Organizational Behavior Chapter 1 Introduction Organizational Behavior Prepared by Sohail Ayaz 03006088501 Institute of Social Sciences rsohailayaz@gmail.com

What Would You Do? Headquarters, Amazon.com, Seattle, Georgia. Amazon grew so fast that it lost control of the basics Sales were growing, but the company was poorly managed Amazon has lost over $3 billion since its inception, but is finally earning profits How can Amazon do a better job to fix what’s going wrong?

What Is Management? After reading the next two sections, you should be able to: describe what management is. explain the four functions of management.

Getting work done through others Management Is… Effectiveness Efficiency Getting work done through others 1

Enter Organizational Behavior Organizational behavior (OB) A field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness. © 2005 Prentice Hall Inc. All rights reserved.

Organizational Performance Efficiency A measure of how well or how productively resources are used to achieve a goal Effectiveness A measure of the appropriateness of the goals an organization is pursuing and the degree to which they are achieved.

Management Functions Planning Organizing Leading Controlling 2

Planning Planning Determining organizational goals and a means for achieving them 2.1

Organizing Deciding where decisions will be made Who will do what jobs and tasks Who will work for whom 2.2

Leading Leading Inspiring Motivating 2.3 For Anne Mulcahy, CEO of Xerox, the key to successful leadership is communicating with the company’s most important constituents: employees and customers. 2.3

Controlling Controlling Monitoring progress toward goal achievement and taking corrective action when needed 2.4

The Control Process 2.4 Set standards to achieve goals Make changes to return performance to standards Compare actual performance to standards 2.4

What Do Managers Do? After reading the next two sections, you should be able to: describe different kinds of managers. explain the major roles and subroles that managers perform in their jobs.

Levels of Management Top Managers Middle Managers First-Line Managers Team Leaders 3

Levels of Management

Top Managers Chief Executive Officer (CEO) Chief Operating Officer (COO) Chief Financial Officer (CFO) Chief Information Officer (CIO) 3.1 3

Responsibilities of Top Managers Creating a context for change Developing commitment and ownership in employees Creating a positive organizational culture through language and action Monitoring their business environments 3.1

Middle Managers Plant Manager Regional Manager Divisional Manager 3.2

Responsibilities of Middle Managers Plan and allocate resources to meet objectives Coordinate and link groups, departments, and divisions Monitor and manage the performance of subunits and managers who report to them Implement changes or strategies generated by top managers 3.2

First-Line Managers Office Manager Shift Supervisor Department Manager 3.3 3

Responsibilities of First-Line Managers Manage the performance of entry-level employees Encourage, monitor, and reward the performance of workers Teach entry-level employees how to do their jobs Make detailed schedules and operating plans 3.3

Responsibilities of Team Leaders Facilitate team performance Manage external relations Facilitate internal team relationships 3.4

Managerial Roles Interpersonal Informational Decisional 4 Figurehead Leader Liaison Monitor Disseminator Spokesperson Entrepreneur Disturbance Handler Resource Allocator Negotiator 4 Adapted from Exhibit 1.4 H. Mintzberg, “The Manager’s Job: Folklore and Fact:.” Harvard Business Review, July-August 1975.

Managerial Roles Interpersonal Roles Figurehead Leader Liaison Managers perform ceremonial duties Managers motivate and encourage workers to accomplish objectives Managers deal with people outside their units 4.1

Managerial Roles Informational Roles Monitor Disseminator Spokesperson Managers scan their environment for information Managers share information with others in their company Managers share information with others outside their departments or companies 4.2

Managerial Roles Decisional Roles Entrepreneur Disturbance Handler Resource Allocator Negotiator Managers adapt to incremental change Managers respond to problems that demand immediate action Managers decide who gets what resources Managers negotiate schedules, projects, goals, outcomes, resources, and raises 4.3

What Does It Take to Be a Manager? After reading the next three sections, you should be able to: explain what companies look for in managers. discuss the top mistakes that managers make in their jobs. describe the transition that employees go through when they are promoted to management.

What Companies Look for in Managers Technical Skills Human Skills Conceptual Skills Motivation to Manage 5

What Companies Look for in Managers Skills are more or less important at different levels of management: 5

Mistakes Managers Make 1. Insensitive to others 2. Cold, aloof, arrogant 3. Betrayal of trust 4. Overly ambitious 5. Specific performance problems with the business 6. Overmanaging: unable to delegate or build a team 7. Unable to staff effectively 8. Unable to think strategically 9. Unable to adapt to boss with different style 10. Overdependent on advocate or mentor 6 Adapted from Exhibit 1.6 McCall & Lombardo, “What Makes a Top Executive?” Psychology Today, Feb 1983

The First Year Management Transition Be the boss Formal authority Manage tasks Job is not managing people Initial expecta- tions were wrong Fast pace Heavy workload Job is to be problem-solver and troubleshooter No longer “doer” Communication, listening, positive reinforcement Learning to adapt and control stress Job is people development Managers’ Initial Expectations After Six Months As a Manager After a Year As a Manager 7 Adapted from Exhibit 1.7

Why Management Matters After reading this section, you should be able to: explain how and why companies can create competitive advantage through people.

Competitive Advantage through People Management Practices in Top Performing Companies 1. Employment Security 2. Selective Hiring 3. Self-Managed Teams and Decentralization 4. High Wages Contingent on Organizational Performance 5. Training and Skill Development 6. Reduction of Status Differences 7. Sharing Information 8 Adapted from Exhibit 1.8

Competitive Advantage through People J.M. Smucker Company has been on Fortune’s list of 100 Best Companies to Work For since the list was started in 1998. Smucker’s has extremely low employee turnover and extremely high employee satisfaction. Tim and Richard Smucker are pictured here.

Competitive Advantage through People Competitive Advantages of Well-Managed Companies Sales Revenues Profits Stock Market Returns Customer Satisfaction http://www.greatplacetowork.com/best/list-bestusa.htm Web Link 8