Chapter 1 Introduction and Historical Background

Chapter 1 Introduction and Historical Background
23 January 1997 Chapter 1 Introduction and Historical Background 1

Learning Goals Describe the concept of an organization
Distinguish between organizational behavior and organizational theory Explain the role of theory and concepts in analyzing organizational issues and problems Analyze the consequences of behavior in organizations Understand the historical foundations of modern organizational behavior

Chapter Overview Introduction
Organizational Behavior and Organizational Theory Theories and Concepts Functional Analysis Historical Foundations

Introduction Organization Characteristics of definition
Chapter 1: Introduction 23 January 1997 Introduction Organization System of two or more persons Engaged in cooperative action Trying to reach a goal Characteristics of definition Applies to any type of organization, small, large, profit, nonprofit Goal oriented Cooperative interaction of two or more people 2

Organizational Behavior and Organizational Theory
Organizational behavior and organizational theory specialize in studying organizations Organizational behavior: understanding behavior, attitudes, and performance Organizational theory: design and structure of organizations See text book Figure 1.1

Theories and Concepts Basic content of each chapter
Concepts are parts of theory Helpful tools for understanding behavior in organizations Develop your analytical skills in using these tools

Theories and Concepts (Cont.)
“Nothing is as practical as a good theory”--Kurt Lewin Definition: “A theory is a plausible explanation of some phenomenon”

Theories and Concepts (Cont.)
Theories and concepts as camera lenses A class of theories gives a wide-angle view of a behavioral scene Specific theories within a class can narrow that view Concepts within a theory act like a telephoto lens pulling in the detail of a behavioral scene See text book Figure 1.2

The four together offer a powerful analytical tool.
Functional Analysis Tool of anthropology that assesses the consequences of behavior Manifest consequences: intended results Latent consequences: unintended results Functional consequences: good results Dysfunctional consequences: bad results The four together offer a powerful analytical tool.

Functional Analysis (Cont.)
Manifest consequences Latent consequences Functional consequences I II Dysfunctional consequences III IV

Functional Analysis (Cont.)
Mainly interested in understanding Manifest functional consequences: intended good effects Latent dysfunctional consequences: unintended bad effects

Historical Foundations
1911: Scientific Management Frederick W. Taylor 1919: Toward a Theory of Administration Henri Fayol 1922: Bureaucracy Max Weber 1925: Observations on Organizations and Management Mary Parker Follett

Historical Foundations (Cont.)
1934: The Functions of the Executive Chester Barnard 1939: The Hawthorne Studies Elton Mayo 1960: Theory X and Theory Y Douglas McGregor 1995: The Twentieth Century's Management Guru Peter F. Drucker

Scientific Management: Frederick W. Taylor (1911) Quotation from the opening paragraph of Frederick W. Taylor’s The Principles of Scientific Management: “The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each employee.” Sets the underlying tone and philosophy of Scientific Management

Scientific Management (cont.) Management and labor of that period had an antagonistic relationship Management wanted as much output as possible from labor at the lowest possible cost Workers tried to protect their interests by not working too hard Neither side felt cooperation could lead to maximum prosperity for both groups

Scientific Management (cont.) Management and labor viewed their goals as mutually exclusive Management: maximize profits Labor: maximize wages Taylor felt his system of Scientific Management could maximize both goals Four principles underlie the approach

Scientific Management’s principles Carefully study jobs to develop standard work practices. Standardize workers’ tools Scientifically select each worker Cooperation of management and workers to ensure work is done according to standard procedures Management plans and makes task assignments; workers carry out assigned tasks

Toward a Theory of Administration: Henri Fayol (1919) Developed the first comprehensive theory of administration Describes the major functions of management Includes several principles that act as administrative guides

Toward a Theory of Administration (cont.) Five functions of management Planning: the results desired and the way to reach them Organizing: designing the organization to reach the plan’s goals Command: guiding and directing organizational units toward the plan’s goal

Toward a Theory of Administration (cont.) Five functions of management (cont.) Coordination: helping different organizational units reach the plan’s goal Control: monitoring progress toward the plan’s goal. Correcting variations from the plan Research evidence: management functions related to an organization’s performance

Toward a Theory of Administration (cont.) Principles of administration “All must observe the same general principles” Set of tools a manager needs to perform the functions of management Applied with a sense of proportion: adapting to the specific situation

Toward a Theory of Administration (cont.) Principles of administration (cont.) Division of labor: organization of the work of individuals and the entire organization Authority and responsibility: decision authority carries with it the responsibility for the decisions Principle of centralization Centralization: decision authority at top or organization Decentralization: decision authority dispersed

Toward a Theory of Administration (cont.) Principles of administration (cont.) Delegation of authority: moves decision authority to lower levels in the organization Unity of command “an employee should receive orders from one superior only.” Felt strongly that managers should not violate this principle Modern matrix organizations (Chapter 17) routinely violate this principle

Toward a Theory of Administration (cont.) Relationships among the principles Delegation of authority gets the desired degree of decentralization Delegation also affects the division of labor Unity of command helps guide an organization’s design

Bureaucracy: Max Weber (1922) Bureaucracy Administrative structure Well-defined offices or functions Hierarchical relationships among functions Offices or functions have clearly defined duties, rights, responsibilities Designed each office or function without regard for who will hold the office

Bureaucracy (cont.) Impersonal relationships within a bureaucracy Decisions made according to existing rules, procedures, policies Bureaucracies attain goals with precision, reliability, efficiency

Bureaucracy (cont.) Bureaucracies use legal or rational authority Exists in position before a person takes the position or function Bureaucracy defines the authority when it develops its division of labor

Bureaucracy (cont.) Person who takes a position assumes the authority of that position Rational authority brought stability to a bureaucracy because the authority stayed in the function

Bureaucracy (cont.) Bureaucracy’s efficiency Clearly defined and specialized functions Use of legal authority Hierarchical form Written rules and procedures Technically trained bureaucrats

Bureaucracy (cont.) Bureaucracy’s efficiency (cont.) Appointment to positions based on technical expertise Promotions based on technical competence Clearly defined career path

Bureaucracy (cont.) Weber felt bureaucracies were rational, predictable systems Rationality followed from the objectivity and impersonality of decisions Consistent decisions based on fact, rules, and procedures Predictability Fixed formal relationships Clearly defined hierarchically organized functions

Mary Parker Follett’s Observations on Organizations and Management (1925) Offered observations on management and organizations from mid-1920s to early 1930s Three of her observations: power, conflict, and leadership

Mary Parker Follett's Observations on Organizations and Management (cont.) Power Capacity to get work done Distinguished from authority Can delegate authority but not power Two types of power: power-over and power-with

Mary Parker Follett's Observations on Organizations and Management (cont.) Power (cont.) Power-over: dominance or coercion; control based on force Power-with: jointly developed power; closely related to cooperation Follett had a positive view of power and saw it as basic to organizations and management

Mary Parker Follett's Observations on Organizations and Management (cont.) Conflict Observations appeared in her unusually titled paper “Constructive Conflict” Difference, not warfare Differences in opinions and interests Cannot avoid conflict in organizations Managers should put conflict to use in their organizations

Mary Parker Follett's Observations on Organizations and Management (cont.) Managing conflict Dominance: one side wins over the other Compromise: each side gives up something to settle an issue Note that the basic conflict issue remains. Conflict could happen over the same issue at a later time.

Mary Parker Follett's Observations on Organizations and Management (cont.) Managing conflict (cont.) Integration of desires Find solution that fully meets goals of each party Neither party gives up anything Integration discovers something new; compromise uses only what exists

Mary Parker Follett's Observations on Organizations and Management (cont.) Leadership Prevailing view of leadership was based on dominance and aggression Offered an alternative view of leadership with many positive qualities Action-oriented person clearly focused on the future

Mary Parker Follett's Observations on Organizations and Management (cont.) Leadership (cont) A vision of the future Focuses the energies of people on that purpose Decisions made with an understanding of their long-term effects

Mary Parker Follett's Observations on Organizations and Management (cont.) Leadership (cont.) Train and develop subordinates to become leaders Good leaders do not want passive followers Followers should try to influence their leaders by suggesting alternative courses of action Characteristics: "tenacity, steadfastness of purpose, tactfulness, steadiness in stormy periods”

The Functions of the Executive: Chester I. Barnard (1938) Rich in basic contributions about organizations and management Selected observations from many in his book Lays a foundation for thinking about organizations and management Interpret executive as any level of management and supervision

The Functions of the Executive (cont.) Definition of an organization “[A] system of consciously coordinated activities or forces of two or more persons” Implies that any system of two or more persons with consciously coordinated activities is an organization Note the importance of cooperation and conscious, deliberate purpose

The Functions of the Executive (cont.) Purpose plus limitations leads to a system of cooperative action Purpose: the goal of the person who formed the organization Limitations: knowledge, financial resources, physical resources Person with purpose needs the cooperation of one or more people to achieve that purpose

The Functions of the Executive (cont.) Use inducements to get people to join the organization and offer their contributions Inducements: salary, fringe benefits, and other rewards Contributions: work that needs to get done Inducements-contributions balance: if inducements are slightly greater than the contributions, the person joins the organization

The Functions of the Executive (cont.) Types of motivation: Motivation to participate: Individual joins and stays with organization Performs at the minimally acceptable level Minimally acceptable level varies among organizations Person learns the minimum performance standards soon after joining the organization Maintaining the motivation to participate is an important executive function

The Functions of the Executive (cont.) Types of motivation (cont.) Motivation to perform Level of performance above the minimally acceptable level Attend to this form of motivation after solving the problem of membership Managers use different incentives to affect the motivation to perform

The Functions of the Executive (cont.) Relationships among Barnard's observations Definition of an organization emphasizes consciously coordinated activities Purpose plus limitations cause people to cooperate with others to achieve the purpose Attract people to the system by affecting the inducements-contributions balance

The Hawthorne Studies (1939) Large social science-based research program at the Hawthorne plant of the Western Electric Company, 1920s-1930s Stimulated by some early illumination experiments done at the plant Productivity in the study’s groups increased no matter what level of lighting was used Later known as the Hawthorne effect: special attention in the study increased productivity

The Hawthorne studies (cont.) Concluded that an empathic, people-oriented form of management increased productivity Better form of management than prevailing authoritarian, money-oriented management

The Hawthorne studies (cont.) Weaknesses in the research design did not allow such strong conclusions Stands as a landmark event in American social science research about people in organizations

Theory X and Theory Y: Douglas McGregor (1960) Managers can hold either of two sets of assumptions about human motivation Assumptions affect the manager’s behavior and management style Although called a theory, they are not theories as defined earlier in the chapter

Theory X assumptions Average person dislikes working and will avoid it if possible Because people dislike working, managers must Tightly control Pressure people to work toward organizational goals Average person wants security, avoids responsibility, has little ambition

Theory X assumptions (cont.) McGregor believed many managers held Theory X assumptions about workers Management behavior Close supervision Punish poor performance Give workers little latitude Use few rewards Typically give only negative feedback

Theory Y assumptions Average person does not dislike work; it is as natural as play If a person is committed to goals, he or she will work toward them without external control Goal commitment follows from the satisfaction of a person's desire to achieve

Theory Y assumptions (cont.) Average person can learn to accept responsibility Lack of ambition is not a basic human characteristic Creativity, ingenuity, imagination: widely dispersed human characteristics Modern organizations only partially use the potentialities of its workers

Theory Y assumptions (cont.) Managers who hold Theory Y assumptions Positively view people Believe they have much hidden potential They will work toward organizational goals Management behavior: give workers more responsibility and rely on self-motivation

The Twentieth Century’s Management Guru: Peter F. Drucker (1995) Austrian born Peter F. Drucker ranks among the most widely read management scholars of the twentieth century Drucker has been a professor of management at Claremont College, California since 1971 Written almost 30 books and continued writing into the late 1990s

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Strategy: how an organization will reach its long-term goals and allocate its resources Strategic planning Typical question: “What is most likely to happen?” Better question: “What has already happened that will create the future?”

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Strategic planning (cont.) Fully understand existing demographics, economic forces, and technological changes These forces will unrelentingly shape the future the organization will face

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Management by objectives and self-control (MBO) Senior management defined the long-range goals of the organization Lower level managers participated in setting their goals Each manager’s goals became the sources of self-control of the manager’s performance

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Management by objectives and self-control (MBO) (cont.) Self-control came from quickly available performance information for the manager Went directly to manager, not to manager’s superior Helped managers guide their unit’s performance

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Predictions for the future Rise in alliances, partnerships, and joint ventures on a global scale Technology will help link these parts of an emerging ”Network Society" Compelling need for decentralized organizations in an increasingly uncertain environment Related increase in the use of teams in organizations

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Predictions for the future (cont.) Increase in number of knowledge workers Continual decline in blue-collar and agricultural workers in all developed free-market countries Twenty-first century will see the evolution of knowledge societies in developed countries

The Twentieth Century’s Management Guru: Peter F. Drucker (cont.) Predictions for the future (cont.) Nonprofit volunteer activities will characterize English-speaking countries Appear less elsewhere Unquestionable formation of a world economy World markets will become more important than domestic markets

Chapter 2 The Organizational Context of the New Millennium
Chapter 2: Emerging Issues in Organizations and Management 8 July 1997 Chapter 2 The Organizational Context of the New Millennium Diversity, Quality, Technology, International 1

Learning Goals Understand why the U.S. Workforce will increase in diversity well into the next century Describe the direction in which many organizations are headed in managing for quality

Learning Goals (Cont.) Explain how technological changes will affect modern organizations and their management Discuss some issues and implications of managing organizations in an increasingly global environment

Chapter Overview Workforce Diversity Quality Management
Technology, Organizations, and Management The Global Environment of Organizations

Technology, Organizations, and Management
Introduction Workforce diversity Quality Management Emerging issues Technology, Organizations, and Management Global environment

Workforce Diversity Differences in workforce composition based on personal and background factors of people Some dimensions of workforce diversity Age Race Physical ability Family status See text book Figure 2.1 for a more complete listing

Workforce Diversity (Cont.)
Projections show more women, more minorities, and older workers in the work force Expect strong regional differences For example, California's population in 2005 will have 50 percent white and 50 percent people of color, speaking 80 languages

Differences in people also present different worldviews to an organization They see the world through different perceptual lenses Issue: harnessing these differences as opportunities to pursue the organization’s mission

Challenges to personnel and work policies Working parents: work schedules and on-site day care Single parent: time off to tend to sick child Native Americans: work schedules and their culture’s celebration periods Disabled: special access to building and work area design Part-time: job sharing

Three views Valuing Managing Workforce diversity Managing for

Valuing diversity Aggressively embrace diversity Goes beyond managing existing diversity Recognizes the essential character of a diverse workforce Actively builds a diverse workforce

Managing diversity Harness the potential of all sources of difference within an organization's workforce Tap diverse perspectives and rethink approaches to tasks and markets Example: after hiring its first Hispanic female attorney, a small northeastern law firm discovered a new market: pursue English-only employment policies in cases involving immigrants. Previously all-white legal staff never thought of that market

Managing diversity (cont.) Not affirmative action in disguise Get the greatest contributions from increasingly diverse people A variety of views enriches organizational life Does not ask people to give up their individuality

Managing diversity (cont.) Honors differences among people, but asks everyone to accept the core values of the organization Core values come from organization's mission: "An unending pursuit of excellence in customer service.” People reach the goal in many different ways because of their diversity

Managing diversity (cont.) No choice about managing for diversity Note the labor force statistics discussed earlier Likely have a diverse labor force in the future, especially as an organization pursues scarce skilled labor Organizations that have followed affirmative action and Equal Employment Opportunity (EEO) guidelines now have diverse workforces

Managing diversity (cont.) Good business strategy Increasingly diverse customer base Think and compete globally to remain competitive A diverse workforce helps managers attract customers from diverse backgrounds Example: Pizza Hut has found that the presence of Muslim workers attracts more Muslim customers

Managing diversity (cont.) Global environment adds another layer of complexity Many U.S. organizations sell in foreign markets, operate in foreign countries, or have joint ventures with foreign organizations Need to understand local customs to meet customer expectations in foreign markets Diverse workforce helps U.S. organizations meet these global challenges

Managing for diversity Aggressively recruit and hire people of diverse backgrounds Challenges Unleash the potential of a diverse workforce Channel it toward organizational goals Provide vision so everyone understands the goals Preserve a diversity of viewpoints Help employees get the satisfaction they want from their work experiences

Managing for diversity (cont.) Policy changes Work schedules Personal leave Language training in English or other languages Other basic skills Fairness in policies: day-care policy applies to all employees

Managing for diversity (cont.) Managers will need to learn new skills Accepting differences Appreciating language differences Learning new languages. Includes sign language to communicate with hearing-impaired employees

Managing for diversity (cont.) Other changes touch the heart of an organization's culture Values suitable to a homogeneous white-male culture need to yield to the heterogeneous values of diverse groups Social activities Rituals in male cultures will need to change to allow ready access by females Rotate activities to meet the desires of both groups Example: if social gatherings include only male-oriented sports, add other activities

Quality Management Managing all parts of an organization to ensure quality products or services Can trace its roots to the 1920s Ignored by American managers until forced to focus on it by competitive forces Many names: Total Quality Control, Leadership through Quality, Total Quality Management, Robust Design, six-sigma quality Quality Management (QM) covers them all

Quality Management (Cont.)
A philosophy and system of management Philosophy: values of quality, continuous improvement, and “getting it right the first time” System of management: tools and techniques that help manage for quality and continuous improvement Has its roots in manufacturing but applies to all organizations

History An American invention, not Japanese Some significant contributors: W. Edwards Deming, Walter A. Shewhart, Armand V. Feigenbaum, Joseph M. Juran, and Philip B. Crosby Taught to the Japanese after WW II. They understood what it meant from the beginning

Requires a total system's view of the organization. Reaches beyond its boundaries Interdependence of outside people, outside organizations, and groups within the organization to manage for quality Employees Suppliers Clients, customers

Interdependence (cont.) Community Coalitions to which the organization belongs Professional or trade associations Competitors

View organizations as a system of processes, not as a vertical chain-of-command view Emphasizes processes, customers, interdependence with suppliers, and the role of feedback in continuous quality improvement Ask customers and suppliers: discover shifts in expectations and quality requirements

Supporting tools and techniques Let people watch work processes to ensure a quality product or service Train employees in the use of the tools Most QM tools and techniques let organizations analyze processes

Supporting tools and techniques (cont.) Typically done by teams of people drawn from all parts of the organization affected by the process Deliberately diverse teams bring different views to the analysis and improvement of a work process Example: analysis team examining an organization's hiring process includes members from the Human Resources Department, hiring departments, newly hired employees, labor union representatives

Benefits Increased employee commitment to continuous quality improvement Cost of providing a service or manufacturing a product drops More dependable service processes. More reliable products

QM differs from other ways of managing Emphasizes a long-term commitment to continuous quality improvement Quality is everyone's job, not the job of a quality-control department Intensely customer focused: demands that all organization members share that focus Emphasizes high involvement in the work process

QM differs from other ways of managing (cont.) Communication in all directions--top-down, bottom-up, laterally A long-term orientation: commitment to the future Decisions made with a view of the future Continuous improvement lets people do more with the same resources

QM differs from other ways of managing (cont.) Involving everyone in continuous improvement can add challenge to employees' jobs Long-run result: a committed corps of people with an impassioned focus on mission, customers, and continuous quality improvement

Moving toward QM presents massive change to an organization Requires people to reframe the way they think about their organization Difficult transformations might account for some QM failures

Results Continuous improvement increases process efficiency and reduces costs Quality can attract new customers and increase the retention of old ones. Costs five times more to get new customers than to keep present ones High quality can make a product or service so attractive that an organization can charge higher prices than competitors

Results (cont.) QM efforts produced poor results when managers did not target improvements to areas that had the greatest long-term positive effect on profits Some significant positive financial effects Some major failures: The Wallace Co. and Florida Power and Light

Technology, Organizations, and Management
Computing power and computer features Desktop computers with CD-Rom drives, high-speed processors, and large memory capacity: create business presentations using three-dimensional animated technology Laptop and palmtop computers: Internet connections using ports in airport telephones, aircraft telephones, or cybercafés Tracking appointments and staying connected will continue to get easier in the future

Technology, Organizations, and Management (Cont.)
Communications technology Note: the first transatlantic telephone cable carried only 89 simultaneous calls! Digital satellite systems: allows handheld digital cellular communication anywhere in the world

Communications technology (cont.) Lucent Technology's Bell Labs' wave division multiplexing Splits a single beam of light into multiple colors Each color is a separate communication channel within an optical fiber Handheld communicators: send and receive , talk to a person by telephone, and surf the Web--from anywhere

Other technologies Electronically based measurement systems: monitor manufacturing processes and collect sales data at store checkout stands Future computer technologies: digitize information from voice interaction and handwriting on a digital tablet Handheld computers: track inventories and send orders electronically

Other technologies (cont.) Navigation satellites: track truck and ship fleets Communication satellites: managers can talk to drivers and ship captains anywhere in the world , voice mail, videoconferencing, teleconferencing Widely used now and will increase in use in the future

Other technologies (cont.) Videoconferencing adds a two-way video connection to the now common teleconference Replace or supplement systems with voic systems. Oral messages, not written ones, appear in a person's electronic mailbox Widespread use of intranets (internal networks) and the Internet

Materials technology and engineering Commonly used: carbon fiber composites and optical fibers New: superpolymers, amorphous metal alloys, and superconductors Innovations in product ideas and technological solutions no longer will depend on naturally existing materials

Materials technology and engineering (cont.) New materials: lighter cars and trucks that can carry heavier loads New ceramics technology allows designing jet engines with more thrust. Larger planes going longer distances with more people and cargo

Manufacturing Agile manufacturing processes with almost no inventory. Direct computer links with customers or end-users Cost-effective and competitive processes to produce both custom-made items and large production runs in the same plant Products moving through these processes can differ from item to item

Manufacturing (cont.) Computer-assisted manufacturing (CAM) Computer-integrated manufacturing (CIM) Modern materials Robotics

Manufacturing (cont.) Laser cutting Bonding methods Internet technology: suppliers receive orders as manufacturer updates its manufacturing schedule in real time

Managerial role changes People in scattered places Networks will act as coordinating mechanisms, replacing face-to-face interaction Increase in telecommuting

New strategies Flexibility: key feature that will permeate the design and response of manufacturing and service operations Includes thorough understanding of customer needs and variations among markets Latter will be especially true for multinationals

New strategies (cont.) Markets in different countries have high diversity even between nearby countries Treat customers of different countries in the way they expect. Example: insurance giant AIG Local agents collect monthly premiums at each insured's home in Taiwan Electronic bank transfers in Hong Kong

Organizational design New strategies require decentralized organizations Fast responses to meet shifting market and customer needs Cross-functional teams to tightly integrate the total business process

Organizational design (cont.) Local teams with broad decision-making and problem-solving authority will help large organizations decentralize Modern information technologies will help globally dispersed organizations decentralize

Organizational design (cont.) Organization-wide self-managing teams Form teams around a specific customer base, product, or service Makes all decisions in response to customer needs Conceives, designs, builds, markets

Organizational design (cont.) Self-managing teams (cont.) Involved in all parts of the business process affecting a customer Will do much of the selection and socialization of new employees Virtual organizations: link to various partners over the Internet

Organizational design (cont.) Virtual organizations (cont.) Example: Aditi Inc. Customer support to software users with a twist Seattle and Bangalore, India based After American workers go home, messages transfer over the Internet to Bangalore Reverse happens at the end of the Indian work day Almost immediate customer response, no matter what their time zone More detail in Chapter 17: Organizational Design

Internet commerce Forecast: $1.3 trillion in sales by 2002 Biggest growth areas: computers, software, books, music, videos Example: Amazon.com offers three million book titles, outstripping Barnes & Noble's 175,000 titles Simple to set up commercial Web sites Observers predict a flood of upstarts: new generation of competitors

The Global Environment of Organizations
Our increasingly interconnected world requires managers to have a global perspective Range of perspective Finding new markets outside the home country Multinational organization: operations in many countries Transnational organization: sees no country boundary limits

The Global Environment of Organizations (Cont.)
Modern managers must think of the entire world as a source of labor, materials, markets, and the like Highly interconnected economies around the world

Technology effects International travel: common and fast with modern aircraft Telecommunication-satellites: information in all forms moves quickly from country to country Includes international videoconferences Easy Internet communication

Free trade effects Regional trade agreements: opening vast new markets; increasing a firm’s competition North American Free Trade Agreement opened the borders of Mexico, Canada, and the United States: easy movement of goods, capital, and services Europe and the Euro: 11 European countries moving to a single currency Many Latin American countries are moving toward freer trade

Issues for managers Language differences among countries Form partnerships with local business people or learning the language oneself can help solve the language problem Cultural differences among countries Affects how a company enters markets, the way it markets goods or services, how it deals with labor laws, and how it builds a loyal customer base Orientations to space and time. See text book for examples

Issues for managers (cont.) Values desired for globally dispersed operations Values of home country? Values of local culture? Values of home country: place people from the home country in charge of units

Issues for managers (cont.) Organizations that hire local people for management positions often first socialize them to its major home country values Hewlett-Packard: managers know the "HP Way" whatever their national origins or the country in which they work

Country culture dimensions that imply acceptable management behavior and organizational forms Five dimensions Power distance Uncertainty avoidance Individualism Masculinity Long-term orientation

Country culture dimensions (cont.) Power distance: degree of inequality among people a culture considers normal Low: people treated as equals despite social status High: people accept authority relations Uncertainty avoidance: value placed on predictability, structure, stability Low: prefer few formal rules High: want clear behavioral guides

Country culture dimensions (cont.) Individualism: value placed on acting alone and not as part of a group Low: group behavior important High: individual behavior important Masculinity: value placed on decisiveness and assertiveness Low: caring for others; warm interpersonal relationships High: assertive, ambitious, tough

Country culture dimensions (cont.) Long-term orientation: value placed on persistence, status, thrift Low: respect for tradition, personal stability, focused on the past High: perseverance, thrift, focused on the future

High Prefer well-defined procedures; clear organizational structure; rules and procedures Use formal authority for coordination and simple structures that emphasize senior management's role I II Uncertainty avoidance Rely less on formal rules and organizational form and more on direct interpersonal interactions to coordinate work activities Rely on simple organizational forms and use of direct supervision III IV Low Low Power distance High Countries in middle of each dimension rely on middle management

Uncertainty avoidance and power distance: Implications High-low countries: Austria, Germany, Israel High-high countries: Mexico, Panama, Guatemala Low-low countries: Denmark, Sweden, Republic of Ireland Low-high countries: China, Malaysia, Singapore Middle of each dimension countries: United States, Canada, The Netherlands

Chapter 3 Ethics and Behavior in Organizations
Chapter 3: Ethics and Behavior and Organizations 28 July 1997 Chapter 3 Ethics and Behavior in Organizations 1

Learning Goals Define ethical and unethical behavior
Discuss why some scholars believe "It's Good Business" to do business ethically Know the functions of ethical values and standards for individuals and societies

Learning Goals (Cont.) Describe the various theories of ethics and the guidelines each offers Explain how to manage for ethical behavior in an organization Identify some international aspects of ethical behavior in organizations

Chapter Overview Ethical and Unethical Behavior "It's Good Business"
Ethical Issues in Organizational Behavior Ethics: The Study of Moral Philosophy

Chapter Overview (Cont.)
Ethical Values of Societies and Individuals Theories of Ethics Managing for Ethical Behavior International Aspects of Ethics

Introduction Modern managers feel growing pressure from the public and government to behave ethically in business transactions Affects employees of all types of organizations: public and private Ethical behavior: right and honorable Unethical behavior: wrong and reprehensible

Introduction (Cont.) Standards for judging behavior as ethical or unethical Right and wrong have different meanings to different people Ethical standards vary from one country to another Growing opportunities for global business increases the complexity of ethical questions Ethical issues: product safety; affect human behavior

Introduction (Cont.) Few in-depth studies of managers and ethical behavior Ethics often are not specific decision criteria Managers find their decisions are bound by context, leading to a situational form of ethics Veteran managers navigate “moral mazes” to survive and succeed in their organizations

Introduction (Cont.) Few in-depth studies (cont.)
Ethical dilemmas are common in management decision making Choices between right and wrong are not always clear Managers rarely use explicit ethical criteria in their decision processes

Introduction (Cont.) Gallup opinion polls about ethical behavior
Pharmacists ranked highest Car salespeople ranked lowest Business executives ranked near the middle People in the United States do not have a positive view of ethics and behavior in organizations

Ethical and Unethical Behavior
Ethical behavior is good, right, just, honorable, and praiseworthy Unethical behavior is wrong, reprehensible, or fails to meet an obligation Judgment of behavior is based on a specific moral philosophy or ethical theory

Ethical and Unethical Behavior (Cont.)
Nagging issues Finding a standard of judgment with which all reasonable people can agree Defining the meaning of “good,” “bad,” “right”, and “wrong” Add the nasty issue of cross-cultural ethical behavior

Subjectively ethical (or unethical): person believes he or she acted ethically according to his or her ethical philosophy (or not) Objectively ethical (or unethical): person acted according to a rule or law (or not) Example: a manager pays bribes because he believes it is ethical in a particular country (subjectively ethical) violates his employer's policies (objectively unethical)

Ethical dilemmas Find 1 cent Find $1 Find wallet with $1,000 and no identification. Find wallet with $1,000 and identification.

