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Individual Differences:
People enter organizations with a unique behaviour, perception, values, and attitude
o It is difficult for an organization to change these characteristics of an employee
Job Satisfaction:
Employees are demanding satisfaction out of their jobs
o Higher satisfied employees leads to higher productivity (basic assumption)
Researchers believe employees want challenges and intrinsic rewards from their work
Job satisfaction is negatively related to absenteeism and turnover
o This costs organizations considerable amounts of money annually
Motivation:
Only 24% of Canadian employees were recognized to a great extent for work well done
Empowerment:
In many organizations employees have become associates and teammates
o Employees are becoming more a part of the business and managers and facilitating
this process
o Employees' roles within many organizations have grown
Self-managed teams instead of employees and managers have become a new trend
o Teamwork and employee responsibility are essential
Empowerment: giving employees responsibility for what they do
o Managers are beginning to learn how to give up power
o Employees are learning to take responsibility for their work and make appropriate
decisions
Behaving Ethically:
Organizations with cutbacks, expectations of increasing worker productivity suffer
consequences
o Employees cut corners, break rules, engage in questionable practices etc.
Ethics: the study of moral values and principles that guide behaviour and inform us
whether actions are right or wrong
o Ethical principles help/guide us to do the right thing
Individuals that have ethical values, and organizations that encourage them will do the right
think
Challenging at the Group Level:
People's behaviour differs when they are in a group to when they are alone
o Behaviour of a group is more than the sum total of individuals acting on their own
Organizations with more teamwork develop employees with greater intrapersonal skills
Learning to work with people from different backgrounds also have become
important
Increased competition forces managers to reduce costs and increase the quality and
productivity
Organizations are productive if goals are achieved and costs are minimized
Productivity: a concern for both effectiveness and efficiency
o Effectiveness: the achievement of goals
o Efficiency: the ratio of effective work output to input required to produce the work
To compete they must lower cost, increase productivity or merge with other
businesses
Businesses must often outsource jobs internationally in order to stay competitive
o Employees and managers are thus in a constant stat of flux
o Employees must increase knowledge and skills in order to meet job requirements
Employees, managers and organizations must become flexible to changing conditions
o Must learn how to shift demand, technology and stay on top of the economy
Social Psychology:
Generally blends concepts from psychology and sociology (considered a branch of
psychology)
o Focus on people's influences on one another
A main study is change, and how to implement it, and reduce barriers to its acceptance
Measure understanding and changing attitudes, communication pattern and building trust
o Made important contributions studying group behaviour, power and conflict
Sociology:
Anthropology:
The study of societies to learn about human being and their activities
o They work on cultures and environments (fundamental values, attitudes etc.)
Contributed to the understanding of organizational culture/environment and cultural
differences
The Rigour of OB:
OB provides a systematic approach to the study of behaviour in organizations
o We believe/assume that behaviour in organizations is not random
Individuals believe rightly, or wrongly in his or her best interest
Can Finance Learn Anything from OB?
Marketing has the closer overlap with OB
o Predicting consumer behaviour is not much different from predicting employee
behaviour
o Both require an understanding of the dynamics and underlying causes of human
behaviour
Behavioural finance, accounting and economics have all grown in importance recently
o Researches from these professions have found it useful to draw from OB concepts
Investors tend to rely more on private info rather than more accurate public info
o Researchers study how feedback affects auditors' behaviour and future work
OB Looks at Consistencies:
All people are different but there are consistencies underlying behaviour of most people
o These consistencies allow us to make predictions
There are rules (written or unwritten) in almost all settings
o Common habits and general actions that are alike across genders, cultures etc.
The systematic study of behaviour is a means to make reasonably accurate predictions
OB Looks Beyond Common Sense:
We as humans watch others and often predict what they will do under certain conditions
o Often these predictions will be inaccurate but can be enhanced with a more
systematic approach
This means believing behaviour is not random and can be accurately predicted
There are certain fundamental consistencies that can reflect individual differences
Systematic study: looking at relationships, attempting to attribute cause and effects, and
draw conclusions based on scientific evidence
o Data gathered under controlled conditions are measures and interpreted in a rigorous
manner
Chapter 2
Perception Defined
Perception: process by which individuals organize/interpret their impressions in different
environments
o Perception can be much different from the objective reality
People's behaviour is based on perception of reality, not on reality itself
o The world that is perceived is the world that is behaviourally important
Factors Influencing Perception
A number of factors affect perception and the factors can reside in the perceiver or target
o Also in the context of the situation in which the perception is made
The Perceiver:
Perceiver: an individual that looks at a target and attempts to interpret what he/she sees
o The interpretation is heavily influenced by the perceiver's personal characteristics
o Characteristics include attitude, personality, motives, interests, experiences etc.
All shape the way we perceive an event
The Target:
A target's characteristics also affect what is perceived by the target
o Novelty, motions, sounds, size and other characteristics of a target shape how they are
seen
o The relationship of a target to its background also influences perception
The Situation:
The context (time, location, light etc.) we see objects or events is also important
o The situation may change and therefore the perception
Neither the perceiver nor the target have changed
Perceptual Errors
Techniques have been developed to better manage perceiving and interpreting other's
actions
o Allow us to make accurate perceptions rapidly and provide valid data for making
predictions
o There are errors that distort the perception process
Attribution Theory:
Attribution theory: how we judge people differently depending on the meaning given to
behaviour
o Basically we observe what seems like atypical behaviour by an individual and make
sense of it
o Cause is internal: whether the individual is responsible for the behaviour
Behaviour is believed to be
o Cause is external: whether something outside the individual caused the behaviour
Behaviour is believed to result from outside causes
Distinctiveness:
Distinctiveness: whether an individual acts similarly across a variety of situations
o External attribution: behaviour is unusual
o Internally caused: behaviour is not unusual
Consensus:
Consensus: how an individual's behaviour compares with others in the same situation
o If an individual responds like everyone else, their behaviour shows consensus
If consensus is high, the wrong doing or odd would be attributed externally
Consistency:
Consistency: a behavioural rule that considers whether the individual has been acting in the
same way over time
How Attributions Get Distorted:
There are usually errors or biases that distort attributions
Selective Perception:
Any characteristic that makes a person/object stand out will increases that it will be
perceived
o More likely to notice objects that you own or that look familiar
Selective perception: selective interpretation of what is seen based on backgrounds etc.
o Allows us to speed-read others, but has risks of inaccurate conclusions
Halo Effect:
Halo effect: when we draw general impressions of people based on one characteristic
o Based on intelligence, likeability, appearance and others
A single trait influences the overall impression of the person being judged
Contrast Effect:
Contrast effect: reaction of one person is influenced by other people recently encountered
o Most often we do not evaluate a person in isolation
o Job candidates can be distorted by a result of their place in the schedule
Projection:
Projection: attributing one's own characteristics to other people
o Judging others based on the fact that they are similar to us
o Tend to judge people as being similar to themselves
When people observes others similar to themselves, their perception is naturally corrected
o People not like themselves, perceptions are not as accurate
Stereotyping:
Judging someone on the basis of our perception of the group to which they belong
o Generalizations allow us to simplify decisions
o Heuristics: judgment shortcuts in decision making
Stereotypes may only provide a little bit of truth when applied to an individual
o Can lead to negative reactions, such as prejudice
Prejudice:
Prejudice: an unfounded dislike of a person/group based on their belonging to a group
o Dislike based on religion, state, ethnicity etc.
o Can lead to negative consequences in the workplace, such as discrimination
Why Do Perception and Judgment Matter?
People in organizations are always judging each other (interviews, workplace etc.)
o Interviews make perceptual judgments during the interview
o Negative info that arises in interviews is heavily weighted than if it arises later
An employee's future is closely tied to appraisal (promotions, pay raises, stability etc.)
Evaluator's perception of good/bad has a large impact on organizational decision making
o Often employees that are promoted are similar to managers that make the decision
Performance appraisals also takes place between employees and team members
Self-Fulfilling Prophecy:
People will attempt to validate their perceptions, even when perceptions are faulty
o Important when we consider performance expectations on the job
Self-fulfilling prophecy: concept that proposes a person will behave in ways consistent
with how he or she is perceived by others
Personality
What is Personality?
Dynamic concept describing the growth and development of a person's psychological
system
o Looks at some aggregate whole that is greater than the sum of the parts
Personality: the stable patterns of behaviour and consistent internal states that determine
how an individual reacts and interacts with others
Measuring Personality:
Researchers have found personality tests are useful in hiring decisions
o Scores on personality help managers forecast the best candidates
o Also used to better understand and more effectively manage people
Commonly measured through self-report surveys in which people rate themselves
o The respondents might lie or practise impression management
o Difficult to determine the accuracy of these reports (several variations)
o Research suggests that observer ratings are better predictions of success on the job
Personality Determinants:
Personality is a result of both nature (hereditary) and nurture (environment)
o Situation also in incorporated into the development of personality
An adults personality is made up of hereditary and environmental factors with additions
from situations
Heredity:
Heredity: factors that were determined at conception (birth)
o Physical stature, facial attractiveness, gender, temperament etc.
