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Summary of Organizational Behavior (Robbins & Judge)

Summary of Organizational Behavior by Robbins and Judge, written in 2013 - donated to World
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Chapter 1: What is Organizational Behavior?

Chapter 2: Foundations of Individual Behavior

Chapter 3: Attitudes and Job Satisfaction

Chapter 4: Personality and Values

Chapter 5: Perception and Individual Decision Making

Chapter 6: Motivation Concepts

Chapter 7: Motivation - applications

Chapter 8: Emotions and moods

Chapter 9: Foundations of Group Behavior

Chapter 10: Understanding work teams

Chapter 11: Communication

Chapter 12: Leadership

Chapter 13: Contemporary Issues in Leadership

Chapter 14: Power and Politics

Chapter 15: Conflict and negotiation

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Chapter 1: What is Organizational Behavior?

Being a good manager requires strong interpersonal skills, as communication is crucial, as one must
manage different types of resources: people, money, and time in order to achieve specific goals.

A Manager’s Four Main Functions

Planning function refers to setting goals, creating strategies, and preparation of plans that make
different activities work coherently and effectively.

Organising function concerns tasks identification and division, assignment of tasks to individuals,
setting reporting and decision- making systems.

Leading function relates to motivating workers and directing others’ actions, choosing
communication canals and solving conflicts.

Controlling function refers to controlling others’ work outcomes and checking whether everything is
being done as planned; and when necessary undertaking corrective actions.

Management roles

They can be divided into 3 main categories: interpersonal roles, informational roles and decisional
roles. The concept was developed by Henry Mintzberg and is called Mintzberg’s Managerial Roles
(below).

ROLE

DESCRIPTION

Interpersonal

Roles which involve ceremonial/symbolic duties

Figurehead
Symbolic head, needs to perform duties of social/legal nature

Leader

Motivates and directs employees

Liaison

Maintains a network of outside contacts

Informational

Collection and dissemination of information

Monitor

Receives information, serves as nerve centre of internal and external information

Disseminator

Transmits information from outsiders to the organisation’s members

Spokesperson

Transmits information about the organisation to outside parties

Decisional
Refers to making choices

Entrepreneur

Analyses the organisation and its environment for opportunities and initiates projects to bring about
change

Disturbance handler

Undertakes corrective actions in case of problems

Resource allocator

Makes or approves important organizational decisions

Negotiator

Represents the organization in negotiations

Management skills

There are 3 types of management skills developed by Robert Katz: Technical skills (application of
specialised knowledge, know-how, e.g. think of mechanical engineer, vet, pharmacist), human skills
(easiness to work in a team, understand others’ behaviors and motives, stimulate others’ actions,
ability to communicate and get along with people), conceptual skills (mental capability to analyse
problems, manage complexity of an issue, decide on solutions and evaluation of possibilities).

Effective or successful managers?

It was investigated in Luthans’ Study of Managerial Activities that effective managers spend most of
their time on communication activities (44%) and on human resource management activities (26%).
In contrast, successful managers spend almost half of their working time on networking activities
(48%) and communication activities (28%). It is understandable that average managers work most of
the time on traditional management (32%) and on communication activities (29%).

Defining Organisation Behavior (OB)

“A field of study that investigates the impact that individuals, groups, and structures have on
behavior within organisations, for the purpose of applying such knowledge toward improving an
organization’s effectiveness” (Robbins, Judge “Organisational Behavior”).

It is important to remember that OB deals with 3 levels of behaviors: individuals, groups and
structures. Knowledge about those 3 types of behaviors is necessary to apply actions which make
the whole organization function successfully.

How to study OB? EBM

In OB systematic study and evidence-based management is combined with intuition. Behavior can be
predicted. If it is examined on the continuous basis one is able to forecast how people can act in
particular circumstances (that is why systematic study of people’s actions are necessary). Systematic
study involves examining causes and effects, just like in science – this is done to make general law-
like conclusions based on gathered data. What is closely related to systematic study is evidence-
based management (EBM). EBM implies making managerial decision after consideration of scientific
facts, data, conclusions, laws. Managers who apply EBM act like scientists – when they face a
problem, they search for scientific information which can give them possible problem solutions, then
they apply the most relevant knowledge in order to solve an issue. Of course, intuition is inseparable
from decision-making process. Nevertheless, importance of systematic study and thus EBM cannot
be questioned.

What major behavioral disciplines contribute to OB?

- Psychology (studies behavior of individual)

- Social psychology (studies behavior of individual within a group)

- Sociology (studies groups, societies, organisational systems, how individual acts in relation to a
society)
- Anthropology (studies societies, groups, cultures, organisational systems)

Absolutes in OB

OB concepts, however law-like they can be, must take into account situational factors. Under
different conditions different individuals act differently. That is why there only a few absolutes in OB.
Because people are different and complex, one needs to consider OB in a contingency framework.

Challenges and opportunities for OB

I) Globalisation implications

Ia) More foreign assignments

Ib) Multicultural work environment

Ic) Coping with anticapitalism backlash – values and norms, even the economical ones, are not the
same everywhere

Id) Placing more and more jobs, productions in low-cost labour countries (e.g. China, Taiwan) –
managers need to find a balance between organization’s interest in low cost and (corporate) social
responsibility.

Ie) Managing people during War on Terror – e.g. people resign from some businesses, cancel flights
because they are afraid of terrorism.

II) Managing work diversity

IIa) Embracing diversity – employees from diverse countries do not give up their cultural values and
norms to adapt to the rest of society. Managers need to make them accommodate so they don’t feel
isolated or ignored

IIb) Changing U.S. demographics

IIc) Implications – Effective managers need to recognize cultural differences and can’t apply the
same standards to all employees.

III) Improving quality and productivity

IV) Improving customer service

V) Improving people skills

VI) Stimulating innovation and change

VII) Coping with “temporariness”

VIII) Working in networked organizations

IX) Helping employees balance work-life conflicts

X) Creating a positive work surrounding – in this point the notion of positive organizational
scholarship needs to be mentioned – it is research area that focuses on fostering strengths rather
than eliminating weaknesses. It is all about what is good, the best in employees and the organization
itself.

XI) Improving ethical behavior

OB Models

> Dependent variables: productivity, absenteeism, turnover, job satisfaction, deviant workplace

behavior (antisocial behavior or workplace incivility), organizational citizenship behavior

> Independent variables:

individual-level variables – motivation, perception, ability, values and attitudes, personality and
emotions, individual decision-making and learning, biographical characteristics

group-level variables – conflict, communication, group decision making, leadership and trust, group
structure, conflict, power and politics, work teams

organisation system-level variables – organizational culture, organization structure and design,

human resource policies and practices.

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Chapter 2: Foundations of Individual Behavior

Abilities

There are 2 major types of abilities.

Intellectual abilities – capacity to perform mental tasks. There are a few dimensions of Intellectual
ability: number aptitude, verbal comprehension, perceptual speed, inductive reasoning, deductive
reasoning, spatial visualization, memory.

Moreover, the notion of general mental ability (GMA) appears – it is an overall aspect of intelligence.
Intelligence and job satisfaction do not relate to each other.

Physical abilities – needed to perform physical tasks. There are nine basic physical abilities grouped
in 3 categories: strength factors (dynamic strength, trunk strength, static strength, explosive
strength), flexibility factors (extent flexibility, dynamic flexibility) and other factors (body
coordination, balance, stamina).

Biographical characteristics

> age and relationship between variables:

1) turnover: the older a person gets, it is less probable that he/she will quit a job.

2) absenteeism: older employees have lower rates of voluntary absenteeism, but higher on
involuntary (unavoidable) one (due to health problems).

3) productivity: age and productivity are not related.

4) job satisfaction: mixed evidence. Generally, satisfaction increases with age in professional job
types and decreases with age in nonprofessional.
> gender – main difference between females and males refers to working hours. Women prefer
more flexible working times and are more often absent at work than men.

> race and relationships:

1) people positively discriminate individuals of the same race as themselves (pay them more,
promote and award more often)

2) different approach of black and white race toward affirmative actions

3) African Americans perform worse in employment assessments/decisions

> tenure and relationships:

1) productivity: positive correlation between productivity and tenure

2) job satisfaction: positive correlation between job satisfaction and tenure

2) absenteeism: negative correlation between absenteeism and tenure (seniority)

3) turnover: the longer a person works in a company, the less probable that he will qui

> religion

Religious discrimination can lead to more health problems, absence and turnover.

Learning

Learning is a process, brings changes in behavior, based on experience.

There are 3 main theories of learning.

A) Classical conditioning

Theory based on the concept that unconditioned stimulus causes unconditioned response and that
conditioned stimuli cause conditioned response. It is based on building connection between
conditioned and unconditioned stimulus. Example: Pavlov’s experiment with dog

B) Operant conditioning

Theory based on idea that one behaves to achieve what he wants or to avoid what he doesn’t want.
Reward after the desired and deliberate behavior occurs is the reinforcement. The elimination of
punishment in case of lack of desired and deliberate behavior is also reinforcement. Those two
methods reinforce achievement of desired response, effect, equal behavior. The theory of operant
conditioning is a part of behaviorism concept which argues that people react to stimuli not
associating them consciously with response. We act in response to stimuli, but all process takes
place on unconscious level.

C) Social learning

People learn by observation others as well as they learn through experience, “on mistakes”. There
are 4 models of social learning:

1. attentional process – people learn from people they pay attention to due to their vital
characteristics

2. retention process – depends on how well one remembers someone’s behavior when he/she is no
longer close, visible, available

3. motor reproduction process – new behavior is a consequence of observation, one copies behavior
of another

4. reinforcement process – one performs desired behavior if he is encouraged to do so by rewarding.

Managerial tool
Managers shape behavior of employees, meaning that the change of behavior happens in steps, and
each step is reinforced. There are 4 main shaping behavior methods:

positive reinforcement,

negative reinforcement,

punishment

extinction

Positive reinforcement refers to rewarding desired behavior, negative refers to elimination of

something unpleasant, not wanted when a behavior occurs. Punishment causes unpleasant
condition when one doesn’t behave in a desired way. Extinction means not applying any
reinforcement and waiting until particular behavior extincts, disappears.

Those reinforcements can happen on continuous or intermittent basis. Desired behavior is

reinforced each time continuous reinforcement is performed. Intermittent reinforcement occurs
when reinforcement is not regular, but it happens enough often to make one behave in a desired
way repeatedly.

When it comes to reinforcement schedules, the concept goes further beyond continuous or
intermittent models. One distinguishes 4 time schedules:

fixed-interval schedule

variable-interval schedule
fixed-ratio schedule

variable-ratio schedule.

We are talking about fixed-interval schedule when reinforcement is applied after a particular period
of time (e.g. salaries). When reinforcement happens on irregular time basis we are referring to fixed-
interval schedule (e.g. class tests in high schools, money bonuses). Fixed-ration schedule tells us that
reinforcement happens always after a certain and constant amount of desired behaviors is
performed (e.g. pupil is not praised each time he gets A, but he is praised after he gets 10 As, and
then 20 As,and so on). Variable-ratio schedule is the opposite. One is rewarded on unpredictable
basis; each time after different amount of desired behaviors occurs. In general, variable schedules
are more effective than fixed.

OB Mod means the application of reinforcement methods described above to people in their
working environment. This happens in 5 steps:

Identification of problematic behavior

Collecting data

Identification of a response’s consequences

Setting up and executing a strategic plan

Measuring improvement

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Chapter 3: Attitudes and Job Satisfaction

Attitudes

Attitudes are evaluations, judgments, opinions about people/objects/states/events. There are 3

main components of attitudes:

cognitive

affective

behavioral

Cognitive refers to just describing things how we see them, e.g. “I have a job”. Affective is related to
emotions and feelings, e.g. when one says: “I am so happy with my job”. Behavioral refers to
intentions, actions, e.g. when one says “I will never resign from my job” or “I am looking for another
job”. All components are related, cognitive and affective aspects of attitudes are inseparable. As one
sees attitudes and behaviors are connected, certain attitude leads always/sometimes/often/never to
certain behavior.