Legal Versus Ethical Behavior: The Issue of Lying
Legal behavior Ethical behavior Lying to a customer about the safety of a product. Testifying under oath in court. “How does my hair look?” Lying: deliberate misrepresentation of the truth.

“It’s Good Business” Ethical behavior is the keystone for smooth, effective, and efficient operation of business organizations The basis of trust in business transactions Long-term positive effects of ethical behavior: trust, reputation, repeat business

“It’s Good Business” (Cont.)
Behaving ethical can be more costly in the short term Example: adding safety equipment not required by law Bears higher cost to do what the firm believes is right

Ethical Issues in Organizational Behavior
Affect people’s behavior without their consent and free will Create situations with dysfunctional high stress for employees Many areas: each chapter discusses the ethical issues

Ethics: The Study of Moral Philosophy
Ethics, or moral philosophy, seeks logical, systematic principles that define ethical behavior Describes the behavior a person ought to choose as the right course of action Ethicists distinguish between ethical absolutism and ethical relativism

Ethics: The Study of Moral Philosophy (Cont.)
Ethical absolutism: ethical system applies to everyone, everywhere Ethical relativism: ethical system is based on local values

Ethics: The Study of Moral Philosophy (Cont.)
Intermediate position: ethics and moral judgments change over time What is right (or wrong) at one point in the development of a social system may be wrong (or right) at another point Ethical systems evolve with the requirements of a social system so people in that system can behave in ways they judge acceptable Only you can decide which position best defines your beliefs

Ethical Values of Societies and Individuals
Exist in all societies Unwritten or written Act as “recipes of action” to reduce conflict when people’s interests differ Change over time as the society’s needs change Cross-cultural effects, especially now. Another source of change

Ethical Values of Societies and Individuals (Cont.)
Ethical values of individuals Develop from societal level values Learn from family, religious training, peers, education, and life experiences Develop more complex thinking patterns with maturity. Includes ethical values Individual differences within a society

Ethical values of individuals (cont.) Ethic of justice: applies moral rules to decide the fairness of an act Believed primarily characteristic of men Stages of moral development From a self focus to a societal focus to a universal moral view

Ethic of justice: three stages Preconventional (individual view) Conventional (societal view) Principled (universal view) See text book Figure 3.1

Ethic of justice (cont.) Preconventional stage Under age nine, some adolescents, and many criminals Self centered Responds only to sanctions Late in stage: becomes aware of other’s interests

Ethic of justice (cont.) Conventional stage Characterizes most adolescents and adults Growing awareness of others’ expectations Accepts the view that mutual agreements take precedence over self-interest Internalized the norms of a group or a society Late in stage: believes moral behavior strengthens the surrounding social system

Ethic of justice (cont.) Principled stage Not reached until after age 20 to 25; many adults never reach it Features the development of moral principles as behavioral guides Person has critically assessed the norms accepted at the conventional stage

Ethic of justice (cont.) Principled stage (cont.) Concludes there are universal moral principles such as the right to liberty Late in stage: two beliefs A person's actions are always guided by freely chosen moral principles Treat each person as a free, autonomous individual Principles may conflict with law, and when they do, the person must follow the moral principle

Ethical values of individuals (cont.) Ethic of care Moral judgments based on empathy for others and the person’s relationship with them Primarily characteristic of women See text book Figure 3.2

Ethic of care: three stages Focus on self (Concerned with survival) Focus on others (Self-sacrificing) Reflective understanding of caring for others

Ethic of care (cont.) Focused on self Own survival Similar to the preconventional stage for men Self-criticism for having selfish motives

Ethic of care (cont.) Focused on others Move away from self-focus Account for other people in situation Feelings, emotion, empathy Focus on unique qualities of situation

Ethic of care (cont.) Reflective understanding of caring for others Balanced view of self in moral decisions Strong focus on caring for others Consider the context, people, and feelings when judging a moral course of action

Summary Ethic of justice: use abstract rules with little focus on feelings and relationships Ethic of care: integrates feelings, emotions, and personal relationships Turning in your mother for having committed an illegal act or foreclosing on her defaulted mortgage.

Heated debate about gender differences in moral development between moral philosophers and moral psychologists Research found slight differences between the ethical perceptions of men and women Women tended to have a slightly higher ethic than men

Conservative interpretation Both men and women use a justice or care view, although they can prefer one to the other Choice of moral view may vary with the specific moral dilemma Both men and women may apply a justice view to rights and justice problems and a care view to moral dilemmas involving social relationships.

Theories of Ethics Four major theories of ethics in the Western world
Utilitarianism: net benefits Rights: entitlement Justice: fairness Egoism: self-interest

Theories of Ethics (Cont.)
Utilitarianism examine an action’s effects to decide whether it is morally correct Action is morally right if the total net benefit of the action exceeds the total net benefit of any other action Assumes a person can assess all costs and benefits of an action

Utilitarianism (cont.) Assessment of net benefits includes any important indirect effects Example: assessing the effects of pollutant discharge from a factory on the immediate surrounding environment and those down stream or down wind from the factory Two forms: act and rule

Utilitarianism (cont.) Act utilitarianism asks a person to assess the effects of all actions Rejects the view that actions can be classified as right or wrong in themselves Example: lying is ethical if it produces more good than bad

Utilitarianism (cont.) Rule utilitarianism asks a person to assess actions according to a set of rules designed to yield the greatest net benefit to all affected Compares act to rules Does not accept an action as right if it maximizes net benefits only once Example: lying is always wrong or “thou shalt not lie”

Utilitarianism (cont.) Two main limitations Hard to use in difficult to quantify situations Does not include rights and justice Other ethical theories meet these objections

Rights Right: a person’s just claim or entitlement Focuses on the person’s actions or the actions of others toward the person Legal rights: defined by a system of laws Moral rights: based on ethical standards Purpose: let a person freely pursue certain actions without interference from others

Rights (cont.) Features Respect the rights of others Lets people act as equals Moral justification of a person’s action Examples Legal right: right to a fair trial in the United States Moral right: right to due process within an organization

Rights (cont.) Rejects view of assessing the results of actions Expresses moral rights from individual's view, not society's. Does not look to the number of people who benefit from limiting another person's rights Example: right to free speech in the United States stands even if a person expresses a dissenting view

Rights (cont.) Types of rights Negative rights: do not interfere with another person’s rights Positive rights: A person has a duty to help others pursue their rights Negative: do not stop a person from whistleblowing Positive: coworker helps another person blow the whistle on unethical actions

Justice Looks at the balance of benefits and burdens distributed among members of a group Can result from the application of rules, policies, or laws that apply to a society or a group Just results of actions override utilitarian results Rejects view that an injustice is acceptable if others benefit the action

Justice (cont.) Theory of distributive justice: three principles The Principle of Equal Liberty Basic liberties must be the same for all people Must protect liberties from attack by others Includes basic liberties of many Western Societies. Example: freedom of speech Organization should not use deception to win contracts: restricts the basic liberty of free choice

Theory of distributive justice (cont.) The Difference Principle Societies or groups will have inequalities but must help the disadvantaged (sick, poor, disabled) Managers should use organizational resources efficiently Helps productivity of society; society can then help the disadvantaged

Theory of distributive justice (cont.) The Principle of Fair Equality of Opportunity Everyone must have the same chance to get the best positions available Organizations must select people based on ability to do a job Provide equal access to education and training to develop skills

Egoism Self-centered form of ethics Two forms of ethical egoism: individual and universal Individual ethical egoism Judges actions only by their effects on one’s interests Usually rejected by moral philosophers as a defensible basis of ethics

Egoism (cont.) Universal ethical egoism Can include the interests of others when assessing one’s actions Still self-centered: pursuing pleasure and avoiding pain “Enlightened self-interest.” Considers the interests of others because the person wants others to do the same toward him or her

Egoism (cont.) Objections raised by moral philosophers Does not resolve conflicts in people’s interests One party would always have the pursuit of his or her interests blocked

Questions from the ethical theories Utilitarianism: does the action yield the greatest net benefits? Rights: does the action negatively affect someone’s moral rights? Justice: does the action give a fair distribution of costs and benefits among those affected? Egoism: will the action lead to other people behaving toward me in a way I would like?

Managing for Ethical Behavior
Dilemma of managing for ethical behavior Ethical behavior happens because a person freely believes it is the right way to behave Cannot impose ethical behavior by force Can develop a culture that supports ethical behavior The decision to behave ethically always rests with each person

Managing for Ethical Behavior (Cont.)
Methods available Codes of ethics Policy guidelines Decision procedures Standards of ethical performance Ethics training Peer reporting of unethical behavior

Codes of ethics Written statements describing prohibited behavior Can base the code on theories of ethics Can come from industry associations, professional associations, or individual organizations Prohibited behaviors: kickbacks, illegal political payments, inappropriate gifts

Policy guidelines Written and usually available to all employees Areas covered: ethical responsibilities of the organization, employee rights, quality of the work environment Makes an organization's culture more ethical if policies are accepted, followed, and enforced

Decision procedures Specify composition of a decision-making group and the scope of decision-making information Encourage using more information about a decision's ethical effects Examples Include community members and employees affected by a new plant's design Information procedures for new product decisions: require a fresh review of negative test results before final decision

Standards of ethical performance Become part of the organization's performance appraisal process Required behavior consistent with law and discretionary behavior that accords with an ethics policy Example--sexual harassment: all employees shall accept the mandate against sexual harassment in Title VII of the Civil Rights Act

Ethics training Goal: help the organization avoid governmental and societal sanctions by preventing unethical and illegal behavior Training content Discuss code of ethics Review organization procedures for reporting unethical behavior Study ethical frameworks based on ethical theories Case studies of ethical and unethical decisions

Ethics training (cont.) Assumes it can change a person's basic character Dimensions of character Capacity for ethical sensitivity Ethical reasoning Ethical conduct Ethical leadership

Peer reporting of unethical behavior Coworkers' reports of perceived unethical behavior: whistle-blowing Problem: often exposes the reporter to strong social pressure to overlook unethical behavior Encourage peer reporting by Specifying it as a desired behavior in a code of ethics Ensure that unethical behavior by one person has negative effect on many others. Punish entire group for one member’s unethical act

International Aspects of Ethics
Chapter 3: Ethics and Behavior and Organizations 28 July 1997 International Aspects of Ethics Sharp contrasts exist between U.S. attitudes toward business ethics and those of other countries Of the major capitalist nations, the United States has the highest frequency of reporting ethical violations, the toughest laws, and the greatest prevalence of organization codes of ethics 47

International Aspects of Ethics (Cont.)
Late 1999: Twenty-nine members and five non-members of the Organization for Economic Cooperation and Development signed an ethics treaty The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions has strong sanctions for bribery Signatories represented economies in the major world regions. China and India were notable exceptions

U.S. managers rely on rules applied equally to all people Managers in other countries rely more on shared values and a sense of obligation The perceived U.S. preoccupation with business ethics prompted the British magazine Economist to publish an editorial entitled ”Hey, America, Lighten Up a Little”

Multinational firms face many ethical questions and issues Operate in many countries; subject to the laws of those countries The legal and social context of globally oriented organizations can present their managers with ethical dilemmas

A legal view The Foreign Corrupt Practices Act of 1977 (FCPA) prohibits a company from using bribes to get business in another country or prevent the restriction of its business Targets of bribes: foreign officials, foreign political parties, and foreign political candidates Violations: maximum fine of $1 million to an organization. Five years and a maximum fine of $10,000 to a manager

A legal view (cont.) The FCPA defines a payment as anything of value, including gifts Under the act, a practice is corrupt if it tries to induce a person to misuse an official position for the benefit of a company A practice is also defined as corrupt by its motive. It is not necessary to complete the practice, nor must it be illegal in the other country

A legal view (cont.) The FCPA excludes small payments required in the ordinary course of business in many countries Allows such payments if they are a usual way of doing business in a country although they would be bribes according to U.S. values The act also allows entertainment and gifts if they are customary An ethical dilemma?

Two ethical views Cultural relativism Ethical realism Multinational organization

Ethical views (cont.) Cultural relativism Cultural relativism refers to differences in ethical values among different cultures Premise: right and wrong should be decided by each society's predominant ethical values Cultural relativists base their argument on three points

Ethical views (cont.) Cultural relativism(cont.) Three points Moral judgments are statements of feelings and opinions; neither wrong nor right Moral judgments are based on local ethical systems; cannot judge right or wrong across cultures Prudent approach: do not claim an action is either right or wrong

Ethical views (cont.) Cultural relativism(cont.) Managers should behave according to local ethical systems, even if their behavior violates the ethical systems of their home country Many philosophers have rejected cultural relativism's argument that codes of ethics cannot cross national boundaries Agree, however, that countries vary in what they define as right and wrong

Ethical views (cont.) Ethical realism Morality does not apply to international transactions Because no power rules over international events, people will not behave morally Because others will not behave morally, one is not morally required to behave ethically See text for a revision to this view of ethical realism

International ethical dilemmas Goods made in a country with no child labor laws Goods made in a country with child labor laws that are not enforced Changing the behavior of local people Making small payments that are allowed under the FCPA

Chapter 4 Organizational Culture
19 June 1997 Chapter 4 Organizational Culture 1

Learning Goals Discuss the concept of organizational culture
Understand the effect of organizational culture on you as an individual Describe the different levels at which we experience an organization's culture Discuss the functions and dysfunctions of organizational culture

Learning Goals (Cont.) Diagnose an organization's culture
Understand the relationship between organizational culture and organizational performance Explain the issues involved in creating, maintaining, and changing organizational culture

Chapter Overview Introduction Levels of Organizational Culture
Functions of Organizational Culture Dysfunctions of Organizational Culture Diagnosing Organizational Culture

Organizational Culture and Organizational Performance Creating, Maintaining, and Changing Organizational Culture International Aspects of Organizational Culture Ethical Issues in Organizational Culture

Introduction Organizational culture: an ideology and a set of values that guide the behavior of organization members Includes ceremonies, rituals, heroes, and scoundrels in the organization’s history Defines the content of what a new employee needs to learn to become an accepted member of an organization

Introduction (Cont.) Key aspects of organizational culture
Sharing of values Structuring of experiences Different sets of values can coexist Although values differ, members of each group can share a set of values If you have traveled abroad, you have already experienced what it is like to enter a new, different, and "foreign" culture

Introduction (Cont.) All human systems that have endured for some time, and whose members have a shared history, develop a culture Specific content of an organization's culture develops from the experiences of a group Adapting to its external environment Building a system of internal coordination

Introduction (Cont.) Each human system within which you interact has a culture: family, college or university, employer, sororities, fraternities Can make different and conflicting demands on you

Jargon, different social backgrounds, different local cultures
Introduction (Cont.) Divides into multiple subcultures Departments, divisions Different operating locations Occupational groups Workforce diversity Global environment Jargon, different social backgrounds, different local cultures

Introduction (Cont.) Organizational culture and organizational socialization Organizational Culture (Chapter 4) Organizational Socialization (Chapter 6) What a new employee needs to learn. The process by which a new employee learns the culture.

Introduction (Cont.) Definition of organizational culture "[A]ny organizational culture consists broadly of long-standing rules of thumb, a somewhat special language, an ideology that helps edit a member's everyday experience, shared standards of relevance as to the critical aspects of the work that is being accomplished, matter-of-fact prejudices, models for social etiquette and demeanor, certain customs and rituals suggestive of how members are to relate to colleagues, subordinates, superiors, and outsiders, and some rather plain 'horse sense' regarding what is appropriate and 'smart' behavior within the organization and what is not." Organizational culture is both the glue holding the system together and the motor moving it toward its goals.

Levels of Organizational Culture (Cont.)
Artifacts: behavior, language, architecture, attire, décor. High visibility Values: guides to behavior. Hard for newcomer to see, but can learn them Espoused values: what people say In-use values: what people do Basic assumptions: like values but often unconscious to veteran members

Levels of Organizational Culture (Cont.)
Artifacts/physical characteristics High visibility Values (Espoused; In-use) Basic assumptions Low visibility Text book figure 4.1

Functions of Organizational Culture (Cont.)
Adaptation to the organization’s external environment Consensus about mission Identify with the organization Clear vision Consistent image to markets, customers, clients

Functions of Organizational Culture (Cont.)
Coordination of internal systems and processes Measurement of results Rewards and sanctions Common language Social relationships Status relationships (stratification) Ideology: heroes, folklore

Dysfunctions of Organizational Culture
“Culture constrains strategy” Merging cultures: culture clash Upjohn: Kalamazoo, Michigan Pharmacia: Sweden Resistance to change: holding to existing values Conflict among subcultures Communication failures: subculture jargon

Diagnosing Organizational Culture
Visible artifacts Physical characteristics Public documents Behavior See textbook Table 4.1 infer Invisible artifacts Values Basic assumptions

Diagnosing Organizational Culture (Cont.)
Two perspectives An outsider considering a job with an organization An insider after you have joined an organization Use the Organizational Culture Diagnosis Worksheet, text book Table 4.1

As an outsider Physical characteristics of organization: site visit or photographs Read about the organization: annual reports, press accounts, Web sites Site visit: How are you treated? Talk to present employees

As an insider Stories and anecdotes Organization heroes Basis of promotions and pay increases Observe behavior in meetings: status differences Focus of meetings: what is discussed?

Organizational Culture and Organizational Performance
Theoretical and empirical research shows a relationship between organizational culture and organizational performance Different theoretical views of the culture-performance link

Organizational Culture and Organizational Performance (Cont.)
Organizations have a competitive advantage when their culture is valuable, rare, and not easily imitated Value: guidance it gives to direct people's behavior toward higher performance Rarity: features of a culture not common among competing organizations

Competitive advantage (cont.) Not easily imitated: hard for competitors to change their cultures to get the same advantages Difficulty of imitation follows from the rare features of some cultures and the difficulties managers have when trying to change a culture

The environment-culture congruence theoretical view Organizations facing high complexity and high ambiguity require a cohesive culture: widely shared values and basic assumptions Organizations facing low uncertainty and low complexity can use more formal control processes such as organization policies, rules, and procedures

Trait theory of organizational culture. Four traits Involvement: degree of participation of employees in organizational decisions Consistency: degree of agreement among organization members about important values and basic assumptions

Trait theory (cont.) Adaptability: ability of the organization to respond to external changes with internal changes Mission: core purposes of the organization that keep members focused on what is important

Some empirical research results Involvement and adaptability related to organizational growth Consistency and mission traits related to profitability Strong, widely dispersed cultures help high risk organizations maintain high reliability. Nuclear submarines, nuclear aircraft carriers See text book for more detail.

Creating, Maintaining, and Changing Organizational Culture
Managers face three decisions about their organization's culture Create a completely new culture, usually in a separate work unit or in a new organization Maintain existing organizational culture They believe it is right for their environments Change their culture to a new set of values, basic assumptions, and ideologies

Creating, Maintaining, and Changing Organizational Culture (Cont.)
Creating organizational culture A deliberate effort to build a specific type of organizational culture Happens when an entrepreneur forms an organization to pursue a vision or when managers of an existing organization form a new operating unit

Creating organizational culture (cont.) The new culture needs an ideology that is understandable, convincing, and widely discussed Ideology is a key tool for getting commitment to the vision from organization members

Maintaining organizational culture A dilemma Keep successful values of the past Question whether those values are right for the environment the organization now faces Requires managers to be aware of what organizational culture is and how it manifests itself in their organization

Maintaining organizational culture (cont.) Requires knowing the existing artifacts, values, and ideologies Can become familiar with their culture by doing the culture diagnosis described earlier Managers want to maintain commitment of organization members to key parts of that culture Strengthen key values so they are widely held throughout the organization

Maintaining organizational culture (cont.) Keep the good part of the organization's culture Requires managers to carefully examine new practices for consistency with their culture Example: introducing drug testing in an organizational culture built on trust

Breaking from some features of the old culture and creating new features Size and depth of change varies depending on degree of difference between the desired new culture and the old The change reaches deep into the cultural fabric of the organization over many years Changing the culture of an organization that has a homogeneous workforce to one that values diversity

Successfully managing the change process Choosing the right time for change Act when the times seem right for culture change Situation clearly demands change Pursue favorable new markets. The organization is performing poorly and faces clear threats to its viability.

Successfully managing the change process (cont.) Managers should not assume everyone in the organization will share their view of the need to change Senior executives play leadership roles Managers move forward with confidence, persistence, and optimism about the new culture

Successfully managing the change process (cont.) The change effort focuses on many aspects of the organization's culture: ideology, values, symbols Managers should know the roots of their organization's culture and maintain some continuity with the past

Successfully managing the change process (cont.) Example: FBI perceives itself as the world’s finest law-enforcement agency. Move to Quality Management is consistent with that view This approach also lets managers say what will not change as a way of offering familiarity and security to veteran employees

International Aspects of Organizational Culture
Effects of national cultures on multinational organizations Local cultures can shape the subcultures of globally dispersed units National culture, local business norms, and the needs of local customers can affect the subcultures of such units

International Aspects of Organizational Culture (Cont.)
Effects of national cultures (cont.) Example: the multinational insurance firm AIG follows local practices in collecting monthly premiums At each insured’s home in Taiwan Electronic bank transfers in Hong Kong

Multinational organizations Employees from many countries working side by side They do not shed their national cultural values when they come to work

Multinational organizations (cont.) Strong chance of subcultures forming along national lines Research evidence suggests that instead of masking local differences with organizational culture, multinational cultures may increase ties people have to their native cultures

Multinational cultural diversity Managers may refuse to recognize cultural differences and insist on the home culture way of doing business The cultural synergy view sees multinational cultural diversity as a resource

Multinational cultural diversity (cont.) Use combinations of cultural differences for the strategic advantage of the organization Get better product ideas for culturally diverse markets and better communication with culturally diverse customers

Ethical Issues in Organizational Culture
What moral action should managers take in managing the cultures of their organiza-tions? An analysis with different ethical theories gives different answers

Ethical Issues in Organizational Culture (Cont.)
Utilitarian analysis The moral action is the one that gives the greatest net benefit to the greatest number of people Cultural values supporting such action are morally correct Managers are morally correct in changing or creating cultures in that direction

Rights-based analysis People must have the right to make free and informed choices about what affects them Fully disclose values and basic assumptions to new employees

Rights-based analysis (cont.) Fully inform employees about proposed changes to the organization's culture Managers can have difficulty honoring a rights-based ethic because veteran employees often are not consciously aware of basic assumptions

Justice analysis A culture is unethical if it prevents employees from freely voicing their opinions A culture is unethical if all employee groups do not have an equal chance for advancement

A moral dimension of organizational culture Require an ethical dialogue in management decision processes Make ethical dialogue an explicit part of the organization's ideology Goal: The discussion of moral issues in decisions is a comfortable, desired, and required part of every manager's job

Chapter 5 Perception, Attitudes, and Personality
October 20, 2017 Chapter 5 Perception, Attitudes, and Personality

Learning Goals Understand human perceptual processes and how people form impressions of others Describe types of perceptual error and their effects on information people get from their environment Explain attribution processes and their effects on perception and attitudes

Learning Goals (Cont.) Discuss the nature of attitudes, how they form and how they change Explain the different views of human personality development Discuss some dimensions of personality and several personality types Recognize the effects of different cultures on perception, attitudes, and personality

Chapter Overview Introduction Perception Attitudes Personality
International Aspects of Perception, Attitudes, and Personality Ethical Issues in Perception, Attitudes, and Personality

Perception, Attitudes, and Personality
Chapter 5 Personality

Perception A cognitive process: lets a person make sense of stimuli from the environment Affects all senses: sight, touch, taste, smell, hearing Includes inputs to person and choice of inputs to which the person attends Stimulus sources: people, events, physical objects, ideas Helps adaptation to a changing environment

Perception (Cont.) Perceptual process
Target: object of the person’s perceptual process Threshold: minimum information from target for the person to notice the target Detection threshold: point at which person notices something has changed in her or his environment Recognition threshold: point at which person can identify the target or change in the target See text book Figure 5.1

Perception (Cont.) Perceptual process (cont.)
Target emerges from its surrounding context sometimes slowly, sometimes quickly Quickly discriminate a high-contrast target from its background; an ambiguous target takes more time to see Contrast can come from the target's size, color, loudness, or smell

Perception (Cont.) Perceptual process (cont.)
People attend more quickly to positively valued stimuli than to negatively valued stimuli Example: achievement-oriented employees notice announcements about promotion opportunities faster than an employee with less achievement motivation

Perception (Cont.) Perceptual defense: shield self from negatively valued stimuli Example: block out annoying sounds Organizational example: block some feedback from a supervisor or coworker when it is negative

Perception (Cont.) Perceptual errors: mistakes in the perceptual process Perceptual set Beliefs about a target based on information about the target or previous experiences with it Information about the target from any source Beliefs act like instructions for processing stimuli from the target

Perception (Cont.) Perceptual errors (cont.)
Stereotype: beliefs and perceived attributes about a target based on the target’s group Examples American university students: energetic and spontaneous Russian university students: orderly and obedient

Self-Perception: A View of Self
Self-perception: process by which people develop a view of themselves Develops from social interaction within different groups, including groups encountered on the Internet Self-perception has three parts: self-concept, self-esteem, self-presentation

Self-Perception: A View of Self (Cont.)
Self-concept: Set of beliefs people have about themselves View people hold of their personal qualities and attributes Factors affecting a person's self-concept Observations of behavior Recall of past significant events Effect of the surrounding social context

Self-concept (cont.) Observations of behavior People see their behavior, and their situation, in the same way they see the behavior of other people Person believes the behavior occurred voluntarily: concludes the behavior happened because of some personal quality or attribute

Self-concept (cont.) Observations of behavior (cont.) People learn about themselves by comparing themselves to other people with similar qualities Example: you may want to assess your abilities to hold a supervisory position. You compare yourself to people with backgrounds similar to yours who have had recent promotions

Self-concept (cont.) Recall of past significant events and effect of the surrounding social context Recall events important in their lives; not error free Tend to recall events they attribute to themselves and not to a situation or other people Often overestimate their role in past events Place more weight on the effects of their behavior and less on the surrounding situation or other people

Self-esteem Emotional dimension of self-perception Positive and negative judgments people have of themselves People with low self-esteem tend to be unsuccessful; do not adapt well to stressful events Those with high self-esteem have the opposite experiences

Self-awareness People differ in degree of self-awareness Two forms Private self-consciousness: behave according to attend to inner feelings and standards Public self-consciousness: behave according to social standard correct for the situation

Self-presentation Behavioral strategies people use to affect how others see them How they think about themselves Goals of self-presentation Affect other people's impressions to win their approval Increase the person's influence in a situation Ensure that others have an accurate impression of the person

Self-presentation (cont.) Highly conscious of public image: change behavior from situation to situation. Readily conform to situational norms People who want others to perceive them in a particular way behave consistently in different situations. They act in ways they perceive as true to themselves with little regard for the norms of the situation

Social Perception: A View of Others
Social perception: process by which people come to know and understand each other Forming impression of a person: perceiver first observes the person, the situation, and the person's behavior

Social Perception: A View of Others (Cont.)
Form a quick impression by making a snap judgment about that person, or Make attributions and integrate the attributions to form a final impression Confirmation biases lead the perceiver to hold tenaciously to it

Elements of social perception Three sets of clues help form the impression of another person Person Situation surrounding the person Observed behavior of the person

Elements of social perception (cont.) Developing first impressions Use different physical aspects of the person: height, weight, hair color, eyeglasses Stereotypes based on physical features Thin men: tense, suspicious, stubborn Blond women: fun loving Neatly dressed people: responsible Stereotypes result from attributing qualities to people based on previously formed perceptions

Elements of social perception (cont.) Preconceptions about the situations in which we see the behavior of other people Develop from experience with the same or similar situations Situation raises expectations about behavior the situation should cause Example: when two people are introduced, we expect both parties to acknowledge the other and probably to shake hands

Attribution processes People use attribution processes to explain the causes of behavior they see in others Begins with a quick personal attribution followed by adjustment based on the characteristics of the situation