Your parent' biological, physiological and inherent psychological makeup
Traits such as shyness, fear and distress are likely caused by genetic characteristics
o May be built into the same genetic code that affects height, hair colour etc.
Genetics can explain up to 50% of the personality differences, 30% of occupational/leisure
interests
o Personalities do change over time (conscientiousness tends to increase with age)
Personality Traits:
Proactive Personality:
Person who identifies opportunities, shows initiative, takes action and perseveres until
change occurs
o Creative positive change in their environment, regardless of constraints or obstacles
o More likely to be leaders and change agents within the organization
o More likely to leave organizations to start their own business
o Seek out info, develop strong contacts, engage in career planning and demonstrate
persistence
Emotions
Strong emotions, particularly anger, interfere with an employee's ability to effectively work
o Either constructive or a simulative to performance-enhancing behaviours
o Employees bring an emotional component with themselves to work
What are Emotions?
Intense feelings that are directed at someone or something
o Reactions to an object (anger, fear, sadness, happiness, disgust, surprise)
o Can turn into moods when you stop focusing on the contextual object
Moods: feeling that are less intense than emotions and that lack a contextual stimulus
o Are not directed at an object, not your normal self
Choosing Emotions: Emotional Labour
Emotional labour: when an employee expresses organizationally desired emotions during
interactions
Emotional dissonance: inconsistencies between the emotions people feel and they show
o Can take a toll on employees (bottles up feelings)
Felt emotions: an individual's actual emotions
Displayed emotions: emotions that are organizationally required and considered
appropriate
Surface acting: hiding one's inner feelings to display what is expected
Deep acting: trying to modify one's true inner feelings to match what is expected
Why Should We Care About Emotions in the Workplace?
People who know their emotions and are good at reading other are more effective in their
jobs
Emotion driven behaviours are typically short in duration and of high variability
Emotions tend to be incompatible with behaviours, they can influence negatively on job
performance
Chapter 3
Values
Basic convictions that a specific model or conduct or end-state of existence is personally or
socially preferable to an opposite or converse mode of conduct or end-state of existence
o A judgmental element that separates an individual's ideas of what is right, good, or
desirable
o Most values are formed by parents, friends, teachers, media etc.
Rokeach's Value Survey:
The survey classifies the values that people hold in two sets (each containing 18 value
items)
o Terminal values (desirable end-state): goals individuals would like to achieve during
their lifetime
o Instrumental values: preferable ways of behaving
People in the same occupation/category tend to have similar values
o Differences in groups makes it difficult to communicate and negotiate
The Elders:
Play by the rules, and there core values are in order (authority, discipline etc.)
o 80% represent traditional values
Baby Boomers:
Influenced by civil rights movement, women's movement, Vietnam war, Beatles
o Rebellious, anxious communitarians, connected enthusiast and disengaged Darwinists
o Rejection of authority, concern for environment, equality
Generation X:
Shaped globalization, two-career parents, MTV, AIDS and computers
o Value flexibility, life options and job satisfaction, skeptical, particularly of authority
o Thrill seeking, aimless dependants, social hedonists, Aquarians and post-materialists
The Ne(x)t Generation:
prosperous times, high expectations and seek meaning in work, life goals (wealth oriented)
Technologically advanced, socially conscious, and entrepreneurial
The Generations Meet in the Workplace:
By using generational differences we can predict social values and behaviour
Managers must be flexible to manage different generations in the same workplace
Cultural Differences:
Even though we have a multicultural society there are tensions among people of different
races
o Canadian's define themselves as not American (different values)
Generally country's/society's values change based on major events or changes/shifts (9/11,
Obama)
Francophone and Anglophone Values:
Francophones are more collective, group-oriented, need for greater achievement, intrinsic
values
o Committed to organizations, reducing ambiguity and uncertainty at work
o Introverted, sensing, thinking and judging
Anglophones are more individualistic, I-centred, take more risks
o Intuitive, feeling and perceiving
Aboriginal Values:
Increasing entrepreneurship by aboriginals and other business partnerships
o Believe in traditional culture, value and languages, self-sustaining economies
o More likely to reflect goals that advance the community
Asian Values:
Chinese and South Asian are the largest visible minorities in Canada
o Tend to exhibit greater power distance and greater collectivism
Gaunxi: connection between two independent individuals to enable a bilateral flow of
personal or social transactions
Western firms must understand Gaunxi in order to conduct business with Asian firms
Attitudes
Evaluative statements (positive/negative) about people, objects or events (responses to
situations)
Employees may be negatively affected by the attitudes of their co-workers or clients
Job Satisfaction:
An individuals general attitude toward his or her job
Most people in Canada/USA would not recommend their work and are not satisfied
What Causes Job Satisfaction:
Most people prefer challenging and stimulating work over predictability and routine
After a comfortable living ($40,000) money satisfaction changes (less important)
Core self-evaluation: people who believe in their inner worth and basic competence
Job Satisfaction and Productivity:
The correlation between job satisfaction and job performance is moderately strong
Job satisfaction and productivity both effect each other positively
o Higher productivity will bring in a larger salary and better working conditions
Job Satisfaction and Organizational Citizenship Behaviour:
OCB can help an organization function more efficiently and effectively
o Job satisfaction is a major determinant of an employee's OCB
o If the workplace is not fair, job satisfaction and OCB are likely to be effected
Job Satisfaction and Customer Satisfaction:
Employee satisfactions is related to positive customer outcomes (customer service etc.)
o Familiar and happy employees increases customer appreciation
o Employees that encounter customer dissatisfaction will not satisfied
How Employees Can Express Dissatisfaction:
Employees can complain, steal property, be slow or not perform their duties (deviant
behaviour)
Exit: dissatisfaction expressed actively attempting to leave the organization
Voice: dissatisfaction expressed by actively and constructively attempting to improve
conditions
Loyalty: dissatisfaction expressed by passively waiting for conditions to improve
Neglect: dissatisfaction expressed by passively allowing conditions to worsen
Exit/neglect represent lowered productivity, absentees, and turnover
Managers Often Don't Get It:
Organizational Commitment:
An employee identifies with an organization and its goals, yet stays with their own
organization
Affective commitment: emotional attachment/identification/involvement with an
organization
Normative commitment: the obligation an individual feels to staying with the organization
Continuance commitment: calculation to stay with an organization base on cost of leaving
Commitment and performance is better for newer employees than experienced
Employees with high organizational commitment are likely to engage in OCB
Employee Engagement:
An individual's involvement/satisfaction/enthusiasm for the work he/she does
o Higher engaged employees leads to higher productivity, profits and customer
satisfaction
Managing Diversity in the Workplace
Companies that design and publicize diversity are producing value statements
o Companies hope to change/influence the behaviour of employees, but it is difficult
Responses to Diversity Initiatives:
Generation X embraces egalitarian and pluralistic values
o As they move through the workplace, diversity tensions will lessen (fewer initiatives
needed)
Employees may exhibit negative reactions to diversity even if the organization supports it
Cultural Intelligence (CQ):
Ability to understand someone's unfamiliar and ambiguous gestures in the same way as
would people from that person's culture
o Determine if a person's behaviour is representative of a group or just that person
Research Findings: Cultural Intelligence
People who have CQ look for clues to help identify a culture's shared understanding
o Looking for consistencies across a variety of people from the same group
Provincial: work best with people of similar backgrounds, difficulties working with others
Analyst: analyze a foreign culture's rules/expectations to determine how they interact
Natural: use intuition to understand those from other cultural backgrounds
Ambassador: communicate convincingly that they fit in, even if they don't know much
Mimic: control actions/behaviours to match others
Chameleon: have high levels of CQ components, mistaken as from another culture
Chapter 4
What is Motivation?
