Chapter 1 What is Organizational Behavior

Robbins: Organizational Behavior

Chapter One

WHAT IS ORGANIZATIONAL BEHAVIOR? LEARNING OBJECTIVES After studying this chapter, students should be able to: Define organizational behavior (OB) Describe what managers do Explain the value of the systematic study of OB List the major challenges and opportunities for managers to use OB concepts Identify the contributions made by major behavioral science disciplines to OB Describe why managers require a knowledge of OB Explain the need for a contingency approach to the study of OB Identify the three levels of analysis in this book’s OB model

CHAPTER OVERVIEW Managers need to develop their interpersonal or people skills if they are going to be effective in their jobs. Organizational behavior (OB) is a field of study that investigates the impact that individuals, groups, and structure have on behavior within an organization, then applies that knowledge to make organizations work more effectively. Specifically, OB focuses on how to improve productivity, reduce absenteeism and turnover, and increase employee citizenship and job satisfaction. We all hold generalizations about the behavior of people. Some of our generalizations may provide valid insights into human behavior, but many are erroneous. Organizational behavior uses systematic study to improve predictions of behavior that would be made from intuition alone. Yet, because people are different, we need to look at OB in a contingency framework, using situational variables to moderate cause-effect relationships. Organizational behavior offers both challenges and opportunities for managers. It recognizes differences and helps managers to see the value of workforce diversity and practices that may need to be changed when managing in different countries. It can help improve quality and employee productivity by showing managers how to empower their people as well as how to design and implement change programs. It offers specific insights to improve a manager’s people skills. In times of rapid and ongoing change, faced by most managers today, OB can help managers cope in a world of “temporariness” and learn ways to stimulate innovation. Finally, OB can offer managers guidance in creating an ethically healthy work climate. WEB EXERCISES At the end of each chapter of this instructor’s manual, you will find suggested exercises and ideas for researching the WWW on OB topics. The exercises “Exploring OB Topics on the Web” are set up so that you can simply photocopy the pages, distribute them to your class, and make assignments accordingly. You may want to assign the exercises as an out-of-class activity or as lab activities with your class. Within the lecture notes the graphic will note that there is a WWW activity to support this material.

The chapter opens introducing Michael Bowser who is a supervisor/team chief for the Department of Defense. The 13 to 18 people who report to him are technical specialists. Despite his technical background as a systems engineer, he states what his job really requires is “people skills.” He has worked to develop his communication skills and learned ways of motivating his staff to meet their individual needs.

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CHAPTER OUTLINE What Manager’s Do A. Importance of Developing Managers’ Interpersonal Skills Companies with reputations as a good place to work—such as Hewlett-Packard, Lincoln Electric, Southwest Airlines, and Starbucks—have a big advantage when attracting high performing employees. A recent national study of the U.S. workforce found that: Wages and fringe benefits are not the reason people like their jobs or stay with an employer. More important to workers is the job quality and the supportiveness of the work environments. Managers’ good interpersonal skills are likely to make the workplace more pleasant, which in turn makes it easier to hire and retain high performing employees. Definitions: Manager: Someone who gets things done through other people. They make decisions, allocate resources, and direct the activities of others to attain goals. Organization: A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals. B. Management Functions 1. French industrialist Henri Fayol wrote that all managers perform five management functions: plan, organize, command, coordinate, and control. Modern management scholars have condensed to four: planning, organizing, leading, and controlling. 2. Planning requires a manager to: Define goals (organizational, departmental, worker levels) Establish an overall strategy for achieving those goals Develop a comprehensive hierarchy of plans to integrate and coordinate activities. 3. Organizing requires a manager to: Determine what tasks are to be done Who is to be assigned the tasks How the tasks are to be grouped Who reports to whom Where decisions are to be made (centralized/decentralized) 4. Leading requires a manager to: Motivate employees Direct the activities of others Select the most effective communication channels Resolve conflicts among members

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B. Management Functions (cont.)

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5. Controlling requires a manager to: Monitor the organization’s performance Compare actual performance with the previously set goals Correct significant deviations. C. Management Roles 1. In the late 1960s, Henry Mintzberg studied five executives to determine what managers did on their jobs. He concluded that managers perform ten different, highly interrelated roles or sets of behaviors attributable to their jobs. The ten roles can be grouped as being primarily concerned with interpersonal relationships, the transfer of information, and decision making. (Exhibit 1-1) 2. Interpersonal roles Figurehead—duties that are ceremonial and symbolic in nature Leadership—hire, train, motivate, and discipline employees Liaison—contact outsiders who provide the manager with information. These may be individuals or groups inside or outside the organization. 3. Informational roles Monitor—collect information from organizations and institutions outside their own Disseminator—a conduit to transmit information to organizational members Spokesperson—represent the organization to outsiders 1. Decisional roles Entrepreneur—managers initiate and oversee new projects that will improve their organization’s performance Disturbance handlers—take corrective action in response to unforeseen problems Resource allocators—responsible for allocating human, physical, and monetary resources Negotiator role—discuss issues and bargain with other units to gain advantages for their own unit D. Management Skills 1. Robert Katz has identified three essential management skills: technical, human, and conceptual. 2. Technical skills The ability to apply specialized knowledge or expertise. All jobs require some specialized expertise, and many people develop their technical skills on the job. 3. Human skills The ability to work with, understand, and motivate other people, both individually and in groups, describes human skills. Many people are technically proficient but interpersonally incompetent.

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Robbins: Organizational Behavior D. Management Skills

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4. Conceptual skills The mental ability to analyze and diagnose complex situations Decision making, for example, requires managers to spot problems, identify alternatives that can correct them, evaluate those alternatives, and select the best one. E. Effective vs. Successful Managerial Activities 1. Fred Luthans and his associates asked: Do managers who move up most quickly in an organization do the same activities and with the same emphasis as managers who do the best job? Surprisingly, those managers who were the most effective were not necessarily promoted the fastest. 2. Luthans and his associates studied more than 450 managers. They found that all managers engage in four managerial activities.

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Traditional management—Decision making, planning, and controlling. The average manager spent 32 percent of his or her time performing this activity.

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Communication—Exchanging routine information and processing paperwork. The average manager spent 29 percent of his or her time performing this activity.

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Human resource management—Motivating, disciplining, managing conflict, staffing, and training. The average manager spent 20 percent of his or her time performing this activity.

