job depth.

LECTURE ENHANCEMENT Point out to students that in recent years, technological changes have enriched secretarial jobs.

You may want to ask students to identify these changes and explain their impact on secretarial work. The integration of personal computers into the modern office is the cause of many of these changes. For example, personal computers have reduced the number of simplified and repetitive tasks performed by secretaries. In addition, the scope and depth of many secretarial jobs have been expanded to include such responsibilities as word processing and the monitoring of budgets.

JOB CHARACTERISTICS MODEL Job characteristics model Figure 6.6 from the textbook presents the job characteristics model developed by Richard Hackman and Greg Oldham. According to this model, five different core job characteristics create three critical psychological states, which in turn produce four different work outcomes. In addition, the relationships between the core job characteristics and the critical psychological states and between the critical psychological states and individual work outcomes are influenced by three moderator variables.

Core job characteristics.

• Skill variety ⎯ the degree to which a job requires a variety of different activities and involves the use of a number of different skills and talents of the individual.

• Task identity ⎯ the degree to which the job requires the completion of a “whole” and identifiable piece of work; one that involves doing a job from beginning to end with a visible outcome.

• Task significance ⎯ the degree to which the job is important and involves a meaningful contribution to the organization or society in general.

• Autonomy ⎯ the degree to which the job gives the employee substantial freedom, independence, and discretion in scheduling the work and in determining the procedures used in carrying it out.

• Job feedback ⎯ the degree to which carrying out the work activities provides direct and clear information to the employee regarding how well the job has been done.

LECTURE ENHANCEMENT Ask a student who has worked in a fast-food restaurant, on an assembly line, or at some other type of simplified job to rate the job on a scale from 1 to 5 on each of the five core job characteristics (1 = low on the characteristic and 5 = high on the characteristic); then ask someone who has had a more enriched job to do the same. Discuss the insights that can be gained from this comparison.

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Psychological Empowerment A job’s motivating potential can be raised by: • Combining tasks to create larger jobs.

• Opening feedback channels to enable workers to know how well they are doing.

• Establishing client relationships to experience feedback directly from customers.

• Employing vertical loading to create more planning and controlling responsibilities.

When the core characteristics are enriched in these ways and the motivating potential for a job is raised as high as possible, the redesigned job can be expected to positively influence three critical psychological states for the individual and create what is often called psychological empowerment: - a sense of personal fulfillment and purpose that arouses one’s feelings of competency and commitment to work. These critical psychological states are: 1. Experienced meaningfulness of work.

2. Experienced responsibility for the outcomes of the work.

3. Knowledge of actual results of work activities.

Moderator Variables The core job characteristics will not affect everyone in the same way. The following will influence the extent to which people respond favorably to enriched jobs.

• Growth-need strength (GNS) is the degree to which a person desires the opportunity for selfdirection, learning, and personal accomplishment at work. People with “high GNS” will respond most positively to enriched jobs.

• The second moderator is knowledge and skill. People whose capabilities fit the demands of enriched jobs are predicted to feel good about them and perform well. Those who are inadequate or who feel inadequate in this regard are likely to experience difficulties.

• Context satisfaction is the extent to which an employee is satisfied with aspects of the work setting such as salary levels and working conditions. In general, people who are more satisfied with job context are more likely than dissatisfied ones to support and do well with job enrichment.

Researchers have questioned whether jobs have stable and objective characteristics to which individuals respond predictably and consistently. Some view job design from the perspective of social information processing theory. This theory argues that individual needs, task perceptions, and reactions are a result of socially constructed realities. Social information in organizations influences the way people perceive their jobs and respond to them.

Finally, research suggests the following answers to common questions about job enrichment and its applications: • •

Should everyone’s job be enriched? The answer is clearly “no.” The logic of individual differences suggests that not everyone will want an enriched job.

Can job enrichment apply to groups? The answer is “yes.” The application of job-design strategies at the group level is growing in many types of settings.

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ALTERNATIVE WORK SCHEDULES Alternative ways of scheduling work are becoming increasing important because of demands for work-life balance and more family-friendly work environments.

Ethical and socially responsible management pays attention to the human factor in organizations ⎯ one way of accomplishing this is with alternative work arrangements.

COMPRESSED WORK WEEKS A compressed work week is any scheduling of work that allows a full-time job to be completed in fewer than the standard five days.

The most common form of compressed workweek is the “4/40” or 40 hours of work accomplished in four 10-hour days.

The potential advantages of the compressed workweek include the following: • Additional time off for workers.

• Lower employee absenteeism and improved recruiting of new employees for the organization.

The potential disadvantages of the compressed workweek include the following: • Individuals can experience increased fatigue from the extended workday and can have family adjustment problems.

• The organization can encounter work scheduling problems and customer complaints because of breaks in work coverage.

• Union opposition may occur in unionized companies.

FLEXIBLE WORKING HOURS Flexible working hours, or flextime, gives individuals a daily choice in the timing of their work commitments.

Advantages of Flextime for the organization • Less absenteeism, tardiness, turnover • More commitment • Higher performance Advantages of Flextime for workers: • Shorter commuting time • More leisure time • More job satisfaction • Greater sense of responsibility

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LECTURE ENHANCEMENT Have any of your students’ experienced compressed work weeks or flexible working hours? If so, have them discuss their experiences, and the impact of the alternative work arrangement on them and on the employing organization.

JOB SHARING Job sharing occurs when one full-time job is assigned to two or more persons who then divide the work according to agreed-upon hours.

Organizations benefit from job sharing when they can attract talented people who would otherwise be unable to work.

Some job sharers report less burnout and claim that they feel recharged each time they report to work.

Job sharing should not be confused with a more controversial arrangement called work sharing, in which workers agree to cut back on the number of hours they work in order to protect against layoffs.

TELECOMMUTING Telecommuting is work done at home or in remote locations using computer and telecommunications linkages with the office.

The potential advantages of telecommuting include the following: • For individuals, telecommuting offers flexibility, the comforts of home, and choice of location consistent with one’s lifestyle.

• For organizations, telecommuting provides cost savings, efficiency, and employee satisfaction.

The potential disadvantages of telecommuting include that telecommuters sometimes complain of isolation from co-workers, decreased identification with the work team, and technical difficulties with computer linkages essential to their work.

A new trend for telecommuters is co-working centers which are places where telecommuters go to share an office environment outside of the home and join the company of others.

A “jelly” is a co-worker community, people who meet together to do individual work in public places like libraries or coffee shops, rather than at home.

PART-TIME WORK Temporary part-time work occurs when an employee is classified as “temporary” and works less than the standard 40-hour work week.

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Permanent part-time work occurs when an employee is considered to be a “permanent” member of the workforce and works less than the standard 40-hour work week.

The potential advantages of part-time work include the following: • Organizations use part-time work to control labor costs, help smooth out peaks and valleys in the business cycle, and retain highly skilled workers who only want to work part-time.

• Part-time work can help individuals who want something less than a full workweek for a variety of personal reasons.

The potential disadvantages of part-time work include the following: • Increased stress for individuals who also hold a full-time job or one or more other part-time jobs.

• Part-timers often fail to qualify for fringe benefits and they may be paid less than their fulltime counterparts.

LECTURE ENHANCEMENT Have the students discuss which of the alternative work arrangement options that they find to be particularly appealing. Make sure they explain why they find them to be appealing? Ask them how, if at all, their preferences might change as they advance in their careers and grow in their personal lives.

CHAPTER STUDY GUIDE What is the link between motivation, performance and rewards?

• The integrated model of motivation brings together insights from content, process, and learning theories around the basic effort -performance -reward linkage.

• Reward systems emphasize a mix of intrinsic rewards—such as a sense of achievement from completing a challenging task—and extrinsic rewards—such as receiving a pay increase.

• Pay for performance systems take a variety of forms, including merit pay, gain-sharing and profit-sharing plans, lump-sum increases, and employee stock ownership.

What are the essentials of performance management?

• Performance management is the process of managing performance measurement and the variety of human resource decisions associated with such measurement.

• Performance measurement serves both an evaluative purpose for reward allocation and a counseling purpose for development and future performance improvement.

• Performance measurement can be done using output measures of performance accomplishment or activity measures of performance efforts.

• The ranking, paired comparison, and forced-distribution approaches are examples of comparative performance appraisal methods.

• The graphic rating scale and behaviorally anchored rating scale use individual ratings on personal and performance characteristics to appraise performance.

• 360 degree appraisals involve the full circle of contacts a person may have in job performance—from bosses, to peers, to subordinates, to internal and external customers.

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•

Common performance measurement errors in performance appraisal include halo errors, central tendency errors, recency errors, personal bias errors, and cultural bias errors.

How do job designs influence motivation and performance?

• Job design by scientific management or job simplification standardizes work and employs people in clearly defined and specialized tasks.

• Job enlargement increases task variety by combining two or more tasks previously assigned to separate workers. Job rotation increases task variety by periodically rotating workers among jobs involving different tasks. Job enrichment builds bigger and more responsible jobs by adding planning and evaluating duties.

• Job characteristics model offers a diagnostic approach to job enrichment based on analysis of five core job characteristics: skill variety, task identity, task significance, autonomy, and feedback.

• Job characteristics model does not assume that everyone wants an enriched job; it indicates that job enrichment will be more successful for persons with high growth needs, requisite job skills, and context satisfaction.

What are the motivational opportunities of alternative work arrangements?

• The compressed work week allows a full-time work week to be completed in fewer than five days, typically offering four 10-hour days of work and three days free.

• Flexible working hours allow employees some daily choice in timing between work and nonwork activities.

• Job sharing occurs when two or more people divide one full-time job according to agreements among themselves and the employer.

• Telecommuting involves work at home or at a remote location while communicating with the home office as needed via computer and related technologies.

• Part-time work requires less than a 40-hour work week and can be done on a schedule classifying the worker as temporary or permanent.

KEY TERMS Activity measures: assess inputs in terms of work efforts.

Behaviorally anchored rating scale: links performance ratings to specific and observable jobrelevant behaviors.

Bonuses: are extra pay awards for special performance accomplishments.

Compressed work week: any scheduling of work that allows a full-time job to be completed in fewer than the standard five days.

Critical incident diaries: written records that give examples of a person’s work behavior that leads to either unusual performance success or failure.

Employee stock ownership plans: give stock to employees or allow them to purchase stock at special prices.

Extrinsic rewards: are valued outcomes given by some other person.

Flexible working hours: gives individuals a daily choice in the timing of their work commitments.

Forced distribution: in performance appraisal forces a set of percentage of persons into predetermined rating categories.

Gain sharing: rewards employees in some proportion to productivity gains.

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Graphic rating scale: in performance appraisal assigns scores to specific performance dimensions.

Intrinsic rewards: are valued outcomes received directly through task performance.

Job design: is the process of specifying job tasks and work arrangements.

Job enlargement: increases task variety by combining into one job two or more tasks that were previously assigned to separate workers.

Job enrichment: the practice of enhancing job content by building into it more motivating factors such as responsibility, achievement, recognition, and personal growth.

Job rotation: increases task variety by periodically shifting workers among jobs involving different tasks.

Job sharing: occurs when one full-time job is assigned to two or more persons who then divide the work according to agreed-upon hours.

Job simplification: standardizes work to create clearly defined and highly specialized tasks.

Merit pay: a compensation system that directly ties an individual’s salary or wage increase to measures of performance accomplishments during a specified time period.

Motivation: forces that account for the level and persistence of an individual’s effort expended at work.

Output measures: of performance assess achievements in terms of actual work results.

Paired comparison: in performance appraisal compares each person with every other.

Performance-contingent pay: you earn more when you produce more and earn less when you produce less.

Profit sharing: rewards employees in some proportion to changes in organizational profits.

Psychological empowerment: is a sense of personal fulfillment and purpose that arouses one’s feelings of competency and commitment to work.

Ranking: in performance appraisal orders each person from best to worst.

Reliability: providing consistent results each time it is used for the same person and situation.

Scientific management: systematic study of job components to develop practices to increase people’s efficiency at work.

Skill-based pay: rewards people for acquiring and developing job-relevant skills.

Stock options: give the owner the right to buy shares of stock at a future date at a fixed or “strike” price.

Telecommuting: refers to work at home or in a remote location via use of computers and advanced telecommunication linkages with a central office or other employment locations.

360 degree evaluation: gathers evaluations from a job holder’s bosses, peers, and subordinates, as well as internal and external customers and self ratings.

Validity: actually measuring people on dimensions with direct relevance to job performance.

Work sharing: when employees agree to work fewer hours to avoid layoffs.

SPECIAL FEATURES Surviving on Faith Alone On August 26, 2010, thirty-three miners and subcontractors were trapped three miles underground in a collapsed mine near Copiapó, Chile. After the dust (literally) settled from the mine’s collapse, the

men coalesced around hard-nosed shift supervisor Luis Urzúa, a mining veteran. To keep them focused on and participating in their own survival, Urzúa divided Los 33, as they became known above ground, into three groups who split shifts maintaining the mine’s nooks he designated as their sleeping, working and washing areas. Drawing on discipline learned in the Chilean military, Urzúa assigned more complex responsibilities as it became clear they would not be rescued immediately. Appropriating a pickup truck as his office, he led the men through topographically

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mapping their new home, regular repair of crumbling rock walls, and digging for water. To simulate night and day, he toggled the headlights of other trucks. Balancing strong leadership and democracy, Urzúa instituted a one man, one vote policy. Psychologists and doctors above ground affirmed Urzúa’s strategy of keeping his men actively involved in their subsistence, and NASA specialists compared their experience to that of astronauts who spend months on the space station.

Ask students if they have ever been involved in a situation where they had to strategize or someone in their group had to strategize in order to lead the group out of a crisis (this could be at work, as a member of a sports team, debating team, etc.). What were some strategies employed to motivate the group and overcome the problem(s)? Have students share these details with the class.

Leaders on Leadership Sir Richard Branson, well known founder of Virgin Group, is a believer in positive reinforcement. Branson had a tough time in school and did poorly on those standardized tests the institutions like to use. Richard is dyslexic, and he does not see the world as we do. About ledership, Branson says: “Having a personality of caring about people is important …… You can’t be a ood leader unless you generally like people. That is how you bring out the best in them.”

Ask students if they agree with Branson’s assessment of what makes a good leader? What other motivating factors do they think are important for a good leader?

OB in Popular Culture Intrinsic rewards are received directly from task performance. For example, the satisfaction that comes from completing a challenging task would be an intrinsic reward. Extrinsic rewards, on the other hand are derived from factors external to the job. The most common extrinsic reward is pay. While both types have positive value, extrinsic rewards typically are not as motivating because they leave the worker feeling compelled to complete a task rather than desiring to do it for sheer enjoyment.

Have students think about their own jobs and identify the intrinsic versus the extrinsic rewards they receive from their jobs. Do students think their generation are interested in intrinsic versus extrinsic rewards? Ask them why they think this is so?

Ethics in OB When workers go to the office sick, it affects their “presenteeism” and, according to some studies, the organization’s bottom line. WebMD reports a study that finds the cost of lost productivity is greater than the cost of paying workers to stay home. Ask students why workers come to work when they are sick and how the problem can be managed.

Research Insight This research describes a study of race in performance appraisals. The study found that in two samples White supervisors gave significantly higher ratings to White workers than they did to Black workers, while Black supervisors also tended to favor White workers in their ratings. While the authors caution interpreting these results as meaning that the rating differences are the result of racial prejudice, they do call for additional studies designed to further examine both the

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existence of bias in supervisory ratings and the causes of such bias. In terms of workplace implications, however, the authors are quite definitive: “If you are a White ratee then it doesn’t matter if your supervisor is Black or White. If you are a Black ratee, then it is important whether your supervisor is Black or White.”

Discuss with students whether they believe the difference in ratings is caused by racial prejudice and, if so, how they might design a study to support their beliefs.

Mastering Management: How to Beat the Mommy Drain This breakout describes how organizations are using flexibility to accommodate workers – especially mothers. Ask students to share their own or their parents experiences with inflexible schedules and the impact on their families. Are there ideas that are not on the list in the book that students believe would benefit workers?

Group Project Have students break into groups and consider how to use the information from this chapter to minimize the problem of “presenteeism.” Presenteeism refers to productivity lost when workers is “present” at the job but not fully functioning due to stress, illness or other distractions. As discussed in “Ethics in OB,” WebMD reports a study that finds the cost of lost productivity due to presenteeism is greater than the cost of paying workers to stay home.

Have student consider the following questions: 1. Why is presenteeism such a problem for workers and organizations? (Why do workers come to work sick? Why is that a problem for organizations?)

2. How can the job characteristics model be used to reduce presenteeism?

3. How might job enlargement and job rotation fit in?

4. What alternative work arrangements might help reduce presenteeism?

Once the questions are answered in the individual groups, reconvene the class and discuss each group’s recommendations.

Chapter 7 TEAMS IN ORGANIZATIONS

STUDY QUESTIONS 1.

2.

3.

4.

What are teams and how are they used in organizations?

When is a team effective?

What are the stages of team development?

How can we understand teams at work?

OB IN ACTION Cases for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

The Forgotten Team Member Sweet Tooth Interrogatories Teamwork and Motivation Serving on the Boundary Eggsperiential Exercise Team Effectiveness Decision-Making Biases

CHAPTER OVERVIEW

This chapter focuses on the nature of teams in organizations. The chapter begins by defining the term “team,” as a group of people working together to achieve a common purpose for which they hold themselves collectively accountable. It discusses how teams in organizations serve different purposes—some teams run things, some teams recommend things, and some teams make or do things. Organizations can be viewed as interlocking networks of permanent teams such as project teams and cross-functional teams, as well as temporary teams such as committees and task forces.

The chapter then discusses when a team is effective by achieving high levels of task accomplishment, member satisfaction, and viability to perform successfully over the long term.

Teams help organizations through synergy in task performance, the creation of a whole that is greater than the sum of its parts. Teams help satisfy important needs for their members by providing them with things like job support and social interactions. The stages of team development – forming, storming, forming, performing, adjourning – and their somewhat distinct management problems are covered followed by a description of how teams work.

CHAPTER OUTLINE TEAMS IN ORGANIZATIONS Teams and Teamwork What Teams Do Organizations as Networks of Teams

Cross-Functional and Problem-Solving Teams Self-Managing Teams Virtual Teams TEAM EFFECTIVENESS Criteria of an Effective Team Synergy and Team Benefits Social Facilitation Social Loafing and Team Problems STAGES OF TEAM DEVELOPMENT Forming Stage Storming Stage Norming Stage Performing Stage Adjourning Stage UNDERSTANDING TEAMS AND WORK Open Systems Model of Teams Team Resources and Setting Nature of the Team Task Team Size Membership Composition of the Team Diversity and Team Performance Team Processes

CHAPTER LECTURE NOTES The chapter opens with the story of Whole Foods Market, with over 300 locations. At Whole Foods, department members work as a team. Teams within stores operate as a team. Parallel departments in regional stores team up. And all stores within each of Whole Foods’ twelve regions work as a team. While Whole Foods does have a core management team, led by founder John Mackey and co-president Walter Robb, the regions operate largely free from corporate interference. John Moore, former National Marketing Director of Whole Foods, identifies a “Libertarian” theme of management running through the company. “[Whole Foods] operates under the belief stores should have the freedom to meet the needs of its unique customers and team members.”

TEAMS IN ORGANIZATIONS TEAMS AND TEAMWORK A team is a group of people brought together to use their complementary skills to achieve a common purpose for which they are collectively accountable.

Teamwork occurs when team members accept and live up to their collective accountability by actively working together so that all their respective skills are best used to achieve important goals.

WHAT TEAMS DO In general, teams can be described three ways: 1. Teams that recommend things. Established to study specific problems and recommend solutions for them, these teams typically work with a target completion date and often disband once the purpose has been fulfilled.

2. Teams that run things. Such management teams consist of people with the formal responsibility for leading other groups. These teams may exist at all levels of responsibility, from the individual work unit composed of a team leader and team members to the top-management team composed of a CEO and other senior executives.

3. Teams that make or do things. These are teams and work units that perform ongoing tasks such as marketing, sales, systems analysis, or manufacturing. Members of these teams must have effective long-term working relationships with one another, solid operating systems, and the external support needed to achieve effectiveness over a sustained period of time.

ORGANIZATIONS AS NETWORKS OF TEAMS A formal team is created and officially designated to serve specific organizational purposes.

Permanent and ongoing teams include departments (e.g., market research department), divisions (e.g., consumer products division), or teams (e.g., product-assembly team) and can vary in size from very small departments or teams of just a few people to large divisions employing a hundred or more people.

Temporary and short-lived teams include those created to solve specific problems or perform defined tasks and include the many temporary committees and task forces that are important components of any organization.

LECTURE ENHANCEMENT Discuss with students the various formal teams to which they belong, or have belonged.

Figure 7.1 in the textbook illustrates the vast networks of formal and informal groups that emerge and coexist in an organization.

Informal groups are unofficial and emerge to serve special interests.

Two types of informal groups include: 1. Friendship groups which consist of persons with natural affinities for one another. They tend to work together, sit together, take breaks together, and even do things together outside of the workplace.

2. Interest groups which consist of persons who share common interests. These may be jobrelated interests, such as an intense desire to learn more about computers, or nonwork interests, such as community service, sports, or religion.

Social network analysis identifies the informal structures and their embedded social relationships that are active in an organization.

CROSS-FUNCTIONAL AND PROBLEM-SOLVING TEAMS A cross-functional team consists of members assigned from different functional departments or work units. It plays an important role in efforts to achieve more horizontal integration and better lateral relations.

Cross-functional teams are a way of trying to beat the functional silos problem, also called the functional chimneys problem. This problem occurs when members of functional units stay focused on matters internal to their function and minimize their interactions with members dealing with other functions.

Problem-solving teams are created temporarily to serve a specific purpose by dealing with a specific problem or opportunity. They exist as the many committees, task forces, and special project teams that are common facts of working life.

Employee involvement teams are a wide variety of teams whose members meet regularly to collectively examine important workplace issues such as ways to enhance quality, better satisfy customers, raise productivity, and improve the quality of work life. A quality circle is an example of such a team that works on problems relating to quality and productivity.

SELF MANAGING TEAMS Self-managing teams (sometimes called self-directed work teams) are high-involvement workgroups empowered to make the decisions needed to manage themselves on a day-to-day basis. It is important that members are good at multiskilling, meaning they are able to perform many different jobs—even all of the team’s jobs—as needed.

Figure 7.2 in the textbook shows that members of true self-managing teams make their own decisions about scheduling work, allocating tasks, training for job skills, evaluating performance, selecting new team members, and controlling the quality of work.

Expected benefits of self-managing teams: • Productivity and quality improvements • Production flexibility and faster response to technological change • Reduced absenteeism and turnover • Improved work attitudes and quality of work life Potential difficulties of self-managing teams: • It may be hard for some team members to adjust to the “self-managing” responsibilities • Higher level managers may have problems dealing with the loss of the first-line supervisor positions

VIRTUAL TEAMS The virtual team is one whose members convene and work together electronically via computers.

Potential advantages of virtual teams: • Bringing together people who may be located at great distances from one another for cost and time efficiencies • The electronic environment can help focus interaction and decision making on objective information • Discussions and information can be electronically stored for continuous access and historical record keeping Potential downsides of virtual teams: • Members of virtual teams can have difficulties establishing good working relationships.

• Lack of face-to-face interaction limits the role of emotions and nonverbal cues in the communication process, perhaps depersonalizing relations among team members.

TEAM EFFECTIVENESS CRITERIA OF AN EFFECTIVE TEAM An effective team is one that achieves high levels of task performance, member satisfaction, and team viability.

• Task performance ⎯ an effective group achieves its performance goals in the standard sense of quantity, quality, and timeliness of work results.

• Member satisfaction ⎯ an effective group is one whose members believe that their participation and experiences are positive and meet important personal needs.

• Team viability ⎯ an effective group has members who are sufficiently satisfied to continue working well together on an ongoing basis and/or look forward to working together again at some future point in time.

LECTURE ENHANCEMENT A good way to expose students to the nature of effective groups is to ask them how they feel about participating in groups. You will usually receive both highly positive and highly negative opinions. Students who have been members of successful athletic, social, extracurricular, classbased, and/or work groups will likely have quite positive attitudes. Those with less favorable experiences, such as students who have encountered nonproductive groups in their classes, will likely be more skeptical of the utility of groups and teams. For these students, the quip “A camel is a horse designed by a committee!” may ring true. Point out that despite their potential drawbacks, groups and teams are an essential organizational resource that all organizational members ⎯ but especially managers and leaders ⎯ must understand in order to tap their full potential.

SYNERGY AND TEAM BENEFITS Effective groups offer the potential for synergy ⎯ the creation of a whole that is greater than the sum of the parts.

Why groups are good for organizations: 1. Groups are good for people.

2. Groups can improve creativity.

3. Groups can make better decisions.

4. Groups can increase commitments to action.

5. Groups help control their members.

6. Groups help offset large organization size.

Teams often have performance advantages over individuals acting alone in following situations: 1. When there is no clear expert in a particular task or problem.

2. When problems are complex, requiring a division of labor and the sharing of information.

3. Teams can be more creative and innovative because of their tendencies to make riskier decisions.

Potential benefits for team members include the following: • People learn from each other and share job skills and knowledge.

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

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

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

SOCIAL FACILITATION Social facilitation is the tendency for one’s behavior to be influenced by the presence of others in a group or social setting.

Social facilitation theory indicates that working in the presence of others creates an emotional arousal or excitement that stimulates behavior and therefore affects performance.

• Arousal tends to work positively when a person is proficient with the task.

• Arousal tends to work negatively when the task is not well learned.

SOCIAL LOAFING AND TEAM PROBLEMS Social loafing, also known as the Ringelmann effect, is the tendency of people to work less hard in a group than they would individually.

People may not work hard in groups for the following reasons: • Their individual contributions are less noticeable in the group context.

• They prefer to see others carry the workload.

Social loafing may be diminished or prevented by doing the following: • Define roles and tasks to maximize individual interests.

• Raise accountability by making individual performance expectations clear and identifiable.

• Tie individual rewards to their performance contribution to the group.

Other common problems of teams include: • Personality conflicts and differences in work styles • Team members who withdraw from active participation due to uncertainty over tasks or battles about goals or competing visions • Ambiguous agendas or ill-defined problems that cause fatigue and loss of motivation • Not everyone is always ready to do group work.

STAGES OF TEAM DEVELOPMENT Figure 7.3 in the textbook describes the five stages of team development as forming, storming, norming, performing, and adjourning.

FORMING STAGE In the forming stage of group development, a primary concern is the initial entry of members to a group.

Members are interested in getting to know each other and discovering what is considered acceptable behavior, in determining the real task of the group, and in defining group rules.

STORMING STAGE The storming stage of group development is a period of high emotionality and tension among the group members.

Hostility and infighting may occur, the group typically experiences many changes, and coalitions or cliques may form Members’ expectations tend to be clarified, and attention shifts toward obstacles standing in the way of group goals.

Individuals begin to understand one another’s interpersonal styles.

Efforts are made to find ways to accomplish group goals while satisfying individual needs.

NORMING STAGE The norming stage of group development, sometimes called initial integration, is the point at which the group begins to come together as a coordinated unit.

The turmoil of the storming stage gives way to a precarious balancing of forces.

Group members strive to maintain a positive balance and the desire for group harmony may obscure group problems.

Some members may mistake norming as the stage of ultimate maturity.

PERFORMING STAGE The performing stage, sometimes called total integration, marks the emergence of a mature, organized, and well-functioning group.

Complex tasks and internal disagreements are handled in creative ways.

Members are motivated by group goals and are generally satisfied.

The primary challenges are continued efforts to improve relationships and performance.

Group members are able to adapt successfully to changing opportunities and demands.

A group that has achieved total integration will reflect the maturity end of the ten continua that are shown in Figure 7.4 from the textbook.

ADJOURNING STAGE In the adjourning stage, a well-integrated group is able to disband, if required, with its work is accomplished.

The adjourning stage is especially important for temporary groups.

The willingness to disband when the job is done and to work well together in future responsibilities, group or otherwise, is an important long-run test of group success.

LECTURE ENHANCEMENT Ask students to describe their experiences with different teams within the context of stages of group development. What happened for them at each stage? How do the students’ experiences compare to the ideas presented above? Did anyone have an experience wherein the group seemed to get stuck at one particular stage ⎯ say, the storming stage? What happened, and what insights does it provide?

UNDERSTANDING TEAMS AT WORK OPEN SYSTEMS MODEL OF TEAMS Figure 7.5 in the textbook shows team effectiveness being influenced by both inputs—“right players in the right seats,” and by processes—“on the same bus, headed in the same direction.”

LECTURE ENHANCEMENT If you have assigned group projects to your students, be sure to relate the open systems model in Figure 7.5 to their group experiences. Throughout your discussion, ask students to indicate how the various group inputs (i.e., tasks; goals, rewards, and resources; technology; membership diversity; and group size) and group processes (i.e., group and intergroup dynamics) affected their group performance, satisfaction, and future viability.

Key team inputs include the nature of tasks; goals, rewards, resources; technology; membership diversity; and group size.

TEAM RESOURCES AND SETTING Appropriate goals, well-designed reward systems, adequate resources, and appropriate technology are all essential to support the work of teams.

Team performance can suffer when resources—information, budgets, work space, deadlines, rules and procedures, technologies, and the like—are insufficient to accomplish the task. By contrast, having a supportive organizational setting within which to work can be a strong launching pad for team success.

NATURE OF THE TEAM TASK Tasks place different demands on groups, with varying implications for group effectiveness.

• The technical demands of a group’s task include its routineness, difficulty, and information requirements.

• The social demands of a task involve relationships, ego involvement, controversies over ends and means, and the like.

• Tasks that are complex in technical demands require unique solutions and more information processing.

• Tasks that are complex in social demands involve difficulties reaching agreement on goals or methods for accomplishing them.

TEAM SIZE The size of a team, as measured by the number of its members, can make a difference in a team’s effectiveness.

• As a team becomes larger, more people are available to divide up the work and accomplish needed tasks, which can increase performance and member satisfaction, but only up to a point.

• As a team size continues to grow, communication and coordination problems often set in, and in turn satisfaction may decline while turnover, absenteeism, social loafing, and team logistical problems may increase.

• A good size for problem-solving teams is between five and seven members.

MEMBERSHIP COMPOSITION OF THE TEAM Team composition is the mix of abilities, skills, backgrounds, and experiences that the members bring to the team.

• FIRO-B theory (with “FIRO” standing for fundamental interpersonal orientation) identifies differences in how people relate to one another in teams based on their needs to express and receive feelings of inclusion, control, and affection.

• In homogeneous teams, members may find it very easy to work together but they may also suffer performance limitations if their collective skills, experiences and perspectives are not a good match for complex skills.

• In heterogeneous teams, a wide pool of talent and viewpoints is available for problem solving but this diversity may also create difficulties as members try to define problems, share information, and handle interpersonal conflicts.

• Status congruence occurs when a person’s position within the group is equivalent in status to positions held outside of the group. Status is a person’s relative rank, prestige, or standing in a group.

DIVERSITY AND TEAM PERFORMANCE Team diversity in the form of different values, personalities, experiences, demographics, and cultures among the members, is an important team input.

Diverse teams have more resources and viewpoints available to engage in problem solving, especially when tasks are complex and demanding. Yet these advantages are not automatic; the diversity must be tapped if the team is to realize the performance benefits.

Diversity–consensus dilemma is the tendency for diversity in groups to create process difficulties even as it offers improved potential for problem solving.

This diversity and performance relationship is apparent in interesting research newly reported in the area of collective intelligence – the ability of a group or team to perform well across a range of tasks.

Figure 7.6 in the textbook illustrates member diversity, stages of team development, and team performance.

TEAM PROCESSES Group dynamics refer to the forces operating in groups that affect the way members relate to and work with one another.

LECTURE ENHANCEMENT If you have assigned group projects to your students, have them describe their required and emergent behaviors.

CHAPTER STUDY GUIDE What are teams and how are they used in organizations?

• • • • • • •

A team is a group of people working together to achieve a common purpose for which they hold themselves collectively accountable.

Teams help organizations by improving task performance; teams help members experience satisfaction from their work.

Teams in organizations serve different purposes—some teams run things, some teams recommend things, and some teams make or do things.

Organizations consist of formal teams that are designated by the organization to serve an official purpose and informal groups that emerge from special interests and relationships but are not part of an organization’s formal structure.

Organizations can be viewed as interlocking networks of permanent teams such as project teams and cross-functional teams, as well as temporary teams such as committees and task forces.

Members of self-managing teams typically plan, complete, and evaluate their own work, train and evaluate one another in job tasks, and share tasks and responsibilities.

Virtual teams, whose members meet and work together through computer mediation, are increasingly common and pose special management challenges.

When is a team effective?

• • • • •

An effective team achieves high levels of task accomplishment, member satisfaction, and viability to perform successfully over the long term.

Teams help organizations through synergy in task performance, the creation of a whole that is greater than the sum of its parts.

Teams help satisfy important needs for their members by providing them with things like job support and social interactions.

Team performance can suffer from social loafing when a member slacks off and lets others do the work.

Social facilitation occurs when the behavior of individuals is influenced positively or negatively by the presence of others in a team.

What are the stages of team development?

• • • •

In the forming stage, team members first come together and form initial impressions; it is a time of task orientation and interpersonal testing.

In the storming stage, team members struggle to deal with expectations and status; it is a time when conflicts over tasks and how the team works are likely.

In the norming or initial integration stage, team members start to come together around rules of behavior and what needs to be accomplished; it is a time of growing cooperation.

In the performing or total integration stage, team members are well-organized and wellfunctioning; it is a time of team maturity when performance of even complex tasks becomes possible.

•

In the adjourning stage, team members achieve closure on task performance and their personal relationships; it is a time of managing task completion and the process of disbanding.

How can we understand teams at work?

• • • •

Teams are open systems that interact with their environments to obtain resources that are transformed into outputs.

The equation summarizing the implications of the open systems model for team performance is: Team Effectiveness = Quality of Inputs x (Process Gains - Process Losses).

Input factors such as the nature of the task, membership composition, team size, and organizational setting and support establish the core performance foundations of a team.

Team processes include basic group dynamics, the way members work together to use inputs and complete tasks.

KEY TERMS Adjourning stage: is where teams disband when their work is finished.

Collective intelligence: is the ability of team to perform well across a range of tasks.

Cross-functional team: members from different functions or work units.

Diversity-consensus dilemma: is the tendency for diversity in groups to create process difficulties even as it offers improved potential for problem solving.

Effective team: a team that achieves high levels of task performance, member satisfaction, and team viability.

Employee involvement team: a wide variety of teams whose members meet regularly to collectively examine important workplace issues such as ways to enhance quality, better satisfy customers, raise productivity, and improve the quality of work life.

FIRO-B theory: examines differences in how people relate to one another based on their needs to express and receive feelings of inclusion, control, and affection.

Formal teams: teams created and officially designated to serve specific organizational purposes.

Forming stage: focuses around the initial entry of members to a team.

Functional silos problem: occurs when members of one functional team fail to interact with others from other functional teams.

Group or team dynamics: are the forces operating in groups that affect the ways members work together.

Heterogeneous teams: members differ in many characteristics.

Homogeneous teams: teams in which members may find it very easy to work together but they may also suffer performance limitations if their collective skills, experiences and perspectives are not a good match for complex skills.

Informal groups: are unofficial and emerge to serve special interests.

Multiskilling: the ability to perform many different jobs—even all of the team’s jobs—as needed Norming stage: is where members start to work together as a coordinated team.

Performing stage: marks the emergence of a mature and well-functioning team.

Problem-solving team: a team created temporarily to serve a specific purpose by dealing with a specific problem or opportunity.

Quality circle: team that meets regularly to address quality issues.

Self-managing team: empowered to make the decisions to manage themselves in day-to-day work.

Social facilitation: is the tendency of one’s behavior to be influenced by the presence of others in a group.

Social loafing: occurs when people work less hard in groups than they would individually.

Social Network Analysis: used to identify the informal groups and networks of relationships that are active in an organization.

Status congruence: involves consistency between a person’s status within and outside a group.

Storming stage: is one of high emotionality and tension among team members.

Synergy: is the creation of a whole greater than the sum of its parts.

Team: a group of people brought together to use their complementary skills to achieve a common purpose for which they are collectively accountable.

Team composition: is the mix of abilities, skills, personalities and experiences that the members bring to the team.

Teamwork: occurs when team members accept and live up to their collective accountability by actively working together so that all their respective skills are best used to achieve important goals.

Virtual team: a team whose members convene and work together electronically via computers.

