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MBA 552 Organizational Behavior and Leadership. Introduction to the Field of Organizational Behavior.

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Presentation on theme: "MBA 552 Organizational Behavior and Leadership. Introduction to the Field of Organizational Behavior."— Presentation transcript:

1 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 OrganizationalBehaviorResearch Understandorganizationalevents Predictorganizationalevents Influenceorganizationalevents Why Study Organizational Behavior

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

21 OrganizationalBehaviorAnchors Multidisciplinaryanchor Systematicresearchanchor Contingencyanchor Open systems anchor Multiple levels of analysis anchor Organizational Behavior Anchors

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 Feedback Feedback Outputs OutputsInputs Subsystem Subsystem Subsystem Subsystem Organization Open Systems Anchor of OB

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? –“...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

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: –Rites –Ceremonials –Rituals Communications –Myths –Sagas –Legends –Stories –Folktales Things –Symbols –Language –Gestures –Physical setting –Artifacts Really minor distinctions among these

49 Layers of Culture Symbols Rituals Heroes Values Practices

50 Cultural Dimensions (Hofstede) Process vs. results Employee vs. job Parochial vs. professional Open vs. closed Loose vs. tight Normative vs. pragmatic

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

55 Changing Culture Can 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 Ethnocentric Home country methods are the best Polycentric Host country methods are the best Geocentric Use the best methods, no matter what the source

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:http://www.infoplease.com/

65 World Religions Source:http://www.infoplease.com/

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 Dress –“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 –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 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 Source: Transparency International Higher score = less corrupt

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

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

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

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

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

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 –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 TrainingTraining –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.


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