Introduction To Organizational Behavior

Introduction to
Organizational
Behavior
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Introduction to Organizational Behavior
Course Instructions
Please read the instructions given below related to Course "Introduction to Organizational
Behavior"
There are 5 sections in this course. All sections are mandatory.
In Section 1 of this course you will cover these topics:
Introducing Organizational Behavior

Foundations Of Individual Behavior
Emotions, Attitudes, And Job Satisfaction
Managing Communications
Perception And Individual Decision Making

Social Systems And Organizational Culture
Motivation
Appraising And Rewarding Performance

Teams In Organizations
Teamwork And Team Performance
Leadership
Power And Politics
Conflict And Negotiation
Organizational Goals And Structures

Human Resource Policies And Practices
Organizational Change And Stress Management
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Introduction to Organizational Behavior > Section
1
Section 1- Instructions
Introducing Organizational Behavior

Foundations Of Individual Behavior
Emotions, Attitudes, And Job Satisfaction
Managing Communications
You may take as much time as you want to complete the topic coverd in section 1.
There is no time limit to finish any Section, However you must finish All Sections before semester end date.
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1 > Topic 1
Topic 1: Introducing Organizational Behavior
T opic Objective:
At the end of this topic, the student would be able to understand the following concepts:
1. Scientific Foundations of Organizational Behavior
2. Organizations as Work Settings
3. Organizational Behavior and Management
Topic Introduction:
Organizational behavior is the study of human behavior in organizations. It is an academic discipline devoted to
understanding individual and group behavior, interpersonal processes, and organizational dynamics with the goal
of improving the performance of organizations and the people in them.
Topic Overview:
1. Scientific Foundations of Organizational Behavior
Organizational behavior emerged as a scholarly discipline devoted to scientific understanding of individuals and
groups in organizations and of the performance implications of organizational processes, systems, and
structures.
1.1 Interdisciplinary Body of Knowledge

Organizational behavior is an interdisciplinary body of knowledge with strong ties to the behavioral sciences
psychology, sociology, and anthropologyas well as to allied social sciences such as economics and political
science. OB is unique, however, in its goals of integrating the diverse insights of these other disciplines and
applying them to real-world problems and opportunities. The ultimate goal of OB is to improve the performance
of people, groups, and organizations and to improve the quality of work life overall.
1.2 Use of Scientific Methods

The field of organizational behavior uses scientific methods to develop and empirically test generalizations about
behavior in organizations. OB scholars often propose and test modelssimplified views of reality that attempt to
identify major factors and forces underlying real-world phenomena. These models link independent variables
presumed causeswith dependent variablesoutcomes of practical value and interest. Here, for example, is a
very basic model that describes one of the findings of OB researchjob satisfaction (independent variable)
influences absenteeism (dependent variable).
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Figure 1.1 describes a set of research methods commonly used by OB researchers. They are based on scientific
thinking, which means that (1) the process of data collection is controlled and systematic, (2) proposed
explanations are carefully tested, and (3) only explanations that can be rigorously verified are accepted.
[Figure 1.1: Common scientific research methods in organizational behavior.]
1.3 Focus on Application

The science of organizational behavior focuses on applications that can make a real difference in how
organizations and people in them perform.
1.4 Contingency Thinking

Rather than assuming that there is one best or universal answer to questions such as those just posed, OB
recognizes that management practices must be tailored to fit the exact nature of each situationthis is called
contingency thinking.
2. Organizations as Work Settings

An organization is a collection of people working together in a division of labor to achieve a common purpose.
This definition describes everything from clubs, voluntary organizations, and religious bodies to entities such as
small and large businesses, labor unions, schools, hospitals, and government agencies. All such organizations
share a number of common features that can help us better understand and deal with them.
2.1 Organizational Purpose, Mission, and Strategy

The core purpose of an organization may be stated as the creation of goods or services for customers.
Nonprofit organizations produce services with public benefits, such as health care, education, judicial processing,
and highway maintenance. Large and small for-profit businesses produce consumer goods and services such as
automobiles, banking, travel, gourmet dining, and accommodations. Yet, as we all know, not all organizations of
the same type pursue their purposes in the same ways or with equal success.
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One way organizations differ is how their purposes are expressed with a sense of mission. A mission statement
describes and helps focus the attention of organizational members and external constituents on the
organizations core purpose.
Given a sense of purpose and mission, organizations pursue strategies to accomplish them. A strategy is a
comprehensive plan that guides an organization to operate in ways that allow it to outperform competitors.
2.2 Organizational Environments and Stakeholders

The concept of strategy places great significance on the relationship between an organization and its external
environment. As shown in Figure 1.2, organizations are 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
product outputs.
[Figure 1.2: Organizations are open systems that create value while interacting with their environments.]
One way to describe and analyze the external environment of organizations is in terms of stakeholderspeople,
groups, and institutions that are affected by and thus have an interest or stake in an organizations
performance. It is common in OB to recognize customers, owners, employees, suppliers, regulators, local
communities, and future generations among the key stakeholders of organizations.
2.3 Organizational Cultures

In the internal environment of organizations, the shared beliefs and values that influence the behavior of
organizational members create what is called the organizational culture. Figure 1.3 shows an approach for
mapping organizational cultures developed by Human Synergistics and using an instrument called the
Organizational Culture Inventory, or OCI. The OCI asks people to describe the behaviors and expectations that
make up the prevailing cultures of their organizations, and the results are mapped into three culture types. In a
constructive culture members are encouraged to work together in ways that meet higher order human needs. In
a passive/ defensive culture members tend to act defensively in their working relationships, seeking to protect
their security. In an aggressive/defensive culture members tend to act forcefully in their working relationships to
protect their status and positions.
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Among these three types of organizational cultures, the constructive culture would be most associated with
high-performance organizations. In constructive cultures people tend to work with greater motivation,
satisfaction, teamwork, and performance. In passive/defensive and aggressive/defensive cultures motivation
tends to be lower and work attitudes less positive. The expectation is that people prefer constructive cultures
and behave within them in ways that fully tap the value of human capital, promoting both high-performance
results and personal satisfaction.
[Figure 1.3: Insights on the performance implications of three types of organizational cultures.]
2.4 Diversity and Multiculturalism

Within the internal environments of organizations, workforce diversity describes the presence of individual
differences based on gender, race and ethnicity, age, able-bodiedness, and sexual orientation. As used in OB, the
term multiculturalism refers to inclusion, pluralism, and genuine respect for diversity and individual differences.
A key element in any organization that embraces multiculturalism is inclusionthe degree to which the culture
values diversity and is open to anyone who can perform a job, regardless of their diversity attributes. Valuing
diversity is a core OB theme that is central to this book and the new workplace.
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3. Organizational Behavior and Management
Regardless of your career direction, the field of organizational behavior will someday be very important as you
try to master the special challenges of serving as a manager, someone whose job it is to directly support the
work efforts of others. The goal, of course, should be to become an effective managerone whose team or
work unit or total organization consistently achieves its performance goals while members remain capable,
enthusiastic, and satisfied in their jobs.
This definition of an effective manager focuses attention on two key outcomes, or dependent variables, that are
important in OB. The first outcome is task performance. You can think of it as the quality and quantity of the
work produced or the services provided by an individual, team or work unit, or organization as a whole. The
second outcome is job satisfaction. It indicates how people feel about their work and the work setting.
3.1 The Management Process

Being a manager is a unique challenge with responsibilities that link closely with the field of organizational
behavior. At the heart of the matter managers help other people get important things done in timely, high-
quality, and personally satisfying ways. And in the workplaces of today this is accomplished more through
helping and supporting than through traditional notions of directing and controlling. Indeed, youll find the
word manager is increasingly being replaced by such terms as coordinator, coach, or team leader.
Among the ways that managerial work has been described and taught is through the four functions shown in
Figure 1.4: planning, organizing, leading, and controlling. These functions describe what managers are supposed
to do in respect to:
Planningdefining goals, setting specific performance objectives, and identifying the actions needed to
achieve them.
Organizingcreating work structures and systems, and arranging resources to accomplish goals and
objectives.
Leadinginstilling enthusiasm by communicating with others, motivating them to work hard, and
maintaining good interpersonal relations.
Controllingensuring that things go well by monitoring performance and taking corrective action as
necessary.
[Figure 1.4: The management process of planning, organizing, leading, and controlling.]
3.2 Managerial Activities, Roles, and Networks

Managers work mostly with other people and often spend little time working alone. They are communicators and
spend a lot of time getting, giving, and processing information in face-to-face and electronic exchanges and in
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formal and informal meetings.
In what has become a classic study, Henry Mintzberg described how managers perform a set of 10 managerial
roles, falling into the three categories shown in Figure 1.5. A managers interpersonal roles involve working
directly with other people, hosting and attending official ceremonies (figurehead), creating enthusiasm and
serving peoples needs (leader), and maintaining contacts with important people and groups (liaison). The
informational roles involve managers exchanging information with other people, seeking relevant information
(monitor), sharing it with insiders (disseminator), and sharing it with outsiders (spokesperson). A managers
decisional roles involve making decisions that affect other people, seeking problems to solve and opportunities to
explore (entrepreneur), helping to resolve conflicts (disturbance handler), allocating resources to various uses
(resource allocator), and negotiating with other parties (negotiator).
Good interpersonal relationships are essential to managerial success in each of these roles. Managers and team
leaders need to develop, maintain, and work well in networks involving a wide variety of people, both inside and
outside the organization. These include task networks of specific job-related contacts, career networks of career
guidance and opportunity resources, and social networks of trustworthy friends and peers. It can be said in this
sense that 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.
[Figure 1.5: Mintzbergs 10 roles of effective managers.]
3.3 Managerial Skills and Competencies

A skill is an ability to translate knowledge into action that results in a desired performance. Robert Katz divides
the essential managerial skills into three categories technical, human, and conceptual.
Technical Skills: A technical skill is an ability to perform specialized tasks. Such ability derives from
knowledge or expertise gained from education or experience. This skill involves proficiency at using select
methods, processes, and expertise in ones job.
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Human Skills: Central to all aspects of managerial work and team leadership are human skills, or the
ability to work well with other people. They emerge as a spirit of trust, enthusiasm, and genuine
involvement in interpersonal relationships. A person with good human skills will have a high degree of self-
awareness and a capacity for understanding or empathizing with the feelings of others.
Conceptual Skills: The capacity to think analytically and solve complex and sometimes ambiguous
problems is a conceptual skill. It involves the ability to see and understand how systems work and how
their parts are interrelated, including human dynamics. Conceptual skill is used to identify problems and
opportunities, gather and interpret relevant information, and make good problem-solving decisions.
3.4 Moral Management

Having the essential managerial skills is one thing; using them correctly to get things done in organizations is
quite another. And when it comes to this issue of ethics and morality, scholar Archie B. Carroll draws a distinction
between immoral managers, amoral managers, and moral managers.
The immoral manager doesnt subscribe to any ethical principles, making decisions and acting in any situation to
simply gain best personal advantage. This manager essentially chooses to behave unethically. One might
describe in this way disgraced executives like Bernard Madoff and others whose unethical acts make headlines.
The amoral manager, by contrast, fails to consider the ethics of a decision or behavior. This manager acts
unethically at times, but does so unintentionally. Common forms of unintentional ethics lapses that we all must
guard against include prejudice that derives from unconscious stereotypes and attitudes, showing bias based on
in-group favoritism, claiming too much personal credit for ones performance contributions, and giving
preferential treatment to those who can benefit you. Finally, the moral manager is one who incorporates ethics
principles and goals into his or her personal behavior.
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1 > Topic 2
Topic 2: Foundations Of Individual Behavior
T opic Objective:
1. The Two Types of Ability
2. Biographical Characteristics Relevant to Organizational Behavior
3. Theories of Learning
4. Shaping: A Managerial Tool
Topic Introduction:
This topic looks at three individual variablesability, biographical characteristics, and learning. Ability directly
influences an employees level of performance. Biographical characteristics are readily observable to managers.
However, just because theyre observable doesnt mean they should be explicitly used in management decisions.
We also need to be aware of implicit biases we or other managers may have.
Any observable change in behavior is prima facie evidence that learning has taken place. Positive reinforcement is
a powerful tool for modifying behavior. By identifying and rewarding performance-enhancing behaviors,
management increases the likelihood that those behaviors will be repeated.
Topic Overview:
1. The Two Types of Ability
Ability refers to an individuals capacity to perform the various tasks in a job. It is a current assessment of what
one can do. An individuals overall abilities are essentially made up of two sets of factors: intellectual and
physical.
1.1 Intellectual Abilities

Intellectual abilities are abilities needed to perform mental activitiesfor thinking, reasoning, and problem solving.
People in most societies place a high value on intelligence, and for good reason. Compared to others, smart
people generally earn more money and attain higher levels of education. Smart people are also more likely to
emerge as leaders of groups. Intelligence quotient (IQ) tests, for example, are designed to ascertain a persons
general intellectual abilities.
The seven most frequently cited dimensions making up intellectual abilities are number aptitude, verbal
comprehension, perceptual speed, inductive reasoning, deductive reasoning, spatial visualization, and memory.
Figure 2.1 describes these dimensions.
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[Figure 2.1:]
1.2 Physical Abilities

Though the changing nature of work suggests that intellectual abilities are becoming increasingly important for
many jobs, physical abilities have been and will remain important for successfully doing certain jobs. Research on
the requirements needed in hundreds of jobs has identified nine basic abilities involved in the performance of
physical tasks. These are described in Figure 2.2. Individuals differ in the extent to which they have each of these
abilities. Not surprisingly, there is also little relationship among them: A high score on one is no assurance of a
high score on others. High employee performance is likely to be achieved when management has ascertained
the extent to which a job requires each of the nine abilities and then ensures that employees in that job have
those abilities.
[Figure 2.2]
2. Biographical Characteristics Relevant to Organizational Behavior
2.1 Age
The relationship between age and job performance is likely to be an issue of increasing importance during the
next decade for at least three reasons. First, there is a widespread belief that job performance declines with
increasing age. Regardless of whether this is true, a lot of people believe it and act on it. Second, the workforce
is aging. The third reason is U.S. legislation that, for all intents and purposes, outlaws mandatory retirement.
Most U.S. workers today no longer have to retire at age 70.
Employers hold mixed feelings for older workers. They see a number of positive qualities that older workers bring
to their jobs, such as experience, judgment, a strong work ethic, and commitment to quality. But older workers
are also perceived as lacking flexibility and as being resistant to new technology. And in a time when
organizations are actively seeking individuals who are adaptable and open to change, the negatives associated
with age clearly hinder the initial hiring of older workers and increase the likelihood that they will be let go during
cutbacks.
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2.2 Gender
The best place to begin is with the recognition that there are few, if any, important differences between men and
women that will affect their job performance. There are, for instance, no consistent malefemale differences in
problem-solving ability, analytical skills, competitive drive, motivation, sociability, or learning ability. Psychological
studies have found that women are more willing to conform to authority and that men are more aggressive and
more likely than women to have expectations of success, but those differences are minor.
One issue that does seem to differ between genders, especially when the employee has preschool-age children,
is preference for work schedules. Working mothers are more likely to prefer part-time work, flexible work
schedules, and telecommuting in order to accommodate their family responsibilities.
Womens quit rates are similar to those for men. The research on absence, however, consistently indicates that
women have higher rates of absenteeism than men do. When a child is ill or someone needs to stay home to
wait for a plumber, it has been the woman who has traditionally taken time off from work. The historical role of
the woman in caring for children and as secondary breadwinner has definitely changed in the past generation,
and a large proportion of men nowadays are as interested in day care and the problems associated with child
care in general as are women.
2.3 Race
Most people in the United States identify themselves according to a racial group. (In contrast, in some countries,
such as Brazil, people are less likely to define themselves according to distinct racial categories.) Race has been
studied quite a bit in OB, particularly as it relates to employment outcomes such as personnel selection decisions,
performance evaluations, pay, and workplace discrimination.
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In employment settings, there is a tendency for individuals to favor colleagues of their own race in performance
evaluations, promotion decisions, and pay raises. There are substantial racial differences in attitudes toward
affirmative action, with African Americans approving of such programs to a greater degree than whites. The
major dilemma faced by employers who use mental ability tests for selection, promotion, training, and similar
personnel decisions is concern that they may have a negative impact on racial and ethnic groups.
2.4 Other Biographical Characteristics: Tenure, Religion, Sexual Orientation, and Gender Identity
The last set of biographical characteristics is tenure, religion, and sexual orientation.
Tenure: With the exception of gender and racial differences, few issues are more subject to
misconceptions and speculations than the impact of seniority on job performance. If we define seniority as
time on a particular job, we can say that the most recent evidence demonstrates a positive relationship
between seniority and job productivity. So tenure, expressed as work experience, appears to be a good
predictor of employee productivity. Tenure is also a potent variable in explaining turnover. The longer a
person is in a job, the less likely he or she is to quit. Tenure and job satisfaction are positively related. In
fact, when age and tenure are treated separately, tenure appears to be a more consistent and stable
predictor of job satisfaction than is chronological age.
Religion: Religion is a touchy subject. Not only do religious and nonreligious people question each others
belief systems, often people of different religious faiths conflict.
Sexual Orientation and Gender Identity: Employers differ a lot in how they treat sexual orientation.
Federal law does not prohibit discrimination against employees based on sexual orientation, though many
states and municipalities do have anti-discrimination policies. Many employers ignore it (practicing some
version of the dont ask, dont tell military policy), some do not hire gays, but an increasing number of
employers are implementing policies and practices protecting the rights of gays in the workplace.
3. Theories of Learning
Three theories have been offered to explain the process by which we acquire patterns of behavior. These are
classical conditioning, operant conditioning, and social learning.
3.1 Classical Conditioning
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Classical Conditioning grew out of experiments to teach dogs to salivate in response to the ringing of a bell,
conducted in the early 1900s by Russian physiologist Ivan Pavlov. A simple surgical procedure allowed Pavlov to
measure accurately the amount of saliva secreted by a dog. When Pavlov presented the dog with a piece of
meat, the dog exhibited a noticeable increase in salivation. When Pavlov withheld the presentation of meat and
merely rang a bell, the dog did not salivate. Then Pavlov proceeded to link the meat and the ringing of the bell.
After repeatedly hearing the bell before getting the food, the dog began to salivate as soon as the bell rang. After
a while, the dog would salivate merely at the sound of the bell, even if no food was offered. In effect, the dog
had learned to respondthat is, to salivateto the bell.
In Pavlovs experiment, the meat was an unconditioned stimulus; it invariably caused the dog to react in a
specific way. The reaction that took place whenever the unconditioned stimulus occurred was called the
unconditioned response (or the noticeable increase in salivation, in this case). The bell was an artificial stimulus,
or what we call the conditioned stimulus. Although it was originally neutral, after the bell was paired with the
meat (an unconditioned stimulus), it eventually produced a response when presented alone. The last key
concept is the conditioned response. This describes the behavior of the dog; it salivated in reaction to the bell
alone.
Using these concepts, we can summarize classical conditioning. Essentially, learning a conditioned response
involves building up an association between a conditioned stimulus and an unconditioned stimulus. When the
stimuli, one compelling and the other one neutral, are paired, the neutral one becomes a conditioned stimulus
and, hence, takes on the properties of the unconditioned stimulus.
Classical conditioning is passive. Something happens, and we react in a specific way. It is elicited in response to a
specific, identifiable event. As such, it can explain simple reflexive behaviors. But most behaviorparticularly the
complex behavior of individuals in organizationsis emitted rather than elicited. That is, its voluntary rather than
reflexive. For example, employees choose to arrive at work on time, ask their boss for help with problems, or
goof off when no one is watching. The learning of those behaviors is better understood by looking at operant
conditioning.
3.2 Operant Conditioning

Operant conditioning argues that behavior is a function of its consequences. People learn to behave to get
something they want or to avoid something they dont want. Operant behavior means voluntary or learned
behavior in contrast to reflexive or unlearned behavior. The tendency to repeat such behavior is influenced by the
reinforcement or lack of reinforcement brought about by the consequences of the behavior. Therefore,
reinforcement strengthens a behavior and increases the likelihood that it will be repeated.
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What Pavlov did for classical conditioning, the Harvard psychologist B. F. Skinner did for operant conditioning.
Skinner argued that creating pleasing consequences to follow specific forms of behavior would increase the
frequency of that behavior. He demonstrated that people will most likely engage in desired behaviors if they are
positively reinforced for doing so; that rewards are most effective if they immediately follow the desired
response; and that behavior that is not rewarded, or is punished, is less likely to be repeated. The concept of
operant conditioning was part of Skinners broader concept of behaviorism, which argues that behavior follows
stimuli in a relatively unthinking manner. In Skinners form of radical behaviorism, concepts such as feelings,
thoughts, and other states of mind are rejected as causes of behavior. In short, people learn to associate
stimulus and response, but their conscious awareness of this association is irrelevant.
3.3 Social Learning

Individuals can learn by observing what happens to other people and just by being told about something as well
as through direct experiences. For example, much of what we have learned comes from watching models
parents, teachers, peers, motion picture and television performers, bosses, and so forth. This view that we can
learn through both observation and direct experience is called social-learning theory.
Although social-learning theory is an extension of operant conditioning that is, it assumes that behavior is a
function of consequencesit also acknowledges the existence of observational learning and the importance of
perception in learning. People respond to how they perceive and define consequences, not to the objective
consequences themselves.
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The influence of models is central to the social-learning viewpoint. Four processes have been found to determine
the influence that a model will have on an individual:
Attentional processes: People learn from a model only when they recognize and pay attention to its
critical features. We tend to be most influenced by models that are attractive, repeatedly available,
important to us, or similar to us in our estimation.
Retention processes: A models influence depends on how well the individual remembers the models
action after the model is no longer readily available.
Motor reproduction processes: After a person has seen a new behavior by observing the model, the
watching must be converted to doing. This process then demonstrates that the individual can perform the
modeled activities.
Reinforcement processes: Individuals are motivated to exhibit the modeled behavior if positive
incentives or rewards are provided. Behaviors that are positively reinforced are given more attention,
learned better, and performed more often.
4. Shaping: A Managerial Tool

Because learning takes place on the job as well as prior to it, managers are concerned with how they can teach
employees to behave in ways that most benefit the organization. When we attempt to mold individuals by
guiding their learning in graduated steps, we are shaping behavior. We shape behavior by systematically
reinforcing each successive step that moves the individual closer to the desired response.
4.1 Methods of Shaping Behavior

There are four ways to shape behavior: through positive reinforcement, negative reinforcement, punishment,
and extinction.
Following a response with something pleasant is called positive reinforcement. This would describe, for instance,
a boss who praises an employee for a job well done. Following a response by the termination or withdrawal of
something unpleasant is called negative reinforcement. If your college instructor asks a question and you dont
know the answer, looking through your lecture notes is likely to preclude your being called on. This is a negative
reinforcement because you have learned that looking busily through your notes prevents the instructor from
calling on you. Punishment is causing an unpleasant condition in an attempt to eliminate an undesirable behavior.
Giving an employee a 2-day suspension from work without pay for showing up drunk is an example of
punishment. Eliminating any reinforcement that is maintaining a behavior is called extinction. When the behavior
is not reinforced, it tends to be gradually extinguished.
Both positive and negative reinforcement result in learning. They strengthen a response and increase the
probability of repetition.
4.2 Schedules of Reinforcement