At this point, the notion of cognitive dissonance appears – it is the reverse effect – when attitude
follows behavior. It is explained as inconsistency between attitudes or between behavior and
attitude (e.g. advising others to drive slowly when you drive fast yourself). What influences
dissonance is: its importance, influence of one’s values, rewards of dissonance.

Major Job Attitudes

Job satisfaction: a positive feeling about one’s job according to an evaluation of its characteristics.

Job involvement (level of identification with the job, caring for and participation in it and considering
it as important for “self”).

Another notion in this part is psychological empowerment – it expresses the belief in the level of
one’s influence on his work setting, abilities, his work importance and locus of control.
Organisational commitment (employee’s identification with the company’s goals, corporate culture,
strategy, mission, values, vision and willingness to preserve his belonging to the organization)

Affective – emotional connection with the company and its values

Continuance – perceived financial benefit resulting from staying rather leaving a firm/company

Normative – feeling obliged to stay in a company because of moral/ethical matters

Perceived organisational support (POS) – level of employee’s conviction and belief that the
organisation supports him, appreciates his work and cares for his comfort, security, and happiness.

Employee engagement – employee’s enthusiasm for the work he does, satisfaction with it and his
commitment to his work.

Job satisfaction

Job satisfaction can be measured in two ways:

Single global rating method (survey participants answer one question: How satisfied are you with
your job?)
Summary of job facets (makes an employee evaluate each element of a job), possible facets can be
salary, communication with co- workers and with supervisor, amount of days off, etc.

The first, “one-question” method is fast and inexpensive. The second one (summary of job facets) is
more accurate, allows the identification of the core problems and makes it easier to create possible
solutions.

What makes employees satisfied with their job?

The fact that they enjoy their work

Interesting jobs that provide training, variety, independence and control

Most people prefer challenging over easy and various over routine

In general, most of the time is the nature of job that makes one satisfied with work. However, also
personality is an important factor influencing job satisfaction. It is essential to have positive core
self-evaluations (which are one’s evaluations of his possibilities, abilities, and strengths).

Once a person achieves a level of payment that allows for him comfortable living, the relationship
between pay and job satisfaction does not exist any longer.

There are 4 responses to dissatisfaction:

Exit – behavior indicating the will to leave the organisation

Voice – results in actively and constructively trying to change dissatisfying conditions

Loyalty – waiting passively hoping for situation improvement

Neglect – doing nothing, letting the conditions worsen

Relationships between job satisfaction variables:

Job satisfaction and job performance  strong positive relation -> more satisfied workers are more
productive

Moderate relation between job satisfaction and organizational citizenship behavior -> more satisfied
workers more probable that they engage in OCB

Satisfied workers enhance customer satisfaction and loyalty

Satisfied workers are less likely to miss work (moderate relation)

Satisfied workers are less likely to quit (strong relation)

Job dissatisfaction is much likely to cause workplace deviance

Managers usually overestimate job satisfaction but do not actually measure it.

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Chapter 4: Personality and Values

Nature of personality

Before going deeper into the subject, we define the term personality as one’s total sum of behaviors,
reactions, and interactions with others. In organisations, HRM departments use personality tests to
measure and forecast the behavior of prospective employee.
The common method of measuring personality is self-report survey – one evaluates himself on
different variables. The other means of personality measurement is the observer-rating survey,
which is a more independent assessment – a person observes and rates personality of another
person (employee, prospective employee, etc). Claimed to be more successful in the context of
organisations.

Personality results from heredity and interactions with an environment. People’s personalities can
change over the course of time. Moreover, the notion of personality traits appears at this point –
these traits are enduring, rather unchanging attributes that characterise behavior. If one is often shy
and/or aggressive and performs these behaviors often, we can call shyness and/or aggression his
personality traits.

Models which organise traits

There are two main models which recognise and organise traits:

The Myers- Briggs Type Indicator

Big Five Model

The Myers- Briggs Type Indicator  the most common personality-assessment tool. It’s a test which
consists of 100 questions related to behaviors, feelings, and attitudes in different situations. After
doing the test, a person can be classified to the following groups:

Extroverted or introverted – extraverted types are gregarious, social, assertive, outgoing

Sensing or intuitive – sensing types like routine, are practical-oriented, pay attention to details

Thinking or feeling – thinking types are logical and analytical when facing problems

Judging or perceiving – judging types like the ordered, structured world, need for control
Disadvantages of the model: a person must be classified either to one type or another –cannot be in-
between the types, and do not reflect job performance.

Big Five Model  personality-assessment tool which recognises 5 aspects:

Extraversion: reflect one’s level of comfort with relationships

Agreeableness -> describing someone who is warm, cooperative, easily reaches compromises and is
trusting.

Conscientiousness -> describing someone who is organised, determined, responsible and reliable.

Emotional stability -> handling stress measure. Negative emotional stability relates to people who
get angry/nervous/upset easily, irritated quickly, feel insecure, and lack confidence.

Openness to experience -> describes curiosity of world or some of its aspects, creativity, interest in
innovations, novelties.

Studies have demonstrated the relationship between personality dimensions and job performance.
Critique: the Big Five model does not represent all relevant traits that a personality can have.

The other traits, which are not shown in the existing 2 models, but are highly relevant to OB are:

Core-self evaluation -> level to which one likes or dislikes himself, whether he thinks he is effective,
able to perform tasks and have control over his surrounding. People with positive core-self
evaluation usually perform at work better.

Machiavellianism -> level of one’s being rational & practical, goal-oriented, very good in bargaining,
keeping distance with showing (experiencing) emotions, thinking that ends justify means. People
with high level of Machiavellianism tend to manipulate others, appear as very persuasive, and are
good in negotiations.
Narcissism -> people who are high in narcissism level are good leaders, but are perceived by others
as arrogant – they want the appreciation, admiration, they may think they are superior.

Self-monitoring -> one’s ability to adjust himself and his behavior to external world, various
environmental circumstances. People with high level of self-monitoring are more responsive to
external signs, but also their behavior differs from situation to situation – they tend to behave
differently when being in a public and differently in private. High self-monitoring means better job
performance than low self-monitoring.

Risk taking -> willingness to accept changes and take risks. Managers with high risk-taking level make
decisions faster.

Type A personality -> people who are highly competitive, always want to achieve more, be more
efficient, they can be aggressive in pursuing their goals, even if it takes being against other
people/difficulties. In US type A is associated positively, with ambition, success. Type B personality is
the opposite – people with type B never hurry with anything, can be relaxed without guilt. Type A
personalities do better during work interviews, are faster workers, work long hours, usually work
under stress and their actions are more predictable.

Proactive personality -> taking initiatives, being ahead with ideas, recognition of opportunities.
Proactive people are seen as leaders, make changes within the organization, but they are more likely
to leave the organization to start business on their-own.

Nature of values

A personal and cultural value is a relative ethic value, an assumption upon which implementation
seems reasonable. Moreover, values that we organise according to their importance and intensity
create a value system. In OB, studying values is important because they influence behavior,
perception, attitudes. They guide one’s behavior in the sense of doing right and wrong.

The most basic categorisation of values recognises terminal and instrumental values and is used in
Rokech Value Survey (RVS). RVS is made of two sets of values: terminal values are desirable goals
and instrumental values that represent behaviors/modes which help to achieve the terminal values
(terminal goals). People in the similar occupations have similar RVS values.

Moreover, it is necessary to mention generational values. Researches have made the following
division:
Veterans -> begin of the workforce in 1950s and 1960s; rather loyal, belief in authority, order,
hardworking, pragmatic, traditionalists.

Boomers -> born after the WWII; workforce from mid-1960s until mid-1980s; career-oriented,
making-money attitude, distrust/dislike of authority.

Xers -> entered workforce from 1985 until 2000; people with team-sprit at work, who value
relationships, bonds, balance their work with private life, question authority, do not like rules.

Nexters -> on the work market since 2000; people to whom financial success is important, they are
technology-oriented at work, confident, value both self and relationships, team spirit combined with
work autonomy.

Disadvantages of the division above: does not apply in all cultures, little research – relying on
intuition, inexact categories.

Matching individual’s values and personality to the workplace

Two main theories:

Person-job fit

Person-organisation fit

Ad1. Person-job fit -> recognises 6 personality types and makes a match between particular
personality fit and occupation and its environment. A successful match guarantees high job
satisfaction and lower probability to resign from the job. The possible personality types in person-job
fit theory are: realistic, investigative, artistic, social, conventional, enterprising. Social people match
best with social occupations, artistic people with artistic jobs, etc…
Ad 2. Person-organisation fit -> this theory claims that people are attracted to and chosen by
organisations that correspond to their values and beliefs. If it is not the case, a person will leave the
organization. A fit between one’s values and corporate culture and values guarantees job
satisfaction, organizational commitment and low probability of leaving the firm.

Global Consequences

Hofstede’s Framework

Values and value systems differ from culture to culture. Hofstede’s framework explains and forecasts
behaviors of people from different cultures. The five dimensions of Hofstede’s theory are:

Power distance -> high level of it means large differences between the rich and the poor, accepts the
existence of social classes, castes. Low level of it emphasizes equality in society.

Individualism versus collectivism

Masculinity versus femininity: high masculinity rating  men dominate the society in which the roles
for men and women are separated. Femininity 

Uncertainty avoidance

Long-term versus short-term orientation

Critique: out-of-date (concept developed 30 years ago, based on IBM company), many changes,
world events have happened since the development of the theory (and they also shape the
dimensions), some results are surprising.
GLOBE Framework

The acronym stands for The Global Leadership and Organizational Behavior Effectiveness. It is an on-
going study in leadership and national culture across different countries representing different
cultures. Some dimensions are the same as Hofstede’s, but apart from them, GLOBE has much more
other aspects: humane orientation, performance orientation.

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Chapter 5: Perception and Individual Decision Making

Perception

Perception is defined as a process of organising and interpreting impressions, thus giving meaning to
the external environment, it is organizing our world with impressions we have. It is different from
reality, it’s subjective, personal. Factors which influence perception can be grouped: there are
factors in the perceiver (attitudes, motives, interests, etc.), factors in the target (novelty, motion,
sounds, size, etc…) and factors in the situation <context> (time, work and social setting).

Attribution theory

It is important to remember the attribution theory. It is based on the concept that when judging
people we try to explain their behavior in two possible ways. Why? Because we recognize that 1)
behavior can be internally caused and/or 2) behavior can be externally caused. When observing,
judging a person we try to determine whether his behavior is caused internally or externally.
Internally caused behaviors are the ones we see as under the control of an individual. Externally
caused are the ones we see as the situation forcing a person to do something. There are, however, 3
factors that determine the fact whether we perceive one’s behavior as internally or externally
caused.

Distinctiveness - > degree to which one behaves differently in different situations

Consensus -> degree to which people facing the same situation, respond similarly
Consistency -> degree to which one’s behavior is consistent, unchanging over time

Moreover, when we judge behaviors of others, we often make fundamental attribution error. It is a
tendency to underestimate the external environment (situational circumstances) and overestimate
internal factors (e.g. blame the person, his personality).

Apart from fundamental attribution error, we are usually under the high influence of self-serving
bias. It is one’s tendency of attributing his successes to internal factors and failures to external
factors. Not blaming self, blaming others.

Shortcuts in judging others

Selective perception -> we base our judgments on the selected by us range/sample of characteristics
(when we judge a person) or aspects of a situation. We can ‘speed-read’ others, but there is a risk of
inaccurate judgements.

Hallo effect -> tendency to make mental generalizations, impressions about a person basing on just
his one characteristic. A single trait can influence the overall impression.

Contrast effects -> when judging a person we compare him to other people we have lately met and
whom we have evaluated better or worse on a particular dimension

Stereotyping-> judging someone on the basis of a perception we have about a group to which he
belongs. Profiling is a different category of stereotyping – it is selecting a particular group which we
stereotype aiming at intensive inquiry/investigation (used in police, criminology)

Applications of shortcuts in organizations:

Employment interview - > first impression is extremely important

Performance expectations -> might be concerned with self-fulfilling prophecy – effect of one’s
inaccurate perception about another person makes this person confirm that inaccurate perception
(and behave in such way).

