Introduction to Organizational Behaviorll Seven Foundation Competencies

n Managing Selfn Managing Communicationn Managing Diversityn Managing Ethicsn Managing Across Culturesn Managing Teamsn Managing Change

ll Definition: The study of human behavior, attitudes, and performance in

organizations.l Value of OB: Helps people attain the competencies needed to become effective

employees, team leaders/members, or managersl Competency = an interrelated set of abilities, behaviors, attitudes, and knowledge

needed by an individual to be effective in most professional and managerial positions

l OB - a field of study that investigates the impact that individuals, groups and structure have on behaviour within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness.

What Is an Organization?• A consciously coordinated social unit, composed of a group of people, which

functions on a relatively continuous basis to achieve a common goal or set of goals.

Effective Employees• Absenteeism

– Failure to report to work• Turnover

– Voluntary and involuntary permanent withdrawal from the organization• Organizational citizenship behaviour

– Discretionary behaviour that is not part of an employee’s formal job requirements, but is helpful to the organization

Contributing Disciplines to the OB Field• Psychology• Sociology• Social Psychology• Anthropology• Political Science

PsychologyThe science that seeks to measure, explain, and sometimes change the behavior of humans and other animals

Psychology is the science that seeks to measure, explain, and sometimes change the behavior of humans and other animals.

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Early industrial/organizational fatigue, boredom, and other factors relevant to working conditions

that could impede efficient work performance. More recently,

learning, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, decision-making processes, performance appraisals, attitude measurement, employee selection techniques, work design, and job stress

SociologyThe study of people in relation to their fellow human beings

Sociologists study the social system in which individuals fill their roles; that is, sociology studies people in relation to their fellow human beings.

Their greatest contribution to OB is through their study of group behavior in organizations, particularly formal and complex organizations

Social Psychology

Social psychology blends the concepts of psychology and sociology. It focuses on the influence of people on one another.

Major area—how to implement it and how to reduce barriers to its acceptance.

An area within psychology that blends concepts from psychology and sociology and that focuses on the influence of people on one another

AnthropologyThe study of societies to learn about human beings and their activities

Anthropology is the study of societies to learn about human beings and their activities.

Anthropologists work on cultures and environments; for instance, they have helped us understand differences in fundamental values, attitudes, and behavior among people in different countries and within different organizations.

Political Science

Frequently overlooked Political science studies the behavior of individuals and groups within a political

environment.

Contingency variables: “It Depends!”Situational factors that make the main relationship between two variables change—e.g., the relationship may hold for one condition but not another

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Challenges and Opportunities for OB• Responding to Globalization

– Increased foreign assignments– Working with people from different cultures– Coping with anti-capitalism backlash– Overseeing movement of jobs to countries with low-cost labor– Managing people during the war on terror

• Managing Workforce Diversity– Embracing diversity– Changing U.S. demographics– Implications for managers

• Recognizing and responding to differences• Improving Quality and Productivity

– Quality management (QM)– Process reengineering

• Responding to the Labor Shortage– Changing work force demographics– Fewer skilled laborers– Early retirements and older workers

• Improving Customer Service– Increased expectation of service quality– Customer-responsive cultures

• Improving people skills• Empowering people• Stimulating innovation and change• Coping with “temporariness”• Working in networked organizations• Helping employees balance work/life conflicts• Improving ethical behavior• Managing people during the war on terrorism

Organizational Citizenship Behavior (OCB)Discretionary behavior that is not part of an employee’s formal job requirements, but that nevertheless promotes the effective functioning of the organization

Job SatisfactionA general attitude (not a behavior) toward one’s job; a positive feeling of one's job resulting from an evaluation of its characteristics Independent VariableThe presumed cause of some change in the dependent variable; major determinants of a dependent variable

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What Managers DoManagers (or Administrators)Individuals who achieve goals through other peopleManagerial Activities

• Make decisions• Allocate resources• Direct activities of others to attain goals

OrganizationA consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals

PlanningA process that includes defining goals, establishing strategy, and developing plans to coordinate activitiesOrganizingDetermining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be madeLeadingA function that includes motivating employees, directing others, selecting the most effective communication channels, and resolving conflictsControllingMonitoring activities to ensure they are being accomplished as planned and correcting any significant deviations

Basic OB Model

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Mintzberg’s Managerial Roles

Management SkillsTechnical Skills

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The ability to apply specialized knowledge or expertise

Human SkillsThe ability to work with, understand, and motivate other people, both individually and in groupsConceptual SkillsThe mental ability to analyze and diagnose complex situations

Foundations of Individual Behavior

Biographical Characteristics• Personal characteristics• Age• Gender• marital status

objective and easily obtained from personnel records.

Ability, Intellect, and IntelligenceAbilityAn individual’s capacity to perform the various tasks in a job.

Intellectual AbilityThe capacity to do mental activities.

Multiple IntelligencesIntelligence contains four subparts: cognitive, social, emotional, and cultural.

Dimensions of Intellectual Ability• Number aptitude – speedy and acc calculations• Verbal comprehension – understand what is read or heard• Perceptual speed – identify visual similarities and differences • Inductive reasoning – identify logical sequence

in problem and solve it• Deductive reasoning – use logic and assess

implications of argument• Spatial visualization – to imagine how an object

looks if its position is changed• Memory – retain and recall past experiences

Physical Abilities

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The capacity to do tasks demanding stamina, dexterity, strength, and similar characteristics.

Nine Physical AbilitiesStrength Factors

1. Dynamic strength2. Trunk strength3. Static strength4. Explosive strength

Flexibility Factors5. Extent flexibility6. Dynamic flexibility

Other Factors7. Body coordination8. Balance9. Stamina

LearningAny relatively permanent change in behavior that occurs as a result of experienceLearning

• Involves change• Is relatively permanent• Is acquired through experience

Theories of Learning

Classical ConditioningA type of conditioning in which an individual responds to some stimulus that would not ordinarily produce such a response.

Key Concepts• Unconditioned stimulus (meat)• Unconditioned response (salivation)• Conditioned stimulus (bell)• Conditioned response (salivation)

Classical Conditioning example• Taste aversion

If a flavor is followed by an illness experience, we will not consume the flavor in the futureCS + UCS ----------> UCRTaste Toxic event Nausea

CS -----> CRFlavor Nausea

Respondent Conditioning Learning Curve• The more often the pairing occurs, the stronger the response

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• Early pairings are more important than later pairings

Extinction• If the conditioned stimulus is no longer followed by the unconditioned stimulus,

responding will gradually slow down and finally cease.• The conditioned stimulus no longer signals the onset of an important event so it is

ignored by the organism.

Operant Conditioning (B.F. Skinner)A type of conditioning in which desired voluntary behavior leads to a reward or prevents a punishment.

