6 Why Study Organizational Behavior UnderstandorganizationaleventsOrganizationalBehaviorResearchInfluenceorganizationaleventsPredictorganizationalevents
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 interactVirtual teamsTelecommutingAffects how organizations are configuredNetwork structures -- alliance of several organizations
9 Trends: Globalization Global companies:Extend their activities to other parts of the worldactively participate in other marketscompete against firms in other countries
10 Trends: Globalization Implications of globalization:New organizational structuresDifferent forms of communicationMore competition, change, mergers, downsizing, stressNeed more sensitivity to cultural differences
11 Network structureAn alliance of several organizations for the purpose of creating a product or serving a client
12 Virtual teamsCross-functional groups that operate across space, time, and organizational boundaries with members who communicate mainly through information technologies
13 Contingent workAny 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 Employabilityemployees perform many tasks, not a specific jobContingent workno explicit or implicit contract for long-term employmentTelecommutingworking from home, usually with a computer connection to the officeVirtual teamsoperate across space, time, and organizational boundaries; mainly communicate through electronic technologies
15 Trends: Changing Workforce Primary and secondary diversityMore women in workforce and professionsDifferent needs of Gen-X, Gen-Y, and baby-boomersDiversity has advantages, but firms need to adjust through:cultural awarenessfamily-friendlyempowerment
16 Primary Dimensions of Diversity EthnicityRaceMental/Physical QualitiesAgeGenderSexual Orientation
17 Secondary Dimensions of Diversity First LanguageLife ExperiencesGeographic LocationBehavioral StyleEducationIncomeWork ExperienceWork StyleParental StatusMarital StatusOccupationReligion
18 More women in workforce and professions Women represent 50% of the paid workforce.Women represent 50% of professional accountantsWomen represent 43% of medical school enrollmentWomen 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 workaholicsGen-X born less loyal seek and expect less securityGen-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 importantpersonal, cultural, organizational, professionalImportance of valuesGlobalization -- more awareness of different valuesValues replacing command-and-controlMore emphasis on ethical business conductEthicsMoral principles/values -- determines whether actions are right/wrong and outcomes are good/bad
24 Systematic Research Anchor Systematic collection of data about organizational principles and practices
25 Scientific methodA 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 approachThe 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 AnchorOrganizations that take their sustenance from the environment and, in turn, affect that environment through their output
31 Open Systems Anchor of OB FeedbackFeedbackSubsystemInputsOutputsOrganization
32 StakeholdersShareholders, 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 capitalThe sum of an organization’s human capital, structural capital, and relationship capital
35 Intellectual Capital Human capital Knowledge that employees possess and generateStructural capitalKnowledge captured in systems and structuresRelationship capitalValue derived from satisfied customers, reliable suppliers, and others
36 Knowledge Management Processes Knowledge acquisitionGraftingLearningExperimentationKnowledge sharingCommunicationCommunities of practiceKnowledge useAwarenessFreedom to apply knowledge
37 GraftingThe process of acquiring knowledge by hiring individuals or buying entire companies
38 Organizational Memory The storage and preservation of intellectual capitalRetain intellectual capital by:Keeping knowledgeable employeesTransferring knowledge to othersTransferring 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 cultureAcquiring cultureChanging 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:HolisticHistorically determinedSocially constructed (perceptions)SoftDifficult 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 missionStrong 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 conflictMergersTop-down attempts to “manage” cultureSubcultures (core culture + adaptations)CounterculturesConflict -- example here is the UP purchase of Oak Ridge -- big corporate meets small town family (the bone marrow transplant); also, “Howie Makem” from RivetheadSubcultures - often by occupational groupsCountercultures -- 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 exclusionPower and statusIntimacy, friendship, and loveRewards and punishments: what is rewarded and punished, as well as what rewards and punishments areIdeology and “religion”: that is, how to manage the unmanageable and explain the unexplainable
