inde047 lect02 organization behavior

INDE047 – Business Management for Engineers: Part I

Mohammad Tawfik, PhD

INDE047 – Business

Management for Engineers

Part I Mohammad Tawfik

November 2013

Organizations

Psychology, Leadership,

Creativity, Conflicts, Destructive

Behavior

How to Win Friends and

Influence People

Dale Carnegie

Fundamental Techniques In

Handling People

Give honest and sincere appreciation

Arouse in the other person an eager want

Six Ways To Make People

Like You

Smile!

Remember Names

Encourage others to talk about themselves

Talk in terms of the other person's interests

Make the other person feel important

Win People To Your Way Of

Thinking

The only way to get the best of an argument is to avoid it

Show respect for the other person's opinions

Get the other person saying "yes, yes" immediately

Let the other person do a great deal of the talking

Let the other person feel that the idea is his or hers

Try honestly to see things from the other person's point of view

Be sympathetic with the other person's ideas and desires

Appeal to the nobler motives

Dramatize your ideas

Throw down a challenge

Be a Leader

Begin with praise and honest appreciation

Call attention to people's mistakes indirectly

Talk about your own mistakes before criticizing the other person

Ask questions instead of giving direct orders

Let the other person save face

Praise the slightest improvement and praise every improvement

Give the other person a fine reputation to live up to

Use encouragement

Leadership and Motivation

Lead, follow, or get out of the

Thomas Paine

The first basic ingredient of

leadership is a guiding vision

Warren Bennis

What is leadership?

Leadership is influence,

nothing more, nothing less

John C. Maxwell

If your actions inspire others

to dream more, learn more,

do more, and become more,

you are a leader

John Quicy Adams

Leaders should …

Have a Vision

Set Goals

Set Action Plans

Monitor and Help

Build Teams

Gather People

Create Loyalty

Help and Care

Delegate

Routine Tasks

Tasks that develop people

Occasional Duties

Outside his areas of expertise

Specific

Share Setting

Inform

Monitor

Willing

Learner

Looks for challenge

Develop People

Leaders Create Leaders

Identify Competencies

Understand Needs and

Motivating People

Laws of Motivation

Richard Denny

1- To Motivate you have

to be Motivated

Motivating Yourself

You must manage yourself

before you can lead others

Zig Ziglar

1926-2012

Set Goals

Seize the moment to act

Have persistence

Build your Willpower

2- Motivation Requires a Goal

“I will only

settle for

domination”

3- Motivation Never Lasts

4- Recognition Motivates

4- To Motivate, Recognize

●Basic human needs

Love Learn

Leave a legacy

How to De-Motivate?

Focus on rewards!

Do not give enough trust!

Reward the wrong attitude!

Mohammad Tawfik, PhD Do not communicate!

Focus on Cost!

How to Motivate?

The SCARF Model

David Rock

Motivate by:

Status

Certainty

Autonomy Relatedness

Fairness

David Rock

“Your Brain at Work”

What Motivates People

Daniel Pink

Motivation

Autonomy

Mastery Purpose

Innovation!

Innovation is the key!

Bringing creative ideas to life

WARNING!

• Nothing really insures that you will get an

innovative idea in any field, rather,

suggestions of things that you may do can

increase the possibility of getting one

Curiosity!

Explore!

Serendipity!

Diversify the search!

Network!

Exercise hunting ..

Exaptation

Be Agile …

Love your mistakes…

Study them …

Even celebrate them!

Some noise is not so bad after

all …

I said “some” … not all!

The Russian nesting dolls!

Empty the bag …

Destructive habits in

organizations and projects

Why Do Good Companies Go Bad?

• In a nutshell: Good companies fail when

they are unable or unwilling to change

when their external environment changes

significantly.

7 Habits

Denial

Arrogance

Complacency

Competence Dependence

Competitive Myopia

Volume Obsession

Turf Wars

Denial

What leads to Denial?

• Denial of emerging technologies.

Denial of changing consumer tastes.

Denial of the new global environment

Signs of Denial

• “Hey, we’re different, so there’s no way

it can happen to us.”

The company is too proud to admit that

someone else has come up with a better

The company ignores, rationalizes, or

blames others for its situation instead of

admitting its fault.

How to break the habit of denial

Look for it

Arrogance

What is Arrogance?

• Offensive display of:

Superiority

Self-importance

Disdain (contempt)

… because of an inflated sense of self

What leads to Arrogance?

• Exceptional achievement in the past

David conquers Goliath

The company pioneers a product or

service

Signs of Arrogance

• The company stops listening

The company becomes extravagantly

eager to show off.

The company begins to act like a bully,

both internally and externally.

Signs of Arrogance

• The company becomes high-handed and

abuses rules

The company favors those who validate its

views and gets rid of those who are

critical.

How to break the habit of

arrogance? • Rotate management to new challenges.