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Networking—Socializing, politicking, and interacting with outsiders. The average manager spent 19 percent of his or her time performing this activity.

Successful managers—defined as those who were promoted the fastest: (Exhibit 1-2) •

Networking made the largest relative contribution to success.

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Human resource management activities made the least relative contribution.

4. Effective managers—defined as quality and quantity of performance, as well as, commitment to employees: •

Communication made the largest relative contribution.

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Networking made the least relative contribution.

5. Successful managers do not give the same emphasis to each of those activities as do effective managers—it almost the opposite of effective managers. 6. This finding challenges the historical assumption that promotions are based on performance, vividly illustrating the importance that social and political skills play in getting ahead in organizations.

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F. A Review of the Manager’s Job

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1. One common thread runs through the functions, roles, skills, and activities approaches to management: managers need to develop their people skills if they are going to be effective and successful. Enter Organizational Behavior Definition: Organizational Behavior: OB is a field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. A. Organizational behavior is a field of study. OB studies three determinants of behavior in organizations: individuals, groups, and structure. OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively. OB is concerned with the study of what people do in an organization and how that behavior affects the performance of the organization. There is increasing agreement as to the components of OB, but there is still considerable debate as to the relative importance of each: motivation, leader behavior and power, interpersonal communication, group structure and processes, learning, attitude development and perception, change processes, conflict, work design, and work stress. Replacing Intuition with Systematic Study A. Introduction

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Each of us is a student of behavior: •

A casual or commonsense approach to reading others can often lead to erroneous predictions.

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You can improve your predictive ability by replacing your intuitive opinions with a more systematic approach.

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The systematic approach used in this book will uncover important facts and relationships and will provide a base from which more accurate predictions of behavior can be made.

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Behavior generally is predictable if we know how the person perceived the situation and what is important to him or her.

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While people’s behavior may not appear to be rational to an outsider, there is reason to believe it usually is intended to be rational by the individual and that they see their behavior as rational.

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A. Introduction (cont.)

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There are certain fundamental consistencies underlying the behavior of all individuals that can be identified and then modified to reflect individual differences. • • •

These fundamental consistencies allow predictability. There are rules (written and unwritten) in almost every setting. Therefore, it can be argued that it is possible to predict behavior.

When we use the phrase systematic study, we mean looking at gathered information under controlled conditions and measured and interpreted in a reasonably rigorous manner. Systematic study replaces intuition, or those “gut feelings” about “why I do what I do” and “what makes others tick.” We want to move away from intuition to analysis when predicting behavior.

Instructor Note: At this point in the lecture you may want to introduce the Myth or Science: Preconceived Notions vs. Substantive Evidence box found in the text. The purpose of the exercise is to replace popularly held notions with research-based conclusions. A suggestion for a class exercise follows the introduction of the material below.

MYTH OR SCIENCE? - Preconceived Notions vs. Substantive Evidence Assume you signed up to take an introductory college course in calculus. On the first day, you were asked: “Why is the sign of the second derivative negative when the first derivative is set equal to zero, if the function is concave from below?” You reply, “How am I supposed to know? That’s why I’m taking this course.” Now, you are in an introductory course in organizational behavior. Your instructor asks you: “Why aren’t employees as motivated at work today as they were 30 years ago?” Reluctantly, you would begin writing. You would have no problem coming up with an explanation to this motivation question. You enter an OB course with many preconceived notions that you accept as facts. OB not only introduces you to a comprehensive set of concepts and theories, but it also has to deal with many commonly accepted “facts” about human behavior and organizations that you have acquired over the years. But these “facts” are not necessarily true. The field of OB is built on decades of research. This research provides a body of substantive evidence that is able to replace preconceived notions. The boxes entitled “Myth or Science?” throughout the text call attention to some of the more popular of these notions or myths about organizational behavior. Class Exercise: 1. Place students in groups of three-to-five. Have them brainstorm a list of at least 3 popular “facts” or myths that they have heard about colleges, college students, and faculty. Example—college students are rebels; college “boys” (or girls) do not want to get their hands dirty on the job; those who can do, those who can’t teach; etc. 2. Record ideas on the board. Go round-robin; take one idea at time from each group in turn until groups contribute all their ideas. 3. Now have students brainstorm about what objective data exists or could be collected to counter each of these myths. Collect the information the same way, posting it on the board. 4. Close with a discussion of the importance of these misperceptions to students and faculty and why the parallel misperceptions about organizational behavior are important.

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Contributing Disciplines to the OB Field A. Introduction

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Organizational behavior is an applied behavioral science that is built upon contributions from a number of behavioral disciplines. The predominant areas are psychology, sociology, social psychology, anthropology, and political science. Exhibit 1-3 overviews the major contributions to the study of organizational behavior. B. Psychology 1. Psychology is the science that seeks to measure, explain, and sometimes change the behavior of humans and other animals. 2. Early industrial/organizational psychologists concerned themselves with problems of fatigue, boredom, and other factors relevant to working conditions that could impede efficient work performance. 3. More recently, their contributions have been expanded to include learning, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, decision making processes, performance appraisals, attitude measurement, employee selection techniques, work design, and job stress. C. Sociology 1. Sociologists study the social system in which individuals fill their roles; that is, sociology studies people in relation to their fellow human beings. 2. Their greatest contribution to OB is through their study of group behavior in organizations, particularly formal and complex organizations. D. Social Psychology 1. Social psychology blends the concepts of psychology and sociology. 2. It focuses on the influence of people on one another. 3. Major area—how to implement it and how to reduce barriers to its acceptance E. Anthropology 1. Anthropology is the study of societies to learn about human beings and their activities. 2. Anthropologists work on cultures and environments; for instance, they have helped us understand differences in fundamental values, attitudes, and behavior among people in different countries and within different organizations. F. Political Science Frequently overlooked as a contributing discipline. Political science studies the behavior of individuals and groups within a political environment.

