Professional Documents
Culture Documents
LEARNING OBJECTIVES
After reading this chapter, students should be able to:
Define organizational behaviour and give three reasons for studying this field of inquiry.
Discuss how globalization influences organizational behaviour.
Summarize the apparent benefits and challenges of telework.
Identify changes in Canada’s work force in recent years.
Describe employability and contingent work.
Explain why values have gained importance in organizations.
Define corporate social responsibility and argue for or against its application in
organizations.
Identify the five anchors on which organizational behaviour is based.
Diagram an organization from an open systems view.
Define knowledge management and intellectual capital.
Identify specific ways that organizations acquire and share knowledge.
CHAPTER GLOSSARY
1
Part 1 Introduction
CHAPTER SYNOPSIS
Organizational behaviour is a relatively young field of There are several trends in organizational
inquiry that studies what people think, feel, and do in behaviour. Globalization requires corporate decision
and around organizations. Organizations are groups of makers to be more sensitive to cultural differences, and
people who work interdependently toward some seems to be associated with the recent rise in job
purpose. OB concepts help us to predict and insecurity, work intensification, and other sources of
understand organizational events, adopt more accurate work-related stress. Information technology blurs the
theories of reality, and influence organizational events. temporal and spatial boundaries between individuals
This field of knowledge also improves the and the organizations that employ them. It has
organization’s financial health. contributed to the growth of telework -- an alternative
work arrangement where employees work at home or a
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Chapter 1 Introduction to the Field of Organizational Behaviour
remote site, usually with a computer connection to the together to continually monitor and transact with the
office. Information technology is also a vital external environment. They acquire resources from the
ingredient in virtual teams -- cross-functional groups environment, transform them through technology, and
that operate across space, time, and organizational return outputs to the environment. The external
boundaries. environment consists of the natural and social
Another trend in organizations is the increasingly conditions outside the organization. External
diverse workforce. Diversity potentially improves environments are generally much more turbulent today,
decision making, team performance, and customer so organizations must become adaptable and
service, but it also presents new challenges. A fourth responsive.
trend is the employment relationships that have Knowledge management develops an organization’s
emerged from the changing work force, information capacity to acquire, share, and use knowledge in ways
technology, and globalization forces. Employment that improves its survival and success. Intellectual
relationship trends include employability and capital is knowledge that resides in an organization,
contingent work. Values and ethics represent the fifth including its human capital, structural capital, and
trend. In particular, companies are learning to apply relationship capital. It is a firm’s main source of
values in a global environment, and are under pressure competitive advantage. Organizations acquire
to abide by ethical values and higher standards of knowledge through grafting, individual learning, and
corporate social responsibility. experimentation. Knowledge sharing occurs mainly
Organizational behaviour scholars rely on a set of through various forms of communication. Knowledge
basic beliefs to study organizations. These anchors sharing includes communities of practice, networks
include beliefs that OB knowledge should be where people share their expertise and passion for a
multidisciplinary and based on systematic research, particular activity or interest. Knowledge use occurs
that organizational events usually have contingencies, when employees realize that the knowledge is available
that organizational behaviour can be viewed from three and that they have enough freedom to apply it.
levels of analysis (individual, team, and organization), Organizational memory refers to the storage and
and that organizations are open systems. preservation of intellectual capital.
The open systems anchor suggests that
organizations have interdependent parts that work
POWERPOINT® SLIDES
Canadian Organizational Behaviour includes a complete set of Microsoft PowerPoint ® files for each chapter. (Please
contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture
outline that follows, a thumbnail illustration of each PowerPoint slide for this chapter is placed beside the
corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip
slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number
and hit the Enter or Return key.) The transparency masters for this chapter are very similar to the PowerPoint files.
3
Part 1 Introduction
®
LECTURE OUTLINE (with PowerPoint slides)
OPENING VIGNETTE
Four Seasons Hotels and Resorts have leveraged the power of
organizational behaviour to become one of the top luxury hotels in the
world as well as one of the best places to work.
• CEO Isadore Sharp emphasizes the importance of relying
Four Seasons and OB on the creativity of its staff and maintaining a culture that
Slide 2
supports employee involvement.