Performance evaluation: subjective evaluations can be problematic.

Link between perception and individual decision making

Perceptions largely influence the quality of decision-making. The decision-maker will evaluate the
data received according to his perception, bias may be involved.

Decision-making in organisations can fall into one of the three categories:

Rational model -> decision-making model that consists of 6 steps, which one should take to find a
problem-solution. Gives a ready scheme that follows a logical order.

Bounded rationality -> based on the idea that people simplify problems to be able to deal with them,
we take out multifaceted aspects of the problem and thus reduce complexity. Only find the first
acceptable solution, but not the optimal one.

Intuitive decision making -> relaying on intuition when making a decision, takes place on
unconscious level. It would be effective to complement this with evidence and good judgements in
decision making.

Common biases and errors in decision- making:

Overconfidence bias – we overestimate our abilities, intellect, knowledge.

Anchoring bias – we rely too much on one piece of information or “anchor”.

Confirmation bias – in a decision-making it means seeking out information that reaffirm our previous
choices and discount information that contradicts it.

Availability bias – basing decision on information that is already gathered and available.

Escalation of commitment – not changing the previous decision despite the negative information.

Randomness error – tendency to believe that one can predict random events

Winner’s curse – concept which states that winners of auctions usually pay too much

for items they bought, in that they overvalue the items.

Hindsight bias – inclination to see events that have occurred as more predictable than they in fact
were before they took place.

Individual differences in decision- making:

Personality: achievement striving people are more likely to escalate commitments than dutiful
people.

Gender – women have tendency to rumination (over-thinking problems, decisions, analyzing them
for very long, before and after some decisions are made)

Organisational constraints:

Performance evaluation – managers are influenced in their decision-making by criteria of their later
evaluation

Reward system – organization’s reward system influences decision-making

Formal regulations – choices, decisions which are made have to fit to regulations, rules, directives of
a firm

System-imposed time constraints – imposing deadlines influence decision-making

Historical precedents – today’s choices are influenced by past choices

Ethics in decision making - 3 ethical decision criteria

Utilitarian criterion – the aim of utilitarianism –> make the best decision that provides greatest good
for the greatest number. Pros and cons: promotes efficiency, productivity but ignores individuals
(can be minorities).

Rights – making decisional choices consistent with rights, laws, liberties. This criterion protects
whistle-blowers who are workers that reveal unethical practices of their organization (because they
have a right to free speech). Pros and cons: gives individual freedom, rights, protection, but at the
same time creates too much of a law-based environment, which lowers productivity and efficiency

Justice – criterion which characterises people who make decision to achieve equity and aim at fair
distribution of benefits. Pros and cons: protects rights of underprivileged, but creates a sense of
entitlement, this reduces risks taking, innovation, productivity.

Utilitarianism tends to be the safe choice for decision-makers, but should not be the single criterion
to judge good decisions.

Improving creativity in decision making

Creativity can be described as ability to generate new, innovative, useful and resourceful ideas. It is
becoming more important in decision-making process. Allows to see more perspectives and angles
of a problem. Most of us need to learn to unleash our creative potential
Three-component model of creativity. It is a model that proposes that one’s creativity needs
expertise (know-how, particular knowledge), creative thinking skills and task motivation (high
motivation to work on interesting, challenging projects)

Global consequences:

Attributions – attributions which people make differ across countries. One needs to be aware of this
fact when making decision or judging decisions of others.

Decision-Making – culture has influence on the decision-making process.

Ethics – there are different ethical norms in different cultures.

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Chapter 6: Motivation Concepts

One defines motivation as a reason for engaging in a particular behavior towards attaining a goal. It
relates to 3 key concepts: direction, intensity and persistence of human behavior. Intensity=how
much one tries, direction= it leads to the desired outcome, persistence=how long one tries.

Early theories of motivation

Hierarchy of needs – Maslow pyramid

1st level -> Psychological – hunger, thirst, shelter, sex

2nd level -> Safety – security, protection

3rd level -> Social – friendship, belonging

4th level -> Esteem – respect, status, recognition

5th level -> Self-actualization – self- fulfilment

Lower order needs (psychological, safety) must be first satisfied so high-order needs (the rest) can be
attained. One cannot move from satisfying psychological needs directly to social, because safety
needs were not satisfied. Higher-order needs are often satisfied internally (within the person),
lower-order needs are satisfied externally (pay, tenure) Later, Maslow’s theory of needs was
elaborated to ERG theory. This theory proposes only 3 core needs – existence, relatedness and
growth.

Theories X (negative) and Y (positive)

This theory is based on manager’s assumptions of their employees. Theory X is full of assumptions
such as: employees are lazy, dislike their work, everything is somebody’s fault, employees’ interest
in job is restricted to just being paid, employee cannot be trusted. Theory Y is based on assumptions
such as: employees may be ambitious, motivated, can handle work autonomy, can be given
authority and be empowered. In terms of Maslow hierarchy, higher-order needs dominate
individuals in theory Y, lower-needs dominate in theory X.

Two-factor theory (motivation-hygiene theory)

Theory developed by F. Herzberg. His studies proved that certain factors cause job satisfaction and a
separate set of factors cause job dissatisfaction. Hygiene factors are: status, job security, salary,
fringe benefits – if these factors are present, a worker won’t be dissatisfied. If they are absent,
workers will be dissatisfied. There are as well motivation factors: challenging work, recognition,
responsibility, and empowerment. These factors give positive satisfaction. Despite many criticisms,
this theory is widely known by managers.

McClelland’s Theory of Needs

It focuses on 3 needs: need for achievement (nAch), need for power (nPow) and need for affiliation
(nAff). These needs are subconscious. Researches focus mainly on nAch and the relationship
between nAch and job performance. Critique: the theory has less practical approach than others and
applying and measuring concept in practice is expensive and time-consuming.
Contemporary theories of motivation

Cognitive Evaluation Theory

Theory which addresses the effects of social contexts on intrinsic motivation. It states that if we
think we will be able to complete the task, we will be intrinsically motivated to complete the task,
requiring no further external motivation. And if we are extrinsically awarded for behavior which was
previously intrinsically rewarding, then the general motivation level drops. Examples of extrinsic
rewards: bonus, salary, verbal praise. Why does it happen?

1. When we are losing control over something, our (previous) intrinsic motivation lowers.

2. Absence of extrinsic reward changes one’s reasons to work (example: mother asks you to clean
your room – your behavior is influenced by an external factor, but with a course of time you begin to
like your room looking clean and neat and you do cleaning without your mother’s requests, just
because you are internally motivated, the cause of cleaning a room changes).

Critique: criticizing methodology and outcomes analysis. The effect of verbal and intangible award is
different on intrinsic behavior of an individual. A recent modernized version of the theory is called
self-concordance theory – it is degree to which a person’s motives for pursuing a goal are consistent
with the person’s interests and core values (page 219, Organisational Behavior). If one is working to
achieve intrinsic goal, it is more probably he will succeed and if he does not succeed he is still happy.
On the other hand, if a person works to achieve extrinsic goals (e.g. money), then it is less probable
he will succeed. Studies suggest that people whose work goals are connected with intrinsic motives
achieve higher job satisfaction, perform better and there is a person-organisation fit.

Goal-setting Theory

This theory claims that providing specific, challenging and interesting goals, while giving constant
feedback, results in better outcome. Acceptance of a goal, however hard it can be to achieve, results
in higher effort to achieve it.

Why are we ‘attracted’ to difficult goals?

1. Because a difficult goal focuses us, makes us concentrate on it and diminishes distractions.
2. A difficult goal makes us more energetic and more hard- working because indeed we need to work
better, harder to accomplish it.

3. Difficult goal equals more determination in pursuing it.

4. Difficult goal equals invention, finding new working methods to be more effective and efficient. In
this whole process, feedback serves as guidance, check list of things that are done and need to be
done.

Self-generated feedback is more effective than externally- generated feedback. There are also other
factors that influence goal-setting effect: a) Goal commitment b) Task characteristic c) National
culture. One can implement a programme called management by objectives (MBO) – setting SMART
goals (specific, measurable, actionable, realistic and tangible). Elements of MBO: goal specificity,
participation in decision making process, time period and feedback. MBO is similar to the goal-
setting theory, only differ in participative goal-setting vs. manager assigned goals. MBO may not
work due to unrealistic expectation, lack of commitment or the inability/unwillingness to reward
according to goal accomplishment.

Self-efficacy Theory

Developed by Albert Bandura. It is based on one’s confidence that he/she can perform/achieve a
goal. The higher one’s belief in succeeding (that is the higher one’s self-efficacy), the higher one’s
motivation and response to feedback. There are four methods of enhancing self-efficacy: enactive
mastery-relevant experience with the task/job, vicarious modeling- gaining confidence by watching
others performing the task, verbal persuasion-someone persuades you that you can succeed, and
the enhancement of positive emotional responses by the reduction of stress reactions (arousal).
Training programs use enactive mastery. The Galatea effect means communicating expectations
directly to employees and self-fulfilling of this expectation.

Reinforcement Theory

It is opposite to goal setting theory, indicating that behaviors are environmentally caused. Not a
motivation theory, but widely considered when discussing about motivation.

Equity Theory

This theory argues that employees compare their efforts and their outcomes with those of other
employees, in case of inequities they act. There are four ways one can compare his inputs and
outputs with those of co- worker: self-inside, self-outside, other-inside, other-outside. The
moderating variables of comparison are gender, length of tenure, level in the organization and
amount of education/professionalism. Same gender prefers references from the same gender. If one
spots inequity, he can make the following decisions:

Change the input

Change the output

Choose a different referent

Distort perception of self

Distort perception of others

Leave the field (e.g. leave the job)

Equity was perceived from the employee’s standpoint in the past (distributive justice), but now is
increasingly perceived from the organisation’s standpoint (organisational justice).

Expectancy Theory

Developed by Victor Vroom. Vroom's theory assumes that behavior results from conscious choices
among alternatives whose purpose it is to maximize pleasure and to minimize pain. Expectancy is
the belief that increased effort will lead to increased performance i.e. if I work harder then this will
be better. Focuses on 3 relationships:

Effort-performance relationship (“The harder I try, the better outcome will be”)

Performance-reward relationship (“The more TVs I sell, the higher bonus I will get”)

Reward-personal goal relationship (“The higher bonus I get, the better car I will buy”)

Challenge: To combine these theories and understand the relations between them (Figure 6.10,
page 161). Also, cultural differences must be considered.
Back to top

Chapter 7: Motivation - applications

Job Characteristics Model

Look at the appendix for the model.

Motivating Potential Score (MPS) – index that estimates the job’s motivating potential. It is
calculated as:

MPS = ((skill variety + task identity + task significance)/3) x autonomy x feedback Motivating jobs
needs to high at least on one of the three dimensions that create meaningfulness and on both
autonomy and feedback. However, it is better to add the above characteristics to improve
motivation, rather than using this complex model.

Job Redesign

Job rotation (employee is performing different tasks at different times, tasks shift, employee moves
from one job to another which requires the same skills level). Reduce boredom, increase motivation,
increase flexibility as employees have more skills. But it increases training costs, creates disruptions,
reduce productivity.

Job enlargement (employee is performing more different and various tasks, his work is becoming
more diverse and it horizontally widened) The application of job enlargement is not always
successful, as employees may dislike the job even more.

Job enrichment (vertical widening of one’s job, adding activities from different expertise fields, e.g.
controlling, leading, planning, implementing, one has more responsibilities and independence).
Reduces absenteeism, turnover costs, increase satisfaction, but doesn’t work very well in
productivity.
Alternative work arrangements

Flextime – flexible time work

Job sharing – two or more workers share a 40-hour week job

Telecommuting – working from home

Ability and opportunity

Performance may be calculated as = (ability x motivation x opportunity to perform). Opportunity to

perform means absence of barriers that may limit the performance of an employee

Employee involvement programs

Participative management – joint decision making between employees are their supervisors

Representative participation – representation of employees who participate in organizational

decision making instead of all workers participating in decision making, in form of works councils and
board representatives.