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There Are Few Absolutes in OB A. Introduction

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1. There are few, if any, simple and universal principles that explain organizational behavior. 2. Human beings are complex. Because they are not alike, our ability to make simple, accurate, and sweeping generalizations is limited. 3. That does not mean, of course, that we cannot offer reasonably accurate explanations of human behavior or make valid predictions. It does mean, however, that OB concepts must reflect situational, or contingency, conditions. 4. Contingency variables—situational factors are variables that moderate the relationship between the independent and dependent variables. 5. Using general concepts and then altering their application to the particular situation developed the science of OB. 6. Organizational behavior theories mirror the subject matter with which they deal. Challenges and Opportunities for OB A. Introduction

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1. There are many challenges and opportunities today for managers to use OB concepts. B. Responding to Globalization Organizations are no longer constrained by national borders. Globalization affects a manager’s people skills in at least two ways. • •

First, if you are a manager, you are increasingly likely to find yourself in a foreign assignment. Second, even in your own country, you are going to find yourself working with bosses, peers, and other employees who were born and raised in different cultures.

C. Managing Workforce Diversity 1. Workforce diversity is one of the most important and broad-based challenges currently facing organizations. 2. While globalization focuses on differences between people from different countries, workforce diversity addresses differences among people within given countries. 3. Workforce diversity means that organizations are becoming more heterogeneous in terms of gender, race, and ethnicity. It is an issue in Canada, Australia, South Africa, Japan, and Europe as well as the United States. 4. A melting-pot approach assumed people who were different would automatically assimilate. 5. Employees do n ot set aside their cultural values and lifestyle preferences when they come to work.

C. Managing Workforce Diversity (cont.)

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6. The melting pot assumption is replaced by one that recognizes and values differences. 7. Members of diverse groups were a small percentage of the workforce and were, for the most part, ignored by large organizations (pe-1980s); now: 47 percent of the U.S. labor force are women Minorities and immigrants make up 23 percent More workers than ever are unmarried with no children. 8. Workforce diversity has important implications for management practice. Shift to recognizing differences and responding to those differences Providing diversity training and revamping benefit programs to accommodate the different needs of employees Instructor Note: At this point in the lecture you may want to introduce the “Workforce Diversity” team exercise found in the text (and at the end of the lecture notes). (Allow 40-45 minutes for the exercise). D. Improving Quality and Productivity

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1. Total quality management (TQM) is a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes. 2.

Implementing quality programs requires extensive employee involvement (Exhibit 1-4).

3. Process reengineering asks the question: “How would we do things around here if we were starting over from scratch?” • •

Every process is evaluated in terms of contribution to goals Rather than make incremental changes, often old systems are eliminated entirely and replaced with new systems

4. To improve productivity and quality, managers must include employees. E. Responding to the Labor Shortage 1. If trends continue as expected, the U.S. will have a labor shortage for the next 10-15 years (particularly in skilled positions). 2. The labor shortage is a function of low birth rates and labor participation rates (immigration does little to solve the problem). 3. Wages and benefits are not enough to keep talented workers. Managers must understand human behavior and respond accordingly. F. Improving Customer Service and People Skills The majority of employees in developed countries work in service jobs—jobs that require substantive interaction with the firm’s customers. For example, 80 percent of U.S. workers are employed in service industries. Employee attitudes and behavior are directly related to customer satisfaction requiring management to create a customer responsive culture. People skills are essential to managerial effectiveness. OB provides the concepts and theories that allow managers to predict employee behavior in given situations.

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G. Empowering People

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Today managers are being called coaches, advisers, sponsors, or facilitators, and in many organizations, employees are now called associates. There is a blurring between the roles of managers and workers; decision making is being pushed down to the operating level, where workers are being given the freedom to make choices about schedules and procedures and to solve workrelated problems. Managers are empowering employees. • • •

They are putting employees in charge of what they do. Managers have to learn how to give up control. Employees have to learn how to take responsibility for their work and make appropriate decisions.

H. Coping with “Temporariness” 1. Managers have always been concerned with change: What is different today is the length of time between changes Change is an ongoing activity for most managers. The concept of continuous improvement, for instance, implies constant change In the past, managing could be characterized by long periods of stability, interrupted occasionally by short periods of change. Today, long periods of ongoing change are interrupted occasionally by short periods of stability! 2. Permanent “temporariness”: Both managers and employees must learn to live with flexibility, spontaneity, and unpredictability The jobs that workers perform are in a permanent state of flux, so workers need to continually update their knowledge and skills to perform new job requirements. 3. Work groups are also increasingly in a state of flux. Predictability has been replaced by temporary work groups, teams that include members from different departments and whose members change all the time, and the increased use of employee rotation to fill constantly changing work assignments. 4. Organizations themselves are in a state of flux. They reorganize their various divisions, sell off poor-performing businesses, downsize operations, subcontract non-critical services and operations to other organizations, and replace permanent employees with temporaries. I. Stimulating Innovation and Change 1. Successful organizations must foster innovation and the art of change. 2. Companies that maintain flexibility, continually improve quality, and beat their competition to the marketplace with innovative products and services will be tomorrow’s winners. 3. Employees are critical to an organization’s ability to change and innovate.

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J. Helping Employees Balance Work-Life Conflicts

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1. The creation of the global workforce means work no longer sleeps. Workers are on-call 24-hours a day or working non-traditional shifts. 2. Communication technology has provided a vehicle for working at any time or any place. 3. Employees are working longer hours per week—from 43 to 47 hours per week since 1977. 4. The lifestyles of families have changes creating conflict: more dual career couples and single parents find it hard to fulfill commitments to home, children, spouse, parents, and friends. 5. Employees want jobs that allow flexibility and provide time for a “life.” Instructor Note: At this point in the lecture you may want to introduce the OB IN THE NEWS: America’s WorldClass Workaholics box found in the text. The purpose of the exercise is to help students better understand what their expectations are when balancing work and life. A suggestion for a class exercise follows the introduction of the material below. Once you have completed the exercise, refer students to the ETHICAL DILEMMA: What’s the Right Balance Between Work and Personal Life? for another viewpoint—this time from the CEO perspective. A summary of the case and questions can be found at the end of this chapter.