SPECIAL FEATURES Whole Foods: Teaming Up for Success At Whole Foods, department members work as a team. Teams within stores operate as a team.

Parallel departments in regional stores team up. And all stores within each of Whole Foods’ twelve regions work as a team. While Whole Foods does have a core management team, led by founder John Mackey and co-president Walter Robb, the regions operate largely free from corporate interference. John Moore, former National Marketing Director of Whole Foods, identifies a “Libertarian” theme of management running through the company. “[Whole Foods] operates under the belief stores should have the freedom to meet the needs of its unique customers and team members.”

Ask students if they have ever been part of a self managed team (one that had to derive their own mission, goals, strategy, etc. )? Ask students how the team went about making decisions and working together? Further ask students what they thought were the advantages and disadvantages to working in such a team?

Mastering Management This breakout describes steps to successful virtual teams, including: • Select team members high in initiative and capable of self-starting.

• Select members who will join and engage the team with positive attitudes.

• Select members known for working hard to meet team goals.

• Begin with social messaging that allows members to exchange information about each other to personalize the process.

• Assign clear goals and roles so that members can focus while working alone and also know what others are doing.

• Gather regular feedback from members about how they think the team is doing and how it might do better.

• Provide regular feedback to team members about team accomplishments.

OB in Popular Culture In the ever popular reality show Survivor, individual players must balance cunning and competitiveness against the need for teamwork and collaboration. In Season 10, Willard Smith finds himself a member of the successful Koror tribe. Willard’s contributions are limited, so his tribe assigns him to tend the fire at night. Instead of fulfilling his obligation, Willard sleeps in the only hammock available. When morning comes, eventual winner Tom Westman complains about losing sleep because he has to “cover” for Willard. Westman’s assessment of Willard’s motives was “why should I do it if somebody else is going to do it for me?” shows that social loafing can be a difficult problem to address even when others know it is happening.

Have students recall if they have ever been part of a team where one member did not contribute at all/as much as the other team members and instead engaged in social loafing. What if anything did the other team members do in that situation? What are some ways to prevent social loafing in teams?

Research Insight Research on social loafing suggests a link between decision making, organizational justice, and social loafing in groups. Findings of the study indicate that social loafing was not significantly related to the use of evaluation structures that identified individual contributions, was negatively related to perceived fairness of group processes, and was positively related to perceived dispensability of one’s contributions. In addition, the relationship between social loafing and perceived dispensability strengthened when individual contributions were more identifiable.

Ethics in OB In a recent survey of MBA students, 56 percent admitted to cheating by plagiarizing, downloading essays from the Web, and more. Some students justify their cheating by saying, “everyone does it.” Have students discuss how to respond in a work situation in which they are told an unethical action is the norm for the industry or business.

Leaders on Leadership What distinguishes a group of people from a high-performance team? For one, it’s the way members work with one another to achieve common goals. A vivid example is a NASCAR pit crew. When a driver pulls in for a pit stop, the team must jump in to perform multiple tasks flawlessly and in perfect order and unison. A second gained or lost can be crucial to a NASCAR driver’s performance. Team members must be well trained and rehearsed to efficiently perform on race day. The NASCAR pit crews don’t just get together and “wing” it on race days. The members are carefully selected for their skills and attitudes, the teams practice-practice-practice, and the pit crew leader doesn’t hesitate to make changes when things aren’t going well.

Have students identify the specific elements of a NASCAR team that make it effective. Let students explain how the leader aids in the effectiveness of such teams. Have students further apply the effective tools used by the NASCAR team to that which takes place/should take place at the organization where they work.

Group Project Assign students randomly to groups of four. Hopefully, the students will end up with classmates with whom they do not usually do group work. Next, have the students meet as a group and come up with a name that reflects something they all have in common. For example: “The snowboarders” or “The middle children” or “The pasta lovers.” Students should have to exchange a great deal of information to find this common ground. (Tell them they cannot choose and easy name like “The university students” or “The residents of your city.”

Next, reassign the students to new random groups and have them do the same thing on-line before the next class period. In the following class, discuss the differences in their communication network (Figure 8.5) and their effectiveness in each medium.

Chapter 8 TEAMWORK AND TEAM PERFORMANCE

STUDY QUESTIONS 1.

2.

3.

4.

What are high performance teams and how do we build them?

How can team processes be improved?

How can team communications be improved?

How can team decisions be improved?

CHAPTER OVERVIEW This chapter focuses on teamwork and team performance. Most students have some experience working in teams. As a result, this should be a high-interest chapter that stimulates interesting classroom discussion. The chapter begins by describing virtual teams. Virtual teams are groups whose members collaborate across time, geographic or organizational boundaries. . The chapter continues by detailing what are high performance teams and how to build them. Highperformance teams have core values, clear performance objectives, the right mix of skills, and creativity. The chapter also focuses on ways to overcome issues in team processes including entry problems, task leadership, role difficulties and norms. The importance of good team communication is emphasized through a discussion of networks, information technology and proxemics. The chapter concludes with a section on group decision making, its problem areas and techniques for improving creativity.

CHAPTER OUTLINE WHAT ARE HIGH-PERFORMANCE TEAMS AND HOW DO WE BUILD THEM? What are high performance teams Characteristics of High-Performance Teams The Team-Building Process Team-Building Alternatives HOW CAN TEAM PROCESSES BE IMPROVED? Entry of New Members Task and Maintenance Leadership Roles and Role Dynamics Team Norms Team Cohesiveness Inter-Team Dynamics HOW CAN TEAM COMMUNICATIONS BE IMPROVED? Communication Networks Proxemics and Use of Space Communication Technologies HOW CAN TEAM DECISIONS BE IMPROVED? Ways Teams Make Decisions Assets and Liabilities of Team Decisions Groupthink Symptoms and Remedies Team Decision Techniques CHAPTER LECTURE NOTES The chapter opens with a look at the emergence of virtual teams in today’s organizations. The benefits of virtual teams as well as how to make virtual teams succeed are outlined in the Chapter Opener. A final point made in the opening is the various technologies used by groups to communicate virtually.

LECTURE ENHANCEMENT Discuss with students real life examples of virtual teams. Specific examples include NASA Space Shuttle Teams and International Medical Teams. Encourage students to think of other possible examples.

Identify students in the class who have been a part of a virtual team. Let them pinpoint what were some disadvantages of working in virtual teams.

HIGH PERFORMANCE TEAMS CHARACTERISTICS OF HIGH PERFROMANCE TEAMS High-performance teams have the following special characteristics that allow them to excel at teamwork and achieve special performance advantages: • The right mix of skills, including technical skills, problem-solving and decision-making skills, and interpersonal skills.

• Strong core values that help guide their attitudes and behaviors in directions consistent with the team’s purpose.

• Ability to turn a general sense of purpose into specific performance objectives.

• Standards for measuring results and obtaining performance feedback • Willingness to help group members understand the need for collective vs. individual efforts.

• They experience collective intelligence.

LECTURE ENHANCEMENT Have each student analyze a team of which he/she has been a member in light of the above characteristics. Then in small groups, have the students share and compare their analyses. Which teams were more like high-performance teams?

THE TEAM BUILDING PROCESS When newly founded, work groups and teams must master challenges as members come together and begin the process of growing and working together as they pass through the various stages of group development.

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

Figure 8.1 from the textbook highlights the action steps and continuous improvement theme of the typical team-building process. The process begins when someone notices that a problem exists or may develop with team effectiveness. Members then work together to gather data relating to the problem, analyze these data, plan for improvements, implement the action plan, and evaluate the results.

Team building is participatory and data based.

The goal of team building is to get good answers to such questions as: 1. “How well are we doing in terms of task accomplishment.”

2. “How satisfied are we as individual members with the group and the way it operates?”

TEAM-BUILDING ALTERNATIVES Formal retreat approach ⎯ team building takes place during an off-site “retreat” that may last from one to several days with group members working intensively on a variety of assessment and planning tasks.

Outdoor experience approach ⎯ this approach places group members in a variety of physically challenging situations that must be mastered through teamwork, not individual work.

Continuous improvement approach ⎯ the manager, team leader, or group members take responsibility for regularly engaging in the team-building process.

IMPROVING TEAM PROCESSES ENTRY OF NEW MEMBERS As more and more jobs are turned over to teams, and as more and more traditional supervisors are asked to function as team leaders, special problems relating to team processes may arise.

Special difficulties are likely to occur when members first get together in a new group or work team, or when new members join an existing one.

New members may worry about the following factors: • Participation ⎯ “Will I be allowed to participate?”

• Goals ⎯ “Do I share the same goals as others?”

• Control ⎯ “Will I be able to influence what takes place?”

• Relationships ⎯ “How close do people get?”

• Processes ⎯ “Are conflicts likely to be upsetting?”

LECTURE ENHANCEMENT Identify individuals in the class who have started a new job recently. Have them discuss their experiences in terms of new member problems.

The following three behavior profiles describe how people may cope with individual entry problems in self-serving ways that might hinder group operations • The tough battler is frustrated by a lack of identity in the new group and may act aggressively or reject authority.

• The friendly helper is insecure, suffering uncertainties of intimacy and control.

• The objective thinker is anxious about how personal needs will be met in the group.

TASK AND MAINTENANCE LEADERSHIP The achievement of sustained high performance by groups requires that both “task needs” and “maintenance needs” be met. Although anyone who is formally appointed as a group leader should help fulfill these needs, all members should also contribute.

Distributive leadership is the sharing among team members of the responsibilities for task and maintenance contributions that move a group forward.

Figure 8.2 from the textbook describes the factors that are involved in leading by task contribution and leading by maintenance contributions.

Task activities refer to the various things members do that directly contribute to the performance of important tasks.

Maintenance activities refer to the various things members do to support the group’s social and interpersonal relationships.

Group members also share the additional responsibility of avoiding the following disruptive behaviors: • Being overly aggressive toward other members.

• Withdrawing and refusing to cooperate with others.

• Horsing around when there is work to be done.

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

• Talking too much about irrelevant matters.

• Trying to compete for attention and recognition.

Incivility or antisocial behavior by members can be especially disruptive of team dynamics and performance.

LECTURE ENHANCEMENT Ask students to describe examples of task activities, maintenance activities, and dysfunctional activities that they have encountered in their group experiences.

ROLES AND ROLE DYNAMICS A role is a set of expectations associated with a job or position on a team. When team members are unclear about their roles or experience conflicting role demands, performance problems can occur.

• Role ambiguity occurs when someone is uncertain about what is expected in his/her role.

• Role overload occurs when too much is expected and the individual feels overwhelmed with work.

• Role underload occurs when too little is expected and the individual feels underutilized.

• Role conflict occurs when someone is unable to respond to role expectations that conflict with one another. Four common types of role conflict are the following:

LECTURE ENHANCEMENT Divide the class into seven groups. Assign a different one of the following types of conflicting role demands to each group: role ambiguity, role overload. In a five-minute period, have each group come up with as many examples of its assigned type as possible. Have each group share some of its examples with the rest of the class.

There are four common forms of role conflict that people at work and in teams can experience.

1. Intrasender role conflict occurs when the same person sends conflicting expectations.

2. Intersender role conflict occurs when different people signal conflicting and mutually exclusive expectations.

3. Person-role conflict occurs when a person’s values and needs come into conflict with role expectations.

4. Inter-role conflict occurs when the expectations of two or more roles held by the same individual become incompatible, such as the conflict between work and family demands.

Role negotiation is a process for discussing and agreeing upon what team members expect of one another.

TEAM NORMS Norms represent ideas or beliefs about how members of a group or team are expected to behave; they are rules or standards of conduct. Managers, task force heads, committee chairs, and team leaders should help their groups adopt positive norms that support organizational goals.

Types of Team Norms A key norm in any setting is the performance norm, which conveys expectations about how hard group members should work.

Other norms that operate with positive and negative implications for groups and organizations include the following: • Ethics norms.

• Organizational and personal pride norms.

• High-achievement norms.

• Support and helpfulness norms.

• Improvement and change norms.

How to Influence Team Norms There are several things managers and team leaders can do to help their teams develop and operate with positive norms, ones that foster high performance as well as membership satisfaction: 1. Act as a positive role model.

2. Hold meetings to discuss team goals and also discuss team norms 3. Select members who can and will live up to the desired norms 4. Provide training and support 5. Reward and positively reinforce desired behaviors 6. Hold regular meetings to discuss team performance and plan how to improve it LECTURE ENHANCEMENT Ask students to provide examples of both positive and negative performance norms that they have encountered in the different groups of which they were members. Discuss how these norms influenced the members’ behavior.

TEAM COHESIVENESS Group or team cohesiveness is the degree to which members are attracted to and motivated to remain part of it.

Cohesiveness tends to be higher when group members are similar in age, attitudes, needs, and backgrounds; when the group is of small size; where members respect one another’s competencies, agree on common goals, and work on interdependent tasks; when they are physically isolated from others; and when they experience performance success or crisis.

Team Cohesiveness and Conformity to Norms The basic rule of conformity in group dynamics states that the more cohesive the group, the greater the conformity of members to group norms. Figure 8.3 in the textbook shows how cohesiveness and conformity to performance norms affect group performance.

• When cohesiveness is high and performance norms are positive, performance will be high.

• When cohesiveness is low and performance norms are positive, performance will be moderate.

• •

When cohesiveness is low and performance norms are negative, performance will be low to moderate.

When cohesiveness is high and performance norms are negative, performance will be low.

How to Influence Team Cohesiveness Team leaders and managers must be aware of the steps they can take to build cohesiveness.

Figure 8.4 in the textbook shows how group cohesiveness can be increased or decreased by making changes in group goals, membership composition, interactions, size, rewards, competition, location, and duration.

LECTURE ENHANCEMENT Ask students to look at Figure 8.4 in the textbook on ways to increase and decrease team cohesiveness. Have them apply these to their various real life team experiences. Later, have the students share their examples with the rest of the class.

INTER-TEAM DYNAMICS Inter-team dynamics are relationships between groups cooperating and competing with one another.

On the negative side between-team dynamics may drain and divert energies because members spend too much time focusing on their animosities or conflicts with another team than on the performance of their own. On the positive side, competition among teams can stimulate them to become more cohesive, work harder, become more focused on key tasks, develop more internal loyalty and satisfaction, or achieve a higher level of creativity in problem solving.

Avoiding the negative side: • Teams can be refocused on a common enemy or a common goal • Direct negotiations can be held among the teams • Members can be engaged in intergroup team-building • Reward systems can also be refocused on team contributions IMPROVING TEAM COMMUNICATIONS COMMUNICATION NETWORKS Figure 8.5 from the textbook describes three patterns typically emerge when team members interact with one another while working on team tasks—the interacting team, the co-acting team, and the counteracting team.

Interacting groups have members who work closely together on tasks and in which close coordination of activities takes place. Interacting groups use decentralized communication networks ⎯ also known as all-channel or star networks ⎯ in which all group members communicate directly and share information with one another.

Coacting groups have members who work on tasks independently while linked together through some form of central coordination. Coacting groups use centralized communication networks ⎯ also known as wheel or chain networks ⎯ in which group members are linked together through a central control point.

Counteracting groups exist when subgroups disagree on some aspect of workplace operations Counteracting groups use restricted communications networks in which polarized subgroups contest one another’s positions and sometimes maintain antagonistic relations with one another.

LECTURE ENHANCEMENT If you have assigned group projects to your students, have them describe the kind of communication network that developed in their groups. What were the advantages and disadvantages of the network they used?

PROXEMICS AND USE OF SPACE Proxemics ⎯ the study of how space is utilized ⎯ is also important to team communication.

Architects and consultants specializing in office design help executives build spaces conducive to the intense communication and teamwork needed today.

COMMUNICATION TECHNOLOGIES Virtual communication networks link team members through electronic communication.

Technology, such as an online discussion forum, acts as the “hub member” in the centralized communication network; simultaneously, through chats and tweets and more, it acts as an everpresent “electronic router” that links members of decentralized networks on an as-needed and always-ready basis.

IMPROVING TEAM DECISIONS Decision making is the process of choosing among alternative courses of action.

WAYS TEAMS MAKE DECISIONS Figure 8.6 in the textbook illustrates the six methods that groups use to make decisions: 1. Decision by lack of response ⎯ one idea after another is suggested without any discussiontaking place; when the group finally accepts the idea, all others have been bypassed and discarded by simple lack of response rather than by critical evaluation.

2. Decision by authority rule ⎯ the chairperson, manager, or leader makes a decision for the group.

3. Decision by minority rule ⎯ two or three people are able to dominate or “railroad” the group into making a decision to which they agree.

4. Decision by majority rule ⎯ formal voting may take place, or members may be polled to find the majority viewpoint.

5. Decision by consensus ⎯ discussion leads to one alternative being favored by most members and the other members agree to support it.

6. Decision by unanimity ⎯ all group members agree totally on the course of action to be taken.

LECTURE ENHANCEMENT Give a group “pop” quiz on the text material. Form groups of five or six members. Only one copy of the quiz should be given to each group. Students are permitted to talk to each other, but must arrive at one answer to each of the quiz questions. Grade the quizzes. Discuss how the different groups made their decisions regarding the correct answers. Consider how their different decisionmaking approaches affected the results.

ASSETS AND LIABILITIES OF TEAM DECISIONS The potential advantages of group decision making include the following: • Information ⎯ more knowledge and expertise is applied to solve the problem.

• Alternatives ⎯ a greater number of alternatives are examined, avoiding tunnel vision.

• Understanding and acceptance ⎯ the final decision is better understood and accepted by all group members.

• Commitment ⎯ there is more commitment among all group members to make the final decision work.

The potential disadvantages of group decision making include the following: • Social pressure to conform ⎯individuals may feel compelled to go along with the apparent wishes of the group.

• Minority domination ⎯ the group’s decision may be forced or “railroaded” by one individual or a small coalition.

• Time demands ⎯ with more people involved in the dialogue and discussion, group decisions usually take longer to make than individual decisions.

LECTURE ENHANCEMENT Ask students to think about their various group experiences. Drawing on these experiences, have the students brainstorm on the advantage and disadvantages of groups.

GROUPTHINK SYMPTOMS AND REMEDIES Groupthink is the tendency of cohesive group members to lose their critical evaluative capabilities. Groupthink can result in poor decisions being made.

Symptoms of groupthink include: • Illusions of invulnerability • Rationalizing unpleasant and disconfirming data • Belief in inherent group morality • Stereotyping competitors as weak, evil, and stupid • Applying direct pressure to deviants to conform to group wishes • Self-censorship by members • Illusions of unanimity • Mind guarding

LECTURE ENHANCEMENT Ask the students whether they have ever been in a group that succumbed to groupthink. If so, have them describe what happened and how they attempted to deal with groupthink.

TEAM DECISION TECHNIQUES Brainstorming In brainstorming, group members actively generate as many ideas and alternatives as possible, and they do so relatively quickly and without inhibitions.

Brainstorming rules.

• All criticism is ruled out.

• “Freewheeling” is welcomed.

• Quantity of ideas is emphasized.

• “Piggy-backing” off of other ideas is encouraged.

Nominal Group Technique The nominal group technique puts people in small groups of six to seven members and asks everyone to respond individually and in writing to a “nominal” question.

Steps in nominal group technique.

• Individuals list alternatives or ideas.

• In a round-robin fashion, participants read aloud their alternatives or ideas.

• In a round-robin fashion, participants ask questions that clarify but do not criticize the alternatives or ideas.

• A structured voting procedure is then used to prioritize the alternatives or ideas.

Delphi Technique The Delphi technique involves generating decision-making alternatives through a series of survey questionnaires in situations when group members are unable to meet face-to-face. In this procedure, questionnaires are distributed online or in hard copy to a panel of decision makers, who submit initial responses to a decision coordinator. The coordinator summarizes the solutions and sends the summary back to the panel members, along with a follow-up questionnaire. The process is repeated until a consensus is reached and a clear decision emerges.

CHAPTER STUDY GUIDE What are high performance teams and how do we build them?

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Team-building is a collaborative approach to improving group process and performance.

• • •

High-performance teams have core values, clear performance objectives, the right mix of skills, and creativity.

Team-building is a data-based approach to analyzing group performance and taking steps to improve performance in the future.

Team-building is participative and engages all group members in collaborative problem solving and action.

How can team processes be improved?

• • • • • • •

Individual entry problems are common when new teams are formed and when new members join existing teams.

Task leadership involves initiating, summarizing, and making direct contributions to the group’s task agenda; maintenance leadership involves gate-keeping, encouraging, and supporting the social fabric of the group over time.

Distributed leadership occurs when team members step in to provide helpful task and maintenance activities and discourage disruptive activities.

Role difficulties occur when expectations for group members are unclear, overwhelming, underwhelming, or conflicting.

Norms are the standards or rules of conduct that influence the behavior of team members; cohesiveness is the attractiveness of the team to its members.

Members of highly cohesive groups value their membership and are very loyal to the group; they also tend to conform to group norms.

The best situation is a team with positive performance norms and high cohesiveness.

Interteam dynamics are the forces that operate between two or more groups.

How can team communications be improved?

• • • • •

Effective teams use alternative communication networks and decision-making methods to best complete tasks.

Interacting groups with decentralized networks tend to perform well on complex tasks; coacting groups with centralized networks may do well at simple tasks.

Restricted communication networks are common in counteracting groups with subgroup disagreements.

Wise choices on proxemics, or the use of space, can help teams improve communication among members.

Information technology ranging from e-mail to instant messaging, tweets, and discussion groups can improve communication in teams, but it must be well used.

How can team decisions be improved?

• • • •

Teams can make decisions by lack of response, authority rule, minority rule, majority rule, consensus, and unanimity.

Although team decisions often make more information available for problem solving and generate more understanding and commitment, the potential liabilities of group decision making include social pressures to conform and greater time requirements.

Groupthink is a tendency of members of highly cohesive teams to lose their critical evaluative capabilities and make poor decisions.

Techniques for improving creativity in teams include brainstorming and the nominal group technique.

KEY TERMS Brainstorming: involves generating ideas through “freewheeling” and without criticism.

Centralized communication network: links group members through a central control point.

Cohesiveness: the degree to which members are attracted to a group and motivated to remain a part of it.

Collective intelligence: is the ability of a team to do well on a wide variety of tasks.

Consensus: is a group decision that has the expressed support of most members.

Decentralized communication network: members communicate directly with one another.

Decision making: the process of choosing among alternative courses of action.

Delphi Technique: involves generating decision-making alternatives through a series of survey questionnaires.

Distributed leadership: the sharing of responsibility for meeting group task and maintenance needs.

Disruptive behavior: behavior in teams harm the group process and limit team effectiveness.

Groupthink: is the tendency of cohesive group to lose their critical evaluative capabilities.

Inter-team dynamics: relationships between groups cooperating and competing with one another.

Maintenance activities: support the emotional life of the team as an ongoing social system.

Nominal Group Technique: involves structure rules for generating and prioritizing ideas.

Norms: rules or standards for the behavior of group members.

Proxemics: the use of space.

Restricted communication network: links subgroups that disagree with one another’s positions.

Role: a set of expectations for a team member or person in a job.

Role ambiguity: occurs when someone is uncertain about what is expected of him or her.

Role conflict: occurs when someone is unable to respond to role expectations that conflict with one another.

Role negotiation: is a process for discussing and agreeing upon what team members expect of one another.

Role overload: occurs when too much work is expected of the individual.

Role underload: occurs when too little work is expected of the individual.

Rule of conformity: the greater the cohesiveness the greater the conformity of members to team norms.

Task activities: directly contribute to the performance of important tasks.

Team-building: a collaborative way to gather and analyze data to improve teamwork.

Virtual communication networks: link team members through electronic communication.

Virtual team: is a group whose members collaborate across time, geographic or organizational boundaries.

SPECIAL FEATURES Leaders on Leadership Nobel Prize winner and founder of Grameen Bank Muhammad Yunus works to eliminate poverty by loaning money on the collateral of the power of teams and teamwork. At Grameen Bank, each loan recipient becomes part of a local team of similar borrowers who agree to support and encourage one another. Discuss with students why this model has been so successful – a 98 percent repayment of loans.

Ethics in OB Ohio State football coach Jim Tressel has sought to move his team beyond past behavior problems into a new era. To do so, he made senior players accountable for making sure teammates act properly at all times. Discuss with students the most effective way of managing group behavior problems. Should the responsibility for keeping the team “in line” fall to the supervisor or the team itself? How can those without formal authority manage others?

Research Insight A study of the increasing diversity of organizational teams finds that strong “faultlines” occur in groups when demographic diversity results in the formation of two or more subgroups whose members are similar to and strongly identify with one another within the subgroup. The result can be that strong faultline groups experience more conflict, less psychological safety and less satisfaction than weak faultline groups. Ask students to share their experiences in strong faultline groups. What techniques did they use to overcome the faultline? This could be a place to tie in the Mastering Management breakout on harnessing team diversity.

Mastering Management This breakout describes ways to achieve consensus, including: 1. Don’t argue blindly; consider others’ reactions to your points.

2. Be open and flexible, but don’t change your mind just to reach quick agreement.

3. Avoid voting, coin tossing, and bargaining to avoid or reduce conflict.

4. Act in ways that encourage everyone’s involvement in the decision process.

5. Allow disagreements to surface so that information and opinions can be deliberated.

6. Don’t focus on winning versus losing; seek alternatives acceptable to all.

7. Discuss assumptions, listen carefully, and encourage participation by everyone.

Group Project Have students break into groups and integrate the ideas from Mastering Management breakout on harnessing team diversity with the Research Insight on faultlines. How can the advice on diversity be used to overcome the problem of faultlines. Ask each group to leverage their own experiences and come up with at least one suggestion not included in the Mastering Management breakout on how to overcome faultlines.

Chapter 9 DECISION MAKING AND CREATIVITY

STUDY QUESTIONS 1.

2.

3.

4.

What is involved in the decision-making process?

What are the alternative decision-making models?

What are key decision-making traps and issues?

What can be done to stimulate creativity in decision making?

OB IN ACTION Cases for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Decisions, Decisions Decode Lost at Sea Entering the Unknown Fostering the Creative Spirit Intuitive Ability Decision-Making Biases

CHAPTER OVERVIEW This chapter focuses on decision making, a process that takes place on a continuous basis in business organizations. The chapter begins by reviewing the basic steps involved in systematic decision making, ethical reasoning and decision making, different types of decisions and decision environments, and risk management in decision making. The chapter progresses to discuss alternative decision-making models including the classical, behavioral, and intuitive models.

Next, the key decision-making traps and issues such as judgmental heuristics and decision biases are discussed. The chapter also discusses how decision-makers need to know when to decide, who to involve and when to quit. The next section of the chapter reviews the stages of creative thinking and methods for fostering creativity in decision making are examined as well.

CHAPTER OUTLINE WHAT IS INVOLVED IN THE DECISION-MAKING PROCESS? Steps in Decision Making Ethical Reasoning and Decision Making Types of Decisions Decision Environments Risk Management in Decision Making

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WHAT ARE THE ALTERNATIVE DECISION-MAKING MODELS? Classical Decision Model Behavioral Decision Model Systematic and Intuitive Thinking WHAT ARE KEY DECISION-MAKING TRAPS AND ISSUES? Judgmental Heuristics Decision Biases Knowing When to Decide Knowing Who to Involve Knowing When to Quit WHAT CAN BE DONE TO STIMULATE CREATIVITY IN DECISION MAKING? Stages of Creative Thinking Personal Creativity Drivers Team Creativity Drivers CHAPTER LECTURE NOTES The chapter opens with the story of Animoto.com, which helps users create memorable slideshows by animating pictures and music they upload. Their web site has more than 1 million users, an estimated 10% of whom are paid subscribers. Recognizing the cost of hosting enough server infrastructure to accommodate rapid growth, the management team rewrote their code to run on Amazon Web Services instead of in-house servers, saving more than $2 million in processor purchases alone. Seeing the agility gained by focusing solely on their core talents, the company chose to outsource the management of nearly every infrastructure service.

THE DECISION-MAKING PROCESS

STEPS IN DECISION MAKING Decision making is the process of choosing a course of action for dealing with a problem or opportunity.

LECTURE ENHANCEMENT Prior to introducing the steps of the decision-making process, ask students to describe how they have gone about making a major decision, such as which college or university to attend. Make sure they describe the sequence of steps they went through, and then relate their discussion to the five basic steps involved in systematic decision making.

The five basic steps involved in systematic decision making are: 1. Recognize and define the problem or opportunity.

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

3. Choose a preferred course of action.

4. Implement the preferred course of action.

5. Evaluate results and follow up as necessary.

In Step 4, lack-of-participation error occurs when important people are excluded from the decision-making process.

ETHICAL REASONING AND DECISION MAKING Figure 9.1 in the textbook links the steps in the decision-making process with corresponding issues of ethical reasoning.

• • • • •

Define the problem = Check for underlying moral problems or dilemmas needing ethical analysis.

Analyze alternatives = Check implications for stakeholder utilities, common good, justice, caring, and virtuous life.

Make choice and double check = Check that the choice reflects the best ends and uses the right means. (Answer “Criteria Questions” and “Spotlight Questions.”)

Take action and double check = Check consistency and integrity of actual actions versus intended actions. (Answer “Criteria Questions” and “Spotlight Questions.”)

Evaluate Result and double check = Check actual ends and means versus desired ends and means. (Answer “Criteria Questions” and “Spotlight Questions.”)

Moral Problems and Dilemmas Ethics is the philosophical study of morality or standards regarding good character and conduct.

When we apply ethical reasoning to decisions made by individuals and teams in organizations, the focus is on moral problems and dilemmas that are associated with the decision-making process.

A moral problem is one that poses major ethical consequences for the decision maker or for others. Importantly, it is possible to address a personal, management, or business problem and not properly consider any moral problems that might be associated with it.

A moral dilemma involves a choice between two or more ethically uncomfortable alternatives.

Ethics Double Checks Four criteria questions for assessing ethics in decision making.5 1. Utility —Does the decision satisfy all constituents or stakeholders?

2. Rights—Does the decision respect the rights and duties of everyone?

3. Justice—Is the decision consistent with the canons of justice?

4. Caring—Is the decision consistent with my responsibilities to care?

The spotlight questions basically expose a decision to public scrutiny and forces us to consider it in the context of full transparency.

1. “How would I feel if my family found out about this decision?”

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2. “How would I feel if this decision were published in the local newspaper or posted on the Internet?”

3. “What would the person you know or know of who has the strongest character and best ethical judgment do in this situation?”

TYPES OF DECISIONS Types of decisions Programmed decisions implement solutions that have already been determined by past experience as appropriate for the problems at hand.

Nonprogrammed decisions implement solutions that are specifically crafted or tailored to fit a unique situation.

LECTURE ENHANCEMENT To stimulate discussion of the programmed decisions versus nonprogrammed decisions, ask students to provide examples of each type. You can either solicit student examples as a prelude to your own illustrations, or present your examples first to get them started.

A crisis decision occurs when an unexpected problem can lead to disaster if not resolved quickly and appropriately.

DECISION ENVIRONMENTS Problem solving and opportunity seeking decisions in organizations are typically made under three different conditions or environments: certainty, risk, and uncertainty. Figure 9.2 in the textbook illustrates the three organizational decision environments.

1. Certain environments exist when information is sufficient to predict the results of each alternative in advance of implementation.

2. Risk environments exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they are aware of the probabilities associated with their occurrence.

3. Uncertain environments exist when managers have so little information on hand that they cannot even assign probabilities to various alternatives and their possible outcomes.

RISK MANAGEMENT IN DECISION MAKING Risk management involves anticipating risks and factoring them into decision making.

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LECTURE ENHANCEMENT As an out-of-class assignment to enhance understanding of different types of decision environments, have each student or small groups of students select a company from the Fortune 500 list. Have them do some background research on the company’s business environment, using the company’s Web site or periodicals such as Fortune magazine or The Wall Street Journal.

Have the students describe the company’s business environment and characterize it as being one certainty, risk, or uncertainty.

DECISION MAKING MODELS Figure 9.3 in the textbook illustrates how decision making is viewed from the classical and behavioral perspectives.

Classical decision model views the manager or team as acting rationally and in a fully informed manner.

Behavioral decision model views decision makers as acting only in terms of what they perceive about a given situation.

CLASSICAL DECISION MODEL Classical decision theory assumes that the manager faces a clearly defined problem, knows all possible action alternatives and their consequences, and then chooses the alternative that offers the best, or “optimum,” solution to the problem.

An optimizing decision gives the absolute best solution to a problem.

Most of us have access to decision-making support from expert systems that reason like human experts and follow “either–or” rules to make deductions. Fuzzy logic that reasons beyond either– or choices and neural networks that reason inductively by simulating the brain’s parallel processing capabilities are becoming operational realities that will move beyond simple programmed decisions.

BEHAVIORAL DECISION MODEL Behavioral decision model views decision makers as acting only in terms of what they perceive about a given situation.

Bounded rationality is a shorthand term suggesting that, while individuals are reasoned and logical, humans have their limits. Individuals interpret and make sense of things within the context of situations. They engage in decision making “within the box” of a simplified view of a more complex reality. This ultimately leads to satisficing.

Satisficing decisions choose the first alternative that appears to give an acceptable or satisfactory resolution of the problem.

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LECTURE ENHANCEMENT Ask students to provide examples of when they have used optimizing decision making and examples of when they have used satisficing decision making. These examples should help students to understand the conditions under which these two approaches usually occur.

INTUITIVE DECISION MODEL Individuals and teams may be described as using both “systematic” and “intuitive” thinking.

In the intuitive decision model decision makers tend to deal with many aspects of a problem at once, jump quickly from one issue to another, and act on hunches from experience or on spontaneous ideas. This approach is common under conditions of risk and uncertainty.

Systematic thinking approaches problems in a rational and analytical fashion.

Intuitive thinking approaches problems in a flexible and spontaneous fashion.

LECTURE ENHANCEMENT Ask students to raise their hands if they think that they rely predominantly on a systematic stepby-step approach to decision making. Make a note of these students. Do the same for those who believe that they use an intuitive approach to decision making most often. From here, several avenues to generating discussion of these alternative ways of making decision are available. For example, you may ask students who believe that they rely more on the systematic (or intuitive) approach to elaborate on the ways in which they typically make decisions. What do they consider to be the advantages of their approach? The disadvantages? Another option is to create panels of users of the intuitive and systematic approaches to engage each other in a debate on the relative merits of their decision-making styles. Or you could create panels of intuitive and systematic decision makers, but instead of having them debate one another, you could instruct them to ask the students with alternative styles questions about the ways in which they typically approach various problems. Any of these options can be used to generate a lively discussion of the relative strengths and weaknesses of the systematic and intuitive decision-making approaches.

DECISION MAKING TRAPS AND ISSUES JUDGMENTAL HEURISTICS Judgment, or the use of one’s intellect, is important in all aspects of decision making. Heuristics are simplifying strategies or “rules of thumb” used to make decisions. Hueristics make it easier to deal with uncertainty and limited information in problem situations.

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• • •

The availability heuristic involves assessing a current event based on past occurrences that are easily available in one’s memory.

The representativeness heuristic involves assessing the likelihood that an event will occur based on its similarity to one’s stereotypes of similar occurrences.

The anchoring and adjustment heuristic involves assessing an event by taking an initial value determined by historical precedent or an outside source, and then incrementally adjusting this value to make a current assessment.

DECISION BIASES In addition to using the common judgmental heuristics, decision makers are also prone to more general biases in decision making.

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

• The hindsight trap is the tendency for the decision maker to overestimate the degree to which an event that has already taken place could have been predicted.

• Framing error is solving a problem in the context perceived.

KNOWING WHEN TO DECIDE The effective manager and team leader knows when to delegate decisions to others, how to set priorities, and when to abstain from acting altogether. When faced with the dilemma of whether or not to deal with a specific problem, asking and answering the following questions can sometimes help.

• What really matters?

• Might the problem resolve itself ?

• Is this my or our problem?

• Will time spent make a difference?

KNOWING WHO TO INVOLVE Good organizational decisions are made by individuals acting alone, by individuals consulting with others, and by groups of people working together.

Individual decisions, or authority decisions, are made by one person in behalf of the team.

Consultative decisions are made by one individual after seeking input from or consulting with members of a group.

Team decisions are made by all members of the team.

Who participates and how decisions are made should reflect the issues at hand. Figure 9.4 from the textbook shows a model developed by Victor Vroom, Philip Yetton, and Arthur Jago that helps managers choose the decision-making method that is most appropriate for various problem situations. The model seeks to sequentially array the key factors that should guide participation choices. The key problem attributes are the following: 1. The required quality of the decision.

2. The commitment needed from subordinates.

3. The amount of information the leader has.

4. The structured/unstructured problem.

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5. Commitment probability (i.e., the chances subordinates would be committed if the leader made the choice).