Personal attribution Characteristics of the person such as beliefs, disposition, or personality, and not the situation, caused the person's behavior Example: when you conclude that another student spends many hours completing a project because he likes to work hard or values hard work, you are making a personal attribution

Chapter 5: Perception, Attitudes, and Personality October 20, 2017 Social Perception: A View of Others (Cont.) Situational attribution Aspects of the situation, not qualities of the person, cause the person's behavior Example: a student worked hard because of the reward of a good grade

Perceiver uses three types of information when forming an attribution Consensus information Distinctiveness information Consistency information

Consensus information Observe other people in the same or a similar situation If other people show the same behavior as the target person, the situation caused the behavior If other people behave differently from the target person, the person caused the behavior

Distinctiveness information Observe the target person in a different situation If the response is different in the new situation, the situation caused the behavior If the response is the same, the person caused the behavior

Consistency information Observe the target person in a similar situation, but at a different time High consistency: same behavior at both times Low consistency: different behavior at both times

Combine consensus, distinctiveness, and consistency information to form attribution Personal attribution: behavior high in consistency; low in consensus and distinctiveness Situational attribution: behavior high in consensus and distinctiveness; low in consistency

Fundamental attribution error Observer underestimates situation as cause of behavior; overestimates the as cause Explaining their behavior: tend to ascribe causes to the situation, not to personal qualities Explaining other’s behavior: tend to ascribe its causes to personal qualities, not the situation

False consensus Overestimate the degree to which others agree with the person's view Reinforces the view the perceiver has of another person

Integration of attributions to form final impression: disposition of perceiver Effects of recent experiences: positive or negative event just before meeting someone for the first time can affect the impression of the person Mood at time of first meeting: Positive impressions in a good mood Negative impressions in a bad mood

Attitudes An attitude is “a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object” Attitude object: physical objects, issues, ideas, events, people, places

Attitudes (Cont.) Parts of an attitude
Cognitive: perceptions and beliefs about an attitude object Affective: feelings about an attitude object Behavioral intentions: how the person wants to behave and what a person says about an attitude object

Attitudes (Cont.) Common work attitudes
Organizational commitment Satisfaction Job involvement Play a role in employee turnover

Attitudes (Cont.) Some connection between attitudes and behavior, although not strong People with strong attitudes about an object will likely behave in accord with their attitude Strong positive attitudes about Macintosh© computers leads to buying one Ardent followers of Jesse Jackson will likely vote for him

Attitudes (Cont.) Attitude formation: affected by the person’s beliefs about an object and the amount and type of information the person has about the object Perceives positive attributes: develops positive attitude Perceives negative attributes: develops negative attitude

Attitudes (Cont.) Attitude formation (cont.) Family upbringing
Peer groups Work groups General social experiences

Chapter 5: Perception, Attitudes, and Personality
October 20, 2017 Attitudes (Cont.) Attitude change Something persuades the person to shift his or her attitudes (persuasive communication) Norms of a social group can affect a person’s attitude (social norms) Person becomes uncomfortable with some aspects of her or his beliefs (cognitive dissonance)

Attitudes (Cont.) Persuasive communication Advertising
Tries to change cognitive part of attitude Assumes affective part will also change Attitude change process Win target’s attention Understand message Accept the influence Remember the message

Attitudes (Cont.) Social influence on attitudes
People are embedded in social groups Feel pressures to conform to norms If person values membership in group, likely will align attitudes with the group norms

Attitudes (Cont.) Cognitive dissonance
Hold multiple beliefs or cognitions about an attitude object Feel tension when discrepancies develop Motivated to reduce the tension Change one or more cognitions Other parts of attitude also change

Personality Set of traits, characteristics, and predispositions of a person Usually matures and stabilizes by about age 30 Affects how a person adjusts to different environments

Personality Theories Cognitive theory: people develop their thinking patterns as their life unfolds Learning theories: behavior patterns develop from the social environment Biological theories: personality as genetically inherited

Personality Theories (Cont.)
Chapter 5: Perception, Attitudes, and Personality October 20, 2017 Personality Theories (Cont.) Cognitive theory Develop thinking patterns as life unfolds Affects how the person interprets and internalizes life's events Cognitive development stages Reflexive behavior of infant More complex modes of perception and interpretation of events Neither driven by instincts nor unwittingly shaped by environmental influences

Learning theories Learn behavior from social interaction with other people Young child: early family socialization Continuously learn from social environment: stable behavior forms the personality Uniqueness of each personality follows from variability in social experiences

Biological theories Ethological theory Develop common characteristics as a result of evolution Behavioral characteristics that have helped survival over generations become inborn characteristics

Biological theories (cont.) Behavior genetics Individual's unique gene structure affects personality development Personality develops from interactions between a person's genetic structure and social environment

The Big-Five Personality Dimensions
Extroversion High: talkative, sociable Low: reserved, introverted Emotional stability High: calm, relaxed Low: worried, depressed Agreeableness High: cooperative, tolerant Low: rude, cold

The Big-Five Personality Dimensions (Cont.)
Conscientiousness High: dependable, thorough Low: sloppy, careless Openness to experience High: curious, intelligent Low: simple, conventional Assess yourself on each dimension

Assess yourself against each type.
Personality Types Locus of control: people control the consequences of their actions or are controlled by external factors External control: luck, fate, or powerful external forces control one’s destiny Internal control: believe they control what happens to them Assess yourself against each type.

Personality Types (Cont.)
Machiavellianism Holds cynical views of other people's motives Places little value on honesty Approaches the world with manipulative intent Maintains distance between self and others Emotionally detached from other people Suspicious interpersonal orientation can contribute to high interpersonal conflict

Machiavellianism (cont.) Focus on personal goals, even if reaching them requires unethical behavior Suspicious orientation leads to view of organizational world as a web of political processes

Type A personality: a keen sense of time urgency, focuses excessively on achievement, aggressive Type B personality: strong self-esteem, even tempered, no sense of time urgency Type A: significant risk factor for coronary heart disease.

Myers-Briggs Type Indicator (MBTI) Popular personality assessment device Four bi-polar dimensions Extroverted (E) - introverted (I) Sensing (S) - intuitive (I) Thinking (T) - feeling (F) Perceiving (P) - judging (J) Assigns people to one of sixteen types based on these dimensions

Myers-Briggs Type Indicator (MBTI) (cont.) Extroverts look outward; introverts turn inward Sensers use data; intuitives use hunches Thinkers are objective; feelers are subjective Perceivers are flexible; judgers want closure ESTJ type: extroverted, sensing, thinking, and judging

International Aspects of Perception, Attitudes, and Personality
Culturally based stereotypes Swiss: punctual Germans: task-oriented Americans: energetic People who hold these stereotypes experience surprises when they meet people from these countries who do not fit the stereotypes

International Aspects of Perception, Attitudes, and Personality (Cont
Culturally based stereotypes (cont.) Project aspects of own culture onto people and situations in a different culture Assumes that the new culture mirrors their own Example: Korean manager visiting Sweden assumes all women seated behind desks are secretaries Such behavior would be inappropriate and possibly dysfunctional in Sweden where many women hold management positions

Attitudes about organizational design, management, and decision making: U.S. managers: a hierarchical organizational design helps solve problems and guides the division of labor in the organization French and Italian managers: a hierarchical design lets people know authority relationships in the organization

Attitudes (cont.) Italian managers: bypassing a manager to reach a subordinate employee is insubordination Swedish and Austrian organizations: decentralized decision making Philippine and Indian organizations: centralized decision making Conclusion: Organizations that cross national borders and draw managers from many different countries have high conflict potential.

Personality characteristics People in individualistic cultures (United States) have a stronger need for autonomy than people in group-oriented cultures (Japan) People in cultures that emphasize avoiding uncertainty (Belgium, Peru) have a stronger need for security than people in cultures that are less concerned about avoiding uncertainty (Singapore, Ireland)

Ethical Issues in Perception, Attitudes, and Personality
Stereotypes and workforce diversity Can have inaccurate stereotypes about the ethics of people with different social, racial, and ethnic backgrounds These stereotypes can affect the opinions people develop about the ethical behavior of such people in the workplace

Ethical Issues in Perception, Attitudes, and Personality (Cont.)
Self-presentation Deliberately managing self-presentations so decisions and behavior appear ethical Limited experimental evidence suggests one can favorably manage other people's impressions of their ethical attitudes

Attribution and accountability Individual responsibility is central to ethical behavior Attribution of responsibility to a person: person behaved ethically or unethically Attribution of responsibility to the situation: individual not held accountable Example: observer believed the person had behaved unethically because of a directive Errors in attribution: could conclude that he or she was not responsible for an unethical act

Ethical attitudes Little reliable and valid information about ethical attitudes Some evidence points to the absence of a fixed set of ethical attitudes among managers Attitudes about ethics in organizations and decision making are situational and varying The morality of behavior and decisions is determined by their social context, not by abstract and absolute rules

Chapter 6 Organizational Socialization
19 June 1997 Chapter 6 Organizational Socialization 1

Learning Goals Explain organizational socialization as a process that develops and communicates an organization's culture Distinguish between roles and role behaviors Describe the stages of organizational socialization and how they repeat during a work career

Learning Goals (Cont.) Distinguish the socialization issues in expatriate and repatriate adjustment Discuss the ethical issues in organizational socialization

Chapter Overview Introduction Roles and Role Behavior
Individual and Organizational Perspectives on Socialization Stages of Organizational Socialization International Aspects of Organizational Socialization Ethical Issues in Organizational Socialization

Introduction (Cont.) Organizational culture and organizational socialization Organizational Culture (Chapter 4) Organizational Socialization (Chapter 6) What a new employee needs to learn. The process by which a new employee learns the culture.

Introduction (Cont) Organizational socialization: process by which people learn the content of an organization's culture Powerful process that affects an individual's behavior Helps shape and maintain an organization's culture The “process by which people learn the values, norms, and required behaviors of an organization’s culture.”

Introduction (Cont) Organizations almost inevitably leave their imprint on individual members through the socialization process Usually the first behavioral process a person experiences after joining an organization Socialization process unfolds through several stages

Introduction (Cont) Perspectives
As an individual affected by the process As a manager using the process Process by which people adjust to new organizations, new jobs, and new groups of people Focuses employees’ on acquiring important values, attitudes, and role behaviors Deals with the basic question of individual-organization fit

Roles and Role Behavior
Role: activities, duties, responsibilities, required behaviors Contributions from the person in exchange for inducements from the organization (pay, fringe benefits) Must roughly balance for the person to accept the role

Roles and Role Behavior (Cont.)
Pivotal role behaviors: must accept them to join and remain a member of an organization Relevant role behaviors: considered desirable and good by the organization but not essential to membership Peripheral role behaviors: neither necessary nor desirable but tolerated

Role episodes Series of role episodes communicate pivotal and relevant role behaviors Start when an organization recruits an individual Continue during the early employment period See text book Figure 6.1

Role Episodes (Cont.) Role senders Before joining the organization: often a company's recruiter After joining The person who hired or will supervise the new employee Other managers Coworkers

Role Episodes (Cont.) Sent role Role sender defines a sent role's pivotal and relevant role behaviors Pivotal role behaviors: orally or in job descriptions, company policies, and employee handbook Relevant role behaviors: orally and less formally than pivotal

Role Episodes (Cont.) Focal person Receives the role behavior sent by the role sender Enacts the role behavior according to the way the person perceives it Focal person's perception forms the received role Complies with the role sender's request or resists it

Role Episodes (Cont.) Role sender assesses how closely behavior matches the sender's perception of the role Reacts to focal person’s behavior Pivotal and relevant role behavior Reinforcement if acceptable Sanctions if not complying Peripheral role behavior: nonreinforcement (ignoring)

Role Episodes (Cont.) Repeats with same role sender Ends when Compliance occurs Noncompliance accepted Termination or employee leaves the organization

Role Episodes (Cont.) Can repeat with other managers or coworkers as the role senders Often receive conflicting role behaviors Likely complies with role sender believed to have the most control over the person’s future

Individual and Organizational Perspectives on Socialization
Person Individualization Socialization Versus Individualization

Stages of Organizational Socialization
Three stages of socialization Choice: Anticipatory Socialization--before joining the organization Entry/Encounter--after entering the organization Change: Metamorphosis--late stage featuring a new self-image Result of one stage becomes input to next stage

Stages of Organizational Socialization (Cont.)
Individual perspective: experiences at each stage Management perspective: each stage helps the socialization process achieve its goals When experienced? First job New position in same organization New position in different organization

Stages of Organizational Socialization (Cont.)
Choice: Anticipatory socialization (“Getting in”) Expectations Entry/encounter (“Breaking in”) Reality Change: Metamorphosis (“Settling in”) Taking on the role Text book Figure 6.2

Choice: Anticipatory Socialization (“Getting In”)
Happens before joining an organization or taking a new job Prepares the person for organizational entry First glimpse of the organization’s culture Develops a person’s expectations or beliefs about the organization

Choice: Anticipatory Socialization (Cont.)
Two issues Realism of self and organization Congruence of self and organization Realism: responsibility of both the organization and the individual Organization: present the positive and negative sides of working for the company Potential employee: present an accurate picture of self

Congruence of self and organization Are your skills and abilities congruent with the needs of the organization? Can the organization satisfy your needs and offer you a congruent set of values?

Lack realism and congruence High turnover Low satisfaction Low organizational commitment Poor job performance Clear negative effects for both the individual and the organization

Ways people learn about an organization Advertising Press accounts Web pages Present employees, especially alumni Internet searches Electronic databases

Socialization processes Recruitment advertising: presentation of the organization Company recruiters: campus interviews Internships: experience the organization while still a student Screening and selection devices: written tests, oral interviews, job simulations

Realistic job previews Balanced descriptions of the job and organization Recruiting brochures or videotapes Interviews with present employees Creates realistic expectations Increases job satisfaction Reduces turnover Realistic employee previews: accurate, candid presentation of self

Entry/Encounter Stage (“Breaking In”)
Crosses the boundary of the organization and enters this second stage of socialization Brings expectations from the anticipatory stage Compares expectations to the reality of the organization Often eager to “learn the ropes”

Entry/Encounter Stage (Cont.)
New self-image The intent of the organization Focuses on pivotal and relevant role behaviors Highlights the “tug of war” between socialization and individualization

Purposes Role clarification Organization: immediate supervisor Immediate workgroup Describe same role requirements? Teach tasks, duties, and responsibilities

Purposes (cont.) Teach immediate workgroup norms Social status Bases of power Informal leaders Performance norms; not always same as organization’s or individual’s values

Conflicting behavioral demands and new employee’s adjustment Work and nonwork roles Stress during this early adjustment period

Socialization processes Purpose: give employee a new self-image Process has three steps Unfreezing: discard old self-image Changing: move to new self-image Refreezing: puts the new self-image solidly in place Metaphor: melting ice cubes in a heart shaped mold and refreezing the mold

Socialization processes (cont.) Indoctrination programs Teach formal rules and procedures (pivotal role behavior) Uniform presentation to many new employees Apprenticeship or mentoring Assign to a veteran employee Teaches technical and social parts of job Varied results because organization has less control than in indoctrination programs

Socialization processes (cont.) Training programs Develop skills important to the job Goes beyond what employee learned in an academic setting Also conveys values and norms of the organization’s culture

Socialization processes (cont.) Debasement or upending experiences Quickly unfreezes new member from old self-image Give new employee an extremely easy or extremely hard task Both task assignments have the same humiliating effect Questions his or her self-image, making the person ready for change

Change: Metamorphosis (“Settling In”)
Change in new employee as the entry/encounter stage flows into the metamorphosis stage Often clear separation from entry/encounter stage with rites and rituals (graduation) The word metamorphosis emphasizes the extraordinary changes that can happen

Change: Metamorphosis (Cont.)
Successful resolution of multiple socialization demands Comfortable in new role Some mastery of job requirements Acceptance of obvious values Adjusted to group norms Self-confidence up; anxiety down

Change: Metamorphosis (Cont.)
Results Rebellious response Rejects all aspects of role Socialization failure Custodial response: accepts existing role Innovative response Content innovation: changes role Role innovation: redefines role; a form of accepting rebellion

International Aspects of Organizational Socialization
Experience an international role transition each time a person moves to and from an international assignment As in domestic job changes, the person experiences the socialization stages International context creates some special issues for socialization processes

International Aspects of Organizational Socialization (Cont.)
Expatriate: moves from home country to another country Repatriate: returns to home country from another country Culture shock for both but for different reasons Home country could have changed in unknown ways On return, expatriate enters a culture with many new features

Cross-cultural adjustment of expatriates and repatriates New job and work environment Interacting with local nationals Culture of the country Organization's socialization process can help adjustment along these dimensions

Issues in expatriate adjustment Cross-cultural training can smooth international role transitions Expatriate adjustment failures Between 16 and 40 percent of U.S. employees return before their international assignment ends Estimated cost of expatriate failures for U.S. multinationals: over $2 billion a year Does not include unmeasured costs such as lost business and loss of employee self-esteem

Issues in expatriate adjustment (cont.) Difficulties during early part of socialization to new assignment Lack of knowledge about local norms and rules of behavior Dramatic changes and contrasts depending on degree of difference between expatriate's home culture and other country's culture Argue for more preparation for international job transitions

Issues in expatriate adjustment (cont.) Typically choose people for based on successful performance in domestic roles Assumption: success in domestic operations means success abroad

Issues in expatriate adjustment (cont.) Recommended selection criteria: Experience from an earlier international assignment Openness to differences among people Willingness to learn about another culture Recommend the same criteria in assessing the adjustment potential of spouse and other family members

Issues in expatriate adjustment (cont.) Expatriate socialization should include cross-cultural training Cross-cultural training helps smooth expatriate adjustment Only about 30 percent of expatriates get such training Training usually offered is not comprehensive

Issues in expatriate adjustment (cont.) Typically includes an orientation to the other country's culture and its physical environment Spouses often not included in such training Their adaptation plays a key role in successful expatriate adjustment

Issues in expatriate adjustment (cont.) Some countries are harder to adjust to than others Greater the differences between the other country's culture and home culture, the harder the adjustment Countries difficult for U.S. employees: India, Liberia, and some Southeast Asian countries

Issues in expatriate adjustment (cont.) Women face a special issue in cultures with male-dominated norms and values Female expatriates and wives of male expatriates: difficult to adjust to such cultures

Issues in expatriate adjustment (cont.) Career development programs can smooth expatriate transitions Show the career connections between Expatriate assignment Repatriate assignment Long-term career Assign at-home mentors to help guide the expatriate

Issues in repatriate adjustment Repatriate may not have an accurate image of home culture before return Anticipatory stage before leaving international assignment: inaccurate expectations of life back home

Issues in repatriate adjustment (cont.) Maintaining accurate expectations Home leave or required visits to the home office Required interactions with people in home office: increase information flow Communication media: telephone, facsimile, international teleconference, , and direct computer connection

Issues in repatriate adjustment (cont.) Role of home office mentor Keep person informed of major policy and strategic changes back home Maintain flow of accurate information about changes in the home organization and culture Goal: give the repatriate accurate expectations about his or her return

Issues in repatriate adjustment (cont.) Successful repatriation Degree of adaptation to other country's culture can affect adaptation to home culture Requires unlearning much of what made the person successful abroad Many perquisites that go with an international assignment are dysfunctional to adjustment Predeparture training: prepare to return home. Almost no multinational offers such training

Ethical Issues in Organizational Socialization
Several ethical issues center on informed consent Should the organization tell potential new employees that it will try to change some values and behavior? Should present employees be told that each time they change positions, their values and behavior will also change? Should an organization reveal the socialization and training goals of its training programs before employees enter the programs?

Ethical Issues in Organizational Socialization (Cont.)
Debasement experiences Most organizations use mild forms of debasement Sororities, fraternities, basic military training, military academies use strong forms of debasement Can create feelings of fear and intimidation Debasement experiences pose a clear ethical dilemma for organizations and managers

Anticipatory socialization Importance of having accurate expectations about working for a particular organization Withholding negative information from potential employees: an ethical issue At what point does an organization behave unethically by not giving a balanced view of itself?

Anticipatory socialization (cont.) Potential employee knowingly withholds information about self Could affect performance or retention by an organization At what point do people behave unethically by not giving a balanced view of self?

Chapter 7 Motivation: Need Theories
October 20, 2017 Chapter 7 Motivation: Need Theories

Learning Goals Discuss the role of needs in behavior in organizations
Describe the major need hierarchy theories of motivation Appreciate that the importance of particular needs varies from person to person

Learning Goals (Cont.) Understand how some needs may be learned
Distinguish between motivator and hygiene factors in a person's environment Discuss the international and ethical issues in motivation

Chapter Overview Introduction Overview of Where We are Headed
Murray's Theory of Human Personality: The Concept of Needs Maslow's Hierarchy of Needs Theory E.R.G. Theory

McClelland's Achievement Motivation Theory Herzberg's Motivator-Hygiene Theory International Aspects of the Need theories of Motivation Ethical Issues and the Need Theories of Motivation

Introduction Assumptions of motivation Theories
Behavior has a starting point, a direction, and a stopping point Focus is on voluntary behavior under the control of the person Behavior is not random. It has purpose and direction

Introduction (Cont.) Motivation is a psychological process that causes
Motivation defined Motivation is a psychological process that causes the arousal, direction, and persistence of voluntary actions that are goal directed.

Introduction (Cont.) that leads to that results in
Motivation is the psychological process Some level of job performance Choice of behavior The Motivation-Behavior-Job Performance Sequence

Introduction (Cont.) Why know about motivation?
Help you understand your behavior and the behavior of others Can help a manager build and manage a “system of motivation.” Offers conceptual tools for analyzing motivation problems in organizations

Overview of Where We are Headed
Need theories (Chapter 7) Murray’s Theory of Human Personality Maslow’s Hierarchy of Needs Theory E.R.G. Theory McClelland’s Achievement Motivation Theory Herzberg’s Motivator-Hygiene Theory

Overview of Where We are Headed (Cont.)
Cognitive and behavioral theories (Chapter 8) Expectancy Theory Equity Theory Goal Setting Theory Behavior Modification

Murray’s Theory of Human Personality
Assumptions People can adapt to their changing environment Human behavior is goal directed Internal and external factors affect behavior People learn from interactions with their environment Preconception of future affect behavior now

Murray’s Theory of Human Personality (Cont.)
Needs Basic to Murray's theory Hypothetical concept: helps explain observable differences in behavior “Invisible link” between a stimulus and a person’s reaction to the stimulus

Types of needs Physical needs Satisfaction of basic physical processes Need for food, air, water, sex Psychological needs Focus on emotional and mental satisfaction Example: the need for social interaction or to achieve difficult goals

Some needs in Murray's theory n Order: organize and systematically arrange objects; be clean, neat, and tidy n Achievement: attain difficult goals; perform as well as possible n Recognition: receive credit for actions; to seek honors and recognition The small n in front of the name of each need is the psychologist’s abbreviation for the word need. See text book Table 7.1

Some needs in Murray's theory (cont.) n Dominance: influence others; affect the direction of a group n Deference: respect authority; admire a person with authority n Autonomy: be independent and not be influenced by others n Affiliation: associate with others, have friends, and join groups

Characteristics of needs Latent internal characteristics activated by a stimulus A person tries to behave in a way that satisfies an activated need Strong need for affiliation: Meet someone you like and start talking to the person

Characteristics of needs (cont.) Needs may show rhythmic patterns over time Manager could satisfy a Need for Dominance in relationships with subordinates Same manager is subordinate to someone else in the organization Engages in behavior directed at the Need for Deference

Chapter 7: Motivation: Need Theories October 20, 2017 Murray’s Theory of Human Personality (Cont.) Characteristics of needs (Cont.) Opposite needs and behavior Need for Dominance in work role, especially a manager or supervisor Need for Deference in nonwork (family) role Work Need for Dominance Nonwork Need for Deference

Characteristics of needs (Cont.) Multiple needs and behavior One need is primary; other need serves the primary Need for Achievement and Need for Affiliation Example: joining student organizations. Such activities are important for finding a good job serves Need for Affiliation Need for Achievement

Implications Understand own and other’s behavior Needs vary in importance among people Directs people’s behavior toward or away from objects Such knowledge can help managers’ shape a motivation system Help us understand behavior we see

Maslow’s Hierarchy of Needs Theory
Five groups of basic needs Healthy adults try to satisfy these needs So basic that they motivate behavior in many cultures Chronic frustration of needs can lead to psychopathological results

Maslow’s Hierarchy of Needs Theory (Cont.)
Physiological needs: basic requirements of the human body; food, water, sleep, sex Safety needs: desires of a person to be protected from physical and economic harm Belongingness and love needs (social): desire to give and receive affection; be in the company of others

Esteem needs: self-confidence and sense of self-worth Esteem from others: valuation of self from other people Self-esteem: feeling of self-confidence and self-respect Self-actualization needs: desire for self-fulfillment Maslow: “. . . the desire to become more and more what one is, to become everything that one is capable of becoming.”

Form a need hierarchy based on the “prepotency” of needs Prepotency: need emerges as a motivator after satisfying a lower-order (more prepotent) need Hierarchy progression: physiological, safety, belongingness, esteem, self-actualization

Belongingness and love
Self- actualization Maslow’s Hierarchy of Needs Esteem Belongingness and love Safety See text book Figure 7.1 Physiological

Need hierarchy Unsatisfied need is a potential motivator of behavior Satisfied need is no longer a motivator Focus on more than one need: promotion leads to more money (esteem and physiological) Need satisfaction follows the order shown but is flexible Weak empirical support Remains a classic interpretation of behavior

E.R.G. Theory A variation of Maslow's hierarchy of needs
Three groups of needs Existence needs: physical and material wants Relatedness needs: desires for interpersonal relationships Growth needs: desires to be creative and productive; to use one’s skills

E.R.G. Theory (Cont.) Growth needs Relatedness needs Existence needs
Maslow hierarchy E.R.G. Theory Self- actualization Relationship of Maslow’s hierarchy to E.R.G. Theory. Growth needs Esteem Belongingness and love Relatedness needs Safety Existence needs Physiological

E.R.G. Theory (Cont.) Both similar to and different from Maslow's need hierarchy Satisfied and unsatisfied needs operate in much the same way Movement upward is the same Movement downward is new See text book Figure 7.2

E.R.G. Theory (Cont.) Satisfaction-progression: move up the hierarchy as needs are satisfied Frustration-regression: move down the hierarchy when a need is frustrated Deficiency cycle: more strongly desire existence needs when they are unsatisfied Enrichment cycle: more strongly desire growth needs when they are satisfied

McClelland’s Achievement Motivation Theory
McClelland and colleagues studied the behavioral effects of three needs Need for Achievement Need for Power Need for Affiliation Emphasized the Need for Achievement, although they investigated all three needs

McClelland’s Achievement Motivation Theory (Cont.)
Product of an impressive long-running research program Controversy over measurement methods Recent study shows the validity of different measures

Strong need for achievement people Take responsibility for results of behavior Willing to take calculated risks Set moderate achievement goals Prefer to set performance standards for themselves Prefer nonroutine tasks to routine assignments Welcome feedback about how well they are doing

Acquire the Need for Achievement through socialization to cultural values Presence of Need for Achievement themes in folklore, mythology, art Need for Achievement societies had high levels of economic development

Strong Need for Power people Focuses on "controlling the means of influencing the behavior of another person” Having strong effects on other people Means of influence: anything available to the person to control the behavior of another Actively searches for means of influence Example: use superior-subordinate relationship or external rewards to control the behavior of another

Two ways of expressing the Need for Power Dominance, physical aggression, exploitation View situations from a win-lose perspective Must win and the other party must lose Did not feel such power behavior resulted in the type of leadership required by organizations

Two ways of expressing the Need for Power (cont.) Persuasion and interpersonal influence Tries to arouse confidence in those he or she wants to influence Clarifies group’s goals and persuades members to achieve those goals Emphasizes group members’ ability to reach goals

Two ways of expressing the Need for Power (cont.) Tries to develop a competence belief in group members McClelland felt this type of power behavior characterized effective leaders in organizations

Strong Need for Affiliation people Focuses on "establishing, maintaining, and restoring positive affective relations with others" Want close, warm interpersonal relationships Seek the approval of others, especially those about whom they care Like other people, want other people to like them, and want to be in the company of others

Need for achievement and behavior Money: important to both high and low achievers, but for different reasons High achiever wants concrete feedback about performance Making a profit, or receiving a bonus, is a statement about success or failure Symbol of success and feedback about job performance

Need for achievement and behavior (cont.) High achiever wants a challenging job and responsibility for work Want to feel successful at doing something over which they have control

Need for achievement and behavior (cont.) Low achiever views monetary reward as an end in itself Get increased performance from low Need for Achievement person by rewarding with money

Managers and executives usually have a stronger Need for Achievement than people in other occupations Evidence points to strong Need for Achievement as an entrepreneur characteristic Nature of Need for Achievement behavior fits well with such role demands

Need for Achievement and Need for Power: some relationships Strong Need for Achievement person Task centered Future oriented Performs to internal standard of excellence

Need for Achievement and Need for Power: some relationships (cont.) Strong Need for Power person Draws attention Risk taking Present oriented Assesses situations for change potential

Need for Achievement and Need for Power: some relationships (cont.) Both types of people important for successful organizations Strong Need for Achievement managers keep an organization going Strong Need for Power people bring dramatic change and innovation

Herzberg’s Motivator-Hygiene Theory
Early interview research with engineers and accountants Negative events: mostly involved a person's job context such as company policy and supervision Positive events: described aspects of the job and feelings of achievement Salary mentioned about the same number of times in negative and positive reports

Herzberg’s Motivator-Hygiene Theory (Cont.)
Dissatisfiers: items predominantly found in descriptions of negative events Could lead to high levels of employee dissatisfaction Improve the dissatisfiers and reduce dissatisfaction Not get higher satisfaction

Satisfiers: items predominantly found in descriptions of positive events Could lead to high levels of employee satisfaction Their absence, or a person's failure to experience them, would not produce dissatisfaction

Two distinct continua: one for satisfaction and one for dissatisfaction Not a single continuum with dissatisfaction on one end and satisfaction on the other Herzberg eventually called the satisfiers motivators; the dissatisfiers hygiene factors

Motivators Achievement Recognition Work itself Hygiene factors Company policies and their administration Quality of supervision Working conditions

Dissatisfiers distracted from the motivators Once the work context is improved, the manager can try to provide the motivators Use a process called job enrichment Add more responsibility and autonomy to the job Creates opportunity for employee to experience the motivators

Empirical research Mixed results Methodological issues See the text book for details

International Aspects of the Need Theories of Motivation
Concept of needs holds across cultures People from different cultures may express and satisfy needs differently Importance of needs in Maslow's need hierarchy United States: self-actualization Latin America: security, affiliation France and Germany: need for security New Zealand: belongingness and love

International Aspects of the Need Theories of Motivation (Cont.)
See textbook for results of some large cross-country studies of McClelland's Achievement Motivation Theory Use caution when applying need theories of motivation in different countries Strong evidence they are culture bound

Ethical Issues and the Need Theories of Motivation
Ethics of directly affecting employee behavior without informed consent Consider the ethics of actions from the different ethical views in Chapter 3

Ethical Issues and the Need Theories of Motivation (Cont.)
Utilitarian analysis Total effects of the manager's efforts Do they produce a widespread net positive benefit for the organization? Rights and justice analysis: Employees' rights to know their manager’s intent

Ethical egoism It is right for a manager to affect behavior because it meets the manager's interests Interests include unit’s work performance and the manager's career

Ethically required to create need satisfying work experiences? Existing research does not always show higher performance and satisfaction from work designs aligned with people's needs Ethical answer rests on the philosophy of each organization and its managers

Should managers consider cultural differences in people’s needs? Manage according to the needs of people in the host culture, or Manage as if they were in their home culture?