Quality circles – volunteer group composed of workers who meet to talk about workplace
improvement, and make presentations to management with their ideas, especially relating to quality
of output in order to improve the performance of the organization, and motivate and enrich the
work of employees.

Rewards as motivators

What to pay? Pay structure -> process of establishing pay level to balance internal and external
equity. Pay more: better qualified, motivated and longer loyalty, but leads to very high cost.

How to pay? More and more organizations use variable-pay programs – refers to compensation that
is received in addition to the base pay. The amount received may be linked directly to individual,
team, division and/or organization performance, and is determined (typically) by a variety of
measures important to the organization.

Piece-rate pay – employees is paid stable price for each unit of completed production. Limitation:
not feasible and realistic for many jobs.

Merit-based pay – pay plan that is performance-related. It provides bonuses for workers who
perform their jobs better, according to measurable criteria. Limitation: only valid upon the
performance evaluation on which it is based; dependant on the pay raise pool, resisted by (trade)
unions.

Bonuses – pay plan rewarding employees for latest performance (not past)

Skill-based pay - employees are paid on the basis of the number of job skills they have or have
acquired or number of jobs they can perform. Limitation: the organization may pay the employees
for acquiring skills which are not immediately needed.

Profit-sharing plan - various incentive plans introduced by businesses that provide direct (cash) or
indirect (stock) payments to employees that depend on company's profitability in addition to
employees' regular salary and bonuses

Gainsharing - program that returns cost savings to the employees, usually as a lump-sum bonus. It is
a productivity measure, as opposed to profit-sharing which is a profitability measure

Employee stock ownership plan – plan in which employees can buy company’s stock for below-
market prices as benefits.

What benefits to offer? Flexible benefits enable employers to select the benefits that suit them.
There are also 3 main types of benefits plan: modular plans, core-plus plans and flexible spending
plans.

How to construct employee recognition programs? – Intrinsic rewards

Financial motivators (pay plans, wage) are effective in short-term, while intrinsic rewards are crucial
motivator in long-term. Intrinsic rewards can be just informal thank you as well as the whole
formally developed program. Intrinsic rewards plans are inexpensive but are vulnerable to politics of
management.

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Chapter 8: Emotions and moods

Affects

Also referred to as the experience of different feelings, can be divided into emotions and moods.

Emotions

Are more intense and have a contextual stimulus (they are caused by a person, situation, action,
event); they usually last for seconds/minutes. Emotions: most of researches have agreed that there
are 6 basic emotions: happiness-surprise-fear-sadness-anger-disgust.

Emotions are critical to rational thinking because they provide us with information regarding our
comprehension of surrounding world. There are few functions of emotions. First set of functions is
based on the concept if evolutionary psychology – it is concept which states that people need to
experience emotions since they have a purpose. It is based on Darwin’s theory that emotions help
solve problems. There are researches who question evolutionary psychology because it may not be
valid in case of all emotions (e.g. fear).

Moods

Are less intense and lack situational stimulus. Are usually not felt towards people and last longer
than emotions. Moods are more cognitive while emotions are more behavioral (can lead us to
action). Moods and emotions can influence each other. Emotion, if it is deep and lasting, and turn
into mood.

Moods can be of negative or positive affect. Positive affect is a set of moods consisting of positive
emotions, we distinguish high positive emotions: excitement, self-assurance, cheerfulness and low
positive emotions: boredom, sluggishness and tiredness. Negative affect is a set of moods consisting
of negative emotions, we distinguish high negative emotions: nervousness, stress and anxiety and
low negative emotions: relaxation, tranquility and poise. Moreover, exists something like positivity
offset what means that most of people experience slightly positive mood when nothing special is
happening.
Sources of emotions/moods

Personality – people have tendencies to experience some moods/emotions/ Moreover, people also
differ in how intense they experience emotions. This last concept is called affect intensity

Time – worst moods early in the week, best moods late in the week. Most positive emotions at mid-
point between waking and sleeping, negative emotions highest in the morning and later average

Weather – weather has little influence on mood. What happens on the cultural level in the society is
illusory correlation (people think that nicer whether makes them feel better) – it occurs when people
associate some events when in reality there’s no link between them

Stress – stress negatively influence moods/emotions

Social life – social activities make people experience positive emotions and also people experiencing
positive emotions seek social activities

Sleep – poor sleep equals negative emotions (at work reduces job satisfaction).

Exercise – sport increase positive moods

Age – negative emotions occur less and less with age. With age, we are more emotionally wise

Gender – women are more emotionally expressive than men due to differences in socialization

Emotional labour

Emotional labour is form of emotional regulation in which workers are expected to display certain
emotions as part of their job, and to promote organizational goals. The intended effects of these
emotional displays are on other, targeted people, who can be clients, customers, subordinates or co-
workers. What happens sometimes is emotional dissonance (showing one emotion while
experiencing another), it is often a difference between felt emotion and displayed emotion
(displayed emotions/regulations are organisationally required and claimed as appropriate in a
particular job).
Employees can show displayed emotions by:

Surface acting - "painting on" affective displays, or faking; Surface acting involves an employee's
presenting emotions on his or her "surface" without actually feeling them. Is more stressful than
deep acting

Deep acting - attempt to change one’s inner feeling to match emotion expressions that an
organization requires (that is displayed emotions).

Affective events theory

Model developed to identify how emotions and moods influence job performance and job
satisfaction. The model increases understanding of links between employees and their emotional
reaction to things that happen to them at work.

Look at the appendix for the model.

Hypothesis:

Emotions affect different job satisfaction and job performance dimensions, such as

organizational citizenship, organizational commitment, workplace deviance, level of effort and

intention to quit.

Emotional episode is actually a series of emotional experiences precipitated by a

single event.

Current emotions always influence job satisfaction, also past emotions about the
event influence the job satisfaction.

Since emotions/moods vary over time, their influence on performance varies.

Emotion-caused behaviors are rather short lasting and of high variability.

Emotions, even the positive ones, have negative influence on job performance.

Emotions provide valuable insight into understanding employees’ behaviors.

Employees and managers cannot ignore emotions and events that influence them.

Emotional intelligence

EI is the self-perceived ability to identify, assess, and manage the emotions or emotional cues of
one's self, of others, and of groups. It is a controversial concept in OB.

PROS EI

CONS EI

Intuitive appeal

Too vague for a concept

Predicts criteria that matter – High EI claimed to correlate to a better job performance

Can’t be measured
EI is biologically based

Suspect validity

OB applications of moods and emotions

Selection -> More and more employers use EI tests when hiring.

Decision making -> Moods/emotions have an important influence on decision- making. Positive ones
improve decision- making and problem- solving. Depression undermines performance.

Creativity -> Good moods contribute to creativity.

Motivation -> Organisations that promote positive moods are likely to have more motivated
employees, thus there is a positive correlation between positive mood and higher motivation

Leadership -> Leaders usually are and should display emotions, like excitement, enthusiasm, etc…
This is critical in persuading people/employees to new idea, strategy, vision.

Negotiation -> Moods and emotions may hamper negotiations. Displaying negative emotion may be
effective, but feeling of poor performance may hinder future cooperation.

Customer Service -> sometimes employees experience emotional dissonance. Moreover, what
employees feel may transfer to customers. It is called emotional contagion – “catching” or copying
emotions from others.

Job attitudes -> People who had good day at work, usually are in good mood when coming back
home that day and the same refers to bad day at work.

Deviant workplace behavior -> negative emotions may lead to deviant workplace behavior.

How managers can influence moods? -> By showing them a funny video – make them laugh, offering
them pleasant beverage – using humor and showing appreciation for good job. When managers are
rather in good mood then employees are positive as well. Use emotional contagion.
Global consequences

Degree to which people experience emotions varies across countries

Norms for expression of emotions differ across cultures

People’s interpretations of emotions vary across cultures (some cultures value certain emotions
more than others, but interpretations are basically similar)

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Chapter 9: Foundations of Group Behavior

A group is defined as two or more people coming together to achieve an objective.

Group types

Formal group – a work group defined by organisational structure

Command group – group composed of people who report directly to a manager

Task group – composed of people working and aiming at completion of a task

Command groups are also task groups, but not necessarily vice versa.

Informal group – is not formally structured, formed by the needs of social contacts

Interest group – people working together to achieve some objective, but at the same time each and
every single member is concerned about the issue/aim

Friendship group – people who share one or more common features/characteristics

Reasons to join a group: security, status, self-esteem, affiliation, power and goal-achievement.

Stages of group development

Five-Stage model

An alternative model for temporary groups with deadlines. Punctuated-equilibrium model

Five-stage model:

Stage 1. Forming: orientation, testing, dependence. Members come together to form a group.

Stage 2. Storming: conflict, emotionality, and resistance to influences and task requirements.
Members become hostile and combative. Leadership is formed during this stage.

Stage 3. Norming: in-group feeling and cohesiveness develops, new standards evolve, new

roles adopted. Members accept roles and behaviors of others.

Stage 4. Performing: the group becomes a functional instrument for dealing with tasks and present
reality. Members have established norms and are able to diagnose problems and come up with
solutions.

Stage 5. Adjourning: the group ends its existence, closure. For temporary groups, it is a stage when
members prepare for group dissolution.
Assumptions:

What makes an effective group is more complex than the model suggests

Groups do not have to go through all the stages, they may jump e.g. from 1st to 4th stage

Stages may go simultaneously

Critique: the model ignores organisational context

Punctuated-equilibrium model:

Stages:

Setting the group’s direction

First phase of group activity – inertia (inactivity, apathy, lethargy)

At the end of first phase a transition takes place (group has already used ½ its time)

Transition leads to major changes

Second phase of inertia follows transition

Group’s last meeting can be described as accelerated activity

The model does not apply to all groups, but only those which work temporarily and have a set
deadline to complete work.
Group properties

Roles: a set of expected behaviors ascribed to a person occupying a particular position in a social unit
(e.g. one can have a role of student, son/daughter, (boyfriend, worker, etc.) Zimbardo’s Prison
Experiment shows that people quickly learn/assume roles, sometimes through stereotypes and
information that mass media and other parties disseminate.

Role identity – situation when attitudes and behaviors are consistent with a role

Role perception – person’s vision on how he/she should behave in a certain circumstances

Role expectations – how other people believe one should behave in a certain situation

Role conflict - takes place when one is forced to take on two different and incompatible roles at the
same time and as a result he/she faces conflicting role expectations

Norms: standards of behavior shared by a group’s members. Norms tell us what we should do in
particular situations. Groups, communities, units, cultures, nations have norms. There are
performance roles, appearance roles, social arrangement roles and resource allocation roles.

The Hawthorne studies proved that people behave differently if they are aware of being watched,
observed, or examined, but as a group, they don’t violate the norm established. They also
emphasised the role of norms in one’s work behavior.
As a member of a group, one often experiences the conformity phenomenon – it is the adjustment
of one’s behavior to align with the norms of the group. There are group norms which press us to
conform with them, to be one of the group’s members.

Deviant workplace behavior is intentional behaviors that violate organizational norms, which
threatens the members and well-being of an organization (e.g. wasting resources, sabotage
properties, spreading rumours, sexual harassment). Individuals who belong to a group are more
likely to engage in deviant behaviors.

Status: is important because it can play the role of a motivator and due to inconsistencies between
perceived and self-status it can have behavioral consequences.

The Status Characteristics Theory states that there are 3 sources of status:

The power a person wields over others

A person’s ability to contribute to a group’s goals

An individual’s personal characteristics

There are a few correlations between status and norms. First of all, people of higher status are
allowed for more deviations from norms and are more resistant to conformity phenomenon. There
is also a tendency for high status people to be more assertive and to be more active in group
interactions. Due to differences in status between group members, a group’s work can suffer –
people of lower status could contribute greatly to a group’s work if it wasn’t for their passiveness in
group’s discussions. Moreover, it is important for group members to think of others in a group as
people of comparable, equitable status. E.g. hiring through relationship, contacts - differences in
status creates tensions.
Size: the size of the group affects it’s functioning. Smaller groups tend to be faster, but larger groups
are better for complex problem-solving issues. General rule may be that large groups can put more
diverse input, but smaller groups do it more productive. The concept of social loafing appears. This
concept states that individuals try less when working in a group than when working individually. To
prevent this phenomenon the following tactics can be used: a) set group goals, b) increase
competition within a group, c) set an evaluation plan – peers evaluate peers, d) distribute group
rewards.

