Introduction to Organizational Behavior

Introduction to Organizational Behavior
Understanding and Managing Organizational Behavior Chapter 1 Sixth Edition Jennifer M. George & Gareth R. Jones Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
Learning Objectives Define organizational behavior and explain how and why it determines the effectiveness of an organization Appreciate why the study of organizational behavior improves a person’s ability to understand and respond to events that take place in a work setting Differentiate among the three levels at which organizational behavior is examined Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Appreciate the way changes in an organization’s external environment continually create challenges for organizational behavior Describe the four main kinds of forces in the environment that post the most opportunities and problems for organizations today Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Xerox’s CEOs turn the company around
At Xerox, Mulcahy and Burns found a way to create a set of new organizational behaviors Favorable work situation has been created because Xerox: Strives to increase employees’ skills and knowledge Provides employees at all levels with rewards to encourage high performance Creates a work setting in which employees develop a longer- term commitment to their organization The opening case describes how Anee Mulcahy and Ursula Burns devised a successful turnaround plan to save Xerox. Mulcahy and Burns worked closely with customers to develop new strategies for Xerox based on improved products and services. In 2009, Mulcahy became the chairperson of Xerox and hand-picked Burns to succeed her as CEO, which Burns did in 2010. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

What Is an Organization?
An organization is a collection of people who work together and coordinate their actions to achieve a wide variety of goals The goals are what individuals are trying to accomplish by being members of an organization (earning a lot of money, helping promote a worthy cause, achieving certain levels of personal power and prestige, enjoying a satisfying work experience). The goals are also what the organization as a whole is trying to accomplish (providing innovative goods and services that customers want, getting candidates elected, raising money for medical research, making a profit to reward stockholders, managers, and employees, and being socially responsible and protecting the natural environment). An effective organization is one that achieves its goals. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

What Is Organizational Behavior?
Organizational behavior (OB) is the study of factors that have an impact on how people and groups act, think, feel, and respond to work and organizations, and how organizations respond to their environments OB is important to study because most people will work for or with someone else at some point and will be affected both positively and negatively by their experiences at work. OB provides a framework for understanding and appreciating the many forces that affect behavior. OB helps us understand questions like: Why are some motivated to join an organization while others are not? Why do some people feel good or bad about their jobs? Why do some people stay with an organization for 30 years while others change jobs regularly? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

What Is Organizational Behavior?
Exhibit 1.1 Insert Exhibit 1.1 here Exhibit 1.1 illustrates how organizational behavior concepts and theories allow people to correctly understand, describe, and analyze the characteristics of individuals, groups, work situations, and the organization itself. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 4

Levels of Analysis Exhibit 1.2 Organizational Level Group Level Individual Level In practice, there are three main levels at which organizational behavior is examined: the individual, the group, and the organization as a whole. A full understanding of OB is impossible without a thorough examination of the factors that affect behavior at each level. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Components of Organizational Behavior
Exhibit 1.3 organizational behavior requires studying Understanding Part One Individuals in Organizations Part Two Group and Team Processes Part Three Organizational Processes Exhibit 1.3 illustrates how the text covers the three levels of organizational behavior. Part One includes chapters 2-9. Part Two includes chapters Part Three includes chapters Part One emphasizes individuals in organizations, but the effects of group or team characteristics and processes (such as communication and decision making) on organizational behavior also need to be understood. A group is two or more people who interact to achieve their goals. A team is a group in which members work together intensively and develop team-specific routines to achieve a common group goal. A virtual team is a group whose members work together intensively via electronic means using a common IT platform, and who may never actually meet. The number of members in a group, the type and diversity of team members, the tasks they perform, and the attractiveness of a group to its members all influence not just the behavior of the group as a whole but also the behaviors of individuals within the group. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Why Study OB? To understand behavior in organizations To learn to use and apply concepts, theories, and techniques to improve, enhance, or change behavior To enable managers to direct and supervise the activities of employees The ability to use the tools of OB to understand behavior in organizations is one reason for studying this topic. A second reason is to learn how to use and apply these concepts, theories, and techniques to improve, enhance, or change behavior so that employees, groups, and the whole organization can better achieve their goals. A working knowledge of organizational behavior is important to employees at all levels in the organization because it helps them to appreciate the work situation and how they should behave to achieve their own goals (such as promotion or higher income). But knowledge of OB is particularly important to managers, people who direct and supervise the activities of one or more employees. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