Utilitarian and rights-based analyses answer "yes" to the first question and "no" to the second Utilitarian view: managing a multinational operation so it aligns with local people's needs Rights view: people have the right of congruence with their needs in their work experiences

Chapter 8 Motivation: Cognitive and Behavioral Theories and Techniques
Chapter 8: Cognitive and Behavioral Theories and Techniques October 20, 2017 Chapter 8 Motivation: Cognitive and Behavioral Theories and Techniques

Learning Goals Describe how people develop expectations about what will happen to them Appreciate differences in the values people place on the results of their behavior Understand the differences between extrinsic and intrinsic outcomes Discuss the role of equity in human motivation and behavior

Learning Goals (Cont.) Use the techniques of goal setting
Describe the powerful technique of behavior modification Discuss some international aspects of motivation

Chapter Overview Introduction Expectancy Theory Equity Theory
Goal Setting Theory Behavior Modification International Aspects of the Cognitive and Behavioral Theories of Motivation Ethical Issues in the Cognitive and Behavioral Theories of Motivation

Introduction Four motivation theories that differ from those in Chapter 7 Three use cognitive processes to explain human behavior The fourth focuses on observable behavior, not cognitive processes

Introduction Cognitive theories Behavioral Theory
Expectancy Theory: describes internal processes of choice among different behaviors Equity Theory: describes how and why people react when they feel unfairly treated Goal Setting Theory: focuses on how to set goals for people to reach Behavioral Theory Behavior Modification: focuses on observable behavior, not internal psychological processes

Expectancy Theory Assumptions
Forces in the environment and person interact to affect behavior People choose among different courses of action People make choices based on preferences for outcomes of actions Choices are rational; based on perceived value of outcomes of actions

Expectancy Theory (Cont.)
People have different preferences for different outcomes Reflect on your preferences for different course grades You will behave in a way to earn your preferred grade You also must believe you will receive your desired grade

Basic concepts Expectancy Subjective probability that a person’s action will be followed by an outcome Ranges from 0 to 1 0 = no connection between an act and an outcome 1 = connection between the act and the outcome is certain .50 = chance that an act will be followed by an outcome

Basic concepts (cont.) Two types of expectancy Effort-performance expectancy: person’s belief that effort leads to a desired performance level (E P) Performance-outcome expectancy: person’s belief that performance will be followed by some outcome (P O)

Simple Expectancy Theory model Effort Performance Outcomes View as flows through a pipeline

Basic concepts (cont.) Valence: preference people have among outcomes Attraction (+) Indifference (0) Avoidance (-) Range: -3 to +3; shows degree of attraction or avoidance a person associates with an outcome

Relationships between expectancies and valences People perceive a connection between effort and desired performance level People have different preferences for different outcomes People also perceive a link between that performance level and an outcome

Chapter 8: Cognitive and Behavioral Theories and Techniques October 20, 2017 Expectancy Theory (Cont.) Formula showing relationships n Motivation = ƒ  (E P)i (P O)i  Vi i=1 

Multiple outcomes are possible for behavior Outcomes: something positively valued (a raise) or negatively valued (being fired) Person's perception of the valence of all outcomes for a behavior decides the choice of behavior Go toward positively valent outcomes Avoid negatively valent outcomes May consider several possible outcomes at once

Expectancies and valences combine multiplicatively Importance of a value of 0 for an expectancy or a valence Positively valent outcome but expectancy = 0: little motivation Indifferent to an outcome (valence = 0): not highly motivated even with expectancy = 1

Motivation = expectancy x valence Valence Effort Performance Outcomes Expectancy Expectancy Text book Figure 8.1

Types of outcomes Extrinsic outcomes: what people receive from someone else for their performance Intrinsic outcomes: what people give to themselves for their performance Types of motivation Extrinsic motivation (“pull”) Intrinsic motivation (“push”)

Extrinsic outcomes Effort Performance Intrinsic outcomes Performance and different outcomes

Extrinsic outcomes Pay increases, promotion, supervisor's praise, quality awards, larger office space Managers give or withhold extrinsic outcomes for employee performance Employee controls the performance level but not directly control the outcome

Extrinsic outcomes (cont.) Time delay of extrinsic outcomes Example: annual or semiannual pay increases Can reduce motivation effect Related to many different needs: physiological, esteem, self-actualization Provides food and shelter Sign of accomplishment Gives feedback about performance

Intrinsic outcomes More individual control Little time delay; increases motivation effect Managers do not directly deliver them Managers can provide opportunities for people to experience intrinsic outcomes. Associated mainly with higher order needs such as self-actualization

Blockages between effort and performance Individual blockages Skills and abilities: perceived and real Task difficulty Experience with task or problem Can increase or decrease the effort-performance expectancy

Blockages between effort and performance (cont.) Organizational blockages Resources Training Conflict Organizational design Can increase or decrease the effort-performance expectancy

Individual blockages Effort Performance Outcomes Organizational blockages Effect of blockages: view as flows through a pipeline

Expanded Expectancy Theory Model Individual blockages Extrinsic outcomes Effort Performance Intrinsic outcomes Organizational blockages Text book Figure 8.2

Equity Theory Focuses on exchange relationships
Perception of equitable or inequitable exchange Exchange relationships: employer-employee, members of a team Some criticism of underlying research Discussion of elements most useful to managers Balance the ratios of inputs to outcomes in exchange relationships

Equity Theory (Cont.) Inputs
Characteristics and behaviors the person brings to the exchange relationship Training, education, age, gender, ethnicity Level of effort and performance Person defines the relevant or important inputs Possible basis of conflict in employer-employee exchange

Equity Theory (Cont.) Outputs
What the person gets from the exchange relationship Positive outcomes: pay, fringe benefits, competent supervision, friendly coworkers Negative outcomes: close, controlling supervision; monotonous job Person decides positive and negative character of outcomes

Equity Theory (Cont.) Compare ratio of outcomes to inputs to perceived ratio of another person or group Can also compare to Similar ratios in the past Standard of fairness Terms Person: individual making the comparison Other: object of comparison

Equity Theory (Cont.) Equity: ratios roughly balance
Person’s perception of equal ratios Example: performance and rewards of self and coworker

Equity Theory (Cont.) Inequity: unequal ratios
Negative inequity: underpayment Positive inequity: overpayment Amount of inequity: proportional to the size of perceived discrepancy in the ratios Point of inequity experience is higher for positive inequity than negative inequity Attribute some amount of overpayment to "good fortune” or a just reward for high levels of effort in the past

Equity Theory (Cont.) = A state of equity Person Other Outcomes Inputs

Equity Theory (Cont.) < Negative inequity (“underpayment”) Person
Other Outcomes Inputs Outcomes Inputs <

Equity Theory (Cont.) > Positive inequity (“overpayment”) Person
Other Outcomes Inputs Outcomes Inputs >

Equity Theory (Cont.) Tension within the individual
Motivation to reduce tension Perceived inequity Responses Responses to inequity

Equity Theory (Cont.) Responses to inequity Change inputs
Negative inequity: reduce effort or quality of work Positive inequity: increase effort or quality of work Change outcomes: ask for increase in pay or status symbols, such as larger office Cognitively distort own inputs and outcomes Negative inequity: reduce perceived importance of job Positive inequity: increase perceived responsibility in job

Equity Theory (Cont.) Responses to inequity Withdrawal
Permanent: leave organization Temporary: increased absences Acting on other: an unfortunately violent possibility Cognitively distort inputs and outcomes of other: overpaid; see more importance in other’s task Change reference groups: shift comparison other to someone else

Equity Theory (Cont.) Equity sensitivity
Equity sensitives: react as predicted by equity theory Benevolents: accept negative inequity Entitleds: accept positive inequity with no feelings of guilt

Expectancy Theory and Equity Theory Combined
Perception of equitable outcomes Individual blockages Extrinsic outcomes Effort Performance Satisfaction Organizational blockages Intrinsic outcomes

Guidelines Suggested by Expectancy and Equity Theory
Tie rewards to performance Preferably tie them to performance close in time Use valued rewards (valence) Watch equity and fairness of reward distribution Incentive: looks to the future Reward: looks to the past

Goal Setting Theory Goal specificity: what, how much, when
“Goals that are specific, challenging, reachable, and accepted by a person lead to higher performance than goals that are “fuzzy,” unchallenging, not reachable, or not accepted (p. 142).” Goal specificity: what, how much, when Acceptance of goal important, but how one gets acceptance is not Participation in goal setting increases information about how to reach goal

Goal Setting Theory (Cont.)
Performance feedback and some rewards improve performance Goals are dynamic not static Provide training and resources to help people reach goals

Behavior Modification
Differs from expectancy and equity theory because it does not use cognitive processes Focuses only on observable behavior Assumptions: People go toward positive outcomes People avoid negative outcomes

Behavior Modification (Cont.)
Chapter 8: Cognitive and Behavioral Theories and Techniques October 20, 2017 Behavior Modification (Cont.) Principles Contingent reinforcement: consequence has strongest effect when delivered after desired behavior occurs Immediate reinforcement: consequence has strongest effect if delivered immediately after behavior occurs Reinforcement size: large consequences have stronger effects than small ones Reinforcement deprivation: longer a person is deprived of a consequence, the stronger its effect on behavior

Approaches to affecting behavior Managers try to shape behavior by applying or withdrawing consequences Positive consequences Negative consequences Four approaches Positive reinforcement Punishment Extinction Negative reinforcement

Approaches to affecting behavior (cont.) Positive reinforcement Applies a positive event to increase the frequency or strength of desirable behavior Example: praise, recognition, sales commissions Increases the likelihood the person will repeat the behavior in the future

Approaches to affecting behavior (cont.) Punishment Applies a negative event to decrease the frequency of undesirable behavior Reprimand Time off without pay Punishment stops behavior but does not change its direction

Approaches to affecting behavior (cont.) Extinction: withdraws a positive consequence to decrease frequency of undesirable behavior Punishment and extinction have the same target--undesirable behavior Differ sharply in other respects Punishment applies a negative event to a behavior; extinction withdraws a positive event Disruptive staff member in a meeting. Encourage other staff members to not laugh at the disruptive member’s behavior.

Approaches to affecting behavior (cont.) Negative reinforcement Increases frequency of desirable behavior by withdrawing a negative event Person tries to escape from or avoid a negative event Supervisor scolds a person for being late for work. Person "escapes" from the negative event by showing up for work on time in the future.

Schedules of reinforcement Continuous reinforcement Apply a consequence after each behavior Example: thanking someone each time a person does something for you Behavior will occur at a steady high rate as long as the reinforcement continues Behavior stops quickly in the absence of the reinforcer

Schedules of reinforcement (cont.) Intermittent reinforcement Apply a consequence based on time between behaviors or number of behaviors Produce more enduring changes in behavior than continuous schedules Four intermittent reinforcement schedules

Intermittent reinforcement schedules (cont.) Fixed ratio Apply a consequence after a fixed number of behaviors Example: sales commissions Behavioral response: high and steady; stops quickly when the consequence is withheld

Intermittent reinforcement schedules (cont.) Variable ratio Applies consequence after a varying number of behaviors Example: complimenting employees for good performance, but not praising each occurrence of good performance Behavioral response: high, steady, enduring Uncertainty of variable ratio schedule may add to the lasting quality of behavior

Intermittent reinforcement schedules (cont.) Fixed interval Applies consequence after a constant time between behaviors Example: receiving a paycheck at the end of a pay period Behavioral response: strongest just before the consequence A fixed interval paycheck will not have much effect on job performance Can strongly reinforce organization membership

Intermittent reinforcement schedules (cont.) Variable interval Applies a consequence after different periods between behavior Example: a manager randomly praising employee performance when warranted Behavioral response: strong and steady Behavior endures; not extinguished easily Uncertainty of reinforcement may contribute to the enduring quality of the behavior

Shaping Technique for gradually changing a person's behavior while aiming for a target behavior Desired change in a person's behavior cannot happen in one step Shaping moves a person's behavior toward the target a step at a time Example: an employee needs to learn a new job or a new procedure

Shaping (cont.) Use positive reinforcement on a continuous schedule as employee gradually learns Treat behavior that does not move toward the target with extinction: withhold praise Once employee reaches the target, the manager uses an intermittent reinforcement schedule When behavior is well in place, can give reinforcement less often

Side effects of punishment Many negative side effects People may also perceive extinction as punishment, possibly resulting in side effects Side effects of extinction should be less strong than those of punishment

Side effects of punishment (cont) Punishment stops behavior temporarily Does not cause the person to adopt desirable behavior Undesirable behavior often returns when the source of punishment is not present Less potent as a shaping tool than positive reinforcement

Side effects of punishment (cont.) Emotional reactions to punishment Anger Hostility toward source Sabotage of equipment and work process

Side effects of punishment (cont.) Climate of distrust between manager and subordinates Undermines manager's ability to shape behavior Inflexible behavior particularly when applied in early employment period New employee who is reprimanded after challenging a boss's decisions is unlikely to engage in that behavior later.

International Aspects of the Cognitive and Behavioral Theories of Motivation
Two assumptions that could restrict use of this chapter’s theories outside the U.S. Individual controls decisions about future actions Manager can deliberately shape the behavior of people

International Aspects of the Cognitive and Behavioral Theories of Motivation (Cont.)
Both assumptions reflect U.S. values of free will, individualism, individual control Cultural contrasts Muslim managers believe something happens mainly because God wills it to happen Hong Kong Chinese believe luck plays a role in all events

Expectancy Theory's validity in other cultures Japanese female life insurance sales representatives responded to commission system as expected Russian textile workers Linked valued extrinsic rewards to worker performance Productivity increased as the theory predicts

Equity Theory: complex cross-cultural effects Reward allocation decisions followed equity theory premises in U.S., Russian, and Chinese samples Other studies Chinese emphasized seniority in their reward decisions more than Americans. Eastern European transition economies: endorsed positive inequity more than American students

Research on Locke's Goal Setting Theory in several countries Results consistent with U.S. work that formulated the theory Some cultural differences U.S. students not affected by how goals were set Israeli students performed better when goals were set participatively; consistent with cultural of cooperation

Ethical Issues and the Cognitive and Behavioral Theories of Motivation
Should a manager tell employees that she or he will try to affect their behavior? Is it ethical to create perceived negative inequity with the hope of forcing out an employee? Should managers use knowledge of human motivation to affect people's behavior in an ethical direction? Should that effort include punishment?

Ethical Issues and the Cognitive and Behavioral Theories of Motivation (Cont.)
Behavior Modification Should humans be subjected to the type of control offered by Behavior Modification? Who will control the people doing the controlling? What are the ends or purposes of the control? Is it right for managers to use Behavior Modification?

Critics have said "no.” Skinner responded by noting that the idea of no control is an illusion Aspects of people's environments have always controlled their behavior Behavior Modification offers positive reinforcement An alternative to the widespread use of negative forms of control (punishment)

Counter control If target person does not respond to the consequences, they must be rearranged and tried again Controller and target person interact Target of the control may actually control the behavior of the person doing the controlling

Who will control those doing the controlling? No foolproof answer Few doubt that Behavior Modification can be used for evil or good You decide whether your goals are ethical, if you use Behavior Modification

Chapter 9 Intrinsic Rewards and Job Design

Learning Goals Discuss the role of job design in giving people opportunities to experience intrinsic rewards Describe the major theories of job design Have some insight into the design of your present job and your reactions to it

Learning Goals (Cont.) Appreciate how the work context affects people's reaction to the design of their jobs Explain the process of diagnosing and redesigning jobs Distinguish between the design of jobs for individuals and the design of jobs for groups

Chapter Overview Introduction Intrinsic Rewards and Job Design
The Job Characteristics Theory of Work Motivation Contextual Factors in Job Design Diagnosing and Redesigning Jobs

Group-Based Job Design Factors Affecting Perceptions of Objective Job Characteristics International Aspects of Job Design Ethical Issues in Job Design

Introduction Job design affects motivation and satisfaction
Organizations and managers can create a context within which employees experience intrinsic rewards Only indirect control over intrinsic rewards Can only create a set of job experiences that lets employees experience intrinsic rewards

Intrinsic Rewards and Job Design
Some job redesign efforts Job rotation Same worker moved among different jobs Each job often had few tasks or activities Proponents believed a worker became less bored by doing many different activities in a day

Intrinsic Rewards and Job Design (Cont.)
Some job redesign efforts (cont.) Job enlargement Add duties and tasks to a job People did not move from one job to another Duties and tasks repackaged to make an individual's job larger Two or more jobs combined into a single new job

Some job redesign efforts (cont.) Job enrichment Also repackaged duties Added duties and tasks that increased a worker autonomy and responsibility Workers also had increased involvement in decision making

Characteristics of approaches Enhance the content of a job to increase satisfaction; decrease boredom Job enrichment: expected to increase employee motivation, job performance, productivity Assumed a positive linear relationship between job design and employee motivation Clear by the 1960s a universal, positive, linear response was not true of all people

The Job Characteristics Theory of Work Motivation (Cont.)
Well-developed and well-understood job design theory Understand how job characteristics affect people’s motivation and satisfaction Text book Figure 9.1: overview of the theory

Affective outcomes: person’s internal reactions; satisfaction and motivation Behavioral outcomes: observable behavior such as quality and quantity of work Critical psychological states Internal reactions to perceived job characteristics Lead to affective and behavioral outcomes

Affective and behavioral outcomes Affective outcomes Internal work motivation: feeling of self-reward from doing the job itself (intrinsic motivation) Growth satisfaction: personal growth and development satisfaction General job satisfaction: overall feelings about work and the organization

Affective and behavioral outcomes Behavioral outcomes Work effectiveness Quality of work performance Quantity of work performance Lower absenteeism Reduced emotional exhaustion and stress

Critical psychological states Knowledge of results: must know job performance while doing the work itself Experienced responsibility: must control the results of work activities Experienced meaningfulness: person must feel the work is important

Perceived and objective job characteristics Core job characteristics: must be present to produce the critical psychological states Perceive objective job characteristics that form impressions of core job characteristics

Skill variety: degree to which job has many different activities using several skills, abilities, and talents Task identity: degree to which job lets a person do a whole piece of work from start to finish Task significance: degree to which the person doing job perceives it as important to others

Autonomy: degree of discretion in deciding how and when to do the job Feedback from the job itself: degree to which person learns about the quality of job performance while doing the task Includes feedback from clients directly served by the job Does not include feedback from a supervisor or coworkers

Relationship of core job characteristics to critical psychological states Skill variety, task identity, and task significance experienced meaningfulness of the work The three job characteristics can offset each other Job not perceived as significant may be a whole job, using many skills and abilities

Relationship of core job characteristics to critical psychological states (cont.) Autonomy experienced responsibility for outcomes of the work Feedback from the job itself knowledge of the actual results of work activities

Motivating potential Summarizes effect of core job characteristics on psychological states Formula on text book page 159 shows combining effects of job characteristics

Motivating potential (cont.) Strong effects of autonomy and feedback from the job itself Autonomy and job feedback related to two of three critical psychological states Low levels of psychological states associated with low affective and behavioral response

Relationships predicted by the theory Positive linear response to motivating potential High motivating potential: high internal work motivation Low motivating potential: low internal work motivation

Relationships predicted by the theory (cont.) Moderator variables Change or affect relationships among parts of the theory Individual moderators: factors in the person Work context moderators: factors surrounding the person while doing the job

Relationships predicted by the theory (cont.) Moderator variables (cont.) Positive moderator variable: more positive response to motivating potential Negative moderator variable: less positive response to motivating potential Negative work context Distraction effect Escape effect See text book Figure 9.2

Relationships predicted by the theory (cont.) Moderator variables (cont.) Knowledge and skill Growth need strength Context satisfaction Theory does not assume universal, positive response to jobs high in motivating potential

Relationships predicted by the theory (cont.) Moderator variables (cont.) Knowledge and skill Person with needed skills and abilities should do job successfully High motivating potential combines with person's knowledge and skill: higher internal work motivation Person without needed skills and abilities should not do job successfully: low internal work motivation

Relationships predicted by the theory (cont.) Moderator variables (cont.) Growth need strength (GNS) Strong growth need people should respond more positively to jobs high in motivating potential than weak growth need people More "ready" to respond than people with weak growth needs Weak growth need people can feel "stretched" by a high motivating potential job

Relationships predicted by the theory (cont.) Moderator variables (cont.) Context satisfaction Quality of supervision Compensation system Job security Immediate coworkers Negative work context distracts from a high motivating potential job Positive work context is supportive; lets the person experience a job’s motivating qualities

Relationships predicted by the theory (cont.) Implications for you If you desire intrinsic outcomes, high MPS jobs Should motivate you Act as a source of satisfaction If you desire extrinsic outcomes, the opposite is true Intrinsic outcomes less important to you than extrinsic outcomes for good performance

Contextual factors in job design Organizational design: task specialization, centralization, decentralization Technical process: major ways the work of the organization gets done Management behavior: relationships with subordinates; involvement of subordinates

Organizational design and job design Task specialization High specialization: low core job characteristics, low motivating potential Low specialization: high job characteristics, high motivating potential

Organizational design and job design (cont.) Centralized-decentralization Centralized decision making: low skill variety, autonomy, and task identity; low motivating potential Decentralized decision making processes: high core job characteristics; high motivating potential

Technical process and job design Hinders or helps job redesign Capital investment in existing technical process can limit job redesign Adopting a particular technical process can help job redesign Group-based technical process Redesign jobs around that technology

Technical process and job design (cont.) Mass-production technical processes Standardized jobs: low core job characteristics; low motivating potential Custom-designed work: high core job characteristics; high motivating potential

Technical process and job design (cont.) New manufacturing approaches Flexible manufacturing techniques: required worker flexibility can increase skill variety and autonomy Group-based manufacturing technologies: group-based job design discussed later

Technical process and job design (cont.) Just-in-time inventory management Removes buffers within the technical process Requires quick worker responses High skill variety, autonomy, feedback from the job itself; high motivating potential

Management behavior and job design Close control over subordinates: low skill variety, task identity, autonomy; low motivating potential General control: high skill variety, task identity, autonomy; high motivating potential

Management behavior and job design (cont.) Involvement in decision-making process Shows importance of a person's organizational role Increase commitment to the decision Allow more discretion in carrying out the decision High skill variety, task significance, autonomy; high motivating potential

Diagnosing and Redesigning Jobs
Get information about existing jobs Questionnaires Personal interviews Direct observations

Diagnosing and Redesigning Jobs (Cont.)
Job Diagnostic Survey (JDS) Measures job characteristics and affective responses Calculate MPS and compare to norms Decide whether job has an excessively low score Identify the job characteristics responsible for low MPS

Job Diagnostic Survey (cont.) Measures employee GNS and levels of work context satisfaction GNS of employees in target jobs Ready to respond to a redesigned job (high GNS)? Context satisfactions: employees perceive a positive work context?

Job Diagnostic Survey (cont.) JDS does not measure employee knowledge and skills Do employees have the needed knowledge and skills to do the redesigned work? If not, include a training program with the job redesign program

Job Diagnostic Survey (cont.) Employees who provide data should see results to verify accuracy Asking employees to suggest ways to redesign their jobs can elicit useful information

Group-Based Job Design
Have mainly focused on job design for individuals Some tasks better done by groups Such groups are known as self-managing work groups Design both the group's task and some aspects of the group

Group-Based Job Design (Cont.)
Self-managing work group Intact groups, permanent or temporary Interdependent members do tasks Both members and nonmembers perceive the groups as real Produces a defined product, service, or decision

Self-managing work group (cont.) Members control the group's tasks and the group's interpersonal processes Have task assignment authority Decide how and when work will be done Major source of it’s self-managing quality

Design of the task and the group Skill variety: group uses many different skills in doing task Task identity: group does whole task Task significance: group members perceive task as important to others

Design of the task and the group (cont.) Autonomy: group task must give group members discretion in getting work done Feedback from the job itself: give feedback to members while doing group’s task

Design of the task and the group (cont.) Group composition Members have needed skills and abilities Group member heterogeneity: find creative solutions based on member differences Group member homogeneity: similar thinking patterns; fail to find creative solutions

Design of the task and the group (cont.) Group composition (cont.) Group size: too large; group's process becomes inefficient Interpersonal skills needed to manage the group's interpersonal processes

Design of the task and the group (cont.) Group norms (see Chapter 10) Rules of conduct for group member's behavior Management: encourage norms consistent with group's task and desired productivity levels Build climate of open discussion of existing and developing group norms

What can we expect to happen? High effort, motivation, performance Group composition: high level of knowledge and skill to do group's work Members could feel satisfied with experiences in the group Research evidence: sizable positive effects compared to individual job design

What can we expect to happen? (cont.) Develop strong norms; try to control each other's behavior Positive performance norms help Focus members on successfully completing tasks Focus members on discovering ways of successfully dealing with work problems

Individual and contextual considerations Makes more interpersonal demands on people than individual job design Best candidates for group-based approach are people with a strong need for affiliation Individuals should also have strong growth needs

Individual and contextual considerations (cont.) Strongly affiliative people with weak growth needs: attracted to social interaction, not intrinsic qualities group's task People with strong growth and social needs are highly desirable

Individual and contextual considerations (cont.) Organization's reward system Interdependent reward system based on performance of all group members Higher performance levels than less interdependent rewards

Factors Affecting Perceptions of Objective Job Characteristics
Perceived or objective job characteristics affect the person Perceptions not always accurate picture of objective job features Social context of person can affect perception of job

Factors Affecting Perceptions of Objective Job Characteristics (Cont.)
Social Information Processing Theory Interactions with other people affect a person's perceptions of job characteristics Informational cues about task can come from coworkers: positive or negative view Socially constructed view may not be the same as the "objective" features of the job

Implications for job redesign Participation in the process may produce satisfaction , not job redesign Using the JDS may sensitize people to certain job characteristics Can manipulate perceptions of job characteristics with social information

Research evidence Produced mixed results Conservative conclusion: Social Information Processing Theory complements Job Characteristics Theory Changes in both objective job characteristics (job redesign) and oral cues by supervisors Largest change in perceptions and satisfaction

International Aspects of Job Design
Cultural differences in motivational needs (see Chapter 7) Striving for intrinsic rewards from job redesign does not apply to all cultures Cultural differences also should guide choice of individual-based or group-based approaches

International Aspects of Job Design (Cont.)
Individual and group-based job design U.S. managers have mostly used individual approaches to job design Recent shifts to group-based approaches Managers in other countries have mainly emphasized group-based job design Sweden and Norway; consistent with their socially oriented values

International Aspects of Job Design (Cont.)
Changing specific job characteristics Belgium, Mexico, Greece, Thailand: Not likely to accept efforts to increase autonomy and task identity French managers particularly dislike recommendations to decentralize decision authority. Subordinates do not expect them to do so

Ethical Issues in Job Design
Self-managing work teams Low need for affiliation people; little desire for team-based work Some people may not want high involvement in work roles. Prefer high involvement in nonwork roles Two ethical questions Voluntary involvement in such teams? Fully inform job applicants about company's use of teams and likelihood of a team assignment?

