ORGANIZATIONAL BEHAVIOR Ace Institute of Management M-B-A-e Term IV, Spring Trimester 2011 Module 4: The Organization PowerPoint Compilation by Course Moderator Satish Jung Shahi Module 4: Organizational Behaviour & Leadership – Ace Institute of Management

Institutionalization: A Forerunner of Culture © 2003 Prentice Hall Inc. All rights reserved.

What Is Organizational Culture? Characteristics: Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability © 2003 Prentice Hall Inc. All rights reserved.

What Is Organizational Culture? (cont’d) © 2003 Prentice Hall Inc. All rights reserved.

What Is Organizational Culture? (cont’d) © 2003 Prentice Hall Inc. All rights reserved.

What Is Organizational Culture? (cont’d) Culture Versus Formalization A strong culture increases behavioral consistency and can act as a substitute for formalization. Organizational Culture Versus National Culture National culture has a greater impact on employees than does their organization’s culture. Nationals selected to work for foreign companies may be atypical of the local/native population. © 2003 Prentice Hall Inc. All rights reserved.

What Do Cultures Do? Culture’s Functions: Defines the boundary between one organization and others. Conveys a sense of identity for its members. Facilitates the generation of commitment to something larger than self-interest. Enhances the stability of the social system. © 2003 Prentice Hall Inc. All rights reserved.

What Do Cultures Do? Culture as a Liability: Barrier to change Barrier to diversity Barrier to acquisitions and mergers © 2003 Prentice Hall Inc. All rights reserved.

Keeping Culture Alive Selection Top Management Socialization Concerned with how well the candidates will fit into the organization. Provides information to candidates about the organization. Top Management Senior executives help establish behavioral norms that are adopted by the organization. Socialization The process that helps new employees adapt to the organization’s culture. © 2003 Prentice Hall Inc. All rights reserved.

Stages in the Socialization Process © 2003 Prentice Hall Inc. All rights reserved.

A Socialization Model 18-2 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.

Entry Socialization Options Formal versus Informal Individual versus Collective Fixed versus Variable Serial versus Random Investiture versus Divestiture 18-3 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.

How Organization Cultures Form 18-4 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.

How Employees Learn Culture Stories Rituals Material Symbols Language © 2003 Prentice Hall Inc. All rights reserved.

Creating An Ethical Organizational Culture Characteristics of Organizations that Develop High Ethical Standards High tolerance for risk Low to moderate in aggressiveness Focus on means as well as outcomes Managerial Practices Promoting an Ethical Culture Being a visible role model. Communicating ethical expectations. Providing ethical training. Visibly rewarding ethical acts and punishing unethical ones. © 2003 Prentice Hall Inc. All rights reserved.

Creating a Customer-Responsive Culture Key Variables Shaping Customer-Responsive Cultures The types of employees hired by the organization. Low formalization: the freedom to meet customer service requirements. Empowering employees with decision-making discretion to please the customer. Good listening skills to understand customer messages. Role clarity that allows service employees to act as “boundary spanners.” Employees who engage in organizational citizenship behaviors. © 2003 Prentice Hall Inc. All rights reserved.

Creating a Customer-Responsive Culture Managerial Actions: Select new employees with personality and attitudes consistent with high service orientation. Train and socialize current employees to be more customer focused. Change organizational structure to give employees more control. Empower employees to make decision about their jobs. © 2003 Prentice Hall Inc. All rights reserved.

Creating a Customer-Responsive Culture Managerial Actions (cont’d) : Lead by conveying a customer-focused vision and demonstrating commitment to customers. Conduct performance appraisals based on customer-focused employee behaviors. Provide ongoing recognition for employees who make special efforts to please customers. © 2003 Prentice Hall Inc. All rights reserved.

Spirituality and Organizational Culture Characteristics: Strong sense of purpose Focus on individual development Trust and openness Employee empowerment Toleration of employee expression © 2003 Prentice Hall Inc. All rights reserved.

How Organizational Cultures Have an Impact on Performance and Satisfaction 18-7 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.