What Is Management? Management is the process of planning, organizing, leading, and controlling an organization’s human, financial, material, and other resources to increase its effectiveness Managers are in a good position to improve their managerial abilities by understanding organizational behavior. Managers at all levels confront the problem of understanding the behavior of their subordinates and responding appropriately. A manager who understands how individual, group, and organizational characteristics affect and shape work attitudes and behavior can begin to experiment to see whether changing one or more of these characteristics might increase the effectiveness of the organization and the individuals and groups it consists of. Organizational effectiveness is the ability of an organization to achieve its goals. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Four Functions of Management
Exhibit 1.4 Planning Decide on organizational goals and allocate and use resources to achieve those goals Organizing Establish the rules and reporting relationships that allow people to achieve organizational goals Controlling Evaluate how well the organization is achieving goals and take action to maintain, improve, and correct performance Leading Encourage and coordinate individuals and groups so that they work toward organizational goals OB and Planning: The study of OB reveals how decisions are made in organizations and how politics and conflict affect the planning process. It shows how group decision making and biases can affect planning. OB and Organizing: OB offers guidelines on how to organize employees to make the best use of their skills and capabilities. OB and Leading: The study of different leadership methods and of how to match leadership style to the characteristics of the organization and all its components is a major concern of OB. OB and Controlling: The theories and concepts of organizational behavior allow managers to understand and accurately diagnose work situations in order to pinpoint where corrective action may be needed. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7

OB Today: Trader Joe’s a Success Story
The Trader Joe's approach to organizing entails decentralizing authority and empowering salespeople to take responsibility for meeting customer needs. Employees are given autonomy to make decisions and provide personalized customer service. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Managerial Roles Leader Monitor Spokesperson Disturbance handler Negotiator Figurehead Liaison Disseminator Entrepreneur Resource allocator A role is a set of behaviors or tasks a person is expected to perform because of the position he or she holds in a group or organization. One researcher, Henry Mintzberg, has identified ten roles that managers play as they manage the behavior of people inside and outside the organization (such as customers or suppliers). Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 8

Managerial Skills Conceptual Skills Technical Skills Human Skills A skill is an ability to act in a way that allows a person to perform well in his or her role. Managers need all three types of skills to perform their organizational functions and roles effectively. Conceptual Skills refer to the ability to analyze and diagnose a situation and distinguish between cause and effect. Human Skills refer to the ability to understand, work with, lead, and control the behavior of other people and groups. Technical Skills refer to job-specific knowledge and techniques. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 9