Ethical Issues in Job Design (Cont.)
Transnational organizations People around the world differ in the importance of needs Many countries do not readily accept decentralizing decision authority Examples: South American countries, India, Hong Kong as examples

Ethical Issues in Job Design (Cont.)
Transnational organizations Swedish and Austrian employees expect high decision making involvement Should managers honor the host national culture? or Should they adhere to their home organization's emphasis on self-managing work teams?

Chapter 10 Groups and Intergroup Processes
Chapter 10: Group and Intergroup Processes Chapter 10: Group and Intergroup Processes 20 February 1997 October 20, 2017 Chapter 10 Groups and Intergroup Processes 1

Learning Goals Distinguish between formal and informal groups
Define the basic conceptual tools for understanding groups Describe how and why cohesive groups form in organizations Discuss the factors that affect group effectiveness Understand the emergence and use of self-managing teams in organizations

Chapter Overview Introduction Formal and Informal Groups
Basic Concepts for Understanding Groups in Organizations Functions of Groups in Organizations A Model of Cohesive Group Formation Stages of Group Development Effects of Workforce Diversity

Social Structure of Groups Factors That Affect Group Effectiveness Self-Managing Teams Dysfunctional Consequences of Groups Intergroup Processes in Organizations International Aspects of Groups in Organizations Ethical Issues About Groups in Organizations

Introduction A collection of people trying to do a task or reach a goal Features Repeated social interaction Mutual dependence to do a task or reach a goal Found throughout an organization Have both good and bad effects Can powerfully affect people’s behavior

Formal and Informal Groups
Functional groups Clusters of people formed by an organization’s design Often permanent Examples: divisions, departments, work units Task groups Carry out specific tasks Often temporary Examples: process action teams, concurrent engineering teams, task forces

Formal and Informal Groups (Cont.)
Found within and across formal groups Social interaction patterns affect their formation Form along interest lines, task requirements, friendship patterns, and the like A “shadow organization”

Basic Concepts for Understanding Groups in Organizations
Cohesiveness Norms Understanding groups Required and emergent behavior Conformity

Basic Concepts for Understanding Groups in Organizations (Cont.)
Cohesiveness Members are attracted to the group’s task and it’s members Members of a cohesive group like to be together and care about each other Cohesive groups tend to perform better than noncohesive groups especially if they are small

Norms Rules of behavior for a group’s members Found in cohesive groups Typically unwritten rules Performance levels, social relationships, relationships within the organization New members learn the group’s norms during early stages of socialization

Conformity to group norms Compliance: person goes along with the norms but does not accept them Personal acceptance: internalized by the person Person’s beliefs and attitudes are congruent with the norms Has more powerful effect on behavior than compliance

Required behavior What a person must do because of membership in an organization Also part of a person’s role in the formal group Examples At work on time Performing job duties a certain way Interacting with specific people in another work unit

Emergent behavior Grows from social interaction among group members Often defined by a group’s norms Newcomer learns these behaviors over time

Functions of Groups in Organizations
Socialization of organization members Source of rewards for members Support members while they work: especially important in hazardous work

Functions of Groups in Organizations (Cont.)
Cohesive group norms supportive of management Interdependent tasks: cooperative behavior helps task accomplishment Produce innovative work behavior Self-policing: behavioral control is more immediate than controls used by managers

A Model of Cohesive Group Formation
Use to understand how and why groups form in organizations Applies to all types of groups Key parts of model Activities: job duties and responsibilities Interactions: social interaction between two or more people Sentiments: attitudes, beliefs, and feelings about the person or persons in the interaction

A Model of Cohesive Group Formation (Cont.)
Activities Interactions Sentiments

Factors affecting cohesive group formation Allow social interaction Proximity (closeness) of people No physical isolation Low noise level Required interaction Incomplete job descriptions

Factors affecting cohesive group formation (cont.) Allow social interaction (cont.) Free time at work Not tied to work area Work requires little attention Low absenteeism and turnover

Factors affecting cohesive group formation (cont.) Restrict social interaction Large distance between people Physical barriers High noise level Low required interaction Thorough job description

Factors affecting cohesive group formation (cont.) Restrict social interaction (cont.) Little free time Tied to work area Work requires attention High absenteeism and turnover

Bases of attraction Attracted to each other to form a cohesive group Similarities: attitudes, beliefs, gender, ethnic background, age, social status, education Share common experiences

Bases of attraction (cont.) Membership can satisfy a person's desire for social interaction Group is instrumental for reaching a goal Join a college sorority or fraternity because of belief that companies like to hire college graduates who have had such involvement.

A Model of Group Formation
Activities Factors allowing social interaction Factors restricting social interaction Interactions Bases of attraction Sentiments Cohesive group Group norms

When Should Cohesive Groups Form?
Cohesive groups should form when Factors restricting social interaction Factors allowing social interaction are more than

When Should Cohesive Groups Form? (Cont.)
Cohesive groups should not form when Factors allowing social interaction are less than Factors restricting social interaction

Stages of Group Development
Groups can develop in a series of stages Each stage emphasizes something different Early aspects focus on the group’s social structure: norms, roles, social status, and role relationships Stages have different implications for member behavior and group performance

Stages of Group Development (Cont.)
Not discrete and clearly identifiable states; plateaus in the group's evolution Newly formed groups of strangers: likely experience all stages of development

Group formation stage (forming) Learn about each other and task Define social and task boundaries Intragroup conflict stage (storming) Discuss social roles Emergence of leadership

Group cohesion stage (norming) Define roles and relationships among them Has an identifiable culture Conflict focuses on task Task orientation stage (performing) Members accept group norms Energy focuses on doing the task

Termination stage Disband Redefine the group's goals Stages repeat New members Redistribution of members Reorganization Organizational redesign

Effects of Workforce Diversity
Workforce diversity: both positive and negative effects on group development and functioning Positive effects Diverse outlooks can potentially help create more solutions to problems Find better ways of doing group’s work

Effects of Workforce Diversity (Cont.)
Positive effects (cont.) Especially useful to organizations that use teams to analyze work Successful management Knowledge of group dynamics Understand and accept differences

Negative effects Misinterpretation of group members' intentions because of different ways of viewing the world Especially likely to happen when members hold stereotypes about other members Communication difficulties if group members do not have a common first language Distrust may exist because group members fear the new and unknown High conflict potential

Other effects Takes longer to pass through the early stages of group formation and become cohesive Introduces wide variation in bases of attraction Makes the process of becoming cohesive longer, more complex, more difficult Although the empirical research is mixed, results support the above statements

Social Structure of Groups
Role Task roles: aspects of group’s task Maintenance roles: behavioral processes within the group Individual roles: behavior that often focuses on individual needs Status structure: relative position of roles and relationships among roles

Social Structure of Groups (Cont.)
Communication network Central role Peripheral role Connecting role Power and influence patterns Formal appointed group leader Informal leaders

Factors That Affect Group Effectiveness
Member satisfaction Reaching the goals of both group and organization Physical environment Affects interaction Table layout Physical boundary defining group Group size and size of work area

Factors That Affect Group Effectiveness (Cont.)
Member characteristics Compatibility of needs Compatibility of personality Decreased conflict Caution: group tasks requiring variations in performance call for differences in member characteristics

Group characteristics Group goals: specific, clear Performance feedback, especially on difficult tasks Interdependent groups should receive group not individual rewards

Group size effects Productivity lower in large groups than in small ones Small groups better for tasks with high cooperation requirements Small enough to let people know performance of other group members

Self-Managing Teams Specific task Autonomous Decision authority

Dysfunctional Consequences of Groups
More time than individuals To do some tasks Development of group structure Managing conflict in during group development Loss of individual identity Diffusion of responsibility

Dysfunctional Consequences of Groups (Cont.)
Social loafing (free rider) and sucker effects can reduce group performance Social loafing (free-rider effect) Perceive one's effort as unimportant, or Not easily noticed by other group members Sucker effects: reduce one's effort as response to feeling of inequity from social loafing

Dysfunctional Consequences of Groups (Cont.)
Groupthink Try to get consensus Consider few alternatives Do not regularly reexamine assumptions

Intergroup Processes in Organizations
Happens at point of interaction between members of two groups Examples: marketing, manufacturing, design engineering Task interdependence from work process design and organizational design Groups with different orientations to tasks, time, and goals: high conflict potential

Intergroup Processes in Organizations (Cont.)
Forces affecting intergroup interactions View their group as composed of members with differing characteristics View other groups as having homogeneous members Tend to favor people from their group

Forces affecting intergroup interactions (cont.) Positively value its purpose Diversity in group membership Conflict in intergroup processes needs attention Such social psychological responses can lead to categorization, stereotyping, and perceptual distortion of members from other groups.

Workforce diversity and informal groups Gender Race Country of origin Age Stereotyping and perceptual distortion of such informal groups Affects quality of intergroup behavior

International Aspects of Groups in Organizations
Cross-cultural variations in tendency to accept group pressure for conformity to group norms Japanese encourage high conformity to norms of a group that has the person's primary loyalty German students in some experimental research showed a low tendency to conform Moderate conformity among people in Hong Kong, Brazil, Lebanon, and the United States

International Aspects of Groups in Organizations (Cont.)
Strength of pressure to conform and intensity of rejection of deviates varies French, Swedish, and Norwegian groups: highest in conformity pressure and intensity of rejection German and British groups: much lower in those pressures

International Aspects of Groups in Organizations (Cont.)
Cross-cultural differences in intergroup processes Collectivistic cultures Expect little expression of conflict; favor suppressing conflict Prefer to personalize interaction; focus on people, despite what group they represent Group membership is an important part of interaction

Ethical Issues About Groups in Organizations
Major ethical issues Conformity to group norms Informed free choice

Ethical Issues About Groups in Organizations (Cont.)
Conformity to group norms Cohesive groups develop powerful forces of socialization to their norms Are managers required to inform recruits about all cohesive groups in the organization?

Selection of members for self-managing teams Self-managing teams require extensive interaction among members for success Do managers have an ethical duty to screen people for membership based on the strength of their social needs? Should managers make membership on such teams voluntary, so people can choose whether to join a team?

Informed free choice Conflict levels within groups, especially heterogeneous groups, can be high and continuous Do managers have an ethical duty to screen people for group membership based on the amount of conflict they can tolerate?

Chapter 11 Conflict in Organizations
Chapter 11: Conflict in Organizations Conflict and Conflict Management 20 February 11997July 17, 1996 Chapter 11 Conflict in Organizations 1

Learning Goals Define conflict and conflict behavior in organizations
Distinguish between functional and dysfunctional conflict Understand different levels and types of conflict in organizations Analyze conflict episodes and the linkages among them

Learning Goals (Cont.) Understand the role of latent conflict in an episode and its sources in an organization Describe a conflict management model Use various techniques to reduce and increase conflict Appreciate some international and ethical issues in conflict management

Chapter Overview Introduction Functional and Dysfunctional Conflict
Levels and Types of Conflict in Organizations Conflict Episodes Conflict Frames and Orientations Latent Conflict: The Sources of Conflict in Organizations

Conflict Management Reducing Conflict Increasing Conflict International Aspects of Conflict in Organizations Ethical Issues in Conflict in Organizations

Conflict Conflicto Conflit Conflito Introduction
Conflict: What does the word mean to you? Conflict Conflicto Conflit Conflito

Introduction (Cont.) Definition Opposition Incompatible behavior
Antagonistic interaction Block another party from reaching her or his goals Range of conflict behavior Doubt or questioning Annihilation of opponent

Introduction (Cont.) Key elements Conflict events
Interdependence with another party Perception of incompatible goals Conflict events Disagreements Debates Disputes Preventing someone from reaching valued goals

Introduction (Cont.) Conflict is not always bad for an organization
Do not need to reduce all conflict Conflict episodes: ebb and flow of conflict An inevitable part of organization life Needed for growth and survival Conflict management includes increasing and decreasing conflict Major management responsibility

Introduction (Cont.) Toda unanimidade é burra.
Brazilian Saying (Ditado popular, Portuguese) Toda unanimidade é burra. (“It’s dumb if we all agree.”) Special thanks to Gustavo Sette Rabello, Graduate Student, The Robert O. Anderson Graduate School of Management, 1996

Functional and Dysfunctional Conflict
Functional conflict: works toward the goals of an organization or group Dysfunctional conflict: blocks an organi-zation or group from reaching its goals Dysfunctionally high conflict: what you typically think about conflict Dysfunctionally low conflict: an atypical view Levels vary among groups

Functional and Dysfunctional Conflict (Cont.)
“Constructive Conflict”--Mary Parker Follett (1925) Increases information and ideas Encourages innovative thinking Unshackles different points of view Reduces stagnation

Dysfunctionally high conflict Tension, anxiety, stress Drives out low conflict tolerant people Reduced trust Poor decisions because of withheld or distorted information Excessive management focus on the conflict

Dysfunctionally low conflict Few new ideas Poor decisions from lack of innovation and information Stagnation Business as usual

Levels and Types of Conflict
Type of conflict Level of conflict Organization Within and between organizations Group Within and between groups Individual Within and between individuals

Levels and Types of Conflict (Cont.)
Intraorganization conflict Conflict that occurs within an organization At interfaces of organization functions Can occur along the vertical and horizontal dimensions of the organization Vertical conflict: between managers and subordinates Horizontal conflict: between departments and work groups

Intragroup conflict Conflict among members of a group Early stages of group development Ways of doing tasks or reaching group's goals Intergroup conflict: between two or more groups

Interpersonal conflict Between two or more people Differences in views about what should be done Efforts to get more resources Differences in orientation to work and time in different parts of an organization

Intrapersonal conflict Occurs within an individual Threat to a person’s values Feeling of unfair treatment Multiple and contradictory sources of socialization Related to the Theory of Cognitive Dissonance (Chapter 5) and negative inequity (Chapter 8)

Interorganization conflict Between two or more organizations Not competition Examples: suppliers and distributors, especially with the close links now possible

Simple conflict episode
Conflict Episodes Simple conflict episode Latent conflict Manifest conflict Conflict aftermath

Conflict Episodes (Cont.)
Latent conflict: antecedents of conflict behavior that can start conflict episode Manifest conflict: observable conflict behavior Conflict aftermath End of a conflict episode Often the starting point of a related episode Becomes the latent conflict for another episode Conflict reduction: lower the conflict level

Conflict Episodes Latent conflict Manifest conflict Conflict reduction
Conflict aftermath

The antecedents of conflict Example: scarce resources Latent conflict Manifest conflict Conflict aftermath

Some latent conflict in the lives of college students Parking spaces Library copying machines Computer laboratory Books in the bookstore School and other parts of your life University policies

Observable conflict behavior Example: disagreement, discussion Latent conflict Manifest conflict Conflict aftermath

Manifest conflict Latent conflict Residue of a conflict episode Example: compromise in allocating scarce resources leaves both parties with less than they wanted Conflict aftermath

Conflict Episodes Latent conflict Perceived conflict Felt conflict
Manifest conflict Text book Figure 11.1 Conflict reduction Conflict aftermath

Perceived conflict Become aware that one is in conflict with another party Can block out some conflict Can perceive conflict when no latent conditions exist Example: misunderstanding another person’s position on an issue

Felt conflict Emotional part of conflict Personalizing the conflict Oral and physical hostility Hard to manage episodes with high felt conflict What people likely recall about conflict

Relationships Among Conflict Episodes
Episodes link through the connection of conflict aftermath to latent conflict Effective conflict management: break the connection Discover the latent conflicts and remove them

Relationships Among Conflict Episodes (Cont.)
Conflict reduction Latent conflict Manifest conflict Conflict aftermath Latent conflict Manifest conflict Conflict aftermath Latent conflict Manifest conflict Conflict aftermath

Conflict Frames and Orientations
Perceptual sets that people bring to conflict episodes Perceptual filters Remove some information from an episode Emphasize other information in an episode

Conflict Frames and Orientations (Cont.)
Relationship-Task Cooperate-Win Emotional-Intellectual

Conflict frame dimensions Relationship-Task Relationship: focuses on interpersonal relationships Task: focuses on material aspects of an episode Emotional-Intellectual Emotional: focuses on feelings in the conflict episode (felt conflict) Intellectual: focuses on observed behavior (manifest conflict)

Conflict frame dimensions (cont.) Cooperate-Win Cooperate: emphasizes the role of all parties to the conflict Win: wants to maximize personal gain

Limited research results End an episode with a relationship or intellectual frame: feel good about relationship with other party Cooperation-focused people end with more positive results than those focused on winning

Conflict orientations Dominance: wants to win; conflict is a battle Collaborative: wants to find a solution that satisfies everyone Compromise: splits the differences Avoidance: backs away Accommodative: focuses on desires of other party

Can change during conflict episode How firmly the person holds orientation Importance of the issues to the person Perception of opponent's power Collaborative orientation: more positive long-term benefits than the others

Conflict orientation and the conflict aftermath Avoidance Accommodative Dominance Collaborative Compromise No residue High residue Conflict aftermath

Combinations of conflict orientations in a group Dominance, avoidance Dominance, dominance Avoidance, avoidance Dominance, collaborative, compromise Collaborative, compromise, avoidance Collaborative, compromise, avoidance, dominance, accommodative

Latent Conflict: The Sources of Conflict in Organizations
Antecedents to conflict episodes Many natural conditions of organizations act as latent conflicts Lurk in the background; trigger conflict when right conditions occur Does not always lead to manifest conflict Give us clues about how to reduce dysfunctionally high conflict

Latent Conflict: The Sources of Conflict in Organizations (Cont.)
Some representative latent conflict Scarce resources: money, equipment, facilities Organizational differentiation: different orientations in different parts of organization Rules, procedures, policies: behavioral guides that can cause clashes Cohesive groups: value and orientation differences among groups

Latent Conflict: The Sources of Conflict in Organizations (Cont.)
Some representative latent conflict (cont.) Interdependence: forces interaction Communication barriers: shift work and jargon Ambiguous jurisdictions: areas of authority not clearly defined Reward systems: reward different behavior in different parts of the organization Sales on commission; manufacturing rewarded for meeting schedules. Communication differences.

Conflict Management Model
Maintain conflict at functional levels Not complete elimination Reducing to functional levels Increasing dysfunctionally low conflict Choose desired level of conflict based on perceived conflict requirements Varies in different parts of an organization Manager’s tolerance for conflict plays a role

Conflict Management Model (Cont.)
Organizational culture Product or service Fast-changing environment Perceived conflict requirements Desired conflict level

Dysfunctionally low conflict Dysfunctionally high conflict Normal Increase conflict Decrease conflict Text book Figure 11.2

Symptoms of dysfunctionally high conflict Low trust Information distortion Tension/antagonism Stress Sabotage of organization’s product or service

Symptoms of dysfunctionally low conflict Deny differences Repress controversial information Prohibit disagreements Avoid interactions Walk away from conflict episode

Reducing Conflict Overview
Lose-lose methods: parties to the conflict episode do not get what they want Win-lose methods: one party a clear winner; other party a clear loser Win-win methods: each party to the conflict episode gets what he or she wants

Reducing Conflict (cont.)
Lose-lose methods Avoidance Withdraw, stay away Does not permanently reduce conflict Compromise Bargain, negotiate Each loses something valued Smoothing: find similarities

Reducing Conflict (Cont.)
Win-lose methods Dominance Overwhelm other party Overwhelms an avoidance orientation Authoritative command: decision by person in authority Majority rule: voting

Win-win methods Problem solving: find root causes Integration: meet interests and desires of all parties Superordinate goal: desired by all but not reachable alone

Summary Lose-lose methods: compromise Win-lose methods: dominance Win-win methods: problem solving

Increasing Conflict Increase conflict when it is dysfunctionally low
Heterogeneous groups: members have different backgrounds Devil’s advocate: offers alternative views Organizational culture: values and norms that embrace conflict and debate

Conflict Insights Possible positive effects of conflict
Latent conflict Conflict aftermath Conflict episodes Links between episodes Latent conflict and methods of reduction

International Aspects of Conflict in Organizations
Cultures that emphasize individualism and competition Positively value conflict English-speaking countries, the Netherlands, Italy, Belgium Cultures that emphasize collaboration, cooperation, conformity Negatively value conflict Many Asian and Latin American countries; Portugal, Greece, Turkey

International Aspects of Conflict in Organizations (Cont.)
No direct research evidence Cultural differences imply different functional conflict levels

Cross-cultural research has dealt with intergroup processes Collaborative and cooperative cultures expect little conflict during intergroup interactions Favor suppression of conflict with little discussion about people's feelings Felt conflict likely part of some conflict episodes but hidden from public view

Managers from an individualistic country operating in a less individualistic country Acceptable to express feelings during a conflict episode Suppression of feelings could baffle them Increasing conflict can confuse local people Almost immediate dysfunctional results

Ethical Issues in Conflict in Organizations
Tolerance for conflict Manager with a high tolerance for conflict; keeps conflict levels too high for subordinates Should such managers reveal their intentions about desired conflict levels? Full disclosure: subordinates could leave the group if conflict levels became dysfunctionally stressful Ethical question applies equally to newly hired employees

Ethical Issues in Conflict in Organizations (Cont.)
Deliberately increasing conflict is an effort to guide behavior in a desired direction Subtle methods of increasing conflict (forming heterogeneous groups) connote manipulation Full disclosure: manager states his intention to use conflict to generate ideas and innovation If people are free to join a group or not, the ethical issue likely subsides

Experiencing intrapersonal conflict Requests to act against one's moral values Observing behavior that one considers unethical Reduce intrapersonal conflict Report unethical acts Transfer to another part of the organization Quit

Different cultures place different values on conflict Optimal conflict levels vary among countries Lower levels conflict in collectivistic countries than individualistic countries Should managers honor such values even if their home country values support higher levels of conflict?

Chapter 12 Leadership and Management

Learning Goals Understand leadership as an influence process in organizations Distinguish between leadership and management Distinguish the trait, behavioral, and contingency theories of leadership

Learning Goals (Cont.) Discuss some alternative views of leadership
Analyze the effects of self-managing teams on leadership Appreciate some international and ethical issues that surround leadership and management

Chapter Overview Introduction Management and Leadership
Trait Approaches to Leadership Behavioral Theories of Leadership Contingency Theories of Leadership Alternative Views of Leadership

Implicit Leadership Theory: “We Know a Leader When We See One” Women, Men, and Leadership Leadership and Self-Managing Teams International Aspects of Leadership and Management Ethical Issues in Leadership and Management

What comes to your mind when you see this word?
Introduction Leadership What is leadership? What comes to your mind when you see this word?

Introduction (Cont.) Name some leaders Who are they? What did they do?

Introduction (Cont.) Leadership
Social influence process of involving two or more people Leader Follower Potential follower

Introduction (Cont.) Leadership (cont.) Two dimensions
Leader intends to affect behavior of another person Target of influence effort perceives intent as acceptable Target must attribute behavior to a specific person Consider the behavior acceptable

Introduction (Cont.) Find leaders in different places in organizations
Formal organization position Personal qualities add or detract from leadership Emergent leaders within formal and informal groups in an organization Leaders at any organization level

Management and Leadership
Managers sustain and control organizations Leaders try to change them Leaders have vision and inspire others to follow it Managers follow an organization’s present vision Management and leadership requirements Differs in different organizational positions Differs at different times in an organization’s history

Management and Leadership (Cont.)
External environment Stable Turbulent Manager Leader

The Evolution of Leadership Research
1900: Traits approaches 1950: Behavioral theories 1990s 1960: Contingency theories

The Evolution of Leadership Research (Cont.)
Contingency Theories (person x situation) Fiedler’s contingency theory (enduring personality-like qualities) House’s path-goal theory (behavior repertoire) Behaviors (task and people) Traits 1900 1950 1960 1970 Time

Trait Approaches to Leadership (Cont.)
Leadership traits: distinctive physical or psychological characteristics Of successful leaders or distinguished leaders from followers Physical: height, weight Social: interpersonal skills, status Personality: self-confidence, intelligence

Trait Approaches to Leadership (Cont.)
Leadership Traits Intelligence Dominance Self-confidence Energy Task-relevant knowledge Drive Desire to lead Honesty/integrity Self-confidence Cognitive ability Knowledge of the business “Leaders are bright, self-confident, high-energy people who know something about the situation they are trying to affect and take control when they must (p. 221).”

Behavioral Theories of Leadership
Two complementary theories University of Michigan Studies Ohio State University Leadership Studies Major dimensions of leader behavior Task-centered behavior People-centered behavior

Behavioral Theories of Leadership (Cont.)
The University of Michigan Studies Production-centered leader behavior Task focused Pressured subordinates to perform Little concern for people Did not trust people to work on their own

The University of Michigan Studies (cont.) Production-centered leader behavior (cont.) Close supervision Little understanding of their work unit's social system Did not set high performance goals

The University of Michigan Studies (cont.) Employee-centered leader behavior Focused on people and their personal success Understood of their work unit's social system Set high performance goals Communicated performance expectations to subordinates Combined a strong concern for the social aspects of the work unit with high performance expectations

The University of Michigan Studies (cont.) Research results Employee-centered leadership: higher work unit performance than production-centered leadership Production-centered leadership: high productivity with several latent dysfunctions Poor employee attitudes Higher turnover or absenteeism Little group loyalty High levels of distrust between subordinates and leaders

The Ohio State Leadership Studies Initiating Structure (task-oriented) High Make individual task assignments Set deadlines Clearly lay out what needs to be done Act decisively

The Ohio State Leadership Studies Initiating Structure (task-oriented) Low Tend not to take initiative Practice "hands off" management Leave people alone; let them define the tasks and deadlines

The Ohio State Leadership Studies (cont.) Excessively high Initiating Structure High turnover High grievance rates Low satisfaction Moderate initiating structure Good task performance when People not trained Face high task ambiguity

The Ohio State Leadership Studies (cont.) Consideration (people-oriented) High Concern for members of their group Empathic and interpersonally warm Interested in developing trust-based relationships with subordinates Seek suggestions and opinions of subordinates Accept and carry out suggestions

The Ohio State Leadership Studies (cont.) Low Publicly criticize subordinate's work Lack concern for other's feelings Little interest in quality of interpersonal interactions Research results High Consideration: high job satisfaction, low turnover, group cohesiveness High on both dimensions: positive work attitudes

Contingency Theories of Leadership
Successful leadership depends on leader's situation Two contingency theories strongly differ Leader as unable to change behavior readily Leader as able to choose from a behavioral repertoire

Contingency Theories of Leadership (Cont.)
Fiedler’s contingency theory of leadership: person has a behavioral predisposition Task-oriented: structures situations, sets deadlines, makes task assignments Relationship-oriented: focuses on people, considerate, not strongly directive

Fiedler’s contingency (cont.) Person’s predisposition to behave interacts with favorableness of situation Determines leader effectiveness Dimensions of situations Leader-member relations Task structure Position power See text book Figure 12.1

Fiedler’s contingency (cont.) Leader-member relations Quality of the relationship between subordinates and leader Amount of trust between leader and subordinates Leader is liked and respected by subordinates

Fiedler’s contingency theory (cont.) Task structure Extent to which work is well defined and standardized or ambiguous and vague High task structure: work is predictable and can be planned Low task structure: ambiguous situation with changing circumstances and unpredictable events

Fiedler’s contingency theory (cont.) Position power: formal authority of leader High position power: leader hires people; rewards or punishes behavior Low position power: policies may constrain leader from using rewards or punishments

Fiedler’s contingency theory (cont.) Classify situations on the three dimensions Favorableness of situation for leader's influence Favorable situations allow high leader influence Unfavorable situations allow little leader influence Task-oriented leaders more effective in highly favorable or highly unfavorable situations Relationship-oriented leaders more effective in situations between those two extremes

Fiedler’s contingency theory (cont.) Difficult to select leaders to match situations Not optimistic about effectiveness of leadership training Fiedler argued for changing the situation to fit a leader's predispositions--”'engineer' the job to fit the [leader]” Or leader learns ways to change situation to fit predisposition

House’s path-goal theory of leadership Leaders affect a subordinate's motivation to reach desired goals Rewards when person reaches desired goals Supportive while person tries to reach goals Makes inherently motivating task assignments Clears barriers to goal accomplishment Clearing subordinates' paths so they can reach desired goals

House’s path-goal theory (cont.) Leader behaviors: a repertoire Directive (task-centered): what, when, how Supportive (people-centered): concern for people and the needs they try to satisfy Participative: consults with subordinates; seriously considers their ideas Achievement-oriented: emphasizes excellence in performance; sets high performance goals See text book Figure 12.2

House’s path-goal theory (cont.) Contingency factors Personal factors of subordinates Work environment factors

House’s path-goal theory (cont.) Subordinates’ personal factors Perception of their ability Locus of control Authoritarianism

House’s path-goal theory (cont.) Work environment factors Tasks Formal authority Primary work group

House’s path-goal theory (cont.) Behavior repertoire Choose behavior based on leader's skills and personality Circumstances facing the leader (contingency factors)

House’s path-goal theory (cont.) Subordinates's ability Low: likely respond positively to directive leader behavior High: directive leader behavior is redundant; they already know what to do

House’s path-goal theory (cont.) Locus of control Internal control (self in control) Responds positively to participative behavior Less positively to directive behavior External control Responds positively to low participative behavior Responds positively to directive leader behavior

House’s path-goal theory (cont.) Authoritarianism Low: tend not to defer to authority; prefer participative behavior High: accept directive leader behavior

House’s path-goal theory (cont.) Work environment factors: affect degree of ambiguity Routine tasks Clearly defined role relationships Standard operating procedures Less ambiguity than tasks done in a more fluid setting Formal authority Lets leader clearly define work roles Helps set clear goals

House’s path-goal theory (cont.) Primary work group People strongly identified with each other Develop well-defined work procedures Creates unambiguous environment People not strongly identified with each other Do not develop well-defined work procedures Creates ambiguous environment

House’s path-goal theory (cont.) Low ambiguity Directive leader behavior redundant Use supportive behavior High ambiguity Directive leader behavior Clarifies work requirements Reduces uncertainty

Alternative Views of Leadership
The Leadership Mystique Transformational Leadership Charismatic Leadership Theories

Alternative Views of Leadership (Cont)
The Leadership Mystique Sense of mission: a vision of a future state for the organization. It does not now exist but it will exist Capacity for power: ability to get and use power to pursue the mission Will to survive and persevere In Jenning’s words: “. . . a will to persevere against a discourteous, unbelieving world of sometimes total opposition.”