• Four Seasons pays close attention to employee
competencies, corporate culture, leadership,
communication, motivation, organizational structure
5
Part 1 Introduction
7
Part 1 Introduction
KNOWLEDGE MANAGEMENT
Any structured activity that improves an organization’s capacity to
acquire, share, and use knowledge for its survival and success
9
Part 1 Introduction
3. Knowledge use
• Knowledge awareness – know that relevant knowledge is
available
• Freedom to apply knowledge
TRANSPARENCY MASTERS
Transparency 1.1: What are Organizations?
Transparency 1.2: Why Study Organizational Behaviour?
Transparency 1.3: Trends: Globalization
Transparency 1.4: Trends: Information Technology
Transparency 1.5 Trends: Workplace Diversity
Transparency 1.6: Trends: Employment Relationship
Transparency 1.7: Employability vs Job Security
Transparency 1.8: Trends: Workplace Values & Ethics
Transparency 1.9: Corporate Social Responsibility
Transparency 1.10: Organizational. Behaviour Anchors
Transparency 1.11: Open Systems Anchor of OB
Transparency 1.12: Knowledge Management Defined
Transparency 1.13: Intellectual Capital
Transparency 1.14: Knowledge Management Processes
Transparency 1.15: Organizational Memory Defined
Chapter 1 Introduction to the Field of Organizational Behaviour
11
Part 1 Introduction
5. After hearing a seminar on knowledge suppliers, and other external sources that provide
management, an oil company executive argues that added value.
this perspective ignores the fact that that oil
Retaining intellectual capital refers to the
companies could not rely on knowledge alone to
discussion in the textbook about retaining
stay in business. They also need physical capital
organizational memory. This includes keeping
(such as pumps and drill bits) and land (where the
good employees and systematically transferring
oil is located). In fact, these two may be more
their human capital into structural capital when
important than what employees carry around in
they must leave. It also includes documentation --
their heads. Discuss the merits of the oil
bringing out hidden knowledge, organizing it, and
executive’s comments.
putting it in a form that can be available to others.
Although less common, many executives still see It also includes embedding knowledge in the
value in land and capital. They give lip service to organization’s systems and structures.
the idea that “People are our most value assets”
7. What effect, if any, does the increasing diversity of
but still don’t understand that land and capital
the workforce have on managing and working in
have little value without people. For instance, this
organizations?
oil company would not have found land with oil
deposit’s unless it had the knowledge to find that Most organizations in Canada have an
oil. It could not operate the equipment to extract increasingly diverse multicultural workforce.
and refine the oil unless it had enough knowledge. Benefits of this increasing demographic diversity
include increased organizational effectiveness due
The executive’s comment that companies could not
to being able to bring together diverse points of
remain in business with only knowledge. On the
view. A diverse workforce may also be able to
contrary, some of the wealthiest organizations
provide better customer service to a diverse
(including many software companies and
customer base. In addition, diversity may become
consulting firms) have few physical assets. Banks
the organization’s competitive advantage by
are selling off their corporate headquarters because
improving decision-making and team performance
their competitive advantage -- their source of
on complex tasks.
wealth -- is found in knowledge. Oil companies
are also outsourcing several aspects of physical Potential challenges resulting from a diverse
assets. Their ships are often owned by others. The workforce include increases in value-based conflict
drilling equipment is leased or owned by among employees and cross-cultural
companies that specialize in drilling. The major communication issues. In addition, managers will
oil companies today are mainly in the knowledge need to continuously test to ensure that OB
business -- scouting for oil or marketing what practices related to work teams, employee
others have found and extracted. involvement, performance-based rewards and
other applications are effective.
This question also suggests a subtle
misunderstanding by the executive about
knowledge management. Although much
corporate knowledge resides in the brains of its
employees (called human capital), it also resides in
the organization’s systems and structures (known
as structural capital).
6. Fully describe intellectual capital, and explain how
an organization can retain this capital.
Intellectual capital is the sum of an organization's
human capital, organizational capital, and
relationship capital. Human capital refers to the
knowledge that employees possess and generate.