Motivation: the intensity, direction and persistence of effort a person shows in reaching a
goal
Intensity: how hard a person tries
o High intensity is unlikely to be beneficial unless it is channeled correctly
Effort requires persistence (measure of how long a person can maintain his/her effort)
Theory X: suggests that employees dislike work, will attempt to avoid it, and must be
coerced, controlled, or threatened with punishment to achieve goals
o Suggests that people are extrinsically motivated
Theory Y: suggests that employees like work, are creative, seek responsibility, and will
exercise self-direction and self-control if they are committed to the objectives
o Suggests that people are intrinsically motivated
Motivation is the result of the interaction of the individual and the situation
o The level of motivation differs both among individuals and within individual at
different times
Intrinsic motivators: a person's internal desire to do something, due to such things as
interest, challenge, and personal satisfaction
Extrinsic motivators: motivation that comes from outside the person and includes such
things as pay, bonuses and other tangible rewards
Punishment by Rewards: suggests that if the right environment is provided, people will be
motivated
Needs Theories of Motivation
Needs theories: describes the types of needs that must be met to motivate individuals
Process theories: help us understand the actual ways in which we and other can be
motivated
Needs theories have been criticized for not holding up to scientific review
o The theories represent a foundation from which contemporary theories have grown
o Managers still use these theories and terminology in explaining employee motivation
Maslow's Hierarchy of Needs Theory:
A hierarchy of five needs - psychological, safety, social, esteem and self-actualization - in
which as soon as each need is substantially satisfied, the next need becomes dominant
o Physiological: includes hunger, thirst, shelter, sex and other bodily needs
o Safety: includes security and protection from physical and emotional harm
o Social: includes affection, belongingness, acceptance and friendship
o Esteem: self-respect, autonomy, achievement, status, recognition and attention
o Self-actualization: growth, achieving one's potential, and self-fulfillment
No need is ever fully met, but substantially satisfies allows for advancement
o To satisfy someone, you must determine what level of the hierarchy the are currently
present
Higher order needs are satisfied internally, while lower order externally
ERG Theory:
Version of Maslow's hierarchy that includes three core needs: existence, relatedness and
growth
Believed that an individual could be focused on all three levels at once
Motivation-Hygiene Theory:
Relates intrinsic factors to job satisfaction and associates extrinsic factors with
dissatisfaction
Achievements, recognition, responsibility, advancement and growth are related to job
satisfaction
o People that felt good about work, attributed these characteristics to themselves
Extrinsic factors like policies, administration, supervision etc. are related to dissatisfaction
o People that are dissatisfied, they attribute the extrinsic factors
Herzberg proposed satisfaction/no satisfaction and dissatisfaction/no dissatisfaction
Factors of job satisfaction (motivators) are different factors of dissatisfaction (hygiene
factors)
o Hygiene factors: policy, salary, admin, supervision, interpersonal relations etc.
When these factors are satisfied, people will not be dissatisfied
Motivation is emphasized through achievement, recognition, responsibility and growth
The procedures used in the theory are limited, as it attends to blaming/attributing certain
characteristics
The reliability of the theory is questionable as there may have been tainted results
No theory was actually created, and no measure of satisfaction was used
The theory ignores previous research such as situational variables
McClelland's Theory of Needs:
Achievement, power and affiliation are three important needs that help explain motivation
Achievement: drive to excel, to achieve in relation to a set of standards, to strive to succeed
o People striving to do things better, seeking more responsibility, challenging tasks
o High probability tasks, that are not too easy, or too hard, but that can be accomplished
o More focused on individual performance rather than the firm or organization
Power: need to make others behave in a way that they would not have behaved otherwise
o Desire to impact others and have control over situations and others
o Tend to be more competitive and focused on status/prestige rather than effective
performance
Affiliation: desire for friendly and close interpersonal relationships
o Strive for friendly relationships rather than competitive/high understanding
relationships
The best managers tend to have a high need for power and low need for affiliation
Summarizing Needs Theories:
Individuals have needs that, when unsatisfied, will result in motivation
There are different needs that must be met before other needs can be considered
Process Theories of Motivation:
Expectancy Theory:
Individuals act depending upon their evaluation of whether their effort will lead to good
performance, whether good performance will be followed by a given outcome, and whether
that outcome is attractive
Effort-Performance Relationship:
Expectancy: the belief that effort is related to performance
Individual perception of how probably it is that a given effort will lead to good
performance
Employee expectancy is influenced by self-esteem, previous success, help from
supervisors, information and proper materials/equipment
Performance-Rewards Relationship:
Instrumentality: the belief that performance is related to rewards
o Negative instrumentality indicated that high performance reduces the chances of a
desired outcome
o 0 instrumentality indicates no relationship between performance and receiving the
desired outcome
Individual perception of whether performing at a given level will lead to a desired outcome
o Whether the performance will be acknowledge by those who allocate rewards
Rewards-Personal Goals Relationship:
Valence: the value or importance an individual places on rewards
o Ranges from -1(very undesirable reward) to +1(very desirable reward)
Degree to which organizational rewards satisfy goals/needs and attractiveness of potential
rewards
Managers often do not have the resources to reward, or reward the wrong things for
accomplishments
Expectancy Theory in the Workplace:
Research of the theory, even in cross-cultural settings have supported the expectancy
theory
Goal-Setting Theory:
Intentions of working toward a goal are a major source of work motivation
o Goals tell employees what needs to be done and with how much effort
Some firms leave goal setting up to managers, although goals may then not be set
Management by objective (MBO): managers and employees jointly set performance goals
that are tangible, verifiable and measurable
o Progress on goals is often reviewed and rewards are allocated on the basis of the
progress
How Does Goal Setting Motivate?
Goals indicate where individuals should direct their efforts when prioritizing
Goals suggest how much effort an individual should put into a given task
Goals create persistence so effort will be spent on a task over time
Goals will help people develop plans for achieving specific goals
When paid by number of units produces, under rewarded employees will produce a large
number of low quality units in comparison with equitably paid employees
Those who are over rewarded do not seem to change their behaviour
Some people simply do not worry about how their rewards compare with those of others
For most employees, motivation depends on relative rewards
People who pursue goals for intrinsic reasons are more satisfied with their jobs
o Feel like they fit into their organization better, and may perform better
These theories may just be a way for managers to get what they want from employees
o Does not necessarily mean an increase in employee productivity
Chapter 5
From Theory to Practice: The Role of Money
There are personality traits and demographic factors that correlate with and individuals
attitude toward money
People who value money highly score higher on competitiveness, materialism and control
o Score higher on self-esteem, need for achievement and Type A personality measures
Organizations need to understand individuals' needs when rewarding
Creating Effective Reward Systems
What to Pay: Establishing a Pay Structure
The worth of the job in the organization and relative to the market determines job pay
structure
Paying more may attract better qualified and more motivated employees
Firms that pay below market level may have high turnover or not be able to afford higher
salaries
How to Pay: Rewarding Individuals through Variable-Pay Programs
Variable-pay programs: a portion of an employee's pay is based on some individual and/or
organizational measure of performance
Costs for organizations decline as productivity declines as pay is variable
Individual-Based Incentives:
Piece-rate pay: employees are paid a fixed sum for each unit of production completed
o Many firms modify this plan and add a base salary to the variable pay plan
Merit-based pay: based on performance appraisal ratings
o Individuals perceive a strong relationship between performance and rewards
Separation between the most productive and blow average producers (lower pay
increases)
Bonuses: rewards employees for recent performance rather than historical performance
o Focus on the recent past, and rewards employees for high productivity or better work
ethic
o Rewarding individuals based on bonuses can cause problems (financial crisis 2008)
Skill-based pay: sets pay based on how many skills employees have/how many jobs they
can do
o Employees may top out and not be able to have any more pay increases
o Employees may be paid for skills they may not need immediately or ever
o Pay is not based on the level of performance which may vary
Group-Based Incentives:
Gainsharing: improvements in group productivity determine the total amount of money to
be shared
o Focuses on productivity gains rather than profits
o Rewards specific behaviours that are less influenced by external factors
Organizational-Based Incentives:
Profit-sharing: employer shares profits with employees based on a predetermined formula
o Employees may ignore customer service and employee development
o Companies in cyclical industries would see varied results, thus varied profit-sharing
o Best in organizations with more teamwork, and managerial philosophy encouraging
participation
Stock options and employee stock ownership plans (ESOP): company-established benefit
plan in which employees acquire stock as part of their benefits
o Employees will think more about their actions if they have ownership in the
organization
Teamwork: incentive pay to individuals can lead to problems in group productivity and
cohesiveness
o Organizations focused of teamwork must focus incentives on the team not individuals
Unions: employees are usually paid based on seniority and job categories, with little
movement
o Against variable pay as it may lead to competition and increased work stress
Public Sector Employees: difficult to link productivity as most of these jobs are service
based
o The goal setting theory is better applied to these types of employees
Research Findings: ESOPs
Have the potential to increase job satisfaction and work motivation
Takes ownership and participative style to achieve improvements in the firm's performance
Research Findings: Variable-Pay Programs
Variable-pay programs increase motivation and productivity
o Does not mean this is true for all organizations or employees
Teamwork, unions, public sectors, and ethics are problems to the pay-for-performance
program
Helps if there are absentees, more employees are able to cover a variety of jobs
Decreases the frequency of repetitive stress injuries
Reduces boredom and increases motivation by diversifying employee activities
o Helps organizations develop better employees with more flexibility
Job Enlargement:
The horizontal expansion of jobs
o Increasing the number and variety of tasks that an individual performs
Results in jobs with greater diversity
Employees learn to complete the tasks in different units and levels of the organization
o Reduces the need for meetings, reduces the cost of office equipment and allows for
job continuity during holidays or sick days
Job Enrichment and the Job Characteristics Model:
Job characteristics model (JCM): identifies five core job dimensions and their relationship
to personal and work outcomes
o Focuses on the content of jobs rather than the context of jobs
o Cab be used to motivate employees by increasing job satisfaction
Job enrichment: the vertical expansion of jobs
o Increases the degree to which workers control the planning, execution, and evaluation
in their work
o Enriched jobs organizes tasks so that employee does a complete activity
o Expands freedom and independence, increases responsibility, and provides feedback
Core Job Dimensions:
Skill variety: degree to which the job requires a variety of different activities so the
employee can use a number of different skills and talents
Task identity: degree to which the job require completion of a whole and identifiable piece
of work
Task significance: degree to which the job has a substantial impact on the lives/work of
other people
Autonomy: degree to which the job provides substantial freedom, independence, and
desecration to the individual in scheduling the work and determining the procedures to be
used in carrying it out
Feedback: degree to which carrying out the work activities required by the job results in the
individual obtaining direct and clear information about the effectiveness of his/her
performance
Critical Psychological States:
Experienced meaningfulness: if an employee's task is meaningful, the employee will view
the job as important, valuable and worthwhile
Experienced responsibility for outcome: employees feel a sense of personal responsibility
for results when their jobs given them greater autonomy
Knowledge of the actual results: feedback helps employees know whether they are
performing effectively
Allows organizations to acquire skilled workers who might not be available on a full-time
basis
Telecommuting:
Employees do their work at home on a computer that is linked to their offices
o Could be at least two days a week on a computer linked to their office
o Can increase productivity and decrease stress while providing better service to clients
Employees may miss out on in-workplace activities such as meetings and events
o Telecommuting can decrease the commitment to the organization as there is increased
distance
Chapter 6
Teams vs. Groups: What's the Difference?
