Introduction to the Field of Organizational Behavior McGraw-Hill/Irwin McShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Pixar Animation Studios OB practices have helped Pixar Animation Studios to become the world’s most successful animation studio Employee competencies People-centered Teamwork and org learning Constructive conflict John Lassiter Chief Creative Officer of Pixar and Disney 1-2

Organizational Behavior and Organizations The study of what people think, feel, and do in and around organizations Organizations Groups of people who work interdependently toward some purpose John Lassiter Chief Creative Officer of Pixar and Disney 1-3

OB Foundations Distinct field around the 1940s OB concepts discussed for more than 2,000 years Some pivotal scholars before OB formed include: Max Weber Frederick Winslow Taylor Elton Mayo Chester Barnard (shown) Mary Parker Follett Chester Barnard 1-4

Why Study OB? Satisfy the need to understand and predict Helps us to test personal theories Influence behavior – get things done OB improves an organization’s financial health OB is for everyone 1-5

Old Perspective of Organizational Effectiveness Goal oriented -- Effective firms achieve their stated objectives No longer accepted as indicator of org effectiveness Could set easy goals Some goals too abstract to evaluate Company might achieve wrong goals 1-6

Four Perspectives of Organizational Effectiveness Open Systems Perspective Organizational Learning Perspective High-Performance WP Perspective Stakeholder Perspective NOTE: Need to consider all four perspectives when assessing a company’s effectiveness 1-7

Open Systems Perspective Organizations are complex systems that “live” within (and depend upon) the external environment Effective organizations Maintain a close “fit” with changing conditions Transform inputs to outputs efficiently and flexibly Open systems perspective lays the foundation for the other three perspectives or organizational effectiveness 1-8

Open Systems Perspective Feedback Environment 1-9

Organizational Learning Perspective An organization’s capacity to acquire, share, use, and store valuable knowledge Need to consider both stock and flow of knowledge Stock: intellectual capital Flow: org learning processes of acquisition, sharing, and use 1-10

Intellectual Capital Human Capital Structural Capital Knowledge that people possess and generate Structural Capital Knowledge captured in systems and structures Relationship Capital Value derived from satisfied customers, reliable suppliers, etc. 1-11

Organizational Learning Processes KNOWLEDGE ACQUISITION KNOWLEDGE SHARING KNOWLEDGE USE Extracting information and ideas from its environment as well as through insight Distributing knowledge throughout the organization Applying knowledge to organizational processes in ways that improves the organization’s effectiveness Examples in practice Hiring skilled staff Posting case studies on intranet Giving staff freedom to try out ideas 1-12

Organizational Memory The storage and preservation of intellectual capital Retain intellectual capital by: Keeping knowledgeable employees Transferring knowledge to others Transferring human capital to structural capital Successful companies also unlearn 1-13

High Performance Work Practices (HPWPs) HPWPs are internal systems and structures that are associated with successful companies Employees are competitive advantage Value of employees increased through specific practices. Maximum benefit when org practices are bundled 1-14

High Performance Work Practices No consensus, but HPWPs include: Employee involvement and job autonomy (and their combination as self-directed teams). Employee competence (training, selection, etc.). Performance-based rewards 1-15

Stakeholder Perspective Stakeholders: any entity who affects or is affected by the firm’s objectives and actions Personalizes the open systems perspective Challenges with stakeholder perspective: Stakeholders have conflicting interests Firms have limited resources 1-16

Stakeholder Perspective Lockheed Martin is rated by engineering students as an “ideal” employer Pays attention to its many stakeholders Relies on values and ethics to guide decisions Strong emphasis on corporate social responsibility (e.g. photo shows clean-up after hurricane Katrina) Lockheed Martin 1-17

Stakeholders: Values and Ethics Values and ethics prioritize stakeholder interests Values Stable, evaluative beliefs, guide preferences for outcomes or courses of action in various situations Ethics Moral principles/values, determine whether actions are right/wrong and outcomes are good or bad Lockheed Martin 1-18

Stakeholders and CSR Stakeholder perspective includes corporate social responsibility (CSR) Benefit society and environment beyond the firm’s immediate financial interests or legal obligations Organization’s contract with society Triple bottom line Economy, society, environment Lockheed Martin 1-19

Types of Individual Behavior Task Performance Goal-directed behaviors under person’s control Organizational Citizenship Contextual performance – cooperation and helpfulness beyond required job duties more 1-20

Types of Individual Behavior (con’t) Counterproductive Work Behaviors Voluntary behaviors that potentially harm the organization Joining/staying with the Organization Agreeing to employment relationship; remaining in that relationship Maintaining Work Attendance Attending work at required times 1-21

Globalization Economic, social, and cultural connectivity with people in other parts of the world Effects of globalization on organizations New structures Increasing diversity Increasing competitive pressures, intensification 1-22

Increasing Workforce Diversity Surface-level diversity Observable demographic and other overt differences in people (e.g. race, ethnicity, gender, age) Deep-level diversity Differences in psychological characteristics (e.g. personalities, beliefs, values, and attitudes) Example: Differences across age cohorts (e.g. Gen-Y) Implications Leveraging the diversity advantage Also diversity challenges (e.g. teams, conflict) Ethical imperative of diversity 1-23

Employment Relationships Work/life balance Minimizing conflict between work and nonwork demands number one indicator of career success Virtual work Using information technology to perform one’s job away from the traditional physical workplace Telework – issues of replacing face time, clarifying employment expectations 1-24

Organizational Behavior Anchors Multidisciplinary anchor Many OB concepts adopted from other disciplines OB develops its own theories, but scans other fields Systematic research anchor OB researchers rely on scientific method Should apply evidence-based management, but… Bombarded with theories and models Challenge translating general theories to specific situations Swayed by consultant marketing Perceptual biases -- ignoring evidence contrary to our beliefs 1-25

Organizational Behavior Anchors (con’t) Contingency anchor A particular action may have different consequences in different situations Need to diagnose the situation and select best strategy under those conditions Multiple levels of analysis anchor Individual, team, organizational level of analysis OB topics usually relevant at all three levels of analysis 1-26

Introduction to the Field of Organizational Behavior McGraw-Hill/Irwin McShane/Von Glinow OB 5e Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. 1-27