OB IN THE NEWS – America’s World-Class Workaholics From the late-1970s to the late-1990s, the average workweek among salaried Americans increased from 43 to 47 hours. Over the same years, the numbers of workers putting in 50 or more hours jumped from 24 to 37 percent. The U.S. has moved past Japan to become the longest working nation in the advanced industrial world. Managers and professionals work the longest hours. These statistics are in stark contrast to many other places on the globe. For instance, in Norway or Sweden, ordinary workers get four to six weeks of vacation and up to a year of paid parental leave. In France, a 35 hour maximum workweek is the law of the land. Compared to the average Western European, Americans are working an average of eight weeks a year longer. Managers in Britain, however, are also working long hours. These statistics lead us to two conclusions. First, Americans are overworked relative to much of the world, making it harder to balance work and family responsibilities. Second, the problem is most prevalent among managers and professionals. With technology expanding the number of professional jobs, we can expect an increasing proportion of the labor force to be complaining of long hours and difficulty in handling work-life conflicts. Class Exercise: 1. Ask students to individually write down the top three-to-five things they are looking for in their first career job. 2. On different sections of the board write categories labels such as: Salary, Family-friendly, Workweek, Office Arrangement, Atmosphere, Management, Perks, Other, etc. 3. Ask students to share their lists by coming up to the board and writing their desires under the category that applies, or create new categories if necessary. 4. Note any patterns that emerge and ask the students to speculate why that is the case. 5. Now ask them to think about and brainstorm as a class what their parents looked for in their careers. A clue to this might be what their parents telling students look for in their first job. 6. As they share their ideas, create a second list on the board. Look at the two lists, and ask the students where they see similarities and differences. Check “” those items that are similar. “X” those that are different. 7. Lead a discussion as to why the two lists are different. What has changed? What is different between the students and their parents’ career expectations? 11


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K. Improving Ethical Behavior

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In an organizational world characterized by cutbacks, expectations of increasing worker productivity, and tough competition, many employees feel pressured to engage in questionable practices. Members of organizations are increasingly finding themselves facing ethical dilemmas in which they are required to define right and wrong conduct. Examples of decisions employees might have to make are: “Blowing the whistle” on illegal activities Following orders with which they do not personally agree Possibly giving inflated performance evaluations that could save an employee’s job Playing politics to help with career advancement, etc. Organizations are responding to this issue by: Writing and distributing codes of ethics Providing in-house advisors Creating protection mechanisms for employees who reveal internal unethical practices Managers need to create an ethically healthy environment for employees where they confront a minimal degree of ambiguity regarding right or wrong behaviors. Coming Attractions: Developing an OB Model A. Overview 1.

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A model is an abstraction of reality, a simplified representation of some realworld phenomenon. (Exhibit 1-6—the OB model)

2. There are three levels of analysis in OB: Individual Group Organizational Systems Level 3. The three basic levels are analogous to building blocks; each level is constructed upon the previous level. 4. Group concepts grow out of the foundation laid in the individual section; we overlay structural constraints on the individual and group in order to arrive at organizational behavior. B. The Dependent Variables

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Dependent variables are the key factors that you want to explain or predict and that are affected by some other factor. Primary dependent variables in OB: Productivity Absenteeism Turnover Job satisfaction A fifth variable—organizational citizenship—has been added to this list.

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C. Productivity

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It is achieving goals by transferring inputs to outputs at the lowest cost. This must be done both effectively and efficiency. An organization is effective when it successfully meets the needs of its clientele or customers Example: When sales or market share goals are met, productivity also depends on achieving those goals efficiently An organization is efficient when it can do so at a low cost. Popular measures of efficiency include: ROI, profit per dollar of sales, and output per hour of labor. Productivity is a major concern of OB: What factors influence the effectiveness and efficiency of individuals, groups and the company? D. Absenteeism 1. Absenteeism is the failure to report to work. 2. Estimated annual cost—over $40 billion for U.S. organizations; $12 billion for Canadian firms; more than 60 billion Deutsch Marks (U.S. $35.5 billion) each year in Germany 3. A one-day absence by a clerical worker can cost a U.S. employer up to $100 in reduced efficiency and increased supervisory workload. 4. The workflow is disrupted and often important decisions must be delayed. 5. All absences are not bad. For instance, illness, fatigue, or excess stress can decrease an employee’s productivity—it may well be better to not report to work rather than perform poorly. E. Turnover Turnover is the voluntary and involuntary permanent withdrawal from an organization. A high turnover rate results in increased recruiting, selection, and training costs; costs estimated at about $15,000 per employee. All organizations have some turnover and the “right” people leaving—underperforming employees—thereby creating opportunity for promotions, and adding new/fresh ideas, and replacing marginal employees with higher skilled workers. Turnover often involves the loss of people the organization does not want to lose.

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F. Organizational citizenship

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Organizational citizenship is discretionary behavior that is not part of an employee’s formal job requirements, but that nevertheless promotes the effective functioning of the organization. Desired citizenship behaviors include: Constructive statements about work group and organization Helping others on their team Volunteering for extra job activities Avoiding unnecessary conflicts Showing care for organizational property Respecting rules and regulations Tolerating occasional work-related impositions. G. Job satisfaction Job satisfaction is “the difference between the amount of rewards workers receive and the amount they believe they should receive.” Unlike the previous three variables, job satisfaction represents an attitude rather than a behavior. It became a primary dependent variable for two reasons: Demonstrated relationship to performance factors The value preferences held by many OB researchers Managers have believed for years that satisfied employees are more productive, however: Much evidence questions that assumed causal relationship It can be argued that advanced societies should be concerned not just with the quantity of life, but also with the quality of life Ethically, organizations have a responsibility to provide employees with jobs that are challenging and intrinsically rewarding. H. The Independent Variables 1.

Organizational behavior is best understood when viewed effectively as a set of increasingly complex building blocks: individual, group, and organizational system.

2. The base, or first level, of our model lies in understanding individual behavior. 3. Individual-level variables: People enter organizations with certain characteristics that will influence their behavior at work. The more obvious of these are personal or biographical characteristics such as age, gender, and marital status; personality characteristics; an inherent emotional framework; values and attitudes; and basic ability levels. There is little management can do to alter them, yet they have a very real impact on employee behavior.

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H. The Independent Variables (cont.)

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4. There are four other individual-level variables that have been shown to affect employee behavior: Perception Individual decision making Learning Motivation 5. The middle level of our model lies in understanding behavior of groups. 6. Group-level variables: The behavior of people in groups is more than the sum total of all the individuals acting in their own way. People behave differently in groups than they do when alone. People in groups are influenced by: a. b. c. d. e.

Acceptable standards of behavior by the group Degree of attractiveness to each other Communication patterns Leadership and power Levels of conflict

7. The top level of our model lies in understanding organizations system level variables 8.

Organizational behavior reaches its highest level of difficulty when we add formal structure.