Transformational Leadership Three elements Charisma: from the Greek, charisma, meaning a gift. A talent to inspire devotion and allegiance Individualized consideration Intellectual stimulation

Transformational Leadership (cont.) Individualized consideration Recognizes subordinates’ individual differences Emphasizes continual growth and development Knows her or his subordinates well Intellectual stimulation Builds high awareness of problems and solutions Stimulates people to image new future states Induces changes in beliefs and values of followers

Transformational Leadership (cont.) Strive for big increases in performance Bring excitement to workplace Build strong emotional bonds between self and subordinates Often bring dramatic changes to an organization's culture High organizational performance

Charismatic Leadership Theories Attract devoted followers They energetically pursue leader's vision Move followers to extraordinary heights of performance Profoundly affect aspirations Build emotional attachment to leader

Charismatic Leadership Theories (cont.) Win commitment to leader's vision Develop and widely communicate an inspirational vision Form bonds of trust between themselves and their followers Impatient with the present Press for continuous improvement

Implicit Leadership Theory: “We Know a Leader When We See One”
Leadership categorization People observe behavior Quickly compare it to their cognitive category of a leader Leadership prototype: a person’s cognitive image of leader traits and characteristics Leadership exemplar: a specific person regarded as a leader

Perspective Offered by Each Theory
Qualities needed Behavior needed Traits Behavioral Leadership requirements of an organization Contingency Alternative views Assess person and situation Vision, charisma, knowledge

Women, Men, and Leadership
Do women and men exhibit different leadership behavior? Women: nurturing and caring Men: competitive and aggressive Results of their socialization?

Women, Men, and Leadership (Cont.)
Limited empirical evidence of differences between men and women Women described themselves Sharing power Encouraging subordinates self-worth Sharing information Men described themselves Using position authority Relying on rewards and punishments

Women, Men, and Leadership (Cont.)
Limited empirical evidence (cont.) People who worked for men high on consideration and initiating structure had the most positive attitudes in one study Women behaved more democratically than men

Leadership and Self-Managing Teams
The increasing use of self-managing teams will change traditional patterns of decision authority in organizations Such teams take on much decision authority formerly held by managers and supervisors Changes the roles of managers and supervisors outside the team Defines new roles for team members

Leadership and Self-Managing Teams (Cont.)
Managers and supervisors outside the team have redefined roles Long-range planning Team guidance and development Resource support Political support Behavior focused on developing the self-managing part of self-managing teams

International Aspects of Leadership and Management
Core values of a country’s culture can defined the type of leadership behavior that is acceptable Value hierarchical relationships--directive approaches accepted: Hong Kong, Latin American countries Do not value hierarchical relationships--supportive (or participative) approaches accepted: Austria, Sweden

International Aspects of Leadership and Management (Cont.)
Some multinational organizations will try for uniformity in leadership behavior Selection of people with behaviors and orientations desired by the company Socialization of people to organization’s core values

Cultural differences in response to directive leadership and management Initiating structure, production-centered, task-oriented, directive behaviors Workers in countries with authoritarian values expect autocratic behavior Other research: few cross-cultural effects Positive effects of supportive leadership Tie positive rewards to performance and get positive results

Global Leadership and Organizational Behavior Effectiveness Program (GLOBE) Major new research program One hundred sixty co-investigators from 60 countries Results from this unprecedented international behavior research effort not yet available

Ethical Issues in Leadership and Management
Leadership uses social influence to deliberately affect another person's behavior Such changes in a person's behavior can happen without a person consciously deciding to change Ethical issue: Are such efforts are an unethical manipulation of other people's behavior?

Ethical Issues in Leadership and Management (Cont.)
Behavior changes may also change a attitudes, values, and beliefs Example: move toward Quality Management and transform an organization's values Individual employees may undergo similar changes Some observers suggest that leadership may have a brainwashing-like effect on people

Ethical Issues in Leadership and Management (Cont.)
Qualities of ethical and unethical leaders Ethical leader Confronts moral dilemmas Rewards ethical behavior Builds an ethical organizational culture Transformational leaders Can get strong commitment to their vision from followers Can clearly have ethical or unethical results

Chapter 13 Communication Processes
20 February 1997 Chapter 13 Communication Processes 1

Learning Goals Explain the basic communication processes of organizations Understand the effects of verbal and nonverbal communication Distinguish between the functions and dysfunctions of organizational communication

Learning Goals (Cont.) Discuss the features of listening, especially of active listening Describe ways to make communication processes more effective Understand the effects of new technology on communication Describe communication networks and the roles that can emerge within a network

Overview Introduction The Basic Communication Process
Types of Communication Functions of Organizational Communication Dysfunctions of Organizational Communication Listening

Overview (Cont.) Active Listening
Improving Communication Effectiveness in Organizations Technology and communication Communication Roles in Organizations Communication Networks International Aspects of Communication Ethical Issues in Communication

Introduction “The word communication will be used here in a very broad sense to include all of the procedures by which one mind may affect another. This, of course, involves not only written and oral speech, but also music, the pictorial arts, the theatre, the ballet, and in fact all human behavior.” View of communication

Introduction (Cont.) Quotation from opening of a classic work describing an early communication theory Heart of the definition is in the first sentence Communication in organizations tries to affect behavior of at least one other person

Introduction (Cont.) Organizational communication
Purpose, flow, and direction of messages and media used for those messages Another view of behavior in organizations “Message behavior”: sending, receiving, and giving meaning to messages

Introduction (Cont.) Organizational communication (cont.)
Happens over a pathway called a network Formal: defined by formal organizational positions; relationships among those positions Informal: patterns of informal social interaction; informal groups in the organization

Introduction (Cont.) Organizational communication (cont.)
Communication in any direction: downward, upward, horizontal Communication networks: interdependent, interlocking, overlapping systems of interaction

The Basic Communication Process
Sender Decides what message to send Encodes it using symbols he or she assumes the receiver will understand Converts message to a signal Sends message over communication channel to receiver See text book Figure 13.1

The Basic Communication Process (Cont.)
Communication channel Person's voice Electronic device Written medium Video medium

Receiver Decodes message and interprets its meaning Responds to message by acting in a manner consistent with that interpretation

Communication media Telephone Letter or memorandum Videoconference Face-to-face meeting Internet chat rooms

Choosing medium Written media for formality and a clear message Face-to-face meeting to convey a sense of teamwork use is largely based on availability and ease of use to the receiver

Feedback loop Interdependence between sender and receiver during communication process Sender interprets the receiver’s response Can send an additional message for clarification

Noise: distortions, errors, and foreign material often affect the quality of the signal Additions to the signal not intended by the sender Surrounds entire communication process Can make communication less effective Diversity, domestic and international, adds additional noise

Types of Communication
Verbal communication: oral, written, electronic, video Nonverbal communication: eye movements, gestures, facial expressions Adds much of the feeling and emotion that a sender wants to give to a message Often has more effect than verbal on the meaning receivers give a message

Types of Communication (Cont.)
Verbal communication Oral communication All forms of speech between a sender and receiver Leaves no permanent, retrievable record of the message and response unless recorded More effective than written when trying to affect receiver's opinion on some matter Nonverbal communication can affect the final interpretation of the message

Verbal communication (cont.) American Sign Language (ASL) Uses patterns of hand and finger movements for communication Includes facial expressions and body movements to express emotions and distinguish sentence types Country and regional differences in signing systems

Verbal communication (cont.) Written communication Any form of handwriting, printed memo, or report Includes messages sent over an electronic medium Receiver's response is more delayed in written than in oral communication Receiver must first read the message before interpreting and responding to it

Verbal communication (cont.) Written communication (Cont.) Advantages over oral communication Retrievable Almost permanent Comprehension is better because of rereading

Verbal communication (cont.) Electronic or video communication Electronic and video communication becoming more important , computer networks, fax machines, computer conferencing, videoconferencing All now available as desktop systems

Verbal communication (cont.) Electronic or video communication (cont.) Advantages High speed transmission and reception Accurate transmission of a message Easy dispersal of the same message to people in scattered locations Direct interaction and quick feedback

Nonverbal communication Behavior that communicates but does not use written or spoken words Gestures Posture Seating position Pitch of voice Speed of speech Physical environment . . .

Nonverbal communication (cont.) Combine verbal and nonverbal communication Create unique communication style, often unknowingly Can contradict, amplify, or complement verbal communication

Nonverbal communication (cont.) Physical aspects of the person Voice: speed, fluency, references to self Facial expressions: smile, frown Gestures: hand movements Body movements: distance Posture: leaning forward

Nonverbal communication (cont.) Physical environment of communication All aspects of using space, including distance between sender and receiver (proxemics) North America: 5 1/2 to 8 feet between speakers Latin America: closer than North America See the “International Aspects” section for more information.

Nonverbal communication (cont.) Time Orientation to and meaning of time North America: punctual Latin America: less punctual Swiss: precisely punctual Arab cultures: last person to arrive is the most important See the “International Aspects” section for more information.

Nonverbal communication (cont.) Communication with signs and signals Turn signals on motor vehicles, traffic control signals, caution flags of highway workers Hand signals for guiding aircraft Special situation: landing on an aircraft carrier

Functions of Organizational Communication
Share information Mission Strategies Policies Tasks, duties, responsibilities Both inside and outside the organization

Functions of Organizational Communication (Cont.)
Feedback about performance Reduces uncertainty Integration and coordination of various functions Especially important in global operations

Functions of Organizational Communication (Cont.)
Persuasion Affecting the behavior of others Often the focus of improvement in communication skills Related to business presentations Emotional expression: let employees express their feelings Innovation. Communicate innovations to those inside and outside the organization

Dysfunctions of Organizational Communication
Selective perception Receiver filters a message and then gives meaning to it Block out information a receiver does not want to hear Semantic problems Different people have different meanings for words “Good,” “average,” “Do your best” Jargon: “burden”, “metrology”

Dysfunctions of Organizational Communication (Cont.)
Distortion of messages: different frames of reference because of background Filter messages Intentional: sender is concerned about receiver’s reaction Unintentional: sender does not fully know what she or he wants to say

Dysfunctions of Organizational Communication (Cont.)
Information overload Too much information to process accurately Related to time available Message timing Too short of time Too early

Listening Different from hearing
Hearing is a physiological process of detecting and processing sounds Listening: mental process of assigning meaning to sounds Communication professionals view it as a primary skill for success People spend about 50 percent of their time listening

Listening (Cont.) Intrapersonal and interpersonal activities
Person receives message from another person (interpersonal) Tries to interpret it (intrapersonal) Responds to other person to show meaning given to message (interpersonal)

Active Listening Listener is responsible for the completeness of a speaker's message Listener's role is not passive Absorbing spoken message Deriving meaning from it Accurately hear facts in message Understand speaker's feelings about message

Active Listening (Cont.)
Deliberate effort to understand a message from speaker's viewpoint Meaning of message includes both content and speaker’s feelings Listener attends to all verbal and nonverbal cues Listener may ask questions for clarification Listener may rephrase speaker’s message

Improving Communication Effectiveness
Sender Understand receiver’s background Culture Education Social status Professional or technical training

Improving Communication Effectiveness (Cont.)
Sender (cont.) Avoid jargon Knowledge of receiver helps sender form messages with content that communicates Take special care when communicating with people from other cultures Applies to oral communication, written communication, and nonverbal communication

Sender (cont.) Ask for oral or written feedback to a message Gives sender observations on receiver's perception and interpretation of message Formal training Improve written and oral communication Improve sender's effectiveness

Receiver Knowing and understanding sender Ask sender for clarification of jargon Receiver's knowledge of self Using jargon introduces noise Can distort messages received

Receiver (cont.) Receiver's perceptual process: alters sender’s meaning of messages Ask sender to clarify message State understanding of message; sender can react to that interpretation

Message Simple concise messages Language shared by sender and receiver Problem: jargon, in-group language, foreign language Simple concise sentences, in language shared by the sender and receiver, are more effective than long complex messages riddled with jargon.

Message (Cont.) Electronic message systems lack nonverbal communication Emoticons ("smileys") add feelings and emotions to text messages

Medium Little noise for effective communication Multiple channels Written memo follows an oral message Meet with receiver to discuss memo

Medium (Cont.) People perceive high-contrast objects faster than low-contrast objects (see Chapter 5) Introduce high contrast into messages by using paper or ink of different colors than normal Change the setting in which an oral message is sent

Technology and Communication
Major changes from fiber optics and new satellites Digital cellular telephone: easy communication around the world Wireless facsimile devices and modems Laptop or notepad computers with digital cellular facsimile devices and modems Unprecedented flexibility and mobility of communication

Technology and Communication (Cont.)
Distributed computing Digital technology and data on a network Text Images Audio Video Numeric

Satellites, fiber optics, Internet, personal computers High-speed connections among networks Global operations: move all forms of information quickly to distant places Internet commerce

Satellites, fiber optics, Internet, Personal computers (cont.) Students in different countries interact to complete course work Transmit almost any media Lessen effects of time zone differences

Videoconferencing Face-to-face communication over almost any distance See each other Speak to each other Show graphic images Send documents Substitutes for traveling to distant sites for meetings

Desktop videoconferencing Two-way video and audio interaction Window on each person's computer screen lets them see each other Text or graphics show on screen Interact to revise material for an upcoming joint business presentation

Multimedia personal computers Manage information media of any form Computer features Scanners Sound boards Presentation software CD-ROMs Animation software Make large audience communication more dramatic than in past

Communication Roles in Organizations
Initiators: start communications; send more messages than they receive or pass on Relayers: receive and pass on more messages than they start or end Liaison Connects two parts of an organization; not a member of either part Helps coordinate organizational functions Can hinder message flow if they become bottlenecks

Communication Roles in Organizations (Cont.)
Passive communication roles Terminators At end of a communication network Mainly receive messages Infrequently send or relay messages to others Isolates Usually outside normal communication process Send, receive, or relay only a few messages

Communication Networks
Structured communication system in organizations Formal organizational design defines some networks Informal social interaction defines others All communication forms: face-to-face, electronic media, video media

Communication Networks (Cont.)
Pair-wise communication: Oral or written communication between two people Each person in a pair focuses attention on the other party Direction: top-down, bottom-up, lateral

Small group communication Three or more people interacting Face-to-face or widely dispersed Occurs within departments, work units, teams, informal groups Communication interaction rotates among members; a structured or a random pattern Within a centralized or a decentralized network

Centralized communication Single person is a key figure in sending and receiving messages Only one or a few parts of the network get information Faster and fewer errors when solving simple problems Less effective with complex problems

Decentralized communication Freely flowing communication Spread potential to get information throughout the network No person in network depends exclusively on anyone else Faster and more accurate with complex problems than with simple problems Process more messages Higher satisfaction among network members

Large audience communication Get a message from one person or a few people to many people Sender designs message before sending it Usually sent continuously with no interruption from audience Examples: department meetings, briefing sessions, training programs

International Aspects of Organizational Communication
Nonverbal communication: a major role across cultures Distance between people North Americans: stand 5 1/2 to 8 feet apart Latin American cultures: people stand much closer Reactions Latin American moves close to the North American North American backs away Latin American might perceive the North American as cold and distant

International Aspects of Organizational Communication (Cont.)
Time orientation Latin Americans view time more casually than North Americans Swiss strongly emphasize promptness in keeping appointments Egyptians usually do not look to the future

International Aspects of Organizational Communication (Cont.)
Time orientation (cont.) South Asians view the long term as centuries Sioux Indians of the United States do not have words for "time" or "wait" in their native language Potential misunderstandings are large

Ethical Issues in Organizational Communication
Communication processes and an organization's ethical image Internal and external Internal processes Newsletters Satellite television broadcasts Direct mailings Bulletin boards

Ethical Issues in Organizational Communication (Cont.)
Communication processes and an organization's ethical image (cont) External processes Annual reports Press releases Public statements by executives What does the organization say and not say about ethical behavior? Organization’s ethical image

Manage external impressions Offering own accounts of behavior that protesters say was unethical Communication in any form designed to affect the perception of others Tries to make the organization, or individual members, look more ethical than charged

Disclosure to employees, customers, suppliers, community Does the organization have an ethical obligation to reveal negative information about its plans to employees? How much should an organization tell its customers or clients about product safety? Should an organization tell its suppliers how it chooses among them?

Communication privacy Do employees have the right to private communications in the work setting? Existing software lets network managers and senior managers read employees' Do people's privacy rights extend to computer surveillance?

Chapter 14 Decision-Making and Problem-Solving Processes

Learning Goals Understand the nature of decision making in organizations Describe several decision-making models and the perspectives they bring to the decision process Distinguish between individual and group decision making and identify the situations for which they are best suited

Learning Goals (Cont.) Discuss how framing a decision affects the results of decision making Understand the process of escalation of commitment to a losing course of action Recognize groupthink and how to avoid it during group decision making Explain several methods of improving decision processes in organizations

Overview Introduction Types of Decision Strategies
The Decision-Making Process Decision-Making Models Assets and Liabilities of Group Decision Making Choosing between Individual and Group Decision Making

Overview (Cont.) Framing Effects Escalation of Commitment Groupthink
International Aspects of Decision Making and Problem Solving Ethical Issues in Decision Making and Problem Solving

Introduction Basic issue: pick the right decision from a set of alternatives Decision-making process Define decision problem Create alternatives Choose an alternative using decision criteria

Introduction (Cont.) Problem solving versus decision making
Problem solving: finding the root cause of a deviation (cause analysis) Decision making: choosing from alternative courses of action (choice analysis) Problem solving Decision making

Overlap between problem solving and decision making.
Introduction (Cont.) Problem solving Decision making Overlap between problem solving and decision making.

Introduction (Cont.) Problem-solving process Identify problem
Find root causes Develop alternatives Decision-making Process

Introduction (Cont.) Individual and group decision making
Individual decision making Use for well-structured problems with several tightly coupled parts Example: stop sign decision Group decision making Use for ill-defined problems with loosely coupled parts Example: buying your mother-in-law’s birthday gift Exceptions: individual’s dispositions and time

Types of Decision Strategies
Programmed decision strategies Unprogrammed decision strategy

Types of Decision Strategies
Programmed decision strategy Routine, recurring, predictable decisions Apply existing rules and standard procedures Example: electric service to a new customer

Types of Decision Strategies (Cont.)
Unprogrammed decision strategy Nonroutine, nonrecurring, unpredictable decisions Events are novel and unusual Decision makers often have not seen such events in the past Do not have experience with them

Types of Decision Strategies Defined by Three Dimensions
Routine Nonroutine Non- recurring Recurring Unprogrammed decisions Programmed decisions Certainty Uncertainty

Some Common Decisions Stop sign decision Cereal decision
Supermarket checkout line decision Potato chip decision Pepperidge Farm cookie decision

Some Not So Common Decisions
Your mother-in-law’s birthday gift Car purchase decision Choosing a job after graduation New apartment/house decision Vacation decision

Decision-Making Models
Rational Bounded rationality Decision making Unstructured Political Garbage can

Decision-Making Models (Cont.)
The Rational Model Closed system Maximizing or minimizing a goal Knows alternatives, results, risks Has preference ordering function Applies that function to alternatives and decides

The Bounded Rationality Model Human limitations constrain rationality in decision process Does not try to maximize a goal Does not know all alternatives Features satisficing behavior Open, dynamic, changes Satisficing: “An example is the difference between searching a haystack to find the sharpest needle in it and searching the haystack to find a needle sharp enough to sew with.“

Unstructured decision-making models Unprecedented, significant, complex decisions Feature uncertainty and ambiguity Break problems into manageable parts Then apply more structured approaches Uses satisficing behavior Vulnerable to factors that disturb orderly movement

Unstructured decision-making models (Cont.) Affected by political forces trying to stop a decision False starts; hit blank walls Dynamic process Can feature an emerging "implicitly favored" alternative Perceptual processes operate while trying to confirm the "implicitly favored" choice

The Garbage Can Model of decision making Decision making under high ambiguity Meeting of four streams in a decision-making garbage can Streams: problems, solutions, participants, choice opportunities

The Garbage Can Model of decision making (cont.) Problem streams: issues or problems facing the organization at a particular time Solutions streams: available solutions to a decision maker. Not always directly connected to present problem Participant streams: decision makers and others who are available to decide Choices streams: opportunities or chances to decide

The Garbage Can Model of decision making (cont.) Streams constantly move through an organization Confluence of streams results in a decision Solutions look for problems to solve, and decision makers make choices based on the arbitrary mix of the four streams in the garbage can.

Political models of decision making People and groups pursuing self-interests Power-based and conflict-based process Bargaining and compromise; conflict management Especially true of resource allocation decisions

Decision-Making Models and Decision Strategies
Unprogrammed decisions Political models Programmed decisions Garbage Can Rational Decision-making process Bounded Rationality Unstructured Political models

Assets and Liabilities of Group Decision Making
Increased information and knowledge Acceptance of decision Understanding the decision Job satisfaction Personal development

Assets and Liabilities of Group Decision Making (Cont.)
Pressure for conformity Dominant individual Favored alternative Winning the argument More time to reach decision

Choosing Between Individual and Group Decision Making
Alternative social processes for decision making “A” approaches: authoritative, decision maker decides a course of action “C” approaches: consultative, decision maker gets information from others but decides a course of action “G” approaches: group-based processes; consensus See text book Table 14.1

Choosing Between Individual and Group Decision Making (Cont.)
Continuum of social processes of decision making Individuals Groups AI AII CI CII GII Consensus More social interaction Longer time to decision Higher potential conflict More information Greater involvement in decision process Increasing acceptance of decision

The Vroom-Yetton Model Normative model Uses a set of rules Protect the acceptance of the decision Protect the quality of the decision Selects one of the five decision approaches that satisfies the underlying rules

Problem characteristics used by model Information available to decision maker Degree of structure of problem Importance of subordinates’ acceptance of decision Likelihood of acceptance Subordinates’ acceptance of goals of organization and decision Amount of conflict among subordinates during the decision process

Contaminants of the Decision-Making Process
Framing effects Escalation of commitment Decision process Groupthink

Framing Effects Differences in presentation or framing of problem can affect choices Framed as gain: people prefer to avoid risks (risk-averse behavior) Framed as loss: people prefer to take risks (risk-seeking behavior) View decision problem from different frames

Escalation of Commitment
Abandon a losing course of action or Increase commitment to it Hope of recovering losses Getting positive future results People will likely commit more resources Result: escalation of commitment to a losing course of action Ignore sunk costs; use future costs and benefits

Groupthink Ugly disease that can infect cohesive decision-making groups Excessive conformity to group norm that supports agreement among members Such decision-making groups have lost the ability to critically assess alternatives

Groupthink (Cont.) Also have lost the ability to critically examine the effects of past decisions Typically have little ethical concern for their decision’s effects Groups that support critically examining alternatives will not suffer from groupthink

Groupthink (Cont.) Preventing groupthink by a group leader
Encourage critical evaluation of issues, ideas, alternatives Deliberately stimulate conflict during decision process Assign one member to play a devil’s advocate role for each group meeting Ask for outsider critique and comment about the group’s deliberations

Methods of Improving Decision Making in Organizations
Human-based methods Generate more alternatives Increase criticism of alternatives Increase conflict: offset liabilities of decision-making groups

Methods of Improving Decision Making in Organizations (Cont.)
Computer-based methods Management information systems Decision support systems Expert systems End-user computing

Brainstorming Spontaneously generate ideas Deferring critical evaluation of ideas Role in the decision process: create a set of alternatives, not select the final one

Brainstorming (cont.) Four rules Freewheeling generation of ideas No criticism of an idea Desire many ideas. Assumption: some good ideas Group members encouraged to suggest ways to combine or improve them

Brainstorming (cont.) Electronic brainstorming: a new approach Lack of anonymity in face-to-face groups can inhibit some people Computer linkage of people; do not interact directly

Nominal Group Technique (NGT) Procedure to generate, evaluate, and choose decision alternatives Members of decision group do not interact during early stages Write ideas about decision problem After about 20 minutes, each person reads one idea from her or his list Another person records ideas on a flip-chart

Nominal Group Technique (cont.) Procedure to generate, evaluate, and choose decision alternatives (cont.) Each person presents one idea at a time until all ideas are recorded No discussion during reading and recording phase Group discusses ideas on flip-chart After discussion, each member votes privately on ideas Pool individual votes to arrive at decision

Delphi Method Structured technique for decisions surrounded by uncertainty or heavily value laden Also used when group members are geographically scattered Examples: forecasting future events and public policy questions

Delphi Method (cont.) Anonymous contributions to group's decision Often by experts No face-to-face interaction

Delphi Method (cont.) Interact through paper-and-pencil questionnaires or computers Multiple step process The Delphi manager statistically summarizes each step's result Becomes the input to the next step

Delphi Method (cont.) Avoids some liabilities of group decision making Lack of face-to-face interaction decreases chance of dominant individual Controlled feedback helps ensure accuracy of information

Devil's advocate technique Person or group advocates a decision alternative; forcefully argues for it Another person or group criticizes the alternative; argues for its rejection Assumes a good decision alternative will withstand harsh criticism Research evidence suggests the technique helps get high-quality decisions

Dialectical inquiry Structured, logical, analytical method of examining decision alternatives Describe the favored decision alternative and data used to select it Analyze assumptions held by decision makers when choosing the alternative

Dialectical inquiry (cont.) Structured, logical, analytical method of examining decision alternatives (cont.) Pick another alternative for consideration; new one or one rejected earlier Logically derive the assumptions underlying the choice of the counter alternative Research evidence suggests this technique also helps get high-quality decisions

Other human-based methods Appreciative management and Technology of Participation Recognize the increasing diversity of decision-making groups Goals Harness differences Decrease dysfunctional conflict Focus diverse members on organization's goals

Computer-based methods Management information systems Information processing systems support daily operating activities and decision-making functions Integrate different subsystems according to a general information management plan Data conform to specifications of integrated system. Allow easy sharing Multiple users access a wide range of data, decision models, and methods of querying databases

Computer-based methods (cont.) Decision support systems Designed to aid human judgment Support decision processes to help get better decisions Dynamic systems that evolve as they are used Can tailor to individual decision maker Several systems for different decision makers and classes of decisions

Computer-based methods (cont.) Expert systems Simulates knowledge and decision process of experts Example: medical diagnosis, a database of symptoms and a set of decision rules to guide a user through a diagnosis Interactive systems using computer access

International Aspects of Decision Making and Problem Solving
Decision process phases earlier apply mostly to the United States, Canada, and some European countries Cultural variations in decision behavior Difficulties in multi-cultural decision groups

International Aspects of Decision Making and Problem Solving (Cont.)
Differences in decision orientations U.S. decision makers: attack and solve problems Malaysian, Thai, Indonesian decision makers: adjust to problem; accept situation

Differences in decision-making behavior Centralized: Philippine and Indian organizations Decentralized: Swedish and Austrian organizations Proceeds slowly in Egyptian organizations; quickly in U.S. organizations Decision makers in Singapore and Denmark take bigger risks than decision makers in Portugal and Greece

Differences in decision-making behavior (cont.) Decision makers in Japan and China usually consider all alternatives before choosing Decision makers in the United States, Germany, and Canada Typically use a serial process Reject alternatives on the way to a final choice

Ethical Issues in Decision Making and Problem Solving (Cont.)
Ethical decision maker Open, fair dialogue with all parties potentially affected Freely gives information No deception during dialogue Does not always know the ethical answer, but freely discusses all issues with affected parties

Ethical Issues in Decision Making and Problem Solving (Cont.)
Ethical decision-making model Decision makers who face ethical issues proceed in two phases Applies decision rule that states a minimum cutoff for each dimension Example: reject any alternative that creates a conflict of interest Assess the decision alternative's benefits or costs weighted by its importance

Ethical Issues in Decision Making and Problem Solving
Ethical decision-making model (cont.) Decision makers consider the ethical dimension with other dimensions Positive benefits of dimensions other than ethical one can overwhelm an undesirable ethical dimension Ethical dimension can have negative effects with little likelihood of happening Large fine but unlikely to be caught Decision makers then pick an unethical decision

Chapter 15 Power and Political Behavior
Chapter 15: Power and Pol. Behavior in Organizations 27 March 97 Chapter 15 Power and Political Behavior 1

Learning Goals Describe the nature of power in organizations and ways to build power Discuss the relationship between power and politics in organizations Describe the bases of power and ways of building power in organizations Understand political strategies and political tactics

Learning Goals (Cont.) Do a political diagnosis
Describe international differences in political behavior in organizations Discuss the ethical issues surrounding organizational politics

Chapter Overview Introduction Power Political behavior
International aspects of political behavior in organizations Ethical issues about political behavior in organizations

Power Introduction How do you perceive power? Dark and gloomy?
Bright and cheery?