• Behaviors are learned by making rewards contingent to behaviors. • Behavior that is rewarded (positively reinforced) is likely to be

repeated.• Behavior that is punished or ignored is less likely to be repeated.

Social-Learning Theory Albert Bandura (extension of operant conditioning) People can learn through observation and direct experience.

• Attentional: the attractiveness or similarity of the model• Retention: how well the model can be recalled• Motor reproduction: the reproducibility of the model’s actions• Reinforcement: the rewards associated with learning the model

behavior

Social Learning - Beyond Reinforcement• External reinforcement isn’t the only way in which behavior is acquired,

maintained, or altered• We can also learn by observing, reading, or hearing about others’ behavior

– We develop anticipated consequences for our behaviors• Even for behaviors we’re never engaged in

Our cognitive abilities give us the capability for insight and foresight– New patterns of behavior can be acquired in the absence of external

reinforcement– We can pay attention to what others do, and repeat their actions

• i.e., We learn through observation, rather than through direct reinforcement

Shaping BehaviorSystematically reinforcing each successive step that moves an individual closer to the desired response.

Reinforcement - The administration of a consequence as a result of a behavior.Proper management of reinforcement can change the direction, level, and persistence of an individual’s behavior is required to change behavior.

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• Some rewards are more effective than others.• The timing of reinforcement affects learning speed and permanence.

Methods of Shaping Behavior1. Positive reinforcement – following a response with something pleasant 2. Negative reinforcement – following a response by termination or withdrawal 3. Punishment- causing an unpleasant condition to eliminate an undesirable behavior4. Extinction – eliminating any reinforcement that is maintaining a behavior

Schedules of ReinforcementContinuous reinforcement - desired behaviour is reinforced each time it is demonstrated. E.g. compliments

Intermittent reinforcement - desired behaviour is reinforced often enough to make the behaviour worth repeating but not every time it is demonstratedTypes of intermittent reinforcement

• Fixed-interval schedule– Rewards are spaced at uniform time intervals- salary

• Variable-interval schedule– Rewards are distributed at random times; reinforcements are unpredictable

e.g weekly pay packets• Fixed-ratio schedule

– Rewards are initiated after a fixed or constant number of responses (e.g. payment for piece-rate workers) e.g piece rate pay

• Variable-ratio schedule– Rewards are varied relative to the behaviour of the individual. E.g

commissioned salesReinforcement Scheduled

Nature of reinforcementEffect on Behaviour

Continuous Reward given after each desired behaviour

Fast learning of new behaviour but rapid extinction

Fixed-interval Reward given at fixed time intervals

Average and irregular performance with rapid extinction

Variable-interval Reward given at variable times

Moderately high and stable performance with slow extinction

Fixed ratio Reward given at fixed amounts of output

High and stable performance attained quickly but also with rapid extinction

Variable-ratio Reward given at variable amounts of output.

Very high performance with slow extinction.

Behavior ModificationOB Mod

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The application of reinforcement concepts to individuals in the work setting.Five Step Problem-Solving Model

1. Identify critical behaviors2. Develop baseline data3. Identify behavioral consequences4. Develop and apply intervention5. Evaluate performance improvement

Personality and Emotions

Personality The sum total of ways in which an individual reacts and interacts with others.

– Combines a set of physical and mental characteristics that reflect how a person looks, thinks, acts, and feels.

Personality TraitsEnduring characteristics that describe an individual’s behavior.

Sixteen primary traits

• Reserved - Outgoing• Less intelligent - More intelligent• Affected by feelings - Emotionally stable• Submissive - Dominant• Serious – Happy-go-lucky• Expedient - conscientious• Timid - Venturesome• Tough-minded - Sensitive• Trusting - Suspicious• Practical - Imaginative• Forthright - Shrewd• Self-assured -apprehensive• Conservative- Experimenting• Group dependent – Self-sufficient• Uncontrolled - Controlled• Relaxed - Tense

MBTI Instrument• Isabel Myers and Katherine Briggs (mother-daughter team)- A personality test

that taps four characteristics and classifies people into 1 of 16 personality types.

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• MBTI tool - indicator of personality type - proven to be remarkably reliable and valid

– Represents the result of over 50 years of research – Is used globally in both education and corporate settings; over 2 million

people each yearMyers-Briggs Type IndicatorType of Social Interaction – Extrovert (E) Introvert (I)Preference for gathering data Sensing (S) Intuitive (N)Preference for Decision Making Feeling (F) Thinking (T)Style of Decision Making Perceptive (P) Judgmental (J)

Sixteen type of personalities

ISTJISFJINFJINTJISTPISFPINFPINTPESTPESFPENFPENTPESTJESFJENFJENTJ

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Big Five Model of Personality DimensionsExtroversionSociable, gregarious, and assertiveAgreeablenessGood-natured, cooperative, and trusting.ConscientiousnessResponsible, dependable, persistent, and organized.Emotional StabilityCalm, self-confident, secure (positive) versus nervous, depressed, and insecure (negative).Openness to ExperienceImaginativeness, artistic, sensitivity, and intellectualism.

7 Major Personality Attributes influencing OB• Core self-evaluation• Machiavellianism• Narcissism• Self-monitoring• Propensity for risk taking• Type A personality• Proactive personalities

Core Self-Evaluation: Two Main Components• Self-Esteem

– Individuals’ degree of liking or disliking themselves, degree of thinking they are worthy or unworthy as a person

• Locus of Control – The degree to which people believe they are masters of their own fate

• Internals (Internal locus of control) Individuals who believe that they control what happens to them

• Externals (External locus of control)Individuals who believe that what happens to them is controlled by outside forces such as luck or chance

Machiavellianism(Mach)Degree to which an individual is pragmatic, maintains emotional distance, and believes that ends

can justify means.They flourish when:

Interact face to face Minimum number of rules Less emotional involvement

Do high Machs make good employees?

Self-Monitoring12

A personality trait that measures an individuals ability to adjust his or her behavior to external, situational factors.

Narcissism Grandiose sense of self-importanceRequires excessive admirationSense of entitlement ArrogantRated worse leadersSelfish & exploitiveLess effective at work

Propensity for risk taking• Willingness to take chances• Impact on how long it takes managers to make a decision

Proactive personalities• Identify opportunities• Show initiative• Persevere until change occurs• Seen as leaders and change agents• Have entrepreneurial initiative

Personality Types

Achieving Personality-Job Fit

Personality Types• Realistic• Investigative• Social• Conventional• Enterprising• Artistic

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Emotions• People differ in emotional reactions, even to the same event, so emotions are useful in making

distinctions between persons• Emotions include three components

– Associated with distinct subjective feelings or affects– Accompanied by bodily changes, mostly in the nervous system– Accompanied by distinct action tendencies, or increases in probabilities of certain

behaviors

Gender and Emotions• Women

– Can show greater emotional expression.– Experience emotions more intensely.– Display emotions more frequently.– Are more comfortable in expressing emotions.– Are better at reading others’ emotions.