The two major types of reinforcement schedules are continuous and intermittent. A continuous reinforcement
schedule reinforces the desired behavior each and every time it is demonstrated. With intermittent
reinforcement, on the other hand, not every instance of the desirable behavior is reinforced, but reinforcement is
given often enough to make the behavior worth repeating. An intermittent reinforcement can be of a ratio or
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interval type. Ratio schedules depend on how many responses the subject makes. The individual is reinforced
after giving a certain number of specific types of behavior. Interval schedules depend on how much time has
passed since the previous reinforcement.
With interval schedules, the individual is reinforced on the first appropriate behavior after a particular time has
elapsed. Reinforcement can also be classified as fixed or variable.
When rewards are spaced at uniform time intervals, the reinforcement schedule is a fixed-interval schedule. The
critical variable is time, which is held constant. If rewards are distributed in time so that reinforcements are
unpredictable, the schedule is a variable-interval schedule. In a fixed-ratio schedule, after a fixed or constant
number of responses are given, a reward is initiated. When the reward varies relative to the behavior of the
individual, he or she is said to be reinforced on a variable-ratio schedule. Salespeople on commission are
examples of individuals on such a reinforcement schedule.
[Figure 2.3]
4.3 Reinforcement Schedules and Behavior

Continuous reinforcement schedules can lead to early satiation, and under this schedule, behavior tends to
weaken rapidly when reinforcers are withheld. However, continuous reinforcers are appropriate for newly
emitted, unstable, or low-frequency responses. In contrast, intermittent reinforcers preclude early satiation
because they dont follow every response. They are appropriate for stable or high-frequency responses.
In general, variable schedules tend to lead to higher performance than fixed schedules. For example, most
employees in organizations are paid on fixed-interval schedules. But such a schedule does not clearly link
performance and rewards. The reward is given for time spent on the job rather than for a specific response
(performance). In contrast, variable-interval schedules generate high rates of response and more stable and
consistent behavior because of the high correlation between performance and reward and because of the
uncertainty involvedthe employee tends to be more alert because there is a surprise factor.
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[Figure 2.4]
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1 > Topic 3
Topic 3: Emotions, Attitudes, And Job Satisfaction
T opic Objective:
1. Foundations of Emotions and Moods
2. Emotions and Moods in Organizations
3. Attitudes
4. Components of Job Satisfaction
5. Job Satisfaction and Behavior
6. Job Satisfaction and Performance
Topic Introduction:
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 ones behavior. Emotional contagion involves the spillover effects onto others of ones emotions
and moods; in other words emotions and moods can spread from person to person.
An attitude is a predisposition to respond in a certain way to people and things. Attitudes have three components
affective, cognitive, and behavioral. Although attitudes predispose individuals toward certain behaviors they do
not guarantee that such behaviors will take place.
Job satisfaction is an attitude toward ones 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. 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.
Topic Overview:
1. Foundations of Emotions and Moods
1.1 Emotion
An emotion is a strong positive or negative feeling directed toward someone or something. Emotions are usually
intense, not long-lasting, and always associated with a sourcesomeone or something that makes us feel the
way we do.
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1.2 Emotional Intelligence
Emotional Intelligence (EI) is defined by scholar Daniel Goleman as an ability to understand emotions in ourselves
and others and to use that understanding to manage relationships effectively. EI is demonstrated in the ways in
which we deal with affect, for example, by knowing when a negative emotion is about to cause problems and
being able to control that emotion so that it doesnt become disruptive.
Golemans point with the concept of emotional intelligence is that we perform better when we are good at
recognizing and dealing with emotions in ourselves and others. When we are high in EI, we are more likely to
behave in ways that avoid having our emotions get the better of us.
Figure 3.1 identifies four essential emotional intelligence competencies that can and should be developed for
leadership success and, we can say, success more generally in all types of interpersonal situations. The
competencies are self-awareness, social awareness, self-management, and relationship management.
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[Figure3.1: Four key emotional intelligence competencies for leadership success.]
Self-awareness is the ability to understand our emotions and their impact on our work and on others. You can
think of this as a continuing appraisal of your emotions that results in a good understanding of them and the
capacity to express them naturally. Social awareness is the ability to empathize, to understand the emotions of
others, and to use this understanding to better relate to them. It involves continuous appraisal and recognition of
others emotions, resulting in better perception and understanding of them.
Self-management in emotional intelligence is the ability to think before acting and to be in control of otherwise
disruptive impulses. It is a form of self-regulation in which we stay in control of our emotions and avoid letting
them take over. Relationship management is an ability to establish rapport with others in ways that build good
relationships and influence their emotions in positive ways. It shows up as the capacity to make good use of
emotions by directing them toward constructive activities and improved relationships.
1.3 Types of Emotions

When it comes to emotions and emotional intelligence, researchers have identified six major types of emotions:
anger, fear, joy, love, sadness, and surprise. The key question from an emotional intelligence perspective is: Do
we recognize these emotions in ourselves and others, and can we manage them well? Anger, for example, may
involve disgust and envy, both of which can have very negative consequences. Fear may contain alarm and
anxiety; joy may contain cheerfulness and contentment; love may contain affection, longing, and lust; sadness
may contain disappointment, neglect, and shame.
It is also common to differentiate between self-conscious emotions that arise from internal sources and social
emotions that are stimulated by external sources. Shame, guilt, embarrassment, and pride are examples of
internal emotions. Understanding self-conscious emotions helps individuals regulate their relationships with
others. Social emotions like pity, envy, and jealousy derive from external cues and information.
1.4 Moods
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Whereas emotions tend to be short-term and clearly targeted at someone or something, moods are more
generalized positive and negative feelings or states of mind that may persist for some time. Everyone seems to
have occasional moods, and we each know the full range of possibilities they represent.
Figure 3.2 offers a brief comparison of emotions and moods. In general, emotions are intense feelings directed
at someone or something; they always have rather specific triggers; and they come in many typesanger, fear,
happiness, and the like. Moods tend to be more generalized positive or negative feelings. They are less intense
than emotions and most often seem to lack a clear source; its often hard to identify how or why we end up in a
particular mood. But moods tend to be more long-lasting than emotions.
[Figure 3.2: Emotions and moods are different, but can also influence one another.]
2. Emotions and Moods in Organizations

Although emotions and moods are influenced by different events and situations, each of us may be prone to
displaying some relatively stable tendencies. Some people seem most always positive and upbeat about things.
For these optimists we might say the glass is nearly always half full. Others, by contrast, seem to be often
negative or downbeat. They tend to be pessimists viewing the glass as half empty. Such tendencies toward
optimism and pessimism not only influence the individuals behavior, they can also influence other people he or
she interacts withco-workers, friends, and family members.
2.1 Emotion and Mood Contagion

Emotion and mood contagion is the spillover effects of ones emotions and mood onto others. You might think
of emotion and mood contagion as a bit like catching a cold from someone. 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.
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2.2 Emotional Labor
The concept of emotional labor relates to the need to show certain emotions in order to do a job well. It is a
form of self-regulation to display organizationally desired emotions in ones job. Emotional labor isnt always
easy; it can be hard to be consistently on, projecting the desired emotions associated with ones work. If
youre having a bad mood day or just experienced an emotional run-in with a neighbor, for example, being
happy and helpful with a demanding customer might seem a little much to ask. Such situations can cause
emotional dissonance where the emotions we actually feel are inconsistent with the emotions we try to project.
That is, we are expected to act with one emotion while we actually feel quite another.
2.3 Emotions and Moods across Cultures

Issues of emotional intelligence, emotion and mood contagion, and emotional labor, become even more
complicated in cross-cultural situations. The frequency and intensity of emotions has been shown to vary among
cultures. Norms for emotional expression can vary across cultures. In collectivist cultures that emphasize group
relationships, individual emotional displays are less likely to occur and less likely to be accepted than in
individualistic cultures. Informal cultural standards called display rules govern the degree to which it is appropriate
to display emotions.
2.4 Emotions and Moods as Affective Events

Figure 3.3 summarizes the Affective Events Theory as a way of summarizing and integrating this discussion of
emotions, moods, and human behavior in organizations. 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.
The left-hand side of Figure 3.3 indicates how the work environment, including emotional labor requirements,
and work events like hassles and uplifts create emotional reactions. These, in turn, influence satisfaction and
performance.
[Figure 3.3: Figurative summary of affective events theory.]
2.5 Functions of Emotions and Moods

In the final analysis, we should remember that emotions and moods can be functional as well as dysfunctional.
The important thing is to manage them wellthe essence of emotional intelligence. Emotions and moods
communicate; they are messages to us that can be valuable if heard and understood.
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3. Attitudes
An attitude is a predisposition to respond in a positive or negative way to someone or something in ones
environment. For example, when you say that you like or dislike someone or something, you are expressing
an attitude. Its important to remember that an attitude, like a value, is a hypothetical construct; that is, one
never sees, touches, or actually isolates an attitude. Rather, attitudes are inferred from the things people say or
through their behavior. They are influenced by values and are acquired from the same sourcesfriends,
teachers, parents, role models, and culture. But attitudes focus on specific people or objects.
3.1 Components of Attitudes

The three basic components of an attitude are shown in Figure 3.4cognitive, affective, and behavioral. The
cognitive component of an attitude reflects underlying beliefs, opinions, knowledge, or information a person
possesses. It represents a persons ideas about someone or something and the conclusions drawn about them.
The affective component of an attitude is a specific feeling regarding the personal impact of the antecedent
conditions evidenced in the cognitive component. The behavioral component is an intention to behave in a
certain way based on the affect in ones attitude. It is a predisposition to act, but one that may or may not be
implemented.
[Figure 3.4: A work-related example of the three components of attitudes.]
3.2 Attitudes and Behavior

The link between attitudes and behavior is tentative. An attitude expresses an intended behavior that may or
may not be carried out. In general we can say that the more specific attitudes are, the stronger the relationship
with eventual behavior.
3.3 Attitudes and Cognitive Consistency

An important issue in the attitude-behavior linkage is consistency. Leon Festinger, a noted social psychologist,
uses the term cognitive dissonance to describe a state of inconsistency between an individuals attitudes and/or
between attitudes and behavior. Festinger points out that cognitive inconsistency is uncomfortable and results in
attempts to reduce or eliminate the dissonance. This can be done in one of three ways: (1) changing the
underlying attitude, (2) changing future behavior, or (3) developing new ways of explaining or rationalizing the
inconsistency. The way we respond to cognitive dissonance is influenced by the degree of control we seem to
have over the situation and the rewards involved.
3.4 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. Think about your work experiences or conversations with
other people about their work. It isnt uncommon to hear concerns expressed about someones bad attitude
or anothers good attitude. Such attitudes appear in different forms, including job satisfaction, job involvement,
organizational commitment, and employee engagement.
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The term morale is used when describing the feelings of a workforce toward their employer. It relates to the
more specific notion of job satisfaction, an attitude reflecting a persons positive and negative feelings toward a
job, co-workers, and the work environment. Indeed, you should remember that helping others achieve job
satisfaction is considered as a key result that effective managers accomplish. That is, they create a work
environment in which people achieve both high performance and high job satisfaction.
In addition to job satisfaction there are other attitudes that OB scholars and researchers study and measure.
One is job involvement, which is defined as the extent to which an individual is dedicated to a job. Someone with
high job involvement psychologically identifies with her or his job, and, for example, would be expected to work
beyond expectations to complete a special project.
Another work attitude is organizational commitment, or the degree of loyalty an individual feels toward the
organization. Individuals with a high organizational commitment identify strongly with the organization and take
pride in considering themselves members. Researchers recognize two primary dimensions to organizational
commitment. Rational commitment reflects feelings that the job serves ones financial, developmental,
professional interests. Emotional commitment reflects feelings that what one does is important, valuable, and of
real benefit to others.
4. Components of Job Satisfaction

Managers can infer the job satisfaction of others by careful observation and interpretation of what people say
and do while going about their jobs. Interviews and questionnaires can also be used to more formally examine
levels of job satisfaction. Two of the more popular job satisfaction questionnaires used over the years are the
Minnesota Satisfaction Questionnaire (MSQ) and the Job Descriptive Index ( JDI). Both address components of
job satisfaction with which all good managers should be concerned. The MSQ measures satisfaction with working
conditions, chances for advancement, freedom to use ones own judgment, praise for doing a good job, and
feelings of accomplishment, among others. The five facets of job satisfaction measured by the JDI are
The work itselfresponsibility, interest, and growth.

Quality of supervisiontechnical help and social support.
Relationships with co-workerssocial harmony and respect.
Promotion opportunitieschances for further advancement.
Payadequacy of pay and perceived equity vis--vis others.
5. Job Satisfaction and Behavior

Job satisfaction is important on quality-of-work-life grounds alone.
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5.1 Withdrawal Behaviors
There is a strong relationship between job satisfaction and physical withdrawal behaviors like absenteeism and
turnover. Workers who are more satisfied with their jobs are absent less often than those who are dissatisfied.
And satisfied workers are more likely to remain with their present employers, while dissatisfied workers are more
likely to quit or at least be on the lookout for other jobs. Withdrawal through absenteeism and turnover can be
very costly in terms of lost experience, and the expenses for recruiting and training of replacements. In fact, one
study found that up or down changes in retention rates result in magnified changes to corporate earnings.
5.2 Organizational Citizenship

Job satisfaction is also linked with organizational citizenship behaviors. These are discretionary behaviors,
sometimes called OCBs, that represent a willingness to go beyond the call of duty or go the extra mile in
ones work. A person who is a good organizational citizen does things that although not required of them help
othersinterpersonal OCBs, or advance the performance of the organization as a wholeorganizational OCBs.
The flip-side of organizational citizenship shows up in a variety of possible counterproductive work behaviors
shown in OB Savvy. Often associated with some form of job dissatisfaction, they purposely disrupt relationships,
organizational culture or performance in the workplace. Counterproductive workplace behaviors cover a wide
range from things like work avoidance to physical and verbal aggression of others to bad mouthing to outright
work sabotage to theft.
5.3 At Home Affect

When OB scholars talk about spillover effects, they are often referring to how what happens to us at home can
affect our work attitudes and behaviors, and how the same holds true as work experiences influence how we
feel and behave at home.
6. Job Satisfaction and Performance

Job satisfaction causes performance; a happy worker is a productive worker. Performance also causes job
satisfaction. Job satisfaction and performance are intertwined, influencing one another, and mutually affected by
other factors such as the availability of rewards.
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6.1 Satisfaction Causes Performance
If job satisfaction causes high levels of performance, the message to managers is: to increase employees work
performance, make them happy.
6.2 Performance Causes Satisfaction

If high levels of performance cause job satisfaction, the message to managers is quite different. Rather than
focusing on job satisfaction as the pathway to performance, attention shifts to creating high performance as a
precursor to job satisfaction, that is performance satisfaction. It generally makes sense that people should
feel good about their job when they perform well.
Figure 3.5 shows a basic model explaining this relationship as based on the work of Edward E. Lawler and Lyman
Porter. It suggests that performance leads to rewards that, in turn, lead to satisfaction. Rewards are intervening
variables that, when valued by the recipient, link performance with later satisfaction. The model also includes a
moderator variableperceived equity of rewards. This indicates that high performance leads to satisfaction only
if rewards are perceived as fair and equitable.
[Figure 3.5: Simplified Porter-Lawler model of the performance satisfaction relationship.]
6.3 Rewards Cause Both Satisfaction and Performance

The final position in the job satisfactionperformance discussion builds from and somewhat combines the prior
two. It suggests that the right rewards allocated in the right ways will positively influence both performance and
satisfaction, which also influence one another. The key issue in respect to the allocation of rewards is
performance contingency, or varying the size of the reward in proportion to the level of performance.
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1 > Topic 4
Topic 4: Managing Communications
T opic Objective:
1. Communication Fundamentals
2. Downward Communication
3. Upward Communication
4. Other Forms of Communication
5. Informal Communication
Topic Introduction:
Communication is the transfer of information and understanding from one person to another person.
Organizations need effective communication in downward, upward, and lateral directions. The two-way
communication process consists of these eight steps: develop an idea, encode, transmit, receive, decode,
accept, use, and provide feedback. To overcome personal, physical, and semantic barriers, managers must pay
close attention to communication symbols, such as words, pictures, and nonverbal actions. Effective
communication requires the study and use of semanticsthe science of meaningto encourage understanding.
Managers play a key role in downward and upward communication, sometimes even delaying or filtering the flow
of information. Many tools are available for their use, such as providing performance feedback and social support
or establishing open-door policies and holding employee meetings. Listening, however, remains one of the most
powerful tools. Networks have become popular ways for employees to find out what is going on around them,
while the rapid development and use of computers and other tools have made possible electronic mail systems,
telecommuting, and virtual offices for some employees.
Topic Overview:
1. Communication Fundamentals
Communication is the transfer of information and understanding from one person to another. It is a way of
reaching others by transmitting ideas, facts, thoughts, feelings, and values. Its goal is to have the receiver
understand the message as it was intended and (often) to act upon that information. When communication is
effective, it provides a bridge of meaning between the two people so they can each share what they feel and
know. By using this bridge, both parties can safely cross the river of misunderstanding that sometimes separates
people.
1.1 The Importance of Communication

Organizations cannot exist without communication. If there is no communication, employees cannot know what
their co-workers are doing, management cannot receive information inputs, and supervisors and team leaders
cannot give instructions. Coordination of work is impossible, and the organization will collapse for lack of it.
Cooperation also becomes impossible, because people cannot communicate their needs and feelings to others.
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1.2 The Two-Way Communication Process
The two-way communication process is the method by which a sender reaches a receiver with a message. The
process always requires eight steps, whether the two parties talk, use hand signals, or employ some advanced-
technology means of communication. The steps are shown in Figure 4.1.
[Figure 4.1: The Communication Process]
Develop an Idea: Step 1 is to develop an idea that the sender wishes to transmit. This is the key step,
because unless there is a worthwhile message, all the other steps are somewhat useless. This step is
represented by the sign, sometimes seen on office or factory walls, that reads, Be sure brain is engaged
before putting mouth in gear.
Encode: Step 2 is to encode (convert) the idea into suitable words, charts, or other symbols for
transmission. At this point, the sender determines the method of transmission so that the words and
symbols may be organized in suitable fashion for the type of transmission.
Transmit: When the message finally is developed, step 3 is to transmit it by the method chosen, such as
by memo, phone call, or personal visit. The sender also chooses a certain channel, such as bypassing or
not bypassing a co-worker, and communicates with careful timing.
Receive: Transmission allows another person to receive a message, which is step 4. In this step, the
initiative transfers to the receiver, who tunes in to receive the message. If it is oral, the receiver needs to
be a good listener, a skill that is discussed shortly. If the receiver does not function, the message is lost.
Decode: Step 5 is to decode the message so it can be understood. The sender wants the receiver to
understand the message exactly as it was sent.
Accept: Once the receiver has obtained and decoded a message, that person has the opportunity to
accept or reject it, which is step 6. The sender, of course, would like the receiver to accept the
communication in the manner intended so activities can progress as planned. Acceptance, however, is a
matter of choice and degree, such that the receiver has considerable control over whether or not to
embrace all the message or just parts of it.
Tw o - w a y communication, made possible by feedback, has a back-and-forth pattern. In two-way

communication, the speaker sends a message and the receivers response comes back to the speaker. The
result is a developing play-by-play situation in which the speaker can, and should, adjust the next message to fit
the previous response of the receiver. The sender needs feedbackthe final stepbecause it tells whether the
message was received, decoded properly, accepted, and used. If necessary, the sender should seek and request
feedback from the receiver. When this two-way communication occurs, both parties experience greater
satisfaction, frustration is prevented, and work accuracy is much improved.
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1.3 Potential Problems
Two-way communication is not exclusively beneficial. It also can cause difficulties. Two people may strongly
disagree about some item but not realize it until they establish two-way communication. When they expose their
different viewpoints, they may become polarized, taking even more extreme positions. When threatened with
the potential embarrassment of losing an argument, people tend to abandon logic and rationality, and engage in
defensive reasoning. They blame others, selectively gather and use data, seek to remain in control, and suppress
negative feelings.
Another difficulty that may emerge is cognitive dissonance. This is the internal conflict and anxiety that occurs
when people receive information incompatible with their value systems, prior decisions, or other information they
may have. Since people do not feel comfortable with dissonance, they try to remove or reduce it. Perhaps they
will try to obtain new communication inputs, change their interpretation of the inputs, reverse their decision, or
change their values. They may even refuse to believe the dissonant input, or they may rationalize it out of the
way.
1.4 Communication Barriers

Even when the receiver receives the message and makes a genuine effort to decode it, a number of
interferences may limit the receivers understanding. Three types of barriers are personal, physical, and semantic.
Personal Barriers: Personal barriers are communication interferences that arise from human emotions,
values, and poor listening habits. They may also stem from differences in education, race, sex,
socioeconomic status, and other factors. Personal barriers are a common occurrence in work situations,
with common examples including distracting verbal habits (e.g., needless repetition of ah or ending
nearly every sentence with you know) or physical actions (e.g., tapping ones fingers).
Physical Barriers: Physical barriers are communication interferences that occur in the environment in
which the communication takes place. A typical physical barrier is a sudden distracting noise that
temporarily drowns out a voice message. Other physical barriers include distances between people, walls
around a workers cubicle, or static that interferes with radio messages. People frequently recognize when
physical interference occurs and try to compensate for it.
Semantic Barriers: Semantic barriers arise from limitations in the symbols with which we communicate.
Symbols usually have a variety of meanings, and we have to choose one meaning from many.
Sometimes we choose the wrong meaning and misunderstanding occurs.
2. Downward Communication
Downward communication in an organization is the flow of information from higher to lower levels of authority.
Managers who communicate successfully are sensitive to human needs and open to true dialogue with their
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employees.
2.1 Prerequisites and Problems

Part of managements failure has been that it did not prepare for effective communication. It failed to lay a good
foundation, so its communication house was built upon sand. A solid foundation has four cornerstones that act
as prerequisites for an effective approach. First, managers need to develop a positive communication attitude.
They must convince themselves that communication is an important part of their jobs, as research on
managerial responsibilities convincingly shows. Second, managers must continually work to get informed. They
need to seek out relevant information of interest to employees, share it, and help employees feel informed.
Third, managers need to consciously plan for communication, and they must do this at the beginning of a course
of action. Finally, managers must develop trust; as mentioned earlier, trust between senders and receivers is
important in all communication. If subordinates do not trust their superiors, they are not as likely to listen to or
believe managements messages.
2.2 Communication Needs

Employees at lower levels have a number of communication needs. Managers think that they understand
employees needs, but often their employees do not think so. This fundamental difference in perception tends to
exist at each level in organizations, thereby making communication more difficult. It causes downward
communicators to be overconfident and probably not take enough care with their downward messages.
2.3 Job Instruction

One communication need of employees is proper instruction regarding their work. Managers secure better
results if they state their instructions in terms of the objective requirements of the job as well as the
opportunities and potential problem areas. The consequences of inadequate job instructions can be disastrous.
3. Upward Communication
If the two-way flow of information is broken by poor upward communication, management loses touch with
employee needs and lacks sufficient information to make sound decisions. It is, therefore, unable to provide
needed task and social support for employees. Management needs to tune in to employees in the same way a
person with a radio tunes in. This process requires initiative, positive action, sensitivity to weak signals, and
adaptability to different channels of employee information. It primarily requires an awareness and belief that
upward messages are important.
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3.1 Difficulties
Several problems plague upward communication, especially in larger, more complex organizations. The first is
delay, which is the unnecessarily slow movement of information up to higher levels. Indecisive managers hesitate
to take a problem upward because doing so implies an admission of failure. Therefore, each level delays the
communication while trying to decide how to solve the problem. The second, and closely intertwined, factor is
filtering. This partial screening out of information occurs because of the natural tendency for an employee to tell
a superior only what the employee thinks the superior wants to hear.
3.2 Upward Communication Practices

A starting point for building better upward communications is to establish a general policy stating what kinds of
upward messages are desired. This could include areas where higher management is accountable, controversial
topics, matters requiring managerial advice, requests for exceptions to corporate policy, or bottom-up
recommendations for change.
4. Other Forms of Communication

Not all communication takes place directly down or up the organizational hierarchy, not all is formally prescribed
by the firm, and not all of it takes place either at work or through face-to-face interaction.
4.1 Lateral Communication

Managers engage in a large amount of lateral communication, or cross-communication, which is communication
across chains of command. It is necessary for job coordination with people in other departments. It also is done
because people prefer the informality of lateral communication rather than the up-and-down process of the
official chain of command. Lateral communication often is the dominant pattern within management.
Employees who play a major role in lateral communication are referred to as boundary spanners. Boundary-
spanning employees have strong communication links within their department, with people in other units, and
often with the external community. These connections with other units allow boundary spanners to gather large
amounts of information, which they may filter or transfer to others. This gives them a source of status and
potential power.
4.2 Social Networking and Electronic Communication

Younger members of the workforce, in particular, have become wired through their widespread participation in
the social networking phenomenon. Social networking technologies are Internet sites and software programs
that allow people to link together into some form of a virtual social community. YouTube, Facebook, and
MySpace are accessed by millions of viewers, and used to share personal information profiles and learn about
others.
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Electronic mail (e-mail) is a computer-based communication system that allows you to send a message to
someoneor to a hundred peoplealmost instantaneously. It is stored within the computer system until the
recipients turn on their networked personal computers, BlackBerries, or iPhones. Then, they can read the
message at their convenience and respond in the same manner. Some electronic mail systems can send
messages in various modes (such as a letter to one correspondent who does not have a computer), and others
can translate the message into a foreign language.
5. Informal Communication
The grapevine is an informal communication system. It coexists with managements formal communication
system. The term applies to all informal communication, including company information that is communicated
informally between employees and people in the community. Although grapevine information tends to be sent
orally, it may be written. Handwritten or typed notes sometimes are used, but in the modern electronic office
these messages typically are flashed on computer screens, creating the new era of the electronic grapevine. This
system can speed the transmission of more units of information within the electronic grapevine in a very short
time. It will not replace the face-to-face grapevine, however, for two reasons:
Not every employee has access to a network of personal computers at work. Many workers enjoy the more
personal social interaction gained through the traditional grapevine.
5.1 Features of the Grapevine

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Several aspects distinguish the grapevine and help us understand it better. The pattern that grapevine
information usually follows is called a cluster chain, because each link in the chain tends to inform a cluster of
other people instead of only one person. In addition, only a few people are active communicators on the
grapevine for any specific unit of information. These people are called liaison individuals.
The grapevine is often more a product of the situation than it is of the person. This means that given the proper
situation and motivation, anyone would tend to become active on the grapevine. Some of the factors that
encourage people to be active are listed in Figure 3.7.
[Figure 4.2: Factors That Encourage Grapevine Activity]
5.2 Rumor
The major problem with the grapevineand the one that gives the grapevine its poor reputation is rumor. The
word rumor sometimes is used as a synonym for grapevine, but technically, there is an important difference
between the two terms. Rumor is grapevine information that is communicated without secure standards of
evidence being present. It is the unverified and untrue part of the grapevine. It could by chance be correct, but
generally it is incorrect; thus it is presumed to be undesirable.