Group: two or more people with a common relationship (do not necessarily engage in
collective work)
Team: small number of people that work closely together toward a common objective
(accountable)
o Share leadership, individually accountable, purpose or mission, problem solving and
effective
Why Have Teams Become So Popular?
Teams have greater flexibility compared to traditional departments/structures
Teams have the potential to be more productive, but must have the key characteristics
o More motivation, quickly assembly, deploy, refocus and disband
Types of Teams
Problem-Solving Teams:
5-12 employees from the same department who meet a once a few hours a week
o Discuss ways of improving quality, efficiency and the work environment
o Also be planning teams, task forces or committees organized to get tasks done
Employees share ideas or suggestions, but do not get to implement suggested actions
Self-Managed Teams:
10-12 employees who take on many responsibilities of their former managers
o Includes planning/scheduling of work, assigning tasks, taking action etc.
Fully self-managed have their own members/leader and evaluate each other
Self-managed teams often perform better than teams with formally appointed leaders
Effectiveness of the team depends on the makeup, tasks being done and reward structure
Cross-Functional Teams:
Group of employees from about the same level of different areas that work to accomplish
tasks
Skunkworks:
Cross-functional teams that develop to create new products or work on complex problems
o Gives teams the ability to work on projects without being watched by the
organization
Virtual Teams:
Uses computers to tie together physically dispersed members in order to achieve a goal
o Most teams today are virtual by sharing links, documents, video conferencing etc.
Virtual teams do not have physical interaction and are less satisfied
o Difficult to build trust, when team members have not met in person
o Virtual teams build trust through the tone or attitude of the conversations
From Individual to Team Member
Roles:
A set of expected behaviours of a person in a given position in a social unit
Role Conflict:
Role expectations: how others believe a person should act in a given situation
Role conflict: one role requirement may make it more difficult to comply with another role
o Creates internal tension, frustration
Role Ambiguity:
When a person is unclear about the expectations of his or her role
o Leads to confusion, stress, bad feelings
Role overload/underload: too much or too little is expected of someone
Norms:
Acceptable standards of behaviour within a group that are shared by the group's members
o Act as a means of influencing the behaviour of the group
Common social norms: performance, appearance, social arrangement, and allocation of
resources
The How and Why of Norms:
Norms develop gradually as group members become acquainted and determine
functionality
o Explicit statements: instructions from the group's powerful member establishes norms
o Critical events: things that have happened in the past that have change the group's
dynamic
o Primacy: first behaviour pattern that emerges in a group often sets team expectations
Conformity:
Adjusting one's behaviour with the norms of the group
o Can impact members by forcing them to act/behave that is consistent with other
members
Conformity explains why some work groups are more prone to anti-social behaviour than
others
o Anti-social groups may lead to individuals being anti-social on their own time
Stages of Group and Team Development
The Five-Stage Model:
Shows how individuals move from being independent to working interpedently with group
members
Stage 1 Forming: first stage in a group development, characterized by much uncertainty
o Testing the behaviour of the group and starting to become a team
Stage 2 Storming: group development, characterized by intragroup conflict
o Conflict of ideas, leadership, and planning
Stage 3 Norming: development characterized by close relationships and cohesiveness
o Conflict resolution, developing relationships, and solidified structure
Stage 4 Performing: development when the group is fully functional
o Team comes together and starts task progress (understanding tasks at hand)
Stage 5 Adjourning: when temporary groups' attention is directed to wrapping up activities
The Punctuated-Equilibrium Model:
Temporary groups often do not follow the five-stage model and have different actions
Phase 1:
First meeting creates a framework of behaviour and assumptions for the team
During inertia teams tend to stand still or become locked into a fix course of action (phase
1)
o Usually team members do not complete assigned tasks or work relatively slow
Phase 2:
Moves out of the inertia stage and recognizes that work needs to be completed
o Most often happens at the halfway point of the teams timeline (halfway to the
deadline)
o Transition from phase 1 to 2, drops old patterns and the group adopts new ones
The teams productivity bursts and there is often a last chance burst to finish all work at the
end
Problem solving and decision making skills help generate alternatives and identify
problems
Interpersonal skills such as feedback, conflict resolution and listening are favourable for
teams
Group members may take on learning or enhancing one of these three types of skills
Teamwork Skills:
Orienting teams to problem-solving situations: provides an understanding or direction
Organize/mange team performance: establish team goals, monitors, evaluates, and provides
feedback
Positive team environment: creating norms, helps supports other team members, model
behaviour
Facilitates/manages task conflict: recognizes conflict and resolves/manages conflicts
Promotes perspective: argues for different points, knowledge based arguments
Personality:
Teams with higher levels of conscientiousness, and openness to experience perform better
o Teams with more than one disagreeable members tend to be worse off
Team performance is often better when members are relatively on the same level
o High conscientious members must compensate for low conscientious people
Roles:
Task-oriented roles: roles performed by group members to ensure that tasks are
accomplished
o Initiators, information seekers, information providers, elaborators, summarizers etc.