Cohesiveness: it is a degree of members attraction to each other combined with motivation to stay
in the group. It is easier for smaller groups to achieve cohesiveness. Cohesiveness relates to group
productivity. If performance-related norms are high, a cohesive group will experience more
productivity.

What can encourage group cohesiveness? Smaller groups, consensus on common goals, more time
spent tighter by group members, enhance the group’s status, encourage competition with other
groups, reward group, not just members, physically isolate the group.

Group decision- making

Group versus individual:

PROs GROUP DECISION MAKING

CONs GROUP DECISION MAKING

Generate more complete information and knowledge

More inputs to the decision making process

Enhance diversity of views – more perspectives, more solutions

Increased acceptance of a solution

Time consuming

Conformity phenomenon hinters the decision making process

Decision may be dominated by individual(s) in a group

Ambiguous responsibility, collective responsibility

Effectiveness:

When we take into account accuracy, group decision making is better, when speed is the concern,
then individual decision making is more effective, In terms of creativity, groups will also bring more
to the table.

Efficiency:

It takes longer for a group to make a decision than it does for an individual.

There are two phenomena that can take place in group decision -making: groupthink and groupshift.
Groupthink is exhibited by group members trying to minimise conflict and reach consensus, which
can lead to a lack of critical testing, analysing, and evaluation of ideas. Conformity pressures are very
high and group members decide to follow the ideas, thinking, and decisions made by others. There
are few signs of groupthink:

Illusions of unanimity among group members; silence is viewed as agreement.

Self-censorship of ideas that deviate from the apparent group consensus.

Direct pressure to conform placed on any member who questions the group’s consensus.

Rationalising warnings that might challenge the group's assumptions.

Groupthink does not characterise all groups. It happens more often when the group’s identity and
cohesiveness is high. Also groups that have a negative self image are more threatened by
groupthink.

The remedies for groupthink can be:

Monitoring the size of the group. The bigger group, the more probable the occurrence of groupthink.

At least one group member should be assigned the role of Devil's advocate. This should be a
different person for each meeting.

Leaders should be impartial and should encourage different opinions and views.

Using techniques that stimulate discussion.

Groupshift is a phenomenon in which the initial positions of individual group members become
exaggerated because of the interactions of the group. Group opinions are more conservative than
individual’s. There are risky shifts and cautious shifts. More often, the shift is towards greater risk.
The best explanation for that is that group diffuses responsibility and the accountability objects are
not clearly defined and that’s why members dare to take riskier decisions.

Group decision- making techniques

Interacting groups are typically groups where there is face-to-face contact.

Brainstorming is the idea-generation process or creativity-technique that is meant to generate many,

different ideas in order to solve a problem. The drawback of this technique is that it is not efficient.
Individuals are more productive in this respect; as groups tend to face “production blocking” – many
people talking at once, thoughts are blocked, communication is hampered.

Nominal group technique (NGT) is a decision making method for use amongst groups of many sizes
who want to make their decision quickly, as by a vote, but where everyone's opinions are taken into
account. Discussion and interpersonal communication are limited. NGT outperforms brainstorming.

Steps in NGT:

1. Silent generation of ideas - members meet and write down individually ideas on a sheet of paper.

2. Sharing ideas - each group member presents one idea to the group members. There are turns until
all ideas are shared.

3. Group discussion – the group discusses ideas and clarifies them.

4. Voting and ranking – each member ranks ideas. The idea with the biggest amount of votes wins.

Electronic meeting or computer-assisted group:

Group members work with computers to make a decision. First issues are presented. Then, group
members type their responses. On the projection screen there are comments and cumulated votes.
Ideas that a person types, appears on the screens of the other team members. Advantages of this
technique: anonymity, speed, honesty. However, researches showed that this method causes
decreased group effectiveness, is time-consuming and leads to lower satisfaction than face-to-face
meetings.

Global consequences:

Cultural differences affect status. It is important to know the role of status in a given culture.

Social loafing is consistent with individualistic cultures/societies, not with collective ones.

Group diversity (especially ethnical and cultural) can lead to increased conflict and low group
morale. However, if they survive initial conflicts over time diverse groups perform better.

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Chapter 10: Understanding work teams

Teams have become an effective and efficient way to make use of employees’ talents. It was found
out that teams have more flexibility and sensitivity to changing circumstances as well as benefitting
from additional motivational factors.

What are the differences between groups and teams?

Work team: the output (result) is greater than sum of individual inputs.

Work group
Work team

Goal

Share information

Collective performance

Synergy

Neutral (sometimes negative)

Positive

Accountability

Individual

Individual and mutual

Skills

Random and varied

Complementary

Types of teams

Problem- solving teams -> 5-12 employees from the same department meet on a weekly basis to
discuss issues such as quality, efficiency, opportunities and working conditions. They share
information on how things can be improved. They usually cannot make decisions.
Self-managed work teams -> teams that can solve problems and implement solutions as well as take
accountability for their results. Such teams count 10-15 employees who perform very
similar/interdependent jobs. Team members take some duties, tasks from their supervisors.
Nevertheless, there is not clear evidence of the effectiveness of self-managed teams. It happens that
members of those teams are more absent at work and have higher turnover statistics. At the same
time, they can be more satisfied with their job. Effectiveness depends on the teams’ norms,
strength, task types and rewards system.

Cross-functional teams -> teams composed of employees who are comparable in a hierarchy, but are
from different departments and their common goal is to accomplish a task. It is a good method for
information exchange between different work areas. They are effective in idea generation, problem
solving and controlling complex assignments. However, they are time-consuming (to build trust and
teamwork)

Virtual teams -> teams that use ICT to have a contact with physically unreachable members in order
to accomplish a common goal. To the main challenges of these teams belong: less direct interactions
between members (least social method), face-to-face discussion advantages cannot be transferred;
members report less satisfaction with group interactions. Those teams are more task-oriented. For
virtual teams to work effectively a manager should make sure that there is trust between team
members, progress on an assignment is monitored and outcomes of team work are publicized within
organization.

What are the characteristics of effective teams?

Look in the appendix for an overview

1. Context components:

- Adequate resources -> teams rely on resources the organisation is willing to give them. Not enough
resources limit teams’ effectiveness. Resources can include information, equipment, staffing,
assistance and support.
- Leadership and structure -> team members must agree on who is doing what. It requires leadership
and team structure to create a fit between individuals’ skills and work tasks. In self-managed teams,
the manager is limited to outside management, while team members perform many inside
management duties. Moreover, what is also important is the multi-team system, where various
teams need coordination to achieve a goal. In multi-team system, leadership plays crucial role –
leaders are to empower teams and facilitate inter-teams processes.

- Climate of trust -> effective team is a team of people that trust each other and trust the leader.
Trust in the leader makes team members follow the strategy and accept the chosen solutions. If
there is trust between team members, the team is more inclined to take risks.

- Performance evaluation and reward system -> rewards must be focused on both individual and
team performance. Individual rewards should be reinforced by team rewards.

2. Composition components:

- Abilities of members -> effective teams need members that have technical skills, problem-solving
skills and decision-making skills, and/or lastly interpersonal skills. The balance between these three
skill components must be kept. Skills can be learnt throughout the working process. There are a few
relations between team members’ abilities and team performance. In case of thought-demanding
tasks, high-ability teams perform better. They are also more flexible. In case of easier tasks, low-
ability teams stay on track of the tasks, while high-ability teams are easily distracted. It needs to be
remembered that matching team ability with task matters. Finally, the leader’s abilities matter.

- Personality of members -> teams that have members who rate higher on conscientiousness and
openness to experience, perform better. Moreover, there has to be a minimum degree of
agreeableness among team members.

- Allocation of roles -> There are 9 major, team roles:

Plant - initiate creative ideas and solve difficult problems

Resource investigator - being the communicator to the external, explore opportunities and contacts.

Coordinator - chairperson, set goals, delegate and promote decision making.

Shaper – putting pressure, push to overcome obstacles

Monitor evaluator: judging carefully and accurately all options

Teamworker: listener, build, avoid conflicts

Implementer: turn ideas into practical actions efficiently

Completer finisher: total check for errors/omissions, ensure on-time delivery

Specialist: provide special knowledge, but only on one side of the problem, i.e. single minded)

- Diversity of members -> The most important point in managing diverse teams is to focus on
members’ uniqueness in thinking, perceiving, analysing in order to get out of them creativity and
support for other members. Furthermore, a notion of organisational demography appears – concept
which claims that analysing team members’ shared demographic features (age, sex, race, work
experience, education) allows turnover prediction. Obviously, the less common features, the more
difficult communication and thus the more probable turnover.

- Size of teams -> Most effective teams are composed of no less than 5 and more than 9 people.
Usually, managers make too big teams. The bigger the team, the less cohesive it can be; Additionally,
bigger teams are more vulnerable to social loafing, less interpersonal interactions and worse
coordination.

- Member preferences -> not all people are team- players, some prefer working individually and that
should be taken into account when creating a team.

3. Work design components -> work-design dimension, discussed in Chapter 7, improve members’
motivation and teams’ effectiveness. They motivate because they increase degree of responsibility
and make work more interesting.
4. Team processes components -> because of social loafing, the group effectiveness is less than the
sum of individual members’ effectiveness.

- Common plan and purpose: showing reflexivity

- Specific goals -> effective teams have SMART objectives/goals

- Team efficacy -> effective teams believe in themselves, have high team-efficacy. However,
managers should provide teams with training, because the higher team members’ abilities and belief
in them, the higher team’s confidence.

- Mental models -> effective teams have similar mental models, which are knowledge and beliefs
about how tasks and work are accomplished successfully.

- Conflict levels -> not every conflict is bad. The most dysfunctional conflict type is relationship
conflict. On the contrary, positive conflict example may be task conflict. In general, teams without
conflicts can suffer from lethargy; conflict reduces probability of groupthink. Conflicts (on the
acceptable level) have the ability to improve team’s effectiveness.

- Social loafing -> effective team is composed of people that avoid social loafing and feel accountable
for the task outcome individually and as a team.

Ways to create team players:

1. Selection: hiring team players -> the best opinion is to hire already good team players to work
areas that demand group working, instead of training them or transferring to a work field that does
not require team spirit.

2. Training: creating team players -> hire specialists to train employees to become good team
workers.
3. Rewarding: encouraging team players -> individual rewards should be balanced with rewards
given to teams. In case of teams however, rewards should favor collective effort.

NOTE

To some tasks better are individuals than teams. Teams are not always the solution. If the task is
simple and can be accomplished by one person, the team should not be created. Moreover, the
work in a team has to be based on aiming at a common goal, one purpose. If it is not the case, team
creation is not reasonable. Finally, team creation has sense when people working in a team have
interdependent tasks and thus need to cooperate to achieve a goal.

Global consequences:

Extent of teamwork varies. For example, in the US (a particularly individualistic country) the extent
of teamwork is not as big as in e.g. Canada or Asia.

When creating self-managed teams, managers need to be careful of the cultural norms and values.
Workers from countries high in power distance are less willing to operate in a self-managed team
(due to their respect from hierarchy, authority) and need more guidance.

Culturally diverse teams have difficulties in team’s functioning at the early stages. It takes time for
people to learn how to overcome conflicts and effectively communicate with others.

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Chapter 11: Communication

Effective and successful communication in a workplace is very important. Problems with

communication are the number one cause of conflicts. Recently, communication skills were
discovered to be the most important skill of a job applicant. Communication is the spread of
information as well as understanding the meaning of the information received/given.

Communication functions
In the OB context there are several functions that communication fulfills. Those functions are:
control, emotional expression, motivation and information. First of all, communication aims at
controlling one’s behavior – think of e.g. an employee required to report work progresses.
Moreover, communication enhances motivation – all motivational techniques require
communication. Furthermore, communication as an emotional expression helps in social
interactions to express our feelings, moods, emotions, and attitudes. Lastly, communication provides
information that is a must in decision- making processes and managerial tools.