Implement nontraditional succession

planning.

Diversify the talent.

Change the leadership.

Complacency

What is Complacency?

• Complacency is the sense of security and

comfort that derives from the belief that

the success that’s taken place in the past

will continue indefinitely.

What leads to Complacency?

Signs of Complacency

• The company is in no hurry to make

decisions.

The company’s processes are overly

bureaucratic.

Everybody has to get on board before a

decision is made.

Signs of Complacency

• The company is completely vertically

integrated.

Enormous cross-subsidies are in place –

by functions, by products, by markets, by

customers. Average costing and average

pricing prevail.

How to break Complacency?

• Reengineer to achieve high quality,

eliminate waste, and reduce inefficiency.

Decentralize profit and loss by creating

and molding business units around

products or geographies.

How to break Complacency?

• Outsource – contract out all non-core

functions.

Reenergize – consider a new leader with a

positive, opportunity-oriented vision

Competency Dependence

What is Competency

Dependence? • Somebody else can be doing a better job,

and if a company is unable to figure out

what to do, it has become competency-

dependent

What leads to Competency

Dependence? • R&D dependence

Design dependence

Sales dependence

Service dependence

Signs of Competency

Dependence • Reengineering, reorganization, retooling

have been tried and still no good results.

The thrill is gone and the company is in a

Stakeholders are leaving

How to break Competency

Dependence? • Find new applications where the same

competency results in new value.

Determine new markets where the same

competency remains an asset.

How to break Competency

Dependence? • Expand the range of your competencies

by moving up or down the value chain.

Refocus company resources into areas

with more growth and profit potential.

Competitive Myopia

What is Competitive Myopia?

• When they define their competition too

narrowly and acknowledge only direct and

immediate competitors

What leads to Competitive

Myopia? • The natural evolution of the industry.

What leads to Competitive

Myopia?

The clustering phenomenon.

Signs of Competitive Myopia

A company allows small niche players to

coexist with it.

The loyalty of a company’s supplier is won

by a nontraditional competitor.

Signs of Competitive Myopia

New entrants, especially those from

emerging economies, are underestimated.

The company becomes helpless against a

substitute technology.

How to break Competitive

Myopia?

Broaden the scope of the product or

market.

Consolidate to squeeze out excess

capacity.

How to break Competitive

Myopia?

Counterattack the nontraditional

competitors.

Refocus on the core business to

concentrate limited resources in the most

successful area.

Volume Obsession

What is Volume Obsession?

• Too much money is being spent for the

company to make money.

What leads to Volume

Obsession?

The high-margin pioneer.

The fast-growth phenomenon

The paradox of scale.

The ball and chain of unintended obligations

Signs of Volume Obsession

Guideline-free, ad hoc spending.

Functional-level cost centers.

A culture of cross-subsidies.

Stakeholders say numbers are not good.

How to break Volume

Obsession?

Identify where the company’s costs are.

Convert cost centers into revenue centers

or profit centers.

Move from vertical integration to “virtual

integration”.

How to break Volume

Obsession? Outsource non-core functions.

Reengineer to automate processes to

improve cost efficiency.

Implement target costing

Become a world-class customer.

The Territorial Impulse

What is Territorial Impulse?

• As companies grow they tend to organize

themselves into “functional” and later

“regional silos”. However, the various

units into which companies organize

themselves don’t always get along well

with each other, for various reasons.

What leads to Territorial

Impulse?

The corporate ivory tower.

Impulse?

Growth requires the institution of formal

policies and procedures.

Impulse?

The informal, spontaneous culture is

extinguished.

Impulse?

A company’s culture is dominated by one

functional specialty.

Signs of Territorial Impulse

Dissension - a lot of headstrong

lieutenants instead of one strong general

Indecision – decision-making is an

agonizing or even impossible process

Signs of Territorial Impulse

Confusion – one side doesn’t know what

the other side is up to

Malaise – nobody’s happy

How to break Territorial

Impulse?

The leader must bring all the people

together in a common cause.

Rotate the people in and out of different

functional or geographic silos.

How to break Territorial

Impulse?

Create permanent cross-functional teams.

Reorganize around customers or products

rather than around function or geography.

Conflict Management

● Based on the lectures on “The art of Conflict Management” by Michael Dues, the teaching Company

Understanding ConflictUnderstanding Conflict

What is a conflict?

● “An expressed struggle between at least two interdependent parties who perceive incompatible goals, scarce resources, and interference from others in achieving their goals.”

● Or Simply: “discomforting difference.”

Elements of Conflict

● Interdependence

● Difference

● Opposition

● Expression

● Emotion

Conflict may be useful!

● Bringing to the surface, problems that were not clear before

Most conflicts rise on how to reach the goal not on the goal itself

To reach win-win resolution ...

● Identify common goals

To reach win-win resolution ...