2
Perception And Individual Decision Making

Social Systems And Organizational Culture
Motivation
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2 > Topic 5
Topic 5: Perception And Individual Decision Making
T opic Objective:
1. What Is Perception?
2. Person Perception: Making Judgments about Others
3. The Link between Perception and Individual Decision Making
4. Decision Making in Organizations
5. Influences on Decision Making: Individual Differences and Organizational Con
6. Ethics in Decision Making
Topic Introduction:
Perception: Individuals base their behavior not on the way their external environment actually is but rather on
what they see or believe it to be. Whether a manager successfully plans and organizes the work of employees
and actually helps them to structure their work more efficiently and effectively is far less important than how
employees perceive the managers efforts. Absenteeism, turnover, and job satisfaction are also reactions to an
individuals perceptions. Dissatisfaction with working conditions and the belief that an organization lacks
promotion opportunities are judgments based on attempts to create meaning out of the job.
Individual Decision Making: Individuals think and reason before they act. This is why an understanding of how
people make decisions can be helpful for explaining and predicting their behavior. In some decision situations,
people follow the rational decision-making model. But few important decisions are simple or unambiguous
enough for the rational models assumptions to apply.
Topic Overview:
1. What Is Perception?
Perception is a process by which individuals organize and interpret their sensory impressions in order to give
meaning to their environment. However, what we perceive can be substantially different from objective reality.
Perception is important in the study of OB simply because peoples behavior is based on their perception of what
reality is, not on reality itself. The world as it is perceived is the world that is behaviorally important.
1.1 Factors That Influence Perception

A number of factors operate to shape and sometimes distort perception. These factors can reside in the
perceiver; in the object, or target, being perceived; or in the context of the situation in which the perception is
made.
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When an individual looks at a target and attempts to interpret what he or she sees, that interpretation is heavily
influenced by the personal characteristics of the individual perceiver. Personal characteristics that affect
perception include a persons attitudes, personality, motives, interests, past experiences, and expectations.
Characteristics of the target we observe can affect what we perceive. Loud people are more likely to be noticed
in a group than quiet ones. So, too, are extremely attractive or unattractive individuals. Because we dont look
at targets in isolation, the relationship of a target to its background also influences perception, as does our
tendency to group close things and similar things together.
The context in which we see objects or events is also important. The time at which we see an object or event
can influence attention, as can location, light, heat, or any number of situational factors.
[Figure 5.1]
2. Person Perception: Making Judgments about Others

This is the issue of person perception, or the perceptions people form about each other.
2.1 Attribution Theory

Attribution theory tries to explain the ways in which we judge people differently, depending on the meaning we
attribute to a given behavior. It suggests that when we observe an individuals behavior, we attempt to
determine whether it was internally or externally caused. That determination, however, depends largely on three
factors: (1) distinctiveness, (2) consensus, and (3) consistency. Internally caused behaviors are those we
believe to be under the personal control of the individual. Externally caused behavior is what we imagine the
situation forced the individual to do.
Distinctiveness: Distinctiveness refers to whether an individual displays different behaviors in different

situations.
Consensus: If everyone who faces a similar situation responds in the same way, we can say the
behavior shows consensus.
Consistency: Finally, an observer looks for consistency in a persons actions. The more consistent the
behavior, the more we are inclined to attribute it to internal causes.
Figure 5.2 summarizes the key elements in attribution theory. It tells us, for instance, that if an employee, Kim
Randolph, generally performs at about the same level on other related tasks as she does on her current task
(low distinctiveness), if other employees frequently perform differentlybetter or worse than Kim does on that
current task (low consensus), and if Kims performance on this current task is consistent over time (high
consistency), you or anyone else judging Kims work will be likely to hold her primarily responsible for her task
performance (internal attribution).
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[Figure 5.2]
2.2 Frequently Used Shortcuts in Judging Others

We use a number of shortcuts when we judge others. These techniques are frequently valuable: They allow us
to make accurate perceptions rapidly and provide valid data for making predictions. However, they are not
foolproof. They can and do get us into trouble. Understanding these shortcuts can help you recognize when they
can result in significant distortions.
Selective Perception: Any characteristic that makes a person, an object, or an event stand out will
increase the probability that we will perceive it. Because we cant observe everything going on about us,
we engage in selective perception.
Halo Effect: When we draw a general impression about an individual on the basis of a single
characteristic, such as intelligence, sociability, or appearance, a halo effect is operating.
Contrast Effects: We dont evaluate a person in isolation. Our reaction to a person is influenced by
other persons we have recently encountered. In a series of job interviews, for instance, interviewers can
make distortions in any given candidates evaluation as a result of his place in the interview schedule. A
candidate is likely to receive a more favorable evaluation if preceded by mediocre applicants and a less
favorable evaluation if preceded by strong applicants.
Stereotyping: When we judge someone on the basis of our perception of the group to which he or she
belongs, we are using the shortcut called stereotyping. One specific manifestation of stereotypes is
profilinga form of stereotyping in which a group of individuals is singled out, typically on the basis of race
or ethnicity, for intensive inquiry, scrutiny, or investigation.
2.3 Specific Applications of Shortcuts in Organizations

People in organizations are always judging each other. Managers must appraise their employees performances.
We evaluate how much effort our coworkers are putting into their jobs. When a new person joins a work team,
the other members immediately size her up. In many cases, our judgments have important consequences for
the organization. Lets briefly look at a few of the most obvious applications.
Employment Interview: A major input into who is hired and who is rejected in an organization is the
employment interview. Its fair to say that few people are hired without an interview. But evidence
indicates that interviewers make perceptual judgments that are often inaccurate. They generally draw
early impressions that very quickly become entrenched.
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Performance Expectations: People attempt to validate their perceptions of reality, even when those
perceptions are faulty. This characteristic is particularly relevant when we consider performance
expectations on the job. The terms self-fulfilling prophecy and Pygmalion effect have evolved to
characterize the fact that an individuals behavior is determined by other peoples expectations.
Performance Evaluation: Performance Evaluations are very much dependent on the perceptual
process. An employees future is closely tied to the appraisal promotions, pay raises, and continuation of
employment are among the most obvious outcomes.
3. The Link between Perception and Individual Decision Making

Individuals in organizations make decisions. That is, they make choices from among two or more alternatives.
Top managers, for instance, determine their organizations goals, what products or services to offer, how best
to finance operations, or where to locate a new manufacturing plant. Middle- and lower-level managers
determine production schedules, select new employees, and decide how pay raises are to be allocated. Of
course, making decisions is not the sole province of managers. Nonmanagerial employees also make decisions
that affect their jobs and the organizations for which they work. They decide whether to come to work on any
given day, how much effort to put forth at work, and whether to comply with a request made by the boss.
Decision making occurs as a reaction to a problem. That is, a discrepancy exists between the current state of
affairs and some desired state, requiring us to consider alternative courses of action.
Every decision requires us to interpret and evaluate information. We typically receive data from multiple sources
and need to screen, process, and interpret it. Which data, for instance, are relevant to the decision and which are
not? The perceptions of the decision maker will answer that question. We also need to develop alternatives and
evaluate the strengths and weaknesses of each. Again, because alternatives dont come with their strengths and
weaknesses clearly marked, an individual decision makers perceptual process will have a large bearing on the
final outcome. Finally, throughout the entire decision- making process, perceptual distortions often surface that
can bias analysis and conclusions.
4. Decision Making in Organizations

If we are to improve how we make decisions in organizations, we need to understand the decision-making
errors that people commit. We begin with a brief Introduction of the rational decision-making model.
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4.1 The Rational Model, Bounded Rationality, and Intuition
Rational Decision Making: We often think the best decision maker is rational and makes consistent,
value-maximizing choices within specified constraints. These decisions follow a six-step rational decision-
making model. The six steps are listed in Figure 5.3. The rational decision-making model relies on a
number of assumptions, including that the decision maker has complete information, is able to identify all
the relevant options in an unbiased manner, and chooses the option with the highest utility.
[Figure 5.3]
Bounded Rationality: Because the human mind cannot formulate and solve complex problems with full
rationality, we operate within the confines of bounded rationality. We construct simplified models that
extract the essential features from problems without capturing all their complexity. We can then behave
rationally within the limits of the simple model.
Intuition: Perhaps the least rational way of making decisions is to rely on intuition. Intuitive decision
making is a nonconscious process created from distilled experience. Its defining qualities are that it occurs
outside conscious thought; it relies on holistic associations, or links between disparate pieces of
information; its fast; and its affectively charged, meaning that it usually engages the emotions.
4.2 Common Biases and Errors in Decision Making

Decision makers engage in bounded rationality, but an accumulating body of research tells us that decision
makers also allow systematic biases and errors to creep into their judgments. These come from attempts to
shortcut the decision process. To minimize effort and avoid difficult trade-offs, people tend to rely too heavily on
experience, impulses, gut feelings, and convenient rules of thumb. In many instances, these shortcuts are helpful.
However, they can lead to severe distortions of rationality. Following are the most common biases in decision
making.
Overconfidence Bias: As managers and employees become more knowledgeable about an issue, they
become less likely to display overconfidence. And overconfidence is most likely to surface when
organizational members are considering issues or problems that are outside their area of expertise.
Anchoring Bias: The anchoring bias is a tendency to fixate on initial information and fail to adequately
adjust for subsequent information. The anchoring bias occurs because our mind appears to give a
disproportionate amount of emphasis to the first information it receives.
Confirmation Bias: The confirmation bias represents a specific case of selective perception. We seek
out information that reaffirms our past choices, and we discount information that contradicts them. We
also tend to accept at face value information that confirms our preconceived views, while we are critical
and skeptical of information that challenges these views. Therefore, the information we gather is typically
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biased toward supporting views we already hold. This confirmation bias influences where we go to collect
evidence because we tend to seek out sources most likely to tell us what we want to hear.
Availability Bias: The availability bias is the tendency for people to base their judgments on information
that is readily available to them.
Escalation of Commitment: Escalation of commitment refers to staying with a decision even when
there is clear evidence that its wrong.
Randomness Error: Our tendency to believe we can predict the outcome of random events is the
randomness error.
Winners Curse: The winners curse argues that the winning participants in a competitive auction
typically pay too much for the item.
Hindsight Bias: The hindsight bias is the tendency to believe falsely, after the outcome of an event is
actually known, that wed have accurately predicted that outcome. When something happens and we
have accurate feedback on the outcome, we seem to be pretty good at concluding that the outcome was
relatively obvious.
5. Influences on Decision Making: Individual Differences and Organizational Constraints

The following factors influence how people make decisions and the degree to which they are susceptible to
errors and biases.
5.1 Individual Differences

Decision making in practice is characterized by bounded rationality, common biases and errors, and the use of
intuition. In addition, individual differences create deviations from the rational model.
5.2 Organizational Constraints

Organizations can constrain decision makers, creating deviations from the rational model. For instance,
managers shape their decisions to reflect the organizations performance evaluation and reward system, to
comply with the organizations formal regulations, and to meet organizationally imposed time constraints.
Previous organizational decisions also act as precedents to constrain current decisions.
6. Ethics in Decision Making

Ethical considerations should be an important criterion in organizational decision making. This is certainly more
true today than at any time in the recent past, given the increasing scrutiny business is under to behave in an
ethical and socially responsible way. The three different ways to frame decisions ethically are described below:
6.1 Three Ethical Decision Criteria

An individual can use three different criteria in making ethical choices. The first is the utilitarian criterion, in which
decisions are made solely on the basis of their outcomes or consequences. Another ethical criterion is to focus
on rights. This calls on individuals to make decisions consistent with fundamental liberties and privileges, as set
forth in documents such as the Bill of Rights. A third criterion is to focus on justice. This requires individuals to
impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs.
6.2 Improving Creativity in Decision Making

A rational decision maker also needs creativity, that is, the ability to produce novel and useful ideas. These are
ideas that are different from whats been done before but that are appropriate to the problem or opportunity
presented. Creativity is important to decision making because it allows the decision maker to more fully appraise
and understand the problem, including seeing problems others cant see. Such thinking is becoming more
important.
6.3 Three-Component Model of Creativity

Three-component model of creativity.66 Based on an extensive body of research, this model proposes that
individual creativity essentially requires expertise, creative thinking skills, and intrinsic task motivation. Studies
confirm that the higher the level of each of these three components, the higher the creativity.
Expertise is the foundation for all creative work. The potential for creativity is enhanced when individuals have
abilities, knowledge, proficiencies, and similar expertise in their field of endeavor.
The second component is creative-thinking skills. This encompasses personality characteristics associated with
creativity, the ability to use analogies, and the talent to see the familiar in a different light.
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The final component in the three-component model of creativity is intrinsic task motivation. This is the desire to
work on something because its interesting, involving, exciting, satisfying, or personally challenging. This
motivational component is what turns creativity potential into actual creative ideas. It determines the extent to
which individuals fully engage their expertise and creative skills.
[Figure 5.4]
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2 > Topic 6
Topic 6: Social Systems And Organizational Culture
T opic Objective:
1. Social System
2. Social Culture
3. Role
4. Status
5. Organizational Culture
6. Fun Workplaces
Topic Introduction:
When people join a work group, they become part of that organizations social system. It is the medium by
which they relate to the world of work. The variables in an organizational system operate in a working balance
called social equilibrium. Individuals make a psychological contract that defines their personal relationship with the
system. When they contribute to the organizations success, we call their behavior functional.
Organizational cultures reflect the assumptions and values that guide a firm. They are intangible but powerful
influences on employee behavior. Participants learn about their organizations culture through the process of
socialization, and influence it through individualization. Organizational cultures can be changed, but the process is
time-consuming. Fun at work can be a legitimate part of a firms culture and can produce personal and
organizational benefits.
Topic Overview:
1. Social System
A social system is a complex set of human relationships interacting in many ways. Possible interactions are as
limitless as the stars in the universe. Each small group is a subsystem within larger groups that are subsystems
of even larger groups, and so on, until all the worlds population is included. Within a single organization, the
social system includes all the people in it and their relationships to one another and to the outside world.
1.1 Social Equilibrium

A system is said to be in social equilibrium when its interdependent parts are in dynamic working balance.
Equilibrium is a dynamic concept, not a static one. Despite constant change and movement in every
organization, the systems working balance can still be retained over time.
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1.2 Functional and Dysfunctional Effects
A change has a functional effect when it is favorable for the system. When an action or a change creates
unfavorable effects, such as a decline in productivity, for the system it has a dysfunctional effect. A major
management task is to appraise both actual and proposed changes in the social system to determine their
possible functional or dysfunctional effects, so that appropriate responses can be anticipated and made.
1.3 Psychological and Economic Contracts

When employees join an organization, they make an unwritten psychological contract with it, although often
they are not conscious of doing so. As shown in Figure 6.1, this contract is in addition to the economic contract
where time, talent, and energy are exchanged for wages, hours, and reasonable working conditions. The
psychological contract defines the conditions of each employees psychological involvementboth contributions
and expectationswith the social system. Employees agree to give a certain amount of loyalty, creativity, and
extra effort, but in return they expect more than economic rewards from the system. They seek job security,
fair treatment (human dignity), rewarding relationships with co-workers, and organizational support in fulfilling
their career development expectations.
[Figure 6.1: The Results of the Psychological Contract and the Economic Contract]
2. Social Culture
Whenever people act in accordance with the expectations of others, their behavior is social. Social cultures are
often portrayed as consistent within a nation, thereby producing a national culture. At the simplest level, national
cultures can be compared on the basis of how their members relate to each other, accomplish work, and
respond to change. However, distinctive social cultures can exist within a nation as well
2.1 Cultural Diversity

Employees in almost any organization are divided into subgroups of various kinds. Formation of groups is
determined by two broad sets of conditions. First, job-related (organizationally created) differences and
similarities, such as type of work, rank in the organization, and physical proximity to one another, sometimes
cause people to align themselves into groups. However, a second set of non-job-related conditions (those
related to culture, ethnicity, socioeconomics, sex, and race) arise primarily from an individuals personal
background; these conditions are highly important for legal, moral, and economic reasons.
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Problems may persist because of a key difference in this context between discrimination and prejudice.
Discrimination is generally exhibited as an action, whereas prejudice is an attitude. Either may exist without the
other.
2.2 Social Culture Values
The Work Ethic: People view work as very important and as a desirable goal in life. They tend to like
work and derive satisfaction from it. They usually have a stronger commitment to the organization and its
goals than do other employees. These characteristics of the work ethic make it highly appealing to
employers.
Social Responsibility: Social responsibility is the recognition that organizations have significant influence
on the nations social system and that this influence must be properly considered and balanced in all
organizational actions.
3. Role
A role is the pattern of actions expected of a person in activities involving others. Role reflects a persons
position in the social system, with its accompanying rights and obligations, power and responsibility. In order to
be able to interact with one another, people need some way of anticipating others behavior. Role performs this
function in the social system.
A person has roles both on the job and away from it, as shown in Figure 6.2. One person performs the
occupational role of worker, the family role of parent, the social role of club president, and many others. In those
various roles, a person is buyer and seller, supervisor and subordinate, and giver and seeker of advice. Each role
calls for different types of behavior. Within the work environment alone, a worker may have more than one role,
such as a worker in group A, a subordinate to supervisor B, a machinist, a member of a union, and a
representative on the safety committee.
[Figure 6.2: Each Employee Performs Many Roles]
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3.1 Role Perceptions
Activities of managers and workers alike are guided by their role perceptionsthat is, how they think they are
supposed to act in their own roles and how others should act in their roles. Since managers perform many
different roles, they must be highly adaptive (exhibiting role flexibility) in order to change from one role to
another quickly. Supervisors especially need to change roles rapidly as they work with both subordinates and
superiors, and with technical and nontechnical activities.
When a manager and an employee interact, each one needs to understand four different role perceptions, as
shown in Figure 4.3. For a manager, two role perceptions are as follows: First there is the managers own role
perception as required by the supervisory job being performed (A). Second, there is the managers perception of
the role of the employee being contacted (B). Two related role perceptions (C and D) exist from the employees
perspective.
Potentially dramatic differences exist between the two outlooksespecially in the direct comparisons such as A
to C and B to D. Obviously, one person cannot meet the needs of others unless one can perceive what they
expect. The key is for both parties to gain accurate role perceptions for their own roles and for the roles of the
other. Reaching such an understanding requires studying the available job descriptions, as well as opening up
lines of communication to discover the others perceptions. Unless roles are clarified and agreed upon by both
parties, conflicts will inevitably arise.
[Figure 6.3: The Complex Web of ManagerEmployee Role Perceptions]
3.2 Mentors
A mentor is a role model who guides another employee (a protg) by sharing valuable advice on roles to play
and behaviors to avoid. Mentors teach, advise, coach, support, encourage, act as sounding boards, and sponsor
their protgs so as to expedite their personal satisfaction and career progress. The best mentors are credible,
challenge you to improve, stimulate you to take risks, build your confidence, support your efforts to set
stretch goals, and identify challenges and opportunities.
The advantages of successful mentoring programs include stronger employee loyalty, faster movement up the
learning curve, better succession planning through development of replacements, and increased level of goal
accomplishments. Some organizations actually assign protgs to a mentor, but this practice can create
problems of resentment, abuse of power, and unwillingness to serve. As a result, other firms simply encourage
employees to seek out their own mentors.
3.3 Role Conflict

When others have different perceptions or expectations of a persons role, that person tends to experience role
conflict. Such conflict makes it difficult to meet one set of expectations without rejecting another. A company
president faced role conflict, for example, when she learned that both the controller and the human resource
director wanted her to allocate the new organizational planning function to their departments.
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3.4 Role Ambiguity
When roles are inadequately defined or are substantially unknown, role ambiguity exists, because people are not
sure how they should act in situations of this type. When role conflict and role ambiguity exist, job satisfaction
and organizational commitment will likely decline. On the other hand, employees tend to be more satisfied with
their jobs when their roles are clearly defined by job descriptions and statements of performance expectations.
4. Status
Status is the social rank of a person in a group. It is a mark of the amount of recognition, honor, esteem, and
acceptance given to a person. Within groups, differences in status apparently have been recognized ever since
civilization began. Wherever people gather into groups, status distinctions are likely to arise, because they enable
people to affirm the different characteristics and abilities of group members.
Individuals are bound together in status systems, or status hierarchies, which define their rank relative to others
in the group. If they become seriously upset over their status, they are said to feel status anxiety.
Loss of statussometimes called losing face or status deprivationis a serious event for most people; it is
considered a much more devastating condition, however, in certain societies. People, therefore, become quite
responsible in order to protect and develop their status.
4.1 Status Relationships

In a work organization, status provides a system by which people can relate to one another as they work.
Without it, they would tend to be confused and spend much of their time trying to learn how to work together.
Though status can be abused, normally it is beneficial because it helps people interact and cooperate with one
another.
4.2 Status Symbols

The status system becomes most visible through its use of status symbols. These are the visible external things
that attach to a person or workplace and serve as evidence of social rank. They exist in the office, shop,
warehouse, refinery, or wherever work groups congregate. They are most in evidence among different levels of
managers, because each successive level usually has the authority to provide itself with surroundings just a little
different from those of people lower in the structure.
4.3 Sources of Status