Structural capital is the knowledge captured and
retained in an organization's systems and
structures. Relationship capital is the value
derived from satisfied customers, reliable
Chapter 1 Introduction to the Field of Organizational Behaviour
13
Part 1 Introduction
Syncrude Canada
Q: In your opinion, what organizational behaviour Vancouver City Savings Credit
concepts described in this book would have the greatest Union
influence on the success of Syncrude and other Q: Why do organizations such as VanCity apply the
mammoth projects? triple bottom line, whereas most companies in Canada
A: This is a question for classroom debate. Some do not?
students might say that this photo caption emphasizes A: Students may need to speculate somewhat on the
organizational structure. Others might suggest that answer to this question. The most likely answer is that
communication plays a major role in the success of many corporate leaders are so focused on short-term
major projects. Teams will likely be mentioned as shareholder value that they fail to see that satisfying
another OB concept. the needs of other stakeholders is often in the best
long-term interest of shareholders. Moreover, these
Banana Magazine leaders are rewarded for their fairly short-term
Q: How do magazines such as Banana encourage financial performance, not the firm’s long-term
multiculturalism in Canada? survival and success. A third factor may be the inherent
ambiguity regarding the benefits of satisfying the needs
A: To answer this question, it would be great if the of stakeholders other than sahareholders.
instructor had a copy of this (or a similar) magazine to
illustrate the material within the magazine. However,
generally, these magazines celebrate cultural
Clarica Life Insurance Company
differences and recognize that people with different Q: Along with independent sales agents, what other
backgrounds can adapt and live successfully within this professional groups would benefit from an intranet-
diversity. based community of practice
Case Synopsis
After the birth of her daughter, Irina, a mortgage officer, decided to telecommute to her job while working at home. The
arrangement is not working as well as she had hoped, because of her isolation from the office and because of problems
with establishing a working atmosphere at home. Her employer has told her that if her work doesn’t improve within the
next month, she will have to return to regular working hours at the office.
Although the workplace and the characters in the case are fictional, the problems encountered by Irina and her
employer are all taken from studies of real-life telecommuting arrangements. (See, for example, Andrew DuBrin,
“Comparison of the Job Satisfaction and Productivity of Telecommuters versus In-House Employees”, Psychological
Reports, June 1991, pp. 1223-1234; Fiona A. E. McQuarrie, “Telecommuting: Who Really Benefits?”, Business
Horizons, November-December 1994, pp. 79-83; Margrethe H. Olson and Sophia B. Primps, “Working at Home with
Computers: Work and Non-Work Issues”, Journal of Social Issues, Fall 1984, pp. 97-112; Barbara J. Risman and
Donald Tomaskovic-Dewey, “The Social Construction of Technology: Microcomputers and the Organization of Work”,
Business Horizons, May-June 1989, pp. 71-75.)
1. What are the major problems in this This question could generate some interesting
telecommuting arrangement? debates about the worker’s and the employer’s
responsibilities in ensuring satisfactory working
There are several major problems that can be
conditions. Irina proposed the telecommuting
identified in this case. First, Irina is having trouble
arrangement, so it could be said that she should
working at home where there is no suitable
have realized the problem of trying to work and
physical space for her to work, and while she is
care for a baby, and the difficulties that her
attempting to simultaneously work and care for a
physical and social isolation from the office could
newborn baby. Clients have also complained to the
cause. There are also some problems in projecting
employer about distractions like a crying baby
a “professional image” when working from home
while dealing with Irina on the phone. This is an
(e.g. Irina’s daughter crying in the background
important point, given the bank’s promise of better
while Irina was on the phone), which Irina could
customer service as its competitive advantage in a
have anticipated.
busy market. Second, while the employer is being
supportive in supplying a computer and couriering On the other hand, the employer probably should
work to and from Irina’s home, the employer not expect greater productivity just because an
appears to have unrealistic expectations of what employee works at home. The employer might also
Irina’s productivity should be. Third, Irina is need to provide additional support to Irina beyond
missing out on potential new clients by not a computer and a regular courier service, rather
physically being in the office when new customers than attributing problems only to Irina’s perceived
drop in. Fourth, while Irina is still visiting the inability to manage her work arrangement. The
office once a week, she is missing regular contact case mentions that a previous employee’s
with her co-workers and thus is “out of the loop” telecommuting arrangement was a failure, which
for the informal transmission of information in the suggests that the employer does not have a good
workplace. Her co-workers also appear to be idea of how to manage telecommuting
resentful of her new work arrangement. successfully.