9. The design of the formal organization, work processes, and jobs; the organization’s human resource policies and practices, and the internal culture, all have an impact. I. Toward a Contingency OB Model (Exhibit 1-7) The model does not explicitly identify the vast number of contingency variables because of the tremendous complexity that would be involved in such a diagram. We will introduce important contingency variables that will improve the explanatory linkage between the independent and dependent variables in our OB model. The concepts of change and stress are included in Exhibit 1-7, acknowledging the dynamics of behavior and the fact that work stress is an individual, group, and organizational issues. Summary and Implications for Managers 1. Managers need to develop their interpersonal skills.

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2. OB is a field that investigates the impact of individuals, groups, and structure on an organization. 3. OB focuses on improving productivity, reducing absenteeism and turnover, and increasing employee citizenship and job satisfaction.

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QUESTIONS FOR REVIEW How are OB concepts addressed in management functions, roles, and skills? Answer – One common thread runs through the functions, roles, and skills of managers: the need to develop people skills if they are going to be effective and successful. Managers get things done through other people. Managers do their work in an organization.  Management functions involve managing the organization—planning and controlling and managing people within the organization—organizing and leading.  Management roles (see Exhibit 1-1) are the “parts” managers play within an organization and involve their interaction with people.  Management skills, as identified by Robert Katz, boil down to three essential management skills: technical, human, and conceptual. These use OB to manage processes and people and to problem solve. Define organizational behavior. Relate it to management. Answer – Organizational behavior (abbreviated OB) is a field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness. As managers accomplish their work through others, OB provides the tools for guiding the productivity of others, predicting human behavior at work and the perspectives needed to manage individuals from diverse backgrounds. What is an organization? Is the family unit an organization? Explain. Answer – An organization is a consciously coordinated social unit, composed of two or more people, which functions on a relatively continuous basis to achieve a common goal or set of goals. The family is a type of organization because it has all the characteristics of an organization. The one variation is that the “goals” of a family may not be explicit, and therefore students might argue that it is not an organization per se. Identify and contrast the three general management roles. Answer – In the late 1960s, Henry Mintzberg discovered three general management roles that had sub-roles (See Exhibit 1-1). The ten roles can be grouped as being primarily concerned with interpersonal relationships, the transfer of information, and decision making. • Interpersonal—ceremonial and symbolic • Figurehead—duties are ceremonial and symbolic in nature • Leadership—hire, train, motivate, and discipline employees • Liaison—contact outsiders who provide the manager with information. These may be individuals or groups inside or outside the organization. • Information—involve the collection and dissemination of information • Monitor—collect information from organizations and institutions outside their own • Disseminator—a conduit to transmit information to organizational members • Spokesperson—represent the organization to outsiders • Decisional—focus on making choices • Entrepreneur—managers initiate and oversee new projects that will improve their organization’s performance • Disturbance handlers—take corrective action in response to unforeseen problems • Resource allocators—are responsible for allocating human, physical, and monetary resources • Negotiator—discuss issues and bargain with other units to gain advantages for their own unit What is a “contingency approach” to OB? Answer – The final model shown in the text, which is a contingency approach, is shown in Exhibit 1-7. The contingency approach refers to situational factors that are variables which moderate the relationship between the independent and dependent variables. There are four key dependent variables (productivity, absenteeism, turnover, and job satisfaction) and a large number of independent variables (for example, motivation, leadership, work processes), organized by level of analysis, that research indicates have varying effects. Because of the large number of independent variables, the study of OB is complex and requires a systematic approach within organizations as we seek to predict the behavior of people at work. 16


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QUESTIONS FOR REVIEW (cont.) Contrast psychology and sociology’s contribution to OB. Answer – OB is a field of study that investigates the impact that individuals, group, and structure have on behavior within organizations. Both psychology and sociology are concerned with behavior. Psychology is the science of behavior that studies individual behavior and sociology studies people in relation to their fellow human beings. Psychological study in the field of OB has contributed knowledge on a number of topics including: learning, perception, personality, emotions, training, leadership, motivation, job satisfaction, decision making, etc. Sociological study has contributed knowledge on topics such as: group dynamics, teams, organizational culture, organizational theory and structure, communications, power and conflict. “Behavior is generally predictable, so there is no need to formally study OB.” Why is that statement wrong? Answer – Such a casual or commonsense approach to reading others can often lead to erroneous predictions. OB improves managers’ predictive ability by replacing intuitive opinions with a more systematic approach. Behavior generally is predictable if we know how the person perceived the situation and what is important to him or her. While people’s behavior may not appear to be rational to an outsider, there is reason to believe it usually is intended to be rational and it is seen as rational by them. There are certain fundamental consistencies underlying the behavior of all individuals that can be identified and then modified to reflect individual differences. These fundamental consistencies allow predictability. When we use the phrase systematic study, we mean looking at relationships, attempting to attribute causes and effects, and basing our conclusions on scientific evidence—that is, on data gathered under controlled conditions and measured and interpreted in a reasonably rigorous manner. What are the three levels of analysis in our OB model? Are they related? If so, how? Answer – Individual, group, organization. The three basic levels are analogous to building blocks—each level is constructed upon the previous level. Group concepts grow out of the foundation laid in the individual section; we overlay structural constraints on the individual and group in order to arrive at organizational behavior. If job satisfaction is not a behavior, why is it considered an important dependent variable? Answer – Job satisfaction is the difference between the amount of rewards workers receive and the amount they believe they should receive. Unlike the other dependent variables, job satisfaction represents an attitude rather than a behavior. It became a primary dependent variable for two reasons: 1) demonstrated relationship to performance factors and 2) the value preferences held by many OB researchers. Managers have believed for years that satisfied employees are more productive. Much evidence questions that assumed causal relationship. However, it can be argued that advanced societies should be concerned with the quality of life. Ethically, organizations have a responsibility to provide employees with jobs that are challenging and intrinsically rewarding. What are effectiveness and efficiency, and how are they related to organizational behavior? Answer – An organization is productive if it achieves its goals (effective) and does so by transferring inputs to outputs at the lowest cost (efficiency). As such, productivity implies a concern for both effectiveness and efficiency. Hospital example—effective when it successfully meets the needs of its clientele. It is efficient when it can do so at a low cost. Business firm example—effective when it attains its sales or market share goals, but its productivity also depends on achieving those goals efficiently. Achieving productivity through effectiveness and efficiency involves all three levels of an organization, the individual, the group, and the organizational system. OB provides the tools, insights, and ability to predict outcomes needed to balance these two elements.