The sources of status are numerous, but in a typical work situation several sources are easily identified. As
shown in Figure 6.4, education and job level are two important sources of higher status. A persons abilities, job
skills, and type of work also are major sources of status.
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[Figure 6.4: Major Sources of Status on the Job]
4.4 Significance of Status

Status is significant to organizational behavior in several ways. When employees are consumed by the desire for
status, it often is the source of employee problems and conflicts that management needs to solve. It influences
the kinds of transfers that employees will take, because they dont want a low-status location (being sent to
Siberia) or dead-end job assignment. It helps determine who will be an informal leader of a group, and it
definitely serves to motivate those seeking to advance in the organization.
5. Organizational Culture
Organizational culture is the set of assumptions, beliefs, values, and norms shared by an organizations
members. This culture may have been consciously created by its key members, or it may have simply evolved
across time. It represents a key element of the work environment in which employees perform their jobs.
Organizational cultures are important to a firms success for several reasons. They give an organizational identity
to employeesa defining vision of what the organization represents. They are also an important source of
stability and continuity to the organization, which provides a sense of security to its members. At the same time,
knowledge of the organizational culture helps newer employees interpret what goes on inside the organization,
by providing an important context for events that would otherwise seem confusing.
5.1 Characteristics of Cultures

Organizations, like fingerprints and snowflakes, are unique. Each has its own history, patterns of communication,
systems and procedures, mission statements and visions, and stories and myths which, in their totality,
constitute its distinctive culture. Cultures are relatively stable in nature, usually changing only slowly over time.
Exceptions to this condition may occur when a major crisis threatens a firm or when two organizations merge
with each other (requiring a careful blending of the two so as to avoid culture clash).
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Most organizational cultures have historically been implicit and unconscious rather than explicit. In that way,
cultures are similar to the act of breathing, which we take for granted until we have problems with it. A final
defining characteristic of most cultures is that they are seen as symbolic representations of underlying beliefs and
values.
5.2 Communicating and Changing Culture

If organizations are to consciously create and manage their cultures, they must be able to communicate them to
employees, especially the newly hired ones. People are generally more willing to adapt and learn when they want
to please others, gain approval, and learn about their new work environment. Similarly, organizations are eager
to have the new employees fit in, and therefore an intentional approach that helps make this happen is used by
many firms.
The cultural communication acts may be lumped under the umbrella of organizational socialization, which is the
continuous process of transmitting key elements of an organizations culture to its employees. Socialization
consists of both formal methods (such as military indoctrination at boot camp or corporate orientation training
for new employees) and informal means (like the role modeling provided by mentors). All these approaches help
shape the attitudes, thoughts, and behavior of employees.
Two powerful methods for communicating an organizational culture to new employees involve signature
experiences and storytelling. Signature experiences are clearly defined and dramatic devices that convey a key
element of the firms culture and vividly reinforce the values of the organization. As a result, the culture is clearly
imprinted in the new employees mind.
Managers are also encouraged to engage in storytelling as a way to forge a culture and build organizational
identity. Stories convey a sense of tradition, explain how past problems have been solved, convey personal
frailty through tales of mistakes made and learned from, and enhance cohesion around key values.
Individualization occurs when employees successfully exert influence on the social system around them at work
by challenging the culture or deviating from it. The interaction between socialization and individualization is
portrayed in Figure 6.5, which shows the types of employees who accept or reject an organizations norms and
values while exerting various degrees of influence. The two extremesrebellion and total conformitymay
prove dysfunctional for the organization and the individuals career in the long run. Isolation, of course, is seldom
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a productive course of action. If we assume that the culture of a certain organization invites its employees to
challenge, question, and experiment while also not being too disruptive, then the creative individualist can infuse
new life and ideas for the organizations benefit.
[Figure 6.5: Four Combinations of Socialization and Individualization]
6. Fun Workplaces
A fun work environment is a unique and increasingly popular organizational culture in which supervisors
encourage, initiate, and support a variety of playful and humorous activities. A fun workplace culture has several
key features:
It is easily recognized (by observing the presence of laughter, smiles, surprise, and spontaneity).
It means different things to various people.
It is relatively easy to create at work.
It elicits a broad range of personal and organizational payoffs.
Employees like to work in an environment that satisfies their economic and security needs, makes them feel
listened to, and recognizes their time, effort, and results. Beyond that, however, many employees value and
appreciate the opportunity to relax and play a little, laugh, have fun occasionally, and generally enjoy themselves
at work.
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2 > Topic 7
Topic 7: Motivation
T opic Objective:
1. A Model of Motivation
2. Motivational Drives
3. Human Needs
4. Behavior Modification
5. Goal Setting
6. The Expectancy Model
7. The Equity Model
Topic Introduction:
Work motivation is the result of a set of internal and external forces that cause an employee to choose an
appropriate course of action and engage in certain behaviors. Ideally, these behaviors will be directed at the
achievement of an organizational goal. Work motivation is a complex combination of psychological forces within
each person, and employers are vitally interested in three elements of it:
Direction and focus of the behavior (positive factors are dependability, creativity, helpfulness, timeliness;
dysfunctional factors are tardiness, absenteeism, withdrawal, and low performance).
Level of the effort provided (making a full commitment to excellence versus doing just enough to get
by).
Persistence of the behavior (repeatedly maintaining the effort versus giving up prematurely or doing it
just sporadically).
Topic Overview:
1. A Model of Motivation
The role of motivation in performance is summarized in Figure 7.1. Internal needs and drives create tensions
that are affected by ones environment. Potential performance (PP) is a product of ability (A) and motivation
(M). Results occur when motivated employees are provided with the opportunity (such as the proper training) to
perform and the resources (such as the proper tools) to do so. The presence of goals and the awareness of
incentives to satisfy ones needs are also powerful motivational factors leading to the release of effort
(motivation). When an employee is productive and the organization takes note of it, rewards will be distributed.
If those rewards are appropriate in nature, timing, and distribution, the employees original needs and drives are
satisfied. At that time, new needs may emerge and the cycle will begin again. It should be apparent, therefore,
that an important starting point lies in understanding employee needs.
[Figure 7.1: A Model of Motivation]
2. Motivational Drives
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People tend to develop certain motivational drives (strong desires for something) as a product of the cultural
environment in which they live. These drives affect the way people view their jobs and approach their lives. Much
of the interest in these patterns of motivation was generated by the research of David C. McClelland of Harvard
University. McClellands research focused on the drives for achievement, affiliation, and power.
[Figure 7.1: Motivational Drives]
2.1 Achievement Motivation

Achievement motivation is a drive some people have to pursue and attain challenging goals. An individual with
this drive wishes to achieve objectives and advance up the ladder of success. Accomplishment is seen as
important primarily for its own sake, not just for the rewards that accompany it.
2.2 Affiliation Motivation

Affiliation motivation is a drive to relate to people on a social basisto work with compatible people and
experience a sense of community. Achievement-oriented people work harder when their supervisors provide
detailed evaluations of their work behavior. But people with affiliation motives work better when they are
complimented for their favorable attitudes and cooperation.
2.3 Power Motivation

Power motivation is a drive to influence people, take control, and change situations. Power-motivated people
wish to create an impact on their organizations and are willing to take risks to do so. Once this power is
obtained, it may be used either constructively or destructively. Power-motivated people make excellent
managers if their drives are for institutional power instead of personal power.
2.4 Managerial Application of the Drives

Knowledge of the differences among the three motivational drives requires managers to think contingently and
to understand the unique work attitudes of each employee. They can then deal with employees differently
according to the strongest motivational drive that they identify in each employee. In this way, the supervisor
communicates with each employee according to that particular persons needs.
3. Human Needs
3.1 Types of Needs

Needs may be classified in various ways. A simple classification is (1) basic physical needs, called primary needs,
and (2) social and psychological needs, called secondary needs. The physical needs include food, water, sex,
sleep, air, and reasonably comfortable temperature and humidity. These needs arise from the basic requirements
of life and are important for survival of the human race. They are, therefore, virtually universal, but they vary in
intensity from one person to another.
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Needs also are conditioned by social practice. Secondary needs are vaguer because they represent needs of the
mind and spirit rather than of the physical body. Many of these needs are acquired and developed as people
mature. The secondary needs are those that complicate the motivational efforts of managers. Therefore,
managerial planning should consider the effect of any proposed action on the secondary needs of employees.
3.2 Maslows Hierarchy of Needs

According to A. H. Maslow, human needs are not of equal strength, and they emerge (become increasingly
important) in a predictable but rather fluid sequence. In particular, as the primary needs become reasonably well
satisfied, a person places more emphasis on the secondary needs. Maslows hierarchy of needs identifies and
focuses attention on five levels, as shown in Figure 7.3.
[Figure 7.3: A Comparison of Maslows, Herzbergs, and Alderfers Models]
Lower-Order Needs: First-level needs involve basic survival and include physiological needs for food,
air, water, and sleep. The second need level that tends to dominate is bodily safety (such as freedom
from a dangerous work environment) and economic security (such as a no-layoff guarantee or a
comfortable retirement plan). These two need levels together are typically called lower-order needs, and
they are similar to the primary needs.
Higher-Order Needs: Three levels of higher-order needs exist. The third level in the hierarchy concerns
love, belonging, and social involvement at work (friendships and compatible associates). The needs at the
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fourth level encompass those for esteem and status, including ones feelings of self-worth and of
competence. The feeling of competence, which derives from the able completion of tasks and the
assurance of others, provides status. The fifth-level need is self-actualization, which is an ongoing process
of becoming all that one is capable of becoming, using ones skills to the fullest, having a rich combination
of values and purpose, and stretching talents to the maximum.
Interpreting the Hierarchy of Needs: Maslows need-hierarchy model essentially says that people
have a variety of needs they wish to satisfy, multiple needs operate simultaneously, all need levels are
often partially satisfied, and that gratified needs are not as strongly motivating as unmet needs.
Employees are more enthusiastically motivated by what they are currently seeking than by receiving more
of what they already have. A fully satisfied need will not be a strong motivator.
3.3 Herzbergs Two-Factor Model

Frederick Herzberg developed a two-factor model of motivation. Herzberg found that employees named
different types of conditions that produced good and bad feelingsthat is, if a feeling of achievement led to a
good feeling, the lack of achievement was rarely given as cause for bad feelings. Instead, some other factor,
such as company policy, was more frequently given as a cause of bad feelings.
Maintenance and Motivational Factors: According to Herzberg certain job factors, such as job
security and working conditions, dissatisfy employees primarily when the conditions are absent. However,
as shown in Figure 7.4, their presence generally brings employees only to a neutral state. The factors are
not strongly motivating. These potent dissatisfiers are called hygiene factors, or maintenance factors,
because they must not be ignored. They are necessary for building a foundation on which to subsequently
create a reasonable level of motivation in employees.
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[Figure 7.4: Effects of Maintenance and Motivational Factors]
Intrinsic and Extrinsic Motivators: Intrinsic motivators are internal rewards that a person feels when
performing a job, so there is a direct and often immediate connection between work and rewards.7 An
employee in this situation is self-motivated. Extrinsic motivators are external rewards that occur apart
from the nature of work, providing no direct satisfaction at the time the work is performed. Examples are
retirement plans, health insurance.
3.4 Alderfers E-R-G Model

Building upon earlier need models (primarily Maslows) and seeking to overcome some of their weaknesses,
Clayton Alderfer proposed a modified need hierarchythe E-R-G modelwith just three levels. He suggested
that employees are initially interested in satisfying their existence needs, which combine physiological and
security factors. Pay, physical working conditions, job security, and fringe benefits can all address these needs.
Relatedness needs are at the next level, and these social factors involve being understood and accepted by
people above, below, and around the employee at work and away from it. Growth needs are in the third
category; these involve the desire for both self-esteem and self-actualization.
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4. Behavior Modification
Organizational behavior modification, or OB Mod, is the application in organizations of the principles of behavior
modification, which evolved from the work of B. F. Skinner.
4.1 Law of Effect

OB Mod is based on the idea that behavior depends on its consequences; therefore, managers can control, or at
least affect, a number of employee behaviors by manipulating their consequences. OB Mod relies heavily on the
law of effect, which states that a person tends to repeat behavior that is accompanied by favorable
consequences (reinforcement) and tends not to repeat behavior that is accompanied by unfavorable (or a lack
of) consequences. Two conditions are required for successful application of OB Modthe manager must be able
to identify some powerful consequences (as perceived by the employee) and then must be able to control and
administer them in such a way that the employee will see the connection between the behavior to be affected
and the consequences.
4.2 Alternative Consequences

Before using OB Mod, however, managers must decide whether they wish to increase the probability of a
persons continued behavior or to decrease it. Once they have decided on their objective, they have two further
choices to make which determine the type of consequence to be applied. First, should they use a positive or a
negative consequence? Second, should they apply it or withhold it? The answers to those two questions result in
four unique alternative consequences, as shown in Figure 7.5.
[Figure 7.5: Four Alternative Consequences of OB Mod]
Behavior is encouraged primarily through positive reinforcement. Positive reinforcement provides a favorable
consequence that encourages repetition of a behavior.
Shaping is a systematic and progressive application of positive reinforcement. It occurs when more frequent, or
more powerful, reinforcements are successively given as the employee comes closer to the desired behavior.
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Negative reinforcement occurs when behavior is accompanied by removal of an unfavorable consequence;
therefore, it is not the same as punishment, which normally adds something unfavorable. Consistent with the
law of effect, behavior responsible for the removal of something unfavorable is repeated when that unfavorable
state is again encountered.
Punishment is the administration of an unfavorable consequence that discourages a certain behavior. Although
punishment may be necessary occasionally to discourage an undesirable behavior, it needs to be used with
caution because it has certain limitations.
Extinction is the withholding of significant positive consequences that were previously provided for a desirable
behavior. Such desirable learned behavior needs to be reinforced to encourage the person to repeat the action in
the future.
4.3 Schedules of Reinforcement

Reinforcement may be either continuous or partial. Continuous reinforcement occurs when reinforcement
accompanies each correct behavior by an employee. Partial reinforcement occurs when only some of the correct
behaviors are reinforcedeither after a certain time or after a number of correct responses. Learning is slower
with partial reinforcement than with continuous reinforcement.
5. Goal Setting
Goal setting works as a motivational process because it creates a discrepancy between current and expected
performance. This results in a feeling of tension, which the employee can diminish through future goal
attainment. Meeting goals also helps satisfy a persons achievement drive, contributes to feelings of competence
and self-esteem, and further stimulates personal growth needs.
5.1 Elements of Goal Setting

Goal setting, as a motivational tool, is most effective when all its major elements are present. These are goal
acceptance, specificity, challenge, and performance monitoring and feedback.
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Goal Acceptance: Effective goals need to be not only understood but also actively accepted.
Specificity: Goals need to be as specific, clear, and measurable as possible so employees will know
when a goal is reached.
Challenge: Perhaps surprisingly, most employees work harder and achieve more when they have
difficult goals to accomplish rather than easy ones.
Performance Monitoring and Feedback: Performance monitoring is observing behavior, inspecting
output, or studying performance indicatorsprovides at least subtle cues to employees that their tasks
are important, their effort is needed, and their contributions are valued. Performance feedback tends to
encourage better job performance, and self-generated feedback is an especially powerful motivational
tool.
6. The Expectancy Model

A widely accepted approach to motivation is the expectancy model, also known as expectancy theory,
developed by Victor H. Vroom. Vroom explains that motivation is a product of three factors: how much one
wants a reward (valence), ones estimate of the probability that effort will result in successful performance
(expectancy), and ones estimate that performance will result in receiving the reward (instrumentality). This
relationship is stated in the following formula:
6.1 The Three Factors
Valence: Valence refers to the strength of a persons preference for receiving a reward. It is an
expression of the amount of ones desire to reach a goal. Since people may have positive or negative
preferences for an outcome, valence may be negative as well as positive. When a person prefers not
attaining an outcome, as compared with attaining it, valence is a negative figure. If a person is indifferent
to an outcome, the valence is 0. The total range is from -1 to +1, as shown in Figure 7.6.
[Figure 7.6: Range of Valence, Expectancy, and Instrumentality]
Expectancy: Expectancy is the strength of belief that ones work-related effort will result in completion
of a task. Since expectancy is the probability of a connection between effort and performance, its value
may range from 0 to 1. If an employee sees no chance that effort will lead to the desired performance,
the expectancy is 0. At the other extreme, if the employee is totally confident that the task will be
completed, the expectancy has a value of 1. Normally, employee estimates of expectancy lie somewhere
between the two extremes.
Instrumentality: Instrumentality represents the employees belief that a reward will be received once
the task is accomplished. Here the employee makes another subjective judgment about the probability
that the organization values the employees performance and will administer rewards on a contingent
basis. The value of instrumentality effectively ranges from 0 to 1.
7. The Equity Model

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J. Stacy Adamss equity theory states that employees tend to judge fairness by comparing the outcomes
(rewards) they receive with their relevant inputs (contributions) and also by comparing this ratio (not always the
absolute level of rewards) with the ratios of other people, as this formula shows:
Inputs include all the rich and diverse elements that employees believe they bring, or contribute, to the jobtheir
education, seniority, prior work experiences, loyalty and commitment, time and effort, creativity, and job
performance. Outcomes are the rewards they perceive they get from their jobs and employers; these outcomes
include direct pay and bonuses, fringe benefits, job security, social rewards, and psychological rewards.
Employees analyze the fairness of their own outcome/input contract, and then compare their contract with
contracts of other workers in similar jobs and even with those outside of their job. Fairness of rewards (equity)
may even be judged in comparison with relatively arbitrary criteria like age.
If employees feel overrewarded, equity theory predicts that they will feel an imbalance in their relationship with
their employer and seek to restore that balance. They might work harder, they might discount the value of the
rewards received (internal and psychological), they could try to convince other employees to ask for more
rewards (external and physical), or they might simply choose someone else for comparison purposes (external
and psychological).
[Figure 7.7: Key Factors in Equity Assessment]

3
Appraising And Rewarding Performance

Teams In Organizations
Teamwork And Team Performance
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3 > Topic 8
Topic 8: Appraising And Rewarding Performance
T opic Objective:
1. Organizational Behavior and Performance Appraisal
2. Economic Incentive Systems
Topic Introduction:
Economic rewards provide social as well as economic value. They play a key role within several motivational
models, blending with expectancy, equity, behavior modification, and need-based approaches. Employees
perform a rough costreward comparison and work somewhat near but below the break-even point.
Performance appraisal provides a systematic basis for assessment of employee contributions, coaching for
improved performance, and distribution of economic rewards. Modern appraisal philosophy focuses on
performance, objectives, mutual goal setting, and feedback. Newer appraisal approaches, such as self-appraisal
and 360-degree feedback systems, provide additional perspectives on employee performance and suggestions
for improvement. Nevertheless, the appraisal interview can be difficult for both manager and employee.
Topic Overview:
1. Organizational Behavior and Performance Appraisal
Organizations require consistent levels of high performance from their employees in order to survive in a highly
competitive global environment. Many firms use some form of results-oriented planning and control systems.
Management by objectives (MBO) is a cyclical process that often consists of four steps as a way to attain
desired performance:
Objective Setting: Joint determination by manager and employee of appropriate levels of future
performance for the employee, within the context of overall unit goals and resources. These objectives
are often set for the next calendar or fiscal year.
Action planning: Participative or even independent planning by the employee as to how to reach those
objectives. Providing some autonomy to employees is invaluable; they are more likely to use their
ingenuity, as well as feel more committed to the plans success.
Periodic reviews: Joint assessment of progress toward objectives by manager and employee,
performed informally and sometimes spontaneously.
Annual evaluation: More formal assessment of success in achieving the employees annual objectives,
coupled with a renewal of the planning cycle. Some MBO systems also use performance appraisal to tie
rewards for employees to the level of results attained.
Performance appraisal plays a key role in reward systems. It is the process of evaluating the performance of
employees, sharing that information with them, and searching for ways to improve their performance. Appraisal
is necessary in order to (1) allocate scarce resources in a dynamic environment, (2) motivate and reward
employees, (3) give employees feedback about their work, (4) maintain fair relationships within groups, (5)
coach and develop employees, and (6) comply with regulations. Appraisal systems, therefore, are necessary for
proper management and for employee development.
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1.1 Appraisal Philosophy
A few decades ago, appraisal programs tended to emphasize employee traits, deficiencies, and abilities, but
modern appraisal philosophy emphasizes present performance and future goals. Modern philosophy also
stresses employee participation in mutually setting goals with the supervisor and knowledge of results. Thus the
hallmarks of modern appraisal philosophy are as follows:
Performance orientation: It is not enough for employees to put forth effort; that effort must result in
the attainment of desired outcomes (products or services).
Focus on goals or objectives: Employees need to have a clear idea of what they are supposed to be
doing and the priorities among their tasks.
Mutual goal setting between supervisor and employee: This is the belief that people will work harder
for goals or objectives that they have participated in setting. Among their desires are to perform a
worthwhile task, share in a group effort, share in setting their objectives, share in the rewards of their
efforts, and continue personal growth.
Clarification of behavioral expectations: This is often done via a behaviorally anchored rating scale
(BARS), which provides the employee and manager with concrete examples of various levels of behaviors.
Extensive feedback systems: Employees can fine-tune their performance better if they know how
they are doing in the eyes of the organization, and receive this information regularly and candidly.
1.2 The Appraisal Interview

Appraisal Interview is a session in which the supervisor provides feedback to the employee on past performance,
discusses any problems that have arisen, and invites a response. Then, the two parties set objectives for the
next time period. In some organizations, the employee is then informed about her or his future salary; in others,
the pay issue is delayed until several months later. The appraisal interview also provides a rich opportunity to
motivate the employee.
Some organizations in both the private and public sectors include, as a formal part of the process, self-appraisal.
This is an opportunity for the employee to be introspective and to offer a personal assessment of his or her
accomplishments, strengths, and weaknesses.
1.3 Performance Feedback

All appraisal systems build on the assumption that employees need feedback about their performance. Feedback
helps them know what to do and how well they are meeting their goals. Generally, performance feedback leads
to both improved performance and improved attitudesif handled properly by the manager.
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[Figure 8.1: Guidelines for Effective Performance Feedback]
A possible reason for poor feedbacknot having enough valid information to create a substantive conclusion
can be overcome by the use of 360-degree feedback. This is the process of systematically gathering data on a
persons skills, abilities, and behaviors from a variety of sourcesthe manager, peers, subordinates, and even
customers or clients. These perspectives are examined to see where problems exist in the eyes of one or more
groups.
2. Economic Incentive Systems

An economic incentive system of some type can be applied to almost any job. The basic idea of such systems is
to induce a high level of individual, group, or organizational performance by making an employees pay
contingent on one or more of those dimensions. Additional objectives include facilitating recruitment and
retention of good employees, stimulating desirable role behaviors such as creativity, encouraging the
development of valued skills, and satisfying key employee needs. The criteria for these incentives could include
employee output, company profit, cost savings, units shipped, level of customer service, or the ratio of labor
cost to total sales. Evaluation of performance may be individual or collective, and the payment may be
immediate (e.g., cash awards) or delayed, as in a profit-sharing plan.
2.1 Incentives Linking Pay with Performance

Several broad types of variable reward incentives link pay with performance. Major ones are shown in Figure
8.2. Perhaps the most popular measure is for the amount of output to determine pay, as illustrated by a sales
commission or a piece rate. It provides a simple, direct connection between performance and reward. Those
workers who produce more are rewarded more. Often pay is determined by a combination quantityquality
measure in order to ensure that a high quality of product or service is maintained. Regardless of the type of
incentive used, its objective is to link a portion of a workers pay to some measure of employee or
organizational performance (output, goals, profits, cost efficiencies, or skills).
Advantages: Incentives provide several potential employee advantages. A major advantage is that they
increase employee beliefs (instrumentality) that reward will follow high performance. If we assume that
money has valence to an employee, then motivation should increase.
Difficulties: With so many favorable conditions supporting incentives, it seems that workers would
welcome almost any incentive because of the rewards it could bring. However, inherent difficulties tend to
offset some of the advantages. Potential equity is offset by other developments that are perceived as
inequities. In behavior modification terms, certain unfavorable consequences exist alongside the favorable
consequences of more pay, so they tend to reduce the potential advantages of incentive pay.
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[Figure 8.2: Advantages and Disadvantages of Incentives Linking Pay with Performance]
2.2 Wage Incentives