2. Is it Irina’s or the bank’s responsibility to solve 3. What solutions can you suggest to the problems
these problems? that you have identified?
Depending on how the problem has been defined, explore ways to support such arrangements if it is
there are numerous solutions that could be applied decided that telecommuting is a viable option. It
in this case. appears that the employer is allowing
telecommuting on a case-by-case basis, and there
First, Irina and the company obviously need to re-
might be benefits to formalizing telecommuting as
negotiate the terms of the telecommuting
an option for more employees if the company
arrangement. There needs to be clearer
decides this is appropriate. Having telecommuting
expectations (on both sides) of Irina’s productivity.
available to other employees might reduce the
The issue of Irina’s time in the office also should
resentment that Irina’s co-workers feel (they may
be resolved, since once a week does not seem to be
be angry because they feel she is receiving special
sufficient for her to stay involved and to acquire
treatment), and could also be a selling point in
new clients. If Irina is concerned about her ability
recruiting new employees.
to spend time away from her child, the employer
could subsidize day care for her during the time If the employer decides to formalize
she is in the office. The employer could also telecommuting as an option, there are cost savings
consider offering some day care arrangements at that could be generated (e.g. bulk purchase of
the office, which would likely be a benefit to other computers, office supplies, and office furniture).
employees with child care responsibilities. Irina Some employers have also developed “semi-
and the company could also explore ways to refer telecommuting” arrangements if many employees
“walk-in” clients to her when she is not physically live considerable distances from a central
in the office. workplace. Rather than setting up working
arrangements in each individual employee’s home,
Second, there could better working conditions for
the employer establishes a “satellite office”: an
Irina at home. Because of the numbers of workers
office space equipped with computers, files,
working part- or full-time at home, many office
photocopiers, and other office furnishings, in a
furniture companies now make cabinets containing
location convenient to the employees. The
computer and filing storage, which can be closed
“satellite office” is not a formal place of business
so that the “work equipment” is not visible when
open to the public, but instead is a non-home-
not in use. This would partially solve the problem
based telecommuting site. Employees who wish to
of Irina being unable to avoid looking at work
telecommute travel to the “satellite office” rather
when she is not working. The cost of purchasing
than to the central workplace, and telecommute
of such a piece of furniture could be covered by
from there rather than from their homes. This
either Irina or the employer, or they could share
arrangement avoids most of the problems
the cost.
associated with working from home, while still
Third, Irina could consider arranging for part- or allowing the employees to avoid extensive travel
full-time child care while she is working at home. and other work-related costs. Having
While this would somewhat reduce the savings telecommuting employees working from one place
generated by telecommuting, it would undoubtedly also allows the employer a greater degree of
improve her ability to work without distraction control over work, instead of managing multiple
and also to present a professional image to her individual telecommuting arrangements.
clients. It would also possibly permit her to work
Finally, Irina and the employer could also question
different hours, depending on the scheduling of
whether telecommuting is appropriate for her
the child care, and thus make it easier for her to be
situation. Telecommuting does not work for every
available outside “regular” office hours, as she had
employee and for every job. Since Irina’s job is, to
suggested to her employer. The employer could
some extent, dependent on regular interaction with
subsidize or cover the cost of childcare to assist
her co-workers and developing a client base from
Irina in implementing this arrangement, since
new customers, it may be that telecommuting is
increased productivity and professionalism would
inappropriate for her job. She may benefit herself
also benefit the employer.
and the employer by returning to an office-based
Fourth, the employer may want to examine how work arrangement.
committed it is to the idea of telecommuting, and
ACTIVITY 1.2: TEAM EXERCISE
HUMAN CHECKERS
Purpose same task and will have the same amount of time to
This exercise is designed to help students understand plan and practice the task. At the end of this planning
the importance and application of organizational and practice, each team will be timed while completing
behaviour concepts. the task in class. The team that completes the task in
the least time wins.
Materials Step 3: Other than chairs, no special materials are
None, but the instructor has more information about required or allowed for this exercise. Although the
the team’s task. [Note: The chairs are optional. This task is not described here, students should learn the
exercise sometimes works better without chairs. following rules for planning and implementing the
Instead, the instructor might use two lines of tape on task:
the floor to keep student teams in a straight line.]