48 Recognizing Culture Events: Communications Things Rites Ceremonials RitualsCommunicationsMythsSagasLegendsStoriesFolktalesThingsSymbolsLanguageGesturesPhysical settingArtifactsReally minor distinctions among theseRites: 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 leadersLegend: 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 narrativeSymbol: any object, act, event, quality, or relation which serves a s a vehicle to convey meaningLanguage: the use of language and words to convey meaningGesture: the use of body movements to convey meaningPhysical 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. resultsEmployee vs. jobParochial vs. professionalOpen vs. closedLoose vs. tightNormative vs. pragmaticProcess-oriented vs. results-oriented•Means vs. goals•Process-orientation associated with manufacturing and office units; results-orientation associated with R & D and service unitsEmployee-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 organizationsParochial vs. professional•Individuals’ identity derived from organization vs. type of job•Professional organizations more specializedOpen system vs. closed system•Communications climate, inclusion of new membersLoose control vs. tight controlInternal structure and controlOrganizations 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 controlledNormative 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-takingAttention to detailOutcome orientationPeople orientationTeam orientationAggressivenessStability
52 Yet Another Perspective…. I. Managing changeII. Achieving goals (how effective)III. Coordinated teamworkIV. Customer orientationV. Cultural strength
53 Sources of Culture Founders Historical events Industry National culture
54 Acquiring Culture Selection process Socialization of new members Rites and ceremoniesRite of passageRite of renewalRite of integrationRite 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 effectMaybe 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 businessNew marketsDemand for global servicesLow cost manufacturingU.S. management practices not necessarily likely to translate to different culturesParadox: 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 perspectiveOverseas suppliers or marketsLow cost productionEmerging markets (Eastern Europe, LDC)E-business has no bordersImmigrant labor force even in U.S.Culture critical to global business, yet hardest to understandBased on unspoken values and assumptionsHuman behavior isn’t logicalBut, human behavior is very complex
58 Approaches to International Business GeocentricUse the bestmethods, no matterwhat the sourceEthnocentricHome countrymethods are thebestPolycentricHost country
59 Basic Principles of Culture What is logical and important in one culture may seem irrational and unimportant in anotherIn describing cultures, people tend to stress the differences and overlook the similaritiesStereotyping may be inevitable for people who lack frequent contact with another cultureCultures are not homogenous; differences exist due to gender, age, socioeconomic status, educationUnderstanding another culture is a journey, not a goal
60 Barriers to Cross-Cultural Understanding Cultural chauvinism / corporate imperialism / ethnocentrismStereotypes (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 orientationPersonality structure (Big 5)What about cultural convergence?Cultural evolutionCultural diffusionImmigration and acculturation
62 What Kinds of Differences Make a Difference? Some specific items:LanguageReligionBusiness practices and etiquetteDifferent lawsDifferent customsCulture in general
63 Language IssuesU.S. one of few countries where we don’t learn a second (or a third) languageLanguages learned in school often do not translate to business usageDo you try?Not in France, not unless you can pronounce it right !Other countries, yes: it’s a gesture of goodwillBut, even if the language is the same, will we understand? (Britspeak)
64 Languages of The WorldSource:http://www.infoplease.com/
65 World ReligionsSource:http://www.infoplease.com/
66 Religious Issues Islam: Ramadan fasting 5 daily prayers (15 minutes or so), even at workModest dress for women (including head scarf)Friday, not Sunday (noon prayers on Fridays)
67 Legal Issues Sample of Mexican employment laws Individual employment contracts requiredStrict limits on overtimeUnionization by facilityFull pay for workers while on strikeDiscrimination covers political doctrine and social condition
68 Different Country, Different Customs: Dress and Address “Casual Days” are a U.S. customRemoving one’s shoesAddressing Other PeopleHerr und Frau, not first names in GermanyTitles (Dr., Professor, “Assistant Vice President”, etc.) very important everywhere but U.S.Business cards essential in Latin America, Europe, JapanPersonal space: much smaller in Latin America, Spain, Italy
69 Different Country, Different Customs: Time Time fluid in Latin America, Spain, ItalyTime off work: Germany, France, Scandinavia: 6 weeks vacation, August in the countryAfrica: everyone attends funerals (impact of AIDS)Working hours and paceEurope (esp. Germany) isn’t open 24/7Latin America, Middle East, Japan: take time to establish relationship before getting down to business
70 Different Country, Different Customs: Eating and Drinking Tea in JapanCoffee in EgyptVodka in RussiaA pint over lunch in the UKDietary Restrictions:India: no beefIslamic countries: no pork or alcohol
71 Perceptions of Corruption Higher score = less corruptSource: 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 worldwideThe dimensionsCollectivism - IndividualismPower DistanceUncertainty AvoidanceMasculinity / Femininity (quality of life)Weaknesses:Data 20 years oldHowever, recent research confirms this structure
74 Change in CulturesHofstede’s data indicates some shift to individualism, but no change in other dimensionsDisneyland phenomenonThat is, surface indicators change, but meaning does notBut….the case of Hong KongManagement values in Hong Kong intermediate between PRC and U.S.Indication of flexibility / change?