Communication process

To understand communication, one needs to be familiar with the so-called communication process
in which the two objects are central – sender and receiver. However, for the communication to be
effective between a message sender and receiver the following phases take place.

As soon as there is a message ready to be sent, sender encodes the message.

The message is transmitted through a chosen channel.

The communication process can be more difficult because of the noise (anything that makes
message more difficult to be understood, received)

The communication can end with the receiver receiving and encoding the message (understanding
the meaning) or with the feedback given from receiver to message source, which is sender.

A sender can choose either informal or formal channels to transmit the message. Formal channels
are set up by the organisation and refer to transmitting work-related messages. Informal channels
are spontaneous and are the response to individual needs.

There are 3 possible communication directions:

Downward communication ↓

Upward communication ↑

Lateral communication ↔

Communication flows from upper to lower levels in the organisational hierarchy. Many forms: face-
to-face, letters, e-mails, etc…

The problem with this communication direction is its one-sidedness – e.g. top managers
communicate to teams, but rarely ask for their advice/opinion. Moreover, the best managers always
give explanations of reasons why and how a decision was made.

Flows from lower to higher levels in the organizational hierarchy. It is extremely important to listen
to what employees have to say, what they want, what their ideas are.

Tip: As an employee do not overload your manager with excessive information – (s)he can be easily
distracted. Communicate clearly, directly and up to the point.

Communication between members on the same level. Called horizontal communication.

Pluses: Saves time, easier coordination.

Minuses: Can be dysfunctional.

There are a few types of interpersonal communications. The first one is oral communication. It is
superior to others in the case of speed and immediate feedback availability. The main disadvantages,
however, are the number of possible parties involved (it is not the best option for a number of
potential message receivers, the effect of a “telephone game” – message goes along many people
what can distort its initial meaning). There is also written communication. The main pluses of this
communication type are: tangibility and verifiability. Complex reports, business plans allow to go
back to parts already read. Moreover, there is tendency to value written word more than spoken.
One of minuses is that writing a message/text/(news)letter requires time and written
communication does not allow for direct feedback. Lastly, there is nonverbal communication. Oral
communication cannot take place without nonverbal communication. Nonverbal communication
components are: body movements, intonation, facial expressions, physical distance. Sometimes it
happens that our nonverbal and verbal communications are inconsistent with each other.

Formal communication networks

Formal small-group networks. Three possible networks are: chain, wheel and all channel. The
communication in chain is strictly operating in a chain of command. Its strongest point is accuracy.
The wheel network is dependent on a person that coordinates communication between people. This
type often happens in teams with strong leaders. All-channel network permits free communication
between network’s members. Everyone talks to everyone. Its strongest point is high member
satisfaction. It often takes place in self-managed teams.

The Grapevine – organization’s informal communication network. The fact that it is not formal, does
not refer to meaningfulness of messages communicated. This network has 3 main features: it is not
controlled, it is seen as very trustworthy source of information, it is often used for the vested-
interest of individuals. It was estimated that 75% of information passed though the grapevine is
accurate, true. Grapevine effects are reinforced by news’ importance, ambiguity and created by
them anxiety. Grapevines fulfill also social and security needs. However, there are negative
consequences to grapevines that managers should eliminate.

Electronic communications – basic and important communication channel.

E-mails (its minuses include: possibility of message misunderstanding, a must to be sensitive when
communicating bad news, negative information, e-mail overuse (abuse), difficulties with expressing
the right level of emotions via e-mails, e-mails control and security)

Instant messaging/text messaging (better than e-mail with short messages, but may be distracting
from work; security concern; informal language usage)

Networking software: Facebook, MySpace, LinkedIn should be used for “high-value items only”, not
as a daily tool.

Web logs (blogs) – employees write blogs while many companies do not have content policies
regulating that, however, this does not mean that employees can share everything with internet
users.
Video conferencing – soon alternative to business traveling

Knowledge Management (KM)

It is a concept that comprises a range of practices used by organizations to identify, create,

represent, distribute and enable adoption of what it knows, how it knows it and how/to whom it is
communicated. KM makes people in the organization aware of how and what information may be
revealed. Thanks to this, it makes the organization competitive for longer. For KM to work
effectively, the right corporate culture needs to be in place. The culture that promotes information
sharing, transparency. KM should be the motivator for employees to share information with other
employees and third parties. KM also regulates the leak-tightness of the organization making it more
hermetic in case of unwanted information leaks.

One should choose the communication channel carefully. Each channel has different information
richness (quantity of information conveyed). The choice of channel depends on the fact whether the
message is more routine or non-routine based. Rich channels better communicate non-routine
messages. Good managers usually find the right match between channel richness and message
ambiguity. There is a tendency to use more often richer channels.

Communication barriers

Whatever communication form we choose, we should prepare for facing communication barriers.
These barriers include:

Filtering – sender manipulates the information so the receiver takes it as more favorable. Telling
what others want to hear. It happens more often in case of status differences and in organizations
with higher hierarchical ladders.

Selective Perception – we select and interpret information we are exposed to. Not everything that
sender is transmitting, is received by receiver because the receiver picks the information he values,
is interested in, etc…

Information Overload – we cannot process each and every information that is sent to us. We are not
capable of that (imagine processing each ad you are exposed to every day). And thus we select, pick
and ignore some information.
Emotions – the way we feel, influences the way we interpret information.

Language – slag, professional jargon, dialects.

Communication Apprehension – fear/anxiety felt about oral or/and written communication e.g.
public speeches, calling on a phone, writing formal letters.

Gender differences – researches showed that in communication men emphasize status and position,
while women try to make connection.

“Politically correct” communication – carefully expressing opinions in a way that does not offense
anyone, while loosing some of the message’s meaning and can hamper effective communication.

Global consequences:

A) Cultural Barriers

barriers caused by semantics

barriers caused by word connotations

barriers caused by differences among perceptions

barriers caused by tone differences

B) Cultural Context -> high and low context cultures: the importance of non-verbal language in the
culture.
C) Cultural Guide: try to understand, put yourself in shoes of people you are talking/listening to; if
you are not sure whether the interlocutor is culturally similar to you first assume a difference and
check if it true; when explaining something try to describe, not interpret; if you have created theory
that is based on your interpretation, try to confirm it and research on it more.

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Chapter 12: Leadership

First of all, the difference between management and leadership has to be explained. Management,
according to John Kotter, means coping with complexity. Leadership, however, means coping with
change. Robert House has different view on this. He thinks that management’s job is to execute
strategies set by leaders, as well as to control, take care of HR and be busy with everyday problems.

The book defines leadership as ability to motivate, encourage a group to achieve set goals, vision or
strategy. The role of the leader may be assigned (formal) or deduced by a person from the position
he/she occupies in the organization. Managers are not equal to leaders. Nevertheless, management
needs both: effective management and effective leadership.

There are a few theories on leadership:

Trait theories on leadership

Theories based on the concept of distinguishing leaders from non-leaders on the basis of person’s
individual qualities and characteristics. These theories claim that leaders are born, not made.

Researches have had difficulties with determining the number and naming the traits that make a
person a good leader. Then, the development of Big Five personality model made it easier for
researches. It has become noticeable that many traits attributed to leaders fall into one or many
categories of the Big Five. So, accordingly:

Extraversion is claimed to be the most important trait of leader emergence, not necessarily of
leader’s effectiveness. Social people are the better leaders than unsocial. Moreover, leaders that are
too assertive are less effective.

Conscientiousness and openness to experience also show strong, positive correlation to leadership.
Agreeableness and emotional stability are not highly related to leadership.

Another trait, not included in the above Big Five model, is EI (emotional intelligence). What is
decisive in case of EI’s importance to leadership is EI’s core value: empathy. Effective leaders are
empathic leaders (leaders that can read other’s feelings, reactions, are good listeners). Nevertheless,
there is more research on other traits, other than EI, and their corrections to leadership.

Summing up, person’s traits help to predict his/her leadership behaviors. Nevertheless, one has to
careful with linking traits with effective leadership, because traits are better predictor of leaders’
emergence rather than effectiveness.

Behavioral theories

Theories based on assumptions that certain behaviors distinguish leaders from non-leaders. The
limitation of this theory can be proved by theory’s main assumption that people can be trained to be
leaders, what is obviously not complete truth. So theories proposed that leadership can be taught.

Ohio State Studies

Ohio State Studies developed 2 dimensions of leadership behavior:

Initiating structure - task-oriented behaviors that facilitate goal accomplishment. Extent, to which a
leader defines leader and group member roles, initiates actions, organizes group activities and
defines how tasks are to be accomplished by the group.

Consideration – people-oriented behaviors. Extent to which a leader exhibits concern for the welfare
of the members of the group. This factor is oriented towards interpersonal relationships, mutual
trust and friendship
Leaders high in consideration make their followers more job-satisfied, motivated and more
respectful.

Leaders high in initiating structure make their followers perform better in groups.

University of Michigan Studies

Also developed 2 dimensions of leadership behavior

Employee- oriented leaders: focus on interpersonal relations, have personal interest in employees’
needs and recognise differences between group members. Associated with higher group
productivity, greater job satisfaction.

Production oriented leaders: focus on task-related and technical issues. Associated with lower group
productivity and job satisfaction.

Blake and Mounton developed a managerial grid (leadership grid), a 9-by-9 matrix representing two
variables; concern for people and concern for production. It represents both University of Michigan
studies on employee and production oriented leaders and Ohio State studies on initiating structure
and consideration. The managerial grid is a good tool for conceptualizing leadership. Leader that
score 9,9 on the grid are the most effective ones.

Trait theories and behavioral theories should be combined for maximum effectiveness. However
they both lack some situational factors.

Contingency theory

This theory states that the leader's ability to lead is contingent upon various situational factors,
including the leader's preferred style, the capabilities and behaviors of followers and also various
other situational factors.
Fiedler Model

The model postulates that the leader’s effectiveness is based on ‘situational contingency’, that is a
result of interaction of two factors, known as 'leadership style' and 'situational favourableness’
(situational control). For the purpose of the research Fiedler developed the least preferred co-
worker (LPC) questionnaire to measure whether an individual is task or relationship oriented. On the
scale 1-8, with 16 sets of adjectives employees rate their co-workers. On this basis, the leadership
style of the respondent is developed. Fiedler claims that in reality there are combined leadership
styles (both task and relationship oriented to different degrees). After fulfilling LPC questionnaire
and thus estimating leadership style, a fit between the leadership style and situation has to be
found. Fiedler defined 3 situational factors:

Leader-member relations (either poor or good) – the better score, the better for leader

Task structure (either high or low) – the higher structured job, the better for leader

Position power (strong or weak) – the stronger position power, the better for leader

Together, there are 8 categories the leader can fall into. To change the state of art (in case of
ineffectiveness), the leader or the situation can be changed.

The model has been positively evaluated. But there are some complications with LPC questionnaire
and practical application of the model.

The recent update of Fiedler model is cognitive resource theory. The theory focuses on the influence
of the leader's intelligence and experience on his or her reaction to stress, and states that the
intelligence and experience can actually reduce stress. But it is the degree of stress that verifies if the
intelligence and experience will positively (low stress) or negatively (high stress) influence leadership
behavior.

Hersey and Blanchard’s Situational Theory

This theory states that depending on employees’ competences and commitment to task as well as
on acceptance/rejection of the leader, leadership style should vary from one person to another. It
focuses on leader’s followers. In this theory effectiveness of leader depends on followers’ behavior.
Hersey and Blanchard recognise 4 leader behaviors that depend on followers’ readiness:

Unable and willing – leader need to show high task-orientation and high relationship orientation

Unable and unwilling - leader needs to give unambiguous directions

Able and willing – leader doesn’t do much

Able and unwilling – leader need to use motivating, supportive leadership style

The evaluation of the theory was rather under critique. There are inconsistencies in the model and
issues with research techniques.