• Men – Believe that displaying emotions is inconsistent with the male image.– Are innately less able to read and to identify with others’ emotions.– Have less need to seek social approval by showing positive emotions.

Negative Workplace Emotions• Negative emotions can lead to a number of deviant workplace behaviours. Categories:

– Production (leaving early, intentionally working slowly)– Property (stealing, sabotage)– Political (gossiping, blaming co-workers)

Holland’s Theory of Personality-Holland’s Theory of Personality-Job FitJob Fit

Type Personality Occupations

Realistic

Investigative

Social

Conventional

Enterprising

Artistic

Shy, Stable, Practical

Analytical, Independent

Sociable, Cooperative

Practical, Efficient

Ambitious, Energetic

Imaginative, Idealistic

Mechanic, Farmer,Assembly-Line Worker

Biologist, Economist,Mathematician

Social Worker,Teacher, Counselor

Accountant, ManagerBank Teller

Lawyer, Salesperson

Painter, Writer,Musician

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– Personal aggression (sexual harassment, verbal abuse)

OB Applications of Understanding Emotions• Ability and Selection

– Emotions affect employee effectiveness.• Decision Making

– Emotions are an important part of the decision-making process in organizations.• Motivation

– Emotional commitment to work and high motivation are strongly linked.• Leadership

– Emotions are important to acceptance of messages from organizational leaders.• Interpersonal Conflict

– Conflict in the workplace and individual emotions are strongly intertwined.• Customer Services

– Emotions affect service quality delivered to customers which, in turn, affects customer relationships.

• Deviant Workplace Behaviors – Negative emotions lead to employee deviance (actions that violate norms and threaten the

organization).• Productivity failures• Property theft and destruction• Political actions• Personal aggression

PerceptionPerceptionA process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

• People’s behavior is based on their perception of what reality is, not on reality itself.• The world as it is perceived is the world that is behaviorally important.

Person Perception: Making Judgments About Others

Attribution TheoryWhen individuals observe behavior, they attempt to determine whether it is internally or externally caused.

Distinctiveness: Shows different behaviors in different situations.Consensus: Response is the same as others to same situation.Consistency: Responds in the same way over time.Errors and Biases in Attributions

Fundamental Attribution ErrorThe tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others

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Self-Serving BiasThe tendency for individuals to attribute their own successes to internal factors while putting the blame for failures on external factorsIn general, we tend to blame the person first, not the situation.

Frequently Used Shortcuts in Judging OthersSelective PerceptionPeople selectively interpret what they see on the basis of their interests, background, experience, and attitudes.Halo EffectDrawing a general impression about an individual on the basis of a single characteristicContrast EffectsEvaluation of a person’s characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristicsProjectionAttributing one’s own characteristics to other peopleStereotypingJudging someone on the basis of one’s perception of the group to which that person belongs

Specific Applications of Shortcuts in Organization• Employment Interview

– Perceptual biases affect the accuracy of interviewers’ judgments of applicants.• Performance Expectations

– Self-fulfilling prophecy (pygmalion effect): The lower or higher performance of employees reflects preconceived leader expectations about employee capabilities.

• Performance Evaluations – Appraisals are subjective perceptions of performance.

• Employee Effort – Assessment of individual effort is a subjective judgment subject to perceptual distortion

and bias.• Employee Loyalty

– Employee support towards the organization.• Whistle-Blowers

– Individuals who report unethical practices by their employer to outsiders.

Factors that Influence PerceptionFactors in the situation

• Time• Work setting• Social setting

Factors in the Perceiver• Attitudes• Motives• Interests

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• Experience• Expectations

Factors in the target• Novelty• Motion• Sounds• Size• Background• Proximity

MotivationThe willingness to do something, conditioned by this action’s ability to satisfy some need for the individual

MotivationThe processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal.

Key ElementsIntensity: how hard a person triesDirection: toward beneficial goalPersistence: how long a person tries

Basic motivational concepts1. Motivation—the forces within the individual that account for the level, direction, and

persistence of effort expended at work.2. Reward—a work outcome of positive value to the individual3. Extrinsic rewards—valued outcomes given to someone by another person.4. Intrinsic rewards—valued outcomes that occur naturally as a person works on a task.

NeedsUnfulfilled physiological and psychological desires of an individual.Explain workplace behavior and attitudes.Create tensions that influence attitudes and behavior.Good managers and leaders facilitate employee need satisfaction.

Hierarchy of needs theoryDeveloped by Abraham Maslow.Lower-order and higher-order needs affect workplace behavior and attitudes.

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Lower-order needs:Physiological, safety, and social needs.Desires for physical and social well being.

Higher-order needs:Esteem and self-actualization needs.Desire for psychological growth and development.Physiological- includes hunger, thirst, shelter, sex and other bodily needsSafety - includes security and protection from physical and emotional harmSocial-includes affection, belongingness acceptance, and friendshipEsteem- includes internal esteem factors such as self-respect, autonomy, and achievement; and external esteem factors such as status, recognition, and attentionSelf-actualization- the drive to become what one is capable of becoming; includes growth, achieving one’s potential, and self-fulfillment

Theory X and Theory Y (Douglas McGregor)Theory XAssumes that employees dislike work, lack ambition, avoid responsibility, and must be directed and coerced to perform.Theory YAssumes that employees like work, seek responsibility, are capable of making decisions, and exercise self-direction and self-control when committed to a goal.

Douglas McGregor proposed two distinct views of human beings: one basically negative, labeled Theory X, and the other basically positive, labeled Theory Y.

• Theory X– The assumption that employees dislike work, are lazy, dislike responsibility, and must be

coerced to perform.

• Theory Y– The assumption that employees like work, are creative, seek responsibility, and can

exercise self-direction.

Herzberg’s Two-Factor TheoryHygiene Factors

• Quality of supervision• Rate of pay• Company policies• Working conditions• Relations with others• Job security

Motivational Factors• Career Advancement

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• Personal growth• Recognition• Responsibility• Achievement

McClelland's Theory of Needs • Need for achievement (nAch) - drive to excel • Need for power (nPow) - the need to make others behave in a way they would not have behaved

otherwise• Need for affiliation (nAff) - the desire for friendly and close interpersonal relationships

Organizational Behavior Modification (OB Mod)Application in organizations of the principles of behavior modification.

This is “Process Theories of Motivation” since it provide perspectives on the dynamics by which employees can be motivated.