Wrapping-Up Organizational Culture: Imagine: We run the management of Yeti Airlines in Nepal. We have made a strategic alliance with Air Arabia and extended our services along the international air route – the license for which was pending with us due to financial crunch despite permission from the Government of Nepal two years ago. As per this alliance, we will be conducting KTM-KUL-KTM direct flights along the Nepal-Malaysia air route. We need to send one of our collegues as our Station Manager in Kualalumpur, Malaysia. Let us choose that colleague and advise him/her about the new workplace. © 2003 Prentice Hall Inc. All rights reserved

ORGANIZATIONAL BEHAVIOR Ace Institute of Management M-B-A -e Term IV, Spring Trimester 2011 Module 4: The Organization PowerPoint Compilation by Course Moderator Satish Jung Shahi Module 4 : Organizational Behaviour & Leadership – Ace Institute of Management

Forces for Change 19-1a E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Forces for Change (cont’d) 19-1b E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Managing Planned Change Goals of Planned Change: Improving the ability of the organization to adapt to changes in its environment. Changing the behavior of individuals and groups in the organization. © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Resistance to Change Forms of Resistance to Change Overt and immediate Voicing complaints, engaging in job actions Implicit and deferred Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Sources of Individual Resistance to Change 19-2 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Sources of Organizational Resistance to Change 19-40 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Overcoming Resistance to Change Tactics for dealing with resistance to change: Education and communication Participation Facilitation and support Negotiation Manipulation and cooptation Coercion © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Lewin’s Three-Step Change Model © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Lewin’s Three-Step Change Model 19-5 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Unfreezing the Status Quo 19-6 E X H I B I T © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Contemporary Change Issues for Today’s Managers: Stimulating Innovation Sources of Innovation: Structural variables Organic structures Long-tenured management Slack resources Interunit communication Organization’s culture Human resources © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Contemporary Change Issues for Today’s Managers: Creating a Learning Organization Characteristics: Holds a shared vision Discards old ways of thinking. Views organization as system of relationships. Communicates openly. Works together to achieve shared vision. © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Contemporary Change Issues for Today’s Managers: Knowledge Management (KM) Why KM is important: Intellectual assets are as important as physical assets. When individuals leave, their knowledge and experience goes with them. A KM system reduces redundancy and makes the organization more efficient. © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Contemporary Change Issues for Today’s Managers: Culture-Bound Organizations Questions for culture-bound organizations: Do people believe change is even possible? How long will it take to bring about change in the organization? Is resistance to change greater in this organization due to the culture of the society in which it operates? How will the societal culture affect efforts to implement change? How will idea champions in this organization go about gathering support for innovation efforts? © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Additional: Theories of “Learning” 1) Classical Conditioning. - Grew out of experiments to teach dogs to salivate in response to the ringing of a bell, Ivan Pavlov. - Involves the creation of unconditioned stimulus that creates unconditioned response. Learning a conditioned response involves building up an association between a conditioned stimulus and an unconditioned stimulus. - E.g.: Malshree Dhun often brings pleasant memories of the festive season. © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Additional: Theories of “Learning” (…cont.) 2) Operant Conditioning. - Behavior is a function of its consequences. - People learn to behave to get something they want or to avoid something they don’t want. - It involves voluntary or learned behavior in contrast to reflexive or unlearned behavior. - Brought about by B. F. Skinner. - E.g.: You tend to work overtime if your boss assures and implements his commitment to compensate you in your next performance appraisal. © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Additional: Theories of “Learning” (…cont.) 3) Social Learning. - Individuals can learn by observing what happens to other people and just by being told about something, as well as by direct experiences. - Extension of operant conditioning, but also acknowledges the existence of observational learning and the importance of perception in learning. - Processes: Attention; Retention; Motor Reproduction; and, Reinforcement. END © 2003 Prentice Hall Inc. All rights reserved.MBAe OB Fall 2008, Module 4 – Ace Institute of Management

Case Study: “Pack Your Bags, You’ve Been Transferred to Kenya” You have to read this case and answer at least two questions given at the end of the case. Your submission deadline is within this class. This is the final of the seven case studies you have dealt so far. Only top five marks will be considered for your final grading. Each case is worth 6/100 for your final grading. N0TE: NEXT CLASS IS YOUR FINAL FOR THIS MODULE THIS SEMESTER AND WILL INCLUDE YOUR FINAL GROUP PRESENTATIONS! © 2003 Prentice Hall Inc. All rights reserved