6. Goal congruence (i.e., the degree to which subordinates share the goals to be obtained by the choice).

7. Subordinate conflict.

8. Subordinate information.

The key to effectively managing participation in decision making is first knowing when to use each decision method and then knowing how to implement each of them well.

KNOWING WHEN TO QUIT The organization’s natural desire to continue on a selected course of action reinforces some natural tendencies among decision makers.

Escalating commitment is the tendency to continue and renew effort on a previously chosen course of action, even though it is not working. The tendency to escalate commitments often outweighs the willingness to disengage from them.

Good decision makers are willing to reverse previous decisions and stop investing time and other resources in unsuccessful courses of action.

LECTURE ENHANCEMENT Explain to students that escalating commitment is encouraged by the popular saying, “If at first you don’t succeed, try, try again.” Current wisdom supports an alternative view, illustrated in this quote by the late W.C. Fields: “If at first you don’t succeed, try, try again. Then quit. No use being a damn fool about it.”

CREATIVITY IN DECISION MAKING Creativity in decision making involves the development of unique and novel responses to problems and opportunities.

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PERSONAL CREATIVITY DRIVERS Creative decisions are more likely to occur when a person has: • A lot of task expertise.

• High level of task motivation • Strong creativity skills sets.

Figure 9.5 in the textbook illustrates individual and team creativity drivers.

TEAM CREATIVITY DRIVERS Techniques for moving teams toward more creativity in decision making include: • Creative membership • Use of special decision techniques such as brainstorming and the nominal group technique • Associative play—making up and telling stories, engaging in art projects, and building toy models that come to mind when dealing with a problem.

• Cross pollination—switching members among teams to gain insights from diverse interests, backgrounds, and experiences when working on problems.

• Analogies and metaphors—using analogies and metaphors to describe a problem and open pathways to creative thinking.

• External support such as making creativity a strategic priority in the broader organizational context, having team leaders who have the patience to allow for creative processes to work themselves through a decision situation, and top management resource support.

CHAPTER STUDY GUIDE What is involved in the decision-making process?

• Decision making is a process of identifying problems and opportunities and choosing among alternative courses of action for dealing successfully with them.

• The steps in the decision-making process, viewed as a rational model, are (1) find and define the problem, (2) generate and evaluate alternatives, (3) decide on the preferred course of action, (4) implement the decision, and (5) evaluate the results.

• Ethical reasoning should be applied in each stage of the decision-making process to ensure that all possible moral problems and dilemmas are dealt with properly.

• Decisions in organizations are made under conditions of certainty, risk, and uncertainly; the challenges to the decision maker are higher in risk and uncertain environments.

• Routine problems can be dealt with through programmed decisions; nonroutine or novel problems require nonprogrammed decisions that are crafted to fit the situation at hand; crisis problems occur unexpectedly and can lead to disaster if managers fail to handle them quickly and properly.

What are the alternative decision-making models?

• •

In the classical decision model, optimum decisions identifying the absolute best alternative are made in conditions where full information is available and after fully analyzing all possible alternatives and their known consequences.

In the behavioral decision model, satisficing decisions that choose the first acceptable alternative are made in conditions of limited information and bounded rationality.

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•

In the intuitive model, decision makers tend to deal with many aspects of a problem at once, jump quickly from one issue to another, and act on hunches from experience or on spontaneous ideas.

What are key decision-making traps and issues?

• The use of judgmental heuristics, or simplifying rules of thumb, can lead to biased results in decision-making; such heuristics include availability decisions based on recent events, representativeness decisions based on similar events, and anchoring and adjustment decisions based on historical precedents.

• Other sources of bias in individual and team decisions are confirmation error, seeking information to justify a decision already made; hindsight trap, overestimating the extent to which current events could have been predicted; and framing error, viewing a problem in a limited context.

• Individuals and teams must know when to make decisions, realizing that not every problem requires an immediate decision.

• Individuals and teams must know who should be involved in making decisions, making use of individual, consultative, and team decisions as needed to best fit the problems and opportunities being faced.

• Individuals and teams must know when to decide to quit and abandon a course of action; they are aware of and able to counteract tendencies toward escalating commitment to previously chosen courses of action that are not working.

What can be done to stimulate creativity in decision making?

• Creativity is the generation of a novel idea or unique approach to solving performance problems or exploiting performance opportunities.

• Creativity in decision making can be enhanced by personal creativity drivers that include task expertise, motivation, and individual creativity skills.

• Creativity in decision making can be enhanced by situational creativity drivers that include a composition of creative members, use of helpful decision techniques, and external support for creativity.

KEY TERMS Anchoring and adjustment heuristic: involves assessing an event by taking an initial value determined by historical precedent or an outside source, and then incrementally adjusting this value to make a current assessment.

Availability heuristic: involves assessing a current event based on past occurrences that are easily available in one’s memory.

Behavioral decision model: views decision makers as acting only in terms of what they perceive about a given situation.

Certain environments: provide full information on the expected results for decision-making alternatives.

Classical decision model: views decision makers as acting in a world of complete certainty.

Confirmation error: the tendency to seek confirmation for what is already thought to be true and not search for disconfirming information.

Consultative decisions: are made by one individual after seeking input from or consulting with members of a group.

Creativity: generates unique and novel responses to problems.

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Crisis decision: required when an unexpected problem can lead to disaster if not resolved quickly and appropriately.

Criteria questions: assess a decision in terms of utility, rights, justice and caring.

Decision Making: is the process of choosing a course of action to deal with a problem or opportunity.

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

Ethics: is the philosophical study of morality.

Framing error: is solving a problem in the context perceived.

Heuristics: simplifying strategies or “rules of thumb” used to make decisions.

Hindsight trap: the tendency for the decision maker to overestimate the degree to which an event that has already taken place could have been predicted.

Individual decisions: or authority decisions, are made by one person on behalf of the team.

Intuitive thinking: approaches problems in a flexible and spontaneous fashion.

Lack of participation error: occurs when important people are excluded from the decision making process.

Moral dilemma: involves a choice between two or more ethically uncomfortable alternatives.

Moral problem: poses major ethical consequences for the decision maker or others.

Nonprogrammed decisions: implement solutions that are specifically crafted or tailored for addressing a nonroutine problem.

Optimizing decisions: give the absolute best solution to a problem.

Programmed decisions: implement solutions that have already been determined by past experience as appropriate for addressing routine problems that arise on a regular basis.

Representativeness heuristic: involves assessing the likelihood that an event will occur based on its similarity to one’s stereotypes of similar occurrences.

Risk environments: exist when decision makers lack complete certainty regarding the outcomes of various courses of action, but they are aware of the probabilities associated with their occurrence.

Risk management: involves anticipating risks and factoring them into decision making.

Satisficing decisions: choose the first alternative that appears to give an acceptable or a satisfactory solution to the problem.

Spotlight decisions: expose a decision to public scrutiny and full transparency.

Systematic thinking: approaches problems in a rational and analytical fashion.

Team decisions: are made by all members of the team.

Uncertain environments: exist when managers have so little information on hand that they cannot even assign probabilities to various alternatives and their possible outcomes.

SPECIAL FEATURES Making a Deal Out of Nothing Animoto.com and its Facebook and iPhone apps help users build one-of-a-kind, animated slideshows from photos and music they upload. The founders, veteran TV production geeks, designed Animoto to think like a director—choreographing the images, music, and transitions for maximum emotional impact. Aside from attracting millions of consumer users, several big name bands have used Animoto to create videos and promotional shorts. As comparable software companies grow, they traditionally expand to bring new infrastructure in house, adding racks of servers, moving to new offices, and hiring support staff as needed to maintain these arrangements. By keeping hardware and software on site, the theory goes, organizations keep

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control of these resources—simultaneously absorbing the direct and indirect costs of doing so.

Recognizing that bringing the tools necessary to run Animoto would sap the young startup’s budget—especially if it caught on quickly—the founders brainstormed a different approach: reworking the service to run on Amazon’s self-contained Web Services platform, accepting that doing so would delay their launch by a nail-biting three months. That proved the right choice during a hectic week when their Facebook user base experience 28-fold growth. They’ve stayed nimble and focused on honing Animoto by outsourcing nearly everything else, such as IT infrastructure (Amazon Web Services), billing and payment (PayPal/Google Checkout), email (Google Apps), and sales recordkeeping (Salesforce.com). Ask students what they think about the decision by Animoto to outsource certain management services? What are the advantages and disadvantages to doing so?

Ethics in OB Foxconn, a major outsourcing firm in China has experienced problems with employee suicides. It makes products for Apple, Dell, and Hewlett Packard, among others. Over 250, 000 people work in a huge complex, stretching from over 1 square mile in Shenzen, China. It’s full of dormitories, and it has restaurants and a hospital in addition to the factory spaces. Netting draped from the dormitories is designed to prevent suicides by jumping from the roofs. Ask the students what they think the responsibilities are of companies that outsource their products or services to other companies. Are the former companies responsible for happenings that take place in the latter companies? Ask the students further what they think the responsibilities are for customers who do business with the former companies? Should customers investigate the conditions under which employees are treated in the latter companies? If customers are aware of unethical treatments that employees receive from organizations they do business with, should they still purchase the product or service? Why or why not?

Mastering Management This breakout provides six rules for crisis management. It could make for a lively discussion to ask students for examples of crises they have encountered and whether these rules would have been helpful.

1. Figure out what is going on 2. Remember that speed matters 3. Remember that slow counts, too 4. Respect the danger of the unfamiliar 5. Value the skeptic 6. Be ready to “fight fire with fire” OB in Popular Culture During the afternoon of January 15, 2009, television news anchors began reporting about a plane in the Hudson river. The natural first reaction is “not another tragic plane crash.” This incident was different. Captain Chesley “Sully” Sullenberger was able to successfully crash land U.S. Air Flight 1549 in the river and save the lives of all the passengers and crew. When interviewed, Captain Sully indicated that his decision to land the plane in the river was an intuitive one, indicating “ It was sort of an instinctive move based upon my experience and my initial read of the situation.” Have students recall and share with the class if they have ever had to make an intuitive decision that required quick thing on their part? What was the end result of the decision they made?

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Research Insight Research on the process behind escalation of commitment found that loan officers were reluctant to categorize individual clients into high-risk categories due to “intervention avoidance.” The researchers argue that the question of escalation of commitment is more complex than traditionally recognized and may involve a host of organizational factors that indirectly influence the tendencies of individuals to make undesirable decision commitments. A second study examined undergraduate students working on a computerized investment task. Results showed that exposure to escalation situations increases tendencies toward unethical acts, and that the tendencies further increase with the magnitude of the escalation. This could lead to a class discussion about how organizational structure leads employees to escalate their commitment to deteriorating projects. Also, as the textbook suggests, students may enjoy discussing how escalation of commitment works in their student groups and what can be done to control it.

Leaders on Leadership Tom Szaky is what many call an “eco-capitalist,” someone who brings environmentalism into the world of business and consumers, While a freshman at Princeton University, Szaky was concerned about campus garbage. So he ordered a million red worms with the goal of learning how to use them to recycle the garbage and reduce landfill usage. It worked, but scaling was a problem. One thing led to another, including conversations with classmate Jon Beyer. Before long, the original idea of eco-friendly waste management became a decision to sell liquid fertilizer made from worm excrement. The idea worked so well that a new firm called Terracycle quickly took shape with a mission to “find a meaningful use for waste materials.”

Have students think of companies that started as creative ideas to solve smaller scaled problems but quickly moved to become larger, more influential entities (e.g. Facebook, Body Shop), what were some key elements to the success of these companies? Ask the students further if they have ever used creative thinking to solve their own problems at work or otherwise? Have them share these with the rest of the class.

Group Project Have students create a name and mission statement for their group. After they have completed it, have them walk through the five basics steps of decision-making and discuss whether the model applied to their process. The five basic steps involved in systematic decision making are: 1. Recognize and define the problem or opportunity.

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

3. Choose a preferred course of action.

4. Implement the preferred course of action.

5. Evaluate the results and follow up as necessary.

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Chapter 10 CONFLICT AND NEGOTIATION STUDY QUESTIONS 1.

2.

3.

4.

What is the nature of conflict in organizations?

How can conflict be managed?

What is the nature of negotiation in organizations?

What are alternative strategies for negotiation?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

The Case of the Missing Raise Choices The Ugli Orange Vacation Puzzle Conflict Dialogues Conflict Management Strategies

CHAPTER OVERVIEW This chapter focuses on conflict and negotiation, which are important topics in organizational behavior. The chapter begins by defining conflict, identifying different types and levels of conflict, differentiating between functional and dysfunctional conflict, and exploring cultural differences in conflict and conflict management. The second section of the chapter focuses on various aspects of managing conflict. Included among the topics in this section are stages of conflict; causes of conflict; the indirect conflict management approaches of reduced interdependence, appeals to common goals, hierarchical referral, and altering scripts and myths; and the direct conflict management approaches that include lose-lose conflict, win-lose conflict, and win-win conflict. The second half of the chapter focuses on negotiation. It defines negotiation and then discusses negotiation goals and outcomes, ethical aspects of negotiation, organizational settings for negotiation, and cultural differences in negotiations. The final section of the chapter focuses on negotiation strategies, contrasting distributive negotiation with integrative negotiation.

Emphasis is placed on how to gain integrative agreements and how to avoid common negotiation pitfalls. The section concludes with a description of alternative dispute resolution, arbitration, and mediation as third-party roles in negotiations.

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CHAPTER OUTLINE WHAT IS THE NATURE OF CONFLICT IN ORGANIZATIONS? Types of Conflict Levels of Conflict Functional and Dysfunctional Conflict Culture and Conflict HOW CAN CONFLICT BE MANAGED? Stages of Conflict Hierarchical Causes of Conflict Contextual Causes of Conflict Indirect Conflict Management Strategies Direct Conflict Management Strategies WHAT IS THE NATURE OF NEGOTIATION IN ORGANIZATIONS? Negotiation Goals and Outcomes Ethical Aspects of Negotiation Organizational Settings for Negotiation WHAT ARE ALTERNATIVE STRATEGIES FOR NEGOTIATION? Approaches to Distributive Negotiation How to Gain Integrative Agreements Common Negotiation Pitfalls Third-Party Roles in Negotiation

CHAPTER LECTURE NOTES The chapter opens with a description of how Brazilian born Eduardo Saverin met Mark Zuckerberg during their freshman year at Harvard. One year later, Saverin incorporated and managed Zuckerberg’s social networking project, the Facebook, from their dorm. Saverin invested $20,000 of his own money as seed funds to attract investors. Tensions rose when Saverin froze the company’s assets after he accused Zuckerberg of spending the money on personal expenses. Zuckerberg in turn reincorporated Facebook, locked Saverin out, and quickly moved Palo Alto, CA, where he sought venture capital by himself. Despite Facebook’s immense success, Saverin has kept a very low profile. For years Facebook denied Saverin’s role in the company’s early days. But just before the release of a tell-all movie, The Social Network, Facebook changed their position and acknowledged Saverin as a co-founder.

CONFLICT IN ORGANIZATIONS Conflict occurs whenever disagreements exist in a social situation over issues of substance or whenever emotional antagonisms create frictions between individuals or groups. The manager or leader may be directly involved in conflict or be a mediator of it. Managers and team leaders must be comfortable with interpersonal conflict, be able to recognize situations that have the potential for conflict, and effectively deal with conflict situations.

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LECTURE ENHANCEMENT One way to get students involved in your discussion of conflict is to ask them to note on a piece of paper a situation where they were involved in a conflict at work or at school. You can either (a) collect and sort through these papers to find good conflict examples [in which case you may suggest that students write their names on their papers], or (b) simply ask students to share their experiences with the class. Regardless of the option you choose, you can count on this approach to supply you with numerous examples that you can then refer back to in discussing substantive and emotional conflicts or functional and dysfunctional conflicts.

TYPES OF CONFLICT Substantive conflict is a fundamental disagreement over ends or goals to be pursued and the means for their accomplishment.

Emotional conflict involves interpersonal difficulties that arise over feelings of anger, mistrust, dislike, fear, resentment, and the like. This type of conflict is commonly known as a “clash of personalities.”

LEVELS OF CONFLICT Interpersonal conflict occurs between two or more individuals who are in opposition to one another. Interpersonal conflict often arises in the performance evaluation process. It may be substantive or emotional or both.

Intrapersonal conflicts often involve actual or perceived pressures from incompatible goals or expectations of the following types: approach-approach, avoidance-avoidance, and approachavoidance.

• Approach-approach conflict occurs when a person must choose between two positive and equally attractive alternatives.

• Avoidance-avoidance conflict occurs when a person must choose between two negative and equally unattractive alternatives.

• Approach-avoidance conflict occurs when a person must decide to do something that has both positive and negative consequences.

Intergroup conflict occurs among groups in an organization. Intergroup conflict can make the coordination and integration of task activities very difficult. Cross-functional teams and task forces can help to minimize intergroup conflict.

Interorganizational conflict commonly refers to the competition and rivalry that characterizes firms operating in the same markets.

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FUNCTIONAL AND DYSFUNCTIONAL CONFLICT Figure 10.1 from the textbook identifies two faces of conflict ⎯ functional and dysfunctional ⎯ in relation to the intensity of conflict and the impact of conflict on performance.

Functional conflict, also called constructive conflict, results in benefits to individuals, the team, or the organization.

LECTURE ENHANCEMENT Ask the students to provide examples of functional conflict that they have personally experienced.

The potential benefits of functional conflict the following: • Conflict can bring important problems to the surface so that they can be addressed.

• Conflict can cause decisions to be considered carefully and perhaps reconsidered to ensure that the right path of action is being followed.

• Conflict can increase the amount of information used for decision making.

• Conflict can offer opportunities for creativity that can improve individual, team, or organizational performance.

Dysfunctional conflict, or destructive conflict, works to the disadvantage of an individual or group.

LECTURE ENHANCEMENT Ask the students to provide examples of dysfunctional conflict that they have personally experienced.

The potential disadvantages of dysfunctional conflict include the following: • Dysfunctional conflict diverts energies.

• Dysfunctional conflict hurts group cohesion.

• Dysfunctional conflict promotes interpersonal hostilities.

• Dysfunctional conflict creates a negative environment for workers.

• Dysfunctional conflict can decrease performance and job satisfaction.

• Dysfunctional conflict can contribute to absenteeism and job turnover.

CULTURE AND CONFLICT Culture and cultural differences must be considered for their conflict potential.

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

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By approaching a cross-cultural work situation with sensitivity and respect, ways can be found to work together without great difficulty and even with the advantages that constructive conflict may offer.

CONFLICT MANAGEMENT True conflict resolution occurs when the underlying reasons for a given destructive conflict are eliminated.

STAGES OF CONFLICT Figure 10.2 from the textbook identifies four stages of conflict: conflict antecedents, perceived conflict, felt conflict, and manifest conflict.

• Conflict antecedents establish the conditions for which conflicts are likely to develop.

• Perceived conflict occurs when the antecedent conditions become the basis for substantive or emotional differences between people or groups.

• Felt conflict occurs when conflict is experienced as tension that motivates the person to take action to reduce feelings of discomfort. For conflict to be resolved, all parties should both perceive it and feel the need to do something about it.

• Manifest conflict occurs when it is expressed openly in behavior. A state of manifest conflict may be resolved by removing or correcting its antecedents.

Manifest conflict: At this point removing or correcting the antecedents results in conflict resolution while failing to do so results in conflict suppression.

Truly resolved conflicts may establish conditions that reduce the potential for future conflicts to make it easier to deal with them.

Conflict suppression is a superficial and often temporary form of conflict resolution. Unresolved substantive conflicts can result in sustained emotional discomfort and escalate into dysfunctional emotional conflict between individuals.

Conflict resolution establishes conditions that eliminate an existing conflict and reduce the potential for it to recur in the future.

CAUSES OF CONFLICT Vertical conflict occurs between hierarchical levels, and commonly involves supervisorsubordinate disagreements over resources, goals, deadlines, or performance results.

Horizontal conflict occurs between persons or groups at the same hierarchical level, and commonly involve goal incompatibilities, resource scarcities, or purely interpersonal factors.

A common variation of horizontal conflict is line-staff conflict that involves disagreements over decision on matters such as budgets, technology, and human resource practices.

Role ambiguity conflicts occur when the communication of task expectations is unclear or upsetting in some way, such as a team member receiving different expectations from the leader and other members.

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Task and workflow interdependencies refer to the disputes and open disagreements that may erupt among people and units who are required to cooperate to meet challenging goals.

Structural differentiation, illustrated in Figure 10.3 in the textbook, occurs where different teams and work units pursue different goals with different time horizons.

Domain ambiguities involve misunderstandings over such things as customer jurisdiction or scope of authority.

Resource scarcity refers to destructive competition that can result when resources are scarce or being redistributed.

Power or value asymmetries exist when interdependent people or groups differ substantially from one another in status and influence or in values.

INDIRECT CONFLICT MANAGEMENT STRATEGIES Indirect conflict management approaches share the common ground of avoiding direct dealings with personalities.

Managed Interdependence Managed Interdependence refers to managers adjusting the level of interdependency among units or individuals when workflow conflicts exist.

• Decoupling is taking action to eliminate or reduce the required contact between conflicting parties.

• Buffering refers to building an inventory to remove direct performance pressures when the outputs of one group are the inputs of another group.

• Persons in linking pin roles, such as project liaison, are expected to understand the operations, members, needs, and norms of their host group. They are supposed to use this knowledge to help their group work better with other groups in order to accomplish mutual tasks.

Appeals to Common Goals Appeals to Common Goals can focus the attention of potentially conflicting parties on one mutually desirable conclusion.

Upward Referral Upward Referral makes use of the chain of command for conflict resolution. Problems are simply referred up the hierarchy for more senior managers to reconcile.

Altering Scripts and Myths Altering Scripts and Myths refers to the superficial management of conflict by using behavioral routines that become part of the organization’s culture.

DIRECT CONFLICT MANAGEMENT STRATEGIES

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LECTURE ENHANCEMENT To introduce the material on direct conflict management approaches, ask the students the following questions: (1) To what extent do you attempt to satisfy your own concerns when you’re trying to resolve a conflict? (2) ) To what extent do you attempt to satisfy the other party’ concerns when you’re trying to resolve a conflict? Select several students to share their selfassessments with respect to these two questions, and ask them to describe how they typically go about trying to resolve a conflict. Relate this discussion to the different conflict resolution strategies identified in Figure 10.4

Figure 10.4 from the textbook describes five different approaches for managing conflict. These approaches reflect differing combinations of assertiveness (i.e., attempting to satisfy one’s own concerns) and cooperativeness (i.e., attempting to satisfy the other party’s concerns).

Lose-Lose Strategies Lose-Lose Strategies occurs when nobody really gets what he or she wants. Lose-lose conflicts often result when there is little or no assertiveness and conflict management takes the following forms.

• Avoidance is an extreme form of inattention; everyone simply pretends that the conflict does not really exist and hopes that it will go away. This is a low-assertiveness and lowcooperativeness situation. Avoidance may be used when an issue is trivial or more important issues are pressing, or when people need to cool down temporarily and regain perspective.

• Accommodation, or smoothing as it is sometimes called, involves playing down differences among the conflicting parties and highlighting similarities and areas of agreement. This is a low-assertiveness and high-cooperativeness situation. Accommodation may be used when issues are more important to others than to yourself or when you want to build “credits” for use in later issues.

• Compromise occurs when each party gives up something of value to the other; but with no one’s desires being fully satisfied, the antecedent conditions for future conflicts are established. This is a moderate-assertiveness and moderate-cooperativeness situation.

Compromise may be used for temporary settlements to complex issues or to arrive at expedient solutions when time is limited.

Win-Lose Strategies In Win-Lose Strategies, one party achieves its desires at the expense and to the exclusion of the other party’s desires. This is a high-assertiveness and low-cooperativeness situation.

• Competition occurs when one party achieves a victory through the use of force, superior skills, or domination. This is a high-assertiveness and low-cooperativeness situation.

• Authoritative command refers to the use of formal authority to dictate a solution and specify who gains what and who loses what. This is a high-assertiveness and low-cooperativeness situation. Authoritative command may be used when quick and decisive action is vital or when unpopular actions must be taken.

Win-Win Strategies Win-Win Strategies is achieved by a blend of both high cooperativeness and high assertiveness.

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Collaboration or problem solving involves recognition by all conflicting parties that something is wrong and needs attention, and it stresses gathering and evaluating information in solving disputes and making choices. Collaboration and problem solving are preferred to gain true conflict resolution when time and cost permit.

The ultimate test for collaboration and problem solving is whether or not the conflicting parties see that the solution to the conflict: 1. Achieves each party’s goals.

2. Is acceptable to both parties.

3. Establishes a process whereby all parties involved see a responsibility to be open and honest about facts and feelings.

Potential disadvantages of collaboration include the following: • Collaboration requires time and energy.

• Both parties to the conflict need to be assertive and cooperative.

• Collaboration may not be feasible if the organization’s culture does not value cooperation.

LECTURE ENHANCEMENT Note that each of the conflict management styles has some value; each is appropriately utilized in different situations. For example, avoidance is appropriate when an issue is trivial or there is no chance of resolution. Accommodation or has merit when issues are more important to others than yourself or when you realize you are wrong. Competition or is useful in situations where quick, decisive action is vital. Compromise is helpful in achieving a temporary solution to a complex issue or when conflicting parties have equal power but are committed to mutually exclusive goals. Collaboration or is appropriate when an integrative solution needs to be found without sacrificing either party’s concerns, both of which are very important.

Ask students if they have ever seen examples of the previously mentioned conflict management styles at work, school or other aspects of their lives.

(Additional information can be found in D. Tjosvold, The Conflict Positive Organization, Boston: Addison-Wesley Publishing Company, Inc. 1991.)

NEGOTIATION Negotiation is the process of making joint decisions when the parties involved have different preferences.

NEGOTIATION GOALS AND OUTCOMES Substance goals deal with outcomes that relate to the “content” issues under negotiation.

Relationship goals deal with outcomes that relate to how well people involved in the negotiation and any constituencies they may represent are able to work with one another once the process is concluded.

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LECTURE ENHANCEMENT Have students describe any experience they have had with any negotiations – whether as an active participant (involved in the negotiations) or as an observer.

An excellent article on negotiation, entitled “Consider Both Relationships and Substance When Negotiating Strategically,” by G.T. Savage, J.D. Blair, and R.L. Sorenson is available in the Academy of Management Executive, 1989, 3(1): 37-48.

Effective negotiation occurs when substance issues are resolved and working relationships are maintained or even improved.

Criterion for an Effective Negotiation are: 1. Quality—The negotiation results offer a “quality” agreement that is wise and satisfactory to all sides.

2. Harmony—The negotiation is “harmonious” and fosters rather than inhibits good interpersonal relations.

3. Efficiency—The negotiation is “efficient” and no more time consuming or costly than absolutely necessary.

LECTURE ENHANCEMENT Consider the following scenario: Suppose that you have given the class a complex project assignment which has a due date four weeks in the future, will count for 40 percent of their course grade, and must be done in groups. Some students complain that project, with its short time line, will overload their schedules. Other students are concerned about their grades, wanting to receive as much guidance and feedback as possible.

Divide the class into groups of four or five students. Have each group devise a plan for negotiating among themselves and with you regarding the above scenario. Select two or three of the teams to share their negotiation plans with the entire class.

After the plans are presented, discuss how the plan reflects negotiation goals and the three criteria for effective negotiations. Also discuss how well the plan follows the negotiation rules for integrative agreements. To what extent is each plan likely to result in a win-win situation for the students and the instructor?

ETHICAL ASPECTS OF NEGOTIATION To maintain good working relationships in negotiations, managers and other involved parties should strive for high ethical standards.

Negotiating parties often try to rationalize questionable ethics as unavoidable, harmless, or justified, but these rationalizations are offset by long-run negative consequences.

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The unethical negotiating party may become a target of revenge.

Unethical negotiating actions may become habitual.

ORGANIZATIONAL SETTINGS FOR NEGOTIATION Two-party negotiation occurs when the manager negotiates directly with one other person.

Group negotiation occurs when the manager is part of a team or group whose members are negotiating to arrive at a common decision. Intergroup negotiation occurs when the manager is part of a group that is negotiating with another group to arrive at a decision regarding a problem or situation affecting both.

Constituency negotiation occurs when the manager is involved in negotiation with other persons, with each party representing a broader constituency.

NEGOTIATION STRATEGIES Distributive negotiation focuses on positions staked out or declared by the parties involved, and each party is trying to claim certain portions of the available pie.

Integrative negotiation ⎯ also called principled negotiation ⎯ focuses on the merits of the issues, and everyone involved tries to enlarge the available pie rather than stake claims to certain portions of it.

LECTURE ENHANCEMENT There are many books, videos, and web-based resources available on how to negotiate effectively. The Web site entitled at http://top7business.com/archives/negotiation/ provides access to a sample of this material.

Ask students to think about their own negotiation strategies, how they themselves negotiate.

Have them share this with the rest of the class.

APPROACHES TO DISTRIBUTIVE NEGOTIATION Participants in distributive negotiation usually approach it as a “win–lose” episode: • “Hard” distributive negotiation takes place when each party holds out to get its own.

• “Soft” distributive negotiation takes place when one party is willing to make concessions to the other to resolve things.

The bargaining zone is the range between one party’s minimum reservation point and the other party’s maximum reservation point.

Figure 10.5 from the textbook illustrates the bargaining zone in a classic two-party negotiation.

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HOW TO GAIN INTEGRATIVE AGREEMENTS The foundations for gaining truly integrative agreements include supportive attitudes, constructive behaviors, and good information.

The Attitudinal Foundations of integrative agreements include the following: • Willingness to trust the other party.

• Willingness to share information with the other party.

• Willingness to ask concrete questions of the other party.

The Behavioral Foundations of integrative agreements include the following: • Separate people from the problem.

• Don’t allow emotional considerations to affect the negotiation.

• Focus on interests rather than positions.

• Avoid premature judgments.

• Keep the identification of alternatives separate from their evaluation.

• Judge possible agreements by set criteria or standards.

The Information Foundations of integrative agreements include the following: • Each party must know what he or she will do if an agreement can’t be reached. In other words, each party must become familiar with his/her BATNA, or “best alternative to a negotiated agreement.”

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

• Each party must achieve an understanding of what the other party values, even to the point of determining the other party’s BANTA. COMMON NEGOTIATION PITFALLS Negotiators need to guard against some common negotiation pitfalls.

• Myth of the fixed pie: the tendency in negotiation to stake out your position based on the assumption that in order to gain your way, something must be subtracted from that of the other party.

• Escalating commitment: once demands have been stated, people become committed to them and are reluctant to back down.

• Overconfidence: negotiators often develop overconfidence that their positions are the only correct ones, consequently leading them to ignore the other party’s needs.

• Communication problems: “Negotiation is the process of communicating back and forth for the purpose of reaching a joint decision.”

• Too Much Telling: the parties don’t really talk to one another, at least not in the sense of making themselves truly understood.

• Too Little Listening: the parties are unable or unwilling to listen well enough to understand what each other is saying.

THIRD-PARTY ROLES IN NEGOTIATION Negotiation may sometimes be accomplished through the intervention of third parties, such as when stalemates occur and matters appear irresolvable under current circumstance.

• Alternative dispute resolution occurs when a neutral third party works with persons involved in a negotiation to help them resolve impasses and settle disputes.

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• •

Arbitration occurs when a neutral third party acts as a “judge” with the power to issue a decision that is binding on all parties.

Mediation occurs when a neutral third party tries to engage the parties in a negotiated solution through persuasion and rational argument.

LECTURE ENHANCEMENT The Negotiation Institute Web site at http://www.negotiation.com/ provides materials that may be used to support and amplify on your discussion of negotiation.

Students should work with their group members and discuss the advantages and disadvantages of using a third party negotiator in organizations. After which, each group should share their discussion with the rest of the class.

CHAPTER STUDY GUIDE What is the nature of conflict in organizations?

• Conflict appears as a disagreement over issues of substance or emotional antagonisms that create friction between individuals or teams.

• Conflict situations in organizations occur at intrapersonal, interpersonal, intergroup, and interorganizational levels.

• Moderate levels of conflict can be functional for performance, stimulating effort and creativity.

• Too little conflict is dysfunctional when it leads to complacency, too much conflict is dysfunctional when it overwhelms us.

How can conflict be managed ?

• Conflict develops through a series of stages, beginning with antecedent conditions and progressing into manifest conflict.

• Indirect conflict management strategies include appeals to common goals, hierarchical referral, organizational redesign, and the use of mythology and scripts.

• Direct conflict management strategies engage different tendencies toward cooperativeness and assertiveness to styles of avoidance, accommodation, compromise, competition and collaboration.

• Lose-lose conflict results from avoidance, smoothing or accommodation, and compromise.

What is the nature of negotiation in organizations?

• Negotiation is the process of making decisions and reaching agreement in situations in which the participants have different preferences.

• Managers may find themselves involved in various types of negotiation situations, including two-party, group, intergroup, and constituency negotiation.

• Effective negotiation occurs when both substance goals (dealing with outcomes) and relationship goals (dealing with processes) are achieved.

• Ethical problems in negotiation can arise when people become manipulative and dishonest in trying to satisfy their self-interests at any cost.

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What are alternative strategies for negotiation?

• The distributive approach to negotiation emphasizes win-lose outcomes; the integrative or principled approach to negotiation emphasizes win-win outcomes.

• In distributive negotiation the focus of each party is on stalking out positions in the attempt to claim desired portions of a fixed pie.

• In integrative negotiation, sometimes called principled negotiation, the focus is on determining the merits of the issues and finding ways to satisfy one another’s needs.

• The success of negotiations often depends on avoiding common pitfalls such as the myth of the fixed pie, escalating commitment, overconfidence, and both the telling and hearing problems.

• When negotiations are at an impasse, third party approaches such as mediation and arbitration offer alternative and structured ways for dispute resolution.

KEY TERMS Accommodation (or smoothing): involves playing down differences among the conflicting parties and highlighting similarities and areas of agreement.

Arbitration: occurs when a neutral third party acts as a judge with the power to issue a decision that is binding on all parties.

Authoritative command: the use of formal authority to dictate a solution and specify who gains what and who loses what.

Avoidance: an extreme form of inattention; everyone simply pretends that the conflict does not really exist and hopes that it will go away.

Bargaining zone: the range between one party’s minimum reservation point and the other party’s maximum reservation point.

Collaboration: involves recognition by all conflicting parties that something is wrong and needs attention, and it stresses gathering and evaluating information in solving disputes and making choices. Also known as problem solving.

Competition: occurs when one party achieves a victory through the use of force, superior skills, or domination.

Compromise: occurs when each party gives up something of value to the other; but with no one’s desires being fully satisfied, the antecedent conditions for future conflicts are established.

Conflict: occurs whenever disagreements exist in a social situation over issues of substance or whenever emotional antagonisms create frictions between individuals or groups.

Conflict resolution: occurs when the underlying reasons for a given destructive conflict are eliminated.

Distributive negotiation: focuses on positions staked out or declared by the parties involved, and each party is trying to claim certain portions of the available pie.

Dysfunctional conflict: conflict that works to the disadvantage of an individual or group.

Effective negotiation: occurs when substance issues are resolved and working relationships are maintained or improved.

Emotional conflict: involves interpersonal difficulties that arise over feelings of anger, mistrust, dislike, fear, resentment, and the like.

Functional conflict: conflict that results in positive benefits to individuals, the group, or the organization.

Integrative negotiation: focuses on the merits of the issues, and everyone involved tries to enlarge the available pie rather than stake claims to certain portions of it.

Intergroup conflict: occurs among members of different teams or groups.

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Interorganizational conflict: commonly refers to the competition and rivalry that characterizes firms operating in the same markets, but it actually encompasses disagreements that exist between any two or more organizations.

Interpersonal conflict: occurs between two or more individuals who are in opposition to one another.

Intrapersonal conflict: often involve actual or perceived pressures from incompatible goals or expectations of the following types: approach-approach, avoidance-avoidance, and approachavoidance.

Mediation: occurs when a neutral third party tries to engage the conflicting parties in a negotiated solution through persuasion and rational argument.

Negotiation: the process of making joint decisions when the parties involved have different preferences.

Substantive conflict: involves a fundamental disagreement over ends or goals to be pursued and the means for their accomplishment.

SPECIAL FEATURES Eduardo Saverin: You’re Out Brazilian-born Eduardo Saverin met Mark Zuckerberg during their freshman year at Harvard.