OB MOD Organizational Applications• Relies on the Law Of Effect -person tends to repeat behavior that is accompanied by favorable

consequences (reinforcement) and tends not to repeat behavior that is accompanied by unfavorable consequences (punishment)

• Well Pay- Reduce absenteeism by rewarding attendance.• Employee Discipline- The use of punishment can be counter-productive.• Developing Training Programs- OB MOD methods improve training effectiveness.• Self-management - Reduces the need for external management control.

Limitations of behavior modification• Most successful when applied to simple tasks• For the more complex tasks in professional and managerial work, feedback typically has the

strongest effect on work performance, followed by social recognition and then money• OB Mod ignores thoughts and feelings.• OB Mod may not explain complex behaviors that involve thinking and feeling.• Stimuli may not be consciously given as a means of shaping behavior.

Employee Involvement Program• A participative process that uses the entire capacity of employees and is designed to encourage

increased commitment to the organisation’s success• Allowing autonomy and control

Participative Management Process in which subordinates share a significant degree of decision-making power with their

immediate superiors Everyone is involved But involvement means that you need to have knowledge on the subject and so can contribute

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And you can be trusted with information Representative Participation

Workers participate in organisational decision making through a small group of representative employees.

Most widely legislated form of employee involvement Two common forms – work councils and board representative

Works Councils Groups of nominated or elected employees who must be consulted when management

makes decisions involving personnel Board Representative

A form of representative participation; employees sit on a company’s board of directors and represent the interests of the firm’s employees.

Flaws – does the trickle down to staff at the bottom

Employee Stock Ownership Plans (ESOPs)• Qualified, defined contribution employee benefit plan - required to invest primarily in the

company’s securities• Employee ownership occurs when a corporation is owned in whole or in part by its employees.

Employees are usually given a share of the corporation after a certain length of employment or they can buy shares at any time.

• Adopt profit sharing where the profits of the corporation are shared with the employees. • Increases production, profitability and improve employees' dedication and sense of ownership.

Quality Circle• Voluntary groups of employees who work on similar tasks or share an area of responsibility• They agree to meet on a regular basis to discuss & solve problems related to work.• They operate on the principle that employee participation in decision-making and problem-solving

improves the quality of work• Characteristics

• Volunteers• Set Rules and Priorities• Decisions made by Consensus• Use of organized approaches to Problem-Solving

Conflict• Conflict – A process that begins when one party perceives that another party has negatively

affected, or is about to negatively affect, something that the first party cares about.• Encompasses a wide range of conflicts that people experience in organizations

• Incompatibility of goals• Differences over interpretations of facts• Disagreements based on behavioral expectations

Transitions in Conflict Thought

Traditional View of ConflictThe belief that all conflict is harmful and must be avoided.

Causes:• Poor communication• Lack of openness

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• Failure to respond to employee needsTransitions in Conflict Thought

Human Relations View of ConflictThe belief that conflict is a natural and inevitable outcome in any group.

Interactionist View of ConflictThe belief that conflict is not only a positive force in a group but that it is absolutely necessary for a group to perform effectively.Functional versus Dysfunctional Conflict

Functional ConflictConflict that supports the goals of the group and improves its performance.

Dysfunctional ConflictConflict that hinders group performance.Types of Conflict

Task ConflictConflicts over content and goals of the work.Relationship ConflictConflict based on interpersonal relationships.Process ConflictConflict over how work gets done.The Conflict Process

Stage I: Potential Opposition or Incompatibility• Communication

– Semantic difficulties, misunderstandings, and “noise”• Structure

– Size and specialization of jobs– Jurisdictional clarity/ambiguity– Member/goal incompatibility– Leadership styles (close or participative)– Reward systems (win-lose)– Dependence/interdependence of groups

• Personal Variables– Differing individual value systems– Personality types

Stage II: Cognition and PersonalizationPerceived ConflictAwareness by one or more parties of the existence of conditions that create opportunities for conflict to arise.Felt ConflictEmotional involvement in a conflict creating anxiety, tenseness, frustration, or hostility.Stage III: IntentionsIntentionsDecisions to act in a given way.

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Cooperativeness:• Attempting to satisfy the other party’s concerns.

Assertiveness:• Attempting to satisfy one’s own concerns.

Stage III: IntentionsCompetingA desire to satisfy one’s interests, regardless of the impact on the other party to the conflict.CollaboratingA situation in which the parties to a conflict each desire to satisfy fully the concerns of all parties.AvoidingThe desire to withdraw from or suppress a conflict.Stage III: IntentionsAccommodatingThe willingness of one party in a conflict to place the opponent’s interests above his or her own.CompromisingA situation in which each party to a conflict is willing to give up something.Conflict ManagementThe use of resolution and stimulation techniques to achieve the desired level of conflict.Stage V: Outcomes

• Functional Outcomes from Conflict– Increased group performance– Improved quality of decisions– Stimulation of creativity and innovation– Encouragement of interest and curiosity– Provision of a medium for problem-solving– Creation of an environment for self-evaluation and change

• Creating Functional Conflict– Reward dissent and punish conflict avoiders.

• Dysfunctional Outcomes from Conflict– Development of discontent– Reduced group effectiveness– Retarded communication– Reduced group cohesiveness– Infighting among group members overcomes group goals

Conflict Management TechniquesConflict Resolution Techniques

• Communication• Bringing in outsiders• Restructuring the organization• Appointing a devil’s advocate

Conflict Options

• Win-Lose • Lose-Lose• Compromise• Win-Win

Win-Lose

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• In Win – Lose, one party gets what he or she wants, whereas the other comes up short.

• Power is the distinguishing characteristic in win-lose problem solving, for it necessary to defeat an opponent to get what one wants.

Lose-Lose • Neither party is satisfied with the outcome.

• Most of us have seen battles of pride in which both parties strike out and both suffer.

Compromise• Compromise give both parties some of what they wanted, though both sacrifice part of their goals.

• Although compromises may be the best obtainable result in some conflicts, it’s important to realize that both people in a dispute can often work together to find much better solutions.

Win – Win • The goal is to find a solution that satisfies the needs of everyone involved. • Not only do the parties avoid trying to win at the other’s expense, but they also believe that by

working together it is possible to find a solution that goes beyond mere compromise and allows all parties to reach their goal in the conflict.