Treat conflicts as a challenges that you can work on together to achieve a solution for both.

Perhaps our greatest limitation in working toward win-win solutions is that each of us comes to the table with deep-seated ideas about conflict and

powerfully ingrained strategies.

Conflict does not arise so much from a difference

itself but from the perception we have of

that difference

To reduce conflict ...

Try to see situation from the other person's perspective

Almost all of us tend to attribute mistakes or failings on our part to external events

... but we also tend to attribute the behavior of others to their own character or emotions

We’re really emotional beings who have evolved an ability to reason that helps us deal with our

emotions.

Remember that emotion is an internal fact; it’s a response to perceptions you are having

Being angry is not the same as acting on your anger

PowerHow Much We Need and How to Use It?

What is Power?

● Power can be defined as the ability to cause or influence an outcome.

What is Power?

● Notice the difference between “influence” and “control”!

Kinds of Power

● Personal power, such as talents, skills, or knowledge that we may have;

Kinds of Power

● Relational power, that is, the power that derives from the nature of the relationship between the parties;

Kinds of Power

● Situational power, the conditions in the conflict situation that give power to one party or one issue more than another

Five Bases of PowerJohn French and Bertram Raven

Reward power

Coercive power

Legitimate power

Referent power

Expert power

The important point to remember is that both parties have power in any conflict and that power derives from the interdependence between the two parties in general and the

particular situation they are in

For conflict resolution ...

● You do not need more power!

● You need sufficient interdependence!!!

The more equal the conflicting parties are in power, the better the chances are of working out a

win-win resolution

Conflict StylesThomas and Kilmann

Avoidance

Accommodation

Competition

Collaboration

Compromise

Dysfunctional Conflict Strategies

Avoidance

Withdrawal

Imposition

Triangulation

Manipulation

Absolute framing

Revenge

Compromise

Principles for Win-Win NegotiationsRoger Fisher and William Ury

Separate people from the problem

Focus on events or behaviors rather than the parties involved.

Focus on interests, not positions

Do not take a position and defend it or bargain for it but to focus on the interest behind the position

Generate options for mutual gain

Brainstorm for multiple options, keeping in mind the goal of mutual gain

The choice of objective criteria

Try to identify measurable ways to assess the value of the suggestions

Identify your BATNA

Best Alternative to Negotiated Agreement

Preparing for Negotiation

Conditions of Negotiation

You are willing and Able to Negotiate

Other Party is willing and

Able to Negotiate

Step 1Define the conflict issue (What and Why)

Step 2Identify and evaluate your goals

Why do I want to resolve this conflict?

What is a good resolution for me?

How important is it to me that I reach this resolution?

How do I want to be viewed by the other party?

How does this situation affect the way I view myself?

Step 3Do you want to resolve the issue by negotiating?

Consider the degree of interdependence

Consider your leverage

The ability to influence the other side to move closer to one's negotiating position

Consider the context of the potential negotiation

Consider the nature of your relationship

Consider the risks of introducing the issue

Consider BATNA

Step 4 Arrange a meeting with the other party

Negotiating Conflict Resolutions

Step 5Conduct the meeting

Step 6Make a contract

The contract must be clear

The contract must address voluntary behavior from the present forward

The contract must be an unequivocal agreement

Step 7Follow through on the contract

Pay attention to the other party compliance with the agreement

If the other party is in compliance, you should express your appreciation

If the other party is not following the agreement, you should arrange another meeting

Managers and Conflict Management

All organizations are like living organisms, constantly moving, changing, and interacting, and

a change in any one element affects the organization as a whole

Some parts of the system operate informally and unofficially

Managers and supervisors must improve conflict management within the organization in order to

minimize costs.

Seven key principles that can guide top supervisors and managers ...

1- Prevent unnecessary conflict ...

Caused by creating competitive situations

Caused by failing to clearly define roles and responsibilities

Caused by failing to establish areas and lines of authority

Caused by making decisions without consulting the stakeholders

2- Be courageous in the face of conflict

3- Focus on the general pattern of conflict management in the organization

4- Promote informal resolution of conflict

by creating policies that state a preference for resolution by discussion, although with authority

still specified for making final decisions

5- Formal processes need to be in place for conflict management

6- Assess and improve on the organizational culture

7- Model the behaviors they desire in conflict management

Moral and Cultural Conflicts

Moral conflicts are those in which the issues are framed as matters of what is morally right and

morally wrong

Note from the outset that this absolute framing is a dysfunctional conflict strategy

Moral values are inherently subjective, yet they are usually held as nonnegotiable absolutes

In a dispute about a moral question, it’s difficult to reach a win-win resolution

Among the specific tactics that may be helpful in dealing with moral conflicts is reframing, that is, finding a constructive new way to view a conflict

through a different lens or frame.

Other useful tactics include fractionating

Developing empathy

Attempting to build mutual trust

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