One year later, Saverin incorporated and managed Zuckerberg’s social networking project, the Facebook, from their dorm. Saverin invested $20,000 of his own money as seed funds to attract investors. Tensions rose when Saverin froze the company’s assets after he accused Zuckerberg of spending the money on personal expenses. Zuckerberg in turn reincorporated Facebook, locked Saverin out, and quickly moved Palo Alto, CA, where he sought venture capital by himself.

Despite Facebook’s immense success, Saverin has kept a very low profile. For years Facebook denied Saverin’s role in the company’s early days. But just before the release of a tell-all movie, The Social Network, Facebook changed their position and acknowledged Saverin as a co-founder.

Ask students to investigate (you could also provide them with the information) and describe other conflicts between other famous co-founders of organizations (e.g. Microsoft, Apple). How were those conflicts resolved? Do the students think they were resolved fairly to both parties (why or why not?

Ethics in OB Catherine Sanderson, a British citizen living and working in Paris, might have asked herself “why not share your expressions and experiences online with others?” before launching her own blog, Le Petite Anglaise. At one point, her blog became so successful that she had 3.000 readers. Even though Sanderson was blogging anonymously, her photo was on the site and the connection to her real job was eventually discovered. Her blogs included the fact that one boss at the workplace called secretaries, “typists” and a description of an unforgivable faux pas that took place at an office holiday party. Under the heading, “Titillation” Sanderson described how she displayed cleavage during a videoconference at the office. She was eventually fired and Sanderson was upset by this, calling it an “unfair firing.” Do you agree with Sanderson? Why or why not? What are some ways that employees can maintain a social media profile and still conform to ethical guidelines at work.

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Leaders on Leadership When Allan Mulally, a former Boeing executive, was appointed CEO of Ford motor Company, many wondered if an “airplane” guy could run a car company. In addition to many changes to modernize plants and streamline operations, Mulally tackled the problems dealing with functional chimneys, lack of open communication and hidden conflict among the various parts of Ford.

Ford has reported record earnings since Mulally’s arrival and Fortune magazine named him, Executive of the Year in 2010. Have students identify the actions that Mulally has engaged in that has resulted in Ford becoming a more successful company, relating these actions to functional and dysfunctional conflict, as well as other various lessons in conflict.

Mastering Management This breakout describes how to negotiate for pay raises. Advice includes going into the negotiation prepared, document and communicate, advocate and ask, stay focused on the goal, view things from the other side, and don’t overreact to bad news. Ask students if they have ever asked for a raise at any job they have worked? How did they go about this? Did they follow the steps outlined? Were they successful in getting the raise?

Research Insight Research using a “language-based approach” studied real disputes being addressed through Square Trade, an online dispute resolution service to which eBay refers unhappy customers. The research found that dispute resolution was less like when negative emotions were expressed and commands were issued. Dispute resolution was more likely when causal explanation were given, communications were firm and suggestions were offered. The researchers suggest: “Watch your language; avoid attacking the other’s face either by showing your anger toward them, or expressing contempt; avoid signaling weakness; be firm in your claim. Provide causal accounts that take responsibility and give face.” This breakout could be used to encourage students to discuss the importance of allowing a negotiating partner to “save face.”

OB in Popular Culture The Beck’s commercial opens with a woman struggling to remove an article of clothing from the jaws of a dog and a room in total disarray. When the boyfriend arrives, the woman gives an ultimatum – either the dog goes or I go – a choice which is quite a dilemma for the boyfriend.

While the boyfriend acknowledges a sense of loyalty to the dog he has owned for eight years, he also recognizes that the woman is the best thing that ever happened to him. The choice in the commercial clearly illustrates an intrapersonal conflict. Ask students if they have ever experienced any intrapersonal conflict (e.g. as an athlete and a student or as a supervisor and a friend). How did they resolve the conflict? What conflict resolution style did they use?

Group Project

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Have students get into groups of four and have them role play a salary negotiation like the one on pages 245-246. One student should assume the role of the job applicant and another the role of the recruiter. The other two members of the group can use the tips in the Mastering Management breakout on page 245 to critique the negotiation. (While the Mastering Management breakout is on asking for a raise, hopefully students can translate it into asking for a salary for the purposes of this exercise). Afterward, have students create their own negotiation scenario and trade roles.

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Chapter 11 COMMUNICATION AND COLLABORATION

STUDY QUESTIONS 1.

2.

3.

4.

What is communication?

What are the issues in interpersonal communication?

What is the nature of communication in organizations?

How can we build more collaborative work environments?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

The Poorly Informed Walrus Active Listening Upward Appraisal 360 Degree Feedback “TT” Leadership Style Empowering Others

CHAPTER OVERVIEW This chapter focuses on the important topics of information and communication. The chapter begins by describing the communication process and examining each of its components in some detail. Particular emphasis is given to the role of feedback in communication, communication channels, and downward, upward, and lateral communication. Next, the essential components of interpersonal communications are explored, including communication barriers, active listening, and cross-cultural communication.

The next section of the chapter focuses on the nature of communication in organizations, including communication channels, flows and status effect. The chapter concludes with a discussion of building more collaborative work environments. The trend toward more transparency and supportive communication principles are discussed.

CHAPTER OUTLINE WHAT IS COMMUNICATION? The Communication Process Feedback and Communication Nonverbal Communication WHAT ARE ISSUES IN INTERPERSONAL COMMUNICATION? Communication Barriers Active Listening Cross-Cultural Communication

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WHAT IS THE NATURE OF COMMUNICATION IN ORGANIZATIONS? Communication Channels Communication Flows Status Effects HOW CAN WE BUILD MORE COLLABORATIVE WORK ENVIRONMENTS? Collaboration Technologies Interactional Transparency Supportive Communication Principles

CHAPTER LECTURE NOTES The chapter opens with the story of 100-year-old department store Nordstrom, which has flourished because of its sharp focus on customer service. However, as competition grew fierce and sales slid, top brass conceded that the company had done so at the expense of modernizing its inventory control systems. Working with Accenture Consulting, Nordstrom merged the inventories of all stores into a single view accessible by both customers and retail associates.

Nordstrom stores now keep less stock on hand, and the chain draws praise from analysts for doing so in a challenging retail environment. .

THE NATURE OF COMMUNICATION THE COMMUNICATION PROCESS Communication is the process of sending and receiving messages with attached meanings.

Figure 11.1 from the textbook describes the keys elements of the communication process, including • Noise: Any disturbance that disrupts the communication process and interferes with the transference of messages.

• A source who encodes an intended meaning into a message.

• Encoding: the process of translating an idea or thought into a message consisting of verbal, written, nonverbal symbols, or some combination of them.

• Communication channel: a pathway through which messages are sent, including face-to-face meetings, electronic mail and online discussions, written letters or memorandums, and telephone or voice-mail, among others. Some people are better at using certain channels over others, and specific channels are better for some messages.

• A receiver who decodes the message into a perceived meaning.

• Decoding: the process of assigning meaning to the received message.

• Feedback communicates how one feels about something another person has done or said.

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LECTURE ENHANCEMENT One way to enhance the discussion of the communication process is to focus on the lecture mode of teaching. As the teacher/lecturer, you are occupying the role of sender, whereas the students are receivers. To communicate with them, you use a variety of symbols including spoken and written words, gestures, transparencies, PowerPoint slides, etc. to send them messages. As receivers, the students decode these messages into perceived meanings, which may or may not be the same as the intended meanings.

FEEDBACK AND COMMUNICATION Feedback is the process through which the receiver communicates with the sender by returning another message. Giving feedback is often associated with one or more persons communicating an evaluation of what another person has said or done.

LECTURE ENHANCEMENT Divide the class into groups of four or five students. Using the guidelines in OB SAVVY 11.1 for providing constructive feedback, have each group devise a plan for how they would go about providing feedback to a fellow group member who is not carrying his/her fair share of the group’s work load. Select two or three of the groups to share their feedback plans with the entire class.

NONVERBAL COMMUNICATION Nonverbal communication takes place through facial expressions, body motions, eye contact, and other physical gestures.

Kinesics is the study of gestures and body postures. The nonverbal side to communication can often hold the key to what someone is really thinking or meaning, and can affect the impressions we make on others.

Proxemics ⎯ the study of how space is used ⎯ is also important to nonverbal communication.

Figure 11.2 shows three different office arrangements and the messages they may communicate to visitors.

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LECTURE ENHANCEMENT A fun way to illustrate the power of nonverbal communication is to call on volunteers to “act out” various emotions without speaking verbally. Specifically, you may whisper to one volunteer to “act angry,” another to “be sad,” another to “be happy,” etc. Alternatively, you may ask one student to portray all of these emotions, plus any others that you choose. Then you can ask the students’ classmates to guess which emotion is being portrayed.

INTERPERSONAL COMMUNICATION

LECTURE ENHANCEMENT Using the example of the lecture mode of teaching, you can preview the discussion of communication barriers by asking students to identify sources of “noise” which sometimes interfere with the effectiveness of lectures. An added benefit of this discussion is that instructors may obtain some useful feedback on their lecturing styles.

COMMUNICATION BARRIERS The most common barriers to interpersonal communication in the workplace include interpersonal issues, physical distractions, and meaning, or semantic, barriers.

Interpersonal barriers occur when individuals are not able to objectively listen to the sender due to things such as lack of trust, personality clashes, a bad reputation, stereotypes/prejudices, etc.

In selective listening, individuals block out information or only hear things that match preconceived notions.

In filtering, senders convey only certain parts of relevant information.

Physical distractions include interruptions from noises, visitors, etc., that interfere with communication.

Semantic barriers involve a poor choice or use of words and mixed messages. The KISS principle of communication means “keep it short and simple.”

ACTIVE LISTENING The ability to listen well is a distinct asset to anyone whose job involves a large proportion of time spent communicating with other people. Everyone in the new workplace should develop good skills in active listening ⎯ the ability to help the source of a message say what he or she really means

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LECTURE ENHANCEMENT Active listening and effective listening are closely related topics Simple rules for effective listening include the following: (1) Stop talking. (2) Help the speaker feel at ease. (3) Have an attitude that shows you want to listen. (4) Avoid distractions. (5) Have empathy for the speaker.

(6) Be patient.

CROSS-CULTURAL COMMUNICATION A common problem in cross-cultural communication is ethnocentrism ⎯ the tendency to believe one’s culture and its values are superior to those of others.

Another problem in cross-cultural communication arises from parochialism—assuming that the ways of your culture are the only ways of doing things.

The difficulties with cross-cultural communication are perhaps most obvious with respect to language differences.

Gestures may also be used quite differently in different cultures.

One of the best ways to understand cultural differences is to learn at least some of the language of the country with which dealings take place.

LECTURE ENHANCEMENT A very entertaining website that provides a collection of cultural misunderstanding (or communications “goofs” in translating phrases from one language to another) is available at http://www.css.edu/users/dswenson/web/335ARTIC/CULTCOMM.HTM. Consider reading some of these “goofs” to your students to illustrate the difficulties inherent in cross-cultural communication.

Ask students if they have ever experienced any cultural misunderstandings, either while in this country or traveling abroad. Have them describe their own feelings as well as the feelings of others (if they were aware of these) who were affected at the time.

Members of low-context cultures are very explicit in using the spoken and written word. In these cultures, the message is largely conveyed by the words someone uses, and not particularly by the “context” in which they are spoken. Low context cultures include Australia, Canada, and the United States.

In contrast, members of high-context cultures use words to convey only a limited part of the message. The rest must be inferred or interpreted from the context, which includes body

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language, the physical setting, and past relationships— all of which add meaning to what is being said. High context cultures are common in Asia and the Middle East.

ORGANIZATIONAL COMMUNICATION COMMUNICATION CHANNELS Information flows in organizations through both formal and informal channels of communication.

• Formal channels follow the chain of command established by an organization’s hierarchy of authority.

• Informal channels do not follow an organization’s hierarchy of authority.

The grapevine is a network of friendships and acquaintances through which rumors and other unofficial information are passed from person to person.

The potential advantages of grapevines include the following: • Enabling the quick and efficient transmission of information.

• Helping to fulfill people’s needs, such as providing a sense of security or providing social satisfaction.

The primary disadvantage of grapevines in the transmission of incorrect or untimely information.

Channel richness refers to the capacity of a channel to convey information effectively. Figure 11.3 in the textbook describes the richness of communication channels.

• The richest channels are face-to-face.

• Telephone, e-mail, written memos, and letters have moderate channel richness.

• Posted notices and bulletins are the leanest channels.

• Richer channels should be used to achieve effective communication with more complex and open-ended messages.

• Leaner channels work well for more routine and straightforward messages.

COMMUNICATION FLOWS Organizational communication is the specific process through which information moves and is exchanged throughout an organization.

Figure 11.4 from the textbook illustrates downward, upward, and lateral information flows in organizations.

• Downward communication follows the chain of command from top to bottom. One of its major functions is to achieve influence through information. Lower-level personnel need to know what higher levels are doing and to be regularly reminded of key policies, strategies, objectives, and technical developments. A lack of adequate downward communication is often cited as a management failure.

• Upward communication is the flow of messages from lower to higher levels in the organization. Upward communication keeps higher levels informed about what lower-level workers are doing, what their problems are, what suggestions they have for improvements, and how they feel about the organization and their jobs.

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•

Lateral communication provides for timely and accurate feedback and product information to be shared between customers and workers, and for internal communication across department or functional boundaries. New organizational designs are emphasizing lateral communication in the form of cross-departmental committees, teams, or task forces, and the matrix organization.

New organization designs are emphasizing lateral communication in the form of crossdepartmental committees, teams, or task forces as well as matrix structures. There is also growing attention to organizational ecology—the study of how building design may influence communication and productivity by improving lateral communications.

Information technology is allowing organizations to 1. Distribute information more instantaneously 2. Make more information available than ever before 3. Allow broader and more immediate access to this information 4. Encourage participation in the sharing and use of information 5. Integrate systems and functions as well as use information to link with other environments in unprecedented ways.

The downsides of these new forms of communication include: 1. Removal of non-verbal communications from the situation 2. Difficulty understanding the emotional aspects of communication 3. Failure in the electronic medium to control one’s emotions. The term flaming is sometimes used to describe rudeness in electronic communication.

4. Information overload and the 24/7 work environment.

Presence-aware tools are software that allows a user to view others’ real-time availability status and readiness to communicate.

STATUS EFFECTS Status differences in organizations create potential communication barriers between persons of higher and lower ranks. On the one hand, given the authority of their positions, managers may be inclined to do a lot of “telling” but not much “listening.” On the other hand, we know that communication is frequently biased when flowing upward in organizational hierarchies because subordinates may tell their superiors only what they think the bosses want to hear.

The mum effect occurs when people are reluctant to communicate bad news or desire to be polite.

COLLABORATIVE WORK ENVIRONMENTS COLLABORATION TECHNOLOGIES Information can often become a source of power that employees hold and use for their own advantage. With the rise of social networking tools, such as Facebook and Twitter, and other technologies, the withholding of information is becoming more and more difficult. Customers have more information power than ever. Instead of fighting these trends, organizations are identifying ways to capitalize on emerging technologies.

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INTERACTIONAL TRANSPARENCY In management, transparency is increasingly being used to symbolize more open and honest sharing of information.

Interactional transparency has been conceptualized in the OB literature as the ability for both leaders and followers to be open, accountable, and honest with each other. It comprises: • sharing relevant information • being forthcoming regarding motives and the reasoning behind decisions • proactively seeking and giving feedback SUPPORTIVE COMMUNICATION PRINCIPLES A set of tools known as supportive communication principles can help focus conversations on joint problem solving to address communication breakdowns and change problematic behaviors before they lead to larger relational problems. The primary emphasis of supportive communication is to avoid defensiveness and disconfirmation.

Defensiveness occurs when individuals feel they are being attacked and they need to protect themselves.

Disconfirmation occurs when an individual feels his self-worth is being questioned. A person shows he is feeling disconfirmed when he withdraws from the conversation or starts engaging in show-off behaviors to try to make himself look good.

CHAPTER STUDY GUIDE What is communication?

• • • • • • • •

Collaborative communication is becoming more important as technology changes the way we work.

Communication is the process of sending and receiving messages with attached meanings.

The communication process involves encoding an intended meaning into a message, sending the message through a channel, and receiving and decoding the message into perceived meaning.

Noise is anything that interferes with the communication process.

Feedback is a return message from the original recipient back to the sender.

To be constructive, feedback must be direct, specific, and given at an appropriate time.

Nonverbal communication involves communication other than through the spoken word (e.g. facial expressions, body position, eye contact, and other physical gestures).

When verbal and nonverbal do not match, research has shown that receivers will pay more attention to the nonverbal.

What are the issues in interpersonal communication?

• • •

To create collaborative communication, people must not succumb to communication barriers.

Interpersonal barriers detract from communication because individuals are not able to objectively listen to the sender due to personal biases; they include selective listening and filtering.

Physical distractions are barriers due to interruptions from noises, visitors and so on.

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• • •

Semantic barriers involve a poor choice or use of words and mixed messages.

Active listening encourages a free and complete flow of communication from the sender to the receiver; it is nonjudgmental and encouraging.

Parochialism and ethnocentrism contribute to the difficulties of experiencing truly effectual cross-cultural communication.

What is the nature of communication in organizations?

• • • • •

Organizational communication is the specific process through which information moves and is exchanged within an organization.

Technologies continue to change in the workplace, challenging traditional notions of hierarchy and structure in organizations.

Communication in organizations uses a variety of formal and informal channels; the richness of the channel, or its capacity to convey information, must be adequate for the message.

Information flows upward, downward, and laterally in organizations.

Status effects in organizations may result in restricted and filtered information exchanges between subordinates and their superiors.

How can we build more collaborative work environments?

• • • •

With the rise of social networking tools, the restriction of information is becoming more and more difficult.

Instead of fighting these trends, organizations are identifying ways to capitalize on emerging technologies that are resulting in a reduction of status differentials and breaking down of corporate silos.

More companies are valuing transparency in communication.

Transparency is enhanced through the use of supportive communication principles.

KEY TERMS Active listening: the ability to help the source of a message say what he or she really means.

Channel richness: refers to the capacity of a channel to convey information effectively.

Communication: the process of sending and receiving messages with attached meanings.

Communication channels: the pathways through which messages are sent, including face-toface meetings, electronic mail and online discussions, written letters or memorandums, and telephone or voice-mail, among others.

Defensiveness: occurs when individuals feel they are being attacked and they need to protect themselves.

Disconfirmation: occurs when an individual feels his or her self-worth is being questioned.

Downward communication: follows the chain of command from top to bottom.

Encoding: is the process of translating an idea or thought into a message consisting of verbal, written, or nonverbal symbols (such as gestures), or some combination of them.

Ethnocentrism: the tendency to believe one’s culture and its values are superior to those of others.

Feedback: the process through which the receiver communicates with the sender by returning another message.

Filter: senders filter information by conveying only certain parts that are relevant.

Flaming: rudeness in electronic communication.

Formal channels: channels that follow the chain of command established by an organization’s hierarchy of authority.

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Grapevine: a network of friendships and acquaintances through which rumors and other unofficial information are passed from person to person.

High-context culture: a culture in which words convey only part of a message, while the rest of the message must be inferred from body language and additional contextual cues.

Informal channels: channels that do not follow an organization’s hierarchy of authority Interactional transparency: is the open and honest sharing of information.

Interpersonal barriers: occur when individuals are not able to objectively listen to the sender due to things such as lack of trust, personality clashes, a bad reputation or stereotypes/prejudices.

Lateral communication: is the flow of messages at the same levels across organizations.

Low-context culture: a culture in which messages are expressed mainly by the spoken and written word.

Mum effect: occurs when people are reluctant to communicate bad news and desire to be polite.

Noise: any disturbance that disrupts the communication process and interferes with the transference of messages.

Nonverbal communication: the type of communication that takes place through facial expressions, body motions, eye contact, and other physical gestures.

Parochialism: assuming that the ways of your culture are the only ways of doing things.

Physical distractions: include interruptions from noises, visitors and the like, that interfere with communication.

Presence: is the act of speaking without words.

Presence aware tools: are software that allow a user to view others’ real-time availability status and readiness to communicate.

Receiver: is the individual or group of individuals to whom a message is directed.

Selective listening: individuals block out information or only hear things that match preconceived notions.

Semantic barriers: involve a poor choice or use of words and mixed messages.

Sender: is a person or group trying to communicate with someone else.

Status differences: are differences between persons of higher and lower ranks.

Supportive communication principles: are a set of tools focused on joint problem solving.

Upward communication: is the flow of messages from lower to higher organization levels.

SPECIAL FEATURES Nordstorm: 115 Stores, 1 Inventory 100-year-old department store Nordstrom flourished because of its sharp focus on customer service. However, as competition grew fierce and sales slid, top brass conceded that the company had done so at the expense of modernizing its inventory control systems. Working with Accenture Consulting, Nordstrom merged the inventories of all stores into a single view accessible by both customers and retail associates. Nordstrom stores now keep less stock on hand, and the chain draws praise from analysts for doing so in a challenging retail environment. Ask students to identify the specific ways in which the new inventory system is advantageous to Nordstorm, its customers, its employees and it other stakeholders.

Leaders on Leadership IDEO has built a business based on design thinking – an approach that brings diverse people into heated dialogue in the hopes of generating breakthrough ideas and creative solutions. Design

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thinking requires a certain kind of leader, so IDEO is careful in the selection process. They seek out individuals who are smart and willing to engage in collaborative work. IDEO promotes a “democracy of ideas.” It discourages formal titles, does not have a dress code, and encourages employees to move around, especially during mental blocks. Stimulating interactions are encouraged by making bikes available to go from building to building and by designing lobbies to foster movement between buildings. Designers are encouraged to talk to one another, in whatever forum possible, and experts commingle in offices that look like “cacophonous kindergarten classrooms.” Ask students what are the advantages and disadvantages of employing these methods of communication in an organization?

OB in Popular Culture In Season 6 of the Amazing race, contestants travel to Dakar, Senegal, to find the final resting place of a nationally famous poet. The stress of competition combined with the difficulties of a new culture cause problems for some of the teams. Some contestants see this task as a difficult almost impossible one, while others see the assignment as an adventure and/or an opportunity to learn new things. Ask students if they believe one must be culturally aware and be able to communicate globally in order to be successful in today’s business world? Is this necessary for all employees or just top executives?

Ethics in OB In the age of social networking, is there a clear line between your personal and professional life?

Today many companies are using the Internet to evaluate employees—both current and prospective. There are stories of employees who are fired or disciplines for things they say online about the company or for what they post to their Facebook pages. Most students will have a Facebook presence. Ask if they would be comfortable with a prospective employer viewing their photos. What message would their current Facebook page communicate about them?

Research Insight This breakout describes some research on employee voice, defined as “the discretionary provision of information intended to improve organizational functioning to someone inside an organization with the perceived authority to act, even though such information may challenge and upset the status quo of the organization and its powerholders.” In a study of leadership behaviors and employee voice, researchers found that leader positivity or personalized behavior is not enough to generate employee voice. Instead, if leaders are going to overcome employee restraint in speaking up, they need to indicate openness to change and willingness to act on input from below. Ask students if the findings are applicable to their work situations? Are the findings applicable in their classes?

Mastering Management This breakout describes how to use supportive communication principles. They include: focusing on the problem and not the person, being specific and descriptive, owning rather disowning the communication and matching the words with the body language.

Group Project In groups, have students discuss the best communication channel for the following messages and their reasons for choosing the channel.

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Messages to Convey: 1. An invitation to the company holiday party.

2. A correction on the time of the company holiday party.

3. A new executive employee has been hired.

4. An executive employee has been fired for misconduct.

5. A change in the dental plan.

6. A plan to change the company’s main product.

7. A plan to relocate the company.

8. The death of an employee.

9. New hours for all workers.

10. The reassignment of one division to a new location.

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Chapter 12 POWER AND POLITICS STUDY QUESTIONS 1.

2.

3.

4.

What are power and influence?

What are the key sources of power and influence?

What is empowerment?

What is organizational politics?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Faculty Empowerment Interview a Leader My Best Manager: Revisited Power Circles Managerial Assumptions Empowering Others Machiavellianism Personal Power Profile

CHAPTER OVERVIEW This chapter focuses on the topics of power and politics in organizations. Most of the chapter focuses on power and it implications. The chapter begins by defining power, and describing how power vested in managerial positions derives from three sources: rewards, punishments, and legitimacy (formal authority). Ways to build position power and personal power as well as using information and influence techniques are explained. The next section of the chapter covers power, obedience, and formal authority. The Milgram experiments on obedience are summarized and their implications for human behavior are outlined. The zone of indifference which defines the boundaries within which people in organizations let others influence their behavior is described.

The third section of the chapter discusses empowerment, the process through which managers help others acquire and use the power needed to make decisions that affect them and their work.

In the final section of the chapter, the related topic of organizational politics is discussed. Issues of political interpretation, political forecasting, subunit power, and politics and corporate strategy are examined. Organizational politics is depicted as a double-edged sword, and as being neither inherently good nor bad. The self-protection mechanisms that people use to shield themselves from politics are discussed; these mechanisms include avoidance, redirecting responsibility, and defending turf. This section of the chapter concludes with a discussion of politics and organizational governance that draws heavily on agency theory and resource dependency theory and emphasizes the role of ethics in organizational governance.

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CHAPTER OUTLINE WHAT ARE POWER AND INFLUENCE? Interdependence, Legitimacy, and Power Obedience Acceptance of Authority and the Zone of Indifference WHAT ARE THE KEY SOURCES OF POWER AND INFLUENCE? Position Power Personal Power Power and Influence Capacity Relational Influence Techniques WHAT IS EMPOWERMENT? Keys to Empowerment Power as an Expanding Pie From Empowerment to Valuing People WHAT IS ORGANIZATIONAL POLITICS? Traditions of Organizational Politics Politics of Self-Protection Politics and Governance

CHAPTER LECTURE NOTES The chapter opens with a description of how Twitter and social media have changed the face of politics. In the hours after its tenth presidential election, Iran shut down text messaging and severely crippled broadband Internet speeds within the country. Because of its worldwide visibility and small message size, Iranian social media users turned to Twitter and the hashtag # iranelection to share information about the election results and pursuant protests. The steady stream of Iranian tweets provided more information to the outsides world than CNN. POWER AND INFLUENCE Power is the ability to get someone to do something you want done or the ability to make things happen or get things done the way you want.

Influence is expressed by others’ behavioral response to the exercise of power.

INTERDEPENDENCE, LEGITIMACY, AND POWER The fate of every member of an organization is, in part, determined by the actions of all other members. All members of an organization are, to some degree, interdependent.

In today’s modern organization the pattern of interdependence, and thus the base for power and politics, rests on a system of authority and control. Organizations have societal backing to seek legitimate goals in legitimate ways.

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The unstated underpinning of legitimacy in most organizations is an implicit technical and moral order.

OBEDIENCE Milgram designed a series of experiments to determine the extent to which people obey the commands of an authority figure, even if they believe they are endangering the life of another person. Subjects were falsely told that the purpose of the experiment was to determine the effects of punishment on learning of word pairs. Subjects were instructed to give successively higher levels of electric shocks to people who missed the word pairs. Of course, the shocks were fictitious since the “learner” was an experimental confederate.

The experimental results revealed that 65 percent of the subjects subjected the “learner” to the maximum level of shock and the remaining 35 percent refused to obey the experimenter at various intermediate points.

The basic conclusion of Milgram’s studies is there is a tendency for individuals to comply with and be obedient to authority.

ACCEPTANCE OF AUTHORITYAND THE ZONE OF INDIFFERENCE Chester Barnard, suggested that in addition to obedience, compliance in organizations also stemmed from the “consent of the governed.” Barnard developed the concept of the acceptance of authority—the idea that some directives would naturally be followed while others would not. The basis of this acceptance view was the notion of an implicit contract between the individual and the firm, known as a psychological contract.

Acceptance of Authority In everyday organizational life, Barnard argued that subordinates accepted or followed a managerial directive only if four circumstances were met.

• The subordinate can and must understand the directive.

• The subordinate must feel mentally and physically capable of carrying out the directive.

• The subordinate must believe that the directive is not inconsistent with the purpose of the organization.

• The subordinate must believe that the directive is not inconsistent with his or her personal interests.

Zone of Indifference In exchange for certain inducements, subordinates recognize the authority of the organization and its managers to direct their behavior in certain ways (i.e., there is a “zone of indifference” in which directives are obeyed).

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

Figure 12.1 from the textbook shows a hypothetical psychological contract for a secretary.

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Research on ethical managerial behavior shows that supervisors can become sources of pressure for subordinates to do such things as support incorrect viewpoints, sign false documents, overlook the supervisor’s wrongdoing, and do business with the supervisor’s friends.

SOURCES OF POWER AND INFLUENCE POSITION POWER Position power derives from an individual’s position in the organizational hierarchy.

Six bases of power are associated with a manager’s position in the organization. These are legitimate, reward, coercive, process, information, and representative power.

1. Legitimate power, or formal hierarchical authority, is the extent to which a manager can use subordinates’ internalized values or beliefs that the boss has the “right of command” to control other people.

2. Reward power is the extent to which a manager can use extrinsic and intrinsic rewards to control other people.

3. Coercive power is the extent to which a manager can deny desired rewards and administer punishment to control other people.

4. Process power is the control over methods of production and analysis that a manager has due to being in a position to influence how inputs are transformed into outputs.

5. Information power is the access to and/or control of information.

6. Representative power is the formal right conferred by the firm to speak for a potentially important group composed of individuals across departments or outside the firm.

LECTURE ENHANCEMENT Ask the students if they have encountered any leaders who have had a truly significant impact on their lives. Have the students describe the types of power these leaders used and the impacts that were achieved.

PERSONAL POWER Personal power resides in the individual and is independent of that individual’s position.

Four bases of personal power are expertise, rational persuasion, reference, and coalitions.

1. Expert power is the ability to control another’s behavior through the possession of knowledge, experience, or judgment that the other person does not have but needs.

2. Rational persuasion is the ability to control another’s behavior because through an individual’s efforts the other person accepts the desirability of an offered goal and a reasonable way of achieving it.

3. Referent power is the ability to control another’s behavior because the person wants to identify with the power source.

4. Coalition power is the ability to control another’s behavior indirectly because the individual owes an obligation to you or another as part of a larger collective interest.

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POWER AND INFLUENCE CAPACITY Power-oriented behavior is action directed primarily at developing or using relationships in which other people are willing to defer to one’s wishes.

Figure 12.2 from the textbook shows three basic dimensions of managerial power and influence ⎯ downward, upward, and lateral ⎯ and how each is achieved.

• Personal power is used to achieve upward influence.

• Personal power is used to achieve lateral influence.

• Position power and personal power are used to achieve downward influence.

The effective manager is one who succeeds in building and maintaining high levels of both position and personal power.

Building Position Power Position power can be enhanced when a manager is able to demonstrate to others that their work unit is highly relevant to organizational goals, called centrality, and is able to respond to urgent organizational need, called criticality.

Position power can be enhanced: • Managers may seek to acquire a more central role in the workflow by having information filtered through them, making at least part of their job responsibilities unique, and expanding their network of communication contacts.

• When managers attempt to increase the relevance of their tasks and those of their unit to the organization to add criticality.

• Managers may attempt to build position power by defining tasks so that they are difficult to evaluate; in turn this will have a negative effect on the organization: Building Personal Power Personal power arises from the individual characteristics of the manager. Three personal characteristics—expertise, political savvy, and likeability—have potential for enhancing personal power in an organization: 1. Building expertise: Additional expertise may be gained by advanced training and education, participation in professional associations, and involvement in the early stages of projects.

2. Political savvy: Better ways to negotiate, persuade individuals, and understand the goals and means they are most willing to accept 3. Likeability: Creates personal appeal in relationships with other people. These include pleasant personality traits, agreeable behavior patterns, and attractive appearance Building Influence Capacity One of the ways managers build influence capacity is by taking steps to increase their visibilities.

This is done by: 1. Expanding the number of contacts they have with senior people 2. Making oral presentations of written work 3. Participating in problem-solving task forces 4. Sending out notices of accomplishments

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5. Seeking additional opportunities to increase personal name recognition.

Most managers also recognize that, between superiors and subordinates, access to or control over information is an important element.

Expert power is often relational and embedded within the organizational context. By developing and using coalitions and networks, an individual may build on his or her expert power.

Managers can also build influence capacity by controlling, or at least attempting to control, decision premises. A decision premise is a basis for defining the problem and selecting among alternatives.

RELATIONAL INFLUENCE TECHNIQUES Using position and personal power successfully to achieve the desired influence over other people is a challenge for most managers. Practically speaking, there are many useful ways of exercising relational influence. The most common techniques involve: Reason: Using facts and data to support a logical argument.

Friendliness: Using flattery, goodwill, and favorable impressions.

Coalition: Using relationships with other people for support.

Bargaining: Using the exchange of benefits as a basis for negotiation.

Assertiveness: Using a direct and forceful personal approach.

Higher authority: Gaining higher-level support for one’s requests.

Sanctions: Using organizationally derived rewards and punishments.

Truly effective managers are able to influence their bosses as well as their subordinates, but little empirical research is available to document how to best exercise upward influence.

EMPOWERMENT Empowerment is the process by which managers help others to acquire and use the power needed to make decisions affecting themselves and their work. The concept of empowerment is part of the sweeping change being witnessed in today’s corporations. Empowerment provides the foundation for self-managing work teams and other employee involvement groups.

KEYS TO EMPOWERMENT Empowerment emphasizes the ability to make things happen. Power is still relational, but in terms of problems and opportunities, not individuals.

Changing Position Power When an organization attempts to move power down the hierarchy, it must also alter the existing pattern of position power. Changing this pattern raises the following important questions: 1. Can “empowered” individuals give rewards and sanctions based on task accomplishment?

2. Has their new right to act been legitimized with formal authority?

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Enhancing Personal Power There is also a very personal aspect to empowerment that goes far beyond the reallocation of position power to involve personal power.

To be empowered individuals need to believe that their jobs are (1) meaningful to them and consistent with their values, (2) call for them to use their competence, (3) allow for discretion and (4) have an impact. If one of these is missing an individual may not feel empowered.

LECTURE ENHANCEMENT Max DePree, the chairperson of Herman Miller, Inc., a Michigan-based office furniture maker provides an excellent example of empowering workers through the practice of leadership. In his book, Leadership is an Art, DePree, who is the son of the firm’s founder, outlines a leadership style based on respect for others and diversity. Respect of this nature ensures that the organization can benefit from everyone’s contributions. DePree also emphasizes the difference between “hierarchical” and “roving” leadership. His point? Often it is the roving, or informal leader, who really counts. What does the hierarchical leader do? If he/she is smart, this person –– or manager –– “supports” the roving leader and helps him or her lead. DePree says: “Roving leadership is the expression of the ability of hierarchical leaders to permit others to share ownership of problems – – to take possession of the situation.”

An example of how “roving,” “lateral,” and “bottom-up” leadership works at Herman Miller is provided by research manager Bill Foley’s decision to forbid the use of rosewood and Honduran mahogany in one of the firm’s hallmark products –– the $2,000 plus Eames chair, because use of these woods contributed to the destruction of the rainforests. While his decision lead to considerable debate, it ultimately was supported. Foley claims the company’s strong ethics and commitment to participatory management helped him feel empowered to make the decision.

Herman Miller’s success at capitalizing on these strengths is apparent from its ranking as one of Fortune magazine’s “most admired” American corporations.

POWER AS AN EXPANDING PIE Along with empowerment, employees need to be trained to expand their power and their new influence potential. The key is to change the concept of power within the organization from a view that stresses power over others to one that emphasizes the use of power to get things done.

A clearer definition of roles and responsibilities may help managers empower others.

Empowerment means that all mangers need to emphasize different ways of exercising influence.

Special support may be needed for individuals so that they become comfortable in developing their own power over events and activities.

FROM EMPOWERMENT TO VALUING PEOPLE Jeffery Pfeffer suggests that firms place employees at the center of their strategy by developing the following characteristics: • Develop employment security for a selectively recruited workforce.

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• • • •

Pay high wages with incentive pay and the potential for employee ownership.

Encourage information sharing and participation with an emphasis on self-managed teams.

Emphasize training and skill development with cross use of talent and cross training.

Pursue egalitarianism (at least symbolically) with little pay compression across units and extensive internal promotion.

ORGANIZATIONAL POLITICS TRADITIONS OF ORGANIZATIONAL POLITICS There are two quite different traditions in the analysis of organizational politics: one that focuses on politics in terms of self-interest and the use of nonsanctioned means, and the other that treats politics as a necessary function resulting from differences in the self-interests of individuals.

1. The tradition of self-interest and the use of nonsanctioned means. This tradition builds on the philosophy outlined in Machiavelli’s The Prince. In this tradition, organizational politics is the management of influence to obtain ends not sanctioned by the organization or to obtain sanctioned ends through nonsanctioned influence means.