Maintenance roles: roles performed by members to maintain good relations within the
group
o Harmonizers, compromisers, gatekeepers, and encouragers
Selecting members that are more flexible prevents the group from being reliant on one
member
Individual roles: roles performed members that are not productive for keeping on the group
on task
Roles Required for Effective Team Functioning:
Roles that build task accomplishment: initiating, seeking information and opinions,
providing information and opinions, clarifying, elaborating, summarizing and consensus
testing
Roles that build and maintain a team: harmonizing, compromising, gatekeeping and
encouraging
Diversity:
The presence of a heterogeneous mix of individuals within a group
o Different characteristics (jobs, positions, experience) and demographic/cultural (age,
race, sex)
Diversity can generate different types of conflict such as interpersonal conflict
Members' Flexibility:
Flexible team members are able to complete a wide range and variety of different tasks
o Improves a teams adaptability and makes it less reliant on one group member
o People who value flexibility are better than a cross trained person
Members' Preference for Teamwork:
When selecting teams, individual preference, abilities, personality and skills should all be
considered
o High-performance teams are likely to be composed of people who like team/team
work
Work Design:
Effective teams need to work together and take collective responsibility to complete tasks
o Includes freedom, autonomy, utilizing different skills, participation and other
characteristics
These enhance member motivation and increases team effectiveness
Motivates teams by increasing responsibility and ownership over the work
Process:
Process variable make up the final component of team effectiveness
Common Purpose:
Common and meaningful purpose provides direction, momentum and commitment for
members
Teams that don't have good planning skills will not succeed
Reflexivity: team characteristic of reflecting on and adjusting the master plan when
necessary
A team must have a good plan and be able to adapt when conditions change or call for it
Specific Goals:
Specific goals facilitate clear communication between group members (maintains focus)
o Difficult goals have been found to raise team performance on the criteria that is set
Teams should be encouraged to develop milestones to focus on working toward their goal
Team Efficacy:
Effective teams that have confidence, and know that they can succeed
o Teams that have been successful raise their believe about the future, increases
motivation
Cohesiveness: degree to which team members are attracted to each other and are motivated
as a team
o If performance norms are high, a cohesive group will be more productive
o High cohesiveness and low performance norms will return low productivity
o High norms and low cohesiveness will return moderate productivity
Instrumental cohesiveness: members don't believe they can complete a goal without the rest
of the group
Small successes build team confidence and creates a stronger performance record
Mental Models:
Knowledge and beliefs (psychological map) about how it gets done
o Effective teams have accurate and common mental models
If members have wrong or different mental models, performance will suffer
Managed Level of Conflict:
Teams that have no or avoid conflict do not create alternatives and are less effective
o Effective teams have an appropriate level of conflict
Reducing Team Conflict:
Group members should try to focus on the issues rather than on personalities (achieve
fairness)
More information creates debates and provides helpful alternatives and arguments
Developing commonly agree upon goals, using humour, and balanced power reduces
conflict
Accountability:
Successful teams make members individually and jointly accountable for the team's
purpose/goals
o Clearly define what they are individually responsible for and jointly responsible for
Beware! Teams Aren't Always the Answer
Teamwork takes more time and often uses more resources than individual work
o Teams have increased communication demand, conflicts and meetings
Not all settings are suitable for teamwork (may decrease efficiency and turnover)
Team fits the situation: Determine if the work can be done by one person, will the team
provide for productivity than an individual, and are members of the group interdependent
Teams more useful: speed is more important, organization mirrors a complex, changing
market environments, innovation and learning have priority and online integration of
interdependent performers
Chapter 7
The Communication Process
Transfer and understanding of a message between two or more people
The sender establishes the message, encodes the message and chooses the channel in which
to send it
The receiver decodes the message and provides feedback to the sender
o Communication problems happened when there is a disruption during these processes
o The process is affected by the sender's perception of the receiver and visa-versa
Encoding and Decoding:
Encoded: converting a message to a symbolic form
Decoded: interpreting a sender's message
Skill, attitudes, knowledge and socio-cultural system affect message encoding and
decoding
Communicative success includes speaking, listening, and reasoning skills
o Interactions with others are affected by our attitudes, values and beliefs
Messages sent/received by people of equal rank are interpreted different than if received by
someone else
The Message:
What is communicated, the actual physical product from the source after it is encoded
o Affected by the code, or group of symbols, we use to transfer meaning, the message
itself, and the decision that we make in selecting and arranging both codes and
content
Messages may not always encapsulate what one or both parties intended/feel
The Channel:
The medium through which a message travels
o Selected by the source who must determine which channel is formal and which is
informal
o Formal channels are established by organizations and transmit messages relating to
the job
o Informal channels are forms such as personal/social messages
Communication apprehension: undue tension and anxiety about oral communication,
written communication or both
Some channels are rich in the ability to handle multiple cues simultaneously, facilitate
rapid feedback and be very personal
Channel richness: amount of info that can be transmitted during a communication episode
The frequency of the messages also determines the channel in which messages are sent
o Non-routine messages are more effective through rich channels
Managers find it easier to deliver bad news through emails, and these messages are
delivered more accurately through this channel
Language:
Age, education and cultural backgrounds influence the language we use and definitions of
words
o Different departments develop their own jargon, or technical language
Senders often assume the language they use means the same to the receiver as it does to
them
Communicating Under Stress:
While under stress, it is often the most difficult time to communicate
o Speak clearly: be direct about what you want to say and avoid hiding behind words
o Be aware of the nonverbal part of communicating: tone, facial expression, body
language
o Think carefully about how you state things: better to be restrained that to offend the
receiver
Organizational Communication
Direction of Communication:
Communication can flow downward, upward and laterally in organizations
Downward: communication flows from one level of an organization to a lower one
o Managers communicating with employees, giving orders and creating rules/regulation
o Managers must explain why decisions are made
Upward: communication flows to a higher level in the organization
o Used to provide feedback to managers/executives, inform them on progress, relay
problems, etc.
Lateral: communication occurs with the same work group, among members, the same level
o Also know an horizontal communication, saves time, used for coordination
Small-Group Networks:
Communication networks: channels by which information flows
Formal networks: task-related communications that follow the authority chain
o Chain, wheel and all-channel are the three most common formal small-groups
o Chain: follows the formal chain of command
o Wheel: rely on leaders to act as the central conduit for all the group's communication
o All-channel: permits all group members to communicate actively with each other
Grapevine:
Informal networks: communications that flow along social and relational lines
o Communication is free to movie in any direction, skips authority, etc.
Grapevine: the organization's most common informal network
o 75% of employees hear about matters first through rumours on the grapevine
Used to structure and reduce anxiety, make sense of limited/fragmented info, serve as
a vehicle to organize group members into coalitions, signal a sender's status of power
Rumours start as a response to situations that are important to us
o Where there is ambiguity, and under conditions that arouse anxiety
Grapevine Patterns:
Single strand: each person tells information to just one other person
Gossip pattern: one person tells everyone the information
o These people are commonly called gossips (about 10% of organizational member
Probability pattern: individuals are randomly told info, with no apparent pattern
Cluster pattern: individuals selectively choose individuals to whom they tell relay
information
o Individuals may strategically choose who they pass information onto
Liaison individuals: friendly, outgoing people who are in position to cross departmental
lines
Grapevine is not managed, it is perceived as being more believable and reliable than formal
information and it is largely used to serve the self-interest of the people within it
Electronic Communications:
Make it possible to work, even if employees are not at their workstation/workplace
Organizational boundaries have become less relevant as more electronic communications
become integrated into the workplace
Email:
The high volumes of email create longer/continuous work days for employees
Misinterpreting the message: misinterpret the message, intent, or tone of the email
Communicating negative messages: emails are always the best way to communicate this
type of info
Overuse of email: receive or have to send too many emails
Email emotions: emails sometimes allow senders to say things they wouldnt have in
person
Privacy concerns: emails may be monitored, cannot always trust the senders of emails
Instant Messaging and Text Messaging:
IM and texts are meant more for short messages
o These types of messages are informal than email, and not as rich
Other Issues in Communication
Nonverbal Communication:
Messages conveyed through body movements, facial expressions and physical distance
between the sender and receiver
Kinesics: study of body motions (gestures, facial configurations and other body
movements)
Body language conveys the extent to which an individual likes another and is interested is
their views, and the relative perceived status between a sender and receiver
Silence as Communication:
Silence represents inaction or non-behaviour
o Silence can mean someone is thinking or contemplating a response to a question
o Silence can mean a person is fearful of speaking
o Silence can signal agreement, dissent, frustration or anger
Communication Barriers between Women and Men:
Men typically use talk to emphasize status, while women use it to create connection
o For men conversations are a means to preserve independence and maintain status
o For women conversations are negotiations for closeness, seek conformation and
support
Women will provide evidence for discrepancies, men will just point them out
Cross-Cultural Communication:
Effective communication is affected by cross-cultural factors that create the potential for
communication problems
Cultural Barriers:
Words often are difficult to translate between different languages, interpreted differently
Words imply different things in different languages, direct translation but different
meaning
Tone differences are interpreted differently depending on specific cultures
Barriers are caused by differences among perceptions (different cultures, backgrounds, etc.)
Cultural Context:
High-context cultures: rely heavily on nonverbal and subtle situational cues in
communication
o Status, place in society, and reputation are considered in communications
o Must desire to build a relationship and build the trust of both parties
Low-context cultures: rely heavily on words to convey meaning in communication
o Body language and written words are
Overcoming Cross-Cultural Difficulties:
Assume differences until similarity is proven
Emphasize description rather than interpretation or evaluation
Be empathetic, understand others' values, experiences and frames of reference, etc.
Treat your interpretations as a working hypothesis
Chapter 8
A Definition of Power
Power: capacity that A has to influence the behaviour of B, so that B acts in accordance to
A's wishes
Bases of Power
Coercive Power:
Power that is based on fear
o One reacts to this power base out of fear of the negative results that might occur
without compliance
o Includes infliction of pain, restriction of movement, controlling by force, etc.