An Open Systems View of Organizational Behavior
Exhibit 1.6 In an open system, an organization takes in resources from its external environment and converts or transforms them into goods and services that are sent back to that environment, where they are bought by customers. The activities of most organizations can be modeled using the open-systems view. Consider asking students to apply the open systems model to a company’s processes. The system is said to be open because the organization draws from and interacts with the external environment to secure resources, transform them, and then sell the products created to customers. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Challenges for OB 1: Changing Social/Cultural Environment 2: Evolving Global Environment 3: Advancing Information Technology 4: Shifting Work/Employment Relationships Each challenge will be addressed on the following slides. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Changing Social and Cultural Environment
National culture Organizational ethics and well-being Diverse workforce The first challenge is the changing social and cultural environment. Forces in the social and cultural environment are those that are due to changes in the way people live and work – changes in values, attitudes, and beliefs brought about by changes in a nation’s culture and the characteristics of its people. National culture is the set of values or beliefs that a society considers important and the norms of behavior that are approved or sanctioned in that society. Over time, national cultures change and this affects the values and beliefs of each nation’s members. An organization’s ethics are the values, beliefs, and moral rules its managers and employees should use to analyze or interpret a situation and then decide what is the most appropriate way to behave. Ethical organizational behavior affects the well-being (happiness, health, and prosperity) of a nation, an organization, citizens, and employees. Metabolife International’s use of ephedra in its supplements is used as an example in the text. Ethics also define an organization’s social responsibility – its obligations toward people or groups outside the organization that are directly affected by its actions. The diversity component of this challenge is covered on the following slide. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Diversity Challenges Fairness and Justice Decision Making and Performance Flexibility Diversity is differences resulting from age, gender, race, ethnicity, religion, sexual orientation, and socioeconomic background, and capabilities/ disabilities. The increasing diversity of the workforce presents three challenges for organizations and their managers: a fairness and justice challenge, a decision-making and performance challenge, and a flexibility challenge. A goal to increase diversity can strain an organization’s ability to satisfy the aspirations of at least part of its workforce. Actively recruiting and promoting minorities can lead to difficult equity issues. How can organizations benefit from the attitudes and perspectives of people with diverse backgrounds? The third diversity challenge is to be sensitive to the needs of different kinds of employees and to try to develop flexible employment approaches that increase their well-being. Examples include new benefits packages customized to needs of different groups of employees (e.g., domestic partner benefits), flextime, job sharing, and mentoring. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Challenges Created by Diverse Workforces
Exhibit 1.7 Exhibit 1.7 illustrates the characteristics used to define the bases of diversity. Companies are taking several approaches to deal with a diverse workforce. Examples of some of these approaches include the following: * New benefits packages customized to the needs of different groups of employees, such as single employees with no children and families, gays in long-term committed relationships, and employees caring for aged parents. * Flexible employment conditions (such as flextime) that give employees input into the length and scheduling of their workweek. * Arrangements that allow for job sharing so that two or more employees can share the same job (to take care of children or aged parents, for example). * Designing jobs and the buildings that house organizations to be sensitive to the special needs of handicapped employees (and customers). * Creating management programs designed to provide constructive feedback to employees about their personal styles of dealing with minority employees. * Establishing mentoring relationships to support minority employees. * Establishing informal networks among minority employees to provide social support. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Evolving Global Environment
Understanding Global Differences Global Learning Global Crisis Management The challenge of responding to social and cultural forces increases as organizations expand their operations globally. Global organizations like GM, Toyota, Kokia, PepsiCo, and Sony produce or sell their products in countries throughout the world. Global organizations must appreciate the differences between countries and benefit from the knowledge to improve an organization’s behaviors and procedures. People in different countries have different values, beliefs, and attitudes. Global organizations must find ways to design processes to fit each culture while maintaining fairness and flexibility. Global learning is the process of acquiring and learning the skills, knowledge, and organizational behaviors and procedures from global situations. More companies are rotating their employees to overseas operations so they can learn firsthand the problems and opportunities that lie abroad. Expatriate employees are employees who live and work for companies located abroad. Extensive global learning allows for more effective responses to the increasing number of crises or disasters that are occurring for natural or manmade causes or because of international terrorism and geopolitical conflicts. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Crisis Management Decisions
Creating teams to facilitate rapid decision making and communication Establishing the organizational chain of command and reporting relationships necessary to mobilize a fast response Recruiting and selecting the right people to lead and work in such teams Developing bargaining and negotiating strategies to manage conflicts that arise whenever people and groups have different interests and objectives Organizational behavior has an important role to play in helping people and organizations respond to such crises for it provides lessons as to how to manage and organize the resources needed to respond to a crisis. How well managers make these decisions determines how quickly an effective response to a crisis can be implemented, and sometimes can prevent or reduce the severity of the crisis itself. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Advancing Information Technology
Organizational Learning Creativity Innovation Information Knowledge Information Technology Information is a set of data, facts, numbers, and words that has been organized in such a way as to provide its users with knowledge. Knowledge is what a person perceives, recognizes, identifies, or discovers from analyzing data and information. IT consists of the many different kinds of computer and communications hardware and software and the skills designers, programmers, managers, and technicians bring to it. IT is used to acquire, define, input, arrange, organize, manipulate, store, and transmit facts, data, and information to create knowledge and promote organizational learning. Organizational learning occurs when members can manage information and knowledge to achieve a better fit between the organization and its environment. Intranets are networks of IT inside an organization that link its members. Creativity is the generation of novel and useful ideas. Innovation is an organization’s ability to make new or improved goods and services or improvements in the way they are produced. IT plays a major role in fostering creativity and innovation because it changes organizational behaviors and procedures. Innovation is an activity that requires constant updating of knowledge and a constant search for new ideas and technological developments that can be used to improve a product over time. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Shifting Work/Employment Relationships
Downsizing Empowerment and Self-Managed Teams Contingent Workers Outsourcing Downsizing is the process by which organizations lay off managers and workers to reduce costs Empowerment is the process of giving employees throughout an organization the authority to make important decisions and be responsible for their outcomes. Self-managed team are work groups who have been empowered and given the responsibility for leading themselves and ensuring that they accomplish their goals. Contingent workers are people who are employed for temporary periods by an organization and who receive no benefits such as health insurance or pensions. Outsourcing is the process of employing people and groups outside the organization to perform specific jobs or types of work activities that used to be performed by the organization itself. This is accomplished sometimes by freelancers – independent individuals who contract with an organization to perform specific tasks. Downsizing, empowered self-managed teams, the employment of part-time contingent workers, and outsourcing are ways in which organizations are changing organizational behaviors and procedures to battle effectively against domestic and global competitors. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