2. The tradition that treats politics as a necessary function resulting from differences in the selfinterests of individuals. In this tradition, organizational politics is viewed as the art of creative compromise among competing interests. Politics arise because individuals and organizations need to develop compromises, avoid confrontation, and live together.

Organizational politics involves the use of power to develop socially acceptable means and ends that balance individual and collective interests.

Political Interpretation The two different traditions of organizational politics are reflected in the ways executives describe their effects on managers and their organizations.

In one survey, 53 percent of those interviewed indicated that organizational politics enhanced the achievement of organizational goals and survival, while 44 percent suggested that it distracted individuals from organizational goals. In this same survey, 60 percent of respondents suggested that organizational politics was good for career advancement, whereas 39 percent reported that it led to a loss of power, position, and credibility.

Organizational politics serve important functions, including overcoming personnel inadequacies, coping with change, and substituting for formal authority. It also can identify problems and move ambitious, problem-solving managers into action.

Political Forecasting Managers may gain a better understanding of political behavior to forecast future actions by placing themselves in the position of other persons involved in critical decisions or events.

Figure 12.3 from the textbook provides an example of using a payoff matrix for political forecasting.

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Subunit Power Units that directly contribute to organizational goals are typically more powerful than units that provide advice or assistance. Units toward the top of the organizational hierarchy are often more powerful than those toward the bottom. Power differentials are not as pronounced among units at or near the same level in an organization.

Five of the more typical lateral, intergroup relations a manager may engage with are: • Workflow linkages involve contacts with units that precede or follow in a sequential production chain.

• Service ties involve contacts with units established to help with problems.

Advisory connections involve formal staff units having special expertise • Auditing linkages involve units that have the right to evaluate the actions of others after action has been taken • Approval linkages involve units whose approval must be obtained before action may be taken.

POLITICS OF SELF-PROTECTION While organizational politics may be helpful to the organization as a whole, it is probably more commonly known and better understood in terms of self-protection.

LECTURE ENHANCEMENT Ask the students to provide examples of how they have protected themselves in interpersonal, group, and organizational settings. Relate these examples to the following lecture material on the politics of self-protection.

Individuals can utilize three common strategies to protect themselves: avoiding action and risk taking, redirecting accountability and responsibility, or defending their turf.

Avoidance Avoidance is quite common in controversial areas where the employee must risk being wrong or where actions may yield a sanction. Common avoidance approaches are working to the rules, playing dumb, depersonalization, and routine stalling.

Redirecting Responsibility Politically sensitive individuals will also protect themselves from accepting blame for the negative consequences of their actions. Common approaches for redirecting responsibility include the following: • Passing the buck ⎯ defining the task in such a way that it becomes someone else’s formal responsibility.

• Buffing (or rigorous documentation) ⎯ taking action only when all the paperwork is in place and it is clear that they are merely following procedure.

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• •

Preparing a blind memo ⎯ taking action but drafting a memo that explains an objection to the implemented action.

Rewriting history ⎯ claiming to be an early supporter of something that turns out to be successful, or one who had initial reservations if a programs fails.

Redirecting techniques for those who are really devious: • Scapegoating ⎯ blaming the problem on someone or some group that has difficulty engaging in self-defense.

• Blaming the problem on uncontrollable events.

• Escalating commitment to a losing course of action.

Defending Turf Defending Turf is a time-honored tradition in most large organizations. Defending turf results when: • Managers seek to increase their power by expanding the jobs their groups perform.

• Competing interests exist among various departments and groups.

POLITICS AND GOVERNANCE Agency Theory Agency Theory reflects the notion that managers are “agents” of the owners and suggests that public corporation can function effectively even though its managers are self-interested and do not automatically bear the full consequences of their managerial actions. The key arguments of agency theory are the following: • By protecting stockholder interests, all the interests of society are served.

• Stockholders have a clear interest in greater returns.

• Managers are self-interested and unwilling to sacrifice these self-interests for others (particularly stockholders) and must be controlled.

Types of controls that are instituted for agents include the following: • Pay plan incentives that align the interests of management and stockholders.

• The establishment of a strong, independent board of directors.

• Stockholders with a large stake in the firm taking an active role on the board.

Resource Dependencies Executive behavior can sometimes be explained in terms of resource dependencies ⎯ the firm’s need for resources that are controlled by others. The resource dependence of an organization increases as: • Needed resources become more scarce.

• Outsiders have more control over needed resources.

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

One political role of the chief executive is to develop workable compromises among the competing resource dependencies facing the organization.

Strategies that alter the firm’s degree of resource dependence include the following:

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• •

Mergers and acquisitions to exercise control over key resources.

Changing the “rules of the game” to secure protection from powerful outsiders.

International competition has narrowed the range of options for chief executives.

Organizational Governance Organizational governance refers to the pattern of authority, influence, and acceptable managerial behavior established at the top of an organization. Organizational governance establishes what is important, how issues will be defined, who should and should not be involved in key choices, and the boundaries for acceptable implementation.

Analysis of organizational governance builds on resource dependence and suggests that a dominant coalition comprised of powerful organizational actors is a key to understanding a firm’s governance. Through the governance system, the dominant coalition attempts to define organizational reality. While organizational governance was an internal and rather private matter in the past, it is now becoming more public and openly controversial.

LECTURE ENHANCEMENT An excellent site on corporate governance is available online at http://www.corpgov.net/. The site explains compelling issues pertaining to corporate governance in the United States in a crisp and fairly short narrative.

CHAPTER STUDY GUIDE What are power and influence?

• Power is the ability to get someone else to do what you want him or her to do.

• Power vested in managerial positions derives from three sources: rewards, punishments, and legitimacy (formal authority).

• Influence is what you have when you exercise power.

• Position power is formal authority based on the manager’s position in the hierarchy.

• Personal power is based on one’s expertise and referent capabilities.

• Managers can pursue various ways of acquiring both position and personal power.

• Managers can also become skilled at using various techniques—such as reason, friendliness, ingratiation, and bargaining—to influence superiors, peers, and subordinates.

What are the key sources of power and influence?

• Individuals are socialized to accept power (the potential to control the behavior of others) and formal authority (the potential to exert such control through the legitimacy of a managerial position).

• The Milgram experiments illustrate that people have a tendency to obey directives coming from others who appear powerful and authoritative.

• Power and authority work only if the individual “accepts” them as legitimate.

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•

The zone of indifference defines the boundaries within which people in organizations let others influence their behavior.

What is empowerment?

• Empowerment is the process through which managers help others acquire and use the power needed to make decisions that affect them and their work.

• Clear delegation of authority, integrated planning, and the involvement of senior management are all important to implementing empowerment.

• Empowerment emphasizes power as the ability to get things done rather than the ability to get others to do what you want.

What is organizational politics?

• Politics involves the use of power to obtain ends not officially sanctioned; it also involves the use of power to find ways of balancing individual and collective interests in otherwise difficult circumstances.

• For the manager, politics often occurs in decision situations when the interests of another manager or individual must be reconciled with one’s own.

• For managers, politics also involves subunits that jockey for power and advantageous positions vis-à-vis one another.

• The politics of self-protection involves efforts to avoid accountability, redirect responsibility, and defend one’s turf.

• Although some suggest that executives are agents of the owners, politics also comes into play as resource dependencies with external environmental elements must be strategically managed.

• Organizational governance is the pattern of authority, influence, and acceptable managerial behavior established at the top of the organization.

• CEOs and managers can develop an ethical organizational governance system that is free from rationalizations.

KEY TERMS Agency theory: reflects the notion that managers are “agents” of the owners and suggests that public corporations can function effectively even though its managers are self-interested and do not automatically bear the full consequences of their managerial actions.

Coalition power: the ability to control another’s behavior indirectly because the individual owes an obligation to you or another as part of a larger collective interest.

Coercive power: the extent to which a manager can deny desired rewards and administer punishment to control other people.

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

Expert power: the ability to control another’s behavior through the possession of knowledge, experience, or judgment that the other person does not have but needs.

Influence: is expressed by others’ behavioral responses to the exercise of power.

Information power: the access to and/or control of information.

Legitimate power: the extent to which a manager can use subordinates’ internalized values or beliefs that the boss has the “right of command” to control other people.

Organizational governance: the pattern of authority, influence, and acceptable managerial behavior established at the top of an organization.

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Organizational politics: one view of organizational politics is the management of influence to obtain ends not sanctioned by the organization or to obtain sanctioned ends through nonsanctioned influence means; an alternate view of organizational politics is that it is the art of creative compromise among competing interests.

Political savvy: is knowing how to negotiate, persuade, and deal with people regarding goals they will accept.

Power: the ability to get someone to do something you want done or the ability to make things happen or get things done the way you want.

Power-oriented behavior: is action directed primarily at developing or using relationships in which other people are willing to defer to one’s wishes.

Process power: the control over methods of production and analysis.

Psychological contract: is an unwritten set of expectations about a person’s exchange of inducements and contributions with an organization.

Rational persuasion: the ability to control another’s behavior because through an individual’s efforts the other person accepts the desirability of an offered goal and a reasonable way of achieving it.

Referent power: the ability to control another’s behavior because the person wants to identify with the power source.

Representative power: the formal right conferred by the firm to speak for a potentially important group composed of individuals across departments or outside the firm.

Reward power: the extent to which a manager can use extrinsic and intrinsic rewards to control other people.

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

SPECIAL FEATURES Tweets Heard ‘Round The World In the hours after its tenth presidential election, Iran shut down text messaging and severely crippled broadband Internet speeds within the country. Because of its worldwide visibility and small message size, Iranian social media users turned to Twitter and the hashtag # iranelection to share information about the election results and pursuant protests. The steady stream of Iranian tweets provided more information to the outsides world than CNN. The preceding story details how social media has changed how political crises are reported and handled in today’s environment. Ask students what other areas have social media changed in the last ten years or so? Have these changes been for the better? Let students debate that last question.

Ethics in OB Telemarketers are often required to read a script that includes less than honest statement. If they read the script, they are given a bonus. If they depart from the script no bonus is given, thereby encouraging the employee to act in a way that may be considered unethical. Ask students what they would do in such a situation? Ask students further if they were ever asked at work or any other settings to engage in unethical behavior by an authority figure (supervisor, coach)? Give the students a chance to describe and how they reacted when they were asked to engage in such behavior.

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Leaders on Leadership In the movie, Invictus, Nelson Mandela used his personal and position powers as President of South Africa to transform a whole society using a rugby team. After being imprisoned from 1964 to 1990, Nelson Mandel becomes president in 1994. At the time, the nation is split. While the South African blacks hate the national rugby team and see them as a symbol of white power and dominance, the team – the Springboks – are beloved by the whites. Mandela reaches across the divide to support the Springboks in their attempt to win an international title when they host the 1995 Rugby World Cup. Ask students what about Nelson Mandela actions helped to heal the differences between whites and blacks in South Africa? Further have students identify other leaders who have set aside their own personal feelings and engaged in behavior that was for the greater good of many people.

Mastering Management This breakout describes ways to hone political skills. Ask students how they can use their college experiences (clubs, events, classes, etc.) to build these skills. Can they practice these skills now?

OB in Popular Culture In Spanglish, John Clasky (Adam Sandler) is an exceptional chef with an exclusive restaurant in California. His assistants Pietro and Gwen are always trying to impress him. Gwen is political, agreeing with and praising the boss and always willing to do favors. Pietro is equally political, just in a more cunning fashion. He controls the actions of others and uses his own cooking skills to make himself invaluable to the boss. What we see in both cases are employees who want to be viewed favorably by the boss. While there is nothing wrong with that, the actions should not keep employees from completing legitimate job responsibilities or mask performance deficiencies. If they do, they represent bad political behaviors. Ask students if they ever engaged in political behavior at work/saw others engage in political behavior? Ask them further to describe such behavior and state whether the behavior was viewed favorably/unfavorably by their manager.

Research Insight Less than 16 percent of board members in major U.S. corporations are female. Ask students why they believe women are so underrepresented on boards? How can women increase their representation on boards? If a board was all female would this be a problem? If it were all male, would this be a problem?

Group Project Outside of class, have students read the article “The Power in Being a People Developer” (HRMagazine, July 2002, Vol. 47, No. 7). The article outlines how developing others helps a manager gain power. It also describes the “downside” of developing others. Break the class into small groups. Have some groups apply the chapter section on power and influence while others apply the chapter section on organizational politics. Ask students if the approaches on power and politics would say the same about the reasons to be a people developer and the reasons NOT to be a people developer?

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Chapter 13 LEADERSHIP ESSENTIALS STUDY QUESTIONS

1.

2.

3.

4.

What is leadership?

What is situational contingency leadership?

What are follower-centered approaches to leadership?

What are inspirational and relational leadership perspectives?

OB IN ACTION

Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

The New Vice President Southwest Airlines Interview a Leader Leadership Skills Inventories Leadership and Participation Student Leadership Practices Inventory Least-Preferred Co-worker Scale Leadership Style “TT” Leadership

CHAPTER OVERVIEW This chapter discusses the vital role of leadership in business organizations. The chapter begins by discussing the differences between managers and leaders, and draws attention to the unique attributes of leaders. The chapter next discusses the trait and behavioral approaches to leadership.

Traits that have positive implications for successful leadership are identified within the context of the trait approach. Under the umbrella of the behavioral approach, the Michigan Studies, the Ohio State Studies, the leadership grid, and Graen’s Leader-Member Exchange Theory are discussed.

The situational contingency theories are also discussed, including Fiedler’s contingency theory, House’s path-goal theory, Hersey and Blanchard’s situational leadership theory, Graen’s leadermember exchange theory, and substitutes for leadership theory. The situational contingency models build on leader behavior theory and research., by emphasizing the circumstances under which different leader behaviors seem to be most effective. The chapter also explores implicit leadership approaches through attribution theory and the inferential perspective. It also considers the representative perspective. The chapter concludes with a discussion of charismatic, transformational, and transactional leaders and the emerging issues regarding charismatic, transformational, and transactional leadership.

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CHAPTER OUTLINE WHAT IS LEADERSHIP? Managers versus Leaders Trait Leadership Perspectives Behavioral Leadership Perspectives WHAT IS SITUATIONAL CONTINGENCY LEADERSHIP? Fiedler’s Leadership Contingency View Path-Goal View of Leadership Hersey and Blanchard’s Situational Leadership Model Substitutes for Leadership FOLLOWER_CENTERED APPROACHES Implicit Leadership Theories (ILTs) Implicit Followership Theories (IFTs) WHAT ARE INSPIRATIONAL AND RELATIONAL LEADERSHIP PERSPECTIVES? Charismatic Leadership Transactional and Transformational Leadership Leader Member Exchange Theory

CHAPTER LECTURE NOTES The chapter opens with a description of Zappos’ CEO – Tony Hsieh - rise to the top, and the innovative methods of sharing the company’s “secrets” to success. In addition to free tours of their Las Vegas headquarters, Zappos now offers one- and two-day seminars. Attendees immerse themselves in Zappos’s culture, which CEO Tony Hsieh believes is inseparable from the company’s success. Attendees have unprecedented one-on-one access to Zappos executives and managers, all of who are happy to espouse the customer- and employee-centric policies that increase profits and retain employees year after year. While the project is in its infancy, Hsieh hopes to develop Zappos’s management consulting business into a venture that earns 10% of annual profits.

LEADERSHIP MANAGERS VERSUS LEADERS The role of management is to promote stability or to enable the organization to run smoothly. The role of leadership is to promote adaptive or useful changes. Persons in managerial positions can be involved with both management and leadership activities. Both management and leadership are needed in an organization.

Leadership is the process of influencing others and the process of facilitating individual and collective efforts to accomplish shared objectives. Leadership appears in two forms: 1. Formal leadership, which is exerted by persons appointed to or elected to positions of formal authority in organizations.

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2. Informal leadership, which is exerted by persons who become influential because they have special skills that meet the resource needs of others.

Although both types are important in organizations, this chapter will emphasize formal leadership.

TRAIT LEADERSHIP PERSPECTIVES Trait theories Trait perspectives assume that traits play a central role in differentiating between leaders and nonleaders or in predicting leader or organizational outcomes. The great person-trait approach reflects this leader and non-leader difference and is the earliest approach in studying leadership, having been introduced more than a century ago.

According to Figure 13.1 in the textbook, the following traits have positive implications for successful leadership: • Energy and adjustment or stress tolerance.

• Prosocial power motivations.

• Achievement orientation.

• Emotional maturity.

• Self-confidence.

• Integrity.

• Perseverance or tenacity.

• Cognitive ability, intelligence, social intelligence.

• Task-relevant knowledge.

• Flexibility.

LECTURE ENHANCEMENT One way to demonstrate to students the objectives as well as the shortcomings of the trait approach to leadership is to ask them to identify the traits of effective leaders. You can do this by asking a generic question such as “What are the traits of effective leaders?” and then recording their responses. Alternatively, you could provide more direction and distinguish between physical and personality traits by respectively asking, “What do leaders look like?” and “What personality characteristics do leaders typically possess?” If you use the former approach, you may want to record separately the physical and personality traits the students identify. Once a reasonable number of traits are listed, you can review them and cross out physical traits such as tall, strong, and good-looking, which have not been substantiated by research. You can also note that while the leadership traits of drive, desire to lead, motivation, honesty and integrity, self-confidence, intelligence, knowledge, and flexibility are seen as desirable, researchers have not found a definitive, universal profile of leadership traits.

BEHAVIORAL LEADERSHIP PERSPECTIVES The behavioral perspective assumes that leaders’ behaviors are central to performance and other outcomes. Instead of dealing with underlying traits, behaviors are considered.

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Michigan Studies The Michigan studies identified two basic forms of leader behaviors: employee centered and production centered.

• Employee-centered supervisors are those who place strong emphasis on their subordinates’ welfare.

• Production-centered supervisors are more concerned with getting the work done.

Employee-centered supervisors were found to have more productive work groups than did the production-centered supervisors. Employee-centered behaviors and production-centered behaviors may be conceptualized as anchoring opposite ends of a continuum. Employee-centered behaviors are also known as human relations oriented behaviors and production-centered behaviors are labeled task oriented behaviors.

Ohio State Studies The Ohio State Studies identified two leader behavior dimensions similar to those found in the Michigan studies: consideration and initiating structure.

• Consideration refers to the extent to which a leader is sensitive to people’s feelings and tries to make things pleasant for his or her followers. A leader high in consideration is similar to the employee-centered supervisor.

• Initiating structure refers to the extent to which a leader is concerned with defining task requirements and other aspects of the work agenda. A leader high in initiating structure is similar to the production-centered supervisor, To have highly satisfied and better performing subordinates, leaders should be high on both consideration and initiating structure behaviors, a dual emphasis that is reflected in the leadership grid approach.

The Leadership Grid Robert Blake and Jane Mouton have developed the leadership grid approach wherein leadership is plotted on a 9 x 9 grid that identifies the following key styles: • 1/1 reflecting a low concern for production and a low concern for people is called “impoverished management.”

• 1/9 reflecting a low concern for production and a high concern for people is called “country club management.”

• 9/1 reflecting a high concern for production and a low concern for people is called “task management.”

• 5/5 reflecting a moderate concern for production and a moderate concern for people is called “middle of the road management.”

• 9/9 reflecting a high concern for production and a high concern for people is called “team management.”

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LECTURE ENHANCEMENT Divide the class into groups of five or six students. Assign each group one of the above five leadership styles from the Blake and Mouton grid. In a six to eight minute period, have each group come up with as many examples of its assigned style as possible, giving particular attention to describing the leaders’ actual behaviors. Have each group report out two or three examples to the class.

CROSS-CULTURAL IMPLICATIONS It is important to consider how well the kinds of behavioral dimensions discussed earlier transfer internationally. Research indicates that the behaviors must be carried out in different ways in alternative cultures.

The concept seems to transfer across boundaries but the actual behaviors differ. For instance, British leaders are seen as considerate if they show subordinates how to use equipment, whereas in Japan the highly considerate leader helps subordinates with personal problems.

SITUATIONAL CONTINGENCY LEADERSHIP The trait and behavioral perspectives assume that leadership, by itself, has a strong impact on outcomes. Leader traits and behaviors can act in conjunction with situational contingencies to predict outcomes. The effects of traits are enhanced by their relevance to the leader’s situational contingencies.

Prosocial power motivation, or power oriented toward benefiting others, is likely to be most important in situations where decision implementation requires lots of persuasion and social influence. “Strong” or “weak” situations also make a difference.

FIEDLER’S LEADERSHIP CONTINGENCY VIEW Fred Fiedler’s situational contingency theory holds that group effectiveness depends on an appropriate match between a leader’s style (essentially a trait measure) and the demands of the situation. Fiedler considers situational control ⎯ the extent to which a leader can determine what his or her group is going to do ⎯ to be the primary contingency factor in determining the effectiveness of leader behavior.

Fiedler uses an instrument called the least preferred co-worker (LPC) scale to measure a person’s leadership style. Respondents are asked to describe the person with whom they have been able to work least well—their least preferred coworker, or LPC. High-LPC leaders (those describing their LPC very positively) have a relationship-motivated style, whereas low-LPC leaders (those describing their LPC negatively) have a task-motivated style.

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Figure 13.2 from the text shows the task-motivated leader achieves greater group effectiveness under conditions of high and low situational control, whereas the relationship-motivated leader has a more effective group under a moderate-control situation.

Situational control reflects a combination of the following three variables: • Leader-member relations (good versus poor), which captures membership support for the leader.

• Task structure (high versus low), which spells out the leader’s task goals, procedures, and guidelines for the group.

• Position power (strong versus weak), which describes the leader’s task expertise and reward or punishment authority.

In leader match training, leaders are trained to diagnose the situation to match their high and low LPC scores with situational control.

Fiedler’s Cognitive Resource Perspective Cognitive resource theory specifies that a leader’s use of directive or nondirective behavior depends on the following situational contingencies: • The leader’s or subordinate group members’ ability or competency.

• Stress.

• Experience.

• Group support of the leader.

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

Evaluation and Application The biggest controversy regarding Fiedler’s contingency approach concerns exactly what the LPC instrument measures. Additional controversy concerns the interpretation of the relationship between situational control and leader motivations.

Leader match training applies Fiedler’s contingency theory by training leaders to diagnose the situation to match their high or low LPC scores with situational control.

PATH-GOAL VIEW OF LEADERSHIP Path-goal theory is rooted in the expectancy model of motivation (see Chapter 6).

House’s path-goal theory of leadership focuses on how a leader influences subordinates’ perceptions of both work goals and personal goals and the links, or paths, found between these two sets of goals. Performance should improve when the leader clarifies the effort-performance (or expectancy) paths and the performance-reward (or instrumentality) paths.

Figure 13.3 in the textbook summarizes the major path-goal relationships in House’s leadership approach. The figure identifies four types of leader factors, two categories of contingency factors and three subordinate outcomes.

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Leadership Factors • Directive leadership spells out the what and how of subordinates’ tasks. It is similar to initiating structure.

• Supportive leadership focuses on subordinate needs and well-being and promoting a friendly work climate. It is similar to consideration.

• Achievement-oriented leadership emphasizes setting challenging goals, stressing excellence in performance, and showing confidence in the group members’ abilities to achieve high standards of performance.

• Participative leadership focuses on consulting with subordinates and seeking and taking their suggestions into account before making decisions.

Contingency Factors • Subordinate attributes: authoritarianism (close-mindedness, rigidity), internal-external orientation (i.e., locus of control), and ability.

• Work-setting attributes: the nature of the subordinates’ tasks (task structure), the formal authority system and the primary workgroup.

Subordinate Outcomes • Job satisfaction: Job leads to valued rewards • Acceptance of leader: Leader leads to valued rewards • Motivational Behavior: Expectancy that effort leads to performance • Instrumentality that such performance is the path to valued rewards Predictions from Path-Goal Theory • • • •

Directive leadership will have a positive impact on subordinates when tasks are ambiguous and the opposite effect when tasks are clear.

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

Achievement-oriented leadership will encourage subordinates to strive for higher performance standards and to have more confidence in their ability to meet challenging goals when subordinates are working at ambiguous, nonrepetitive tasks.

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

Evaluation and Application While path-goal theory has been in existence for about 30 years, many aspects of it have not been tested adequately.

Possible applications of path-goal theory include the following: • Training could be used to change leadership behavior to fit the situational contingencies.

• The leader could be taught to diagnose the situation and to learn how to change the contingencies.

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LECTURE ENHANCEMENT Ask students if they have ever had a leader who exhibited path-goal characteristics to improve their (the student’s) performance? Allow the student to describe in detail what the leader did, highlighting how the leader exhibited the path-goal characteristics.

HERSEY AND BLANCHARD’S SITUATIONAL LEADERSHIP MODEL This model focuses on the situational contingency of maturity, or “readiness,” of followers.

Readiness refers to the extent to which people have the ability and willingness to accomplish a specific task. A leader should adjust his/her leadership style based on the degree of readiness of the followers

LECTURE ENHANCEMENT Hersey and Blanchard’s four levels of follower readiness can be compared to student classifications on a high school or college sports team. Freshmen are essentially low readiness subordinates who require a telling style of leadership. Sophomores are willing to assume more responsibility, but lack some of the skills; they respond well to a selling style. Juniors are able to handle more responsibility, but may lack confidence; they respond well to a participating style.

Finally, since seniors are able, willing, and confident, they respond best to the delegating style.

Figure 13.4 from the textbook depicts the Hersey and Blanchard model and shows how four different leadership styles are related to follower readiness.

• A telling style (i.e., high emphasis on task behavior and low emphasis on relationship behavior) is best for low follower readiness (i.e., unable and unwilling or insecure).

• A selling style (i.e., high emphasis on task behavior and high emphasis on relationship behavior) is best for moderately low follower readiness (i.e., unable but willing or confident).

• A participating style (i.e., low emphasis on task behavior and high emphasis on relationship behavior) is best for moderately high follower readiness (i.e., able but unwilling or insecure).

• A delegating style (i.e., low emphasis on task behavior and low emphasis on relationship behavior) is best for high follower readiness (i.e., able and willing or confident).

The Hersey-Blanchard situational leadership model requires the leader to develop the capability to diagnose situational demands and then chose and implement the appropriate leadership response.

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LECTURE ENHANCEMENT Compare and contrast the three major situational contingency theories discussed above using the following table. Point out that while Fiedler argues that it’s hard for leaders to change their style, the other theorists recommend that leaders should be flexible in adjusting their styles to match the situation. Therefore, the theory that works best for a particular individual may depend upon the extent to which he or she is capable of changing styles.

CONTINGENCY THEORIES Comparison Points

Fiedler's Approach

House's Approach

Hersey and Blanchard's Approach

Concern

Situational Control

Situational Attributes

Situational Attributes

Diagnostic Focus

Task Structure, Position Power, Leader-member Relations

Subordinate Characteristics, Task Demands

Follower Readiness

Leadership Styles

Task-motivated, Relationshipmotivated

Directive, Supportive, Participative, AchievementOriented

Telling, Selling, Participating, Delegating

Managerial Implications

Effective leader matches style with situation

Effective leader chooses style to complement situational attributes

Effective leader chooses style to complement situational attributes

SUBSTITUTES FOR LEADERSHIP The substitutes for leadership theory argues that sometimes hierarchical leadership makes essentially no difference. Substitutes for leadership make a leader’s influence either unnecessary or redundant in that they replace the leader’s influence. Some examples of these variables are shown in Figure 13.5.

Romance of leadership is where people attribute romantic, almost magical, qualities to leadership.

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FOLLOWER –CENTERED APPROACHES Until very recently, issues of followership have been largely ignored in leadership research. As discussed below, this issue is addressed in cognitive approaches to leadership, but is also becoming its own field of study in newly emerging work on followership.

IMPLICIT LEADERSHUP THEIORIES (ILTs)

In the mid-1970s, Dov Eden and Uri Leviatan wrote an article in which they concluded that “leadership factors are in the mind of the respondent.” This radical idea sparked what is known as the cognitive revolution in leadership, in which researchers recognized that if leadership resides in the minds of followers then it is imperative to discover what followers are thinking.

Leadership Categorization Theory According to this theory, individuals naturally classify people as leaders (or not) using implicit leadership theories.

Implicit leadership theories are preconceived notions about the attributes (e.g., traits and behaviors) associated with leaders. They reflect the structure and content of “cognitive categories” used to distinguish leaders from nonleaders. These attributes, or leadership prototypes, are a mental image of the characteristics that make a “good” leader, or that a “real” leader would possess to be considered effective in a given situation. To make this categorization, individuals engage in a two-stage matching process.

Table 13.1 in the textbook shows the relevant prototypes, which are first activated and the target person is compared with the prototype. The target person is then categorized as a leader (or not) depending on the degree of fit with the prototype.

IMPLICIT FOLLOWERSHIP THEORIES (IFTs) Followership is defined as the behaviors of individuals acting in relation to leaders. To understand these behaviors, researchers are investigating whether there is an association between followers’ implicit theories and the nature of their interactions with leaders.

Followership Categorization Theory Dr. Thomas Sy developed a measure of implicit followership theory (IFT) that we can refer to as followership categorization theory. Again using the concept of implicit theories, this research gathered prototypical behavior of followers as described by leaders.

Table 13.2, shows an 18-item implicit followership theory (IFT) scale that contains two main factors: followership prototype and followership antiprototype. Followership prototype consists of factors associated with good followers, including being “industrious,” having enthusiasm and being a good organizational citizen. Followership antiprototype consists of behaviors associated with ineffective followership, including conformity, insubordination, and incompetence.

The Social Construction of Followership

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According to social construction approaches, individual behavior is “constructed” in context, as people act and interact in situations. Social constructions are influenced by two things: the individuals’ implicit theories about how they should act, and the nature of the situation in which they find themselves.

Using a social construction approach to the study of followership, Carsten and colleagues found that followers tend to act in different ways according to their beliefs and the context. Some followers hold passive beliefs, viewing their roles in the classic sense of following—as passive, deferent and obedient to authority (i.e., a passive IFT). Others hold proactive beliefs, viewing their role as expressing opinions, taking initiative, and constructively questioning and challenging leaders (i.e., a proactive IFT).

INSPIRATIONAL AND RELATIONAL LEADERSHIP PERSPECTIVES CHARISMATIC LEADERSHIP Charismatic leaders are those who, by force of their personal abilities, are capable of having a profound and extraordinary effect on followers. Charismatic leaders are high in the need for power and have high feelings of self-efficacy and conviction in the moral rightness of their beliefs. The negative (or dark) side of charismatic leadership emphasizes personalized power that serves the leader’s personal interests, whereas the positive (or bright) side emphasizes socialized power that tends to empower the followers.

Conger and Kanungo’s three-stage charismatic leadership model.

Stage 1: the leader critically evaluates the status quo.

Stage 2: the leader formulates and articulates the goals along with an idealized future vision.

Stage 3: the leader shows how these goals and vision can be achieved.

Figure 13.6 from the textbook describes the traits and behaviors of “distant charismatics” (i.e., where leaders seldom, if ever, have close contact with followers) and “close charismatics” (i.e., where leaders have direct contact with followers).

TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP Transactional leadership involves leader-follower exchanges necessary for achieving routine performance agreed upon between leaders and followers. Dimensions of transactional leadership include: • Contingent rewards provide various kinds of rewards in exchange for mutually agreed upon goal accomplishment.

• Active management by exception involves watching for deviation from rules and standards and taking corrective action.

• Passive management by exception involves intervening only if standards are not met.

• Laissez-faire management involves abdicating responsibilities and avoiding decisions.

Transformational leadership occurs when leaders broaden and elevate their followers’ interests, when they generate awareness and acceptance of the group’s purposes and mission, and when they stir followers to look beyond their own interests for the good of others.

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Dimensions of transformational leadership include: • • • •

Charisma provides vision and a sense of mission, and it instills pride, along with follower respect and trust.

Inspiration communicates high expectations, uses symbols to focus efforts, and expresses important purposes in simple ways.

Intellectual stimulation promotes intelligence, rationality, and careful problem solving.

Individualized consideration provides personal attention, treats each employee individually, and coaches and advises.

Transformational leadership is likely to be strongest at the top management level, where there is the greatest opportunity for proposing and communicating a vision., but it can be found throughout an organization.

Review of research on transformational leadership report significant favorable relationships between Bass’s leadership dimensions and various aspects of performance and satisfaction, as well as extra effort, burnout and stress, and predispositions to act as innovation champions on the part of followers. The strongest relationships tend to be associated with charisma or inspirational leadership, although in most cases the other dimensions are also important.

Issues in Charismatic and Transformational Leadership Can people be trained in charismatic/transformational leadership?

Yes. People can be trained to adopt new leadership approaches. Leaders can devise improvement programs to address their weaknesses and work with trainers to develop their leadership skills.

Leaders can be trained in charismatic skills.

Is charismatic/transformational leadership always good?

No. Dark-side charismatics can have negative effects on the population of followers.

Charismatic/transformational leadership is not always needed; sometimes emphasis on a vision diverts energy from more important day-to-day activities. Charismatic/transformational leadership by itself is not sufficient; Charismatic/transformational leadership needs to be used in conjunction with traditional leadership. Charismatic/transformational leadership is not important only at the top; it applies at all levels of organizational leadership.

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LECTURE ENHANCEMENT Consider asking your students the following set of questions: Would you rather work for a boss or a leader? Would you rather be a boss or a leader? Do you think that there is a difference?

Consider the following list of contrasts between bosses and leaders from the preface to The Quality School by William Glasser, M.D. (The book is about putting Deming’s quality principles into public schools.)

Bosses

Leaders

A boss drives.

A boss relies on authority.

A boss says, “I.” A boss creates fear.

A boss knows how.

A boss creates resentment.

A boss fixes blame.

A boss makes work drudgery.

A leader leads.

A leader relies on cooperation.

A leader says, “We.” A leader creates confidence.

A leader shows how.

A leader creates enthusiasm.

A leader fixes mistakes.

A leader makes work interesting

LEADERS MEMBER EXCHANGE THEORY Leader Member Exchange theory shows that leaders develop differentiated relationships with subordinates in their work groups. Some subordinates relationships are high quality (high LMX) “partnerships,” characterized by mutual influence, trust, respect, and loyalty.

Other relationships are low quality (low LMX), more in line with traditional supervisory relationships. Low quality relationships are characterized by formal status and strict adherence to rules of the employment contract. They have low levels of interaction, trust, and support.

These differentiated relationships are important for subordinates because they have strong associations with work outcomes. Research shows that high-quality LMX is associated with increased follower satisfaction and productivity, decreased turnover, increased salaries, and faster promotion rates. Low quality relationships are associated with negative work outcomes, including low job satisfaction and commitment, greater feelings of unfairness, lower performance, and higher stress.

CHAPTER STUDY GUIDE What is leadership?

• Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives.

• Leadership and management differ in that management is designed to promote stability or to make the organization run smoothly, whereas the role of leadership is to promote adaptive change.

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• • • • •

Trait or great-person approaches argue that leader traits have a major impact on differentiating between leaders and nonleaders or predicting leadership outcomes.

Traits are considered relatively innate and hard to change.

Similar to trait approaches; behavioral theories argue that leader behaviors have a major impact on outcomes.

The Michigan and Ohio State approaches are particularly important leader behavior theories.

Leader behavior theories are especially suitable for leadership training.

What is situational contingency leadership?

• Leader situational contingency approaches argue that leadership, in combination with various situational contingency variables, can have a major impact on outcomes.

• The effects of traits are enhanced to the extent of their relevance to the situational contingencies faced by the leader.

• Strong or weak situational contingencies influence the impact of leadership traits.

• Fiedler’s contingency theory, House’s path-goal theory, Hersey and Blanchard’s situational leadership theory, Graen’s leader-member exchange theory, and Kerr and Jermier’s substitutes for leadership theory are particularly important specific situational contingency approaches.

• Sometimes, as in the case of the substitutes for leadership approach, the role of situational contingencies replaces that of leadership, so that leadership has little or no impact in itself.

What are follower-centered approaches to leadership?

• Follower-centered approaches focus on how followers view leaders and how they view themselves. The former are called implicit leadership theories (ILTs) and the latter are called implicit followership theories (IFTs).

• Implicit leadership theories (ILTs) are part of leadership categorization theory. They describe the cognitive categorization processes of followers as they identify characteristics, or prototypes, of traits and behaviors they associate with leaders (and nonleaders).

• Typical prototypes of leaders are sensitivity, dedication, tyranny, charisma, attractiveness, masculinity, intelligence and strength. They reflect both the positive and negative elements of leaders.

• Followership is defined as the behaviors of individuals acting in relation to leaders.

Followership categorization theory is the study of implicit followership theories identified by leaders.