Pay for Performance Basically, wage incentives, which are a form of merit pay, provide more pay for more
output or results, often referred to as pay for performance. The main reason for use of wage incentives is clear:
They nearly always increase productivity while decreasing labor costs per unit of production. Workers under
normal conditions without wage incentives have the capacity to produce more, and wage incentives are one way
to induce employees to work up to their potential. The increased productivity and reduced turnover often is
substantial.
Difficulties: Wage incentives furnish an example of the kinds of difficulties that may develop with many
incentive plans, despite their potential benefits. Managements job is to try to prevent or reduce the
problems while increasing benefits, so that the incentive plan works more effectively.
2.3 Profit Sharing

Profit sharing is a system that distributes to employees some portion of the profits of business, either
immediately (in the form of cash bonuses) or deferred until a later date (held in trust in the form of employee-
owned shares). Profit sharing recognizes mutual interests. Employees become interested in the economic
success of their employer when they see that their own rewards are affected by it. Greater institutional
teamwork tends to develop.
Difficulties: Even in those situations where profit sharing seems appropriate, some general
disadvantages exist:
Profits are not directly related to an employees effort on the job. Poor market conditions may nullify
an employees hard work.
Employees must wait for their reward, and this lengthy delay diminishes its impact.
Since profits are somewhat unpredictable, total worker income may vary from year to year. Some
workers may prefer the security of a more stable wage or salary.
2.4 Gain Sharing

A gain-sharing plan establishes a historical base period of organizational performance, measures improvements,
and shares the gains with employees on some formula basis.
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Behavioral Basis: Gain-sharing plans use several fundamental ideas from organizational behavior and
are much more than pay systems. They encourage employee suggestions, provide an incentive for
coordination and teamwork, and promote improved communication. Gain sharing broadens the
understanding of employees as they see a larger picture of the system through their participation rather
than confining their outlook to the narrow specialty of their job.
Contingency Factors: The success of gain sharing is contingent upon a number of key factors, such as
the moderately small size of the unit, a sufficient operating history to allow the creation of standards, the
existence of controllable cost areas, and the relative stability of the business. In addition, management
must be receptive to employee participation, the organization must be willing to share the benefits of
production increases with employees, and the union should be favorable to such a cooperative effort.
Managers need to be receptive to ideas and tolerant of criticism from employees.
2.5 Skill-Based Pay

Skill-based pay (also called knowledge-based pay or multi-skill pay) rewards individuals for what they know how
to do. Employees are paid for the range, depth, and types of skills in which they demonstrate capabilities. They
start working at a flat hourly rate and receive increases for either developing skills within their primary job or
learning how to perform other jobs within their work unit.
Advantages: Although skill-based pay systems are quite new, they have several potential strengths.
They provide strong motivation for employees to develop their work-related skills, they reinforce an
employees sense of self-esteem, and they provide the organization with a highly flexible workforce that
can fill in when someone is absent.
Disadvantages: Skill-based pay presents several disadvantages, and some firms have backed away
from early experiments with it. First, since most employees will voluntarily learn higher-level jobs, the
average hourly pay rate will be greater than normal. Second, a substantial investment in employee training
must be made, especially in the time spent coaching by supervisors and peers. Third, not all employees
like skill-based pay because it places pressure on them to move up the skill ladder. The subsequent
dissatisfaction may lead to a variety of consequences, including employee turnover. Fourth, some
employees will qualify themselves for skill areas that they will be unlikely to use, causing the organization
to pay them higher rates than they deserve from a performance standpoint.
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3 > Topic 9
Topic 9: Teams In Organizations
T opic Objective:
1. Teams in Organizations
2. Team Effectiveness
3. Stages of Team Development
4. Foundations of Team Performance
Topic Introduction:
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 purposessome 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 organizations 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.
Topic Overview:
1. Teams in Organizations
1.1 What Teams Do

When we talk about teams in organizations, one of the first things to recognize is that they do many things and
make many types of performance contributions. In general we can describe them as teams that recommend
things, run things, and make or do things.
First, there are 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. These teams include task forces, ad hoc committees, special project teams, and the like.
Second, there are 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.
Third, there are 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.
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1.2 Organizations as Networks of Teams
Organizations everywhere are using teams and teamwork to improve performance. The many formal teams
found in organizations are created and officially designated to serve specific organizational purposes. Some are
permanent and ongoing. They appear on organization charts as departments (e.g., market research
department), divisions (e.g., consumer products division), or teams (e.g., product-assembly team). Such teams
can vary in size from very small departments or teams of just a few people to large divisions employing a
hundred or more people.
In addition to their networks of formal teams, Figure 9.1 also shows that organizations have vast networks of
informal groups that emerge and coexist as a shadow to the formal structure and without any formal purpose or
official endorsement. These informal groups form spontaneously through personal relationships or special
interests and create their own interlocking networks of relationships within the organization.
[Figure 9.1: The organization as an interlocking network of informal groups.]
A tool known as social network analysis is used to identify the informal groups and networks of relationships that
are active in an organization. Such an analysis typically asks people to identify co-workers who help them most
often, who communicate with them regularly, and who energize and de-energize them. When results are
analyzed, social networks are drawn with lines running from person to person according to frequency and type
of relationship maintained.
1.3 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. Members of
cross-functional teams are expected to work together with a positive combination of functional expertise and
integrative or total systems thinking. The expected result is higher performance driven by the advantages of
better information and faster decision making.
Cross-functional teams are a way of trying to beat the functional silos problem, also called the functional
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chimneys problem. It occurs when members of functional units stay focused on matters internal to their function
and minimize their interactions with members dealing with other functions.
Organizations also use any number of problem-solving teams, which 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.
1.4 Virtual Teams

Information technology has brought a new type of group into the workplace. This is the virtual team, whose
members convene and work together electronically via computers. It used to be that teamwork was confined in
concept and practice to those circumstances in which members could meet face to face.
In terms of potential advantages, virtual teams bring together people who may be located at great distances
from one another. This offers obvious cost and time efficiencies. The electronic rather than face-to-face
environment of the virtual team can help focus interaction and decision making on objective information rather
than emotional considerations and distracting interpersonal problems.
Many of the downsides to virtual teams occur for the same reasons they do in other groups. Members of virtual
teams can have difficulties establishing good working relationships. When the computer is the go-between,
relationships and interactions among virtual team members are different from those of face-to-face settings.
The lack of face-to-face interaction limits the role of emotions and nonverbal cues in the communication
process, perhaps depersonalizing relations among team members.
1.5 Self-Managing Teams

A high-involvement work-group design that is becoming increasingly well established is known as the self-
managing team. Sometimes called self-directed work teams, these are small groups empowered to make the
decisions needed to manage themselves on a day-to-day basis.
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Self-managing teams basically replace traditional work units with teams whose members assume duties
otherwise performed by a manager or first-line supervisor. Figure 9.2 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.
[Figure 9.2: Organizational and management implications of self-managing teams.]
A self-managing team should probably include between 5 and 15 members. The teams need to be large enough
to provide a good mix of skills and resources but small enough to function efficiently. Because team members
have a lot of discretion in determining work pace and in distributing tasks, multiskilling is important. This means
that team members are expected to perform many different jobseven all of the teams jobsas needed.
Ideally, the more skills someone masters, the higher his or her base pay. Team members should also be
responsible for conducting training and certifying one another as having mastered various skills.
2. Team Effectiveness
There is no doubt that teams are pervasive and important in organizations; they accomplish important tasks and
help members achieve satisfaction in their work. Teams and teamwork have their difficulties; not all teams
perform well, and not all team members are always satisfied.
2.1 Criteria of an Effective Team

Effective team is defined as one that achieves high levels of task performance, member satisfaction, and team
viability.
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With regard to task performance, an effective team achieves its performance goals in the standard sense of
quantity, quality, and timeliness of work results. For a formal work unit such as a manufacturing team this may
mean meeting daily production targets. For a temporary team such as a new policy task force this may involve
meeting a deadline for submitting a new organizational policy to the company president.
With regard to member satisfaction, an effective team is one whose members believe that their participation and
experiences are positive and meet important personal needs. They are satisfied with their tasks,
accomplishments, and interpersonal relationships. With regard to team viability, the members of an effective
team are sufficiently satisfied to continue working well together on an ongoing basis and/or to look forward to
working together again at some future point in time. Such a group has all-important long-term performance
potential.
2.2 Synergy and Team Benefits

When teams are effective, they offer the potential for synergythe creation of a whole that is greater than the
sum of its parts. Synergy works within a team and it works across teams as their collective efforts are
harnessed to serve the organization as a whole.
The performance advantages of teams over individuals acting alone are most evident in three situations. First,
when there is no clear expert for a particular task or problem, teams seem to make better judgments than
does the average individual alone. Second, teams are typically more successful than individuals when problems
are complex, requiring a division of labor and the sharing of information. Third, because of their tendencies to
make riskier decisions, teams can be more creative and innovative than individuals.
2.3 Social Loafing and Team Problems

Although teams have enormous performance potential, they can also have problems. One concern is social
loafing, also known as the Ringlemann effect. It is the tendency of people to work less hard in a group than they
would individually. Max Ringlemann, a German psychologist, pinpointed the phenomenon by asking people to pull
on a rope as hard as they could, first alone and then as part of a team. He found that average productivity
dropped as more people joined the rope-pulling task. He suggested that people may not work as hard in groups
because their individual contributions are less noticeable in the group context and because they prefer to see
others carry the workload.
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Social Facilitation is the tendency for ones behavior to be influenced by the presence of others in a group or
social setting. In a team context social facilitation can be a boost or a detriment to an individual members
performance contributions. Social facilitation theory suggests that working in the presence of others creates an
emotional arousal or excitement that stimulates behavior and therefore affects performance. The effect works
to the positive and stimulates extra effort when one is proficient with the task at hand.
Other common problems of teams include personality conflicts and differences in work styles that antagonize
others and disrupt relationships and accomplishments. Sometimes team members withdraw from active
participation due to uncertainty over tasks or battles about goals or competing visions. Ambiguous agendas or
ill-defined problems can also cause fatigue and loss of motivation when teams work too long on the wrong
things with little to show for it. And finally, not everyone is always ready to do group work.
3. Stages of Team Development

The team passes through a series of life cycle stages. Depending on the stage the team has reached, the leader
and members can face very different challenges and the team may be more or less effective. Figure 9.3
describes the five stages of team development as forming, storming, norming, performing, and adjourning.
[Figure 9.3: Five stages of team development.]
3.1 Forming Stage

In the forming stage of team development, a primary concern is the initial entry of members to a group. During
this stage, individuals ask a number of questions as they begin to identify with other group members and with
the team itself.
3.2 Storming Stage

The storming stage of team development is a period of high emotionality and tension among the group
members. During this stage, hostility and infighting may occur, and the team typically experiences many
changes. Coalitions or cliques may form as individuals compete to impose their preferences on the group and to
achieve a desired status position.
3.3 Norming Stage

The norming stage of team development, sometimes called initial integration, is the point at which the members
really start to come together as a coordinated unit. The turmoil of the storming stage gives way to a precarious
balancing of forces. With the pleasures of a new sense of harmony, team members will strive to maintain
positive balance.
3.4 Performing Stage

The performing stage of team development, sometimes called total integration, marks the emergence of a
mature, organized, and well-functioning team. Team members are now able to deal with complex tasks and
handle internal disagreements in creative ways. A team that has achieved the level of total integration typically
scores high on the criteria of team maturity as shown in Figure 9.4.
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[Figure 9.4: Ten criteria for measuring the maturity of a team.]
3.5 Adjourning Stage

A well-integrated team is able to disband, if required, when its work is accomplished. The adjourning stage of
team development is especially important for the many temporary teams such as task forces, committees,
project teams, and the like. Their members must be able to convene quickly, do their jobs on a tight schedule,
and then adjournoften to reconvene later if needed.
4. Foundations of Team Performance

The open systems model in Figure 9.5 shows team effectiveness being influenced by both inputsright players
in the right seats, and by processeson the same bus, headed in the same direction. You can remember the
implications of this figure by this equation:
[Figure 9.5: An open-systems model of team effectiveness.]
4.1 Team Inputs

The inputs to a team are the initial givens in the situation. They set the foundations for all subsequent action;
the stronger the input foundations, the better the chances for long-term team effectiveness. Key team inputs
include resources and setting, the nature of the task, team size, and team composition.
Resources and Setting: Appropriate goals, well-designed reward systems, adequate resources, and
appropriate technology are all essential to support the work of teams.
Nature of the Task: The tasks they are asked to perform can place different demands on teams, with
varying implications for group effectiveness. When tasks are clear and well defined, it is easier for
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members to both know what they are trying to accomplish and to work together while doing it.
Team Size: The size of a team, as measured by the number of its members, can have an impact on
team effectiveness. As a team becomes larger, more people are available to divide up the work and
accomplish needed tasks.
Team Composition: The basic rule of thumb for team composition is to choose members whose talents
and interests fit well with the tasks to be accomplished and whose personal characteristics increase the
likelihood of being able to work well with others.
4.2 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. And it can pose both opportunities and problems. When teams are
relatively homogeneous, displaying little or no diversity, it is probably easier for members to quickly build social
relationships and engage in the interactions needed for teamwork. But the lack of diversity may foster narrow
viewpoints and otherwise limit the team in terms of ideas, perspectives, and creativity. When teams are more
heterogeneous, having a diverse membership, they gain potential advantages in these latter respects; there are
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.
4.3 Team Processes

When it comes to analyzing how well people work together in teams and whether or not process gains exceed
process losses, the focus is on critical group dynamicsthe forces operating in teams that affect the way
members relate to and work with one another. George Homans described group dynamics in terms of required
behaviorsthose formally defined and expected by the teamand emergent behaviorsthose that team
members display in addition to any requirements.
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3 > Topic 10
Topic 10: Teamwork And Team Performance
T opic Objective:
1. High-Performance Teams
2. Improving Team Processes
3. Improving Team Communications
4. Improving Team Decisions
Topic Introduction:
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.
Topic Overview:
1. High-Performance Teams
1.1 Characteristics of High-Performance Teams

Whatever the purpose or tasks, the foundation for any high performing team is a set of members who believe in
team goals and are motivated to work hard to accomplish them. Indeed, an essential criterion of a high-
performance team is that the members feel collectively accountable for moving together.
High-performance teams also are able to turn a general sense of purpose into specific performance objectives.
Whereas a shared sense of purpose gives general direction to a team, commitment to targeted performance
results makes this purpose truly meaningful.
Members of high-performance teams have the right mix of skills, including technical, problem-solving, decision-
making, and interpersonal skills. A high-performance team has strong core values that help guide team
members attitudes and behaviors in directions consistent with the teams purpose. Such values act as an
internal control system for a group or team that can substitute for outside direction and supervisory attention.
1.2 The Team-Building Process

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Team-building is a sequence of planned activities designed to gather and analyze data on the functioning of a
team and to initiate changes designed to improve teamwork and increase team effectiveness. When done well
and at the right times, team-building is an effective way to deal with teamwork problems or to help prevent
them from occurring in the first place.
The action steps for team-building are highlighted in Figure 10.1. Although it is tempting to view the process as
something that consultants or outside experts are hired to do, the fact is that it can and should be part of any
team leader and managers action repertoire. Team-building begins when someone notices an actual or a
potential problem with team effectiveness. Data is gathered to examine the problem. This can be done by
questionnaire, interview, nominal group meeting, or other creative methods. Members then work together to
analyze the data, plan for improvements, and implement the action plans.
[Figure 10.1: Steps in the team-building process.]
1.3 Team-Building Alternatives

Team-building can be accomplished in a wide variety of ways. In the formal retreat approach, team-building
takes place during an off-site retreat. The agenda, which may cover from one to several days, is designed to
engage team members in a variety of assessment and planning tasks. These are initiated by a review of team
functioning using data gathered through survey, interviews, or other means. Formal retreats are often held with
the assistance of a consultant, who is either hired from the outside or made available from in-house staff. Team-
building retreats offer opportunities for intense and concentrated efforts to examine group accomplishments and
operations.
The outdoor experience approach is an increasingly popular team-building activity that may be done on its own
or in combination with other approaches. It places group members in a variety of physically challenging situations
that must be mastered through teamwork, not through individual work. By having to work together in the face
of difficult obstacles, team members are supposed to experience increased self-confidence, more respect for
others capabilities, and a greater commitment to teamwork.
Not all team-building is done at a formal retreat or with the assistance of outside consultants. In a continuous
improvement approach, the manager, team leader, or group members themselves take responsibility for
regularly engaging in the team-building process. This method can be as simple as periodic meetings that
implement the team-building steps; it can also include self-managed formal retreats.
2. Improving Team Processes

Team leaders and members alike must be prepared to deal positively with such issues as introducing new
members, handling disagreements on goals and responsibilities, resolving delays and disputes when making
decisions, reducing friction, and dealing with interpersonal conflicts. These are all targets for team-building. And
given the complex nature of group dynamics, team-building is, in a sense, never finished. Something is always
happening that creates the need for further leadership efforts to help improve team processes.
2.1 Entry of New Members

Special difficulties are likely to occur when members first get together in a new group or team, or when new
members join an existing team. Problems arise as new members try to understand what is expected of them
while dealing with the anxiety and discomfort of a new social setting.
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Edgar Schein points out that people may try to cope with individual entry problems in self-serving ways that may
hinder team development and performance. He identifies three behavior profiles that are common in such
situations.
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. This person may show
extraordinary support for others, behave in a dependent way, and seek alliances in subgroups or cliques. The
objective thinker is anxious about how personal needs will be met in the group. This person may act in a passive,
reflective, and even single-minded manner while struggling with the fit between individual goals and group
directions.
2.2 Task and Maintenance Leadership

Research in social psychology suggests that teams have both task needs and maintenance needs, and that
both must be met for teams to be successful. Even though a team leader should be able to meet these needs at
the appropriate times, each team member is responsible as well. This sharing of responsibilities for making task
and maintenance contributions that move a group forward is called distributed leadership, and it is usually well
evidenced in high-performance teams.
[Figure 10.2: Task and Maintenance Leadership in Team Dynamics.]
Figure 10.2 describes task activities as the various things team members and leaders do that directly contribute
to the performance of important group tasks. They include initiating discussion, sharing information, asking
information of others, clarifying something that has been said, and summarizing the status of a deliberation.
The figure also shows that maintenance activities support the social and interpersonal relationships among team
members. They help a team stay intact and healthy as an ongoing and well-functioning social system. A team
member or leader can contribute maintenance leadership by encouraging the participation of others, trying to
harmonize differences of opinion, praising the contributions of others, and agreeing to go along with a popular
course of action.
In addition to helping meet a groups task and maintenance needs, team members share additional responsibility
for avoiding and eliminating any disruptive behaviors that harm the group process. These dysfunctional activities
include bullying and 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, and trying to compete for attention and recognition.
2.3 Roles and Role Dynamics

In groups and teams, new and old members alike need to know what others expect of them and what they can
expect from others. 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.
Although this is a common problem, it can be managed through awareness of role dynamics and their causes.
Simply put, teams tend to perform better when their members have clear and realistic expectations regarding
their tasks and responsibilities.
Role ambiguity occurs when a person is uncertain about his or her role in a job or on a team. Role overload
occurs when too much is expected and someone feels overwhelmed. Role underload is just the opposite; it
occurs when too little is expected and the individual feels underused. Both role overload and role underload can
cause stress, dissatisfaction, and performance problems. Role conflict occurs when a person is unable
to meet the expectations of others. The individual understands what needs to be done but for some reason
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cannot comply.
A technique known as role negotiation is a helpful team-building activity for managing role dynamics. This is a
process in which team members meet to discuss, clarify, and agree upon the role expectations each holds for
the other.
2.4 Team Norms

Team norms are the ideas or beliefs about how members are expected to behave. They can be considered as
rules or standards of conduct that are supposed to guide team members. Norms help members to guide their
own behavior and predict what others will do.
Types of Team Norms: A key norm in any team setting is the performance norm that conveys
expectations about how hard team members should work and what the team should accomplish. The
best case for any manager is to be leading work teams with high performance norms. But many other
norms also influence the day-to-day functioning of teams. Teams also commonly have norms regarding
how to deal with supervisors, colleagues, and customers, as well as norms establishing guidelines for
honesty and ethical behaviors.
2.5 Team Cohesiveness

The cohesiveness of a group or team is the degree to which members are attracted to and motivated to remain
part of it. Because cohesive teams are such a source of personal satisfaction, their members tend to display
fairly predictable behaviors that differentiate them from members of less cohesive teamsthey are more
energetic when working on team activities, less likely to be absent, less likely to quit the team, and more likely to
be happy about performance success and sad about failures. Cohesive teams are able to satisfy a broad range
of individual needs, often providing a source of loyalty, security, and esteem for their members.
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Team Cohesiveness and Conformity to Norms: Even though cohesive groups are good for their
members, they may or may not be good for the organization. The issue is performance: will the cohesive
team also be a high-performance team? The answer to this question depends on the match of
cohesiveness with performance norms. And the guiding rule of conformity in team dynamics is: The
greater the cohesiveness of a team, the greater the conformity of members to team norms. You can
remember it this way:
Figure 10.3 shows the performance implications of this rule of conformity. When the performance norms
are positive in a highly cohesive work group or team, the resulting conformity to the norm should have a
positive effect on both team performance and member satisfaction. This is a best-case situation for team
members, the team leader, and the organization. When the performance norms are negative in a highly
cohesive group, however, the same power of conformity creates a worst-case situation for the team
leader and the organization.
[Figure 10.3: How cohesiveness and conformity to norms influence team performance.]
How to Influence Team Cohesiveness: Figure 10.4 shows how team cohesiveness can be increased
or decreased by making changes in such things as goals, membership composition, interactions, size,
rewards, competition, location, and duration. When the team norms are positive but cohesiveness is
lacking, the goal is to take actions to increase cohesion and gain more conformity to the positive norms.
But when team norms are negative and cohesiveness is high, just the opposite may have to be done. The
goal in this situation is to reduce cohesiveness and thus reduce conformity to the negative norms. Finally,
it should be remembered that team norms can be positively influenced to harness the power of
conformity in teams that are already cohesive or in those where cohesion is being rebuilt or strengthened.
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[Figure 10.4: Ways to increase and decrease team cohesiveness.]
2.6 Inter-Team Dynamics

The term inter-team dynamics refers to the dynamics that take place between two or more teams in these and
other similar situations. Organizations ideally operate as cooperative systems in which the various components
support one another. In the real world, however, competition and inter-team problems often develop within an
organization and with mixed consequences.
3. Improving Team Communications

It is important in teams to make sure that every member is strong and capable in basic communication and
collaboration skills.
3.1 Communication Networks

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. Each is associated with a different
communication network as shown in Figure 10.5.
[Figure 10.5: Communication networks and interaction patterns found in teams.]
In order for a team to be effective and high-performing, the interaction pattern and communication network
should fit well with the task at hand, ideally with the patterns and networks shifting as task demands develop and
change over time.
When task demands require intense interaction, this is best done with a decentralized communication network.
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Also called the star network or all-channel network, the basic characteristic is that everyone communicates as
needed with everyone else; information flows back and forth constantly, with no one person serving as the
center point.
When task demands allow for more independent work by team members, a centralized communication network
is the best option. Also called the wheel network or chain network, its basic characteristic is the existence of a
central hub through which one member, often the team leader, collects and distributes information among the
other members.
Restricted communication network forms in which the subgroups contest each others positions and restrict
interactions with one another. The poor communication characteristic of such situations often creates problems,
although there are times when counteracting teams might be set up to provide conflict and critical evaluation to
help test out specific decisions or chosen courses of action.
3.2 Proxemics and Use of Space