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QUESTIONS FOR CRITICAL THINKING Contrast the research comparing effective managers with successful managers. What are the implications from the research for practicing managers? Answer – Successful managers—Networking made the largest relative contribution to success. Human resource management activities made the least relative contribution. Effective managers—Communication made the largest relative contribution; networking the least. Successful managers do not give the same emphasis to each of those activities as do effective managers. Their emphases are almost the opposite. This finding challenges the historical assumption that promotions are based on performance, vividly illustrating the importance that social and political skills play in getting ahead in organizations. One common thread runs through the functions, roles, skills, and activities approaches to management: managers need to develop their people skills if they are going to be effective and successful. Why do you think the subject of OB might be criticized as being “only common sense,” when one would rarely hear such a criticism of a course in physics or statistics? Answer – Each of us is a student of behavior by nature. Unfortunately, our casual or commonsense approach to reading others can often lead to erroneous predictions. However, we can improve our predictive ability by replacing our intuitive opinions with a more systematic approach. The systematic approach used in this book will uncover important facts and relationships and will provide a base from which more accurate predictions of behavior can be made. Behavior generally is predictable if we know how the person perceived the situation and what is important to him or her. While people’s behavior may not appear to be rational to an outsider, there is reason to believe it usually is intended to be rational and it is seen as rational by them. Systematic study replaces intuition, or those “gut feelings” about “why I do what I do” and “what makes others tick.” Millions of workers have lost their jobs due to downsizing. At the same time, many organizations are complaining that they cannot find qualified people to fill vacancies. How do you explain this apparent contradiction? Answer – The nature of the jobs is the key issue. Low-skill jobs are being replaced; high-skill, conceptual, and technical jobs are increasing. Employees need new or updated skill sets. Organizations will need to develop a strategy for attracting and retaining desired workers which might include targeted recruiting strategies and employee development programs as just two examples of how to meet this crisis. On a 1 to 10 scale measuring the sophistication of a scientific discipline in predicting phenomena, mathematical physics would probably be a 10. Where do you think OB would fall on the scale? Why? Answer – Students’ answers will vary, but the key point is that OB is moving up the scale and is somewhere about a 5. It retains the complexity and unpredictability of being a human science but is using objective and empirical tools in the study of such behaviors to improve the applicability and predictability of its findings. What do you think is the single most critical “people” problem facing managers today? Give specific support for your position? Answer – Students’ answers will vary. However, that managers must continue to develop his or her communication skills is always of critical importance. Other issues facing managers from an OB perspective are: the changing nature of work (what we do, how we do it do, and where we do it), challenges brought about by technology, finding and retaining skilled workers, motivating workers, stress and organizational change would all rank high on a critical scale confronting managers in today’s workplace.

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POINT-COUNTERPOINT – Successful Organizations Put People First Point Microsoft, Motorola, W.L. Gores & Associates, Southwest Airlines, Ben & Jerry’s Homemade, Hewlett-Packard, Lincoln Electric, and Starbucks pursue “people-first” strategies. Evidence suggests that successful organizations put people first. Employees are a company’s only true competitive advantage. Competitors can match most organization’s products, processes, locations, distribution channels, and the like. What practices differentiate people-first organizations? 1) Cultural diversity; 2) Family-friendly; 3) Investing in employee training; 4) Empowering their employees. In turn, this converts into higher employee productivity and satisfaction. These employees are willing to put forth the extra effort to do whatever is necessary to see that their jobs are done properly and completely. People-first strategies also lead to organizations being able to recruit smarter, more conscientious, and more loyal employees. Counter Point Putting “people first” is easy to say. Putting people first is not necessarily consistent with long-term competitiveness. Organizations are more typically pursuing a “labor-cost minimization” strategy rather than a people-first strategy. As a result, most business firms place profits over people. 1) Cost-cutting measures; 2) Reengineering processes; 3) Substituting temporary workers for full-time permanent staff. Organizations with problems typically look to staffing cuts as a first response. Few organizations have the luxury to be able to provide workers with anything more than minimal job security. Employees are a variable cost. The labor-cost-minimization strategy appears to be spreading worldwide. It began in the United States, spread to Japan, South Korea, and Thailand—places that historically protected their employees in good times and bad— because people-first policies are inconsistent with aggressive, low-cost, global competition. Teaching Notes: Choose two teams of three-to-five students. [The rest of the class will act as a jury.] Have them prepare, outside of class, one side of the issue to debate in class. Create a controlled debate giving each side up to 8 minutes to make its case, 3 minutes to cross-examine the other side, then 5 minutes in class to prepare a 3–5 minute rebuttal, and then a final 1-minute summation/closing argument. Have the remainder of the class vote on who made the stronger case. Close with a discussion of the issue leading the students to understand this is not an either/or situation, but the best response incorporates elements of both positions. Time required Opening statement Cross-exam Prep. for rebuttal Rebuttal Closing Total time

Pro Pro Simultaneous both sides Con Con

8 minutes 3 minutes 5 minutes 3–5 minutes 1 minute

Con Con

8 minutes 3 minutes

Pro

35-40 minutes

Pro:

3–5 minutes (note change of order) 1 minute

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Chapter One TEAM EXERCISE – Workforce Diversity

Purpose – To learn about the different needs of a diverse workforce Time required – Approximately 40 minutes Participants and roles – Divide the class into six groups of approximately equal size. Each group is assigned one of the following roles. (The members of each group are to assume the character consistent with their assigned role.) 

 



 

Nancy is 28 years old. She is a divorced mother of three children, ages 3, 5, and 7. She is the department head. She earns $37,000 a year on her job and receives another $3,600 a year in child support from her exhusband. Ethel is a 72-year-old widow. She works twenty-five hours a week to supplement her $8,000 annual pension. Including her hourly wage of $7.50, she earns $17,750 a year. John is a 34-year-old black male born in Trinidad who is now a U.S. resident. He is married and the father of two small children. John attends college at night and is within a year of earning his bachelor’s degree. His salary is $24,000 a year. His wife is an attorney and earns approximately $44,000 a year. Lu is a 26-year-old physically impaired male Asian American. He is single and has a master’s degree in education. Lu is paralyzed and confined to a wheelchair as a result of an auto accident. He earns $29,000 a year. Maria is a single 22-year-old Hispanic. Born and raised in Mexico, she came to the United States only three months ago. Maria’s English needs considerable improvement. She earns $18,000 a year. Mike is a 16-year-old white male high school sophomore who works fifteen hours a week after school and during vacations. He earns $6.75 an hour, or approximately $5,200 a year.