• Prototypical follower behaviors have been identified as industriousness (e.g., hard-working), having enthusiasm and being a good citizen. Follower antiprototypes include conformity, insubordination and incompetence.

• Implicit followership theories have also been studied relative to social constructions of follower roles. Social construction approaches consider individuals’ beliefs regarding how they should act and the contexts in which they act.

• Social construction perspectives of followership have identified passive and proactive IFTs. Passive IFTs are consistent with classic definitions of followers as obedient, passive and deferent, while proactive IFTs reflect beliefs among followers that they need to express opinions, take initiative and constructively challenge leaders.

What are inspirational and relational leadership perspectives?

• Inspirational and relational leadership perspectives focus on how leaders motivate and build relationships with followers to achieve performance beyond expectations.

• Particularly important among such approaches are Bass’s transformational/transactional theory and House’s and Conger and Kanungo’s charismatic perspectives.

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• • • • •

Transformational behaviors include charisma, inspiration, intellectual stimulation and individualized consideration. Transactional behaviors include contingent reward, management-by-exception, and laissez-faire leadership.

Charismatic/transformational leadership is not always good, as shown by the example of Adolf Hitler.

The most prominent relational leadership theory is leader-member exchange (LMX).

LMX describes how leaders develop relationships with some subordinates that are high quality and some that are low quality. Subordinates in high quality relationships receive much better benefits and outcomes than those in low quality LMX. The most effective leaders should develop high quality relationships with all subordinates.

KEY TERMS Achievement-oriented leadership: in House’s leadership model, this refers to leader behavior that emphasizes setting challenging goals, stressing excellence in performance, and showing confidence in the group members’ ability to achieve high standards of performance.

Behavioral perspective: assumes that leaders behaviors are central to performance and other outcomes.

Charisma: provides vision and a sense of mission, and it instills pride along with follower respect and trust.

Charismatic leaders: leaders who, by force of their personal abilities, are capable of having a profound and extraordinary effect on followers.

Consideration: the extent to which a leader is sensitive to people’s feelings and tries to make things pleasant for his or her followers.

Directive leadership: in House’s leadership model, this refers to leader behavior that spells out the what and how of subordinates’ tasks.

Followership: is defined as the behaviors of individuals acting in relation to leaders.

Implicit followership theories: are preconceived notions about prototypical and antiprototypical followership behaviors and characteristics.

Implicit leadership theories: are preconceived notions about the attributes associated with leaders that reflect the structure and content of “cognitive categories” used to distinguish leaders from nonleaders.

Individualized consideration: provides personal attention, treats each employee individually, and coaches and advises.

Initiating structure: the extent to which a leader is concerned with defining task requirements and other aspects of the work agenda.

Inspiration: communicates high expectations, uses symbols to focus efforts, and expresses important purposes in simple ways.

Intellectual stimulation: promotes intelligence, rationality and careful problem solving, by for example, encouraging looking at a very difficult problem in a new way.

Leader match training: applies Fiedler’s contingency theory by training leaders to diagnose the situation to match their high or low LPC scores with situational control.

Leader-member exchange (LMX) theory: emphasizes the quality of the working relationship between leaders and followers.

Leadership: the process of influencing others and the process of facilitating individual and collective efforts to accomplish shared objectives.

Leadership grid: is an approach that uses a grid that places concern for production on the horizontal axis and concern for people on the vertical axis. Least preferred co-worker (LPC)

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scale: in Fiedler’s contingency theory, the LPC measures a person’s leadership style based on a description of the individual with whom he/she has been able to work least well.

Participative leadership: in House’s leadership model, this refers to leader behavior that focuses on consulting with subordinates and seeking and taking their suggestions into account before making decisions.

Passive followership beliefs: are beliefs that followers should be passive, deferent and obedient to authority.

Path-goal theory of leadership: focuses on how a leader influences subordinates’ perceptions of both work goals and personal goals and the links, or paths, found between these two sets of goals.

Proactive followership beliefs: are beliefs that followers should express opinions, take initiative, and constructively question and challenge leaders.

Prosocial power motivation: is power oriented towards benefiting others.

Prototypes: are a mental image of the characteristics that comprise an implicit theory.

Recognition-based: leadership effectiveness based on how well a person fits characteristics of a good or effective leader.

Romance of leadership: refers to people attributing romantic, almost magical, qualities to leadership.

Situational control: the extent to which a leader can determine what his or her group is going to do.

Situational leadership model: focuses on the situational contingency of maturity or “readiness” of followers.

Social construction: approaches describe individual behavior as “constructed” in context, as people act and interact in situations.

Substitutes for leadership: make a leader’s influence either unnecessary or redundant in that they replace the leader’s influence.

Supportive leadership: in House’s leadership model, this refers to leader behavior that focuses on subordinate needs and well-being and promoting a friendly work climate.

Trait perspectives: assume that traits play a central role in differentiating between leaders and nonleaders or in predicting leader or organizational outcomes.

Transactional leadership: involves leader-follower exchanges necessary for achieving routine performance agreed upon between leaders and followers.

Transformational leadership: occurs when leaders broaden and elevate their followers’ interests, when they generate awareness and acceptance of the group’s purposes and mission, and when they stir followers to look beyond their own interests for the good of others.

SPECIAL FEATURES Zappos Insights: Revealing Corporate Secrets Tony Hsieh doesn’t see the need to protect the secrets to Zappos’s wild success. In fact, the CEO is happy to share them with anyone who comes by the office. Hsieh has built a $635 million internet superstore by doing two things very well: exceeding customers’ expectations and driving positive word-of-mouth recommendations, which Zappos calls “delivering WOW”. And Hsieh believes so strongly in the organizational culture that encompasses Zappos’s desire to satisfy that he’s on a mission to share it with anyone who will listen via tours of their headquarters, leadership retreats, and even two new books.

It all comes together in a program called Zappos Insights. The core experience is a tour of Zappos’s Las Vegas headquarters. “Company Evangelists” lead groups of twenty around the cubicles, which often overflow with kitschy action figures and brightly colored balloons, giving participants a glimpse of a workplace that prizes individuality and fun as much as satisfied

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customers. The tours are free, but many visitors actually come for paid one- and two-day seminars that immerse participants in Zappos culture. Want to learn how to recruit employees who are committed to your company culture? You’ll get face time with Zappos HR staff. Yearn to learn what keeps customers coming back? Ask their Customer Loyalty Team. Hungry for a home-cooked meal? The capstone of the two-day boot camp is dinner at Tony Hsieh’s house, with ample time to talk customer service with the CEO himself. Seminars range from $497– $3,997.

Ask students if they think exposing the company’s culture, strategy and secrets to outsiders is a good idea? Why or why not? Ask the students further about where they work/have worked in the past, could that company also follow Zappos idea? Give them a few minutes to write down and then share with the class what specific elements would be included in this tour.

Research Insight Research suggests that when business used participatory leadership, it made the democratically based style legitimate and increased the opportunity for individuals to express their voice.

Participative leadership was related to less corruption and less unrest as was the future-oriented aspect of culture. Also, decision freedom was linked to less corruption and unrest. Discuss with students what cultural factors might impact the relationship between participation and voice.

Leaders on Leadership Eric Schmidt was out as CEO of Google and Larry Page was in. Schmidt had been brought in by the board directors in 2001 to provide “adult supervision” to then 27-year-old founders, Larry Page and Sergey Brin. For 10 years, Google’s management structure was described as something of a three-ring circus, with co-founders Page and Brin running the business behind the scenes and Schmidt as the public face. In many ways, Page is taking over at an ideal time. Google’s business is doing well, with the company reporting revenues of $29.3 billion. The concern however is not for the present, it is for the future. As reported in Newsweek, there is a gnawing sense that Google’s best days are behind it. It is facing tough competition from Facebook and Microsoft.

Ask students if they agree with these last two sentences? What steps could Google engage in that would improve their competitive advantage?

OB in Popular Culture In remember the Titans, legendary coach Herman Boone (Denzel Washington) has a daunting task. In assuming the position of head football coach at the newly integrated T. C. Williams High School, he demonstrates path-goal leadership. Boone knows that many of the players will not respect a “colored” coach. When it comes to practice, he uses a very directed leadership style – my way or else, get the plays right or expect to run. At the same times, he respects the difficulties his players face. What other leadership characteristics does Boone display? Ask students who played sports, what effective leadership styles did their coach use that produced positive results with the players?

Ethics in OB In Corporate America today, there seems to be a perception that CEOs have tremendous influence on company success whereas workers are more or less interchangeable. CEO compensation is typically over 260 times greater than the compensation provided to the median full-time employee. Thus, a typical CEO will earn more in one day than the average worker will earn in a

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year. Between 1995 and 2005, CEO compensation rose nearly 300 percent, while the average employee salary rose less than 5 percent – both occurring during a timeframe in which average corporate profits rose by a little over 100 percent.

Ask students if they think top executives deserve such high pay? Why or why not? Do they believe that lower level employees are more interchangeable? What are some ways to ensure that CEO salaries and benefits are more clearly tied to a company’s performance? What are some ways in which lower level employees’ salaries and benefits can be tied to a company’s performance?

Mastering Management This breakout provides tips for building high-quality exchange relationships with employees.

Group Project Have students work individually to reflect on a great leader they have known in their life. This could be a parent, scout leader, religious leader, neighbor or anyone else. Have them list at least five traits of the “great leader” and identify the most important trait. Then have them get together in groups and compare lists. What does their comparison tell them about the great person-trait approach?

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Chapter 14 LEADERSHIP CHALLENGES AND ORGANIZATIONAL CHANGE STUDY QUESTIONS 1.

2.

3.

4.

What is moral leadership?

What is shared leadership?

How do you lead across cultures?

How do you lead organizational change?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Novo Nordisk Interview a Leader Leadership Skills Inventory Force-Field Analysis “TT” Leadership

CHAPTER OVERVIEW This chapter builds on the leadership ideas of the previous chapter by covering integrative leadership, moral leadership and change leadership. It begins by discussing moral leadership, which consists of authentic leadership, servant leadership, spiritual leadership, and ethical leadership. It then moves to shared leadership - a dynamic, interactive influence process among individuals in groups for which the objective is to lead one another to the achievement of group or organizational goals or both. The chapter then addresses the issues of culture in leadership by covering Project GLOBE (Global Leadership and Organizational Effectiveness Research Program), which involves 62 societies, 951 organizations, and about 140 country coinvestigators. Next is strategic leadership, consisting of multiple-level leadership, top management teams, and Boal and Hooijberg’s strategic leadership perspective. The final section of the chapter discusses change leadership and concludes with the different reasons underlying people’s resistance to change and how to deal effectively with resistance to change.

CHAPTER OUTLINE WHAT IS MORAL LEADERSHIP? Authentic Leadership Spiritual Leadership Servant Leadership Ethical Leadership WHAT IS SHARED LEADERSHIP? Shared Leadership in Work Teams Shared Leadership and Self-Leadership

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HOW DO YOU LEAD ACROSS CULTURES? The GLOBE Perspective Leadership Aspects and Culture Culturally Endorsed Leadership Matches Universally Endorsed Aspects of Leadership LEADING ORGANIZATIONAL CHANGE? Contexts for Leadership Action Leaders as Change Agents Planned Change Strategies Resistance to Change

CHAPTER LECTURE NOTES The chapter opens with the story of Mark Berns, who heads Ready About, a consulting firm that helps clients manage and survive large organizational changes such as mergers, acquisitions, and strategy realignments. Immersed in day-to-day operations, many companies lack the perspective to understand how organizational change will affect their soft assets, such as company culture and successful internal communication. Ready About’s consulting emphasizes helping companies understand and monitor the health of these resources while managing operational or material change.

MORAL LEADERSHIP AUTHENTIC LEADERSHIP Authentic leadership essentially argues “know thyself.” It involves both owning one’s personal experiences (values, thoughts, emotions, and beliefs) and acting in accordance with one’s true self (expressing what you really think and believe, and acting accordingly).

Those high in authenticity tend to have also exhibit: • Self-efficacy, the belief about the likelihood of successfully completing a specific task.

• Optimism, the expectation of positive outcomes.

• Hope, the tendency to look for alternative pathways to reach a desired goal.

• Resilience, the ability to bounce back from failure and keep forging ahead.

SPIRITUAL LEADERSHIP Spiritual leadership can be seen as a field of inquiry within the broader setting of workplace spirituality. Spiritual Leadership Theory or SLT is a causal leadership approach for organizational transformation designed to create an intrinsically motivated, learning organization. Spiritual leadership includes values, attitudes, and behaviors required to intrinsically motivate self and others to have a sense of spiritual survival through calling and membership.

Figure 14.1 in the textbook illustrates the causal model of spiritual leadership theory. Some key terms in Figure 14.1 are considered qualities of spiritual leadership: • Vision—defines the destination and journey, reflects high ideals, encourages hope/faith

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• •

Altruistic love—trust/loyalty as well as forgiveness/acceptance/gratitude, honesty, courage, humility from organization and followers Hope/Faith—endurance, perseverance, do what it takes, have stretch goals.

SERVANT LEADERSHIP Servant leadership was developed by Robert Greenleaf in 1964, who argued that the primary purpose of business should be to create a positive impact on its employees and its community.

The servant leader is attuned to basic spiritual values and, in serving these, serves others including colleagues, the organization, and society. Servant leaders help others discover their inner spirit, earn and keep their trust, and exhibit effective listening and service over self-interest.

ETHICAL LEADERSHIP There is no simple definition of ethical leadership. Many believe it is characterized by caring, honest, principled, fair and balanced choices by individuals who act ethically, set clear ethical standards, communicate about ethics with followers and reward as well as well punish others based on ethical or unethical conduct.

A key similarity between ethical leadership and authentic, servant, and spiritual leadership is role modeling, so important in social learning theory. Altruism, or concern for others, and integrity are also important similarities.

Figure 14.2 in the textbook illustrates similarities and differences between ethical, spiritual, authentic, and transformational theories of leadership.

LECTURE ENHANCEMENT Ask students to share stories of moral leaders in their lives. Were these leaders ethical, authentic, servant or spiritual? Can the four types of moral leadership be easily divided?

SHARED LEADERSHIP Shared leadership is a dynamic, interactive influence process among individuals in groups for which the objective is to lead one another to the achievement of group or organizational goals or both.

SHARED LEADERSHIP IN WORK TEAMS Locations of Shared Leadership This type of leadership can come from outside or inside the team. Outside the team, the leaders can be traditional, formally designated vertical first-level supervisors, or foremen or an outside vertical leader of a self-managing team whose duties tend to be quite different from those of a traditional supervisor. Inside the team, such leadership can be assigned to one person, rotated across team members, or even shared simultaneously as different needs arise across time.

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Desired Shared Conditions A key contribution to team performance (regardless of who provides it) is to create and maintain conditions for performance. The following are important considerations.

• Efficient, Goal-Directed Effort • Adequate Resources: • Competent, Motivated Performance • A Productive, Supportive Climate • Commitment To Continuous Improvement And Adaptation SHARED LEADERSHIP AND SELF-LEADERSHIP Self-leadership represents a portfolio of self-influence strategies that are believed to positively influence individual behavior, thought processes, and related activities. Often, self-leadership activities are divided into three broad categories: Behavior-focused strategies, self-rewards, and constructive thought patterns.

• Behavior-Focused Strategies tend to increase self-awareness leading to the handling of behaviors involving necessary but not always pleasant tasks. These strategies include selfobservation, self-goal setting, self-reward, self-correcting feedback, and practice.

• Self-Rewards can be quite useful in moving behaviors toward goal attainment. Self-rewards can be real (e.g., a steak dinner) or imaginary (imagining a steak dinner).

• Constructive Thought Patterns focus on the creation or alteration of cognitive thought processes. Self-analysis and improvement of belief systems, mental imagery of successful performance outcomes, and positive self-talk can all help.

LEADERSHIP ACROSS CULTURES THE GLOBE PERSPECTIVE The GLOBE (Global Leadership and Organizational Behavior Effectiveness Research Program) is an ambitious program that involves about 17,000 managers from 951 organizations functioning in 62 societies throughout the world, 140 or so country co-investigators, plus a coordinating team and four research associates. The GLOBE approach argues that leadership variables and cultural variables can be meaningfully applied at societal and organizational levels.

Figure 14.3 in the textbook shows a simplified version of the GLOBE theoretical model which explains the relationships between: 1. Societal cultures, norms and practices 2. Leader attributes and behaviors 3. Organizational form, culture, and practices 4. Culturally endorsed implicit leader theory or leadership prototype 5. Leader acceptance 6. Leader effectiveness The specific assumptions comprising the model are: 1. Societal cultural norms of shared values and practices affect leaders’ behavior.

2. Leadership affects organizational form, culture, and practices.

3. Societal cultural values and practices also affect organizational culture and practices

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4. Organizational culture and practices also affect leaders’ behavior 5 & 6. Societal culture/organizational culture practices influence the process by which people come to share implicit theories of leadership or what House calls Culturally Endorsed Implicit Leader Theory or CLT profiles develop in each culture in response to societal and firm culture/practices.

7. Leader acceptance is a function of the interaction between CLTs and leader attributes and behaviors: leader attributes/behaviors congruent with CLTs are more accepted than non-CLTs. 8. Leader effectiveness is a function of the interaction between strategic organizational contingencies (not shown) and leader attributes and behaviors.

9. Acceptance of the leader by followers facilitates leader effectiveness 10. Leader effectiveness, over time, will increase leader acceptance LEADERSHIP ASPECTS AND CULTURE There are six broad-based leadership dimensions encompassing 21 primary leadership dimensions and a larger number of leadership items and attributes: 1. Charismatic/value-based: inspire, motivate, expect high performance outcomes 2. Team-oriented: team building and implementation of a common goal among team members 3. Participative: degree to which others are managed in making an implementation 4. Humane-oriented: support, consideration, compassion, and generosity 5. Autonomous: independent and individualistic leadership 6. Self-protective: ensuring safety and security of the individual, self-centered, and face saving.

There are a limited number of cultural aspects that have consistently been linked to effective leadership. Variations on these aspects of culture call upon the leader to adjust his or her approach. The nine dimensions of societal culture used in the GLOBE studies are: 1. assertiveness 2. future orientation 3. gender egalitarianism 4. uncertainty avoidance 5. power distance 6. institutional emphasis on collectivism vs. individualism 7. in-group collectivism 8. performance orientation 9. humane orientation CULTURALLY ENDORSED LEADERSHIP MATCHES So far GLOBE researchers have matched cultural and leadership dimensions for over 62 countries and collapsed them to form 10 geographic clusters. For the six broad-based leadership dimensions, Figure 14.4 in the textbook shows the degree to which a particular aspect of leadership is endorsed with an H for highly endorsed, an M for moderately endorsed, and an L for not endorsed.

Where an emphasis on a specific leadership dimension is matched with an H on a cultural dimension, it is labeled a culturally endorsed leadership dimension (called a CLT). This aspect of leadership is characteristic of what individuals in the culture expect from an effective leader.

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UNIVERSALLY ENDORSEDASPECTS OF LEADERSHIP Leadership described in terms of integrity, charismatic-visionary, charismatic-inspirational, and team-oriented are almost universally endorsed as indications of outstanding leadership.

Leadership described in terms of irritability, egocentricity, noncooperativeness, malevolence, being a loner, dictatorial, and ruthless are identified as indicators of ineffective leadership.

The important point to remember is that there are dramatically different expectations for leaders in different cultures.

LEADING ORGANIZATIONAL CHANGE Change leadership helps deal with the idea of an organization that masters the challenges of change while still creating a satisfying, healthy, and effective workplace for its employees. People in the new workplace must be comfortable dealing with adaptation and continuous change, along with greater productivity, willingness to learn from the successes of others, total quality, and continuous improvement.

CONTEXTS FOR LEADERSHIP ACTION These sources of instability can be combined to depict the overall character of the opportunities and constraints facing the leader. As illustrated in Figure 14.5 in the textbook, the contexts are: 1. Stability: stable conditions exist and the focus is on adjusting and creating internal operations to enhance system goals 2. Crisis: identifiable and dramatic departures from prior practice and sudden threats to high priority goals, providing little or no response time 3. Dynamic Equilibrium: organizational stability occurs only within a range of shifting priorities with programmed change efforts 4. Near the Edge of Chaos: a transition zone poised between order and chaos.

Patterning of Attention and Network Development Patterning of attention involves isolating and communicating important information from a potentially endless stream of events, actions, and outcome.

Patterning is used to stress the establishment of a norm where the leader is expected to ask questions, raise issues, and help gather information for unit members.

Network development involves developing and managing the connections among individuals both inside and outside the unit or firm.

In combination, greater patterning of attention and network development increases the size, interconnectedness, and diversity of the unit to provide a variety of world views.

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LEADERS AS CHANGE AGENTS Transformational change results in a major overhaul of the organization or its component systems. Organizations experiencing transformational change undergo a significant shift in basic characteristic features.

Incremental change, or frame-bending change, is part of the organization’s natural evolution in that it builds on the existing ways of operating to enhance or extend them in new directions.

Incremental change includes the introduction of new products, new technologies, and new systems and processes. The capability of improving continuously through incremental change is an important asset in today’s demanding environments.

Change agents are individuals and groups who lead and support the change process by taking responsibility for changing the existing behavior patterns of other people or the social system.

The success of both transformational change and incremental change depends in part on change agents.

Planned and unplanned change Unplanned change occurs spontaneously and without a change agent’s direction, and such change may be disruptive. When unplanned change occurs, the appropriate goal is to act quickly to minimize the negative consequences and maximize any possible benefits.

Planned change is the result of specific efforts by a change agent and is a direct response to someone’s perception of a performance gap.

A performance gap is the discrepancy between the desired and actual state of affairs.

Performance gaps may represent problems to be resolved or opportunities to be explored.

Forces and targets for change Forces for change include the following. Planned change based on any of these forces can be internally directed toward a wide variety of organizational components.

• Organization-environment relationships.

• Organizational life cycle.

• Political nature of organizations.

Figure 14.6 from the textbook identifies various organizational targets for planned change. The targets for change include organizational purpose, objectives, strategy, culture, people, task, structure, and technology. These targets are highly interconnected in the workplace.

PLANNED CHANGE STRATEGIES Figure 14.7 from the textbook identifies three different change strategies ⎯ force-coercion, rational persuasion, and shared power ⎯ and the power bases, change agent behaviors, and predicted outcomes associated with each strategy.

Force-Coercion The force-coercion strategy uses legitimacy, rewards, or punishments as primary inducements to change. The change agent acts unilaterally to “command” change through the formal authority of

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his or her position, to induce change via an offer of special rewards, or to bring about change via threats of punishment. People respond to this strategy mainly out of the fear of being punished if they do not comply with a change directive or out of the desire to gain a reward if they do.

Compliance is usually temporary.

Rational Persuasion The rational persuasion strategy attempts to bring about change through the use of special knowledge, empirical support, or rational arguments. This strategy assumes that rational people will be guided by reason and self-interest in deciding whether or not to support a change.

Shared-Power The shared-power strategy actively and sincerely involves the people who will be affected by a change in planning and making key decisions relating to this change. This strategy is sometimes called a normative-reeducative approach. This strategy tries to develop directions and support for change through involvement and empowerment. Given the high level of involvement, this strategy is likely to result in longer lasting and internalized change.

LECTURE ENHANCEMENT If you used the previous Enhancement, discuss with the students the viability of using forcecoercion, rational persuasion, or shared power to achieve the planned change in your college or university.

RESISTANCE TO CHANGE Resistance to change is any attitude or behavior that indicates unwillingness to make or support a desired change. Change agents often view resistance as something that must be overcome for change to be successful. It is helpful to view resistance to change as feedback that the change agent can use to facilitate achieving the change objectives.

Why People Resist Change Reasons people resist change include: • Fear of the unknown • Insecurity • Lack of a felt need to change • Threat to vested interests • Contrasting interpretations • Lack of resources Resistance to the Change Itself People may reject a change because they believe it is not worth their time, effort, or attention. To deal with this form of resistance, the change agent should inform all those affected by the change as to how it satisfies the following criteria:

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• • • •

Benefit ⎯ the change should have a clear relative advantage for the people being asked to change, it should be perceived as “a better way.”

Compatibility ⎯ the change should be as compatible as possible with existing values and experiences of the people being asked to change.

Complexity ⎯ the change should be no more complex than necessary; it must be as easy as possible for people to understand and use.

Triability ⎯ the change should be something that people can try on a step-by-step basis and make adjustments as things progress.

Resistance to the Change Strategy Using the force-coercion strategy may create resistance among individuals who resent management by “command” or the use of threatened punishment. Using the rational persuasion strategy may create resistance when the data are suspect or the expertise of advocates is unclear.

Using the shared-power strategy may create resistance if it appears manipulative and insincere.

Resistance to the Change Agent Resistance to the change agent is directed at the person implementing the change and often involves personality and other differences.

LECTURE ENHANCEMENT Assuming that you used the preceding two enhancements, ask the students to identify potential sources of resistance for the planned change in your college or university.

How to Deal with Resistance Figure 14.8 from the textbook outlines the following methods for dealing with resistance to change.

• Education and communication ⎯ the objective is to educate people about a change before it is implemented and to help them understand the logic of the change.

• Participation and support ⎯ with the goal of allowing others to help design and implement the changes, this approach asks people to contribute ideas and advice or to work on task forces or committees that may be leading the change.

• Facilitation and support ⎯ involves providing assistance, both emotional and material, for people experiencing the hardships of change.

• Negotiation and agreement ⎯ offers incentives to actual or potential change resistors; tradeoffs are arranged to provide special benefits in exchange for assurances that the change will not be blocked.

• Manipulation and cooptation ⎯ makes use of covert attempts to influence others, selectively providing information and consciously structuring events so that the desired change occurs.

• Explicit or implicit coercion ⎯ employs the force of authority to get people to accept change.

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LECTURE ENHANCEMENT Assuming that you used the preceding three enhancements, have the students discuss ways of overcoming resistance to planned change in your college or university.

STUDY GUIDE What is moral leadership?

• Moral leadership includes authentic leadership, servant leadership, and spiritual and ethical leadership.

• Authentic leadership emphasizes owning one’s personal experiences and acting in accordance with one’s true or core self which underlies virtually all other aspects of leadership.

• Servant leadership is where the leader is attuned to basic spiritual values and, in serving these, serves others including colleagues, the organization, and society.

• Spiritual leadership is a field of inquiry within the broader setting of workplace spirituality; it includes values, attitudes, and behaviors required to intrinsically motivate self and others to have a sense of spiritual survival through calling and membership.

• Ethical leadership emphasizes moral concerns.

What is shared leadership?

• Shared leadership is a dynamic, interactive influence process among individuals in groups for which the objective is to lead one another to the achievement of group or organizational goals or both.

• The influence process often involves peer or lateral influence and at other times involves upward or downward hierarchical influence within a team.

• Though broader than traditional vertical leadership, shared leadership may be used in combination with it.

• Self-leadership techniques can be used to improve the effectiveness of shared leadership.

How do you lead across cultures?

• Cross-cultural leadership emphasizes Project GLOBE (Global Leadership and Organizational Effectiveness Research Program), which involves 62 societies, 951 organizations, and about 140 country co-investigators.

• It assumes that the attributes and entities that differentiate a specified culture predict organizational practices and leader attributes and behaviors that are most often carried out and most effective in that culture.

• It identifies a number of potentially important aspects of culture that form the basis for culturally based leader prototypes.

• It matches key aspects of leadership to the important aspects of culture to identify endorsed elements of leadership.

• It suggests both universally endorsed elements of leadership as well as those unique to a particular culture and group of nations.

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How do you lead organizational change?

• Change leadership helps deal with the idea of an organization that masters the challenges of both radical and incremental change while still creating a satisfying, healthy, and effective employee workplace.

• Change leadership deals with leaders as change agents, phases of planned change, change strategies, and resistance to change.

• Radical or transformational change results in a major overhaul of the organization or its component systems.

• Incremental or frame-bending change as part of an organization’s natural evolution is frequent and less traumatic than radical change.

• Change agents are individuals and groups who take responsibility for changing the existing behavior pattern or social system; being a change agent is an integral part of a manager’s leadership role.

• Planned change strategies consist of force-coercion, rational persuasion, and shared power.

• Dealing with resistance to change involves education and communication, participation and involvement, facilitation and support, negotiation and agreement, manipulation and cooptation, and explicit or implicit agreement.

KEY TERMS Context: is the collection of opportunities and constraints that affect the occurrence and meaning of behavior and the relationships among variables.

Culturally endorsed leadership dimension: is one that members of a culture expect from effective leaders.

Force-coercion strategy: uses authority, rewards, and punishments to create change.

Hope: the tendency to look for alternative pathways to reach a desired goal.

Incremental change: builds on the existing ways of operating to enhance or extend them in new directions.

Optimism: the expectation of positive outcomes.

Patterning of attention: involves isolating and communicating what information is important and what is given attention from a potentially endless stream of events, actions and outcome.

Performance gap: a discrepancy between the desired and actual conditions.

Planned change: the result of specific efforts led by a change agent.

Power change strategy: utilized to mobilize power, exert influence over others and get people to support planned change efforts.

Rational persuasion strategy: uses facts, special knowledge, and rational argument to create change.

Resilience: the ability to bounce back from failure and keep forging ahead.

Resistance to change: an attitude or behavior that shows unwillingness to make or support a change.

Self-efficacy: is a person’s belief that he or she can perform adequately in any situation.

Shared leadership: a dynamic, interactive influence process among individuals in groups for which the objective is to lead one another to the achievement of group or organizational goals or both.

Shared-power strategy: uses participatory methods and emphasizes common values to create change.

Transformational change: radically shifts the fundamental character of an organization.

Unplanned change: occurs spontaneously and without a change agent’s direction.

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SPECIAL FEATURES Ready About: Don’t Loose Your Bearings The opening chapter story is on Ready About, a consulting firm that helps clients manage and survive large organizational changes such as mergers, acquisitions, and strategy realignments.

Immersed in day-to-day operations, many companies lack the perspective to understand how organizational change will affect their soft assets, such as company culture and successful internal communication. Ready About’s consulting emphasizes helping companies understand and monitor the health of these resources while managing operational or material change. Ask students how important are organization like Ready About in today’s environment? What challenges do such organizations face in the current economic climate? Can organizations be effective if they chose not to use Ready About services? What are the advantages and disadvantages to an organization for using a consulting firm such as Ready About?

OB in Popular Culture Braveheart, the movie, is an account loosely based on the life of William Wallace, the Guardian of Scotland, who helped liberate Scotland from England. Wallace brings about change because he fights not for himself, but for the rights of all Scotsmen. He exhibits self-efficacy in his belief that he can defeat the English when others have been unsuccessful. He is optimistic that he can obtain freedom for Scotland – even to the point of death. There is a hope that this freedom will allow his fellow Scotsman to live a life he dreams about. Finally, he is resilient, fighting against incredible odds, including betrayal by the Scottish nobles. Do students think Wallace will be successful? Why or why not? Have students link Wallace’s leadership characteristics to those presented in the chapter – what leadership theories/perspectives does Wallace exhibit? Can students think further of a modern day hero that has engaged in actions similar to Wallace?

Ethics in OB This breakout describes research on the moral reasoning of athletes vs. the general population.

The research finds that moral reasoning of athletes is worse than that of nonathletes. From the time athletes enter big-time sports, their moral reasoning does not improve and sometimes declines. Ask students to discuss what may be the cause of this effect. Does moral reasoning during games/events differ than moral reasoning during everyday life?

Research Insight A recent study of CEO values, organizational culture, and performance suggest that when a CEO values self-direction, there is more cultural emphasis on innovation; when a CEO values security, there is more cultural emphasis on bureaucracy; and when a CEO values benevolence, the culture is more supportive of its members. The study also linked aspects of organizational culture with specific elements of performance. More innovation was associated with higher sales growth. A bureaucratic culture was linked to efficiency while a supportive culture was associated with greater employee satisfaction. In sum, CEO values are linked to organizational culture which, in turn, is associated with organizational outcomes. Discuss with students how the values of the CEO might become evident to members of an organization. Through language? Symbols?

Ceremonies and other practices? How do the students know the values of their university president or provost?

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Leaders on Leadership Founded by Patricia Karter, Dancing Deer sells $8 million of cookies and other confections a year. Karter’s leadership story began in 1994 with a $20, 000 investment and two ovens in a former pizza shop. Growth came quickly as the bakery prospered. For Karter, the anchor point has always been clear – let core values be the guide. Dancing Beer employees get stock options and free lunches, 35% of profits from the firm’ s Sweet Homes cakes are donated to help the homeless find accommodations and jobs. When offered a chance to make a large cookie sale to Williams-Sonoma, Karter declined. Why? Because the contract would have required use of preservatives, and that violated her values. Ask students what they think are the core values that have led to Karter’s success? What organizations can the students think of that also have core values that are key to the way the organization operates? Ask students if they have ever worked at an organization that has always followed their core values and principles, regardless of potential losses? Have the students describe such organizations and what it is like to work there.

Mastering Management This breakout describes ways of networking for moral leadership. Moral leadership can be encouraged through the formation of giving circles that bring people together for charity.

Group Project In small groups, have students look at the section on shared leadership in the context of working on student teams. Have each team create a description of a mythical super team by listing their best experiences to date on the following features of self-direction work teams: efficient, goaldirected effort; adequate resources; competent, motivated performance; a productive, supportive climate; and commitment to continuous improvement and adaptation. Once students have their super team descriptions done, lead a discussion on why so many student teams fall short.

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Chapter 15 ORGANIZATION CULTURE AND INNOVATION STUDY QUESTIONS 1.

2.

3.

4.

What is organizational culture?

How do you understand an organizational culture?

What is innovation and why is it important?

How can we manage organizational culture and innovation?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Never on Sunday How We View Differences Workgroup Culture Fast-Food Technology Alien Invasion Are You Cosmopolitan?

Team Effectiveness Which Culture Fits You?

CHAPTER OVERVIEW This chapter discusses the stability and meaning provided by organizational culture and the necessity for evolutionary change provided by an emphasis on innovation. Organizational or corporate culture is the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members. The roles of dominant cultures, subcultures, and countercultures in organizations are discussed and related to the development of multicultural organizations. The chapter then examines different levels of cultural analysis, and considers how stories, rites, rituals, and symbols help people to understand an organization’s culture. Cultural rules and roles as well as shared values, meanings, and organizational myths enable people to gain a fuller and richer understanding of an organization’s culture. Next, the chapter turns to innovation and why it is important. Innovation is the process of creating new ideas and then implementing them in practical applications. The chapter discusses steps in the innovation process and common features of highly innovative organizations. Finally, how to manage organizational culture and innovation is covered. Executives may manage many aspects of the observable culture directly while nurturing shared values among the membership is a major challenge for executives.

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CHAPTER OUTLINE WHAT IS ORGANIZATIONAL CULTURE? Functions of Organizational Culture Subcultures and Countercultures National Culture and Corporate Culture HOW DO YOU UNDERSTAND AN ORGANIZATIONAL CULTURE? Layers of Cultural Analysis Stories, Rites, Rituals, and Symbols Cultural Rules and Roles Shared Values, Meanings, and Organizational Myths WHAT IS INNOVATION AND WHY IS IT IMPORTANT? The Process of Innovation Product and Process Innovations Balancing Exploration and Exploitation Building, Reinforcing, and Changing Culture HOW CAN WE MANAGE ORGANIZATIONAL CULTURE AND INNOVATION? Management Philosophy and Strategy Tensions between Cultural Stability and Innovation

CHAPTER LECTURE NOTES The chapter opens with a description of how communications by Wall Street firms and employees are restricted by intensely detailed regulatory guidelines, which present a challenge for individual employees who wish to promote themselves using social media tools. Some firms ban all social media use by employees. Others are taking a predictably cautious approach to exploring social media.

ORGANIZATIONAL CULTURE Organizational or corporate culture is the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members. No two organizational cultures are identical.

Cultural differences can have a major impact on the performance of organizations and the quality of work life experienced by their members.

FUNCTIONS OF ORGANIZATIONAL CULTURE External Adaptation External adaptation involves reaching goals and dealing with outsiders regarding tasks to be accomplished, methods used to achieve the goals, and methods of coping with success and failure.

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Three important aspects of external adaptation are: 1. Separating more important from less important eternal forces.

2. Developing ways to measure accomplishments.

3. Creating explanations for why goals are not always met.

The final issues in external adaptation deal with two important, but often neglected, aspects of coping with external reality: 1. Individuals need to develop acceptable ways of telling outsiders just how good they really are 2. Individuals must collectively know when to admit defeat.

External adaptation involves answering the following important instrumental or goal-related questions concerning coping with reality: 1. What is the real mission?