Political Behavior Introduction (Cont.)
How do you perceive political behavior? Political Behavior

Introduction (Cont.) Political behavior pervades organizational life
Focuses on developing and using power in an organization Often gives power to people who do not have it from their organizational position

Power Power: ability to get something done the way a person wants it done Includes the ability to gather physical and human resources and put them to work to reach a goal Essential to leadership and management functions

Power (Cont.) More than dominance: a capacity to get something done in an organization Central feature of political behavior Unavoidable presence in organizations

Power (Cont.) Facets of power
Potential power: one party perceives another party as having power and the ability to use it Actual power: the presence and use of power Potential for power: person or group has control of resources from which to build power

Power (Cont.) Power relationships: moments of social interaction where power manifests itself Dimensions of power relationships Relational: social interaction between people and groups Dependence Reliance of one party on another party High power when valued results not available elsewhere Sanctioning: use of rewards or penalties

Power (Cont.) Power and authority
Different concepts although a person can have both Authority usually flows from a person’s position in an organization Power can accrue to people at any level

Power (Cont.) Power flows Reporting relationships
Lateral relationships Cross-functional relationships

Power (Cont.) Power dynamics
Dynamic not static; rises and falls for people and groups Shifts in environment can change power of person or group Marketing: successful product--power goes up; lose market share--power goes down Technology: as it increases in importance, people who know it become more powerful. The opposite happens as importance of technology drops

Bases of Power Bases of power: aspects of formal manage-ment position and personal characteristics Organizational bases of power: sources of power in formal management position Personal bases of power: sources of power in a manager’s personal characteristics Accumulate to a total power base See text book Figure 15.1

Bases of Power (Cont.) Organizational bases of power Legitimate power
Derives from position Decision authority Reward power Tie positive results to a person’s behavior Organization’s reward system and policies

Bases of Power (Cont.) Organizational bases of power (cont.)
Coercive power Tie negative results to a person’s behavior Organization’s reward system and policies Information power Information control Information distribution

Bases of Power (Cont.) Organizational bases of power (cont.)
All management positions have some organizational basis of power Minimally have legitimate power Reward and coercive power depend on organi-zational policies about rewards and sanctions Assume the power in the position but it stays after person leaves the position

Bases of Power (Cont.) Personal bases of power
Referent power: positive feelings about the leader. Related to charisma Expert power: technical knowledge and expertise Flow from the attributes and qualities of the person Strongly affected by attribution processes

Power, Leadership, and Management
Essential to leadership and management Much more than dominance Capacity to get things done

Power, Leadership, and Management (Cont.)
Behavior of powerful leaders and managers Delegate decision authority See people’s talents as a resource Can change people’s working conditions Get resources and information for work group Take risks

Behavior of powerful leaders and managers (cont.) Press for innovations Share power widely Help develop people Results Highly effective Increases total power of the work group Increases people’s promotion opportunities

Behavior of powerless leaders and managers Supervise closely Do not delegate decision authority Often distrust subordinates See people’s talents as a threat Stick to the rules

Behavior of powerless leaders and managers (cont.) Do not take risks Strongly focus on the work Protect his or her territory Results Ineffective Low total power of work group Decreases people’s promotion opportunities

Which do you prefer: powerful or powerless leader or manager?

Building Power Six major sources of power
Sources are related to bases of power described earlier Political diagnosis, described later, is an important step in building power

Building Power (Cont.) Knowledge, skill, reputation, professional credibility (expert and information power) Political network Formal or informal Often based on position in a communication channel Important in lateral relationships Create perception of dependence: control of scarce resources

Building Power (Cont.) Work activities (legitimate power)
Extraordinary Visible Successful at high-risk activities Charisma (referent power). Especially important in lateral relationships

Building Power (Cont.) Power base of the work unit
Coping with uncertainty Unique function Changes in external environment Centrality in work flow Human resource management departments that become expert in affirmative action, equal employment opportunity, and workforce diversity can increase their power.

Attribution of Power Ascribing power to people at any level
May not be same as actual power Attribution based on Personal characteristics Context of the person

Attribution of Power (Cont.)
Personal characteristics Formal position: status and authority Technical knowledge Central position in a communication network Context of the person Physical context Group or project membership Member of a coalition

Political Behavior Getting, developing, and using power to reach a desired result Often appears in situations of uncertainty or conflict over choices Often happens outside accepted channels of authority

Political Behavior (Cont.)
Unofficial, unsanctioned behavior to reach a goal Build bases of power Use political behavior Affect decisions Get scarce resources Earn cooperation of people outside direct authority

Ebbs and flows with the dynamics of power Two characteristics: power and influence Directed at reaching organizational goals or individual goals Plays an important role in lateral relationships Rarely have formal authority in such relationships

Characteristics of political processes Political process Power Influence

Political behavior and lateral relationships Line-staff Many entry positions Marketing Human resource management Information systems Competition for resources: money, people, equipment, office space Interdependence in work flow. Especially modern manufacturing

Political Maneuvering in Organizations
Political strategy Plan to reach a goal using specific political tactics Goal: organizational or personal Political tactics Builds power base Uses power

Political Maneuvering in Organizations (Cont.)
Political strategy Specifies combinations and sequences of political tactics Includes plan for responding to changes in the political context People at all levels can develop and use a political strategy Not written; usually tacit

Political strategy (cont.) Used in Resource allocation Choice of senior managers Career decisions Performance appraisals Pay increase decisions

Political tactics Decision making processes Selectively emphasize decision alternatives Influence decision process in favor of self or work unit Use outside expert or consultant. Power is equal but wants to shift another level Control the decision making agenda: often done when person does not want change

Political tactics (cont.) Build coalitions Form around people inside and outside the organization Those believed important to person’s position Co-optation: get support by putting possible opponents on a task force or advisory board

Political Diagnosis Help understand the loci of power
Identify type of political behavior likely to happen in an organization Usually done unobtrusively by observing behavior and making subtle inquiries

Political Diagnosis (Cont.)
Areas of diagnosis Individuals Identify powerful people and politically active people Assess amounts of power Assess ways they likely will use their power Assess their political skills

Areas of diagnosis (cont.) Coalitions Alliance of people who share a common goal Widely dispersed in organization Try to affect decisions

Areas of diagnosis (cont.) Political networks Affiliations, alliances, coalitions Control information flow and resources Identify major influences in the network

The Dark Side of Organizational Politics
Deception Lying Organizational politics Intimidation

The Dark Side of Organizational Politics (Cont.)
Deception See the Machiavelli quotation on page 293 Trick another party into picking wrong decision alternative Personal goals more important than organizational goals Manager does not want change and asks for an endless series of studies

Lying Intentional misstatement of the truth Trying to mislead other party Distorts information in favor of the liar Can have long-term negative effects if discovered “There will be no layoffs.”

Intimidation Direct or indirect pressures on a person by someone with power over the person Restrict communication of person with others Isolate from others Includes sexual harassment of anyone Imply withholding a promotion unless . . .

International Aspects of Political Behavior in Organizations
People from different cultures hold different beliefs about power and power relationships Some cultures see a directive and autocratic use of power as correct Other cultures define a consultative or democratic approach as correct Different individuals within those cultures have different beliefs about power relationships

International Aspects of Political Behavior in Organizations (Cont.)
The Philippines, Mexico, India, Singapore, Hong Kong: value a directive use of power Workers ascribe power to a directive manager and weakness to a consultative one Consultative-oriented managers at a disadvantage in power-directive cultures

Scandinavian countries, Israel, Switzerland, Austria, and New Zealand Expect managers to involve workers in decision-making process Directive manager would not be well accepted by workers in Scandinavian organizations Manager has high power in home culture; little power in Scandinavian cultures

Cultural orientation to uncertainty and power Workers in Greece and France expect managers to maintain low levels of uncertainty Manager who cannot keep uncertainty low has little power and influence over his workers Workers in Denmark and the United States have higher tolerance for uncertainty

Cultural orientation to uncertainty and power (cont.) Nonmanagers in those countries expect managers to make risky decisions Ascribe high power to risk-taking managers; low power to those who avoid risk Degree of power ascribed to managers affects their ability to affect others with political tactics

Individualistic orientation and power High individualistic: United States, Australia, Great Britain, Canada, the Netherlands Low individualistic Many South American countries Value family ties and conformity to social norms South American workers expect managers to look after them Managers who show interest in subordinates' private lives enjoy high power

Ethical Issues About Political Behavior in Organizations
Utilitarian view: using power and political behavior to serve only one's self-interest is unethical Political behavior that uses excessive organizational resources to reach a personal goal is also unethical

Ethical Issues About Political Behavior in Organizations (Cont.)
Suggest any political strategy is unethical Does not serve goals of the organization or A larger group of people than the single political actor Ignoring equipment maintenance to push products through a manufacturing process for personal gain is behaving unethically

Using power and political behavior that violates another person's rights is unethical A political tactic such as co-optation can violate others' rights Co-opted individual, unless he or she understands the goal of the political actor, has not consented to such influence

Sense of justice strongly argues for fair treatment Giving preferential treatment to someone to build a sense of obligation is unethical

Guidelines for ethical political behavior Distinguishes organizational statesmanship from "dirty politics" Behavior should serve people outside the organization, beyond the single political actor Individuals should clearly know intent of actor; give free consent to be influenced

Guidelines (cont.) Right of due process should not be violated while the political behavior unfolds Administration of policies should allow fair treatment of all affected people

Chapter 16 Stress in Organizations
5 December 1996 Chapter 16 Stress in Organizations Chapter 16: Stress in Organizations 1

Learning Goals Understand the body's natural responses to stressful events Discuss various models of the stress response See that stress is not always bad for people Describe the sources of stress in modern living

Learning Goals (Cont.) Understand burnout as a special case of stress
Distinguish between individual and organizational strategies of stress management Recognize how working in another country presents its own sources of stress Appreciate the ethical issues raised by stress in organizations

The General Adjustment Syndrome: “Fight or Flight” An Integrated Model of Stress Burnout

Stress Management: Individual and Organizational Strategies International Aspects of Stress in Organizations Ethical Issues About Stress in Organizations

How do you know you are experiencing stress?
What is it? How do you know you are experiencing stress?

Introduction Stress is an unavoidable part of modern living
Can come from a simple event such as crossing a busy street Also can come from an exciting event such as a college graduation Not always bad if a person is prepared for stress

Introduction (Cont.) A person experiences stress when an event presents a constraint, an opportunity, or excessive physical and psychological demand Constraint Something blocks a person from reaching a desired goal Example: long grocery store checkout lines Opportunity A chance event that lets us reach a desired goal Example: finding $10,000 in unmarked bills

Introduction (Cont.) A person experiences stress (cont.)
Excessive physical demand Asking a person to do something beyond their physical abilities Example: pushing against your car to keep it from rolling down your driveway (a 6% grade) Excessive psychological demand A stressor pushes a person beyond what they can psychologically handle Example: a cumulative final examination in your finance class

Introduction (Cont.) Stressors Source of stress for a person
Objects or events in a person’s physical and social environment that can induce the stress response Arise in three places in people’s lives Work environment Nonwork environment Life transition

Introduction (Cont.) Sources of stressors Work environment
Nonwork environment Life transitions

Introduction (Cont.) Stressors (cont.)
Presence of a stressor does not lead to uniform stress responses A person’s perceptual process affects the person’s stress response Varies among people A challenge to overcome A threat

Introduction (Cont.) Stress response (cont.)
The stress response has both physiological and psychological aspects Physiological response is an integrated set of bodily functions that readies the person to respond to the stressor or stressors A fast reaction More details on the stress response later

Introduction (Cont.) Stress response (cont.)
Some amount of stress can energize and motivate a person Response to an opportunity. Helps a person move toward valued results Response to a threat. Adrenaline flows and increased heart rate help a person deal with the threat Variations in stress response are tied to skills, abilities, and experience with the stressors

Introduction (Cont.) Understand stress because of its possible positive and negative effects on people and organizations Understand stress management Manage stress for self to reduce negative effects Manage stress in organizations to maximize its positive effects

The General Adjustment Syndrome: “Fight or Flight”
An early model of stress response Views the stress response as a natural human adaptation to a stressor Adaptation happens when the person chooses behavior that lets her change the stressor (a fight response) or leave the presence of the stressor (a flight response

The General Adjustment Syndrome (Cont.)
The stress response unfolds in three closely related stages Alarm: The body prepares to fight or adjust to the stressor by increasing heart rate, blood sugar, respiration, and muscle tension Resistance: The body tries to return to a normal state by adapting to the stressor Exhaustion: comes from repeatedly experiencing a stressor or constantly resisting a stressor

Alarm Resistance Exhaustion

Effects of exhaustion stage Body wears down Stress-related illnesses can appear (headaches, ulcers, insomnia) Both individual and organizational damage can occur Underscores the reasons to learn about stress management

Stress response leads to either distress or eustress Distress The negative result of stress Person has not adapted to a stressor or has not removed it from his or her environment Example: becoming speechless at the beginning of a class presentation

Stress response leads to either distress or eustress Eustress A positive result of stress Person has adapted to a stressor or it has not exceeded her ability to adapt to it Example: winning an unexpectedly large amount of money in a lottery

An Integrated Model of Stress
See text book Figure 16.1 for a diagram of the model Describes the sources of stress and conditions that evoke a stress response The integrated model of stress combines many pieces of research to give a detailed view of stressors, stress response, and the results of stress

An Integrated Model of Stress (Cont.)
Stressors Antecedents of stress Occur in work experiences, nonwork experiences, and life transitions As people's perceptual processes filter the stressors, a stress response results Physiological and psychological changes Person chooses behavior in response to the stressor Behavioral choice affects whether the person feels distress or eustress

Stressors (cont.) If the person perceives a stressor as excessively demanding or as a harmful constraint, distress results If the person perceives a stressor as a challenge or an exciting opportunity, eustress results

Work stressors: deadlines, job security, physical environment, and work overload Nonwork stressors: financial problems, dual careers, and relocation Life transition stressors: marriage, divorce, death of a loved one, and children leaving home

Perceived stress Selective perception: filtering out a stressor. Ignoring a steady noise in the background Attribution processes: ascribing positive qualities to a stressor. Long waits in a grocery store checkout line allow observations of human behavior

Stress response: A physiological and psychological response to a stressor Physiological response involves the sympathetic nervous system, the para-sympathetic nervous system, and the endocrine system Body instantly secretes many hormones to prepare a person for fast reaction to the stressor Blood pressure rises, heart rate increases, and breathing rate increases

Psychological response includes increased apprehension and alertness Positive response includes feelings of excitement and challenge Negative response includes feelings of fear and anxiety Psychological response varies among people Physiological response is about the same for everyone

Behavioral response Change stressor Remove stressor Leave stressor Dilemma of choosing the right behavior for a specific stressor Wrong choice: distress Right choice: eustress

Results of a distress response Happens when person does not choose the right behavior Predisposed to distress Low resilience to common stressors Includes behavioral, psychological, and medical results

Results of a distress response (cont.) Behavioral results Drug use Appetite disorder Proneness to accidents Violence Effects on marital relations Effects on sleep patterns Spouse and child abuse

Results of a distress response (cont.) Psychological results Anxiety Alienation Depression Psychosomatic effects

Results of a distress response (cont.) Medical results Heart disease Stroke Back aches Ulcers Headache Complex relationships among stressors and medical results. For example, drug and alcohol use and heart disease

Results of a eustress response Exhilaration of winning a competition Excitement of an unexpectedly high grade in a course Surprise of receiving an unexpected gift

Moderators: affect the relationships shown in text book Figure 16.1 Personality Hardy personalities Type A and B personalities Skills, abilities, and experience Skills and abilities to carry out a task Less distress if a person has experience with the stressor

Moderators (cont.) Family health history Hypertension High serum cholesterol Ulcers

Moderators (cont.) Demographic characteristics Dual career families Single parent Age Diet Sodium levels Saturated fat Physical fitness Increases resilience to stress Less likely to feel harmful effects of distress

Burnout A chronic state of emotional exhaustion that comes from an unrelenting series of on-the-job pressures with few moments of positive experience Special case of distress Repeated exposure to work stressors results in emotional exhaustion

Burnout (Cont.) Depersonalization of relationships follows emotional exhaustion as a coping response Views the people served as objects instead of humans Builds an impersonal barrier to the stressor Final stage of the burnout process: reduced personal accomplishment Lose interest in their work Experience decreased efficiency Have little desire to take the initiative

Burnout (Cont.) Results: headaches, mood swings, cynicism, and drug use among other results High burnout occupations: customer service representatives, nurses, and social workers Low burnout occupations: research physicists, forest rangers, and laboratory technicians

Stress Management: Individual and Organizational Strategies
Stress management tries to maintain stress at an optimal level for both the individual and the organization Stress management strategies Stress reduction: decrease number of stressors Stress resilience: increase person’s ability to endure stressors Stress recuperation: help a person bounce back from the stress response

Stress Management (Cont.)
Have both individual and organizational strategies within each category Brief examples of each here More detail in Chapter 16 of the text book

Individual Strategies
Stress reduction Decrease the amount of stress a person experiences Example: avoiding holiday shopping crowds. Use the internet Stress resilience Develop physical and psychological stamina against potentially harmful stressors Example: physical exercise, diet, and weight control

Individual Strategies (Cont.)
Stress recuperation Rejuvenate physically and psychologically, especially after severe distress Example: vigorous walking for 30 minutes after taking three final examinations on the same day

Organizational Strategies
Stress reduction Reduce the number of stressors to which employees are exposed Example: training programs for job-related activities or time management Stress resilience Improve employees’ stamina against unavoidable stressors Example: on-site exercise centers; stress-resilient diets in company cafeteria

Organizational Strategies (Cont.)
Stress recuperation Help employees rejuvenate after a stressful work day Example: relaxation training. Employee counseling programs

Discussion: Stress Management in Your Life
Having reviewed observations on stress management, please answer the following questions What are you now doing to manage stress in your life? What will you do that is new to manage stress in your life?

Discussion: Stress Management Quiz
Which is better after a high distress day? Eating a big bag of cheetos with a six pack of Dr pepper and watching three rental movies Vigorous exercise for at least thirty minutes

International Aspects of Stress in Organizations
Stress issues arise in three areas Business trips to other countries Relocation to another country for an extended time Returning home

International Aspects of Stress in Organizations (Cont.)
Business trips to other countries Crossing time zones Adjusting sleep patterns Culture shock Learning to move about in the new culture

Relocation to another country for an extended time Everything from traveling to a new country Many others because of extended stay Intensified culture shock Living quarters Possibly servants Shopping Language

Returning home Repatriates often assume nothing has changed while they were gone Often recall only positive features of home country Reentering the organization Contrast in ways and mores of home country to foreign country they have left

Ethical Issues About Stress in Organizations
Organizational change: do managers have an ethical duty to prepare employees for change? Physical work environment: is it unethical for managers to knowingly expose workers to hazards?

Ethical Issues About Stress in Organizations (Cont.)
Person-environment fit: is it unethical for an organization to distort information about a job? Knowledge about work and nonwork stressors: should managers consider nonwork stressors when trying to understand the total stress effects on an employee?

Chapter 17 Organizational Design
Chapter 17: Organizational Design: Contingency and Configuration Views 24 April 1997 Chapter 17 Organizational Design 1

Learning Goals Describe how organizational design coordinates activities in an organization and gets information to decision makers Discuss the contingency factors of organizational design Distinguish between the organizational design effects of strategy, external environment, technical process, and size

Learning Goals (Cont.) Describe the design features of functional, divisional, hybrid, and matrix organization forms Explain the characteristics of several forms of organizations that are likely to evolve in the future

The Contingency Factors of Organizational Design Forms of Organizational Design International Aspects of Organizational Design Ethical Issues in Organizational Design

Introduction Organizational design refers to the way managers structure their organization to reach the organization’s goals Structural elements include Allocation of duties, tasks, and responsibilities between departments and individuals Reporting relationships Number of levels

Introduction (Cont.) Organizational charts show the formal design or structure. See text book Figure 17.1 An incomplete picture because of informal arrangements and underlying behavioral processes Two basic goals of organizational design Get information to decision makers Coordinate the interdependent parts of an organization

The Contingency Factors of Organizational Design
Overview External environment: Includes the organization’s competitors, customers, suppliers, government, . . . Strategy: The plan for reaching the goals of the organization Open systems character of organizations tightly couples these two factors

The Contingency Factors of Organizational Design (Cont.)
Overview (cont.) Technical process: The system an organization uses to produce its products or services Size: The number of organization members

The Contingency Factors of Organizational Design (Cont.)
Major tools for implementation Technical process Forms of organizational design Mission Achieve organization goals External environment Strategy Relationships Among the Contingency Factors Roles of organizational culture and size.

Strategy An organization’s strategy describes long-term goals and way of reaching the goals Describes resource allocation Plays a mediating role between the external environment and the tools of organizational design Note the two headed arrows in the drawings Example: Product innovation response

Strategy (Cont.) Strategy’s mediating role in organizational design
“Structure follows strategy” “Strategy follows structure” In both views, the design of the organization is a major tool for carrying out the strategy

Choice of an organizational form
Strategy (Cont.) Strategy’s mediating role in organizational design (cont.) “Structure follows strategy” Choice of an organizational form Reach strategic goals

Strategy (Cont.) Strategy’s mediating role in organizational design (cont.) “Strategy follows structure” Organizational design is an environment within which managers form strategy. Prevents developing an effective strategy Develop effective strategy

External Environment Managers assess the uncertainty in the external environment when considering design decisions Can design the organization to increase information about the environment Or make the organization more flexible in its response to the environment Information plays a key role because it can reduce risk in a manager's predictions about the future

External Environment (Cont.)
Two elements of environmental uncertainty Complexity of the external environment. Ranges from simple to complex Simple environment has a few similar elements Complex environment has many different elements

Static to dynamic external environment Static external environment is unchanging or slowly changing Dynamic external environment is filled with quickly moving events that could conflict with each other Degree of change creates uncertainty in predicting future states of the environment

Four possible states of the external environment Simple-static: lowest uncertainty Complex-dynamic: highest uncertainty Simple-dynamic and complex-static environments are about midway between the other two Example: Internet commerce has created a complex-dynamic environment for much of the retail industry

Technical Process Conversion of inputs to outputs
Manufacturing, service, or mental processes Affects peoples’ behavior in many ways Work pace Worker control Degree of routine Predictability Interdependence within the process Various types of technical processes exist

Organization Size As size increases, organizations have
More formal written rules and procedures More management levels, unless managers decentralize More complex organizational forms Higher coordination requirements because of complexity Size and technical process: more strongly associated with organizational design in small organizations than in large organizations

Forms of Organizational Design
Three major forms: functional, divisional, and matrix Combine functional and divisional designs to get a hybrid design Several variations of the divisional design Several evolving forms of organizational design

Organizational Design by Function
Groups tasks of the organization according to the activities they perform Typically configured into departments such as manufacturing, engineering, accounting, marketing, . . . Functional configurations can vary from one organization to another depending on tasks and goals

Organizational Design by Function (Cont.)
Strategy: Focused on a few products or services in well defined markets with few competitors External environment: stable, simple, little uncertainty Technical process: Routine with little interdependence with other parts of the organization Size: Small to medium

See Figure 17.1 in the text book for an example Each major functional area helps align the company with each sector Marketing, for example, focuses on customers. It does not manufacture products. That is the job of the manufacturing function

Line and staff Line does the major operating tasks Staff gives support and serve in advisory roles. Emphasizes technical skills within each function Individuals work with others who share common backgrounds and views Homogeneity can lead to narrow views of the function’s contribution to the organization

Strengths Specialization Brings specialists together Collegial relationships develop among specialists Encourages development of specialized skills and information sharing Clear career paths for specialists

Weaknesses Does not help managers respond quickly to external changes Emphasis on specialization promotes a tunnel-vision view of the goal of the function Functional design can produce a set of widely accepted behaviors and perceptions with the organization

Organizational Design by Division
Uses decentralization Divisions formed around products, services, locations, customers, programs, or technical process Often evolves from a functional design As the external environment changes, managers may need to diversify its activities to stay competitive A common management reaction to large organization size

Organizational Design by Division (Cont.)
Strategy: Focused on different products, services, customers, or operating locations External environment: Complex, fast changing, with moderate to high uncertainty Technical process: Nonroutine and interdependent with others parts of the organization Size: large

Emphasizes decision-making autonomy throughout the organization Has high interpersonal skill demands because of extensive contacts with people throughout the organization Rewards behavior that goes toward the goal of decentralization: product, customer, service, or location

Strengths Easily adapts to differences in products, services, clients, location, and the like For example, products and differ in how manufactured and marketed Products, services, and customers are highly visible Often appear in division names

Weaknesses Loses economies of scale because many functions such as accounting are duplicated within the divisions Technical specialization is more diffuse compared to a functional design Hard to get uniform application of policies and procedures across divisions

Hybrid Organizational Design
Hybrid design uses both functions and divisions Managers use a hybrid design to get the benefits and reduce the weaknesses of the two configurations The divisions decentralize some functions, and the headquarters location centralizes others Centralized functions often are the costly ones

Hybrid Organizational Design (Cont.)
People in different parts of the organization fulfill different requirements Functional areas reward technical expertise Functional specialists often support the divisions Divisions do the primary work of the organization

Strategy: Focused on many products or services External environment: Fast changing, moderate to high uncertainty, complex Technical process: Both routine and nonroutine; high interdependence with functions and divisions Size: Large

Strengths Focuses on products, services, and customers Adapts well to complex environments Economies of scale: expensive shared resources are centralized and support all divisions

Weaknesses Focus on division goals can lose total organization view Non-uniform application of organizational policies Potential for high administrative overhead if staff expands without control Potential conflict between division managers and corporate headquarters. Managers want autonomy; headquarters wants control

Matrix Organizational Design
Used when two sectors of the external environment demand management attention Typically responding to the customer and technical parts of the environment Customers have special needs Technology changes fast Emerged during the 1950s within the U.S. aerospace industry

Matrix Organizational Design (Cont.)
Rejects the unity of command principal described in Chapter 1 of the text book Uses multiple authority structures, so that many people report to two managers People from different functional areas work on various projects

Each person has at least two supervisors or managers. One supervisor is in the functional area and the other is in a project Mixture of people from the functional areas varies according the project needs Multiple reporting relationships are a basic feature of matrix organizations See text book Figure 17.3 for a simplified matrix organizational design.

