1. Organizational Behavior and Leadership
MBA 552
Organizational Behavior and Leadership

2. Introduction to the Field of Organizational Behavior

3. Organizational behavior (OB)
The study of what people think, feel, and do in and around organizations.

4. Values
Stable, long-lasting beliefs about what is important in a variety of situations

5. What are Organizations?
Groups of people who work interdependently toward some purpose
Structured patterns of interaction
Coordinated tasks
Work toward some purpose
© N. B. Scott

6. Why Study Organizational Behavior
Understand
organizational
events
Organizational
Behavior
Research
Influence
organizational
events
Predict
organizational
events

7. Organizational culture
The basic pattern of shared assumptions, values, and beliefs governing the way employees within an organization think about and act on problems and opportunities

8. Trends: Information Technology
Affects how employees interact
Virtual teams
Telecommuting
Affects how organizations are configured
Network structures -- alliance of several organizations

9. Trends: Globalization
Global companies:
Extend their activities to other parts of the world
actively participate in other markets
compete against firms in other countries

10. Trends: Globalization
Implications of globalization:
New organizational structures
Different forms of communication
More competition, change, mergers, downsizing, stress
Need more sensitivity to cultural differences

11. Network structure
An alliance of several organizations for the purpose of creating a product or serving a client

12. Virtual teams
Cross-functional groups that operate across space, time, and organizational boundaries with members who communicate mainly through information technologies

13. Contingent work
Any job in which the individual does not have an explicit or implicit contract for long-term employment, or one in which the minimum hours of work can vary in a nonsystematic way.

14. Trends: Employment Relationship
Employability
employees perform many tasks, not a specific job
Contingent work
no explicit or implicit contract for long-term employment
Telecommuting
working from home, usually with a computer connection to the office
Virtual teams
operate across space, time, and organizational boundaries; mainly communicate through electronic technologies

15. Trends: Changing Workforce
Primary and secondary diversity
More women in workforce and professions
Different needs of Gen-X, Gen-Y, and baby-boomers
Diversity has advantages, but firms need to adjust through:
cultural awareness
family-friendly
empowerment

16. Primary Dimensions of Diversity
Ethnicity
Race
Mental/Physical Qualities
Age
Gender
Sexual Orientation

17. Secondary Dimensions of Diversity
First Language
Life Experiences
Geographic Location
Behavioral Style
Education
Income
Work Experience
Work Style
Parental Status
Marital Status
Occupation
Religion

18. More women in workforce and professions
Women represent 50% of the paid workforce.
Women represent 50% of professional accountants
Women represent 43% of medical school enrollment
Women represent 4% of the leadership of corporations

19. Different needs of Gen-X, Gen-Y, and baby-boomers
Baby-boomers born desire job security and are workaholics
Gen-X born less loyal seek and expect less security
Gen-Y born 1978 – 88? Expect plenty of responsibility and involvement in the employment relationship.
Different generations bring different values and expectations

20. Trends: Values and Ethics
Stable, long-lasting beliefs about what is important
personal, cultural, organizational, professional
Importance of values
Globalization -- more awareness of different values
Values replacing command-and-control
More emphasis on ethical business conduct
Ethics
Moral principles/values -- determines whether actions are right/wrong and outcomes are good/bad

21. Organizational Behavior Anchors
Multidisciplinary
anchor
Organizational
Behavior
Anchors
Open systems
anchor
Systematic
research
anchor
Multiple levels
of analysis
anchor
Contingency
anchor

22. Multidisciplinary Anchor
Psychology – Motivation, perception, attitudes, personality, job stress, leadership
Sociology- Team Dynamics, roles, socialization, communication patterns, organizational power
Anthropology- Corporate culture, organizational rituals, cross-cultural dynamics
Political Science- Inter-group conflict, coalition formation, power and politics, decision-making
Economics- Decision-making, negotiation, power

23. Multidisciplinary Anchor
Industrial engineering- job design, productivity, work measurement
Communications- Knowledge management, electronic mail, corporate culture, employee socialization
Information systems- Team dynamics, decision-making, knowledge management
Marketing- Knowledge management, creativity, decision-making
Women’s studies- Organizational power, perceptions

24. Systematic Research Anchor
Systematic collection of data about organizational principles and practices

25. Scientific method
A systematic, controlled, empirical, and critical investigation of hypothetical propositions about the presumed relationships among natural phenomena

26. Contingency Anchor It depends ------ on the situation
Selection of the best strategy depends on the conditions under which a decision must be made.