2. How do we contribute?

3. What are our goals?

4. How do we reach our goals?

5. What external forces are important?

6. How do we measure results?

7. What do we do if specific targets are not met?

8. How do we tell others how good we are?

9. When do we quit?

LECTURE ENHANCEMENT Discuss how the college/university addresses some or all of the above questions regarding external adaptation.

Internal integration deals with the creation of a collective identity and with finding ways of matching methods of working and living together.

Three important aspects of working together are: 1. Deciding who is a member and who is not.

2. Developing an informal understanding of acceptable and unacceptable behavior.

3. Separating friends from enemies.

Internal integration involves answering the following important questions associated with living together: • What is our unique identity?

• How do we view the world?

• Who is a member?

• How do we allocate power, status, and authority?

• How do we communicate?

• What is the basis for friendship?

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LECTURE ENHANCEMENT Discuss how the college/university addresses some or all of the above questions regarding internal integration.

SUBCULTURES AND COUNTERCULTURES Subcultures are groups of individuals with a unique pattern of values and philosophy that are not inconsistent with the organization’s dominant values and philosophy.

Countercultures are groups whose patterns of values and philosophies outwardly reject those of the larger organization or social system.

Within an organization mergers and acquisitions may produce adjustment problems. Employers and managers of an acquired firm may hold values and assumptions that are quite inconsistent with those of the acquiring firm. This is known as the “clash of corporate cultures.”

NATIONAL CULTURE AND CORPORATE CULTURE Corporate mergers across national boundaries often serve to highlight both corporate and national cultural differences. National cultural values may become embedded in the expectations of important organizational constituencies and in generally accepted solutions to problems.

Importing Societal Subgroups Every large organization imports potentially important subcultural groupings when it hires employees from the larger society. The difficulty in importing groupings from the larger society lies in the relevance of these subgroups to the organization as a whole.

The following three problems are associated with accepting subcultural divisions and working within the confines of the larger culture: 1. Subordinate groups are likely to form into a counterculture and to work more diligently to change their status than to better the firm.

2. The firm may encounter extreme difficulty in coping with broader cultural changes.

3. Firms that accept and build on natural divisions from the larger culture may encounter extreme difficulty in developing sound international operations.

Building on National Cultural Diversity The multicultural organization is a firm that values diversity but systematically works to block the transfer of societally based subcultures into the fabric of the organization. Taylor Cox suggests a five-step program for developing a multicultural organization: 1. The organization should develop pluralism with the objective of multi-based socialization.

2. The organization should fully integrate its structure so that there is no direct relationship between a naturally occurring group and any particular job.

3. The organization must integrate the informal networks by eliminating barriers and increasing participation.

4. The organization should break the linkage between naturally occurring group identity and the identity of the firm.

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5. The organization must actively work to eliminate interpersonal conflict based on either the group identity or the natural backlash of the largest societally based grouping.

UNDERSTANDING ORGANIZATIONAL CULTURE LAYERS OF CULTURAL ANALYSIS As shown in Figure 15.1 from the textbook, the three important levels of cultural analysis in organizations are observable culture, shared values, and common assumptions.

1. The first level of cultural analysis is observable culture, which refers to “the way we do things around here.” The observable culture includes unique stories, ceremonies, and corporate rituals that make up the history of the firm or a group within the firm.

2. The second level of cultural analysis involves the shared values that link people together and provide a powerful motivational mechanism for members of the culture. Every member may not agree with the shared values, but they have all been exposed to them and have often been told they are important.

3. The deepest level of cultural analysis involves common cultural assumptions, which are the taken-for-granted truths that collections of corporate members share as a result of their joint experience. It is often extremely difficult to isolate these patterns, but doing so helps explain why culture invades every aspect of organizational life.

LECTURE ENHANCEMENT Divide the class into groups of five or six students. Have each group focus on a different campus organization ⎯ fraternities and sororities are excellent choices ⎯ and analyze the organization’s observable culture, shared values, and common cultural assumptions.

STORIES, RITES, RITUALS, AND SYMBOLS To begin understanding a corporate culture, it is often easiest to start with stories of the company’s founding, its successes and failures, and its winners and losers.

• Sagas are embellished heroic accounts of accomplishments.

• Rites are standardized and recurring activities used at special times to influence the behaviors and understanding of organizational members.

• Rituals are systems of rites. Rites and rituals may be unique to subcultures within an organization.

• A cultural symbol is any object, act, or event that serves to transmit cultural meaning.

CULTURAL RULES AND ROLES Organizational culture often specifies when various types of actions are appropriate and where individual members stand in the social system. These cultural rules and roles are part of the normative controls of the organization and emerge from its daily routines.

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SHARED VALUES, MEANINGS, AND ORGANIZATIONAL MYTHS Shared Values Shared values help turn routine activities into valuable and important actions, tie the organization to the important values of society, and may provide a very distinctive source of competitive advantage.

An organization with a strong culture possesses a broadly and deeply shared value system, but this can reinforce a singular view of the organizational and its environment, thereby rendering change difficult.

Strong corporate cultures share the following characteristics: • A widely shared real understanding of what the firm stands for, often embodied in slogans.

• A concern for individuals over rules, policies, procedures, and adherence to job duties.

• A recognition of heroes whose actions illustrate the company’s shared philosophy and concerns.

• A belief in ritual and ceremony as important to members and to building a common identity.

• A well-understood sense of the informal rules and expectations so that employees and managers know what is expected of them.

• A belief that what employees and managers do is important and that it is essential to share information and ideas.

Shared Meanings What you see as an outside observer may or may not be what organizational members see.

Through interaction with one another, and as reinforced by the rest of the organization, workers may infuse a larger shared meaning ⎯ or sense of broader purpose ⎯ into their tasks.

Organizational culture is a “shared” set of meanings and perceptions.

Organizational Myths Organizational myths are unproven and often unstated beliefs that are accepted uncritically.

Myths allow executives to redefine impossible problems into more manageable components.

Myths can facilitate experimentation and creativity, and they allow managers to govern.

Three common myths may combine to present major risk problems: 1. The presumption that at least senior management has no risk bias 2. The presumption of administrative competence 3. The denial of trade-offs Figure 15.2 from the textbook describes purposeful unintended consequences arising from organizational myths.

INNOVATION IN ORGANIZATIONS Innovation is the process of creating new ideas and putting them into practice.

THE PROCESS OF INNOVATION

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Figure 15.3 from the textbook describes the basic steps in a typical process of organizational innovation. The steps include the following: 1. Idea creation: to create an idea through spontaneous creativity, ingenuity, and information processing.

2. Initial experimentation: to establish the idea’s potential value and application.

3. Feasibility determination: to identify anticipated costs and benefits.

4. Final application: to produce and market a new product or service, or to implement a new approach to operations.

While it is convenient to depict the process as a sequential four-step affair, you should be aware that in practice the process of innovation is often quite messy.

PRODUCT AND PROCESS INNOVATIONS Product innovations result in the introduction of new or improved goods or services to better meet customer needs.

The key difficulty with product development is the integration across all of the units needed to move from the idea stage to final implementation. Culturally, new product development often challenges existing practice, existing value structures, and common understandings.

Process innovations result in the introduction of new and better work methods and operations.

LECTURE ENHANCEMENT To illustrate the value of innovation to organizations, share with students the classic story on the origins of “post-it” notes in the 3M Corporation. To embellish the information provided, explain how Art Fry, a 3M employee got the idea for “post-it” notes while attempting to mark pages in his Sunday hymnal. He found that a light adhesive developed by a colleague, Spencer Silver, was perfect for the task. To this point, Spencer’s adhesive had been considered a failure because it wasn’t sticky enough. Even after the “post-it” application of the adhesive was identified, Fry had trouble getting the full support of management. To win them over, he distributed “post-it” notes throughout the company. Within a short time, top executives were hooked on them. When market tests proved successful, the product received the green light. Ultimately, “post-it” notes became one of the five best selling office products in history. Innovations such as this are encouraged at 3M through formal practices such as “bootlegging” in which small groups of researchers and marketers work together to bring new products to market.

(Source: A Passion for Excellence, New York: Random House, 1985; Breakthroughs!, New York: Rawson Associates, 1986; C. Knowlton, “What Makes America Best, Fortune, March 28, 1988, pp. 40-54; B. Dumaine, “Ability to Innovate,” Fortune, January 29, 1990; pp. 43, 46; S. Weiner, “A Hard Way to Make a Buck,” Forbes, April 29, 1991, pp. 134-137; The Economist, November 30, 1991, pp. 70-72.)

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BALANCING EXPLORATION AND EXPLOITATION Figure 15.3 in the textbook illustrates how the innovation continuum runs from exploration to exploitation.

Exploitation focuses on refinement and reuse of existing products and processes.

Exploration calls for the organization and its managers to stress freedom and radical thinking and therefore opens the firm to big changes—or what some call radical innovations.

Managers may attempt to solve this tension between exploration and exploitation by having separate units for the two types of activities.

A more culturally oriented solution to the tension is based on the notion of an ambidextrous organization: 1. Managers must recognize the tension between exploration and exploitation.

2. They should realize that one form of thinking based on a single perspective is inappropriate.

3. Managers need to discuss with their subordinates the paradoxes arising from simultaneously thinking about big ideas and sound incremental improvements.

4. Managers must encourage subordinates to embrace these paradoxes and use them as motivations to provide creative solutions.

BUILDING, REINFORCING, AND CHANGING CULTURE Managers can modify the visible aspects of culture, such as the language, stories, rites, rituals, and sagas. Managers can change the lessons to be drawn from common stories and even encourage individuals to see the reality they see. Top managers, in particular, can set the tone for a culture and for cultural change.

One of the key ways management influences the organizational culture is through the reward systems it establishes. In many larger U.S.-based firms the reward system matches the overall strategy of the firm and reinforces the culture emerging from day-to-day activities. Two patterns of reward systems, strategies, and corporate cultures are common: 1. A steady state strategy, matched with hierarchal rewards, which is consistent with what can be labeled a clan culture.

2. The second pattern stresses evolution and change. Here the rewards emphasize and reinforce a more market culture.

Managers can help foster a culture that provides answers to important questions concerning external adaptation and internal integration.

Mistakes that managers can make in building, reinforcing, and changing culture: 1. Trying to change people’s values from the top down while keeping the ways in which the organization operates the same.

2. Trying to change people’s values from the top down without recognizing the importance of individuals.

Attempting to revitalize an organization by dictating major changes and ignoring shared values.

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MANAGING ORGANIZATIONAL CULTURE AND INNOVATION Good managers are able to reinforce and support an existing strong culture; good managers are also able to help build resilient cultures in situations where the features of strong cultures are absent.

MANAGEMENT PHILOSOPHY AND STRATEGY Management philosophy links key goal-related issues with key collaboration issues to come up with general ways by which the firm will manage its affairs. A well developed management philosophy is important for the following reasons: 1. It establishes generally understood boundaries on all members of the firm.

2. It provides a consistent way of approaching new and novel situations.

3. It helps hold individuals together by assuring them of a known path toward success.

TENSIONS BETWEEN CULTURAL STABILITY AND INNOVATION Organizational cultural lag is a condition where dominant cultural patterns are inconsistent with new emerging innovations.

One of the key challenges to management in promoting innovation where there are widely held and strong attached-to shared values and common assumptions is to show how they apply to the new innovations.

CHAPTER STUDY GUIDE What is organizational culture?

• Organizational or corporate culture is the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members.

• The functions of the corporate culture include responding to both external adaptation and internal integration issues.

• Most organizations contain a variety of subcultures, and a few have countercultures that can sometimes become the source of potentially harmful conflicts.

• The corporate culture also reflects the values and implicit assumptions of the larger national culture.

How do you understand an organizational culture?

• Organizational cultures may be analyzed in terms of observable actions, shared values, and common assumptions (the taken-for-granted truths).

• Observable aspects of culture include the stories, rites, rituals, and symbols that are shared by organization members.

• Cultural rules and roles specify when various types of actions are appropriate and where individual members stand in the social system.

• Shared meanings and understandings help everyone know how to act and expect others to act in various circumstances.

• Common assumptions are the taken-for-granted truths that are shared by collections of corporate members.

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What is innovation, and why is it important?

• Innovation is the process of creating new ideas and then implementing them in practical applications.

• Steps in the innovation process normally include idea generation, initial experimentation, feasibility determination, and final application.

• Common features of highly innovative organizations include supportive strategies, cultures, structures, staffing, and senior leadership.

• Product innovations result in improved goods or services; process innovations result in improved work methods and operations.

• Process innovations introduce into operations new and better ways of doing things.

• While it is necessary to balance exploration and exploitation, it is difficult to accomplish.

How can we manage organizational culture and innovation?

• Executives may manage many aspects of the observable culture directly.

• Nurturing shared values among the membership is a major challenge for executives.

• Adjusting actions to common understandings limits the decision scope of even the CEO. • There are tensions between the tendency for cultural stability in most firms and the need to innovate.

KEY TERMS Countercultures: groups where the patterns of values and philosophies outwardly reject those of the larger organization or social system.

Cultural symbol: any object, act, or event that serves to transmit cultural meaning.

Exploitation: focuses on refinement and reuse of existing products and processes.

Exploration: calls for the organization and its managers to stress freedom and radical thinking and therefore opens the firm to big changes—or what some call radical innovations.

External adaptation: deals with reaching goals, the tasks to be accomplished, the methods used to achieve the goals, and the methods of coping with success and failure.

Innovation: the process of creating new ideas and putting them into practice.

Internal integration: deals with the creation of a collective identity and with ways of working and living together.

Management philosophy: a philosophy that links key goal-related issues with key collaboration issues to come up with general ways by which the firm will manage its affairs.

Multicultural organization: a firm that values diversity but systematically works to block the transfer of societally based subcultures into the fabric of the organization.

Observable culture: the way things are done in an organization.

Organizational cultural lag: a condition where dominant cultural patterns are inconsistent with new emerging innovations.

Organizational or corporate culture: the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members.

Organizational myth: a commonly held cause-effect relationship or assertion that cannot be supported empirically.

Process innovations: introduce into operations new and better ways of doing things.

Product innovations: introduce new goods or services to better meet customer needs.

Rites: standardized and recurring activities used at special times to influence the behaviors and understanding of organizational members.

Rituals: systems of rites.

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Sagas: embellished heroic accounts of the story of the founding of an organization.

Subcultures: groups who exhibit unique patterns of values and philosophies not consistent with the dominant culture of the larger organization or social system.

SPECIAL FEATURES Social Media and Corporations: Don’t Cross The Line When You Go Online Communications by Wall Street firms and employees are restricted by intensely detailed regulatory guidelines, which present a challenge for individual employees who wish to promote themselves using social media tools. Some firms ban all social media use by employees. Others are taking a predictably cautious approach to exploring social media.Ask students if they believe that banning social media is

a good idea? Why or why not? One option is to break the class into groups, beginning with different groups arguing each side of the argument. Have the students explore in groups and discuss with the rest of the class how social media has been beneficial to various organizations’ successes in the last decade. Further have them explore in groups and discuss with the rest of the class how social media has been beneficial to various sectors of society in the last decade Ethics in OB Picture the manager – well meaning, an overall good person, but facing a real dilemma: job cuts need to be made in a bad economy. Who gets laid off? Sarah is young, single and years out of college; she is very hard working topped the performance ratings this year, and always steps forward when volunteers are needed for evening work or travel. Mary is in her mid-40s, has two children, and her husband is a pediatrician; her performance is good, always at or above average during performance reviews, but she has limited time available for evening work and out of town travel. Ask students who they would pick for the layoff and why? Ask them further what other criterion can be used to decide who gets laid off in organizations? Should organizations always make sure that lay off decisions are ethical and legal? Have students debate both sides of this question.

Leaders on Leadership Christine Specht is a natural…..If you can think of a company president as a natural. In the summer of 2010 she unveiled the new logo and restaurant design for Cousin Subs. As the second generation to head this firm, she often stresses the importance of culture and her intention to keep stressing the key attributes her father instilled. Yet there is also the new. When she became Cousins president, Christine Specht visited all of the franchise operations and then reorganized the central office operations. Ask students what are some factors that have caused this organization to remain successful long term? Ask the students further how they think the organization could go about using social media to reinforce their original culture and values to their main stakeholders.

OB in Popular Culture In the movie, The Firm, hotshot lawyer Mitch McDeere (Tom Cruise) accepts a position at the Memphis law firm of Bendini, Lambert and Locke. After graduating first in his Harvard law School class, he knows what it means to work hard. He shows up early on the first day and finds himself alone in the firm’s law library. Sometime later, Lamar Quin (Terry Kinney) arrives to

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show him around. When Mitch say he “thought he would get a jump start on the bar exam”, Lamar quickly responds, “Good, because no associate of the firm ever failed the bar exam.” Let students describe some of the stories, rites, rituals and symbols that are representative of the organization’s culture where they have worked/ are working. Ask them further how these cultural elements have been received by themselves and their fellow employees?

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Research Insight What characteristics of innovation teams are linked to success? Authors in an Applied psychology article found that six team processes were particularly important: (1) vision – the degree of clarity and commitment to goals, 92) support for innovation – support both within and from outside, (3) task orientation – a climate for excellence, (4) cohesion – a commitment to the team and maintenance of group membership, (5) internal communications – quality interactions with the group, and (6) external communications – quality interaction with outsiders. Ask students if they agree with the six points for team success? Are any more important than the others?

Mastering Management This breakout describes how to become a better culture manager.

Group Project Divide the class into groups, give each group a copy of the university’s mission statement and send them on a cultural scavenger hunt. Tell them to be back in 30 minutes. Have groups share the stories, rites, rituals and symbols that they found and know about campus. For example, a statue of the university’s founder and the stories that are told about the founder. Ask them about things that reflect the mission statement and those that do not. If possible, have a prize for the team with the most ideas.

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Chapter 16 ORGANIZATIONAL GOALS AND STRUCTURES STUDY QUESTIONS 1.

2.

3.

4.

What are the different types of organizational goals?

What are the hierarchical aspects of organizations?

How is work organized and coordinated?

What are bureaucracies and what are the common forms?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

First Community Financial Tinker Toys Organizations Alive!

Fast-Food Technology Alien Invasion A Twenty-First-Century Manager Organizational Design Preference

CHAPTER OVERVIEW This chapter focuses on the basic attributes of organizations. The chapter begins by discussing the nature of mission and strategy in business organizations and how societal goals, output goals, and systems goals influence the formulation and implementation of mission and strategy. Next the chapter examines the hierarchical aspects of organizations through formal structure, vertical specialization, chain of command, and the distinction between line and staff units, control, and centralization versus decentralization. The chapter then turns to an examination of horizontal specialization and the coordination of work across horizontally differentiated organizational units.

Horizontal differentiation is explored within the context of traditional departmental structures ⎯ functional, divisional, and matrix. Next, the chapter examines personal and impersonal methods of coordinating departmental structures. The chapter concludes with a discussion of mechanistic structures (or machine bureaucracies), organic structures (or professional bureaucracies) and hybrid structures, which combine features of the mechanistic and organic types.

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CHAPTER OUTLINE WHAT ARE THE DIFFERENT TYPES OF ORGANIZATIONAL GOALS? Societal Goals Output Goals Systems Goals WHAT ARE THE HIERARCHICAL ASPECTS OF ORGANIZATIONS? Organizations as Hierarchies Controls Are a Basic Feature Centralization and Decentralization HOW IS WORK ORGANIZED AND COORDINATED? Traditional Types of Departments Coordination WHAT ARE BUREAUCRACIES AND WHAT ARE THE COMMON FORMS? Mechanistic Structure and the Machine Bureaucracy Organic Structures and the Professional Bureaucracy Hybrid Structures

CHAPTER LECTURE NOTES The chapter opens with the story about how some organizations benefit when they give employees more autonomy in their jobs. These companies are exploring alternatives to rigid rules and bureaucratic structures in order to keep valued employees and increase their productivity. These measures often align with harnessing employees’ passions, giving them flexible work schedules, or more clearly defining their roles.

ORGANIZATIONAL GOALS No firm can be all things to all people. By selecting goals, firms also define who they are and what they will try to become. The choice of goals involves the type of contribution the firm makes to the larger society and the types of outputs it seeks.

The goals of the organization should be internally consistent as well as consistent with the way in which the firm is organized.

SOCIETAL GOALS Societal goals reflect an organization’s intended contributions to the broader society.

By contributing to the larger society, organizations gain legitimacy, a social right to operate, and more discretion for their non-societal goals and operating practices. By claiming to provide specific types of societal contributions, an organization can make legitimate claims over resources, individuals, markets, and products.

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A firm’s societal contribution is often part of its mission statement, which is a written statement of organizational purpose. A good mission statement identifies whom the firm will serve and how it will go about accomplishing its societal purpose.

Organizations that can more effectively translate the positive character of their societal contribution into a favorable image have an advantage over firms that neglect this sense of purpose.

LECTURE ENHANCEMENT Bring a copy of the mission statement for your college or university to class. Discuss the institution’s strategic objectives in light of the mission statement. Have students also bring in copies of their organization’s mission statement and do the same.

OUTPUT GOALS Although an organization may have a primary beneficiary, its mission statement may also recognize the interests of many other parties.

Output goals define the type of business an organization is in and which provide some substance to the more general aspects of mission statements.

SYSTEMS GOALS Systems goals are concerned with conditions within the organization that are expected to increase its survival potential.

For many organizations, systems goals include growth, productivity, stability, harmony, flexibility, prestige, and human resource maintenance.

Systems goals must often be balanced against one another. Different parts of the organization are often asked to pursue different types of systems goals. The relative importance of different systems goals can vary substantially across various types of organizations.

Well-defined systems goals can accomplish the following • They can focus managers’ attention on what needs to be done.

• They can provide flexibility in devising ways to meet important targets.

• They can be used to balance the demands, constraints, and opportunities facing the firm.

• They can form a basis for dividing the work of the firm (i.e., developing a formal structure).

HIERARCHY AND CONTROL Successful organizations develop a structure that is consistent with the pattern of goals and strategy established by senior management.

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The formal structure that shows the planned configuration of positions, job duties, and the lines of authority among different parts of the enterprise.

Traditionally, the formal structure of the firm has also been called the division of labor.

LECTURE ENHANCEMENT To introduce material regarding basic attributes of organizations, describe for the students the organization structure that exists at your college/university. Focus on why the college/university is organized as it is and what is accomplished through this organization form. Also give attention to how this structure reflects the institution’s strategy.

ORGANIZATIONS AS HIERARCHIES Vertical specialization is the hierarchical division of labor that distributes formal authority and establishes where and how critical decisions are to be made. This division of labor creates a hierarchy of authority ⎯ an arrangement of work positions in order of increasing authority.

The Organization Chart The organization chart is a diagram that depicts the formal structures of organizations. Figure 16.1 from the textbook provides an example of a partial organization chart for a large university.

As such, it shows the various positions, the position holders, and the lines of authority that link them to one another.

While an organization chart may clearly indicate who reports to whom, it is also important to recognize that it does not show how work is completed, who exercises the most power over specific issues, or how the firm will respond to its environment.

The chain of command is a listing of who reports to whom up and down the organizational hierarchy.

Unity of command. ⎯ the notion that each individual should have one boss and each unit one leader ⎯ is considered necessary to avoid confusion, to assign accountability to specific individuals, and to provide clear channels of communication up and down the organization.

Span of Control Span of control refers to the number of individuals reporting to a supervisor. Narrower spans of control are expected when tasks are complex, when subordinates are inexperienced or poorly trained, or when tasks call for team effort. Narrow spans of control yield many organizational levels that are not only expensive but also make the organization unresponsive to necessary change.

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New information technologies now allow organizations to broaden the span of control, flatten their formal structures, and still maintain control of complex operations.

Line and Staff Units Line units are work groups that conduct the major business of the organization.

Staff units are work groups that assist the line units by performing specialized services to the organization.

Other distinctions between line and staff: 1. Nature of the relationship of a unit in the chain of command. Although all units reporting to a higher level staff unit are considered staff from an organizational perspective, some subordinate staff units are charged with conducting the major business of the higher unit—they have a line relationship up the chain of command.

2. The amount and types of contacts each maintains with outsiders to the organization. Some units are mainly internal in orientation; others are more external in focus.

• Internal line units focus on transforming raw materials and information into products and services.

• External line units focus on maintaining linkages to suppliers, distributors, and customers.

• Internal staff units assist the line units in performing their functions.

• External staff units assist the line units, but the focus is on linking the firm to the environment and buffering internal operations.

Staff units can be assigned predominantly to senior-, middle-, or lower-level managers. When staff responsibilities are assigned predominantly to senior management, the capability of senior management to develop alternatives and make decisions is expanded.

Some firms are outsourcing many of their staff functions.

One of the foremost trends in management involves using information technology to streamline operations and reduce staff in order to lower costs and raise productivity.

LECTURE ENHANCEMENT For small businesses that are unsure of how to organize, an excellent resource from which to obtain management advice is SCORE, or the Service Corps of Retired Executives. SCORE maintains a Web site at http://www.score.org/.

CONTROL ARE A BASIC FEATURE Control is the set of mechanisms used to keep action or outputs within predetermined limits.

Control deals with setting standards, measuring results versus standards, and instituting corrective action.

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LECTURE ENHANCEMENT Before you discuss controls, you may want to solicit student input by asking them to identify some examples of controls that are used in organizations. You can simply record these controls on the chalkboard, whiteboard, or overhead projector as they are offered. Students typically provide many examples ranging from a minimum GPA requirement to liquor laws to shoplifting guards. You can then use some of the examples to illustrate the different types of controls presented below.

Output Controls Output controls focus on desired targets and allow mangers to use their own methods for reaching defined targets. Most modern organizations use output controls as part of an overall method of managing by exception. Output controls promote flexibility and creativity as well as facilitate dialogue concerning corrective action.

Process Controls Process controls attempt to specify the manner in which tasks are accomplished. Types of process controls include the following: • Policies, Procedures, and Rules • Formalization and Standardization • Total Quality Management Policies, procedures, and rules A policy is a guideline for action that outlines important objectives and broadly indicates how an activity is to be performed.

Procedures indicate the best method for performing a task, show the aspects of a task that are most important, or outline how an individual is to be rewarded.

Rules typically describe in detail how a task or a series of tasks is to be performed, or they indicate what cannot be done.

Rules, procedures, and policies are often employed as substitutes for direct managerial supervision.

Formalization and standardization Formalization is the written documentation of work rules, policies, and procedures.

Standardization is the degree to which the range of actions in a job or series of jobs is limited so that actions are performed in a uniform manner.

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Total quality management Establishing a total quality management process within the firm is based on the ideas of the late W. Edwards Deming regarding continual improvement resting upon statistical analyses of the firm’s operations Deming’s 14 points for achieving total quality management (see also Figure 16.2) include the following : 1. Create a consistency of purpose in the company to innovate, put resources into research and education, and put resources into maintaining equipment and new production aids.

2. Learn a new philosophy of quality to improve every system.

3. Require statistical evidence of process control and eliminate financial controls on production.

4. Require statistical evidence of control in purchasing parts; this will mean dealing with fewer suppliers.

5. Use statistical methods to isolate the sources of trouble.

6. Institute modern on-the-job training.

7. Improve supervision to develop inspired leaders.

8. Drive out fear and instill learning.

9. Break down barriers between departments.

10. Eliminate numerical goals and slogans.

11. Constantly revamp work methods.

12. Institute massive training programs for employees in statistical methods.

13. Retrain people in new skills.

14. Create a structure that will push, every day, on the above 13 points.

The Illusion of Control One of the myths in management is the illusion of control. With too many output and process goals, subordinates appear to have very little flexibility. However, as the number of output and process controls escalates, so do the conflicts between the output and process controls. The result is that subordinates begin to pick and choose which controls they follow and managers only have the illusion that subordinates are reaching toward the specified goals.

CENTRALIZATION AND DECENTRALIZATION Centralization is the degree to which the authority to make decisions is restricted to higher levels of management.

Decentralization is the degree to which the authority to make decisions is given to lower levels in an organization’s hierarchy.

Greater centralization is often adopted when the firm faces a single major threat to its survival.

Decentralization has the following effects: • It provides higher subordinate satisfaction.

• It provides a quicker response to a diverse series of unrelated problems.

• It assists in on-the-job training of subordinates for higher-level positions.

• Decentralization encourages participation in decision making.

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ORGANIZING AND COORDINATING WORK Horizontal specialization is a division of labor that establishes specific work units or groups within an organization; it is often referred to as the process of departmentation.

Whenever managers divide tasks and group similar types of skills and resources together, they must also be concerned with how each group’s individual efforts will be integrated with others ⎯ this is coordination.

TRADITIONAL TYPES OF DEPARTMENTS Since the pattern of departmentation is so visible and important in a firm, managers often refer to their pattern of departmentation as the departmental structure. While most firms use a mix of various types of departments, it is important to take a look at the traditional types and what they do and do not provide the firm.

Functional Departments Functional departments group individuals by skill, knowledge, and action. Figure 16.3 from the textbook identifies the major advantages and disadvantages of functional departmentation or functional specialization.

Advantages of departmentation by function include the following: • Yields very clear task assignments, consistent with an individual’s training.

• Individuals within a department can easily build on one another’s knowledge, training, and experience.

• Provides an excellent training ground for new managers.

• It is easy to explain.

• Takes advantage of employee technical quality.

Disadvantages of departmentation by function include the following: • May reinforce the narrow training of individuals.

• May yield narrow, boring, and routine jobs.

• Communication across technical area is complex and difficult.

• “Top management overload” with too much attention to cross-functional problems.

• Individuals may look up the organizational hierarchy for direction and reinforcement rather than focus attention on products, services, or clients.

LECTURE ENHANCEMENT Ask students to think about how the curriculum at their college/university addresses the different functions of business. Are marketing, finance, production, and human resource management, for instance, taught as stand-alone courses, or are they taught in some integrated fashion? As standalone courses, what does this convey to students about the functional chimneys of business? What does any integrated format convey about tearing down these functional chimneys?

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Divisional Departments Divisional departments group individuals and resources by products, territories, services, clients, or legal entities.

Figure 16.4 from the textbook shows a divisional pattern of organization grouped around products, regions, and customers for three divisions of a conglomerate. This pattern is often used to meet diverse external threats and opportunities. Figure 16.4 also identifies the major advantages and disadvantages of divisional specialization.

Advantages of divisional departmentation include the following: • Promotes adaptability and flexibility in meeting the demands of important external groups.

• Allows for spotting external changes as they emerge.

• Provides for the integration of specialized personnel.

• Focuses on the success or failure of particular products, services, clients, or territories.

Disadvantages of divisional departmentation include the following: • Does not provide a pool or highly trained individuals with similar expertise to solve problems and train others • Allows duplication of effort, as each division attempts to solve similar problems.

• May give priority to divisional goals over the health and welfare of the overall organization.

• Creates conflict between divisions over shared resources.

Matrix Structures Matrix structures are the simultaneous use of both the functional and divisional forms of departmentation. Figure 16.5 provides an example of the matrix pattern in an aerospace organization.

Advantages of matrix departmentation include the following: • Combines strengths of both functional and divisional departmentation.

• Blends technical and market emphasis.

• Provides a series of managers able to converse with both technical and marketing personnel.

Disadvantages of matrix departmentation include the following: • Very expensive.

• Unity of command is loose (individuals have more than one supervisor).

• Authority and responsibilities of managers may overlap, causing conflicts and gaps in effort across units and inconsistencies in priorities.

• It is difficult to explain to employees.

LECTURE ENHANCEMENT Ask students to consider the project teams on which they most likely have worked in one or more of their courses. Have them describe the challenges they have encountered in responding to the expectations of both the project team leader and the course instructor. Relate their descriptions to the preceding discussion of the advantages and disadvantages of matrix departmentation.

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COORDINATION Coordination is the set of mechanisms that an organization uses to link the actions of its units into a consistent pattern.

Much of the coordination within a unit is handled by its manager.

Smaller organizations may rely on their management hierarchy to provide the necessary consistency and integration. As the organization grows, managers become overloaded and the organization needs to develop more efficient and effective ways of linking work units to one another.

Personal Methods of Coordination Personal methods of coordination produce synergy by promoting dialogue, discussion, innovation, creativity, and learning, both within and across organizational units. As new information technologies have moved into practice, the potential for developing and maintaining effective contact networks has expanded. For example, many executives use e-mail to supplement direct personal communication.

The most common personal methods of coordination are direct contact between and among organizational members and committee memberships. As more organizations develop flatter structures with greater delegation, they are finding that task forces can be quite useful. Whereas committees tend to be long lasting, task forces are typically formed with a more limited agenda.

The appropriate mix of personal coordination methods should be tailored to the individual skills, abilities, and experiences of subordinates.

Impersonal Methods of Coordination Impersonal methods of coordination produce synergy by stressing consistency and standardization so that individual pieces fit together. Impersonal coordination methods are often refinements and extensions of process controls with an emphasis on formalization and standardization.

Historically, firms used specialized departments to coordinate across units. However, this method is expensive and often results in considerable rigidity.

Two powerful impersonal methods of coordination are the matrix form of departmentation and management information systems. The management information system becomes an electronic network, linking individuals throughout the organization.

While control involves the vertical exercise of formal authority involving targets, measures, and corrective action, coordination stresses cooperative problem solving.

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BUREAUCRACY AND BEYOND Bureaucracy is an ideal form of organization, the characteristics of which were defined by the German sociologist Max Weber. Weber argued that the rational and logical idea of bureaucracy was superior to building the firm based on charisma or cultural tradition.

• The “charismatic” ideal-type organization was overly reliant on the talents of one individual and could fail when the leader leaves.

• Too much reliance on cultural traditions blocked innovation, stifled efficiency, and was often unfair.

Bureaucracies rely on a division of labor, hierarchical control, promotion by merit with career opportunities for employees, and administration by rule.

Just as interpretations of Weber have evolved over time, so has the notion of a bureaucracy. The chapter discusses two popular basic types of bureaucracies: the mechanistic structure and machine bureaucracy and the organic structure and professional bureaucracy as well as some hybrid approaches.

MECHANISTIC STRUCTURE AND THE MACHINE BUREAUCRACY The mechanistic type (or machine bureaucracy) emphasizes vertical specialization and control.

Mechanistic organizations stress rules, policies, and procedures; specify techniques for decision making; and emphasize developing well-documented control systems backed by a strong middle management and supported by a centralized staff. Firms often use the mechanistic design in pursuing a strategy of becoming a low cost leader.

The prime advantage of the mechanistic type is efficiency through extensive vertical and horizontal specialization. Tied together with elaborate controls and impersonal coordination mechanisms.

Disadvantages of the mechanistic type include the following: • Employees may not like rigid designs, which may result in motivational problems.

• Unions further solidify narrow job description by demanding fixed work rules to protect employees from extensive vertical controls.

• Key employees may leave.

• The organization is less able to adjust to subtle external changes or new technologies.

ORGANIC STRUCTURES AND THE PROFESSIONAL BUREAUCRACY The organic type (or professional bureaucracy) is much less vertically oriented than its mechanistic counterpart and it emphasizes horizontal specialization.

Organic organizations have minimal procedures and rely on the judgments of experts and personal means of coordination. Firms using the organic design find it easier to pursue strategies that emphasize product quality, quick response to customers, or innovation.

Advantages of the organic type include the following: • It is better than the mechanistic type for problem solving and serving customer needs.

• Centralized direction by senior management is less intense.

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•

The organization is good at detecting external changes and adjusting to new technologies.

Disadvantages of the organic type include the following: • It is not as efficient as the mechanistic type.

• It has restricted capacity to respond to central management direction.

LECTURE ENHANCEMENT Xerox is an example of an organization that has moved back and forth between a mechanistic structure and an organic structure. Under Xerox’s founder, Joseph Wilson, the company was positioned on the organic end of the continuum as evidenced by its “loose organizational structure.” Wilson’s successor as CEO, Peter McClough moved Xerox toward the mechanistic end through the implementation of much-needed controls. When David Kearnes took over as CEO, however, he found that slow decision making, unnecessary layers of management, and an inability to respond to face-paced market changes characterized the mechanistic structure McClough had implemented. Kearnes responded to these problems by moving Xerox back toward an organic design that included small product teams and encouraged diversification.

(Source: “Culture Shock at Xerox,” Business Week, June 22, 1987; “Remaking the American CEO,” New York Times, January 25, 1987, p. C-8.)

HYBRID STRUCTURES Many very large firms have found that neither the mechanistic nor the organic approach was suitable for all their operations.

Common types of hybrid structures include: • The divisional firm, an extension of the divisional pattern of departmentation, is composed of quasi-independent divisions so that different divisions can be more or less organic or mechanistic.