Rule #1: You cannot use any written form of
communication or any props other than chairs to
Task Description (read to students) assist in the planning or implementation of this
Each team will develop and execute a strategy in which
task.
the three team members on either side of an open space
Rule #2: You may speak to other students in your team
will move to the other side in the same final order (see
at any time during the planning and
exhibit on this page). Team members 1, 2, and 3 begin
implementation of this task.
on the left side and must move to the right side in the
Rule #3: When performing the task, you must move
same order. Team members 4, 5, and 6 will begin on
only in the direction of your assigned destination.
the right side of the open chair or space and must move
In other words, you can only move forward, not
to the left side in the same order (see Exhibit below).
backwards.
Rule #4: When performing the task, you can move
Exhibit forward to the next space, but only if it is vacant
(see Exhibit 1 in textbook).
Before
Rule #5: When performing the task, you can move
1 2 3 4 5 6 forward two spaces, if that space is vacant. In
other words, you can move around a student who
is one space in front of you to the next space if
After that space is vacant (see Exhibit 2 in textbook).
Company alignment
Company alignment estimates the extent to which you Low social needs at work
follow company procedures and have values congruent People with a high score on this subscale do not rely on
with company values. The greater the alignment, the co-workers to satisfy their social needs. Successful
more likely that you can abide by company practices teleworkers tend to score higher on this subscale 9i.e.
while working alone and with direct supervision. have lower social needs at work) because teleworking
While some deviation from company practices may be offers less opportunity for social interaction with co-
appropriate, teleworkers need to agree with company workers than when working in an office setting each
values and provide work that is consistent with day. Scores on this scale range from 4 to 20. Notice
company expectations most of the time. Scores on this that HIGH scores represent LOW social needs.
scale range from 4 to 20.
Score Interpretation
Score Interpretation 15 to 20 Low social needs
15 to 20 High company alignment 9 to 14 Moderate social needs
9 to 14 Moderate company alignment 4 to 8 High social needs
4 to 8 Low company alignment
Independent initiative
One of the most important characteristics of successful Total Telework Disposition
teleworkers is that they are able to set their own work This overall score combines the results for company
goals and maintain a productive work schedule without alignment, social needs at work, and independent
direct supervision. People who score higher on this initiative. A higher score indicates that students will
subscale tend to have a higher degree of independent probably be more satisfied and productive in a
initiative. Scores on this scale range from 6 to 30. teleworking arrangement than someone with a lower
score on this scale. Specifically, people with high
Score Interpretation
scores have higher alignment with company values and
24 to 30 High independent initiative practices, lower social needs at work, and higher
15 to 23 Moderate independent initiative independent initiative. Scores on this scale range from
14 to 70.
6 to 14 Low independent initiative
Score Interpretation
54 to 70 High telework disposition
34 to 53 Moderate telework disposition
14 to 33 Low telework disposition
SUPPLEMENTAL CASE
AN UNTIMELY INCIDENT AT ANCOL CORP.
STUDENT HANDOUT
Paul Simard was delighted when Ancol Ltd. offered But the problems did not end there. Without time
him the job of manager at its Jonquiere, Quebec plant. clocks, the payroll department could not deduct pay for
Simard was happy enough managing a small metal the amount of time that employees were late. Instead,
stamping plant with another company, but the a letter of reprimand was placed in the employee’s
headhunter’s invitation to apply to the plant manager personnel file. However, this required yet more time
job at one of Canada’s leading metal fabrication and additional skills from the supervisors. Employees
companies was irresistible. Although the Jonquiere did not want these letters to become a permanent
plant was the smallest of Ancol’s 15 operations across record, so they filed grievances with their labour union.
Canada, the plant manager position was a valuable The number of grievances doubled over six months,
first step in a promising career. which required even more time for both union officials
One of Simard’s first observations at Ancol’s and supervisors to handle these disputes.