Background Our six participants work for a company that has recently installed a flexible benefits program. Instead of the traditional “one benefit package fits all,” the company is allocating an additional 25% of each employee’s annual pay to be used for discretionary benefits. Those benefits and their annual cost are listed below. 

Supplementary health care for employee Plan A (No deductible and pays 90%) = $3,000 Plan B ($200 deductible and pays 80%) = $2,000 Plan C ($1,000 deductible and pays 70%) = $500



Supplementary health care for dependents (same deductibles and percentages as above): Plan A = $2,000 Plan B = $1,500 Plan C = $500



Supplementary dental plan = $500



Life insurance: Plan A ($25,000 coverage) = $500 Plan B ($50,000 coverage) = $1,000 Plan C ($100,000 coverage) = $2,000 Plan D ($250,000 coverage) = $3,000



Mental health plan = $500



Prepaid legal assistance = $300



Vacation = 2 percent of annual pay for each week, up to 6 weeks a year



Pension at retirement equal to approximately 50 percent of final annual earnings = $1,500 20


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

Four-day workweek during the three summer months (available only to full-time employees) = 4 percent of annual pay



Day-care services (after company contribution) = $2,000 for all of an employee’s children, regardless of number



Company-provided transportation to and from work = $750



College tuition reimbursement = $1,000



Language class tuition reimbursement = $500

The Task Each group has 15 minutes (consider increasing this to 25 minutes) to develop a flexible benefits package that consumes 25% (and no more!) of their character’s pay. After completing step 1, each group appoints a spokesperson who describes to the entire class the benefits package they have arrived at for their character. The entire class then discusses the results. How did the needs, concerns, and problems of each participant influence the group’s decision? What do the results suggest for trying to motivate a diverse workforce? Teaching Notes 1. With these types of exercises, students will press for the “right answer.” Emphasize that how they reached their decisions and awareness of other’s perspectives is key here, much more so than the final decision. 2. The allocation of resources may take several forms and be correct. Students should look at how well the needs were met by their decision. • What needs were identified? • How did each element of the benefit plan meet the identified need? • How diverse were the needs, and why were they so diverse? 3.

Consider having students research this benefit web site in order to make more informed decisions— http://www.benefitslink.com/

[Special thanks to Professor Penny Wright (San Diego State University) for her suggestions during the development of this exercise.]

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ETHICAL DILEMMA – What’s the Right Balance Between Work and Personal Life? When you think of work/life conflicts, you probably tend to think of people in lower levels of organizations. But a recent survey of 179 CEOs revealed that many of them are struggling with this issue. Thirty-one percent, for instance, said they have a high level of stress in their lives; 47 percent admitted that they would sacrifice some compensation for more personal time; and 16 percent considered changing jobs in the last six month to reduce stress or sacrifices made in their personal lives. Most of these surveyed executives conceded that they had given up, and continue to give up, a lot to get to the top in their organizations. They are often tired from the extensive and exhausting travel their jobs demand, not to mention an average 60-hour workweek. Yet most feel the climb to CEO position was worth whatever sacrifices they have had to make. Jean Stone, while not representative of the group, indicates the price that some of these executives have had to pay. As CEO and president of Dukane Corp., and Illinois based manufacturer of electronic communications equipment, Stone describes herself as highly achievement oriented. She has an intense focus on her job and admits to having lost sight of her personal life. Recently divorced after a 10-year marriage, she acknowledges “career and work pressures were a factor in that.” Instructor Note: These questions can be used as a group Q & A in class, or in conjunction with the exercise OB IN THE NEWS – America’s World-Class Workaholics found in the boxed text within the chapter. Another idea would be to assign the questions as a journal entry or short homework assignment. Questions: 1. 2. 3. 4.

How much emphasis on work is too much? What’s the right balance between work and personal life? How much would you be willing to give up to be CEO of a major? If you were CEO, what ethical responsibilities, if any, do you think you have to help your employees balance their work/family relationships?

CASE EXERCISE – Great Plains Software: Pursuing a People-First Strategy Great Plains Software in Fargo, North Dakota, is a success story. Begun in 1983, today it employs 2,200 people, generates sales of $195 million, and was recently bought by Microsoft for $1 billion. Management attributes much of its success to the company’s people-first strategy. What does Great Plains do to facilitate its people-first culture? Managers point to the company’s structure, perks, and its commitment to helping employees develop their skills and leadership. Great Plains has a flat organizational structure with minimal hierarchy. Work is done in teams and perks include casual dress, onsite daycare, aerobics, and dance classes. Management has a high degree of commitment to the development of its people. There is a long list of training and educational opportunities designed to help employees build their skill level. The premier program is called Leadership is Everywhere. Doug Burgum, CEO, is convinced the People-First strategy works. Turnover is just 5 percent—far below the industry average of 18 to 25 percent. Note to Instructor: Student answers will vary, but could include the elements bulleted below each question. 1.

Putting people first has worked for Great Plains. If it is so effective, why do you think all firms have not adopted these practices?

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Robbins: Organizational Behavior • • •

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Management structure differs throughout organizations and other organizations may not be ready, or want, to make such a dramatic change to a flat structure with teams. Organizations may perceive the training and non-traditional “perks” such as child care as too expensive to implement. Management may feel that what they are doing within their organizations is just as effective and are satisfied with the results.

2.

Do you think a people-first approach is more applicable to certain businesses or industries than others? If so, what might they be? Why? • The approach that Great Plains Software adopts is just one approach to putting people first. Other organizations may not have the same strategy, yet believe they have a “people-first” approach for their employees. • More traditionally structured organizations in conservative industries would have difficulty with the Great Plains approach. For example, banking and other financial industries would be unlikely to adopt casual dress standards for direct customer contact personnel. However, they may be just as likely to invest in training and education to improve the skill levels of employees. • Each industry or organization would have its own reasons for adopting a particular strategy when focusing on employees. Fundamentally, it would be dependent on the goals the organization is trying to achieve while meeting their customers’ expectations.