Competition• Plus

– The winner is clear– Winners usually experience gains

• Minus– Establishes the battleground for the next conflict– May cause worthy competitors to withdraw or leave the organization

Accommodation• Plus

– Curtails conflict situation– Enhances ego of the other

• Minus– Sometimes establishes a precedence– Does not fully engage participants

Compromise• Plus

– Shows good will– Establishes friendship

• Minus– No one gets what they want– May feel like a dead end

Collaboration• Plus

– Everyone “wins”– Creates good feelings

• Minus– Hard to achieve since no one knows how– Often confusing since players can “win” something they didn’t know they wanted

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Tips for Managing Workplace Conflict• Build good relationships before conflict occurs• Do not let small problems escalate; deal with them as they arise• Respect differences• Listen to others’ perspectives on the conflict situation• Acknowledge feelings before focussing on facts• Focus on solving problems, not changing people• If you can’t resolve the problem, turn to someone who can help• Remember to adapt your style to the situation and persons involved

STRESS MANAGEMENTStressA dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important.

• Moderate levels of stress may actually improve performance and efficiency

• Too little stress may result in boredom

• Too much stress may cause an unproductive anxiety level

EUSTRESS Eustress or positive stress occurs when your level of stress is high enough to motivate you to move into action to get things accomplished. DISTRESS or negative stress occurs when your level of stress is either too high or too low and your body and/or mind begin to respond negatively to the stressors.

ALARM STAGEAs you begin to experience a stressful event or perceive something to be stressful psychological changes occur in your body. This experience or perception disrupts your body’s normal balance and immediately your body begins to respond to the stressor(s) as effectively as possible.

EXAMPLESl Cardiac - increased heart ratel Respiratory - increased respirationl Skin - decreased temperaturel Hormonal - increased stimulation of adrenal genes which produce an adrenal rush.

RESISTANCE STAGEDuring this stage your body tries to cope or adapt to the stressors by beginning a process of repairing any damage the stressor has caused. Your friends, family or co-workers may notice changes in you before you do so it is important to examine their feedback to make sure you do not reach overload.

EXAMPLESl Behavior indicators include: lack of enthusiasm for family, school, work or life in general,

withdrawal, change in eating habits, insomnia, hypersomnia, anger, fatigue.24

l Cognitive Indicators include: poor problem solving, confusion, nightmares, hyper-vigilance.

EXHAUSTION STAGEDuring this stage the stressor is not being managed effectively and the body and mind are not able to repair the damage.

EXAMPLES Digestive disorders, withdrawal, headaches, tension, insomnia, loss of temper.Work Stress and Its Management

ConstraintsForces that prevent individuals from doing what they desire.

DemandsThe loss of something desired.

Potential Sources of Stress• Environmental Factors

– Economic uncertainties of the business cycle– Political uncertainties of political systems– Technological uncertainties of technical innovations– Terrorism in threats to physical safety and security

• Organizational Factors– Task demands related to the job– Role demands of functioning in an organization– Interpersonal demands created by other employees– Organizational structure (rules and regulations)– Organizational leadership (managerial style)– Organization’s life stage (growth, stability, or decline)

• Individual Factors– Family and personal relationships– Economic problems from exceeding earning capacity– Personality problems arising for basic disposition

• Individual Differences– Perceptual variations of how reality will affect the individual’s future.– Greater job experience moderates stress effects.– Internal locus of control lowers perceived job stress.– Strong feelings of self-efficacy reduce reactions to job stress.

Inverted-U Relationship between Stress and Job Performance

Managing Stress• Individual Approaches

– Implementing time management– Increasing physical exercise– Relaxation training– Expanding social support network

• Organizational Approaches– Improved personnel selection and job placement– Training

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– Use of realistic goal setting– Redesigning of jobs– Increased employee involvement– Improved organizational communication– Offering employee sabbaticals– Establishment of corporate wellness programs

Crisis Management

Crisis- a major, unpredictable event that threatens to harm an organization and its stakeholders. THREE ELEMENTS

(a) a threat to the organization(b) element of surprise(c) a short decision time

Crisis Management Plan • Methods used to respond to both the reality and perception of crises • Involves establishing metrics to define what scenarios constitute a crisis and should consequently

trigger the necessary response mechanisms

Crisis Management Model • Successfully diffusing a crisis requires an understanding of how to handle a crisis – before it

occurs.Gonzalez-Herrero and Pratt created a four-phase crisis management model process that includes

• issues management• planning-prevention• the crisis• post-crisis

Contingency Planning• Preparing contingency plans in advance, as part of a crisis management plan, is the first step to

ensuring an organization is appropriately prepared for a crisis • management teams can rehearse a crisis plan by developing a simulated scenario to use as a drill

Examples of organizational crises • Bribery

Hostile TakeoverTerrorist AttackCopyright infringementVehicular fatalityInformation sabotageProduct tamperingNatural disaster that destroys organizational officeComputer tamperingSexual harassmentConfidential data lossProduct/service boycottMalicious rumorHazardous material leak

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Plant explosionPersonnel assaultAssault of customersCounterfeitingNatural disaster that destroys corporate headquartersNatural disaster that eliminates key stakeholders

INTERPERSONAL SKILLSTransactional Analysis

• Developed by Eric Berne who believed that the majority of our life experiences are recorded in our subconscious minds in an unaltered fashion and become a part of the way we behave

– The behavior is subconsciously designed to get reactions and determine how others feel about us.

• A method of dealing with behavioral disorders• Can be used to manage classroom behavior if we understand that children’s acceptable and

unacceptable behavior is designed to ascertain how others feel about them

Ego States• An EGO state is a consistent pattern of feeling and experience, related to a corresponding

pattern of behaviorEric Berne states that each person has 3 Ego States

• The Parent• The Adult• The Child

Transactional Analysis• Four basic life scripts:• I’m OK, you’re OK – ideal• I’m OK, you’re not OK – get away from me• I’m not OK, you’re OK – I’ll never get anywhere• I’m not OK, you’re not OK – get rid of each other

I’m OK, you’re OK• Cooperate, share

You believe in yourself and others, are trusting and tend to get on with lifeI’m not OK, you’re OK

• Submit to, concede• You have a low opinion of your own value and poor self esteem; lack self confidence and expect

things to go wrong A negative outlook tends to lead to a self fulfilling prophesy and you often lose out in situations

I’m OK, you’re not OK• Compete, aggression• You will tend to be competitive. You may not cope well with failure, look down at others,

blame other people and see them as cause of your failureI’m not OK, you’re not OK

• Avoid• Life may seem to be futile and that nothing can be done to improve things. A life of rejecting and

feeling rejected

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Fundamental Ideas• Three Ego States

– Parent Ego State – Child Ego State– Adult Ego State

• Four Life Positions– I’m not OK; you’re OK– I’m not OK; you’re not OK– I’m OK; you’re not OK– I’m OK; you’re OK

• Individuals need to feel adequate

The Three Ego States• Parent Ego State – It consists of experiences from the first five years in life. It is the state from

which behaviors to control others are employed. • Child Ego State – It is “recorded” during the parent ego state. State when feelings rule.• Adult Ego State – By monitoring the parent and child ego states, it alters automatic behaviors that

would normally occur.