Path-goal theory

A theory which states that a leader's function is to clear the path towards the goal of the group, by
meeting the needs of subordinates. The theory is based on Expectancy Theory of Motivation and on
Ohio State Studies (on structure initiating and consideration). The author of the theory, R.House,
recognized 4 leadership behaviors:

Directive leader - leader lets followers know what is expected of them and tells them how to
perform their tasks

Participative leader - involves leaders consulting with followers and asking for their suggestions
before making a decision

Supportive leader - leader is friendly and approachable, shows concern for the followers’
psychological well being
Achievement-oriented leader - leader sets challenging goals for followers, expects them to perform
at their highest level

The model assumes 2 categories of situational variables. A category of variables that can be and
cannot be controlled by an employee. The first category of variables that can be controlled are
personal characteristics (locus of control, experience and perceived ability), the second category are
environmental contingency factors that cannot be controlled (task structure, formal authority
system and work group).

Critique of contingency theories – they do not take into account followers. Leadership does not
when it is considered only from the perspective of a leader, because leadership is a relation between
a leader and followers. In reality, leaders act differently towards different people.

Leader-member exchange (LMX) Theory

Focuses on the two-way relationship between supervisors and subordinates. Leaders often develop
relationships with each member of the group that they lead, and Leader-Member Exchange Theory
explains how those relationships with various members can develop in unique ways. In the group,
there are in-groups – trusted followers to who leader pays more attention an out-groups – followers
who get less attention, time, and rewards. The relationship between a leader and out-groups are
more formally set than those between a leader and in-groups. It is the leader who classifies certain
followers to in-groups or out-groups at the beginning of a group’s functioning. This classification is
usually driven by absence/presence of common characteristics. This relationship is rather stable.

It is claimed that people in leader’s in-group and the leader share more common features than in
case of people in leader’s out-groups.

The evaluation of this theory was rather positive. It is true that leaders do make distinctions
between followers. In-groups have better performance, higher satisfaction, more support for leader
and higher citizenship behavior.

Decision Theory: Vroom and Yetton’s Leader-Participation Model

Relates leadership behavior and participation to decision making. Provides a set of rules to
determine the form and amount of participative decision- making in different situations. There are
now 12 contingency variables in the latest revision of this model. This model is often too
complicated for managers/leaders to actually put into place in organizations.

Leaderships in Europe:

Three clusters identified:

Cluster 1: The Anglo culture (UK & Ireland). Focus on results. Leaders empower and motivate people

Cluster 2: Scandinavian, focus on relationships. Similar values to cluster 1, but differ in the general
quality of life, instead of competitive individualism in cluster 1.

Cluster 3: Mediterranean cluster: leaders are expected to be more powerful.

Europe leadership can also be clustered as East and West. Western Europe is also clustered in north
and south with differences in leadership style and perception

Global consequences - differences in leadership around the world:

Brazil: managers in Brazil need to team-oriented, participative and caring. Leaders in Brazil are
people-oriented, are high on consideration level.

France: leaders over there need to be high in structure; initiating, task-oriented, better directive
style of leadership rather than participative or supportive.
Egypt: similar to Brazil with the difference in power distance. There is a clear status and power
distinction between leader and followers.

China: High-performance orientation combined with high level of consideration. There are also
status differences expectations. The best option: moderately participative style.

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Chapter 13: Contemporary Issues in Leadership

Framing is a way of communicating to create/modify/change meaning. Framing influences

leadership behavior because it makes leaders capable of influencing how people comprehend,
perceive and make meaning of different situations, people, events.

Charismatic leadership

There are four characteristics of charismatic leaders, as described by R.House: vision and
articulation, personal risk, sensitivity to followers’ needs and unconventional behavior. Followers of
charismatic leaders by observing leader’s behavior notice the leader’s abilities which distinguish
him/her from other people, which are extraordinary and make the leader exceptional.

Born vs. made?

Many leaders are both with charisma, however, those were not charisma-gifted can be trained how
to expose charismatic behaviors. There is even a 3 phase program of how to become a charismatic
individual. First step is to develop charismatic thinking-attitude and acting. Secondly, individual
creates relation with followers. Thirdly, individual ‘produces’ potential in followers by influencing
their emotions.

Charismatic leaders and their influence on followers

Charismatic leaders do influence their followers, using 4-step process. First, a leader communicates
attractive/interesting vision. Next, the first step is followed by vision statement, what is a formal
expression of a company’s vision or mission. Then, the leader shows the modelled behavior, values,
which are supposed to be examples for followers. Lastly, the charismatic leader influences followers’
emotions, usually by unconventional behavior; displaying courage and assurance of vision’s success
and rightness. The most important element of a vision is its inspirational aspect and focus on the
future. Moreover, the vision should adapt to reality and relevant events as well it should be
challenging and realistic to achieve.

Charismatic leadership versus situational factors.

There are several relations:

Charismatic leaders influence high performance and high satisfaction among their followers.

Organisations that have charismatic leaders make more profit

Charismatic leaders affect people differently – people are more willing to follow a leader in a case of
stress, disaster, emergence, crisis. Also people with low self-esteem are more likely to take leader’s
direction.

However, despite those positive relations, there is reasonable assumption that charismatic leaders’
effectiveness depends on situation. The situational factors that enhance charismatic leaders’
effectiveness are the ideological components of followers’ tasks or high level of stress/uncertainty.
In these situations, charismatic leaders are successful. The factors that limit charismatic leaders’
usefulness relate to the organizational context – lower level managers with charismatic qualities do
not have a field of activity to demonstrate them.

Charismatic leadership: problems and disadvantages:

Charismatic leaders use their charisma for abusive actions: e.g. to increase their salaries, re-position
their companies due to their image, blur the line between their interest and organization’s interest
and use company’s resources for their personal benefit. They may be ego-driven and then cause
problems for organizations. There is a name for those leaders who are ambitious, driven, loyal and
use these features to act in their organization’s interest, well-being rather than in their own interest.
They are level-5 leaders. They have the 5 following qualities: individual capability, team spirit and
skills, managerial competence, ability to motivate others and a mixture of humility and professional
will.

Transformational leadership
Transformational vs. transactional leaders.

Transactional leaders use conventional reward and punishment to gain compliance from their
followers. They clarify employees’ roles, tasks requirements. They use management by exception:
which seeks to minimize the opportunity for exceptions by enforcing defensive management
processes (looking for deviations and intervention when standards are not met). Transactional
leaders’ aspects: contingent rewards, management by exception and laissez-faire.

Transformational leaders are those who inspire and get things done by injecting enthusiasm and
energy. They have profound and outstanding effect on their followers. They provide a vision,
communicate high expectation and promote intelligence, careful problem-solving and have belief in
followers. They give followers personal attention and individual care. They are the inspiration; they
are coaches, advisors, and listeners. Transformational leadership can be learnt.

Transformational leaders’ aspects: idealized influence, inspirational motivation, intellectual

stimulation and individual consideration.

Assumptions about transformational leadership:

Transformational leaders are more creative and encourage/promote creativity and innovativeness
among their followers

Followers of transformational leaders are more ambitious in achieving goals and take personal
interest in pursuing organizational goals

Vision is very important in mechanism of transformational leadership. It explains the effectiveness of

transformational leadership

Transformational leaders make followers more committed to the organization; its strategy and make
followers have more belief, trust in their leaders.

Transformational leadership can ‘boost’ impressive evidence for its effectiveness. Transformational
leadership style generates more productive and satisfied followers-workers. But, there are also
studies proving that contingent reward leadership is sometimes more effective than
transformational leadership.

There are debates about transformational leadership and charismatic leadership. Some researches
use them interchangeably, some think that charisma is just one of a trait that transformational
leaders have and that transformational leadership is broader than charismatic one. Nevertheless,
studies show that leaders, who score high on charisma, score also high on transformational
leadership.

Authentic leadership: ethics and trust as fundamentals of leadership

Authentic leaders are those who know who they are, act openly and accordingly to their beliefs and
values, are honest with themselves and with the followers, are considered as ethical. Their main
advantage and virtue is trust. Authentic leaders build trust on their transparency – they value
information sharing and communicate messages reflecting their values, beliefs, norms, ideals.
Authentic leadership, unlike other leadership styles, focus on the moral side of leadership.

The topic of ethics in leadership is getting more and more attention. There are several reasons for
that. First, there is a general trend towards ethical shift in management. Moreover, bibliographies of
famous leaders revealed their unethical behaviors.

Moreover, the relations between leaders and their ethical behavior are crucial. Unethical leaders
abuse their power, position to achieve self-serving goals. Ethical leaders, however use their power
and charisma for the benefit of society or a group.

The notion of socialised charismatic leadership has recently emerged as a leadership style that is
non-exploitative and motivates followers to maximize the gains of the organization without regard
for the leader's personal needs. Those leaders demonstrate other- centred attitude rather than self-
centred.

Trust
Trust is a relationship of reliance, it is the expectation that another party will not behave
opportunistically. The notion implies willingness to take risk and familiarity. There are however other
trust dimensions to be mentioned: integrity (the most important), competence, consistency, loyalty
and openness. Trust is crucial in leadership. It is the fundamental on which leader builds his/her
image and identity.

There are 3 types of trust:

1) Deterrence-based trust – trust is based on fear or reprisal in the trust is abused (most fragile type,
most new relationships are based on it, punishment as a result of trust violation). Example: new
manager-employee relationship.

2) Knowledge-based trust – trust based on the predictability of behaviors, this predictability is built
on past relations, experiences. It relies on information. In this trust type, predictability builds trust, if
you are able to predict person’s behavior, then you trust him/her more. Most relations in
organisations are based on this trust type. Example: manager-employee relationship

3) Identification-based trust – trust based on emotional connection between the parties, on mutual
understanding, on knowing what the other party wants, expects, appreciates. Exists loyalty between
parties and minimum level of control is imposed. Example: marriage.

There are also principles of trust:

Mistrust drives out trust

Trust begets trust

Trust can be regained

Mistrusting groups self-destruct

Mistrust lowers productivity

Contemporary Leaders

Mentoring

A mentor is a person from the higher-level management who takes the position of sponsor and
supervisor for the less-experienced employee (protégé). Mentoring is based on career and
psychological function. Some firms have official mentoring programs, some have informal
mentoring. Mentoring is beneficial for mentor, protégé and the whole organization. The main
benefits for mentor include the access to what lower-level employees think, feel and thanks to that
it also gives possibility to sense potential problems. There is a tendency to select protégé basing on
his/her similarities with the mentor. Nevertheless, although mentoring approach serves many
functions, most of its outcomes emphasize psychological benefits rather than material.

Self-leadership

Its main assumption proposes that individuals, by controlling their actions, can develop leadership
behaviors and qualities. The importance of self-leadership goes along with the importance of team
creation. Teams need self-directed people.

Online leadership

There has only been little research on this leadership type. It’s important to remember that words,
sent digitally, can also (de)motivate. Good online leaders need to carefully select words, “read
between the lines”, and learn how to make messages transmit trust, status, warmth, motivation.
They also need to think about the actions that need to follow the message on the employee’s side.
The main challenge of online leaders is to build and maintain trust.

Challenges to the leadership construct

There are 2 assumptions that challenge the importance of leadership (leadership not being
necessary):

1. Attribution theory of leadership -> this theory states that leadership is one of the attributions that
people make about others, to explain social events. People simply associate leaders certain with
characteristics and when they meet individual representing these characteristics, they take him/her
for leader. In organizations, people explain organizational situations by attribution theory, e.g. high
profit is explained by having a good leader. By appearing as a good leader, others can view you as
one, even if you lack actual accomplishments.

2. Substitutes for and neutralizers of leadership -> some people think that there are substitutes for
leadership and neutralisers of leaders’ influence on others. The substitutes make leaders’ activities
unnecessary, while neutralisers negate leaders’ effectiveness and influence. This theory is however
under controversy, as there are many problems with applying the theory of substitutes and
neutralisers and the difference between these two notions are sometimes blurred.

Finding and creating effective leaders:

Selecting leaders – analysis of situation a company faces, helps to find what kind of leader is needed.
Tests as well as interviews may help to identify a leader. Moreover, companies should plan/prepare
for leadership changes.