In organizations, coercive power includes firing people, or assigning employees to
unpleasant work
Reward Power:
power that achieves compliance based on the ability to distribute rewards that others view
as valuable
o In organizations this is money, performance appraisals, promotions, information, etc.
o Do not have to be a manager to exert reward power
Legitimate Power:
Power that a person receives as a result of their position in the hierarchy of an organization
o Positions of authority include coercive and reward powers
o Includes acceptance by members of an organization of the authority of a position
Expert Power:
Influence based on special skills or knowledge
o Relies on trust that all relevant information is given out honestly and completely
o The more information that is shared, the less expert power a person has
Referent Power:
Influence based on possession by an individual of desirable resources or personal traits
If people admire someone to the point of modelling their behaviour and attitudes, that
person possess referent power over people
Information Power:
Power that comes from access to an control over information
o Data/knowledge that others need can make others depend on them
Evaluating the Bases of Power:
Commitment: person is enthusiastic about the request, and shows initial and persistence in
carrying it out
o Associated with expert and referent power
Compliance: person goes along with the request grudgingly, puts in minimal effort and
takes little initiative carrying out the request
o Associated with reward and legitimate power
Resistance: person is opposed to the request and tries to avoid it with such tactics as
refusing, stalling or arguing about it
o Associated with coercive power
Rational persuasion, inspirational appeals, and consultation tend to be the most effective
o Pressure often backfires and tends to be the least effective
Rational persuasion works across all levels of the organizational hierarchy
Better to begin with softer tactics and then rely on harder tactics
Political skill: the ability to influence others in such a way as to enhance one's objectives
The culture of the organization in which a person works will influence the best tactics to be
used
Effects of Empowerment:
At an individual level and the team level, empowerment leads to greater productivity
o Some managers do not empower employees because this can take away some of their
power
o Some employees have little/no interest in being empowered and thus resist attempts
o Empowerment is not something that works well in every workplace throughout the
world
The Abuse of Power: Harassment in the Workplace
Managers control the resources that most employees consider important and scarce
Coworkers exercise power by withholding information, cooperation and support
Workplace Bullying:
Shaming people, embarrassing people, holding them up to ridicule, constantly being on
their case for no apparent reason, being unreasonable, etc.
Sexual Harassment:
Sexual harassment is more likely to occur in workplace environments that tolerate bullying,
intimidation, yelling, innuendo, and other forms of discourteous behaviour
Sexual harassment: unwelcome behaviour of a sexual nature in the workplace that
negatively affects the workplace environment or leads to adverse job-related consequences
for the employee
o Undermines the victims' mental and physical health
Make sure there are policies in place that outline the rules, and consequences
o Investigate every complain and include the legal and human resource departments
o Make sure offenders are disciplined or terminated
o Raise employee awareness about the issues surrounding sexual harassment
Politics: Power in Action
Definition of Political Behaviour:
Those activities that influence, or attempt to influence, the distribution of advantages and
disadvantages within the organization
o Efforts to influence the goals, criteria, or process used for decision making
o Withholding information, spreading rumours, leaking confidential info, exchanging
favours with other organizations, lobbying, etc.
The Reality of Politics:
Organizations are made up of individuals and groups with different values, goals, and
interests
o Allows for the potential of conflict over resources
People disagree about the allocation of resources (budgets, space allocation,
responsibilities, etc.)
o Gains by one department/employee are often sees as loses for another
People will try to use whatever influence they have to spin the facts to support their
goals/interests
Organizations can be politics free if all the members hold the same goals and interest,
organizational resources are not scarce, and performance outcomes are completely clear
and objective
Chapter 9
Conflict Demand
A process that begins when one part perceives that another party has negatively affected, or
is about to negatively affect, something that the first party cares about
o From incompatible goals, differences over interpretations, disagreements, etc.
Functional vs. Dysfunctional Conflict:
Functional conflict: conflict that supports the goals of the group and improves its
performance
Dysfunctional conflict: conflict that hinders group performance
Cognitive conflict: conflict that is task-oriented and related to differences in perspectives
and judgments
Affective conflict: conflict that is emotional and aimed at a person rather than an issue
Sources of Conflict:
There are a number of conditions that can give rise to conflict
o They don't have to be directly related to conflict
Communication:
Conflict through semantic difficulties, misunderstandings, and noise in communication
channels
Conflict increases with either too much or too little communication
Structure:
Conflict related to the requirements of the job or the workplace more than personality
Size, specialization, and composition of the group act as forces to stimulate conflict
The greater the ambiguity in precisely defining where responsibility for actions lies, the
greater the potential for conflict to emerge
Reward systems create conflict when one member's gain is at another's expense
Leadership style can create conflict if managers tightly control and oversee the work of
employees, allowing employees little discretion in how they carry out tasks
The diversity of goals among groups is a major source of conflict
If one group is dependent on another, or if interdependence allows one group to gain at
another's expense, opposing forces are stimulated
Personal Variables:
There may be personal variables that you are not in agreement with that creates conflict
o Includes the individual value system, and personality characteristics
Conflict Resolution
Conflict Management Strategies:
Forcing: imposing one's will on the other party
Problem solving: trying to reach an agreement that satisfies both one's own and the other
party's aspirations as much as possible
Avoiding: ignoring or minimizing the importance of the issues creating the conflict
Yielding: accepting and incorporating the will of the other party
Compromising: balancing concern for oneself with concern for the other part in order to
reach a solution
Process in which two or more parties exchange goods or services and try to agree on the
exchange rate for them
o Positions: the individual's stand on the issues
o Interests: the underlying concerns that are affected by the negotiation resolution
Bargaining Strategies:
Distributive bargaining: negotiation that seeks to divide up a fixed amount of resources
o A win-lose situation
Integrative bargaining: negotiation that seeks one or more settlements that can create a winwin solution
How to Negotiate:
Negotiation is made up of a five step process
1. Developing a strategy
2. Defining group rules
3. Clarification and justification
4. Bargaining and problem solving
5. Closure and implementation
BATNA: the best alternative to a negotiated agreement
o The outcome an individual faces if negotiations fail
Bargaining zone: the zone between each party's resistance point, assuming there is overlap
in this range
Contemporary Issues in Negotiation
Cultural Differences in Negotiating Style:
France: they like conflict and frequently gain recognition and develop reputations by
thinking and acting against each other
China: the Chinese draw out negotiations because they believe negotiations never end
Japan: the Japanese also negotiate to develop relationships and commitment to work
together
USA: Americans are known around the world for their impatience and their desire to be
liked
Chapter 10
What Is Organizational Culture?
Definition of Organizational Culture:
Patterns of shared values, beliefs, and assumptions considered to be the appropriate way to
think and act within an organization
o Culture is shared by the members of the organization
o Culture helps members solve and understand the thinks that it encounters (internally
and externally)
o Members believe the belief, expectations are valid and are taught to new members
Levels of Culture:
Artifacts: aspects of an organization's culture that you see, hear, and feel
Beliefs: understanding of how objects and ideas relate to each other
Values: stable, long-lasting beliefs about what is happening
Assumptions: taken-for-granted notions of how something should be
Characteristics of Culture:
There are seven primary characteristics that capture the essence of an organization's culture
Innovation and risk-taking: degree to which employees are encouraged to be innovative
and risk-taking
Attention to detail: employees are expected to work with precision, analysis and attention
to detail
Outcome oriented: management focuses on results, or outcomes, rather that on techniques
and processes
People orientation: management decisions take into consideration the effect of outcomes on
people within the organization
Team orientation: work activities are organized around teams rather than individuals
Aggressiveness: people are aggressive and competitive rather than easygoing and
supportive
Stability: organizational activities emphasize maintaining status quo is contrast to growth
Culture's Functions:
Culture has boundary-defining roles because it creates distinction between organizations
Culture conveys a sense of identity to organization members
Culture helps create commitment to something larger than an individual's interest
Culture enhances stability, holds the organization and it members together
Culture serves as a control to guide and shade attitudes and behaviours of employees
Culture lays out the rules, both explicit and implicit
Do Organizations Have Uniform Cultures?
Employees from different backgrounds and levels should have the same organizational
culture
Dominant culture: system of shared meaning that expresses the core values shared by a
majority of the organization's members
Subcultures: mini-cultures within an organization, typically defined by department
designations and geographical separation
o Strong subcultures can make it hard for managers to implement organizational change
Core values: primary, or dominant, values that are accepted throughout the organization
Reading an Organization's Culture
Strong culture: culture in which the core values are intensely held and widely shared
o Weak cultures may not create attachment to the organization for employees
Strong culture demonstrates high agreement among employees and builds cohesiveness,
loyalty and organizational commitment
Stories:
Stories about organizations, their employees and managers tell about the organizations
legitimacy for current practices
Rituals:
Repetitive sequences of activities that express and reinforce the key values of the
organization
o What goals are important, which people are important, and which ones are
expendable
Material Symbols:
Size of offices, elegance of furnishings, executive perks, dress code, uniform, etc.
o Corporate logos, signs, brochures, advertisements real aspects of the organization's
culture
Material symbols convey to employees, customers and clients who is important, and the
kinds of behaviour that are appropriate
Language:
Organization use language as a way to identify members of a culture or subculture
Organizations develop unique terms to describe equipment, offices, staff, suppliers,
customers, etc.