3.

What downside, if any, do you see in working at a company like Great Plains? • The lines between work and leisure become blurred and individuals may not develop a “life” outside of the workplace. • The constant change and activity could lead to fatigue.

4.

What downside, if any, do you see in managing a company like Great Plains? While not necessarily a downside, internal communication systems would need to be extremely efficient. Understanding the needs and capabilities of each of your employees would be of paramount importance when making job/team assignments. The continuously changing environment requires managers to constantly monitor shifting goals and priorities. While that provides a challenge and interest, it could also lead to burn-out.

5.

Some critics have argued that “People-first polices do lead to high profits. High profits allow peoplefirst policies.” Do you agree? Explain your position. • The annual savings on reduced turn-over is significant—particularly in the technology industry where high salaries and low labor supply are the norm. • The majority of “perks” provided to the employees cost very little, such as casual dress and nostatus parking. • The continual investment in employee skills provides a developed workforce that is ready to perform and innovate. This provides a scaffolding when market forces change and require new strategies of response from the employees and management.

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Exploring OB Topics on the World Wide Web 1. Using the World Wide Web (WWW) to locate information can be a useful tool to the student (or manager) interested in exploring topics in OB. Search Engines are our navigational tool to explore the WWW. Some commonly used search engines are: www.e xcite.c om www.g oogle.c om www.yahoo.com www.lycos.com www.hotbot.com www.looksmart.com For this first exercise, go to www.searchenginewatch.com to learn more about what Search Engines and Metacrawlers do and how they differ. Once you are on the searchenginewatch home page, click on Search Engine Listings then on Major Search Engines. This page presents an overview of the major engines and how best to use them. Do not forget to look at other topics on this web site that are interesting to you. Now perform a search on “Organizational Behavior” using three different search engines. Do the results differ or are they the same? If they differ, why do you think they are different? Write a paragraph or two answering these questions based on what you learned from researching Search Engines. Also, include another paragraph providing examples and/or reasons of when you would use choose one Search Engine over another. 2. The text tells us that OB replaces intuition with systematic study. Where do scholars prepare for a career researching OB topics? Additionally, what if you decide at some point to pursue graduate study in OB. Where would you go? Perform a search to identify two-to-three graduate programs in OB and print out the home page with the descriptions of these programs and bring them to class. Note that different schools have programs in different departments and disciplines which shows the diversity thinking about OB in these programs. If you need ideas as where to start, try: Harvard—http://www-hugsas.harvard.edu/webfiles/admis/socsci/orgbeh.htm Official web site of the Organizational Behavior Division of the Academy of Management— http://www.buec.udel.edu/OBWeb/ If time allows, we will discuss as a class the information you found on the general areas of study and the types of courses required in graduate work in OB. 3.

The field of OB is closely linked to practice of Human Resource Management (HRM). Go to the Society for Human Resource Management web page: www.shrm.org and answer the following questions: • •

As you read the SHRM homepage, identify OB topics and list on a separate paper. Try to find as many as possible. Compare your list with a classmate and note the ones you missed. Choose one of the topics and on a separate paper write three questions you have on the topic. Click on the topics or web links on the SHRM homepage and try to find the answers. If you find what you are looking for, write the answers next to your original questions. If you 24


Chapter One

are unsuccessful in finding the answers, write a short paragraph describing what your strategy would be to find the answers you want. 4. We read about Great Plains Software’s effort to put “People First.” Many organizations look for ways to promote diversity through family-friendly policies. Look for three companies who are

25


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incorporating family friendly policies into their HRM strategy. On a separate paper answer the following questions: • Who are the companies? (Be sure to list their web address too.) • What are their policies? • How do these policies attract and keep people? • Do these policies interest you? Why? • How might they make their policies more attractive to workers? • If they make the changes you suggest, what results would you expect? (Is there evidence to back up your opinion? If it is just your opinion, say so, but later we will look for studies that back up or refute your opinion today.) If you are having difficulty finding sites for this exercise, try some of the ones below: http://www.inc.com/incmagazine/archives/16990601.html http://www.workforceonline.com/archive/article/000/06/74.xci (Note: Workforce Online requires you to fill out a free registration.) http://www.inc.com/301/ideas/0283.html http://www.inc.com/incmagazine/archives/07930561.html http://www.smartbiz.com/sbs/arts/ctm5.htm 5. Find an organization that directly addresses the cost of absenteeism or turnover on its Web site. What, if anything, is that organization doing to reduce those costs? What did your search tell you in terms of the importance or unimportance of these costs to organizations? In class we will meet in small groups to discuss the strategies organizations are using. Once you have found an organization, check with me to make certain that we do not have too many in the class researching the same company. Be prepared to talk about your organization’s strategy to the group and possibly the class. Below are some web sites to get you started, but do not hesitate to perform your own search: • www.shrm.org http://www.jointventure.org/initiatives/health/96direct/effect.html http://www.workforceonline.com/archive/article/000/05/21.xci . http://www.healthworkplace.com • http://eafinc.org/jobsrvy.htm 6.

Try some advanced searching. Go to www.google.com and click on advanced search. In the “exact phrase” box, key in “organizational behavior,” and in the “at least one of these words” box, key in “globalization. On the drop down menu for Language choose English. Scroll through the pages to determine if there is a pattern to the types of web pages returned. Go back to the advanced search page (use your back button or retype the URL). This time in the “exact phrase” box, key in “globalization,” and in the “at least one of these words” box, key in “employ*” (the * is a wildcard symbol which will bring up any word which begins with employ such as employee). What types of pages were returned this time? Which would be more useful to a scholar researching OB and globalization? Why? Now, repeat the above process choosing an OB topic of your choice instead of “globalization.” Did you find similar patterns of web page returns with your first and second try? Prepare a paragraph or two telling what you learned about researching OB topics on the WWW.

7.

Visit the companion web site for our textbook to see what resources are available to you. At this web site you find study guides with practice tests, recent news articles, and Web sites. Go to: www.prenhall.com/pubguide/. Key in “Robbins” in the search box and hit the search button. Scroll down and select the textbook. You will need to register to enter the site. (Keep track of your password!) Take the true/false practice test for the first chapter and print your results. 26

Chapter 1 What is Organizational Behavior

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