An important but sometimes neglected part of communication in teams involves proxemics, or the use of space
as people interact. We know, for example, that office or workspace architecture is an important influence on
communication behavior. It only makes sense that communication in teams might be improved by either
arranging physical space to best support it, like moving chairs and tables into proximity with one another, or by
choosing to meet in physical spaces that are conducive to communication, such as meeting in a small
conference room in the library or classroom building rather than a busy coffee shop.
3.3 Communication Technologies

In effect we can think of technology as allowing and empowering teams to use virtual communication networks
in which team members can always be in electronic communication with one another as well as with a central
database. In effect the team works in both physical space and in virtual space, with the results achieved in each
contributing to overall team performance. 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 ever-present electronic router that links members of decentralized networks on an as-needed and
always-ready basis.
4. Improving Team Decisions

One of the most important activities for any team is decision making, the process of choosing among alternative
courses of action.
4.1 Ways Teams Make Decisions

Edgar Schein, a noted scholar and consultant, observes that teams may make decisions through any of the six
methods shown in Figure 10.6lack of response, authority rule, minority rule, majority rule, consensus, or
unanimity. Schein doesnt rule out any method, but he does point out the disadvantages that teams suffer when
decisions are made without high levels of member involvement.
Lack of Response: In decision by lack of response, one idea after another is suggested without any
discussion taking place. When the team finally accepts an idea, all others have been bypassed and
discarded by simple lack of response rather than by critical evaluation.
Authority Rule: In decision by authority rule, the chairperson, manager, or leader makes a decision for
the team. This can be done with or without discussion and contributions by other members and is very
time efficient.
Minority Rule: In decision by minority rule, two or three people are able to dominate, or railroad, the
group into making a decision with which they agree.
Majority Rule: One of the most common ways that groups make decisions is decision by majority rule.
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This usually takes place as a formal vote with members being polled publicly or confidentially to find the
majority viewpoint.
Consensus: Another decision alternative is consensus. Formally defined, decision by consensus occurs
when discussion leads to one alternative being favored by most team members and the other members
agreeing to support it.
Unanimity: A decision by unanimity may be the ideal state of affairs. Here, all team members agree
totally on the course of action to be taken. This is a logically perfect decision situation that is extremely
difficult to attain in actual practice.
[Figure 10.6: Alternative ways that teams make decisions.]
4.2 Groupthink Symptoms and Remedies

An important potential problem that arises when teams try to make decisions is groupthinkthe tendency of
members in highly cohesive groups to lose their critical evaluative capabilities. As identified by social psychologist
Irving Janis, groupthink is a property of highly cohesive teams, and it occurs because team members seek
conformity and become unwilling to criticize each others ideas and suggestions. Desires to hold the team
together, feel good, and avoid unpleasant disagreements bring about an overemphasis on agreement and an
under emphasis on critical discussion. According to Janis, the result often is a poor decision.
There is no doubt that groupthink is a serious threat to the quality of decision making in teams at all levels and in
all types of organizations. Team leaders and members alike should be alert to its symptoms and be quick to take
any necessary action to prevent its occurrence.
4.3 Team Decision Techniques

When tasks are complex, information is uncertain, creativity is needed, time is short, strong voices are
dominant, and debates turn emotional and personal, decisions can easily get bogged down or go awry.
Fortunately, there are some team decision techniques that can be helpful in such situations.
Brainstorming: In brainstorming, team members actively generate as many ideas and alternatives as
possible, and they do so relatively quickly and without inhibitions.
Nominal Group Technique: In any team there will be times when the opinions of members differ so
much that antagonistic arguments will develop during discussions. At other times the team is so large that
open discussion and brainstorming are awkward to manage. In such cases a structured approach called
the nominal group technique may be helpful, and it can be done face-to-face or in a computer-mediated
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meeting.
Delphi Technique: The Rand Corporation developed a third group-decision approach, the Delphi
Technique, for 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.

4
Leadership
Power And Politics
Conflict And Negotiation
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4 > Topic 11
Topic 11: Leadership
T opic Objective:
1. Leading versus Managing
2. Trait and Behavioral Theories of Leadership
3. Situational Theories
4. From Transactional to Charismatic Leadership
5. Additional Perspectives on Leadership
Topic Introduction:
Leadership is defined as a social influence process in which the leader tries to obtain the voluntary participation of
employees in an effort to reach organizational objectives. Leadership entails more than having authority and
power. Although leadership and management overlap, each entails a unique set of activities or functions.
Managers typically perform functions associated with planning, investigating, organizing, and control, and leaders
deal with the interpersonal aspects of a managers job.
Topic Overview:
1. Leading versus Managing
It is important to appreciate the difference between leadership and management to fully understand what
leadership is all about. Bernard Bass, a leadership expert, concluded that leaders manage and managers lead,
but the two activities are not synonymous. Bass tells us that although leadership and management overlap,
each entails a unique set of activities or functions. Broadly speaking, managers typically perform functions
associated with planning, investigating, organizing, and control, and leaders deal with the interpersonal aspects of
a managers job. Leaders inspire others, provide emotional support, and try to get employees to rally around a
common goal. Leaders also play a key role in creating a vision and strategic plan for an organization. Managers,
in turn, are charged with implementing the vision and strategic plan. Table 11.1 summarizes the key differences
found between leaders and managers.
[Table 11.1: Differences between Leaders and Managers]
2. Trait and Behavioral Theories of Leadership
2.1 Trait Theory

Traits play a central role in how we perceive leaders. It is important to determine the traits embodied in peoples
schemata (or mental pictures) for leaders. If those traits are inappropriate (i.e., foster discriminatory selection
and invalid performance appraisals), they need to be corrected through training and development. Managers
should be careful to avoid using gender-based stereotypes when making overseas assignments. Moreover,
organizations may find it beneficial to consider selected leadership traits when choosing among candidates for
leadership positions. Gender should not be used as one of these traits.
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leadership positions. Gender should not be used as one of these traits.
2.2 Behavioral Styles Theory

By emphasizing leader behavior, something that is learned, the behavioral style approach makes it clear that
leaders are made, not born. This is the opposite of the trait theorists traditional assumption. Given what we
know about behavior shaping and model-based training, leader behaviors can be systematically improved and
developed.
Behavioral styles research revealed that there is no one best style of leadership. The effectiveness of a particular
leadership style depends on the situation at hand. For instance, employees prefer structure over consideration
when faced with role ambiguity. Finally, research also reveals that it is important to consider the difference
between how frequently and how effectively managers exhibit various leader behaviors. For example, a manager
might ineffectively display a lot of considerate leader behaviors. Such a style is likely to frustrate employees and
possibly result in lowered job satisfaction and performance. Because the frequency of exhibiting leadership
behaviors is secondary in importance to effectiveness, managers are encouraged to concentrate on improving
the effective execution of their leader behaviors.
3. Situational Theories
Situational leadership theories grew out of an attempt to explain the inconsistent findings about traits and styles.
Situational theories propose that the effectiveness of a particular style of leader behavior depends on the
situation. As situations change, different styles become appropriate. This directly challenges the idea of one best
style of leadership.
3.1 Fiedlers Contingency Model

Fred Fiedler, an OB scholar, developed a situational model of leadership. It is the oldest and one of the most
widely known models of situational leadership. Fiedlers model is based on the following assumption:
Fiedlers theory also is based on the premise that leaders have one dominant leadership style that is resistant to
change. He suggests that leaders must learn to manipulate or influence the leadership situation in order to create
a match between their leadership style and the amount of control within the situation at hand.
3.2 PathGoal Theory

Pathgoal theory was originally proposed by Robert House in the 1970s. It was based on the expectancy theory
of motivation. House proposed a model that describes how leadership effectiveness is influenced by the
interaction between four leadership styles (directive, supportive, participative, and achievement-oriented) and a
variety of contingency factors. Contingency factors are situational variables that cause one style of leadership to
be more effective than another. In order to gain a better understanding of how these contingency factors
influence leadership effectiveness, we illustratively consider locus of control, task ability and experience, and task
structure.
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Employees with an internal locus control are more likely to prefer participative or achievement-oriented
leadership because they believe they have control over the work environment. Such individuals are unlikely to be
satisfied with directive leader behaviors that exert additional control over their activities. In contrast, employees
with an external locus tend to view the environment as uncontrollable, thereby preferring the structure provided
by supportive or directive leadership. An employee with high task ability and experience is less apt to need
additional direction and thus would respond negatively to directive leadership. This person is more likely to be
motivated and satisfied by participative and achievement-oriented leadership. Oppositely, an inexperienced
employee would find achievement-oriented leadership overwhelming as he or she confronts challenges
associated with learning a new job. Supportive and directive leadership would be helpful in this situation. Finally,
directive and supportive leadership should help employees experiencing role ambiguity. However, directive
leadership is likely to frustrate employees working on routine and simple tasks. Supportive leadership is most
useful in this context.
[Figure 11.1: A General Representation of Houses Revised PathGoal Theory]
3.3 Hersey and Blanchards Situational Leadership Theory

Situational leadership theory (SLT) was developed by management writers Paul Hersey and Kenneth Blanchard.
According to the theory, effective leader behavior depends on the readiness level of a leaders followers.
Readiness is defined as the extent to which a follower possesses the ability and willingness to complete a task.
Willingness is a combination of confidence, commitment, and motivation.
The SLT model is summarized in Figure 11.2. The appropriate leadership style is found by cross referencing
follower readiness, which varies from low to high, with one of four leadership styles. The four leadership styles
represent combinations of task- and relationship-oriented leader behaviors (S 1 to S4 ). Leaders are encouraged
to use a telling style for followers with low readiness. This style combines high task-oriented leader behaviors,
such as providing instructions, with low relationship-oriented behaviors, such as close supervision. As follower
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readiness increases, leaders are advised to gradually move from a telling, to a selling, to a participating, and,
ultimately, to a delegating style. In the most recent description of this model, the four leadership styles depicted
in Figure 11.2 are referred to as telling or directing (S1 ), persuading or coaching (S2 ), participating or supporting
(S3 ), and delegating (S4 ).
[Figure 11.2: Situational Leadership Model]
4. From Transactional to Charismatic Leadership
4.1 The Difference between Transactional and Charismatic Leadership

Transactional leadership focuses on the interpersonal transactions between managers and employees. Leaders
are seen as engaging in behaviors that maintain a quality interaction between themselves and followers. The two
underlying characteristics of transactional leadership are that (1) leaders use contingent rewards to motivate
employees and (2) leaders exert corrective action only when subordinates fail to obtain performance goals.
In contrast, charismatic leadership emphasizes symbolic leader behavior, visionary and inspirational messages,
nonverbal communication, appeal to ideological values, intellectual stimulation of followers by the leader, display
of confidence in self and followers, and leader expectations for follower self-sacrifice and for performance beyond
the call of duty. Charismatic leadership can produce significant organizational change and results because it
transforms employees to pursue organizational goals in lieu of self-interests.
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4.2 How Does Charismatic Leadership Transform Followers?
Charismatic leaders transform followers by creating changes in their goals, values, needs, beliefs, and
aspirations. They accomplish this transformation by appealing to followers self-conceptsnamely, their values
and personal identity. Figure 11.3 presents a model of how charismatic leadership accomplishes this
transformation process.
Figure 11.3 shows that organizational culture is a key precursor of charismatic leadership. Organizations with
adaptive cultures anticipate and adapt to environmental changes and focus on leadership that emphasizes the
importance of service to customers, stockholders, and employees. This type of management orientation
involves the use of charismatic leadership.
Charismatic leaders first engage in three key sets of leader behavior. If done effectively, these behaviors
positively affect individual followers and their work groups. These positive effects, in turn, influence a variety of
outcomes. Second, charismatic leadership has effects on multiple levels within an organization.
[Figure 11.3: A Charismatic Model of Leadership]
5. Additional Perspectives on Leadership

Three additional approaches to leadership are leadermember exchange theory, substitutes for leadership, and
servant-leadership.
5.1 The LeaderMember Exchange (LMX) Model of Leadership

The leadermember exchange model of leadership revolves around the development of dyadic relationships
between managers and their direct reports. This model focuses on the quality of relationships between managers
and subordinates as opposed to the behaviors or traits of either. This model does not assume that a leader
treats all subordinates in about the same way.
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This traditional approach to leadership is shown in the left side of Figure 11.4. In this case, the leader (designated
by the circled L) is thought to exhibit a similar pattern of behavior toward all employees (E1 to E5 ). In contrast,
the LMX model is based on the assumption that leaders develop unique one-to one relationships with each of the
people reporting to them. Behavioral scientists call this sort of relationship a vertical dyad. The forming of vertical
dyads is said to be a naturally occurring process, resulting from the leaders attempt to delegate and assign work
roles. As a result of this process, two distinct types of leadermember exchange relationships are expected to
evolve.
One type of leadermember exchange is called the in-group exchange. In this relationship, leaders and followers
develop a partnership characterized by reciprocal influence, mutual trust, respect and liking, and a sense of
common fates. Figure 11.4 shows that E1 and E5 are members of the leaders in-group. In the second type of
exchange, referred to as an out-group exchange, leaders are characterized as overseers who fail to create a
sense of mutual trust, respect, or common fate. E2 , E3 , and E4 are members of the out-group on the right side
of Figure 11.4.
[Figure 11.4: A Role-Making Model of Leadership]
5.2 Substitutes for Leadership

Virtually all leadership theories assume that some sort of formal leadership is necessary, whatever the
circumstances. But that basic assumption is questioned by this model of leadership. Specifically, some OB
scholars propose that there are a variety of situational variables that can substitute for, neutralize, or enhance
the effects of leadership. These situational variables are referred to as substitutes for leadership. Substitutes for
leadership can thus increase or diminish a leaders ability to influence the work group. For example, leader
behavior that initiates structure would tend to be resisted by independent- minded employees with high ability
and vast experience. Consequently, such employees would be guided more by their own initiative than by
managerial directives.
5.3 Servant-Leadership
Servant-leadership is more a philosophy of managing than a testable theory. The term servant-leadership was
coined by Robert Greenleaf in 1970. Greenleaf believes that great leaders act as servants, putting the needs of
others, including employees, customers, and community, as their first priority. Servant-leadership focuses on
increased service to others rather than to oneself.
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Because the focus of servant-leadership is serving others over self-interest, servant leaders are less likely to
engage in self-serving behaviors that hurt others (e.g., stockholders and employees). More and more companies
are trying to instill a philosophy of servant-leadership into their organizational cultures.
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4 > Topic 12
Topic 12: Power And Politics
T opic Objective:
1. Power and Influence
2. Sources of Power and Influence
3. Empowerment
4. Organizational Politics
Topic Introduction:
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 or formal authority. Influence is
what you have when you exercise power. Position power is formal authority based on the managers position in
the hierarchy. Personal power is based on ones expertise and referent capabilities. Managers can pursue various
ways of acquiring both position and personal power. Managers can also become skilled at using various
techniquessuch as reason, friendliness, and bargainingto influence superiors, peers, and subordinates.
Politics involves the use of power to obtain ends not officially sanctioned as well as 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 where the interests of another manager or individual must be reconciled with
ones own. For managers, politics also involves subunits that jockey for power and advantageous positions vis-
-vis one another. The politics of self-protection involves efforts to avoid accountability, redirect responsibility,
and defend ones turf.
Topic Overview:
1. Power and Influence
In organizational behavior, power is defined as the ability to get someone to do something you want done or the
ability to make things happen in the way you want them to. The essence of power is control over the behavior
of others. Without a direct or indirect connection it is not possible to alter the behavior of others.
While power is the force used to make things happen in an intended way, influence is what an individual has when
he or she exercises power, and it is expressed by others behavioral response to the exercise of power.
1.1 Interdependence, Legitimacy, and Power

It is important to remember that the foundation for power rests in interdependence. Each member of an
organizations fate is, in part, determined by the actions of all other members. All members of an organization
are interdependent. It is apparent that employees are closely connected with the individuals in their work group,
those in other departments they work with, and, of course, their supervisors. In todays modern organization
the pattern of interdependence and, therefore the base for power and politics, rests on a system of authority
and control. Additionally, organizations have societal backing to seek reasonable goals in legitimate ways.
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The unstated foundation of legitimacy in most organizations is an understood technical and moral order. From
infancy to retirement, individuals in our society are taught to obey higher authority. In societies, higher
authority does not always have a bureaucratic or organizational reference but consists of those with moral
authority such as tribal chiefs and religious leaders. In most organizations, higher authority means those close
to the top of the corporate pyramid. The legitimacy of those at the top derives from their positions as
representatives for various constituencies. This is a technical or instrumental role.
1.2 Obedience
The tendency to obey is powerful and it is a major problem in the corporate boardroom where the lack of
dissent due to extreme obedience to authority has been associated with the lack of rationality and questionable
ethics.
1.3 Acceptance of Authority and the Zone of Indifference
Acceptance of Authority: In everyday organizational life subordinates accept or follow a managerial

directive only if four circumstances are 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: It describes the range of requests to which a person is willing to respond without
subjecting the directives to critical evaluation or judgment. Directives falling within the zone are obeyed
routinely. Requests or orders falling outside the zone of indifference are not considered legitimate under
terms of the psychological contract. Such extraordinary directives may or may not be obeyed. This link
between the zone of indifference and the psychological contract is shown in Figure 12.1.
[Figure 12.1: Hypothetical No psychological contract for a secretary.]
2. Sources of Power and Influence

Within each organization a managers power is determined by his or her position and personal power, his or her
individual actions, and the ability to build upon combinations of these sources.
2.1 Position Power

One important source of power available to a manager stems solely from his or her position in the organization.
Specifically, position power stems from the formal hierarchy or authority vested in a particular role. There are six
important aspects of position power: legitimate, reward, coercive, process, information, and representative
power.
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Legitimate Power: It stems from the extent to which a manager can use subordinates internalized
values or beliefs that the boss has a right of command to control their behavior.
Reward Power: Reward power is the extent to which a manager can use extrinsic and intrinsic rewards
to control other people.
Coercive Power: Coercive power is the extent to which a manager can deny desired rewards or
administer punishments to control other people.
Process Power: It is the control over methods of production and analysis.
Information Power: Information power is the access to and/or the control of information.
Representative Power: Representative power is the formal right conferred by the firm to speak for and
to a potentially important group.
2.2 Personal Power

Personal power resides in the individual and is independent of that individuals position within an organization.
Personal power is important in many well-managed firms, as managers need to supplement the power of their
formal positions. Four bases of personal power are expertise, rational persuasion, reference, and coalitions.
Expert Power: Expert power is the ability to control anothers behavior because of the possession of
knowledge, experience, or judgment that the other person does not have but needs.
Rational Persuasion: Rational persuasion is the ability to control anothers behavior because, through
the individuals efforts, the person accepts the desirability of an offered goal and a reasonable way of
achieving it.
Referent Power: Referent power is the ability to control anothers behavior because of the individuals
desire to identify with the power source.
Coalition Power: Coalition power is the ability to control anothers behavior indirectly because the
individual owes an obligation to you or another as part of a larger collective interest.
2.3 Power and Influence Capacity

A considerable portion of any managers time is directed toward what is called power-oriented behavior. Power-
oriented behavior is action directed primarily at developing or using relationships in which other people are willing
to defer to ones wishes. Figure 12.2 shows three basic dimensions of power and influence affecting a manager
and include downward, upward, and lateral dimensions. Also shown in the figure are the uses of personal and
position power. The effective manager is one who succeeds in building and maintaining high levels of both
position and personal power over time. Only then is sufficient power of the right types available when the
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position and personal power over time. Only then is sufficient power of the right types available when the
manager needs to exercise influence on downward, lateral, and upward dimensions.
[Figure 12.2: Three dimensions of managerial power and influence.]
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. 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.
Building Personal Power: Personal power arises from the individual characteristics of the manager.
Three personal characteristicsexpertise, political savvy, and likeabilityhave potential for enhancing
personal power in an organization. The most obvious is building expertise. Additional expertise may be
gained by advanced training and education, participation in professional associations, and involvement in
the early stages of projects. A somewhat less obvious way to increase personal power is to learn political
savvybetter ways to negotiate, persuade individuals, and understand the goals and means they are
most willing to accept. Finally, a managers personal power is increased by characteristics that enhance his
or her likeability and create personal appeal in relationships with other people.
Building Influence Capacity: One of the ways people build influence capacity is by taking steps to
increase their visibilities in the organization. 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, and (5) seeking additional opportunities
to increase personal name recognition. Another way of building influence capacity is by controlling access
to information.
Relational Influence: There are many useful ways of exercising relational influence. The most common
techniques involve the following:
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 ones requests.
Sanctions: Using organizationally derived rewards and punishments.
3. 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.
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3.1 Keys to Empowerment
The concept of empowerment emphasizes the ability to make things happen. Power is still relational, but in
terms of problems and opportunities, not just individuals. Cutting through all of the corporate rhetoric on
empowerment is quite difficult, because the term has become quite fashionable in management circles. Each
individual empowerment attempt needs to be examined in light of how power in the organization will be
changed.
Changing Position Power: When an organization attempts to move power down the hierarchy, it must
also alter the existing pattern of position power.
Expanding the Zone of Indifference: When embarking on an empowerment program, management

needs to recognize the current zone of indifference and systematically move to expand it.
3.2 Power as an Expanding Pie

Along with empowerment, employees need to be trained to expand their power and their new influence
potential. This is the most difficult task for managers and a challenge for employees, for it often changes the
dynamic between supervisors and subordinates. 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. Under the new definition of power, all employees can be more powerful and the chances of success
can be enhanced.
4. Organizational Politics
It is important, to understand the importance of organizational politics and adopt a perspective that allows work
place politics to function in a much broader capacity.
4.1 Traditions of Organizational Politics

There are two different traditions in the analysis of organizational politics. One tradition builds on Machiavellis
philosophy and defines politics in terms of self-interest and the use of non-sanctioned means. In this tradition,
organizational politics may be formally defined as the management of influence to obtain ends not sanctioned by
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the organization or to obtain sanctioned ends by way of non-sanctioned influence.
The second tradition treats politics as a necessary function resulting from differences in the self-interests of
individuals. Here, organizational politics is viewed as the art of creative compromise among competing interests.
Under this view, the firm is more than just an instrument for accomplishing a task or a mere collection of
individuals with a common goal. It acknowledges that the interests of individuals, stakeholders, and society must
also be considered.
4.2 Politics of Self-Protection