Creating and Sustaining an Organization's Culture
Culture is often derived from the philosophy of its founders
o This creates a selection criteria that top managers use to choose future employees
How a Culture Begins:
Founders only hire and keep employees who think and feel the way they do
Founders indoctrinate and socialize these employees of their way of thinking and feeling
Founders' behaviour acts as a role model, encouraging employees to identify with the
founders
o Internalize those beliefs, values and assumptions
o Founders' personality becomes embedded in the culture of the organization
Keeping a Culture Alive:
Human resource practices act to maintain a culture within an organization
o Selective process, performance evaluation criteria, training and development, etc.
o Ensure employees fit in with the culture, with rewards or penalties
Selection:
Identify and hire individuals who have the knowledge, skills and ability to perform the job
o How the candidate will fit into the organization will often be the main determinant
o Perspective employees may find a conflict with the culture or the other way around
Top Management:
Actions of tap management have a major impact on the organization's culture
o What they say, and how they behave establishes norms that filter through the
organization
o Establishes the level of risk, what is appropriate, etc.
Socialization:
Process that adapts new employees to an organization's culture
o Training programs that help new employees adapt and learn about an organization's
culture
Socialization can be conceptualizes as a process with three stages
Pre-arrival Stage: period of learning in the socialization process that occurs before a new
employee joins the organization
o Learn the values, attitudes, and expectations of the organization
Encounter stage: new employees see what the organization is really like and confronts the
possibility that expectations and reality may diverge
o Proper selection will reduce the chance of new employees not adapting to the culture
Metamorphosis stage: new employees adjust to the values and norms of the job, work
group, etc.
o The more formal the socialization process the better chance the culture will be
adopted
o New employee becomes comfortable with the organization and their job
o New employee has internalized the norms of the organization
o New employee feels accepted, trusted, valued and is self-confident
o New employee understands how they will be evaluated and the associated criteria that
is used
The Liabilities of Organizational Culture
Culture as a Barrier to Change:
Employees are less likely to share values if the work environment is dynamic
o Rapid change in organizations reduces the effect of an entrenched organizational
culture
Organizations with strong cultures may fail when those practices no longer match up well
with the needs of the environment or the market
Culture as a Barrier to Diversity:
Management wants new employees to accent the organization's core cultural values
o Openly acknowledge and support the differences employees bring to the organization
Strong cultures can be liabilities when they effectively eliminate the unique strengths of
individuals
o Institutional bias may become insensitive to people who are different
Culture as a Barrier to Mergers and Acquisitions:
Most often financial advantages or product synergy are looked at first
Chapter 11
Are Manager and Leaders the Same?
Managers promote stability while leader press for change and only organizations that
embrace both sides of the contradiction can survive in turbulent times
Leadership as Supervision
There are three general types of theories that emerged
1. Trait theories: propose leaders have a particular set of traits that make them different from
non-leaders
2. Behavioural theories: propose that particular behaviours make for better leaders
3. Contingency theories: proposes the situation has an effect on leaders
Trait Theories: Are Leaders Different from Others:
Trait theories of leadership: theories that propose traits (personality, social, physical, or
intellectual) differentiate leaders from non-leaders
Recent studies have shown that emotional intelligence may also have an effect on
leadership
Behavioural Theories: Do Leaders Behave in Particular Ways?
Behavioural theories of leadership: theories that propose that specific behaviours
differentiate leaders from non-leaders
Ohio State Studies:
Initiating structure: extend to which a leader is likely to define and structure his/her role
and the roles of employees in order to attain goals
Consideration: extend to which a leader is likely to have job relationships characterized by
mutual trust, respect for employees' ideas, and regard for their feelings
The Michigan Studies:
Employee-oriented leaders: a leader who emphasizes interpersonal relations
Production oriented leaders: a leader who emphasizes the technical or task aspects of the
job
The Leadership Grid:
A two dimensional grid outlining 81 different leadership styles
Contingency Theories: Does the Situation Matter?
Situational or contingency theories: theories that propose leadership effectiveness is
dependent on the situation
Fiedler Contingency Model:
A leadership theory that proposes effective group performance depends on the proper
match between the leader's style of interacting with his/her followers and the degree to
which the situation gives the leader control and influence
Leader-member relations: degree of confidence, trust, and respect members have for
their leaders
Task structure: degree to which job assignments are procedurized
Structured or unstructured
Position power: degree of influence a leader has over power-based activities
Hiring, firing, discipline, promotions, and salary increases
Transformational Leadership:
Transactional leaders: leaders who guide or motivate their followers in the direction of
establish goals by clarifying role and task requirement
Transformational leaders: leaders who inspire followers to transcend their own self-interest
and who are capable of having profound and extraordinary effect on followers
Mentoring:
A senior employee who sponsors and supports a less experienced employee
Self-Leadership (or Self-Management):
There are several approaches that can be used to help leaders create self-leaders
o Model self-leadership: practise self-observation, setting challenging goals, selfdirection, and self-reinforcement
o Encourage employees to create self-set goals
o Encourage the use of self-rewards to strengthen and increase desirable behaviours
o Create positive thought patterns
o Create a climate of self-leadership
o Encourage self-criticism
Team Leadership:
There are four specific roles that team leaders play
o Liaisons with external constituencies
o Troubleshoots
o Conflict managers
o Coaches
Online Leadership:
The structure of words in a digital communication has the power to motivate or demotivate
the receiver
Online leaders face the difficulty of developing and maintaining trust
o Online negotiations are affected because there is a lack of trust between parties
Leading Without Authority:
There are three benefits of leading without authority
o Latitude of creative deviance: easier to raise harder questions and look for less
traditional solutions
o Issue of focus: individuals can focus on a single issue, rather than several
o Front-line information: individual is closer to the detailed experiences of some of the
stakeholders
Contemporary Issues in Leadership
Authentic Leadership:
Leaders who know who they are, know what they believe in and value, and act on these
values and beliefs openly and candidly
Moral Leadership:
Socialized charismatic leadership: a leadership concept that states that leaders convey
values that are other-centred vs. self-centred and who role model ethical conduct
o Truth telling
o Promise keeping
o Fairness
o Respect
Chapter 12
How Should Decisions Be Made?
Decision: the choice made from two or more alternatives
The Rational Decision-Making Process:
Rational: refers to choices that are consistent and value-maximizing within specific
constraints
Rational Decision Making Model: a six-step decision making model that describes how
individuals should behave in order to maximize some outcome
1. Define the problem
2. Identify the criteria
3. Allocate weights to the criteria
4. Develop alternatives
5. Evaluate the alternatives
6. Select the best alternative
Assumptions of the Model:
Problem clarity: the problem is clear and unambiguous
Known options: assumed the decision maker can identify all the relevant criteria and can
list alternatives
Clear preferences: rationality assumes the criteria and alternatives can be ranked and
weighted
Constant preferences: assumed that specific decision criteria are constant and the weights
are constant
No time or cost constraints: decision maker can obtain full info about criteria and
alternatives
Maximum payoff: decision maker will choose the alternative that yields the highest
perceived value
How Do Individuals Actually Make Decisions?
Bounded Rationality in Considering Alternatives:
Bounded rationality: limitations on a person's ability to interpret, process, an act on
information
Intuition:
Intuitive decision making: a subconscious process created out of a person's many
experiences
Judgment Shortcuts:
Overconfidence bias: error in judgment that arises from being far too optimistic about one's
own performance
Anchoring bias: a tendency to fixate on initial information, from which one then fails to
adequately adjust for subsequent information
Confirmation bias: tendency to seek out information that reaffirms past choices and to
discount information that contradicts past judgments
Availability bias: tendency for people to base their judgments on information that is readily
available to them rather than complete data
Escalation of commitment: an increased commitment to a previous decision despite
negative information
Randomness error: tendency of individuals to believe that they can predict the outcome of
random events
Winner's curse: tendency for the winning participants in an auction to pay too much for the
item won
Hindsight bias: tendency to believe falsely, after an outcome of an event is actually known
that one could have accurately predicted that outcome
Improving Decision Making Through Knowledge Management
Knowledge management: process of organizing and distributing an organization's
collective wisdom so that the right information gets to the right people at the right time
o Organization that can quickly and efficiently tap into their employees' collective
experience and wisdom are more likely to outsmart the competition
Group Decision Making
Groupthink and Groupshift:
Groupthink: phenomenon in which group pressures for conformity prevent the group from
critically appraising unusual, minority or unpopular views
Groupshift: phenomenon in which the initial positions of individual group members
became exaggerated because of the interactions of the group
Group Decision-Making Techniques:
Interacting groups: typical groups, where members interact with each other face to face
Brainstorming: an idea-generation process that specifically encourages any and all
alternatives, while withholding any criticism of those alternatives
Nominal group technique: a group decision-making method in which individual members
meet face to face too pool their judgments in a systematic but independent fashion
Electronic meetings: a meeting where members interact on computers, allowing for
anonymity of comments and aggregation of votes
Chapter 13
What Is Organizational Structure?