• A conglomerate is a single corporation that contains a number of unrelated businesses. The conglomerate simultaneously illustrates three key points: 1. All structures are combinations of the basic elements.

2. There is no one best structure ⎯ the appropriate structure depends on factors such as the size of the firm and its environment, technology, and strategy.

3. The firm does not stand alone but is part of a larger network of firms that compete against other networks.

LECTURE ENHANCEMENT Have the students analyze the structure of the college/university they are attending. Is it a mechanistic structure, an organic structure, or a hybrid structure? What particular characteristics of the organization did they consider in arriving at their analytical conclusions?

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CHAPTER STUDY GUIDE What are the different types of organizational goals?

• Societal goals: organizations make specific contributions to society and gain legitimacy from these contributions.

• A societal contribution focused on a primary beneficiary may be represented in the firm’s mission statement.

• Output goals: as managers consider how they will accomplish their firm’s mission, many begin with a very clear statement of which business they are in.

• Firms often specify output goals by detailing the types of specific products and services they offer.

• Systems goals: Corporations have systems goals to show the conditions managers believe will yield survival and success.

• Growth, productivity, stability, harmony, flexibility, prestige, and human resource maintenance are examples of systems goals.

What are the hierarchical aspects of organizations?

• The formal structure is also known as the firm’s division of labor.

• The formal structure defines the intended configuration of positions, job duties, and lines of authority among different parts of the enterprise.

• Vertical specialization is used to allocate formal authority within the organization and may be seen on an organization chart.

• Vertical specialization is the hierarchical division of labor that specifies where formal authority is located. Typically, a chain of command exists to link lower-level workers with senior managers.

• The distinction between line and staff units also indicates how authority is distributed, with line units conducting the major business of the firm, and staff providing support.

• Managerial techniques, such as decision support and expert computer systems, are used to expand the analytical reach and decision-making capacity of managers and to minimize staff.

• Controls are sets of mechanisms the organization uses to keep action or outputs within predetermined levels.

• Output controls focus on desired targets and allow managers to use their own methods for reaching these targets.

• Process controls specify the manner in which tasks are to be accomplished through (1) policies, rules, and procedures; (2) formalization and standardization; and (3) total quality management processes.

• Firms are learning that decentralization often provides substantial benefits.

How is work organized and coordinated?

• Horizontal specialization is the division of labor that results in various work units and departments in the organization.

• Three main types or patterns of departmental structures exist: functional, divisional, and matrix. Each pattern of departmental structure has a mix of advantages and disadvantages.

• Organizations may successfully use any type, or a mixture, as long as the strengths of the structure match the needs of the organization.

• Coordination is the set of mechanisms an organization uses to link the actions of separate units into a consistent pattern.

• Personal methods of coordination produce synergy by promoting dialogue, discussion, innovation, creativity, and learning.

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•

Impersonal methods of control produce synergy by stressing consistency and standardization so that individual pieces fit together.

What are bureaucracies and what are the common forms?

• The bureaucracy is an ideal form based on legal authority, logic, and order that provides superior efficiency and effectiveness.

• Mechanistic, organic, and hybrids are common types of bureaucracies.

• Hybrid types include the divisionalized firm and the conglomerate. No one type is always superior to the others.

KEY TERMS Bureaucracy: a structural form that relies on a division of labor, hierarchical control, promotion by merit with career opportunities for employees, and administration by rule.

Centralization: the degree to which the authority to make decisions is restricted to higher levels of management.

Conglomerates: a single corporation that contains a number of unrelated businesses.

Control: the set of mechanisms used to keep action or outputs within predetermined limits.

Coordination: the set of mechanisms that an organization uses to link the actions of its units into a consistent pattern.

Decentralization: the degree to which the authority to make decisions is given to lower levels in an organization’s hierarchy.

Divisional departmentation: groups individuals and resources by products, territories, services, clients, or legal entities.

Formalization: the written documentation of work rules, policies, and procedures.

Functional departmentation: groups individuals by skill, knowledge, and action.

Horizontal specialization: a division of labor that establishes specific work units or groups within an organization; it is often referred to as the process of departmentation.

Line units: work groups that conduct the major business of the organization.

Matrix departmentation: the simultaneous use of both the functional and divisional forms of departmentation.

Mechanistic type or machine bureaucracy: a structural type that emphasizes vertical specialization and control.

Mission statements: written statements of organizational purpose.

Organic type or professional bureaucracy: a structural type that is much less vertically oriented than its mechanistic counterpart and which emphasizes horizontal specialization.

Organization charts: diagrams that depict the formal structures of organizations.

Output controls: controls that focus on desired targets and allow mangers to use their own methods for reaching defined targets.

Output goals: goals that define the type of business an organization is in and which provide some substance to the more general aspects of mission statements.

Process controls: controls that attempt to specify the manner in which tasks are accomplished.

Societal goals: goals that reflect an organization’s intended contributions to the broader society.

Span of control: the number of individuals reporting to a supervisor.

Staff units: work groups that assist the line units by performing specialized services to the organization.

Standardization: the degree to which the range of actions in a job or series of jobs is limited so that actions are performed in a uniform manner.

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Systems goals: goals that are concerned with conditions within the organization that are expected to increase its survival potential.

Vertical specialization: the hierarchical division of labor that distributes formal authority and establishes where and how critical decisions are to be made.

SPECIAL FEATURES Employee Autonomy: A Little Freedom Goes a Long Way Jack Welch Jr., the former CEO and chairman of general Electric felt that to get the most out of your employees, you needed to provide them with clear goals and the freedom to excel according to their own rules. He is not alone. There’s a growing consensus that organizations benefit when they give employees more autonomy in their jobs. These companies are exploring alternatives to rigid rules and bureaucratic structures in order to keep valued employees and increase their productivity. These measures often align with harnessing employees’ passions, giving them flexible work schedules, or more clearly defining their roles. Ask students what they think the advantages and disadvantages are to giving employees more autonomy in their jobs? Ask students to further choose the best job they have had and have them think of ways in which they could increase the autonomy of such a job. Let students share their answers with the class after their self-reflection.

Ethics in OB As organizations restructure, and cut back on staff” they place a greater burden on those employees that remain. Ask students if they have ever experienced that overburdened state in any organization they have worked? What are some ways in which the organization they have worked have dealt with decreased staff? Could the organizations have addressed the shortage in a different manner that would still result in cost savings but also allow employees to feel less burdened?

Leaders on Leadership When the WNBA’s Seattle Storm announced Karen Bryant as the new Storm CEO, success was far from clear. Known as KB, Bryant was a local high school basketball superstar with a modest record as a collegian. After beginning her new position, Bryant set clear compatible goals: (1) world-class basketball, (2) fan accessibility and affordability, (3) a sense of community and (4) a successful business model. In 2009, the Storm fielded a competitive team, stressing ticket prices that allowed the whole family to attend and stressing extensive community involvement. In 2010 The Storm organization reached the goals initially set by KB – the WNBA Championship. Ask students what about KB’s style of leadership has allowed her to overcome the obstacles she has faced? Ask the students further if they have faced any obstacles themselves and what about their own personalities have allowed them to overcome their obstacles?

OB in Popular Culture Pixar’s Ratatouille is the story about a rat named Remy that aspires to be a great cook like his hero, Chef Auguste Gusteau. Following an accident that separates Remy from the rest of his family, he finds himself in Paris. In a short time, he is peering down through a skylight into the restaurant made famous by the now departed Gusteau. As he observes, he learns that all the

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positions in the kitchen are critical – even that of the garbage boy. Have students think about lower level positions in the organizations they have worked? How did these positions (e.g. janitor, busboy, security guard) impact the overall goals of the organization? Let students further think about the lower level positions at the university/college they attend and do the same.

Mastering Management This breakout describes managerial challenges in a bureaucracy. They include: overspecialization, over reliance on the chain of command, objectification of senior executives, overemphasis on conformity and rules as ends in and of themselves.

Research Insight In a study of independent contractors on a movie set, an interesting organizational structure was found. Each contractor negotiates a role with the others. Efforts are coordinated through an informal process. For the most part, everyone is on their best behavior and works together to complete the job. Ask students how this same process might occur in an organization with a formal structure.

Group Project Have the students work in groups to “re-write” the mission of their college or university. Some questions that might help them include: • What is not included that should be and why?

• What is included that should not be and why?

• What are the words that speak volumes to the real mission of the university? Do you think the crafters of the mission statement meant those words to carry a great deal of weight?

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Chapter 17 STRATEGY, TECHNOLOGY, AND ORGANIZATIONAL DESIGN STUDY QUESTIONS 1.

2.

3.

4.

5.

Why are strategy and organizational learning important?

What is organizational design and how is it linked to strategy?

How does technology influence organizational design?

How does the environment influence organizational design?

How should the whole organization be led strategically?

OB IN ACTION Case for Critical Thinking Team and Experiential Exercises

Self-Assessment Portfolio

Mission Management and Trust Tinker Toys Organizations Alive Alien Invasion A 21st-Century Manager Group Effectiveness Organizational Design Preferences

CHAPTER OVERVIEW This chapter wraps up the textbook with a focus on strategic capabilities and design. The first section covers strategy and organizational learning. Strategy is the process of positioning the organization in the competitive environment and implementing actions to compete successfully. It is a pattern in a stream of decisions. Organizational learning is the process of acquiring knowledge and using information to adapt successfully to changing circumstances.

The second section of the chapter describes organizational design and its link to strategy. It describes how organizational design is a way to implement the positioning of the firm in its environment and provide a basis for a consistent stream of decisions. The third section of the chapter discusses how organizational design is the process of choosing and implementing a structural configuration for an organization. Organizational design is a way to implement the positioning of the firm in its environment. The final section of the chapter describes how organizations, as open systems, need to receive inputs from the environment and, in turn, to sell outputs to their environment. Therefore, understanding the environment is important,

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CHAPTER OUTLINE WHY ARE STRATEGY AND ORGANIZATIONAL LEARNING IMPORTANT? Strategy Organizational Learning Linking Strategy and Organizational Learning WHAT IS ORGANIZATIONAL DESIGN AND HOW IS IT LINKED TO STRATEGY? Organizational Design and Strategic Decisions Organizational Design, Age and Growth Smaller Size and the Simple Design HOW DOES TECHNOLOGY INFLUENCE ORGANIZATIONAL DESIGN? Operations Technology and Organizational Design Adhocracy as a Design Option for Innovation and Learning Information Technology and Organizational Design HOW DOES THE ENVIRONMENT INFLUENCE ORGANIZATIONAL DESIGN? Environmental Complexity Using Networks and Alliances STRATEGIC LEADERSHIP OF THE WHOLE ORGANIZATION Strategic Leadership and the Challenges at Multiple Levels Developing a Top Management Team Using Top Management Leadership Skills

CHAPTER LECTURE NOTES The chapter opens with information on a strategic merger between American Airlines and Citibank. The two companies are involved in a partnership to release a co-branded AAdvantage Citi Visa card. Along with an initial signing bonus, cardholders earn frequent flyer miles for nearly every purchase on the card. The partnership is mutually beneficial: Citibank purchases miles in bulk from American, which in turn releases demographic information about AAdvantage members to Citi.

STRATEGY AND ORGANIZATIONAL LEARNING STRATEGY Strategy is the process of positioning the organization in the competitive environment and implementing actions to compete successfully. Choosing the types of contributions the firm intends to make to the larger society, precisely whom it will serve, and exactly what it will provide to others are conventional ways in which firms begin to make the pattern of decisions and corresponding implementations that define its strategy.

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The Strategy Process The strategy process is ongoing. It should involve individuals at all levels of the firm to ensure that there is a recognizable, consistent pattern—yielding a superior capability over rivals—up and down the firm and across all of its activities. This recognizable pattern involves many facets to develop a sustainable and unique set of dynamic capabilities.

Strategy and Co-Evolution With astute senior management, the firm can coevolve.

That is, the firm can adjust to both internal and external changes even as it shapes some of the challenges facing it. Co-evolution is a process, and one aspect of this process is repositioning the firm in its setting as the setting changes. A shift in the environment may call for adjusting the firm’s scale of operations. Senior management can also guide the process of positioning and repositioning in the environment.

ORGANIZATIONAL LEARNING Organizational learning is the process of knowledge acquisition, information distribution, information interpretation, and organizational retention in adapting successfully to changing circumstances. Organizational learning involves the adjustment of the organization’s and individual’s actions based on its experience and that of others. Organizational learning is the key to successful co-evolution.

How Organizations Acquire Knowledge Firms obtain information and knowledge in a variety of ways and at different rates during their histories.

Mimicry occurs when managers copy what they believe are the successful practices of others.

Mimicry is important to the new firm for the following reasons: 1. It provides workable, if not ideal, solutions to many problems.

2. It reduces the number of decisions that need to be analyzed separately, allowing managers to concentrate on more critical issues 3. It establishes legitimacy or acceptance by employees, suppliers, and customers and narrows the choices calling for detailed explanations.

Failure often results from simply copying others without attempting to understand the issues involved or the cause-effect relationships.

Experience: A primary way to acquire knowledge is through experience. Besides learning by doing, managers can also systematically embark on structured programs to capture the lessons to be learned from failure and success. The major problem with emphasizing learning by doing is the inability to forecast precisely what will change and how it will change.

Vicarious learning involves capturing the lessons of others’ experiences. Typically successful vicarious learning involves both scanning and grafting.

• Scanning involves looking outside the firm and bringing back useful solutions.

• Grafting is the process of acquiring individuals, units, or firms to bring in useful knowledge.

Information Distribution and Interpretation: Once information is obtained, managers must establish mechanisms to distribute relevant information to the individuals who may need it. A primary challenge in larger firms is to locate quickly who has the appropriate information and who needs specific types of information.

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Retention: Organizations contain a variety of mechanisms that can be used to retain useful information. Seven important ones are: 1. Individuals—The most important storehouses of information for organizations are employees.

2. Transformation mechanisms—Documents, rule books, written procedures, and even standard but unwritten methods of operation are all transformation mechanisms used to store accumulated information.

3. Formal structure—The organization’s formal structure and the positions in an organization are less obvious but equally important mechanisms for storing information.

4. Physical structures—Physical structures (or ecology, in the language of learning theorists) are potentially important mechanisms used to store information.

5. External archives—External archives can be tapped to provide valuable information about most larger organizations.

6. IT Systems—Finally, internal information technology of a firm, or its IT system, can provide a powerful and individually tailored mechanism for storing information.

LINKING STRATEGY AND ORGANIZATIONAL LEARNING It is important to emphasize that sustaining a competitive strategy with consistent innovation and learning involves more than just a commitment by individuals; it calls for a systematic adjustment of the organization’s structure and processes to alterations in the size and scope of operations, the technology selected, and the environmental setting. The process involved in making these dynamic adjustments is known as organizational design.

STRATEGY AND ORGANIZATIONAL DESIGN Organizational design is the process of choosing and implementing a structural configuration.

The choice of an appropriate organizational design is contingent upon several factors, including the size of the firm, its operations and information technology, its environment, and the strategy it selects for growth and survival.

ORGANIZATIONAL DESIGN AND STRATEGIC DECISIONS Strategy is both a positioning of the firm in its environment to provide it with the capability to succeed and a pattern in the stream of decisions.

The structural configuration of organizations (or organizational design) should accomplish the following: 1. It should enable senior executives to emphasize the skills and abilities that their firms need to compete as well as to remain agile and dynamic in a rapidly changing world.

2. It should allow for individuals to experiment, grow, and develop competencies so that the strategy of the firm can evolve.

ORGANIZATIONAL DESIGN, AGE AND GROWTH As organizations grow, the design of the firm needs to be adjusted.

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The Perils of Growth and Age A managerial script is a series of well-known routines for problem identification, alternative generation, and analysis common to managers within a firm. The script may be elaborate enough to provide an apparently well-tested series of solutions based on the firm’s experience. Older firms are rarely structured for learning; rather, they are structured for efficiency. Few managers question a successful script. Consequently, they start solving today’s problems with yesterday’s solutions.

Overcoming Inertia For larger organizations a key challenge is eliminating the vertical, horizontal, external, and geographic barriers that block desired action, innovation, and learning.

There are several major factors associated with the inability to dynamically co-evolve and develop a cycle with positive benefits, but three are obvious from current research.

1. Organizational inertia 2. Hubris 3. Detachment SMALLER SIZE AND THE SIMPLE DESIGN To develop greater capabilities managers must adjust the organizational design to take advantage of the size, technology and environment of the firm even as they adjust the design to alter each of these.

Size and organizational design Large organizations cannot be just bigger versions of their smaller counterparts.

As the number of individuals in a firm increases arithmetically, the number of possible interconnections among them increases geometrically.

The design of small firms is directly influenced by core operations technology.

Larger firms have many core operations technologies in a variety of much more specialized units, thereby resulting in greater organizational complexity than in smaller firms.

Small Size and the Simple Design The simple design is a configuration involving one or two ways of specializing individuals and units. Vertical specialization and control typically emphasize levels of supervision without elaborate formal mechanisms (e.g., rule books and policy manuals), and the majority of the control resides in the manager.

The simple design is appropriate for many small firms, such as family businesses, retail stores, and small manufacturing firms.

The strengths of the simple design are simplicity, flexibility, and responsiveness to the desires of a central manager.

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The perils of size and age occur when an organizations ages and begins to grow beyond the simple structure, becoming more rigid, inflexible, and difficult to change.

TECHNOLOGY AND ORGANIZATIONAL DESIGN

Organizational design must be adjusted to fit technological opportunities and requirements.

Operations technology is the combination of resources, knowledge, and techniques that creates a product or service output for an organization.

Information technology is the combination of machines, artifacts, procedures, and systems used to gather, store, analyze, and disseminate information for translating it into knowledge.

OPERATIONS TECHNOLOGY AND ORGANIZATIONAL DESIGN Two common classifications of operations technology are Thompson’s classification and Woodward’s classification.

Thompson’s View of Technology Thompson classified technologies based on the degree to which the technology could be specified and the degree of interdependence among the work activities.

• Under intensive technology, there is uncertainty as to how to produce desired outcomes.

Coordination and knowledge exchange are of critical importance with this kind of technology.

• Mediating technologies link parties that want to become interdependent. The degree of coordination among the individual tasks with pooled technology is substantially reduced.

Information management becomes more important than coordinated knowledge application • Under long-linked technology ⎯ also called mass production or industrial technology ⎯ the way to produce the desired outcome is known. The task is broken down into a number of sequential steps. Control is critical, and coordination is restricted to making the sequential linkages work in harmony.

Woodword’s View of Technology Woodward also divides technology into three categories: • In small-batch production, a variety of custom products are tailor-made to fit customer specifications.

• In mass production, the organization produces one or a few products through an assemblyline system.

• Organizations using continuous-process technology produce a few products using considerable automation.

Woodward concluded that the combination of structure and technology was critical to the success of the organizations. When technology and organizational design were matched properly, a firm was more successful.

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ADHOCRACY AS A DESIGN OPTION FOR INNOVATION AND LEARNING In those instances where managers and employees simply do not know the appropriate way to service a client or to produce a particular product, an adhocracy may be an appropriate structural design.

Adhocracy is an organizational structure that is characterized by few rules, policies, and procedures; substantial decentralization; shared decision-making among members; extreme horizontal specialization; few levels of management; and virtually no formal controls.

The adhocracy is particularly useful when an aspect of the firm’s operations technology presents two sticky problems: • The tasks facing the firm vary considerably and provide many exceptions.

• Problems are difficult to define and resolve.

INFORMATION TECHNOLOGY AND ORGANIZATIONAL DESIGN Information technology, the Web, and the computer are not only virtually inseparable, but they have also fundamentally changed the organizational design of firms to capture new competencies.

From an organizational standpoint, IT can be used, among other things, as a partial substitute for some operations as well as some process controls and impersonal methods of coordination. IT has a strategic capability as well as a capability for transforming information to knowledge.

IT as a Substitute In many organizations the initial implementation of IT displaced the most routine, highly specified, and repetitious jobs. A second wave of substitution replaced process controls and informal coordination mechanisms.

IT to Add Capability IT adds capability in several ways; • It provides individuals deep within the organization the information they need to plan, make choices, coordinate with others, and control their own operations.

• It opens new opportunities for learning through electronic commerce, teleconferencing and cell phones • It empowers individuals by expanding their jobs and making jobs both interesting and challenging • It connects task forces and temporary teams • It can be linked to total quality management (TQM) programs and embedded in machinery.

The Virtual Organization And IT Opportunities E- Business and IT: Whether it is business to business (B2B) or business to consumers (B2C), there is a whole new set of firms with information technology at the core of their operations.

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The Virtual Organization Firms are finding IT can be the basis for a new way to compete through “virtual organizations.” A virtual organization is an ever-shifting constellation of firms, with a lead corporation that pools skills, resources, and experiences to thrive jointly.

The virtual organization works if it operates by some unique rules and is led in a most untypical way: • The production system that yields the products and services that customers desire needs to be a partner network among independent firms where they are bound together by mutual trust and collective survival.

• This partner network needs to develop and maintain (a) an advanced information technology (rather than just face-to-face interaction), (b) trust and cross-owning of problems and solutions, and (c) a common shared culture.

Virtual Projects With a “virtual” network of task forces and temporary teams to both define and solve problems, the members will only connect electronically.

Instead of telling others what to do, managers will need to treat their colleagues as unpaid volunteers who expect to participate in governing the meetings and who are tied to the effort only by a commitment to identify and solve problems.

ENVIRONMENT AND ORGANIZATIONAL DESIGN Understanding organizational environments is important because organizations are open systems that receive inputs from the environment and in turn sell outputs to the environment.

The general environment is the set of cultural, economic, legal-political, and educational conditions found in the areas in which the organization operates.

The specific environment consists of the owners, suppliers, distributors, government agencies, and competitors with which an organization must interact to grow and survive.

A firm typically has much more choice in the composition of its specific environment than its general environment.

LECTURE ENHANCEMENT As an out-of class assignment for student groups, have each group select a well-known company to examine with regard to its organizational environment. Have the students identify the general environmental conditions that are affecting many organizations at the present point in time. Also have them try to identify some stakeholders in the specific environment that are relevant to resource inputs, transformation process, and product outputs.

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ENVIRONMENTAL COMPLEXITY Environmental complexity is the magnitude of the problems and opportunities in the organization’s environment as evidenced by three main factors: the degree of richness, the degree of interdependence, and the degree of uncertainty stemming from both the general and the specific environment.

Environmental Richness The environment is richer when the economy is growing, when individuals are improving their education, and when those on whom the organization relies are prospering. For businesses, a richer environment means that economic conditions are improving, customers are spending more money, and suppliers (especially banks) are willing to invest in the organization’s future. A rich environment has more opportunities and dynamism (i.e., the potential for change), and the organizational design must enable the firm to recognize these opportunities and capitalize on them. The opposite of richness is decline, such as a general recession.

Environmental Interdependence The link between external interdependence and organizational design is often subtle and indirect in that the organization may co-opt powerful outsiders by including them, or adjust its overall design strategy to absorb or buffer the demands of a more powerful external element.

Uncertainty and volatility Environmental uncertainty and volatility can be particularly damaging to large bureaucracies since investments quickly become outmoded and internal operations no longer work as expected.

The more organic form of organization design is the appropriate response to uncertainty and volatility. With extreme uncertainty and volatility, movement toward an adhocracy may be needed.

USING NETWORKS AND ALLIANCES In a complex global economy, firms must learn to co-evolve by altering their environment. Two important ways of accomplishing this is through the management of networks and the development of alliances.

How networks and alliances are operationalized in different areas of the world: • •

•

In Europe, informal combines or cartels exist wherein competitors work cooperatively to share the market in order to decrease uncertainty and improve favorability for all.

In Japan, the network of relationships among well-established firms in many industries is called keiretsu. In a bank-centered keiretsu, firms are linked directly to one another through cross ownership and historical ties to one bank. In a vertical keiretsu, a key manufacturer is at the hub of a network of supplier firms or distributor firms.

In the United States, a very specialized form of network organization is evolving. Here, the central firm specializes in core activities, such as design, assembly, and marketing, and works with a comparatively small number of participating suppliers on a long-term basis for both component development and manufacturing efficiency. The central firm is the hub of a network where others need it more than it needs any other member.

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Interfirm alliances, which are announced cooperative agreements or joint ventures between two independent firms, often involve corporations that are headquartered in different nations.

Alliances are quite common in high technology industries, because they seek not only to develop technology but also to ensure that their solutions become standardized across regions of the world. In alliances, firms cooperate rather than compete; consequently, both the alliance managers and the sponsoring executives must be patient, flexible, and creative in pursuing the goals of the alliance and each sponsor.

STRATEGIC LEADERSHIP OF THE WHOLE ORGANIZATION Strategic leadership is the study of leading a quasi-independent unit, department, or organization.

While many focus on the individual at the top of the pyramid, such as the chief executive officer, or president of the United States, research suggests that strategic leadership is not rooted in just the top management team or the CEO. The top management team as a group is also important.

STRATEGIC LEADERSHIP AND THE CHALLENGES AT MULTIPLE LEVELS Starting from the bottom, organizations can be separated into three major zones (1) the production zone, (2) the administrative zone and (3) the systems zone. As the names imply, the challenge to the leader across the zones vary.

Leadership requirements at different levels or echelons of management differ. Each echelon gets more complex than those beneath it in terms of its leadership and managerial requirements.

Leaders at top levels have special responsibilities since their influence cascades throughout the organization.

Because problems become increasingly complex from the lower levels to the upper levels of the organization, you can expect that managers at each level must demonstrate increasing cognitive and behavioral complexity in order to deal with an increase in organizational complexity.

Cognitive complexity is the degree to which individuals perceive nuances and subtle differences.

Behavioral complexity is the possession of a repertoire of roles and the ability to selectively apply them.

DEVELOPING A TOP MANAGEMENT TEAM Top management teams (TMTs) refer to the relatively small group of executives at the very top of the organization or the leaders of the firm. Often the top management team is composed of three to ten executives.

The composition of the top management team is important because the collective nature, temperament, outlook, and interactions among these individuals alters the choices made in the leadership of the organization.

The composition of a top management team can have a major influence on how an organization operates in terms of the shared culture, decision-making and management styles, and even the ethical foundation of day-to-day workplace behaviors.

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USING TOP MANAGEMENT LEADERSHIP SKILLS In a model developed by Boal and Hooijberg, the focus is on the tensions and complexity faced by strategic leaders and is shown in Figure 17.1. In their model, Boal and Hooijberg express the challenges at the top in terms of tensions among desirable conditions. They express these tensions as stemming from Emergent Theories and the Competing Values Framework (CVF).

Specifically there are tensions between (1) flexibility versus control and (2) internal focus versus external focus.

Figure 17.1 shows CVF, behavioral complexity, emotional complexity, and cognitive complexity as directly associated with absorptive capacity, capacity to change, and managerial wisdom as well as with charismatic/transformational leadership and vision.

Organizational Competencies and Strategic Leadership Consistent with the research of Boal and Hooijberg, it is important to recognize key organizational competencies and link them with strategic leadership effectiveness and ultimately with organizational effectiveness.

The first key competency is absorptive capacity, which is the ability to learn. It involves the capacity to recognize new information, assimilate it, and apply it toward new ends. It utilizes processes necessary to improve the organization-environment fit.

The second key competency is adaptive capacity, which refers to the ability to change. Boal and Hooijberg argue that in the new, fast-changing competitive landscape, organizational success calls for strategic flexibility, that is, being able to respond quickly to competitive conditions.

The third key competency is managerial wisdom, which involves the ability to perceive variation in the environment and understand the social actors and their relationships. Thus, emotional intelligence is called for and the leader must be able to take the right action at the right moment.

CHAPTER STUDY GUIDE Why are strategy and organizational learning important?

• Strategy is the process of positioning the organization in the competitive environment and implementing actions to compete successfully. It is a pattern in a stream of decisions.

• Organizational learning is the process of acquiring knowledge and using information to adapt successfully to changing circumstances.

• For organizations to learn, they must engage in knowledge acquisition, information distribution, information interpretation, and organizational retention in adapting successfully to changing circumstances.

• Firms use mimicry, experience, vicarious learning, scanning, and grafting to acquire information.

• Firms established mechanisms to convert information into knowledge. Chief among the problems of interpretation are self-serving interpretations.

• Firms retain information via individuals, transformation mechanisms, formal structure, physical structure, external archives, and their IT system.

• To compete successfully, individuals, units, and firms will need to constantly learn because of changes in the scope of operations, technology, and the environment.

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What is organizational design, and how is it linked to strategy?

• Organizational design is the process of choosing and implementing a structural configuration for an organization.

• Organizational design is a way to implement the positioning of the firm in its environment.

• Organizational design provides a basis for a consistent stream of decisions.

• Strategy and organizational design are interrelated, and must evolve with changes in size, technology, and the environment.

• The design of a large organization is far more complex than that of a small firm.

• With aging, firms become subject to routine managerial scripts. Large organizations will need to systematically break down boundaries limiting learning.

• Smaller firms often adopt a simple structure because it works, is cheap, and stresses the influence of the leader.

How does technology influence organizational design?

• Operations technology and organizational design should be interrelated to insure the firm produces the desired goods and/or services.

• Adhocracy is an organizational design used in technology intense settings.

• Information technology is the combination of machines, artifacts, procedures, and systems used to gather, store, analyze, and disseminate information for translating it into knowledge.

• IT provides an opportunity to change the design by substitution, for learning, and to capture strategic advantages.

• IT forms the basis for the virtual organization.

How does the environment influence organizational design?

• Organizations, as open systems, need to receive inputs from the environment and, in turn, to sell outputs to their environment.

• The environment is more complex when it is richer and more interdependent with higher volatility and greater uncertainty.

• The more complex the environment, the greater the demands on the organization, and firms should respond with more complex designs.

• Firms need not stand alone but can develop network relationships and alliances to cope with greater environmental complexity.

• By honing the knowledge gained in this text you can develop the skills to compete successfully in the 21st century and become a leader.

How should the whole organization be led strategically?

• When the focus is on strategic leadership this is leadership of a quasi-independent unit, department, or organization.

• The expectations for leaders, the time frame for their actions and the complexity of the assignments increases as one moves up the organizational hierarchy.

• Strategic leadership, as used here, includes the leadership of both the CEO and the top management team.

• Boal and Hooijberg’s view of strategic leadership uses emergent theories: cognitive complexity, emotional intelligence (complexity), and behavioral complexity as well as charismatic, transformational, and visionary leadership to influence absorptive capacity, capacity to change, and managerial wisdom, which in turn influence effectiveness.

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KEY TERMS Absoprtive capacity: is the ability to learn.

Adaptive capacity: refers to the ability to change.

Adhocracy: emphasizes shared, decentralized decision making; extreme horizontal specialization; few levels of management; the virtual absence of formal controls; and few rules, policies, and procedures.

Behavioral complexity: is the possession of a repertoire of roles and the ability to selectively apply them.

Cognitive complexity: is the degree to which individuals perceive nuances and subtle differences.

Environmental complexity: the magnitude of the problems and opportunities in the organization’s environment as evidenced by the degree of richness, interdependence, and uncertainty.

General environment: the set of cultural, economic, legal-political, and educational conditions found in the areas in which the organization operates.

Grafting: the process of acquiring individuals, units, and/or firms to bring in useful knowledge to the organization.

Information technology: the combination of machines, artifacts, procedures, and systems used to gather, store, analyze, and disseminate information for translating it into knowledge.

Interfirm alliances: announced cooperative agreements or joint ventures between two independent firms.

Managerial wisdom: is the ability to perceive variations in the environment and understand the social actors and their relationships.

Managerial script: is a series of well known routines for problem identification and alternative generation and analysis common to managers within a firm.

Mimicry: is the copying of the successful practices of others.

Operations technology: is the combination of resources, knowledge and techniques that creates a product or service output for an organization.

Organizational design: the process of choosing and implementing a structural configuration for an organization.

Organizational learning: the process of knowledge acquisition, information distribution, information interpretation, and organizational retention.

Scanning: looking outside the firm and bringing back useful solutions to problems.

Simple design: a configuration involving one or two ways of specializing individuals and units.

Specific environment: the set of owners, suppliers, distributors, government agencies, and competitors with which an organization must interact to grow and survive.

Strategic leadership: is leadership of a quasi-independent unit, department or organization.

Strategy: positions the organization in the competitive environment and implements actions to compete successfully.

Vicarious learning: involves capturing the lessons of others’ experiences.

Virtual organization: an ever-shifting constellation of firms, with a lead corporation, that pool skills, resources, and experiences to thrive jointly.

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SPECIAL FEATURES American Airlines and Citibank In the chapter opening story American Airlines and Citibank partner to release a co-branded AAdvantage Citi Visa card. Along with an initial signing bonus, cardholders earn frequent flyer miles for nearly every purchase on the card. The partnership is mutually beneficial: Citibank purchases miles in bulk from American, which in turn releases demographic information about AAdvantage members to Citi. Have students get in groups and discuss the advantages for American Airlines and Citibank, as well as both companies’ customers. Are there any disadvantages to such an alliance? Have the students discuss these as well.

Ethics in OB There was a time when John Wood was just another, albeit up-and-coming Miscrosoft executive.

Now he is a social entrepreneur, fighting illiteracy through a nonprofit called Room to Read. So far, the organization has built over 100 schools and 1,000 libraries in Cambodia, India, Nepal, Vietnam and Laos. Have students self-reflect and identify 1-2 social projects that they would like to become involved in, in their local community. Further, have the students detail how best to go about becoming involved and list details of what exactly they would want to do with the social projects. Encourage students to take their ideas one step further and actually pursue these opportunities.

Leaders on Leadership According to Costco’s CEO Jim Sinegal, “Costco is able to offer lower prices ... by eliminating virtually all the frills and costs historically associated with conventional wholesalers...We run a tight operation with extremely low overhead....” On the surface this sounds much like most large box discount retailers who pursue a low-cost strategy in order to effectively compete. So what is the difference? For one, Costco invests in its employees. They pay almost all full-time employees full benefits, including health care and retirement. And the base wages are among the highest in the industry. They also promote from within. Ask students what are the strategies that Costco engages in that allows it to be successful. Ask them further why they think not all companies pursue a strategy similar to Costco’s strategy for all its stakeholders?

OB in Popular Culture Out of Work, Tom Reilly (Zach Braff) lands a job at Sunburst with the help of his father-in-law.

Tom is in for a bit of a rude awakening. He arrives his first day to find an open-air office with employees singing, riding motorized skateboard scooters and casually dresses. New co-workers arrive with an imaginery “yes” ball, which is designed to encourage cooperation and positive thinking. When Tom unintentionally offends a co-worker, he learns about the practice of “mushiwaki” where employees accept responsibility for their actions without having to publicly apologize. Although the scene is meant to be comical, it does reflect a trend in newer businesses toward more open designs that gives employees incredible freedom and control. Have students think about and later share with the class the advantages and disadvantages of these newly designed business models that are created to promote creativity and critical thinking? Can such models work in all organizations – regardless of size and industry?

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Mastering Management This breakout describes the management of a virtual project. Students may have experienced many virtual projects as they have juggled busy classes with busy schedules. Ask what guidelines they find helpful in managing future projects.

Research Insight While there has been a lot of discussion about how the values of the CEO impact performance, there have been comparatively few comprehensive studies. Recently, Y. Berson, S. Oreg, and T. Dvir started to remedy this with a study of CEO values, organizational culture, and performance.

They hypothesized and found the following in a study of some 22 CEOs and their firms in Israel: CEOs tend to place a high priority on self-direction or security or benevolence. This priority tends to emphasize a particular type of organizational culture. Specifically, when a CEO values selfdirection, there is more cultural emphasis on innovation; when a CEO values security, there is more cultural emphasis on bureaucracy; and when a CEO values benevolence, the culture is more supportive of its members. Then they linked aspects of organizational culture with specific elements of performance (organizational outcomes). More innovation was associated with higher sales growth. A bureaucratic culture was linked to efficiency while a supportive culture was associated with greater employee satisfaction. In sum, CEO values are linked to organizational culture, which in turn, is associated with organizational outcomes. Discuss with students the importance of CEO values and how these values shape the culture, performance and outcomes at an organization. If time permits, have students bring to class information about the CEO at an organization they have worked/are working. Do the students agree that the CEO values at their own organization impacted how things were done/are being done, as well as the culture of the organization?

Group Project Since this is the last chapter, have students break into their groups and discuss the “best” and “worst” of the class subject matter. Questions to consider include: • What topics resonated with the students?

• What topics lead students to a better understanding of other topics (such as marketing or finance)?

• What topics appear the most useful?

• What topics appear the least useful?

• What group exercises increased understanding of the topics?

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