27. Contingency approach
The idea that a particular action may have different consequences in different situations

28. Multiple Levels of Analysis Anchor
Individual Level - includes the characteristics and behaviors of employees including thought processes such as motivation, perception, personalities, attitudes, and values.

29. Multiple Levels of Analysis Anchor
Team Level – considers interaction of people, teams dynamics, decisions, power, organizational politics, conflict, and leadership.
Organizational Level- focuses on how people structure working relationships and how organizations interact with their environment

30. Open Systems Anchor
Organizations that take their sustenance from the environment and, in turn, affect that environment through their output

31. Open Systems Anchor of OB
Feedback
Feedback
Subsystem
Inputs
Outputs
Organization

32. Stakeholders
Shareholders, customers, suppliers, governments, and any other groups with a vested interest in the organization.
They influence the firm’s access to inputs and ability to discharge outputs.

33. Knowledge Management Defined
Any structured activity that improves an organization’s capacity to acquire, share, and use knowledge for its survival and success

34. Intellectual capital
The sum of an organization’s human capital, structural capital, and relationship capital

35. Intellectual Capital Human capital
Knowledge that employees possess and generate
Structural capital
Knowledge captured in systems and structures
Relationship capital
Value derived from satisfied customers, reliable suppliers, and others

36. Knowledge Management Processes
Knowledge acquisition
Grafting
Learning
Experimentation
Knowledge sharing
Communication
Communities of practice
Knowledge use
Awareness
Freedom to apply knowledge

37. Grafting
The process of acquiring knowledge by hiring individuals or buying entire companies

38. 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

39. Fully describe intellectual capital, and explain how an organization can retain this capital
Intellectual capital is the sum of an organization's human capital, organizational capital, and relationship capital. Human capital refers to the knowledge that employees possess and generate. Structural capital is the knowledge captured and retained in an organization's systems and structures. Relationship capital is the value derived from satisfied customers, reliable suppliers, and other external sources that provide added value.

40. Intellectual capital retention continued
Retaining intellectual capital refers to retaining organizational memory. This includes keeping good employees and systematically transferring their human capital into structural capital when they must leave. It also includes documentation -- bringing out hidden knowledge, organizing it, and putting it in a form that can be available to others. It also includes embedding knowledge in the organization’s systems and structures.

41. Communities of practice:
Informal groups bound together by shared expertise and passion for a particular activity or interest.

42. Organization Culture Defining culture Does it matter?
Describing culture
Acquiring culture
Changing culture

43. Defining Culture What is it? Characteristics:
“...the shared patterns of thought, belief, feelings, and values that result from shared experience and common learning”
“system of shared meaning”
“The social glue that holds the organization together”
Characteristics:
Holistic
Historically determined
Socially constructed (perceptions)
Soft
Difficult to change

44. Climate vs. Culture Climate = actual events
Culture = individuals’ perception of events

45. Does It Matter? Enhances group members’ ability to adapt and survive
Reduces uncertainty about what to do and how to do it (and thus, reduces anxiety)
Provides sense of mission
Strong or widely-held culture may lead to high performance (jury’s out on this one)

46. Single or Multiple Cultures ?
Multiple cultures may be a sign of conflict
Mergers
Top-down attempts to “manage” culture
Subcultures (core culture + adaptations)
Countercultures
Conflict -- example here is the UP purchase of Oak Ridge -- big corporate meets small town family (the bone marrow transplant); also, “Howie Makem” from Rivethead
Subcultures - often by occupational groups
Countercultures -- can be a source of change (DeLorean’s attempt to change culture at GM)

47. What is Included? Common language and conceptual categories
Group boundaries and criteria for inclusion and exclusion
Power and status
Intimacy, friendship, and love
Rewards and punishments: what is rewarded and punished, as well as what rewards and punishments are
Ideology and “religion”: that is, how to manage the unmanageable and explain the unexplainable