While organizational politics may be helpful to the organization as a whole, it is more commonly known and
better understood in terms of self-protection. Whether or not management likes it, all employees recognize that
in any organization they must first watch out for themselves. In too many organizations, if the employee
doesnt protect himself or herself, no one else will. Individuals can employ three common strategies to protect
themselves. They can (1) avoid action and risk taking, (2) redirect accountability and responsibility, or (3)
defend their turf.
Avoidance: Avoidance is quite common in controversial areas where the employee must risk being
wrong or where actions may yield a sanction. Perhaps the most common reaction is to work to the
rules. That is, employees are protected when they adhere strictly to all the rules, policies, and procedures
and do not allow deviations or exceptions. Perhaps one of the most frustrating but effective techniques is
to play dumb.
Redirecting Responsibility: Politically sensitive individuals will always protect themselves from accepting
blame for the negative consequences of their actions. Again, a variety of well-worn techniques may be
used for redirecting responsibility. Passing the buck is a common method employees and managers use.
The trick here is to define the task in such a way that it becomes someone elses formal responsibility. The
ingenious ways in which individuals can redefine an issue to avoid action and transfer responsibility are
often amazing.
Defending Turf: Defending turf is a time-honored tradition in most large organizations. As noted earlier
in the chapter, managers seeking to improve their power attempt to expand the jobs their groups
perform. Defending turf also results from the coalitional nature of organizations. That is, the organization
may be seen as a collection of competing interests held by various departments and groups. As each
group attempts to expand its influence, it starts to encroach on the activities of other groups. Turf
protection is common in organizations and runs from the very lowest position to the executive suite.
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4.3 Politics and Governance
Agency Theory: An essential power problem in todays modern corporation arises from the separation
of owners and managers. A body of work called agency theory suggests that public corporations can
function effectively even though their managers are self-interested and do not automatically bear the full
consequences of their managerial actions. The theory argues that (1) all the interests of society are
served by protecting stockholder interests, (2) stockholders have a clear interest in greater returns, and
(3) managers are self-interested and unwilling to sacrifice these self-interests for others (particularly
stockholders) and thus must be controlled. The term agency theory stems from the notion that managers
are agents of the owners.
Resource Dependencies: Executive behavior can sometimes be explained in terms of resource

dependenciesthe firms need for resources that are controlled by others. Essentially, the resource
dependence of an organization increases as (1) needed resources become more scarce, (2) outsiders
have more control over needed resources, and (3) there are fewer substitutes for a particular type of
resource controlled by a limited number of outsiders. Thus, one political role of the chief executive is to
develop workable compromises among the competing resource dependencies facing the organization
compromises that enhance the executives power.
Organizational Governance: Organizational governance refers to the pattern of authority, influence,

and acceptable managerial behavior established at the top of the organization. This system 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.
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4 > Topic 13
Topic 13: Conflict And Negotiation
T opic Objective:
1. Transitions in Conflict Thought
2. The Conflict Process
3. Bargaining Strategies
4. The Negotiation Process
5. Third-Party Negotiations
Topic Introduction:
Conflict is defined as a process that begins when one party perceives that another party has negatively affected,
or is about to negatively affect, something that the first party cares about. Many people automatically assume
that conflict is related to lower group and organizational performance. Conflict can be either constructive or
destructive to the functioning of a group or unit. Levels of conflict can be either too high or too low. Either
extreme hinders performance. An optimal level is one at which there is enough conflict to prevent stagnation,
stimulate creativity, allow tensions to be released, and initiate the seeds for change, yet not so much as to be
disruptive or to deter coordination of activities.
Negotiation is defined as a process in which two or more parties exchange goods or services and attempt to
agree on the exchange rate for them. It is an ongoing activity in groups and organizations. Distributive bargaining
can resolve disputes, but it often negatively affects the satisfaction of one or more negotiators because it is
focused on the short term and because it is confrontational. Integrative bargaining, in contrast, tends to provide
outcomes that satisfy all parties and that build lasting relationships.
Topic Overview:
1. Transitions in Conflict Thought
It is entirely appropriate to say there has been conflict over the role of conflict in groups and organizations. One
school of thought has argued that conflict must be avoidedthat it indicates a malfunctioning within the group.
We call this the traditional view. Another school of thought, the human relations view, argues that conflict is a
natural and inevitable outcome in any group and that it need not be evil but rather has the potential to be a
positive force in determining group performance. The third, and most recent, perspective proposes not only that
conflict can be a positive force in a group but explicitly argues that some conflict is absolutely necessary for a
group to perform effectively.
1.1 The Traditional View of Conflict

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The early approach to conflict assumed that all conflict was bad. Conflict was viewed negatively, and it was used
synonymously with such terms as violence, destruction, and irrationality to reinforce its negative connotation.
Conflict, by definition, was harmful and was to be avoided. The traditional view of conflict was consistent with the
attitudes that prevailed about group behavior in the 1930s and 1940s. Conflict was seen as a dysfunctional
outcome resulting from poor communication, a lack of openness and trust between people, and the failure of
managers to be responsive to the needs and aspirations of their employees.
The view that all conflict is bad certainly offers a simple approach to looking at the behavior of people who create
conflict. Because all conflict is to be avoided, we need merely direct our attention to the causes of conflict and
correct those malfunctions to improve group and organizational performance. Although research studies now
provide strong evidence to dispute that this approach to conflict reduction results in high group performance,
many of us still evaluate conflict situations using this outmoded standard.
1.2 The Human Relations View of Conflict

The human relations view of conflict argued that conflict was a natural occurrence in all groups and
organizations. Because conflict was inevitable, the human relations school advocated acceptance of conflict.
Proponents rationalized its existence: It cannot be eliminated, and there are even times when conflict may
benefit a groups performance. The human relations view dominated conflict theory from the late 1940s through
the mid-1970s.
1.3 The Interactionist View of Conflict

Whereas the human relations view accepted conflict, the interactionist view of conflict encourages conflict on the
grounds that a harmonious, peaceful, tranquil, and cooperative group is prone to becoming static, apathetic, and
nonresponsive to needs for change and innovation. The major contribution of the interactionist view, therefore,
is encouraging group leaders to maintain an ongoing minimum level of conflictenough to keep the group viable,
self-critical, and creative.
The interactionist view does not propose that all conflicts are good. Rather, some conflicts support the goals of
the group and improve its performance; these are functional, constructive, forms of conflict. In addition, there
are conflicts that hinder group performance; these are dysfunctional, or destructive, forms of conflict. What
differentiates functional from dysfunctional conflict? The evidence indicates that you need to look at the type of
conflict. Specifically, there are three types: task, relationship, and process.
Task conflict relates to the content and goals of the work. Relationship conflict focuses on interpersonal
relationships. Process conflict relates to how the work gets done. Studies demonstrate that relationship conflicts
are almost always dysfunctional.
2. The Conflict Process

The conflict process has five stages: potential opposition or incompatibility, cognition and personalization,
intentions, behavior, and outcomes. The process is diagrammed in Figure 13.1.
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[Figure 13.1: The Conflict Process]
2.1 Stage I: Potential Opposition or Incompatibility

The first step in the conflict process is the presence of conditions that create opportunities for conflict to arise.
They need not lead directly to conflict, but one of these conditions is necessary if conflict is to surface. For
simplicitys sake, these conditions (which we can also look at as causes or sources of conflict) have been
condensed into three general categories: communication, structure, and personal variables.
Communication: Differing word connotations, jargon, insufficient exchange of information, and noise in
the communication channel are all barriers to communication and potential antecedent conditions to
conflict. The potential for conflict increases when either too little or too much communication takes place.
Structure: The term structure is used, in this context, to include variables such as size, degree of
specialization in the tasks assigned to group members, jurisdictional clarity, member-goal compatibility,
leadership styles, reward systems, and the degree of dependence between groups. The size and
specialization act as forces to stimulate conflict. The larger the group and the more specialized its
activities, the greater the likelihood of conflict. Tenure and conflict have been found to be inversely related.
The potential for conflict tends to be greatest when group members are younger and when turnover is
high.
Personal Variables: Personal variables, which include personality, emotions, and values. Evidence
indicates that certain personality typesfor example, individuals who are highly authoritarian and dogmatic
lead to potential conflict. Emotions can also cause conflict.
2.2 Stage II: Cognition and Personalization

If the conditions cited in Stage I negatively affect something that one party cares about, then the potential for
opposition or incompatibility becomes actualized in the second stage. Perception is required. Therefore, one or
more of the parties must be aware of the existence of the antecedent conditions. However, because a conflict is
perceived conflict does not mean that it is personalized. In other words, A may be aware that B and A are in
serious disagreement . . . but it may not make A tense or anxious, and it may have no effect whatsoever on As
affection toward B. It is at the felt conflict level, when individuals become emotionally involved, that parties
experience anxiety, tension, frustration, or hostility.
2.3 Stage III: Intentions

Intentions intervene between peoples perceptions and emotions and their overt behavior. These intentions are
decisions to act in a given way.
Intentions are separated out as a distinct stage because you have to infer the others intent to know how to
respond to that others behavior. A lot of conflicts are escalated merely by one party attributing the wrong
intentions to the other party. In addition, there is typically a great deal of slippage between intentions and
behavior, so behavior does not always accurately reflect a persons intentions.
Figure 13.2 represents one authors effort to identify the primary conflict-handling intentions. Using two
dimensionscooperativeness (the degree to which one party attempts to satisfy the other partys concerns)
and assertiveness (the degree to which one party attempts to satisfy his or her own concerns) five conflict-
handling intentions can be identified: competing (assertive and uncooperative), collaborating (assertive and
cooperative), avoiding (unassertive and uncooperative), accommodating (unassertive and cooperative), and
compromising (midrange on both assertiveness and cooperativeness).
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[Figure 13.2: Dimensions of Conflict-Handling Intentions]
Competing: When one person seeks to satisfy his or her own interests, regardless of the impact on the
other parties to the conflict, that person is competing.
Collaborating: In collaborating, the intention of the parties is to solve a problem by clarifying differences
rather than by accommodating various points of view. If you attempt to find a win/win solution that
allows both parties goals to be completely achieved, thats collaborating.
Avoiding: A person may recognize that a conflict exists and want to withdraw from it or suppress it.
Accommodating: In order for the relationship to be maintained, one party needs to be willing to be self-
sacrificing. This intention is referred as accommodating.
Compromising: In compromising, there is no clear winner or loser. Rather, there is a willingness to
ration the object of the conflict and accept a solution that provides incomplete satisfaction of both parties
concerns.
2.4 Stage IV: Behavior

When most people think of conflict situations, they tend to focus on Stage IV because this is where conflicts
become visible. The behavior stage includes the statements, actions, and reactions made by the conflicting
parties. These conflict behaviors are usually overt attempts to implement each partys intentions. But these
behaviors have a stimulus quality that is separate from intentions. As a result of miscalculations or unskilled
enactments, overt behaviors sometimes deviate from original intentions.
It helps to think of Stage IV as a dynamic process of interaction. Exhibit 13.3 provides a way of visualizing
conflict behavior. All conflicts exist somewhere along this continuum. At the lower part of the continuum are
conflicts characterized by subtle, indirect, and highly controlled forms of tension. An illustration might be a
student questioning in class a point the instructor has just made. Conflict intensities escalate as they move
upward along the continuum until they become highly destructive. Strikes, riots, and wars clearly fall in this upper
range. For the most part, you should assume that conflicts that reach the upper ranges of the continuum are
almost always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum.
[Figure 13.3: Conflict-Intensity Continuum]
This brings us to conflict-management techniques. Exhibit 13.4 lists the major resolution and stimulation
techniques that allow managers to control conflict levels.
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[Figure: 13.4]
2.5 Stage V: Outcomes

The actionreaction interplay between the conflicting parties results in consequences. As our model
demonstrates, these outcomes may be functional in that the conflict results in an improvement in the groups
performance or dysfunctional in that it hinders group performance.
3. Bargaining Strategies
There are two general approaches to negotiationdistributive bargaining and integrative bargaining. As Figure
13.5 shows, distributive and integrative bargaining differ in their goal and motivation, focus, interests,
information sharing, and duration of relationship.
3.1 Distributive Bargaining

The most identifying feature of Distributive Bargaining is that it operates under zero-sum conditions. The essence
of distributive bargaining is negotiating over who gets what share of a fixed pie. By fixed pie, we mean that the
bargaining parties believe there is only a set amount of goods or services to be divvied up. Therefore, fixed pies
are zero-sum games in that every dollar in one partys pocket is a dollar out of their counterparts pocket. When
parties believe the pie is fixed, they tend to bargain distributively.
3.2 Integrative Bargaining

Integrative bargaining operates under the assumption that there are one or more settlements that can create a
win/win solution. In terms of intra-organizational behavior, all things being equal, integrative bargaining is
preferable to distributive bargaining. Why? Because the former builds long-term relationships. It bonds
negotiators and allows them to leave the bargaining table feeling that they have achieved a victory. Distributive
bargaining, however, leaves one party a loser. It tends to build animosities and deepen divisions when people
have to work together on an ongoing basis.
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[Figure 13.5]
4. The Negotiation Process

Figure 13.6 provides a simplified model of the negotiation process. It views negotiation as made up of five steps:
(1) preparation and planning, (2) definition of ground rules, (3) clarification and justification, (4) bargaining and
problem solving, and (5) closure and implementation.
[Figure 13.6]
4.1 Preparation and Planning

Before you start negotiating, you need to do your homework. Whats the nature of the conflict? Whats the
history leading up to this negotiation? Whos involved and what are their perceptions of the conflict? What do
you want from the negotiation? What are your goals?
4.2 Definition of Ground Rules

Once youve done your planning and developed a strategy, youre ready to begin defining the ground rules and
procedures with the other party over the negotiation itself.
4.3 Clarification and Justification

When initial positions have been exchanged, both you and the other party will explain, amplify, clarify, bolster,
and justify your original demands. This neednt be confrontational. Rather, its an opportunity for educating and
informing each other on the issues, why they are important, and how each arrived at their initial demands.
4.4 Bargaining and Problem Solving

The essence of the negotiation process is the actual give-and-take in trying to hash out an agreement. This is
where both parties will undoubtedly need to make concessions.
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4.5 Closure and Implementation
The final step in the negotiation process is formalizing the agreement that has been worked out and developing
any procedures that are necessary for implementation and monitoring. For major negotiationswhich would
include everything from labor-management negotiations to bargaining over lease terms to buying a piece of real
estate to negotiating a job offer for a senior management positionthis requires hammering out the specifics in
a formal contract. For most cases, however, closure of the negotiation process is nothing more formal than a
handshake.
5. Third-Party Negotiations
Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve their
differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution.
There are four basic third-party roles: mediator, arbitrator, conciliator, and consultant.
A mediator is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion,
suggesting alternatives, and the like. Mediators are widely used in labor-management negotiations and in civil
court disputes. The overall effectiveness of mediated negotiations is fairly impressive. The settlement rate is
approximately 60 percent, with negotiator satisfaction at about 75 percent. But the situation is the key to
whether or not mediation will succeed; the conflicting parties must be motivated to bargain and resolve their
conflict.
An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested
by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over
mediation is that it always results in a settlement. Whether or not there is a negative side depends on how
heavy-handed the arbitrator appears.
A conciliator is a trusted third party who provides an informal communication link between the negotiator and
the opponent. The consultants role is not to settle the issues, but, rather, to improve relations between the
conflicting parties so that they can reach a settlement themselves. Instead of putting forward specific solutions,
the consultant tries to help the parties learn to understand and work with each other. Therefore, this approach
has a longer-term focus: to build new and positive perceptions and attitudes between the conflicting parties.

5
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Organizational Goals And Structures

Human Resource Policies And Practices
Organizational Change And Stress Management
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5 > Topic 14
Topic 14: Organizational Goals And Structures
T opic Objective:
1. Organizational Goals
2. Hierarchy and Control
3. Organizing and Coordinating Work
4. Bureaucracy and Beyond
Topic Introduction:
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. Managers decide how to link conditions considered desirable for enhanced survival prospects
with its societal and output desires. From these basic choices, executives can work with subordinates to develop
ways of accomplishing the chosen targets.
Topic Overview:
1. Organizational Goals
The goals of the firm should be consistent and compatible with the way in which it is organized.
1.1 Societal Goals

Organizations do not operate in a social vacuum but rather they reflect the needs and desires of the societies in
which they operate. Societal goals reflect an organizations intended contributions to the broader society.
Organizations normally serve a specific societal function or an enduring need of the society. Often, the social
contribution of the firm is a part of its mission statement.
1.2 Output Goals

Output goals define the type of business an organization is in and provide some substance to the more general
aspects of mission statements.
1.3 Systems Goals

Systems goals are concerned with the conditions within the organization that are expected to increase the
organizations survival potential. The list of systems goals is almost endless, since each manager and researcher
links todays conditions to tomorrows existence in a different way. For many organizations, however, the list
includes growth, productivity, stability, harmony, flexibility, prestige, and human-resource maintenance. In some
businesses, analysts consider market share and current profitability important systems goals.
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2. Hierarchy and Control
The formal structure outlines the jobs to be done, the person(s) (in terms of position) who is (are) to perform
specific activities, and the ways the total tasks of the organization are to be accomplished. In other words, the
formal structure is the skeleton of the firm.
2.1 Organizations as Hierarchies

In larger organizations, there is a clear separation of authority and duties by hierarchical rank. That is, firms are
vertically specialized. This separation represents vertical specialization, a hierarchical division of labor that
distributes formal authority and establishes where and how critical decisions are to be made. This division creates
a hierarchy of authorityan arrangement of work positions in order of increasing authority.
The Organization Chart: Organization charts are diagrams that depict the formal structures of
organizations. A typical chart shows the various positions, the position holders, and the lines of authority
that link them to one another.
Span of Control: The number of individuals reporting to a supervisor is called the span of control.
Narrower spans of control are expected when tasks are complex, when subordinates are inexperienced or
poorly trained, or when tasks call for team effort. Unfortunately, narrow spans of control yield many
organizational levels.
Line and Staff Units: A very useful way to examine the vertical division of labor is to separate line and
staff units. Line units and personnel conduct the major business of the organization. The production and
marketing functions are two examples. In contrast, staff units and personnel assist the line units by
providing specialized expertise and services, such as accounting and public relations.
2.2 Controls 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.
Output Controls: Output controls focus on desired targets and allow managers to use their own
methods to reach defined targets. Most modern organizations use output controls as part of an overall
method of managing by exception.
Process Controls: Process controls attempt to specify the manner in which tasks are accomplished.
There are many types of process controls, but three groups have received considerable attention: (1)
policies, procedures, and rules; (2) formalization and standardization; and (3) total quality management
controls.
Policies, Procedures, and Rules: Most organizations implement a variety of policies, procedures, and
rules to help specify how goals are to be accomplished. A policy allows for individual discretion and minor
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adjustments without direct clearance by a higher-level manager. Procedures indicate the best method for
performing a task, show which aspects of a task are the most important, or outline how an individual is to
be rewarded. Many firms link rules and procedures. Rules are more specific, rigid, and impersonal than
policies. They typically describe in detail how a task or a series of tasks is to be performed, or they
indicate what cannot be done.
Formalization and Standardization: Formalization refers to the written documentation of rules,

procedures, and policies to guide behavior and decision making. Standardization is the degree to which the
range of allowable actions in a job or series of jobs is limited so that actions are performed in a uniform
manner. It involves the creation of guidelines so that similar work activities are repeatedly performed in a
similar fashion.
2.3 Centralization and Decentralization

Different firms use very different mixes of vertical specialization, output controls, process controls, and
managerial techniques to allocate the authority or discretion to act. The farther up the hierarchy of authority the
discretion to spend money, to hire people, and to make similar decisions is moved, the greater the degree of
centralization. The more such decisions are delegated, or moved down the hierarchy of authority, the greater
the degree of decentralization.
3. Organizing and Coordinating Work

Managers must divide the total task into separate duties and group similar people and resources together.
Organizing work is formally known as horizontal specialization. Horizontal specialization is a division of labor that
establishes specific work units or groups within an organization. This aspect of the organization is also called
departmentation. There are several pure forms of departmentation. Whenever managers divide tasks and group
similar types of skills and resources together, they must also be concerned with how each groups individual
efforts will integrate with others. Integration across the firm is the subject of coordination. Managers use a mix
of personal and impersonal methods of coordination to tie the efforts of departments together.
3.1 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 look at the traditional types and what they do and do not provide the firm.
Functional Departments: Grouping individuals by skill, knowledge, and action yields a pattern of
functional departmentation.
Divisional Departments: In divisional departments individuals and resources are grouped by products,
territories, services, clients, or legal entities. Figure 14.1 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.
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[Figure 14.1: A divisional pattern of departmentation.]
Matrix Structures: Matrix departmentation uses both the functional and divisional forms simultaneously.
Figure 14.2 shows the basic matrix arrangement for an aerospace program. The functional departments
on one side and the project efforts on the other. Workers and supervisors in the middle of the matrix
have two bossesone functional and one project.
3.2 Coordination
Coordination is the set of mechanisms that an organization uses to link the actions of their units into a
consistent pattern. This linkage includes mechanisms to link managers and staff units, operating units with each
other, and divisions with each other. Coordination is needed at all levels of management, not just across a few
scattered units.
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Personal Methods of Coordination: Personal methods of coordination produce synergy by promoting
dialogue and discussion, innovation, creativity, and learning, both within and across organizational units.
Personal methods allow the organization to address the particular needs of distinct units and individuals
simultaneously.
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.
4. Bureaucracy and Beyond

Bureaucracies rely on a division of labor, hierarchical control, promotion by merit with career opportunities for
employees, and administration by rule.
4.1 Mechanistic Structures and

The Machine Bureaucracy The mechanistic type of bureaucracy emphasizes vertical specialization and control.
Organizations of this type 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. There is often extensive use of the functional pattern of departmentation throughout the
firm. Henry Mintzberg uses the term machine bureaucracy to describe an organization structured in this manner.
The mechanistic design results in a management emphasis on routine for efficiency. Firms often used this design
in pursuing a strategy of becoming a low-cost leader.
4.2 Organic Structures and the Professional Bureaucracy

The organic type is much less vertically oriented than its mechanistic counterpart is; it emphasizes horizontal
specialization. Procedures are minimal, and those that do exist are not as formalized. The organization relies on
the judgments of experts and personal means of coordination. When controls are used, they tend to back up
professional socialization, training, and individual reinforcement. Staff units are placed toward the middle of the
organization. Because this is a popular design in professional firms, Mintzberg calls it a professional bureaucracy.
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5 > Topic 15
Topic 15: Human Resource Policies And Practices
T opic Objective:
1. Selection Practices
2. Training and Development Programs
3. Performance Evaluation
Topic Introduction:
An organizations human resource policies and practices represent important forces for shaping employee
behavior and attitudes. In this topic, we specifically discuss the influence of selection practices, training and
development programs, and performance evaluation systems.
Topic Overview:
1. Selection Practices
The most important HR decision you can make is who you hire. That makes senseif you can figure out who
the right people are. The objective of effective selection is to figure out who these right people are, by matching
individual characteristics (ability, experience, and so on) with the requirements of the job. When management
fails to get a proper match, both employee performance and satisfaction suffer.
1.1 How the Selection Process Works

Figure 15.1 shows how the selection process works in most organizations. Having decided to apply for a job,
applicants go through several stagesthree are shown in the exhibitduring which they can be rejected at any
time. In practice, some organizations forgo some of these steps in the interests of time.
[Figure 15.1: Model of Selection Process in Organizations]

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1.2 Initial Selection
Initial selection devices are the first information applicants submit and are used for preliminary rough cuts to
decide whether an applicant meets the basic qualifications for a job. Application forms (including letters of
recommendation) are initial selection devices. We list background checks as either an initial selection device or a
contingent selection device, depending on how the organization does it. Some organizations prefer to check into
an applicants background right away. Others wait until the applicant is about ready to be hired, contingent on
everything checking out.
1.3 Substantive Selection

If an applicant passes the initial screens, next are substantive selection methods. These are the heart of the
selection process and include written tests, performance tests, and interviews.
Written Tests: Typical written tests include (1) intelligence or cognitive ability tests, (2) personality
tests, (3) integrity tests, and (4) interest inventories.
Performance-Simulation Tests: The two best-known performance-simulation tests are work samples
and assessment centers. The former are suited to routine jobs, while the latter are relevant for the
selection of managerial personnel.
Interviews: Of all the selection devices organizations around the globe use to differentiate candidates,
the interview continues to be the most common. Not only is the interview widely used, it also seems to
carry a great deal of weight. That is, the results tend to have a disproportionate amount of influence on
the selection decision. The candidate who performs poorly in the employment interview is likely to be cut
from the applicant pool regardless of experience, test scores, or letters of recommendation. Conversely,
all too often, the person most polished in job-seeking techniques, particularly those used in the interview
process, is the one hired, even though he or she may not be the best candidate for the position.
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1.4 Contingent Selection
If applicants pass the substantive selection methods, they are basically ready to be hired, contingent on a final
check. One common contingent method is a drug test. Drug testing is controversial. Many applicants think it is
unfair or invasive to test them without reasonable suspicion. Such individuals likely believe that drug use is a
private matter and applicants should be tested on factors that directly bear on job performance, not lifestyle
issues that may or may not be job relevant. Drug tests typically screen out individuals who have used marijuana
but not alcohol (for both legal and practical reasons alcohol is legal and leaves the system in 24 hours).
2. Training and Development Programs

