Chapter 1: Organizational Behavior

Organizational Behavior How people act and react in organizations And an understanding of why people behave the way they do Organizations are social entities Combine management, psychology, & sociology

Why is OB Important? Helps you influence the behavior of others (subordinates, managers, coworkers, etc.) Helps you understand and influence your own behavior Technical expertise will only get you so far Need to be able to accomplish things through others Employee behaviors impact financial performance

Historical Perspective of OB Human Relations Movement Quality Movement E-Business Human & Social Capital

Human Relations Movement The Hawthorne Studies People’s attitudes about management affect their performance Recent re-analysis Elton Mayo & Mary Parker Follett People aren’t machines – human factors should be considered Motivation, attitudes, emotional state, etc.

Human Relations Movement Douglas McGregor’s Theory X & Theory Y Theory X Most people dislike work and want to avoid it People require close direction People want to avoid responsibility and have little ambition Theory Y Work is a natural activity People can be self-directed if they are committed to the objective Rewards help commitment Most employees accept and seek responsibility Employees have imagination, ingenuity and creativity

Quality Movement Began in 1980s in US in response to Japan Total Quality Management (TQM) Continuous improvement Customer focused Employee driven* W. Edwards Deming Early leader of quality movement Expert in statistical process control techniques Claimed importance of employees in TQM

E-Business Internet changed communication Easier to communicate more information to more people Net Generation Value freedom, want customization, skeptical of info., value integrity, good collaborators, like speed and innovation.

Human & Social Capital Human Capital Social Capital An individual’s talents & skills Important to all “knowledge workers” Must be grown & developed Social Capital An individual’s professional social network Good relationships with boss, co-workers, subordinates, etc. Helps you get things done & move career forward

21st Century Management Management: working with & through others to achieve organizational objectives Individual  Teams Command & Control  Participative Mgt. Ego-centered  Customer Centered Centralized  Decentralized

Clark Wilson Management Skills Research Dealing effectively with people is the cornerstone of effective management More skilled managers have more productive and happier employees Failed managers tend to overestimate their skill set

Contingency Theories There is no one best way to do something The appropriate managerial action depends on the specifics of the situation No universal rules or laws

Roberta received her first managerial assignment, after completing the management training program, to be the new supervisor of the Customer Complaints department. Friday afternoon, she talked to several managers she had worked with in the training program, and they confirmed what she had heard elsewhere – the department had a terrible reputation, and it was deserved. Monday Roberta arrived early to familiarize herself with the office before the staff arrived. Much to her surprise, over half of them were already there. Within fifteen minutes, the rest had arrived. This seemed like a good time for an informal meeting. Roberta walked out of her office and addressed the group as they sat at their desks. “Good morning, I'm Roberta James, your new supervisor. I’m looking forward to getting to know all of you and to working with you to develop and maintain a good Customer Complaint department.” Suddenly the phone started ringing, but no one answered it. “Why doesn't someone answer the phone?” Roberta asked. One staff member replied, “It's not 9:00 yet, we're not open.” “They'll call back,” said another.

Corporate Social Responsibility Corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law or union contract.

Corporate Social Responsibility Pyramid

Is Business Ethics Really a Problem? 62% occasionally observe unethical behavior Senior managers think their companies are more ethical than lower level employees 64% mislead about finances 41% of applicants lied about their education

7 Moral Principles for Managers Dignity of human life Autonomy Honesty Loyalty Fairness Humaneness The common good

Ethical Climate In order to create an ethical climate, managers should: Behave ethically themselves Screen job applicants Have a code of ethics Provide ethics training Reward ethical behavior Assign responsibility for ethical climate to someone (chief ethics officer)

Jonica Gunson is the environmental compliance manager for a small plastics manufacturing company. She is currently faced with the decision whether or not to spend money on new technology that will reduce the level of a particular toxin in the wastewater that flows out the back of the factory and into a lake.  The factory's emission levels are already within legal limits. However, Jonica knows that environmental regulations for this particular toxin are lagging behind scientific evidence. In fact, a scientist from the university had been quoted in the newspaper recently, saying that if emission levels stayed at this level, the fish in the lakes and rivers in the area might soon have to be declared unsafe for human consumption.  Further, if companies in the region don't engage in some self-regulation on this issue, there is reason to fear that the government — backed by public opinion — may force companies to begin using the new technology, and may also begin requiring monthly emission level reports (which would be both expensive and time consuming).  But the company's environmental compliance budget is tight. Asking for this new technology to be installed would put Jonica's department over-budget, and could jeopardize the company's ability to show a profit this year. 

The Performance of Ethics Ethical companies outperform unethical ones by 200-300 % in market value (Business and Society Review) $30K invested in 30 ethical companies over 30 years would yield 4.7x to the Dow Jones Industrials (Johnson & Johnson Research Study) 40% of consumers would boycott an unethical company, 20% have done so (Conference Board) Workers in ethical companies are 6x more loyal (Hudson Institute)