75 Collectivism - Individualism Identification with group vs. identification as an individualCollective cultures:Think in terms of in-groups and out-groupsLife decisions made by groupLook after one’s in-group, no matter whatIndividualistic culturesConcern for self and immediate familyIndividual privacyAssociation with level of economic development
76 Collectivism - Individualism: Where Collective…………...……IndividualisticVenezuelaPakistanTaiwanPortugalGreeceBrazilIndiaJapanArab countriesSpainIsraelAustriaGermanyNorwayFranceCanadaGreat BritainU.S.
77 Power DistanceThe extent to which a culture accepts that power is distributed unevenlyHigh power distancePeople have a place in society, high or lowSuperiors are to be respectedLess trust and cooperationLow power distanceEqual rights for everyoneHierarchies are established for conveniencePower can be judged to be legitimate or not
78 Power Distance: Where High…………………...……...……Low Philippines Mexico IndiaBrazilHong KongFranceTurkeyPakistanJapanArgentinaU.SCanadaAustraliaGermanySwedenIrelandDenmarkIsrael
79 Uncertainty Avoidance The extent to which a society feels threatened by ambiguity and uncertaintyHigh uncertainty avoidanceLots of policies, rules, regulationsHard work valued, time is moneyAcceptance of authorityConflict avoidedLow uncertainty avoidanceLook to common senseTolerance, constructive conflictAggression less accepted
80 Uncertainty Avoidance: Where High…………………...……...……LowUruguayBelgiumJapanFranceMexicoIsraelItalyAustriaArab countriesGermanySwitzerlandEast AfricaCanadaU.S.IndiaGreat BritainSwedenSingapore
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 culturesClear gender roles; machismoLive to workAmbition, success valuedFeminine culturesSympathy for the unfortunateWork to livePeople are important
82 Masculinity / Femininity: Where High…………………...……...……LowJapanItalyMexicoIrelandU.S.AustraliaHong KongArab countriesBrazilIsraelIndonesiaFranceSpainSouth KoreaPortugalFinlandNetherlandsSweden
83 …Plus One Confucian Work Dynamic Based on work done in East Asia by “Chinese Cultural Connection” groupFocus on:Long-termOrderThriftPersistenceRespect for tradition
84 Different Dimensions…Same Result Company provided housing, marriage brokers, etc. in Asian countriesFeminine concern for people?Taking care of the in-group?Cooperative labor negotiationsJapan: collective orientationNetherlands: feminine quality of lifeEconomic growth and developmentEurope: Protestant Work Ethic (Individualistic, High Power Distance, Masculine)Asia: Confucian Work Dynamic
85 Do National Borders = Cultural Borders? Multiple culturesCanadaBelgiumIndiaCulturally homogeneous areasScandinaviaCultural clusters
87 General Expatriate Issues: The Sojourners How many are there?Nobody really knowsEstimated 350,000 or more (estimate from 1996)Who are they?87% maleManagersSales, technical, professionalWhat happens?Estimated 25% to 50% of assignments failCost…$50,000 and up
88 Why do Expatriates Fail? Family problems (60%)Inability to adjustLack of flexibility“Culture shock”Lack of sensitivity to host culture
89 Culture ShockAn 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 culturePsychologicalWell-being, satisfaction“Culture shock”
91 What Can Be Done? Selection procedures Organizational support: before, during, and after assignmentTrainingFew U.S. firms train expatriates (30%)Most European / Asian firms doDifferent success rates clearly establish value of training
92 Training for Expatriates Knowledge-basedLanguageCultural differencesCultural sensitivityGeneralSpecificInclude spouse and, if possible, family members
93 Other Support Mechanisms Mentor or buddy systemsTrips homeAssistance with schooling and other family needsHousing / cost of living differentialsSecuritySafe housingGuards, kidnapping insurance, etc.