Competent employees dont remain competent forever. Skills deteriorate and can become obsolete and new
skills need to be learned. Thats why organizations spend billions of dollars each year on formal training.
2.1 Types of Training

Training can include everything from teaching employees basic reading skills to conducting advanced courses in
executive leadership. Here we discuss four general skill categoriesbasic literacy and technical, interpersonal, and
problem-solving skills.
Basic Literacy Skills: Organizations increasingly have to teach basic reading and math skills to their
employees.
Technical Skills: Most training is directed at upgrading and improving an employees technical skills.
Technical training has become increasingly important today for two reasonsnew technology and new
structural designs in the organization. Jobs change as a result of new technologies and improved
methods. In addition, technical training has become increasingly important because of changes in
organization design.
Interpersonal Skills: Some employees have excellent interpersonal skills, but others require training to
improve theirs. This includes learning how to be a better listener, how to communicate ideas more clearly,
and how to be a more effective team player.
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Problem-Solving Skills: Managers, as well as many employees who perform Non-routine tasks, have
to solve problems on their jobs. When people require these skills but are deficient in them, they can
participate in problem-solving training. This can include activities to sharpen their logic, reasoning, and
problem-defining skills as well as their abilities to assess causation, develop and analyze alternatives, and
select solutions.
2.2 Training Methods

Training methods are most readily classified as formal or informal and as on-the- job or off-the-job training.
Historically, training meant formal training. Its planned in advance and has a structured format. However, recent
evidence indicates that 70 percent of workplace learning is made up of informal training unstructured,
unplanned, and easily adapted to situations and individualsfor teaching skills and keeping employees current. In
reality, most informal training is nothing other than employees helping each other out. They share information
and solve work-related problems with one another. Perhaps the most important outcome of this realization is
that many managers are now supportive of what used to be considered idle chatter.
On-the-job training includes job rotation, apprenticeships, understudy assignments, and formal mentoring
programs. But the primary drawback of these on-the- job training methods is that they often disrupt the
workplace. So organizations invest in off-the-job training. The most popular off-the-job training continues to be
live classroom lectures. But it also encompasses videotapes, public seminars, self-study programs, Internet
courses, satellite-beamed television classes, and group activities that use role-plays and case studies.
2.3 Individualizing Formal Training to Fit the Employees Learning Style

The way you process, internalize, and remember new and difficult material isnt necessarily the same way others
do. This fact means that effective formal training should be individualized to reflect the learning style of the
employee.
2.4 Evaluating Effectiveness

Most training programs work rather well in that the majority of people who undergo training learn more than
those who do not, react positively to the training experience, and after the training engage in the behaviors
targeted by the program. Still, some factors make certain programs work better than others. The success of
training also depends on the individual. If individuals are unmotivated to learn, they will benefit very little.
3. Performance Evaluation
Performance evaluation system and the way its administered can be an important force influencing employee
behavior.
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3.1 Purposes of Performance Evaluation
Performance evaluation serves a number of purposes. One purpose is to help management make general
human resource decisions. Evaluations provide input into important decisions such as promotions, transfers, and
terminations. Evaluations also identify training and development needs. They pinpoint employee skills and
competencies that are currently inadequate but for which remedial programs can be developed. Evaluations also
fulfill the purpose of providing feedback to employees on how the organization views their performance.
Furthermore, performance evaluations are the basis for reward allocations. Decisions as to who gets merit pay
increases and other rewards are frequently determined by performance evaluations.
3.2 What Do We Evaluate?

The criteria that management chooses to evaluate when appraising employee performance will have a major
influence on what employees do. The three most popular sets of criteria are individual task outcomes, behaviors,
and traits.
Individual Task Outcomes: If ends count, rather than means, then management should evaluate an
employees task outcomes.
Behaviors: In many cases, its difficult to identify specific outcomes that can be directly attributed to an
employees actions. This is particularly true of personnel in advisory or support positions and individuals
whose work assignments are intrinsically part of a group effort.
Traits: The weakest set of criteria, yet one that is still widely used by organizations, is individual traits.
We say theyre weaker than either task outcomes or behaviors because theyre farthest removed from
the actual performance of the job itself. Traits such as having a good attitude, showing confidence, being
dependable, looking busy, or possessing a wealth of experience may or may not be highly correlated with
positive task outcomes, but only the naive would ignore the reality that such traits are frequently used as
criteria for assessing an employees level of performance.
3.3 Who Should Do the Evaluating?

Who should evaluate an employees performance? By tradition, the task has fallen to the manager, on the
grounds that managers are held responsible for their employees performance. But that logic may be flawed.
Others may actually be able to do the job better.
With many of todays organizations using self-managed teams, telecommuting, and other organizing devices
that distance bosses from their employees, an employees immediate superior may not be the most reliable
judge of that employees performance. Thus, in more and more cases, peers and even subordinates are being
asked to participate in the performance evaluation process. Also, increasingly, employees are participating in
their own performance evaluation.
The latest approach to performance evaluation is the use of 360-degree evaluations. It provides for
performance feedback from the full circle of daily contacts that an employee might have, ranging from mailroom
personnel to customers to bosses to peers. The number of appraisals can be as few as 3 or 4 or as many as
25, with most organizations collecting 5 to 10 per employee.
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3.4 Methods of Performance Evaluation
The methods for performance evaluation are:
Written Essays: Probably the simplest method of evaluation is to write a narrative describing an
employees strengths, weaknesses, past performance, potential, and suggestions for improvement. The
written essay requires no complex forms or extensive training to complete.
Critical Incidents: Critical incidents focus the evaluators attention on the behaviors that are key in
making the difference between executing a job effectively and executing it ineffectively. That is, the
appraiser writes down anecdotes that describe what the employee did that was especially effective or
ineffective.
Graphic Rating Scales: In this method, a set of performance factors, such as quantity and quality of
work, depth of knowledge, cooperation, attendance, and initiative, is listed. The evaluator then goes down
the list and rates each on incremental scales. The scales may specify five points, so a factor such as job
knowledge might be rated 1 (poorly informed about work duties) to 5 (has complete mastery of all
phases of the job).
Behaviorally Anchored Rating Scales: Behaviorally anchored rating scales (BARS) combine major
elements from the critical incident and graphic rating scale approaches: The appraiser rates the employees
based on items along a continuum, but the points are examples of actual behavior on the given job rather
than general descriptions or traits.
Forced Comparisons: Forced comparisons evaluate one individuals performance against the
performance of another or others. It is a relative rather than an absolute measuring device. The two most
popular comparisons are group order ranking and individual ranking.
Group Order Ranking: The group order ranking requires the evaluator to place employees into a
particular classification, such as top one-fifth or second one-fifth.
Individual Ranking Approach: The individual ranking approach rank-orders employees from best to
worst. If the manager is required to appraise 30 employees, this approach assumes that the difference
between the first and second employee is the same as that between the twenty-first and twenty-
second.
3.5 Suggestions for Improving Performance Evaluations

The performance evaluation process is a potential minefield of problems. For instance, evaluators can
unconsciously inflate evaluations (positive leniency), understate performance (negative leniency), or allow the
assessment of one characteristic to unduly influence the assessment of others (the halo error). Some appraisers
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bias their evaluations by unconsciously favoring people who have qualities and traits similar to their own (the
similarity error). And, of course, some evaluators see the evaluation process as a political opportunity to overtly
reward or punish employees they like or dislike. Although there are no protections that will guarantee accurate
performance evaluations, the following suggestions can significantly help to make the process more objective
and fair.
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5 > Topic 16
Topic 16: Organizational Change And Stress

Management
T opic Objective:
1. Forces for Change
2. Planned Change
3. Resistance to Change
4. Overcoming Resistance to Change
5. Approaches to Managing Organizational Change
6. Work Stress and Its Management
Topic Introduction:
Managers are the primary change agents in most organizations. By the decisions they make and their role-
modeling behaviors, they shape the organizations change culture. For instance, management decisions related
to structural design, cultural factors, and human resource policies largely determine the level of innovation within
the organization. Similarly, management decisions, policies, and practices will determine the degree to which the
organization learns and adapts to changing environmental factors.
Topic Overview:
1. Forces for Change
No company today is in a particularly stable environment. Even traditionally stable industries such as energy and
utilities have witnessedand will continue to experienceturbulent change. Companies that occupy a dominant
market share in their industries must change, sometimes radically.
The dynamic and changing environments that organizations face today require adaptation, sometimes calling for
deep and rapid responses. Change or die! is the rallying cry among todays managers worldwide. Figure 16.1
summarizes six specific forces that are acting as stimulants for change.
[Figure 16.1]
2. Planned Change
Essentially there are two goals of Planned Change. First, it seeks to improve the ability of the organization to
adapt to changes in its environment. Second, it seeks to change employee behavior.
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adapt to changes in its environment. Second, it seeks to change employee behavior.
If an organization is to survive, it must respond to changes in its environment. When competitors introduce new
products or services, government agencies enact new laws, important sources of supplies go out of business, or
similar environmental changes take place, the organization needs to adapt. Efforts to stimulate innovation,
empower employees, and introduce work teams are examples of planned-change activities directed at
responding to changes in the environment.
Because an organizations success or failure is essentially due to the things that its employees do or fail to do,
planned change also is concerned with changing the behavior of individuals and groups within the organization.
3. Resistance to Change
In some ways, resistance to change is positive. It provides a degree of stability and predictability to behavior. If
there werent some resistance, organizational behavior would take on the characteristics of chaotic randomness.
Resistance to change can also be a source of functional conflict.
Resistance to change doesnt necessarily surface in standardized ways. Resistance can be overt, implicit,
immediate, or deferred. Its easiest for management to deal with resistance when it is overt and immediate. For
instance, a change is proposed and employees quickly respond by voicing complaints, engaging in a work
slowdown, threatening to go on strike, or the like. The greater challenge is managing resistance that is implicit or
deferred. Implicit resistance efforts are more subtleloss of loyalty to the organization, loss of motivation to
work, increased errors or mistakes, increased absenteeism due to sicknessand hence are more difficult to
recognize. Similarly, deferred actions cloud the link between the source of the resistance and the reaction to it.
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A change may produce what appears to be only a minimal reaction at the time it is initiated, but then resistance
surfaces weeks, months, or even years later. Or a single change that in and of itself might have little impact
becomes the straw that breaks the camels back. Reactions to change can build up and then explode in some
response that seems totally out of proportion to the change action it follows. The resistance, of course, has
merely been deferred and stockpiled. What surfaces is a response to an accumulation of previous changes.
Figure 16.2 summarizes major forces for resistance to change, categorized by individual and organizational
sources. Individual sources of resistance reside in basic human characteristics such as perceptions, personalities,
and needs. Organizational sources reside in the structural makeup of organizations themselves.
[Figure 16.2]
4. Overcoming Resistance to Change

Seven tactics have been suggested for use by change agents in dealing with resistance to change.
4.1 Education and Communication

Resistance can be reduced through communicating with employees to help them see the logic of a change.
Communication can reduce resistance on two levels. First, it fights the effects of misinformation and poor
communication: If employees receive the full facts and get any misunderstandings cleared up, resistance should
subside. Second, communication can be helpful in selling the need for change.
4.2 Participation
Its difficult for individuals to resist a change decision in which they participated. Prior to making a change, those
opposed can be brought into the decision process. Assuming that the participants have the expertise to make a
meaningful contribution, their involvement can reduce resistance, obtain commitment, and increase the quality of
the change decision. However, against these advantages are the negatives: potential for a poor solution and
great consumption of time.
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4.3 Building Support and Commitment
Change agents can offer a range of supportive efforts to reduce resistance. When employees fear and anxiety
are high, employee counseling and therapy, new-skills training, or a short paid leave of absence may facilitate
adjustment. Research on middle managers has shown that when managers or employees have low emotional
commitment to change, they favor the status quo and resist it. So firing up employees can also help them
emotionally commit to the change rather than embrace the status quo.
4.4 Implementing Changes Fairly

Try as managers might to have employees see change positively, most workers tend to react negatively. Most
people simply dont like change. But one way organizations can minimize the negative impact of change, even
when employees frame it as a negative, is to makes sure the change is implemented fairly.
4.5 Manipulation and Cooptation

Manipulation refers to covert influence attempts. Twisting and distorting facts to make them appear more
attractive, withholding undesirable information, and creating false rumors to get employees
To accept a change are all examples of manipulation. Cooptation, on the other hand, is a form of both
manipulation and participation. It seeks to buy off the leaders of a resistance group by giving them a key role in
the change decision. The leaders advice is sought, not to seek a better decision, but to get their endorsement.
Both manipulation and cooptation are relatively inexpensive and easy ways to gain the support of adversaries,
but the tactics can backfire if the targets become aware that they are being tricked or used. Once discovered,
the change agents credibility may drop to zero.
4.6 Selecting People Who Accept Change

Research suggests that the ability to easily accept and adapt to change is related to personalitysome people
simply have more positive attitudes about change than others. It appears that people who adjust best to change
are those who are open to experience, take a positive attitude toward change, are willing to take risks, and are
flexible in their behavior.
4.7 Coercion
Last on the list of tactics is coercion; that is, the application of direct threats or force on the resisters. The
advantages and drawbacks of coercion are approximately the same as those mentioned for manipulation and
cooptation.
5. Approaches to Managing Organizational Change

The several approaches to managing change: Lewins classic three-step model of the change process, Kotters
eight-step plan, action research, and organizational development.
5.1 Lewins Three-Step Model

Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the status quo,
movement to a desired end state, and refreezing the new change to make it permanent.
[Figure 16.3: Lewins Three-Step Change Model]
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The status quo can be considered to be an equilibrium state. To move from this equilibriumto overcome the
pressures of both individual resistance and group conformityunfreezing is necessary. It can be achieved in one
of three ways. The driving forces, which direct behavior away from the status quo, can be increased. The
restraining forces, which hinder movement from the existing equilibrium, can be decreased. A third alternative is
to combine the first two approaches. Companies that have been successful in the past are likely to encounter
restraining forces because people question the need for change. Similarly, research shows that companies with
strong cultures excel at incremental change but are overcome by restraining forces against radical change.
[Figure 16.4: Unfreezing the Status Quo]
5.2 Kotters Eight-Step Plan for Implementing Change

John Kotter of the Harvard Business School built on Lewins three-step model to create a more detailed
approach for implementing change. Kotter began by listing common failures that managers make when trying to
initiate change. These included the inability to create a sense of urgency about the need for change, failure to
create a coalition for managing the change process, the absence of a vision for change and to effectively
communicate that vision, not removing obstacles that could impede the achievement of the vision, failure to
provide short-term and achievable goals, the tendency to declare victory too soon, and not anchoring the
changes into the organizations culture. Kotter then established eight sequential steps to overcome these
problems. Theyre listed in Figure 16.5.
[Figure 16.5]
5.3 Action Research

Action research refers to a change process based on the systematic collection of data and then selection of a
change action based on what the analyzed data indicateIts importance lies in providing a scientific methodology
for managing planned change. The process of action research consists of five steps: diagnosis, analysis,
feedback, action, and evaluation.
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The change agent, often an outside consultant in action research, begins by gathering information about
problems, concerns, and needed changes from members of the organization. This diagnosis is analogous to the
physicians search to find specifically what ails a patient. In action research, the change agent asks questions,
interviews employees, reviews records, and listens to the concerns of employees.
Diagnosis is followed by analysis. What problems do people key in on? What patterns do these problems seem
to take? The change agent synthesizes this information into primary concerns, problem areas, and possible
actions.
The third stepfeedbackrequires sharing with employees what has been found from steps one and two. The
employees, with the help of the change agent, develop action plans for bringing about any needed change.
Now the action part of action research is set in motion. The employees and the change agent carry out the
specific actions to correct the problems that have been identified.
The final step, consistent with the scientific underpinnings of action research, is evaluation of the action plans
effectiveness. Using the initial data gathered as a benchmark, any subsequent changes can be compared and
evaluated.
5.4 Organizational Development

Organizational development (OD) is not an easily defined single concept. Rather, its a term used to encompass
a collection of planned-change interventions built on humanistic-democratic values that seek to improve
organizational effectiveness and employee well-being.
The OD paradigm values human and organizational growth, collaborative and participative processes, and a spirit
of inquiry. The change agent may be directive in OD; however, there is a strong emphasis on collaboration.
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6. Work Stress and Its Management
Most of us are aware that employee stress is an increasing problem in organizations.
6.1 What Is Stress?

Stress is a dynamic condition in which an individual is confronted with an opportunity, demand, or resource
related to what the individual desires and for which the outcome is perceived to be both uncertain and important.
Stress is not necessarily bad in and of itself. Although stress is typically discussed in a negative context, it also
has a positive value. Its an opportunity when it offers potential gain.
6.2 Potential Sources of Stress

There are three categories of potential stressors: environmental, organizational, and personal.
[Figure 16.6]
Environmental Factors: Just as environmental uncertainty influences the design of an organizations

structure, it also influences stress levels among employees in that organization. There are three main
types of environmental uncertainty: economic, political, and technological.
Changes in the business cycle create economic uncertainties. When the economy is contracting, for
example, people become increasingly anxious about their job security. Political uncertainties dont tend to
create stress among North Americans as they do for employees in countries like Haiti or Venezuela.
Technological change is a third type of environmental factor that can cause stress. Because new
innovations can make an employees skills and experience obsolete in a very short time, computers,
robotics, automation, and similar forms of technological innovation are a threat to many people and cause
them stress.
Organizational Factors: There is no shortage of factors within an organization that can cause stress.
Pressures to avoid errors or complete tasks in a limited time, work overload, a demanding and insensitive
boss, and unpleasant coworkers are a few examples. Weve categorized these factors around task, role,
and interpersonal demands.
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Task demands are factors related to a persons job. They include the design of the individuals job
(autonomy, task variety, degree of automation), working conditions, and the physical work layout.
Role demands relate to pressures placed on a person as a function of the particular role she plays in
the organization. Role conflicts create expectations that may be hard to reconcile or satisfy.
Interpersonal demands are pressures created by other employees. Lack of social support from
colleagues and poor interpersonal relationships can cause stress, especially among employees with a
high social need.
Personal Factors: Primarily, these factors are family issues, personal economic problems, and inherent
personality characteristics.
Stressors Are Additive: A fact that tends to be overlooked when stressors are reviewed individually is
that stress is an additive phenomenon. Stress builds up. Each new and persistent stressor adds to an
individuals stress level.
6.3 Individual Differences

What individual difference variables moderate the relationship between potential stressors and experienced
stress? At least four variablesperception, job experience, social support, and personalityhave been found to
be relevant moderators.
Employees react in response to their perception of reality rather than to reality itself. Perception, therefore, will
moderate the relationship between a potential stress condition and an employees reaction to it. Experience on
the job tends to be negatively related to work stress. There are two reasons for this: First is the idea of
selective withdrawal. Voluntary turnover is more probable among people who experience more stress. Second,
people eventually develop coping mechanisms to deal with stress. Because this takes time, senior members of
the organization are more likely to be fully adapted and should experience less stress.
There is increasing evidence that social supportthat is, collegial relationships with coworkers or supervisors
can buffer the impact of stress. The logic underlying this moderating variable is that social support acts as a
palliative, mitigating the negative effects of even high-strain jobs.
6.4 Consequences of Stress

Stress shows itself in a number of ways. For instance, an individual who is experiencing a high level of stress may
develop high blood pressure, ulcers, irritability, difficulty making routine decisions, loss of appetite, accident-
proneness, and the like. These symptoms can be subsumed under three general categories: physiological,
psychological, and behavioral symptoms
Physiological Symptoms: Stress could create changes in metabolism, increase heart and breathing
rates, increase blood pressure, bring on headaches, and induce heart attacks.
Psychological Symptoms: Stress can cause dissatisfaction. Job-related stress can cause job-related
dissatisfaction. Job dissatisfaction, in fact, is the simplest and most obvious psychological effect of
stress. But stress shows itself in other psychological statesfor instance, tension, anxiety, irritability,
boredom, and procrastination.
Behavioral Symptoms: Behavior-related stress symptoms include changes in productivity, absence,

and turnover, as well as changes in eating habits, increased smoking or consumption of alcohol, rapid
speech, fidgeting, and sleep disorders.
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6.5 Managing Stress
The individual and organizational approaches toward managing stress are:
Individual Approaches: An employee can take personal responsibility for reducing stress levels.
Individual strategies that have proven effective include implementing time-management techniques,
increasing physical exercise, relaxation training, and expanding the social support network.
Organizational Approaches: Several of the factors that cause stressparticularly task and role
demandsare controlled by management. As such, they can be modified or changed. Strategies that
management might want to consider include improved personnel selection and job placement, training,
use of realistic goal setting, redesigning of jobs, increased employee involvement, improved organizational
communication, offering employee sabbaticals, and establishment of corporate wellness programs.
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Introduction To Organizational Behavior

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Introduction to

There are 5 sections in this course. All sections are mandatory.

In Section 1 of this course you will cover these topics:

Introducing Organizational Behavior

In Section 2 of this course you will cover these topics:

Perception And Individual Decision Making

In Section 3 of this course you will cover these topics:

Appraising And Rewarding Performance

In Section 4 of this course you will cover these topics:

In Section 5 of this course you will cover these topics:

Organizational Goals And Structures

In Section 1 of this course you will cover these topics:

Introducing Organizational Behavior

Topic 1: Introducing Organizational Behavior

1.1 Interdisciplinary Body of Knowledge

1.2 Use of Scientific Methods

[Figure 1.1: Common scientific research methods in organizational behavior.]

1.3 Focus on Application

1.4 Contingency Thinking

2. Organizations as Work Settings

2.1 Organizational Purpose, Mission, and Strategy

2.2 Organizational Environments and Stakeholders

2.3 Organizational Cultures

2.4 Diversity and Multiculturalism

3.1 The Management Process

3.2 Managerial Activities, Roles, and Networks

[Figure 1.5: Mintzbergs 10 roles of effective managers.]

3.3 Managerial Skills and Competencies

3.4 Moral Management

Topic 2: Foundations Of Individual Behavior

1.1 Intellectual Abilities

1.2 Physical Abilities

2. Biographical Characteristics Relevant to Organizational Behavior

3.1 Classical Conditioning

3.2 Operant Conditioning

3.3 Social Learning

4. Shaping: A Managerial Tool

4.1 Methods of Shaping Behavior

4.2 Schedules of Reinforcement

4.3 Reinforcement Schedules and Behavior

Topic 3: Emotions, Attitudes, And Job Satisfaction

1.3 Types of Emotions

2. Emotions and Moods in Organizations

2.1 Emotion and Mood Contagion

2.3 Emotions and Moods across Cultures

2.4 Emotions and Moods as Affective Events

[Figure 3.3: Figurative summary of affective events theory.]

2.5 Functions of Emotions and Moods

3.1 Components of Attitudes

[Figure 3.4: A work-related example of the three components of attitudes.]

3.2 Attitudes and Behavior

3.3 Attitudes and Cognitive Consistency

3.4 Types of Job Attitudes

4. Components of Job Satisfaction

The work itselfresponsibility, interest, and growth.

5. Job Satisfaction and Behavior

5.2 Organizational Citizenship

5.3 At Home Affect

6. Job Satisfaction and Performance

6.2 Performance Causes Satisfaction

[Figure 3.5: Simplified Porter-Lawler model of the performance satisfaction relationship.]

6.3 Rewards Cause Both Satisfaction and Performance

Topic 4: Managing Communications