48. Recognizing Culture Events: Communications Things Rites Ceremonials
Rituals
Communications
Myths
Sagas
Legends
Stories
Folktales
Things
Symbols
Language
Gestures
Physical setting
Artifacts
Really minor distinctions among these
Rites: planned sets of activities involving several forms of cultural expressions (initiation)
Ceremonials: several rites, connected with a single occasion or event (Mary Kay convention)
Rituals: standardized set of techniques and behaviors (“doubling up”)
Myth: dramatic narrative of imaginary events used to explain origins or transformations (i.e., reactions to crises)
Saga: a historical narrative about the accomplishments of a group and its leaders
Legend: a handed down narrative of an historical event, embellished with fictional details (IBM and the name badge)
Story: a narrative based on true events, which may incorporate fiction (The GM refrigerator)
Folktale: a completely fictional narrative
Symbol: any object, act, event, quality, or relation which serves a s a vehicle to convey meaning
Language: the use of language and words to convey meaning
Gesture: the use of body movements to convey meaning
Physical setting: physical surroundings such as offices, buildings, etc.
Artifact: material objects used to facilitate culturally expressive activities

49. Layers of Culture Practices Symbols Rituals Heroes Values
The layers move from more to less visible/tangible.
Symbols are “words, gestures, or objects that carry a particular meaning within a culture”.
Heroes are “persons, alive or dead, real or imaginary, who possess characteristics highly prized in the culture and who thus serve as models for behavior”.
Rituals are “collective activities that are technically superfluous but are socially essential within a culture—they are therefore carried out foe their own sake”.
Values are not visible; they are “broad, non-specific feelings of good and evil, beautiful and ugly, normal and abnormal, rational and irrational—feelings that are often unconscious and rarely discussable, that cannot be observed as such but are manifested in alternatives of behavior”.

50. Cultural Dimensions (Hofstede)
Process vs. results
Employee vs. job
Parochial vs. professional
Open vs. closed
Loose vs. tight
Normative vs. pragmatic
Process-oriented vs. results-oriented
•Means vs. goals
•Process-orientation associated with manufacturing and office units; results-orientation associated with R & D and service units
Employee-oriented vs. job-oriented
•Concern for people vs. concern for getting the job done
•Job-oriented units evaluated on profits; people oriented units evaluated on performance against budget
•Total capital higher in employee-oriented organizations
Parochial vs. professional
•Individuals’ identity derived from organization vs. type of job
•Professional organizations more specialized
Open system vs. closed system
•Communications climate, inclusion of new members
Loose control vs. tight control
Internal structure and control
Organizations with “innovative or unpredictable activities” tended to be loosely controlled; organizations with a product requiring precision or where risk is involved (banks, pharmaceutical mfg.) tend to be tightly controlled
Normative vs. pragmatic
•Customer orientation; normative equates to product driven, pragmatic is customer driven
•Pragmatism associated with service units and competitive markets

51. Cultural Dimensions (another perspective)
Innovation and risk-taking
Attention to detail
Outcome orientation
People orientation
Team orientation
Aggressiveness
Stability

52. Yet Another Perspective….
I. Managing change
II. Achieving goals (how effective)
III. Coordinated teamwork
IV. Customer orientation
V. Cultural strength

53. Sources of Culture Founders Historical events Industry
National culture

54. Acquiring Culture Selection process Socialization of new members
Rites and ceremonies
Rite of passage
Rite of renewal
Rite of integration
Rite of Passage facilitate transition of individuals into new social roles and statuses (military basic training, fraternity initiations)
Rite of Enhancement enhance individual members’ social identities and increase their status (awards banquets)
Rite of Renewal refurbish social structure and improve organizational functioning (teambuilding and other OD activities)
Rite of Integration encourage and revive common feelings that bind individuals together and commit them to the organization.