Johari Window• The Johari Window is a communication model that can be used to improve understanding between

individuals. • Developed by Joseph Luft and Harry Ingham (the word “Johari” comes from Joseph Luft and

Harry Ingham).

• Contains 4 quadrants- Open, Hidden, Blind & Unknown.• It is used to improve understanding between individuals or groups.

• The Johari Window– The Johari window classifies an individual’s relating to others according to four quadrants

(or windowpanes).• Quadrant 1, the open quadrant • Quadrant 2, the blind quadrant• Quadrant 3, the hidden area• Quadrant 4, the area of the unknown

Quadrant 1: Open Area• What is known by the person about him/herself and is also known by others.

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Quadrant 2: Blind Area, or "Blind Spot"• What is unknown by the person about him/herself but which others know. This can be simple

information, or can involve deep issues (for example, feelings of inadequacy, incompetence, unworthiness, rejection) which are difficult for individuals to face directly, and yet can be seen by others.

Quadrant 3: Hidden or Avoided Area• What the person knows about him/herself that others do not.

Quadrant 4: Unknown Area• What is unknown by the person about him/herself and is also unknown by others.• Movement along the horizontal and vertical dimensions enables individuals to change their

interpersonal styles by Increasing the amount of communication to the public area• Individuals can build trust between themselves by disclosing information about themselves. • They can learn about themselves and come to terms with personal issues with the help of feedback

from others.

LEADERSHIPProcess of influencing others to achieve organisational goals.

Who is a Leader?• A Leader is someone in authority to lead others to accomplish a goal(s). • A leader needs to be able to motivate others to accomplish a goal(s) while at the same time

encourage others to work toward their own professional goals.

• “Managers are people who do things right, while leaders are people who do the right thing.” Warren Bennis

LeadershipThe ability to influence a group toward the achievement of goals.

ManagementUse of authority inherent in designated formal rank to obtain compliance from organizational members.

Leaders vs. ManagersLEADERS:

l innovatel focus on people l inspire trustl have a long-range viewl ask what and whyl have eyes on horizonl originatel challenge status quo

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l do the right thingt MANAGERS:

l administratel focus on systems and structuresl rely on controll have a short-range viewl ask how and whenl have eyes on bottom linel initiatel accept status quol do things right

Foundations For Effective Leadership• Power

– the ability to get others to do what you want them to do• Reward Power

– The capacity to offer something of value as a means of influencing other people• Coercive Power

– The capacity to punish or withhold positive outcomes as a means of influencing other people.

• Legitimate Power– The capacity to influence other people by virtue of formal authority or the rights of office.

• Expert Power – The capacity to influence other people by virtue of specialized knowledge.

• Referent Power – The capacity to influence other people because of their desire to identify personally with

you

Leadership Styles• Autocratic Style

– Acts in unilateral command and control fashion• Human Relation Style

– Emphasizes people over tasks• Democratic Style

– Encourages participation with an emphasis on both task accomplishments and development of people

• Lassize-faire Style– Is low on both tasks and people

• Autocratic= task oriented; “come on, we’ve got to get this job done & this is how we will do it”• Democratic= balances concern with task & employee “we should get together & figure out the best

way to get this done”• Laissez-faire=concerned with employee; people oriented; “don’t worry about whether or not this

gets done, just do it if and when you feel like it”• Autocratic= Does not share authority with employees• Democratic= Shares responsibility & authority with employees• Laissez-faire= Gives away authority to employees• Autocratic= Emphasis is on policies• Democratic= Enforces policies but with concern for employees• Laissez-faire= Puts employees before policies

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Leadership Styles: How Leader Gets Job Done• Autocratic= Tells employees what to do; does not seek their input; can be very efficient• Democratic= Seeks input from employees and encourages problem solving; can be time

consuming if people do not stay on task• Laissez-faire= Tries to please everyone; very dysfunctional

Leadership Styles: What Gets Done• Autocratic= Will probably reach goals• Democratic= Goal might be achieved; if there has been staff input can create positive feelings• Laissez-faire= Probably nothing

Leadership Styles: When Style Can Be Used• Autocratic= Crisis situations, code situations, emergencies• Democratic= Daily nursing situations, meetings, committees, review of care plans• Laissez-faire= When agency goals/policies are not a consideration

Leadership Styles: Problems With Each• Autocratic= Employees feel that they have no “say so”• Democratic= In many situations it is not feasible or reasonable to consider “everyone’s”

perspective. Can lead to chaos & confusion; can delay progress• Laissez-faire= “No one is at the wheel”; complete chaos; nothing gets done; agencies &

organizations will not survive w/ this type of leadership

When to use Autocratic• New, untrained employees • Employees do not respond to any other leadership style • High-volume production needs• Limited time for decision making • Manager’s power is challenged by an employee

Bureaucratic• Manager manages “by the book¨

• Everything must be done according to procedure or policy

• If it isn’t covered by the book, the manager refers to the next level above him or her

• Police officer more than leader

When to use Bureaucratic• Performing routine tasks • Need for standards/procedures • Use of dangerous or delicate equipment • Safety or security training being conducted• Tasks that require handling cash

When to use Democratic• To keep employees informed • To encourage employees to share in decision-making and problem-solving• To provide opportunities for employees to develop a high sense of personal growth and job

satisfaction

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• Complex problems that require a lots of input• To encourage team building and participation.

When to use Laissez-Faire• Employees are highly skilled, experienced, and educated• Employees have pride in their work and the drive to do it successfully on their own• Outside experts, such as staff specialists or consultants are being used • Employees are trustworthy and experienced

Trends In Leadership Development• Charismatic Leader

– develops special leader–follower relationships and inspires followers in extraordinary ways.

• Transactional Leader – directs the efforts of others through tasks, rewards, and structures.

• Transformational Leader – Inspires Enthusiasm and Extraordinary Performance

Traits Theories of LeadershipTheories that consider personality, social, physical, or intellectual traits to differentiate leaders from nonleaders.Leadership Traits:

• Ambition and energy• The desire to lead• Honest and integrity• Self-confidence• Intelligence• High self-monitoring• Job-relevant knowledge

Behavioral Theories of LeadershipTheories proposing that specific behaviors differentiate leaders from nonleaders.

• Trait theory:Leaders are born, not made.

• Behavioral theory:Leadership traits can be taught.

Ohio State StudiesInitiating StructureThe extent to which a leader is likely to define and structure his or her role and those of sub-ordinates in the search for goal attainment.ConsiderationThe extent to which a leader is likely to have job relationships characterized by mutual trust, respect for subordinate’s ideas, and regard for their feelings.