Conditions under which an organization may choose a matrix design Pressures from the external environment for a dual focus High uncertainty within the multiple sectors of the external environment Constraints on human and physical resources

High conflict potential because of multiple authority relationships Managers need well-developed conflict management skills Demand high levels of coordination, cooperation, and communication Requires high levels of interpersonal skill

Different matrix uses and forms Within specific functional areas such as marketing. Managers responsible for a brand or group of brands bring all marketing skills together to focus on the products Temporary forms for specific projects Permanent forms for the organization’s on-going work

Strengths Responsive, flexible, efficient use of costly resources Potentially high levels of human motivation and involvement Managers can respond fast to market changes Shares scarce and expensive resources People get information about a total project, not only about their specialty

Weaknesses High levels of ambiguity because of multiple authority relationships Ambiguity can encourage power struggles among managers Multiple authority relationships can give opposing demands to people High conflict potential can reach dysfunctional levels and act as significant stressors for people in matrix organizations

Evolving Forms of Organizational Design
Several new forms of organizational design Self-managing teams, a team-based approach A process view of organizational design focuses on work processes The virtual organization. This unusual form links widely scattered organizations into a network

Self-Managing Teams Customer focus and fast changing environments require decisions at lower levels in an organization Decentralizes decision authority in the teams Decision authority in these teams can focus on customers, processes, and product design

Self-Managing Teams (Cont.)
Often cross-functional membership Helps flatten an organization by removing a layer of management Results in a nimble organization that can respond to fast changing customer needs

A Process View of Organizational Design
Discards the view of packaging duties and tasks along functional or divisional lines The organization is a set of interconnected processes that weave across multiple functions Focuses on the results of a process not on people’s skills or functions People have responsibility for all or part of a process with decision authority over those parts

The Virtual Organization
A temporary network of companies or people that focus on reaching a specific target Information technology links members into a network no matter where they are in the world Enter agreements to get needed skills or resources Little direct control over functions done by other members of the network

The Virtual Organization (Cont.)
Features a need for high trust among members Need conflict management and negotiation skills Interdependent in reaching a mutually desired goal

International Aspects of Organizational Design
The international context of organizations increases environmental complexity Varying cultural orientations and laws introduce high uncertainty in the external environment Functional and divisional designs are more congruent with cultures that want to avoid uncertainty and accept hierarchical relationships (Latin American countries and Japan)

International Aspects of Organizational Design (Cont.)
Matrix organizations do not work well in countries that avoid ambiguity (Belgium, France, and Italy) Self-managing teams work well in countries with socially oriented values (Sweden and Norway) Virtual organizations use communications and computer technology to span national boundaries

Ethical Issues and Organizational Design
Lobbying activities can change an organization’s external environment. Both legal and ethical in the United States Bribing government officials is illegal under U.S. law Introducing new technologies can displace workers and cause stress among those who need to learn the technology

Ethical Issues and Organizational Design (Cont.)
Ethical issues about reducing the size of an organization and increasing its efficiency. A utilitarian analysis looks at the net benefits of management’s actions High conflict and ambiguity of matrix organizations can act as a significant stressor Moving to the alternative forms is large-scale organizational change and stress for many people

Chapter 18 Organizational Change and Development
28 July 1997 Chapter 18 Organizational Change and Development

Learning Goals Discuss the pressures on managers to change their organizations Describe different types of organizational change Explain the phases and targets of planned organizational change

Learning Goals (Cont.) List some reasons for resistance to change in organizations Describe the organizational development techniques managers can use to change their organizations Understand some international aspects of organizational change and development

Chapter Overview Introduction Forces For and Against Change
Unplanned and Planned Organizational Change Targets of Organizational Change Planned Organizational Change Resistance to Change

Organizational Development International Aspects of Organizational Change and Development Ethical Issues About Organizational Change and Development

Introduction Organizational change involves movement from the present state of the organization to some future or target state Future state can include a new strategy, new technology, or changes in the organization’s culture

Introduction (Cont.) Organizational change: moving from the present state of the organization to some future or target state. A A’ Time

Introduction (Cont.) Many sources of pressure on managers to change their organizations exist and will continue in the future Identify the pressures on organizations and their managers to change Want to know the probable effects on you as a member of a changing system

Introduction (Cont.) Know how to deliberately change an organization
Understand the sources of resistance to change Learn how to manage the change process to reduce resistance

Forces For and Against Change
External forces for change Competitors and markets Acquisition threats International: global markets Workforce diversity Quality management

Forces For and Against Change (Cont.)
Internal forces for change High dissatisfaction Felt stress Loss of control of processes Dysfunctionally high conflict Slow decision making High turnover and absenteeism Communication dysfunctions

Forces against change Internal: resistance to change from individuals and groups External: special interest groups such as consumer groups and unions View the forces for and against change as a force field working on the organization

A Force Field Present state of the organization Desired state of the organization Forces for change Forces against change A Time A’ Text book Figure 18.1

Unplanned and Planned Organizational Change
Unplanned organizational change: forces for change overwhelm resistance to change Planned organizational change: A deliberate, systematic change effort

Unplanned and Planned Organizational Change (Cont.)
Unplanned organizational change Forces for change overwhelm resistance to change Usually unexpected Chaotic, uncontrolled change effects Example: economic changes leading to reductions in workforce

A deliberate, systematic change effort Change organizational design, information systems, job design, and people’s behavior Although managers try to follow a plan, the change does not always move smoothly The change effort often hits blockages, causing managers to rethink their goals and plan

Phases Define the desired future state of the organization Diagnose the present state of the organization Move the organization to the desired future state A change agent helps managers to bring about planned change. An external or internal consultant

Targets of Planned Organizational Change
Organizational culture Decision processes Communication processes Job design Organizational design

Targets of Planned Organizational Change (Cont.)
Technology Strategy Managers should choose the target only after careful assessment of the current state of the organization and the need for change.

Targets of Planned Organizational Change (Cont.)
A model for thinking about planned organizational change Targets Culture Technology Organizational design Job design External environment Strategy Mission

Planned Organizational Change
Reasons for planned organizational change Managers react to environmental shifts They anticipate the future state of the external environment Often a difficult task. As noted by an organizational change scholar, “planned organization change is messy and never as clear as we have written in our books and articles”

Planned Organizational Change (Cont.)
Models of planned organizational change Evolutionary model Incremental change Example: changing the organization’s pay scale to stay market competitive Revolutionary model Change many parts of an organization Example: strategic shift

Evolutionary model of organizational change Three phases with no distinct boundaries. Each phase blends into the next phase A manager or other change agent develops a need for change among those affected The change agent then tries to move the organization or part of it toward the changed state The change agent tries to stabilize the change and make it a part of the organization

Evolutionary model of organizational change Sees change happening in small bits that add to a total amount of change Unexpected events can occur along the way, forcing a return to an earlier phase

Revolutionary model of organizational change Organizational change unfolds over long periods of stability followed by bursts of major change activities Uses three concepts Equilibrium period: organization moves steadily toward its mission and goals Revolutionary period: a major change in the strategic direction of the organization Deep structures: enduring features of the organization that let it succeed

Revolutionary model of organizational change (cont.) Two events trigger a revolutionary period Dissatisfaction with the organization's performance Strong feelings among organization members that it is time for change

Revolutionary model of organizational change (cont.) Dissatisfaction with the organization's performance Misfit between the organization’s deep structure and its current environment Follows a clear organizational failure or when many believe failure is imminent

Revolutionary model of organizational change (cont.) Strong feelings among organization members that it is time for change Organization members feel uneasy with the current equilibrium period Develop feelings of little forward movement Characterizes organizations that must shift direction

Resistance to Change No matter what the target, changes affect the social system of an organization People develop long-standing, familiar patterns of social interaction Strong resistance develops when organizational change affects these social networks

Resistance to Change (Cont.)
Resistance can take many forms Lack of cooperation with the change effort Sabotage of the change effort Dysfunctionally high conflict levels

Reasons for resistance to change Perceive the loss of something valued such as social status Misunderstand the goal of the change Distrust the change agent No common perception of the value of the change Low tolerance for change

Manager’s orientation to resistance to change Problem to overcome Forcefully reduce resistance Can increase resistance Signal to get more information Affected targets may have valuable insights about the change’s effects Change agent can involve the targets in diagnosing the reasons for the resistance

Manager’s orientation to resistance to change (cont.) Absence of resistance Also a signal to get more information Low commitment to the change can make the change less effective Resisters can focus the change agents on potentially dysfunctional aspects of a proposed change

Managing the change process to reduce resistance Use change agents with characteristics similar to the change target Use dramatic ceremonies and symbols to signal disengagement from the past Widely communicate information about the change

Managing the change process to reduce resistance (cont.) Involve those affected by the change Commit enough resources Negotiation may be necessary, when a powerful person or group is a potential source of resistance

Managing the change process to reduce resistance (cont.) Cooptation: a political tactic that aims to gain endorsement of the change from important individuals or groups Sometimes no choice other than to force change onto the target system

Organizational Development
Organizational development is a long-term, systematic, and prescriptive approach to planned organizational change Although it uses a system-wide view, it can focus on single subsystems of an organization Applies the theories and concepts of the social and behavioral sciences to organizational change

Organizational Development (Cont.)
Tries to develop an organization’s self-renewing capacity Tries to create an organization that can continuously improve Views conflict as an inevitable part of organizational life

Phases of Organizational Development (Cont.)
Organizational development unfolds in a series of phases These are phases, not steps, because no clear boundaries exist between them Phases can repeat. For example, during the evaluation phase, managers may discover a need for more data from the diagnosis stage See text book Figure 18.2

Entry First contact of the consultant with the client Usually client initiates contact Building a client-consultant relationship Mutual evaluation of each other Decide they can develop a compatible working relationship

Contracting Develop an agreement between the consultant and client Can range from an oral agreement to a legally binding agreement Describes mutual expectations and each party’s duties Not static. Subject to renegotiation as the organizational development program unfolds

Diagnosis Consultant gets information about the client system and diagnoses its current state Observe the client’s behavior and reactions Observe physical characteristics of system Systematic data collection using surveys, interviews, and company records Consultant summarizes this phase’s results for feedback to the client system

Feedback Consultant has a series of feedback meetings with client system members The number of meetings varies according to the scope of the organizational development program Several steps: (1) consultant’s analysis; (2) discussion; (3) consultant’s preliminary diagnosis; and (4) actively work with members of client system to arrive at collaborative diagnosis

Planning the change A collaborative activity between the consultant and client system Identify alternative courses of action and the effects of each Lay out the steps in the change program Client decides the nature of the change program--not the consultant

Intervention Collaborative intervention to move the client system to the desired future state Includes job and organizational design changes, conflict reduction program, and the like. See the “Organizational Development Interventions” section of the chapter Consultant’s role: help the intervention and forecast dysfunctional results Earlier client involvement helps reduce resistance to change in the intervention phase

Evaluation Focuses on whether the organizational development effort had the desired effect Ranges from simply asking how the client feels to a well-designed research effort Done independently of the consultant Should also give the client system information about the next steps to take

Termination Ends at some point Client terminates consultant As the client system changes and develops, the external consultant reduces involvement Internal consultants are part of the organization and can continue contact The goal is independence of the client system from the consultant. Build client system self-reliance

Organizational Development Interventions
Many interventions exist for organizational development programs Systematic techniques drawn from the behavioral sciences Earlier chapters have detailed descriptions of the interventions summarized here

Organizational Development Interventions (Cont.)
Human process interventions Focus on interpersonal, intra-group, and intergroup processes Includes conflict, communication and decision making Goal: improve human processes to get more effective organizational functioning

Structural and technological interventions Focus on organizational design, job design, and the addition of new technology New technology focuses on improving organizational processes Goal: improve human productivity and organizational effectiveness

Human resource management interventions Draws on the human resource management or personnel practices of an organization Includes motivation and rewards, career planning and development, and stress management Goal: change individual behavior and performance to get improved organizational effectiveness

Strategy interventions Changes in an organization’s strategic position to better align it with the external environment Includes changes in the organization’s culture to create values and beliefs more congruent with the new environment Goal: strategic shifts to gain competitive advantage

Multiple interventions have the strongest effects Structural/technological interventions and human resource management interventions had the strongest effects Effects stronger in small organizations than in large organizations Survey feedback has weaker effects than other interventions

International Aspects of Organizational Development
Intellectual roots of organizational development are mainly in the United States, England, northern Europe, and Scandinavia Values and assumptions of organizational development consultants likely reflect these cultural values Nature of interventions also reflect these cultural values

International Aspects of Organizational Development (Cont.)
Cultural differences and effect of organizational development approaches Latin American workers often accept a directive management style France and Italy: view organizations as hierarchical systems that use power and political behavior Sweden and the United States: view organizations as less hierarchical

International Aspects of Organizational Development (Cont.)
Cultural differences and effect of organizational development approaches (cont.) Conflict management approaches vary depending on tolerance of uncertainty Tend to use nonconfrontational approaches to conflict reduction

Ethical Issues About Organizational Development
Ethical dilemmas that can undermine an organizational development effort Misrepresentation of consultant’s capabilities, skills, or experience Misrepresentation of client’s problems Data confidentiality and voluntarism in providing data Full awareness of and consent to the behavioral changes asked of participants

Chapter 19 Future Directions of Organizations and Management
9 July 1997 Chapter 19 Future Directions of Organizations and Management Items in red are new observations since the publication of the book. 1

Learning Goals Summarize the domestic and international future for work, organizations, and management Discuss the role a global orientation will play as organizations try to compete in the future Describe the types of technological changes that will affect organizations and their management in the future

Learning Goals (Cont.) Explain the direction that organizational design is expected to take in the future Understand the changes in management behavior that are needed both to compete in a global environment and to manage within new organization structures Describe the ethical issues that will emerge in the future

Chapter Overview Domestic Changes International Changes
Technological Changes Organization and Management Changes Ethical Issues in the Future

Introduction Differs from other chapters in the book
Looks into the future instead of describing well-grounded knowledge of organizational behavior Predicting the future carries the risk of being wrong Exciting times ahead, if these predictions are right

Introduction (Cont.) Mainly based on press reports
Drew from academics and respected statistical sources Examines four areas of expected changes Domestic changes International changes Technological changes Organization and management changes Ethical issues in the future

Introduction (Cont.) Major changes and implications Domestic
International Technological Organization changes Management changes

Domestic Changes Job skill Population requirements demographics
Economic changes Workforce composition

Domestic Changes (Cont)
Population demographics Total population: 221 million Includes net immigration of 820,000 53 percent men and 47 percent women, about the same since 1976 Younger (16-24) and older (55-64) groups will have a higher percentage change than in the past Minority groups will increase faster than the white nonHispanic group

Domestic Changes (Cont.)
Population demographics (cont.) Older people living longer than in the past International scope of ethnic diversity; major differences in Values Attitudes Languages

Domestic Changes (Cont)
Job skill requirements New jobs will require higher skills and more education Education implications Many companies turning to skilled labor in other countries. For example, there was a 56 percent increase in software development work sent to India in 1997

Workforce diversity: Bureau of Labor statistics predictions for the workforce in 2006 More female (47 percent) and minority workers (29 percent) Fifteen percent of workforce will be age 55 or over Continued increase in contract or temporary workers

Economic changes Foreign trade and technology sectors will have the fastest growth Technology-based and computer-related products will become the most dynamic parts of the economy Interconnections among national economies will continue to produce uncertainty

Manufacturing innovations Quality will reach unprecedented levels Products will feature easy maintenance, low recall, and easy installation Keynotes: quality, speed, flexibility, and response to customer requirements Close connections with customers and suppliers

Manufacturing innovations (cont.) Agile manufacturing: build to customer specifications. Example: Dell Computer Just-in-time inventory management. Low inventory on-hand, high interdependence with suppliers, high interdependence within the manufacturing process More decentralization in the manufacturing process

Manufacturing innovations (cont.) Concurrent engineering. Cross-functional teams of manufacturing engineers, design engineers, marketing specialists, and customer representatives Requires good understanding of the group and conflict management concepts described in earlier chapters of the book

Mergers and acquisitions In 1998, $1 trillion in mergers DaimlerChrysler formed in 1998 Phillips Petroleum Co. is a likely target of French giant Elf Aquitaine

Mergers and acquisitions (cont.) Bertelsman AG wants to acquire Random House 1999 mergers: BPAmoco; Exxon-Mobil “There are no German and American companies. There are only successful and unsuccessful companies,” Thomas Middelhoff, chairman of Germany’s Bertelsmann AG.

The future consumer More demanding, both domestically and internationally Helped by some technological changes described later. More knowledgeable The “zero tolerance of defects” customer has arrived

International Changes
Future managers should view their external environment as extending beyond their country’s boundaries Competitors often come from other countries View entire world as potential markets, supply sources, places of production Applies to organizations of any size Emerging transnational organization sees no boundaries. Example: Asea Brown Boveri operates in 140 countries

International Changes (Cont.)
Climbing education levels. Able to work with modern technology Expanding computing, communications, and video technology Fastest growing but turbulent economies in Latin America, Eastern Europe, and Asia The United States and Europe will play major economic roles in the next century Immigration will be an important and divisive domestic issue

North America Continued strong position in world trade, although Europe is a major competitor Trade among North American Free Trade Agreement (NAFTA) partners has soared and will continue to do so Mexico is developing into a major manufacturer and exporter of sophisticated products

Latin America New governments moving away from economically crippling policies of the 1980s Reducing tariffs, encouraging outside investment, and selling state owned companies Market potential is colossal Extensive free trade areas Free Trade Area of the Americas by 2005?

Latin America (Cont.) 1999: Argentina and Brazil discuss a common currency January 2000: Ecuador considers moving to the U.S. dollar as its currency

Europe, Scandinavia, and the Former Soviet Union
The Euro, a single currency that unites the eleven countries of the European Monetary Union (EMU), arrived in Western Europe on January 1, 1999 EMU: Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Luxembourg, Portugal, and Spain

Europe, Scandinavia, and the Former Soviet Union (Cont.)
Denmark, Sweden, and The United Kingdom chose not to join the union Greece did not meet the economic and financial criteria for membership Immediately replaced national currencies in cashless transactions Euro replaces national currencies, January 1, 2002 DaimlerChrysler: adopted the Euro for all company transactions, January 1, 1999

The EMU is the world's second largest economy, almost as large as the U.S. economy If the four countries who are not part of the EMU join, and the EMU accepts those desiring to join, the total EMU economy becomes the largest in the world The Euro could become a major world currency, competing strongly with the U.S. dollar for many country's reserves

A single currency lets consumers see the pricing of the same items in different countries The Euro will not let companies charge high prices in one country to offset low prices in another country Transnational companies such as Coca-Cola Co. face the challenge of converging prices in different countries, even with labor cost and tax differences

Eastern and Central European countries that are moving to market-oriented economies: Poland, the Czech Republic, Estonia, Slovenia, and Hungary Western European countries are trying to build economic relations with them Want to join the EMU, but likely not economically ready until 2010

Building an extensive transportation network High-speed railroads, tunnels, and bridges The Eurotunnel linking Great Britain and the Continent will increase commerce in both directions Hungary is leading Eastern Europe in improving its rail, road, and telecommunications infrastructure

Russian Federation Dismantling their centralized economies and building market-oriented ones Moving to a decentralized market system will not be easy because state-owned monopolies produce huge amounts of investment and consumer goods Economic and political instability will continue

Russian Federation (cont.) President Boris Yeltsin resigned on December 31, 1999 Premier Vladmir Putin became acting President Despite the turmoil, some analysts see continued forward movement to open market economy Tense relationships with some other countries of the former Soviet Union: Kazakhstan and Chechnya

Russian Federation (cont.) Opportunities abound for quick-moving organizations Rich oil and gas reserves, timber, gold, and unsatisfied consumer desires Major opportunities: communication, roads, petrochemical, medical equipment, and pipelines

Asia Prominent economies: China, Japan, Singapore, Hong Kong, Taiwan, South Korea, Thailand, Malaysia, Indonesia, and the Philippines Highly diverse markets with more differences that similarities among them Devaluation of the Thai bhat triggered recessions in several countries: Thailand, Indonesia, Japan, China, and South Korea

Asia (Cont.) Singapore and the Philippines felt fewer effects
Analysts predict a rebound and continued economic growth into the next century

Asia (Cont.) Hong Kong A Special Administrative Region of China
Many feared Beijing interference would dampen its entrepreneurial spirit Still have few government controls, low taxes, and no tariffs

Asia (Cont.) Hong Kong (cont.)
Recovering economically and continuing to forge strong ties to businesses on the Chinese mainland Strategy: import goods for cheap assembly in China; reexport finished goods from Hong Kong

Asia (Cont.) China Population: 1.2 billion, a potentially massive market Increased desire to expand outside investment due to economic reforms in the 1980s Uncertainty surrounds China's economic future Unemployment is at levels that might bring social protests Although an uncertain economic future, companies from all over the world see China as a burgeoning market

Asia (Cont.) Japan Struggling to pull itself out of a strangling recession Slowly moving forward with economic reforms Wants to remain a major global player Could emerge from its crisis as a strong global competitor

Asia (Cont.) Taiwan A serious international competitor
No longer sees itself as a cheap assembler of other people's products Will play an increasing role worldwide in electronics, semiconductors, and personal computers

Asia (Cont.) Taiwan (cont.)
Dropped import barriers and planning to reduce foreign exchange controls Its consumers vie for luxury goods ranging from Jaguar cars to satellite dishes A growing high-technology industry is contributing to Taiwan's economic growth

Asia (Cont.) South Korea
Faced its largest economic crisis in the late 1990s. Following thirty years of spectacular economic development Debt-ridden chaebols moved the economy near recession Widespread layoffs happened in many industries, creating social unrest in a country where not having a job is shameful

Asia (Cont.) South Korea (cont.)
President Lee Hun Jai has strongly pursued economic reform His goal: shake out the old ways of doing business and move to a 21st century competitive economy Foreign investment has increased as desired By early 1999, there were signs that a new South Korea will enter the next century

Asia (Cont.) Association of South East Asian Nations (ASEAN)
Formidable economic block: 500 million people who want Western goods ASEAN: Brunei, Indonesia, Laos, Malaysia, Myanmar (formerly Burma), the Philippines, Singapore, Thailand, and Vietnam

Asia (Cont.) Association of South East Asian Nations (ASEAN) (cont.)
Reducing trade barriers; forming economic alliances Repledged their unity at a December 1998 summit Planning the ASEAN Free Trade Area

Technological Changes
Communication Internet Biotechnology Materials Manufacturing Transportation

Communication Wireless, digital communication will become common in the next century, using digital satellite systems Desktop Personal Computer (PC) videoconferencing Virtual teams Includes nonverbal communication Combine the two in a portable system. Possibilities are almost endless

Communication (Cont.) Speech technology; translation technology
Direct voice communication with immediate translation into another language Videoconferencing in one language. Closed caption translation in another Speech activated personal information manager

Internet Internet usage predictions 1 billion e-mail accounts by 2002
European usage grew by 300 percent in the late 1990s By 2000, more non-English speakers on the Internet than English speakers. Language translation software will grow in usage Faceless quality of Internet communication can cause misunderstandings. “High tech requires high touch,” says one executive

Internet (Cont.) Internet commerce
From potato chips to blue jeans to Yves Saint Laurent fashions to Volvo cars Growth in commerce 1995: almost no transactions 1998: $8 billion in transactions 2003: $100 billion in transactions Not necessarily in addition to in-store sales

Internet (Cont.) Internet commerce (cont.) No country boundaries
Emerging new business model--the e-corporation New English words and phrases E-commerce, i-commerce “Bricks and mortar”: physical buildings Ebiz. Business week has a new quarterly supplement called e.Biz. First published in March 1999 Virtual organization, virtual group

Internet (Cont.) Issues
Transaction security. More accepted by U.S. consumers than European Data privacy Computer security

Internet (Cont.) Strategies Bricks and mortar alone E-commerce alone
Combine bricks and mortar with e-commerce. Example: Staples.com

Internet (Cont.) Some cautious predictions from the Gartner group. Source: Infoworld, November 15, 1999, page 10 : Technology trigger : Peak of inflated expectations : Trough of disillusionment : Slope of enlightenment : E-business ends : Plateau of profitability

Internet (Cont.) Some Web sites to visit www.Gap.Com www.Commtouch.Com

Biotechnology Calling the next century the “century of biology”
Medical research will operate at the gene level, unraveling human DNA. A single “smart card” will carry a person’s DNA profile Agriculture: genetically engineered plants. Controversial in the European Union

Biotechnology (Cont.) Other biotechnology effects
Papermaking: use new enzymes. Reduce chlorine usage Computers: DNA-based designs and self-repairing software “Stone wash” blue jeans: use enzymes not stones. Reduces pumice dust

Materials Silently and efficiently, the new team member toils away in a chemistry lab at the university of California at Santa Barbara. With perfect precision, she lays down an ultrathin layer of an organic substrate. Onto this, she deposits interlocking calcite crystals, atom by atom. The two layers bond in a delicate crystal lattice. Under a microscope, it calls to mind the flawless thin-film layers on a silicon chip. An abalone at work!

Materials (Cont.) The world of nanotechnology: studying how nature builds things atom by atom Wave division multiplexing technology: separate communication channels from different light colors in same optical fiber Microelectromechanical systems (MEMS): combine sensors, motors, and processors on a single sliver of silicon

Manufacturing Interconnected processes with real-time links to suppliers Close ties to customers to make what they want Increased competitiveness to those companies that recognize worldwide differences in customers Example: Solectron Corp, Milpitas, California, a 21st century manufacturer

Transportation Aircraft design
Lighter, faster aircraft that can go farther with more people Possible supersonic aircraft that flies the Los Angeles-Tokyo route in 4 hours, not the 10 hours it now takes CargoLifter, a German cargo company, will launch a fleet of helium airships (super-blimps) that can haul 160 tons

Transportation (Cont.)
Aircraft design (cont.) Wing-in-Ground (WIG) effect vehicles Plane-boat devices that takeoff and land on water Fly just above the surface to use ground effects for lift Carry cargo or people Originally Russian research; used on the Caspian Sea Now pursued by Australia and Germany

Transportation (Cont.)
Ocean transport Larger cargo ships Carry 6,000 containers, 100 percent more than at present Plans for a superhub for such ships on the East Coast of Canada or the United States New catamarans called “wavepiercers” transport people and cargo at 45 knots (52 MPH)

Organization and Management Changes
Strategy Long-term view Extraordinary patience Tailor products to local tastes. Domino’s pizza: squid and sweet mayonnaise for the Japanese market

Organization and Management Changes (Cont.)
Strategy (cont.) Gold Kist exports chicken feet to China. Called paws, the Chinese view them as a delicacy Discover new ideas for domestic markets in foreign markets. Häagen-Dazs and its dulce de leche ice cream

Continued global mergers and acquisitions Ford Motor Co. and Mazda Motor Corp. Deutsche Bank has proposed a merger with Bankers Trust Always looking for synergy in the merger or acquisition

Organizational design Decentralized designs for strategies emphasizing flexibility and customer needs Quick responses needed for changing customer needs and shifting markets Cross functional teams: broad decision-making and problem-solving authority Existing and future communication technology will let globally dispersed organizations reach decentralization on a scale previously not possible

Management behavior Decentralized decision making Self-managing work teams Reward systems Skill-based pay systems Profit sharing Gain sharing Stock ownership Increases people’s skills and lets them share in an organization’s success

Management behavior (cont.) Information technologies help with Decentralization Self-managing teams Leadership requirements Facilitators Resources Guides Helpers

Ethical Issues in the Future
Increased domestic sensitivity about ethical issues in the future Business Week featured ethical concerns about the accuracy of corporate earnings reports in late The cover screamed, "Corporate Earnings: Who Can you Trust?” The cover story noted, "[Companies] appear to be exploiting opportunities to jazz up their earnings like never before--all without stepping outside the loose confines of generally accepted accounting principles (GAAP)"

Ethical Issues in the Future (Cont.)
Increasing international sensitivity to ethical standards More countries have begun to see that corruption in international commerce decreases trust and increases uncertainty The Organization for Economic Cooperation and Development: Convention on Combating Bribery of Foreign Public Officials in International Business Transactions Heavy criminal penalties for illegal bribes

Chapter 1 Introduction and Historical Background

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Chapter 1 Introduction and Historical Background

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