Jonquiere plant was that relations between employees Nine months after removing the time clocks, Paul
and management were strained. Taking a page from a Simard met with union officials, who agreed that it
recent executive seminar that he attended on building would be better to put the time clocks back in.
trust in the workplace, Simard ordered the removal of Employee-management relations had deteriorated
all time clocks from the plant. Instead, the plant would below the level when Simard had started. Supervisors
assume that employees had put in their full shift. This were burnt out from overwork. Productivity had
symbolic gesture, he believed, would establish a new dropped due to poorer attendance records and
level of credibility and strengthen relations between increased administrative workloads.
management and employees at the site. A couple of months after the time clocks were put
Initially, the 250 production employees at the back in place, Simard attended an operations meeting
Jonquiere plant appreciated their new freedom. They at Ancol’s headquarters in Toronto. During lunch,
felt respected and saw this gesture as a sign of positive Simard described the time clock incident to Liam
change from the new plant manager. Two months Jackson, Ancol’s plant manager in Northern British
later, however, problems started to appear. A few Columbia. Jackson looked surprised, then chuckled.
people began showing up late, leaving early, or take Jackson explained that the previous BC plant manager
extended lunch breaks. Although this represented only had done something like that with similar
about five percent of the employees, others found the consequences six or seven years ago. The previous
situation unfair. Moreover, the increased absenteeism manager had left some time ago, but Jackson heard
levels were beginning to have a noticeable effect on about the BC timeclock from a supervisor during the
plant productivity. The problem had to be managed. manager’s retirement party two months ago.
Simard asked supervisors to observe and record “I guess it’s not quite like lightning striking the
when the employees came or went and to discuss same place twice,” said Simard to Jackson. “But it sure
attendance problems with those abusing their feels like it.”
privileges. But the supervisors had no previous
experience with keeping attendance and many lacked
the necessary interpersonal skills to discuss the matter Discussion Questions
with subordinates. Employees resented the 1. What symptom(s) exist in this case to suggest that
reprimands, so relations with supervisors deteriorated. something has gone wrong?
The additional responsibility of keeping track of 2. What are the root causes that have led to these
attendance also made it difficult for supervisors to symptoms?
complete their other responsibilities. After just a few 3. What actions should Ancol or Paul simard take to
months, Ancol found it necessary to add another correct these problems?
supervisor position and reduce the number of
employees assigned to each supervisor.
© Copyright 1998 Steven L. McShane. This case is
based on actual events, but names and some facts have
been changed to provide a fuller case discussion.
SUPPLEMENTAL CASE ANALYSIS
AN UNTIMELY INCIDENT AT ANCOL CORP.
NOTE: Instructors should look through the video Handy, an international writer on organizational
suggestions section in other chapters to find videos behaviour, discusses the future of organizations, the
relating to the emerging themes discussed in this changing nature of work and management and the
opening chapter of the textbook. need for adaptation. ISBN 0563208309
Creating the Learning Organization. (1997, 76 min., The Change Masters: Understanding The Theory.
VHS) These three video programs (created by CASE (1987, 22 mins, VHS) Dr. Rosabeth Moss Kanter
Television for BBC) describe the organizational- identifies “change masters” as individuals and
learning techniques used by successful companies. companies who anticipate change and respond with
They discuss how to implement change and develop a new ideas. She describes the seven ingredients that are
learning culture within a business and how to analyze essential to successful change masters and explains
an organization's learning style. The three programs how to create the kind of environment that builds
are entitled: 1. Learning to survive v. 2. The learning innovation and promotes acceptance to change.
experience v. 3. Making it happen.
The Change Masters: Putting The Theory Into
Soaring to Excellence, Learning to Let Employees Action (1987, 42 mins., VHS) This program profiles
Lead. (1994, 30 min., corVision Media). James A. three major companies: Hewlett-Packard, Security
Belasco & Ralph C. Stayer share the belief that the Pacific Bank, and the Stanley works. They have
critical difference in today's companies rests in the refocused their business strategies in order to compete
"intellectual capital" found in the people who make-up more effectively in an ever-changing business
the entire organization. This program is based on a environment. All three illustrate successful
book by the same name, written by Belasco and Stayer. implementation of the “change master” concepts
developed by Dr. Kanter in her book The Change
Handy on the Future of Organizations. (1990, 18 Masters
min., VHS). This BBC production features Charles
NOTES