University of Michigan Studies32

Employee-Oriented LeaderEmphasizing interpersonal relations; taking a personal interest in the needs of employees and accepting individual differences among members.Production-Oriented LeaderOne who emphasizes technical or task aspects of the job.

The Managerial Grid(Blake and Mouton)

Trust: The Foundation of LeadershipTrustA positive expectation that another will not—through words, actions, or decisions—act opportunistically.Trust is a history-dependent process (familiarity) based on relevant but limited samples of experience (risk).Dimensions of Trust

• Integrity– honesty and truthfulness.

• Competence– an individual’s technical and interpersonal knowledge and skills.

• Consistency– an individual’s reliability, predictability, and good judgment in handling situations.

• Loyalty– the willingness to protect and save face for another person.

• Openness– reliance on the person to give you the full truth.

Contingency Models of LeadershipSituational favorableness:The appropriate leadership style depends on the combination of three contingency variables.Contingency Theories of Leadership

• Four leadership styles in path-goal theory– Directive

• Let followers know what is expected, schedule work for them, give specific guidance

– Supportive• Be friendly and show concern for needs of followers

– Participative• Consult with followers and use their suggestions to make decisions

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– Achievement-oriented• Set challenging goals and expect followers to perform at their highest levels

Transactional and Transformational LeadershipTransactional LeadersLeaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements.

Transformational LeadersLeaders who provide individualized consideration and intellectual stimulation, and who possess charisma.

• Contingent Reward• Management by Exception (active)• Management by Exception (passive)• Laissez-Faire• Charisma• Inspiration• Intellectual Stimulation• Individual Consideration

Leadership Traits• Intelligence

– More intelligent than non-leaders– Scholarship– Knowledge– Being able to get things done

• Physical– Doesn’t see to be correlated

• Personality – Verbal facility – Honesty – Initiative– Aggressive– Self-confident– Ambitious– Originality– Sociability– Adaptability

Power and Politics• Power

– A capacity that A has to influence the behaviour of B so that B acts in accordance with A’s wishes.

• Dependency: B’s relationship to A when A possesses something that B requires• Politics

– Behaviour to influence or attempt to influence the distribution of advantages and disadvantages within the organization.

• Coercive power– The person can make things difficult for people, and you want to avoid getting him or her

angry. • Power that is based on fear.

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• Reward power– The person is able to give special benefits or rewards to people, and you find it

advantageous to trade favors with him or her. • Legitimate power

– The person has the right, considering his or her position and your job responsibilities, to expect you to comply with legitimate requests.

• Expert power– The person has the experience and knowledge to earn your respect, and you defer to his or

her judgment in some matters.• Referent power

– You like the person and enjoy doing things for him or her.• Coercive power tends to result in negative performance responses from individuals, decreases

satisfaction, increases mistrust, and creates fear. • Legitimate power does not have a negative effect, but does not generally stimulate employees to

improve their attitudes or performance, and it does not generally result in increased commitment. • Reward power may improve performance in a variety of situations if the rewards are consistent

with what the individuals want as rewards.• Expert power relies on trust that all relevant information is given out honestly and completely.

Leaders’ Use of Power• The least effective power bases are the ones most likely to be used by managers

– Coercive, legitimate, and reward– Easiest to implement

• Effective leaders use referent and/or expert power

Empowerment: Giving Power to Employees• The freedom and the ability of employees to make decisions and commitments• Managers disagree over definition of empowerment

– Empowerment as delegating decision making within a set of clear boundaries versus

– Empowerment as “a process of risk taking and personal growth”

Conditions for True Empowerment• Clear definition of the values and mission of the company• Company must help employees acquire the relevant skills• Employees need to be supported in their decision making, and not criticized when they try to do

something extraordinary• Employees need to be recognized for their efforts

Characteristics of Empowered People• Sense of self-determination

– Employees are free to choose how to do their work; They are not micromanaged• Sense of meaning

– Employees feel that their work is important to them; They care about what they are doing• Sense of competence

– Employees are confident about their ability to do their work well; They know they can perform

• Sense of impact – Employees people believe they can have influence on their work unit; Others listen to their

ideas

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Political Behaviour• Those activities that influence, or attempt to influence, the distribution of advantages and

disadvantages within the organization.– Legitimate: normal everyday behaviour– Illegitimate: extreme political behaviours that violate the implied rules of the game

• Organizations are made up of groups and individuals who have differing values, goals and interests• Resources in organizations are limited• Performance outcomes are not completely clear and objective

Impression Management• The process by which individuals attempt to control the impression others form of them• More likely used by high self-monitors than low self-monitors

– High self-monitors try to read the situationImpression Management (IM) Techniques

• Conformity– Agreeing with someone else’s opinion in order to gain his or her approval.

• Excuses– Explanations of a predicament-creating event aimed at minimizing the apparent severity of

the predicament.• Apologies

– Admitting responsibility for an undesirable event and simultaneously seeking to get a pardon for the action.

• Acclamations– Explanation of favorable events to maximize the desirable implications for oneself.

• Flattery– Complimenting others about their virtues in an effort to make oneself appear perceptive

and likable.• Favours

– Doing something nice for someone to gain that person’s approval.• Association

– Enhancing or protecting one’s image by managing information about people and things with which one is associated.

Organization Development and ChangeDefinition:

“A process used to enhance both the effectiveness of an organization and the well-being of its members through planned interventions.”

• Planned activity – diagnosing problems, implementing plan• OD effects entire organization – ripple effects• OD requires support – all levels• OD aims to improve organizational effectiveness and health• Goals flow from deliberate interventions

Organizational Development (OD)A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-being.OD Values:

1. Respect for people2. Trust and support3. Power equalization

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4. Confrontation5. Participation• OD initiated in response to need/problem - turnover, absenteeism, low job satisfaction = reactive

• Often conducted by outside consultant – gives independence

• Views organization as a system – interdependent set of components

• Involves extensive planning: deal with resistance, systematic diagnosis, develop change plan, get buy in etc

Reasons for OD

• External: *Knowledge explosion

*Competitor pressure

*Changing employee demands – want more decision-making and responsibility – want empowerment (see text page 274)

*Legislation

• Internal: *identified problem/s – turnover etc *natural growth stages

Organization Development TheoriesTwo main categories of OD theories:

• Change process theory – How does change take place?

• Implementation theory – How can change strategies be put into practice?