Training leaders – there are a few things managers can do to enhance the training outcomes.
Leaders high in self-monitoring benefit from training more. Leaders can be even more effective is
they are taught how to implement skills, build trust, mentor, recognise situational contexts and cope
with them. Moreover, research has shown that charismatic leadership qualities can be enhanced by
behavioral training using modelling. Also, transformational leadership skills can be taught.

Global consequences:

Transformational/charismatic leadership style works around the globe. There are some universal
dimensions of leadership e.g. leaders’ vision, foresight, motivating skills, trust, proactivity,
dynamism. However, cultural differences and leadership type adaptation are also important.
Globalisation made the leadership style more universal.
Back to top

Chapter 14: Power and Politics

What is power?

Power refers to the potential of the influence that a person/party can exert on another person/party
so that it acts in a way that the influencer wants. It can exist, but not be used. It is based on a
dependency variable.

Relationship between power and leadership

Leaders use power as a mean to achieve goals. Power just needs dependability, while leadership
requires goals compatibility between leader’s and his/her followers’ goals.

Bases of power

Formal power:

Based on one’s position in an organisation.

- Coercive power: power dependent on fear. A person acts in a way because he/she fears of
outcomes of incompliance. This power bases on threat of application e.g. sanction, restrictions, pain,
dismissal and so on.

- Reward power: can be gained from one's capacity to reward compliance. People comply with
directives, orders because compliance generates positive benefits. There are those who reward and
those who see it as valuable. It is the opposite of coercive power.

- Legitimate power: a formal power one gains by holding a particular position in an organization,
includes both coercive and reward power. In OB context, it is probably the most common.
Personal power:

Power originating from a person’s characteristics.

Expert power: power that is based on unique skills or know-how/knowledge.

Referent power: individual power based on a high level of identification with, admiration of, or
respect for the powerholder (e.g power of celebrities)

Personal bases of power are most effective. They relate positively to satisfaction, organisational
commitment and performance. Coercive power causes less satisfaction and less commitment.

Dependency: Relation between A and B - The greater B depends on A, the greater power A has over
B.

Dependency is inversely proportional to the alternative resources e.g. among the famous people,
fame is no longer a power. In the business context, an example of suppliers can be given - many
suppliers are better than one.

What creates dependency? It is the resources’…

Importance

Scarcity

Impossibility of substitutes
Power tactics

Power tactics are ways in which a person uses power in specific situations.

There are 9 different influence tactics:

(1) Legitimacy

(2) Rational persuasion

(3) Inspirational appeal

(4) Consultation

(5) Exchange

(6) Personal appeals

(7) Ingratiation – using flattery, praise

(8) Pressure

(9) Coalitions

Research has proved that rational persuasion, inspirational appeal and consultation are the most
effective. Pressure is probably the least effective. Combination of many may be helpful. The
effectiveness of those tactics depends on the influence’s direction e.g. rational persuasion works
only in upward influence. Moreover, the order of tactics matter. It’s better to start with “softer”.
Using just one soft tactic works better than using just one hard tactic and the best way of all is to
combine many soft tactics.
People differ in their political skills. More politically skilled are more effective users of power tactics.
Moreover, organizational culture influences the acceptance or refusal of some power tactics.

Politics: Power in action

Organisational Politics

Political behavior is used to describe “activities that are not required as part of a person’s formal role
in the organization but that influence or attempt to influence, the distribution of advantages and
disadvantages within the organization” (page 381). This definition includes decision- making process
as the’ distribution of advantages and disadvantages’.

There are 2 dimensions of political behavior: legitimate political behavior (normal day-to-day
politics, e.g. complain to supervisor, form coalitions) and illegitimate political behavior (political
actions, decision which violate rules, are abusive e.g. sabotage).

The reality of politics: organizations are politics-loaded because of competition for scarce, limited
resources as well as disagreement between different parties in many issues. Politics exists because
there is a lot ambiguity in interpreting facts and some people use politicking (using influence to
support facts aiming at achieving their interests).

Causes and consequences of political behavior:

Factor encouraging political behavior can be individual or organizational.

Individual factors: some traits, qualities are connected with political behavior. These traits are high
self-monitoring, internal locus of control, High Machiavellian personality, organizational investment,
perceived job alternatives, expectations of success.

Organisational factors: factors resulting from organizational culture and internal, working
environment. Certain cultures do promote political activity. Organizational factors that promote
political behaviors are: resource reallocation, promotion opportunities, low trust, role ambiguity,
vague evaluation system, zero-sum reward practices (win/lose approach), democratic decision
making, high performance pressures, self-serving senior managers.

People’s responses to organizational politics:

For most people in the organization, outcomes of politicking are negative. Organizational politics
may threaten employees. It correlates to decrease in job satisfaction, increase of anxiety and stress,
increased turnover and lower performance. Apart from these relations, there is also correlation
between politics influence and understanding or organizational politics mechanisms. If an employee
knows the politics in a firm, he know why certain decisions are made and by whom. If the
understanding is high and politics level is high then employees perceive politics as opportunities and
their performance increases. Nevertheless, low understanding means perceiving organizational
politics as a threat and then employees feel threatened response with defensive behaviors (action
performed to avoid action, blame or change). People from politically unstable countries are used to
political issues and their tolerance is higher.

Impression management (IM):

IM is the process through which people try to control the impressions other people form of them.
Only people high in self-monitoring are IM concerned. IM is usually used in job interviews and
performance evaluations. To IM techniques belong: flattery, excuses, favors, self-promoting,
apologies, association, and conformity, which some works better than the others. Impression
Managers must be careful to avoid being perceived as manipulative or insincere, since the
impressions conveyed about them are not always false.

Global challenges:

Politics perceptions have rather negative effects around the world

People from different cultures prefer different power tactics

Effectiveness of power tactics differ between cultures.

Back to top

Chapter 15: Conflict and negotiation

Conflict is the process initiated when one party perceived as about to be, or being negatively
affected by another party on something that the first party cares about.

School of thoughts on conflict:

Traditional school of conflict assumes that conflict must be avoided at all costs and that it causes
group’s functioning deterioration. The conflict is perceived as dysfunctional, bad, violent.

Human relations school of conflict assumes that conflict is a natural response and should be
accepted as such. Still, the theory argues it cannot be avoided and sometimes can be functional.

Interactionist school of conflict argues that minimum level of conflict benefits group’s performance.
Conflict is viewed as helpful to avoid group’s stagnation, apathy. Conflict is something necessary.

The theory distinguished between functional and dysfunctional conflicts. Functional conflicts help
the group, while dysfunctional worsen its operation.

It also distinguishes between task, relationship and process conflicts. Relationship conflicts are
usually dysfunctional. Low levels of process conflicts as well as low/moderate levels of task conflicts
are functional.

The conflict process

Stage 1 - Potential opposition or incompatibility

3 categories of conditions that can lead to a potential conflict:

Communication (misunderstandings, a lot of noise in communication channel, jargon, different
connotations of words, etc…)

Structure (assignment size, specialization, rewards, dependence between members, etc…)

Personal variables (personality, emotions, values, etc…)

Stage 2 – Cognition and personalisation

2 possibilities: felt conflict or perceived conflict.

At this stage, at least one party is aware of the conflict’s existence. This is the phase when conflict
issues tend to be defined and parties think how to react. Moreover, emotions play a role in how we
perceive the conflict situation. Negative emotions tend to worsen the situation, while positive
emotions encourage agreement.

Stage 3 – Intentions

Conflict-handling intentions: competing, collaborating, compromising, avoiding and accommodating.

Competing - assertive and uncooperative –parties want to satisfy their interests

Collaborating - assertive and cooperative –parties want to reach agreement that satisfies everyone

Compromising – moderate level of assertiveness and cooperativeness – parties are willing to resign
from some of their postulates/potential benefits

Avoiding – unassertive and uncooperative – withdrawal or suppression

Accommodating – unassertive and cooperative – readiness to take another party’s interest as
superior and place them above own concerns.

Stage 4 – Behavior

Party’s behavior and other’s reactions. Conflict becomes visible. One should pay attention to
conflict-intensity continuum – the higher the conflict level, the more intense the reaction. High level
of conflicts usually implies dysfunctional outcomes. There are however conflict management
techniques which can minimize or stimulate the conflict level to reach the required conflict degree.

Conflict-resolution techniques: problem- solving, compromise, resources expansion, superordinate

goals, smoothing, avoidance, authoritative command, altering the human variable and altering the
structural variables.

Conflict-stimulation techniques: communication, outsiders’ appearance, organizational restructure,

devil’s advocate appointment.

Stage 5 – Outcomes

Functional outcomes – eliminates groupthink, enhance creativity and decision making quality,
increase productivity. Cultural diversity acts in favor of functional conflicts. Functional conflicts can
be created – rewarding people who go against the mainstream with their ideas, programs that
encourage dissention, systems of managers’ evaluation, assigning devil’s advocates. Successful
organizations reward dissenters and punish conflict avoiders.

Dysfunctional outcomes – decrease in group’s cohesiveness, group’s performance, lower

satisfaction, commitment.

Negotiation: Bargaining strategies

Distributive bargaining

The different parties are trying to divide something up-distribute something, creation of win//lose
situation. The parties assume that there is not enough to go around, and they cannot "expand the
fixed pie," so the more one side gets, the less the other side gets. In OB context, the best example is
wage negotiation.

The process of distributive bargaining involves 2 negotiators. Each of them has his target (most
acceptable situation) and resistance point (the least acceptable situation) as well as aspiration range
(area between these 2 points where negotiation can take place).

Some hints on how to negotiate in distributive bargaining:

Make the first offer, it should be aggressive (recall anchoring bias)

Reveal a deadlin

Integrative bargaining

The parties are trying to make more of something. Creation of win/win solutions. It is preferable to
the distributive bargaining because it builds relations.

There must be some conditions for integrative bargaining to succeed: parties involved in
negotiations need to be flexible, open, sensitive about others’ needs and value information-sharing.

Teams bargain more in integrative style than individuals

When more issues are under negotiation, more likely win/win situation will appear

Compromise does not almost implies win/win outcomes because it reduces need for integrative
bargaining
The negotiation process

1) Preparation and planning -> ‘doing homework’, results in BATNA (best alternative to a negotiated
agreement) – the least acceptable situation

2) Definition of ground rules

3) Clarification and justification

4) Bargaining and problem solving

5) Closure and implementation

What individual differences influence a negotiation’s effectiveness?

Personality traits – lack of strong evidence, but some of them indicate that certain traits of The Big
Five are connected to negotiation processes Agreeable and extraverted negotiators do not perform
well in distributive bargaining. Also intelligence seems to influence bargaining.

Moods/emotions – yes, depends on the bargaining type. In distributive bargaining, angry negotiators
perform better. In integrative bargaining positive moods/emotions have positive influence.

Gender – women and men negotiate similarly, but gender affects negotiation’s outcomes. Men are
supposedly slightly better negotiators than women. Women are exposed to stereotype threat, if
they do not confirm they are blamed for breaking gender stereotype. Women may also more
influenced by their own attitudes and actions.

Third-party negotiations
Mediator – A neutral party who assists in negotiations and conflict resolution, the process being
known as mediation

Arbitrator - legal technique for the resolution of disputes outside the courts, wherein the parties to a
dispute refer it to one or more persons, by whose decision they agree to be bound. Arbitrator has
authority to dictate the agreement.

Conciliator - parties to a dispute agree to utilize the services of a conciliator, who then meets with
the parties separately in an attempt to resolve their differences (serves as informal communication
link between parties)

Consultant – is a trained in conflict management third party who tries to assist creative problem
solving by communication and proper analysis.

Global challenges:

Negotiation and communication differs across cultures in terms of purpose, perception (win/win,
win/lose), style and expressing emotions.

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Contributions, Comments & Kudos

ob ilaventhan contributed on 15-12-2020 15:13

mba study purpose

Management shahzad contributed on 11-02-2021 06:27

it a fine handout

MBA 610 Nick Son contributed on 08-07-2021 16:45

MIssing some updated information that is found in the 18th edition. Great starting point though and
makes note takings faster.

OB Andualem Ayele contributed on 23-01-2022 07:04

For studies of OB
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This summary was written in the year 2013-2014.

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