55. Changing Culture Can it be changed? Should it be changed?
In a new organization: The founder effect
Maybe yes?
Maybe no?
Should it be changed?
Strong culture can be a barrier to innovation, growth and change

56. OB in the Cross-Cultural Context
Why are cross-cultural issues important?
Growing impact of global business
New markets
Demand for global services
Low cost manufacturing
U.S. management practices not necessarily likely to translate to different cultures
Paradox: may be easier to adjust to a very different culture than to a very similar culture

57. Why International Management?
Important to have a global perspective
Overseas suppliers or markets
Low cost production
Emerging markets (Eastern Europe, LDC)
E-business has no borders
Immigrant labor force even in U.S.
Culture critical to global business, yet hardest to understand
Based on unspoken values and assumptions
Human behavior isn’t logical
But, human behavior is very complex

58. Approaches to International Business
Geocentric
Use the best
methods, no matter
what the source
Ethnocentric
Home country
methods are the
best
Polycentric
Host country

59. Basic Principles of Culture
What is logical and important in one culture may seem irrational and unimportant in another
In describing cultures, people tend to stress the differences and overlook the similarities
Stereotyping may be inevitable for people who lack frequent contact with another culture
Cultures are not homogenous; differences exist due to gender, age, socioeconomic status, education
Understanding another culture is a journey, not a goal

60. Barriers to Cross-Cultural Understanding
Cultural chauvinism / corporate imperialism / ethnocentrism
Stereotypes (positive and negative)
The highly successful organization may find it more difficult to adapt

61. Cultural Values The ethical dilemma Are there common values?
Basic idea of social organization, goal orientation
Personality structure (Big 5)
What about cultural convergence?
Cultural evolution
Cultural diffusion
Immigration and acculturation

62. What Kinds of Differences Make a Difference?
Some specific items:
Language
Religion
Business practices and etiquette
Different laws
Different customs
Culture in general

63. Language Issues
U.S. one of few countries where we don’t learn a second (or a third) language
Languages learned in school often do not translate to business usage
Do you try?
Not in France, not unless you can pronounce it right !
Other countries, yes: it’s a gesture of goodwill
But, even if the language is the same, will we understand? (Britspeak)

64. Languages of The World
Source:

65. World Religions
Source:

66. Religious Issues Islam: Ramadan fasting
5 daily prayers (15 minutes or so), even at work
Modest dress for women (including head scarf)
Friday, not Sunday (noon prayers on Fridays)

67. Legal Issues Sample of Mexican employment laws
Individual employment contracts required
Strict limits on overtime
Unionization by facility
Full pay for workers while on strike
Discrimination covers political doctrine and social condition

68. Different Country, Different Customs: Dress and Address
“Casual Days” are a U.S. custom
Removing one’s shoes
Addressing Other People
Herr und Frau, not first names in Germany
Titles (Dr., Professor, “Assistant Vice President”, etc.) very important everywhere but U.S.
Business cards essential in Latin America, Europe, Japan
Personal space: much smaller in Latin America, Spain, Italy

69. Different Country, Different Customs: Time
Time fluid in Latin America, Spain, Italy
Time off work: Germany, France, Scandinavia: 6 weeks vacation, August in the country
Africa: everyone attends funerals (impact of AIDS)
Working hours and pace
Europe (esp. Germany) isn’t open 24/7
Latin America, Middle East, Japan: take time to establish relationship before getting down to business

70. Different Country, Different Customs: Eating and Drinking
Tea in Japan
Coffee in Egypt
Vodka in Russia
A pint over lunch in the UK
Dietary Restrictions:
India: no beef
Islamic countries: no pork or alcohol

71. Perceptions of Corruption
Higher score = less corrupt
Source: Transparency International

72. Economic Freedom Higher score = less freedom
Source: Wall Street Journal

73. Cultural Dimensions: Hofstede’s Big 4
Based on survey of IBM employees worldwide
The dimensions
Collectivism - Individualism
Power Distance
Uncertainty Avoidance
Masculinity / Femininity (quality of life)
Weaknesses:
Data 20 years old
However, recent research confirms this structure

74. Change in Cultures
Hofstede’s data indicates some shift to individualism, but no change in other dimensions
Disneyland phenomenon
That is, surface indicators change, but meaning does not
But….the case of Hong Kong
Management values in Hong Kong intermediate between PRC and U.S.
Indication of flexibility / change?