• Change process theory – seeks to explain how organizations improve and change. According to Lewin and Schein, there are three stages:

– Unfreezing– Change through cognitive restructuring– Refreezing

• Implementation theory – how specific intervention strategies are designed and carried out. Four main types:

– Human process-based theory– Technostructural theory– Sociotechnical systems theory– Organization transformation theory

Forces for ChangeForce Examples

Nature of the workforce More cultural diversityAging populationMany new entrants with inadequate skills

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Technology Faster, cheaper, and more mobile computersOn-line music sharingDeciphering of the human genetic code

Economic shocks Rise and fall of dot-com stocks 2000–02 stock market collapseRecord low interest rates

Competition Global competitors

Mergers and consolidationsGrowth of e-commerce

Force Examples

Social trends Internet chat rooms Retirement of Baby BoomersRise in discount and “big box” retailers

World politics Iraq–U.S. war

Opening of markets in China War on terrorism following 9/11/01

Managing Planned ChangeChangeMaking things different.Planned ChangeActivities that are intentional and goal oriented.Change AgentsPersons who act as catalysts and assume the responsibility for managing change activities.

Goals of Planned Change:Improving the ability of the organization to adapt to changes in its environment.Changing the behavior of individuals and groups in the organization.

Resistance to ChangeForms of Resistance to Change

– Overt and immediate• Voicing complaints, engaging in job actions

– Implicit and deferred• Loss of employee loyalty and motivation, increased errors or mistakes, increased

absenteeism

Tactics for dealing with resistance to change:• Education and communication• Participation• Facilitation and support• Negotiation• Manipulation and cooptation• Coercion

Lewin’s Three-Step Change Model

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UnfreezingChange efforts to overcome the pressures of both individual resistance and group conformity.RefreezingStabilizing a change intervention by balancing driving and restraining forces.Driving ForcesForces that direct behavior away from the status quo.Restraining ForcesForces that hinder movement from the existing equilibrium.

Types of Interventions: Human Process-Based

• Survey Feedback– The systematic collection of survey data– Fed back to groups to promote problem solving and change

• Team Building– A process to improve a group’s problem-solving abilities– Example: process consultation

• Job Enlargement– Adding variety through similar tasks

• Job Enrichment– Increasing responsibility, knowledge of results, and meaningfulness of work

• Alternative Work Schedules– Compressed workweek– Flextime work schedule

• Quality Circles– Involving employees in work decisions

• Total Quality Management (TQM)– Continuous improvement efforts

• Self-Managing Teams (SMTs)– Team members have authority to make decisions and regulate the team’s activities

• Total Quality Management (TQM)– Five basic components:

• Total commitment from senior management• Quality standards and measures in place• Training in quality for all employees (including Statistical Process Control)• Programs/ways to reward, recognize, and celebrate quality achievements• Strong quality communication efforts

• Self-Managing Teams– Basic components:

• Interdependence among team members• Individual members have discretion/authority to make important work decisions• Individual members possess a variety of skills, so that they can perform multiple

tasks• The team receives regular performance feedback

Types of Change• Downsizing, rightsizing – targets staffing costs

• = Structural Reorganization:– All five of Mintzberg’s parts targeted– Greatest loss in the middle line; results in larger spans of control– Technostructure, support staff; outsourced

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• OD is a complex process

• OD is part of an organizations natural growth – done appropriately it can ensure organizational survival

• Resistance to change is a major challenge for OD work

Organizational Change• Organizational Change

– Any alterations in the people, structure, or technology of an organization• Characteristics of Change

– Is constant yet varies in degree and direction– Produces uncertainty yet is not completely unpredictable– Creates both threats and opportunities

• Managing change is an integral partof every manager’s job.

InnovationA new idea applied to initiating or improving a product, process, or service.Sources of Innovation:

• Structural variables• Organic structures• Long-tenured management• Slack resources• Interunit communication

• Organization’s culture• Human resources

Idea ChampionsIndividuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the idea is implemented.

• Creativity– The ability to combine ideas in a unique way or to make an unusual association.

• Innovation– Turning the outcomes of the creative process into useful products, services, or work

methods

Creating the “Right” Environment for Innovation• Structural Variables

– Adopt an organic structure– Make available plentiful resources– Engage in frequent interunit communication– Minimize extreme time pressures on creative activities– Provide explicit support for creativity

• Cultural Variables– Accept ambiguity

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– Tolerate the impractical– Have low external controls– Tolerate risk taking– Tolerate conflict– Focus on ends rather than means– Develop an open-system focus– Provide positive feedback

• Human Resource Variables– Actively promote training and development to keep employees’ skills current.– Offer high job security to encourage risk taking.– Encourage individual to be “champions” of change.

Organizational Culture• A system of meaning shared by the organization’s members• Cultural values are collective beliefs, assumptions, and feelings about what things are good,

normal, rational, valuable, etc.

Culture is the social glue that helps hold an organization together by providing appropriate standards for what employees should say or do.Do Organizations Have Uniform CulturesDominantCultureCoreValuesSubcultures

Culture’s Functions:1. Defines the boundary between one organization and others.2. Conveys a sense of identity for its members.3. Facilitates the generation of commitment to something larger than self-interest.4. Enhances the stability of the social system.

Managerial Actions:• Select new employees with personality and attitudes consistent with high service orientation.• Train and socialize current employees to be more customer focused.• Change organizational structure to give employees more control.• Empower employees to make decision about their jobs.• Selection

• Concerned with how well the candidates will fit into the organization.• Provides information to candidates about the organization.

• Top Management• Senior executives help establish behavioral norms that are adopted by the organization.

• Socialization• The process that helps new employees adapt to the organization’s culture.

Creating An Ethical Organizational Culture• Characteristics of Organizations that Develop High Ethical Standards

– High tolerance for risk– Low to moderate in aggressiveness– Focus on means as well as outcomes

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• Managerial Practices Promoting an Ethical Culture– Being a visible role model.– Communicating ethical expectations.– Providing ethical training.– Visibly rewarding ethical acts and punishing unethical ones.

• Evaluation of Effectiveness – There is no single approach to that is appropriate in all circumstances or for all

organizational types.• The Time Dimension of Organizational Effectiveness Involves

– Meeting organizational objectives and prevailing societal expectations in the near future.– Adapting to environmental demands and developing as a learning organization in the

intermediate future.– Surviving as an effective organization into the future.

Creating a Learning OrganizationLearning OrganizationAn organization that has developed the continuous capacity to adapt and change.Characteristics:

1. Holds a shared vision2. Discards old ways of thinking.3. Views organization as system of relationships.4. Communicates openly.5. Works together to achieve shared vision.

Single-Loop LearningErrors are corrected using past routines and present policies.Double-Loop LearningErrors are corrected by modifying the organization’s objectives, policies, and standard routines.Fundamental Problems in Traditional Organizations:

• Fragmentation based on specialization.• Overemphasis on competition.• Reactiveness that misdirects attention to problem-solving rather than creation.

Challenges to Managing• Knowledge Management

– The cultivation of a learning culture where organizational members systematically gather and share knowledge with others in order to achieve better performance

• Learning Organization– An organization that has developed the capacity to continuously learn, adapt, and change

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