How job tasks are formally divided, grouped, and coordinated
There are usually flat and pyramidal organizational structures
Chain of Command:
The continuous line of authority that extends from upper organizational levels to the lowest
level and clarifies who reports to whom
o Tells employees who to go to if they have a problem and who they report to
Delegation: assignment of authority to another person to carry out specific duties, allowing
the employee to make some of the decisions
o Employees can become empowered to make decisions that were previously for
managers
Self-managed and cross-functional teams have decreased the relevance of chain-ofcommand
Span of Control:
The number of employees that report to a manager
Determined by the number of employees a manager can efficiently and effectively direct
o The wider of larger the span the more efficient the organization
At some point managers manage too many employees and it becomes less
efficient
Employee performance suffers as managers have limited time to support
individuals
Narrow spans are more expensive, they make communication complex, and are sometimes
overly tight for supervision and lack employee autonomy
Individual Responses to Span of Control:
There is no research to show that there is a best type of span of control
o Each employee is different and will prefer different things compared to the next
employee
Centralization and Decentralization:
Centralization: degree to which decision making is concentrated at a single point in the
organization
o Top managers or executives make decisions without input from lower-level
employees
Decentralization: degree to which decision making is distributed to lower-level employees
o Action can be taken more quickly to solve problems
o More people provide input for decisions, and are closer to the management levels
Governance can help family businesses manage conflicts that may arise
A sense of direction, values to work/live by and understood policies for employees
The Bureaucracy:
An organizational design with highly routine operating tasks achieved through
specialization, formalized rules and regulations, tasks that are grouped into functional
departments, centralized authority, narrow spans of control and decision making that
follows the chain of command
Strengths of Bureaucracy:
Ability to perform standardized activities in a highly efficient manner
o Put together similar specialities in functional departments results in economies of
scale, minimum duplication of staff/equipment and employees who talk with their
peers
An effective structure for ensuring consistent application of policies and practices and
accountability
Weaknesses of Bureaucracy:
Can create subunit conflict, as units begin to compete with each other instead of working
together
Can lead to power being concentrated in just the hands of a few people
The Matrix Structure:
An organizational design that combines functional and product departmentalization
o It has a dual chain of command
o Advertising agencies, research and development, construction, hospitals,
governments, etc.
Employees would have two bosses (function and product managers)
Matrix structures reduce the bureaucratic downfalls such as competition between
departments/divisions
Matrix structures may also create confusion and power struggles and place stress on
employees
o Unclear of who to report to, confusion, ambiguity, role conflict, unclear expectations,
etc.
New Design Options
The Team Structure:
The use of teams as the central device to coordinate work activities
o Breaks down departmental barriers and decentralizes decision making to the level of
the work team
Modular Organization:
A small core organization that outsources major business functions
o Outsources many functions and concentrates on what is does best
Managers in modular organizations spend some time coordinating and controlling external
relations
o Can respond more quickly to environmental changes
o Increased focus on customers and markets
o Devote their technical and managerial talents to their most critical activities
Management may lose partial control of the key parts of the business
o Organizations may be forced to rely on outsiders, this decreases operational control
Imitators use a mechanistic structure to maintain tight controls and low costs, and create
organic subunits to pursue new undertakings
Organizational Size:
Size of an organization greatly affects its structure
Large organizations tend to have more specialization, departmentalization, vertical levels
and rules
o Impact of size becomes less important as an organization expands
Technology:
The way in which an organization transfers its inputs into outputs
Organizational structures adapt to their technology
Variations in Technology:
Degree to routineness: technologies tend toward either routine or non-routine activities
o Routine: automated, standardized operations, assembly line, etc.
o Non-routine: customized, furniture restoring, custom shoe making, etc.
The Relationship Between Technology and Structure:
Routine tasks are associated with taller and more departmentalized structures
Routineness is associated with job descriptions and other formalized documentation
Technology centralization is moderated by the degree of formalization
o Formal/central decision making are control mechanisms
o Routine technology can lead to centralization, only if formalization is low
Environment:
Those institutions or forces outside the organization that potentially affect the
organization's performance
o Suppliers, customers, competitors, regulators, public groups, etc.
The uncertainty of the organizations environment will affects it's structure
Capacity:
Degree to which an organization can support growth
Growing environments can generate excess resources for times of relative scarcity
o Leaves room for an organization to make mistakes, while scare capacity does not
Volatility:
Degree of instability in an environment
o High degree of unpredictable change, and the environment is dynamic
o Difficult for managers to predict accurately the probabilities of decision alternatives
Complexity:
Degree of heterogeneity and concentration among environmental elements
o Organizations with high complexity usually operate with greater unpredictability
o Little room for error, a diverse set of elements in the environment to monitor
constantly
Chapter 14
What Causes Change?
The changing nature of the workforce
o Human resource policies and practices have to change to reflect the needs of an aging
labour force
Technology is changing jobs and organizations
Economic shocks have continued to impose changes on organizations
Competition is changing with globalization and better transportation
Social trends don't remain static, and continually change with time
Change Agents:
People who act as catalysts and assume the responsibility for managing change activities
Approaches to Managing Change
Lewin's Three-Step Model:
Unfreezing: change efforts to overcome the pressures of both individual resistance and
group conformity
Moving: efforts to get employees involved in change process
Refreezing: stabilizing a change intervention by balancing driving and restraining forces
Driving forces: forces that direct behaviour away from the status quo
Restraining forces: forces that hinder movement away from the status quo
Kotter's Eight-Step Plan for Implementing Change:
1. Establish a sense of urgency by creating a compelling reason for why change is needed
2. Form a coalition with enough power to lead the change
3. Create a new vision to direct the change and strategies for achieving the vision
4. Communicate the vision throughout the organization
5. Empower others to act on the vision by removing barriers to change and encouraging risktaking and creative problem-solving
6. Plan for, create, and reward short-term wins that move the organization toward the new
vision
7. Consolidate improvements, reassess changes, and make necessary adjustments in the new
programs
8. Reinforce the changes by demonstrating the relationship between new behaviours and
organizational success
Action Research:
A change process based on the systematic collection of data and then selection of a change
action based on what the analyzed data indicate
o Two step process, first diagnosis followed by analysis and feedback
Appreciative Inquiry:
An approach to change that seeks to identify the unique qualities and special strengths of an
organization, which can then be built on to improve performance
Discovery: to find out what people think are the strengths of the organization
Dreaming: information from the discovery phase is used to speculate on possible
futures for the organization
Design: participants focus on finding a common vision of how the organization will
look, and agree on its unique qualities
Destiny: participants discuss how the organization is going to fulfill its dream
Resistance to Change
Individual Resistance:
Self-interest: people worry that they will lose something of value if change happens
o People look after their own self-interest rather than those of the organization
Misunderstanding and lack of trust: people resist change when they dont understand the
nature of the change and fear that the cost of change will outweigh any potential gains for
them
Different assessments: people resist change when they see it differently than their managers
do and think the costs outweigh the benefits, even for the organization
Low tolerance for change: people resist change because they worry that they do not have
the skills and behaviour required of the new situation
o May feel they are being asked to do too much, too quickly
Cynicism:
Employees often feel cynical about the change process
o Feeling uninformed about what was happening
o Lack of communication and respect about one's manager
o Lack of communication and respect from one's union representative
o Lack of opportunity for meaningful participation in decision making
Organizational Resistance:
Structural inertia: organizations have built in mechanisms to produce stability
Limited focus of change organizations are made up of a number of independent subsystems
Group inertia: even if individuals want to change their behaviour, group norms may act as a
constraints
Threat to expertise: changes in organizational patterns may threaten the expertise of
specialized groups
Threat to establish resource allocation: groups in the organization that control sizable
resources often see change as a threat
Overcoming Resistance to Change
Education and communication
Participant and involvement
Building support and commitment
Implementing changes fairly
Manipulating and co-optation
Selecting people who accept change
Explicit and implicit coercion