75. Collectivism - Individualism
Identification with group vs. identification as an individual
Collective cultures:
Think in terms of in-groups and out-groups
Life decisions made by group
Look after one’s in-group, no matter what
Individualistic cultures
Concern for self and immediate family
Individual privacy
Association with level of economic development

76. Collectivism - Individualism: Where
Collective…………...……Individualistic
Venezuela
Pakistan
Taiwan
Portugal
Greece
Brazil
India
Japan
Arab countries
Spain
Israel
Austria
Germany
Norway
France
Canada
Great Britain
U.S.

77. Power Distance
The extent to which a culture accepts that power is distributed unevenly
High power distance
People have a place in society, high or low
Superiors are to be respected
Less trust and cooperation
Low power distance
Equal rights for everyone
Hierarchies are established for convenience
Power can be judged to be legitimate or not

78. Power Distance: Where High…………………...……...……Low Philippines Mexico
India
Brazil
Hong Kong
France
Turkey
Pakistan
Japan
Argentina
U.S
Canada
Australia
Germany
Sweden
Ireland
Denmark
Israel

79. Uncertainty Avoidance
The extent to which a society feels threatened by ambiguity and uncertainty
High uncertainty avoidance
Lots of policies, rules, regulations
Hard work valued, time is money
Acceptance of authority
Conflict avoided
Low uncertainty avoidance
Look to common sense
Tolerance, constructive conflict
Aggression less accepted

80. Uncertainty Avoidance: Where
High…………………...……...……Low
Uruguay
Belgium
Japan
France
Mexico
Israel
Italy
Austria
Arab countries
Germany
Switzerland
East Africa
Canada
U.S.
India
Great Britain
Sweden
Singapore

81. Masculinity / Femininity (Quality of Life)
The extent to which society values typically “masculine” values, such as assertiveness, and acquisition of things, as opposed to caring for others and quality of life.
Masculine cultures
Clear gender roles; machismo
Live to work
Ambition, success valued
Feminine cultures
Sympathy for the unfortunate
Work to live
People are important

82. Masculinity / Femininity: Where
High…………………...……...……Low
Japan
Italy
Mexico
Ireland
U.S.
Australia
Hong Kong
Arab countries
Brazil
Israel
Indonesia
France
Spain
South Korea
Portugal
Finland
Netherlands
Sweden

83. …Plus One Confucian Work Dynamic
Based on work done in East Asia by “Chinese Cultural Connection” group
Focus on:
Long-term
Order
Thrift
Persistence
Respect for tradition

84. Different Dimensions…Same Result
Company provided housing, marriage brokers, etc. in Asian countries
Feminine concern for people?
Taking care of the in-group?
Cooperative labor negotiations
Japan: collective orientation
Netherlands: feminine quality of life
Economic growth and development
Europe: Protestant Work Ethic (Individualistic, High Power Distance, Masculine)
Asia: Confucian Work Dynamic

85. Do National Borders = Cultural Borders?
Multiple cultures
Canada
Belgium
India
Culturally homogeneous areas
Scandinavia
Cultural clusters

86. Cultural Clusters

87. General Expatriate Issues: The Sojourners
How many are there?
Nobody really knows
Estimated 350,000 or more (estimate from 1996)
Who are they?
87% male
Managers
Sales, technical, professional
What happens?
Estimated 25% to 50% of assignments fail
Cost…$50,000 and up

88. Why do Expatriates Fail?
Family problems (60%)
Inability to adjust
Lack of flexibility
“Culture shock”
Lack of sensitivity to host culture

89. Culture Shock
An emotional and psychological reaction to the confusion, ambiguity, value conflicts and hidden clashes that occur as a result of fundamentally different ways of perceiving the world and interacting socially between cultures. Disequilibrium

90. Aspects of Adjustment Sociocultural Psychological
Social skills needed to operate in different culture
Psychological
Well-being, satisfaction
“Culture shock”

91. What Can Be Done? Selection procedures
Organizational support: before, during, and after assignment
Training
Few U.S. firms train expatriates (30%)
Most European / Asian firms do
Different success rates clearly establish value of training

92. Training for Expatriates
Knowledge-based
Language
Cultural differences
Cultural sensitivity
General
Specific
Include spouse and, if possible, family members

93. Other Support Mechanisms
Mentor or buddy systems
Trips home
Assistance with schooling and other family needs
Housing / cost of living differentials
Security
Safe housing
Guards, kidnapping insurance, etc.