A Short History of Organizational Behavior
Appendix 1A: F.W. Taylor and Scientific Management Mary Parker Follett Hawthorne Studies Theory X and Y The systematic study of OB began in the closing decades of the nineteenth century after the industrial revolution. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

F.W. Taylor and Scientific Management
Scientific management is the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency The amount of and effort each employee expends to produce a unit of output can be reduced by increasing specialization and the division of labor Frederick Taylor ( ) is best known for defining the techniques of scientific management. Taylor was a manufacturing manager who eventually became a consultant and taught other managers how to apply the principles of scientific management. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Four Principles of Scientific Management
1. Study the way employees perform their tasks, gather informal job knowledge that employees possess, and experiment with ways of improving the way tasks are performed 2. Codify the new methods of performing tasks into written rules and standard operating procedures To discover the most efficient method of performing specific tasks, Taylor studied and measured the ways different employees went about performing their tasks. He used time and motion studies. Once he understood the existing method of performing a task, he would experiment with ways to increase specialization. He advocated that once the best method was found for performing a particular task, it should be recorded so that it could be taught to all employees performing the same task. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Four Principles of Scientific Management_2
3. Carefully select employees so that they possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures 4. Establish an acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level Employees who could not be trained to the level required were transferred to a job where they were able to reach the minimum required level of proficiency. Taylor advocated that employees should benefit from any gains in performance. They should be paid a bonus and receive some percentage of the performance gains achieved through the more efficient work process. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Mary Parker Follett Management must consider the human side Employees should be involved in job analysis Person with the knowledge should be in control of the work process regardless of position Cross-functioning teams used to accomplish projects Mary Parker Follett ( ) was concerned that Taylor was ignoring the human side of the organization. Her approach was very radical for the time. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

The Hawthorne Studies Hawthorne Works of the Western Electric Company; Initiated as an attempt to investigate how characteristics of the work setting affect employee fatigue and performance (i.e., lighting) Found that productivity increased regardless of whether illumination was raised or lowered The Hawthorne Studies refers to a series of studies conducted from 1924 to 1932 at the Hawthorne Works of the Western Electric Company. The study was initiated to investigate how the level of lighting would affect employee fatigue and performance. The researchers conducted an experiment in which they systematically measured employee productivity at various levels of illumination. However, no matter whether the lighting was raised or lowered, productivity increased. The researchers were puzzled and invited Elton Mayo to assist them. Mayo proposed the use of the relay assembly test to investigate other aspects of the work context on job performance. Eventually, they found that the employees were responding to the increased attention from the researchers. The Hawthorne Effect suggested that the attitude of employees toward their managers affects the employees’ performance. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

The Hawthorne Studies_2
Factors influencing behavior: Attention from researchers Manager’s leadership approach Work group norms The “Hawthorne Effect” Elton Mayo and F.J. Roethlisberger found that employees adopted norms of output to protect their jobs. Those who performed above the norms were called ratebusters and those who performed below the norms were called chisellers. Workgroup members discipline both in order to create a fair pace of work. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Douglas McGregor: Theory X and Theory Y
Employees will do what is good for the organization when committed Managers must create setting to encourage commitment to goals and provide opportunities for initiative Theory X Average employee is lazy, dislikes work, and will try to do as little as possible Manager’s task is to supervise closely and control employees through reward and punishment Several studies after World War II revealed how assumptions about employees’ attitudes and behavior affect managers’ behaviors. Douglas McGregor proposed that two different sets of assumptions about work attitudes and behaviors dominate the way managers think and affect how they behave in organizations. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning Dissemination or sale of any part of this work (including on the Worldwide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

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