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    AB1601 Organisational Behaviour

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    Organizational Behavior and Design fX1; SN, aT \ @ 4 TN aa \, sity, Singapore Nanyang Technological Unive: Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. create Course Organizational Behavior & Design AB1601 Nanyang Technological University Singapore Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. create’ http//create.mheducation.com Copyright 2019by McGraw Hl Education. Alright recerved. inten the United Stats of America Except at permitted under the United States Copyright Actof 1876, no part bfthispubleation may be reproduced or dsribured any form. cory any means or stored in adatabase or retrieval stem, ‘without prior witten permission ofthe publsher ‘This MeGraw-Hil Create text may include mstrias submited to MeGra-Hil for publication by theinstructorof this curse The insrcior isso’ responsible‘or the ecitorilcantentof such materials. Instructorsretan copyright of these additional materals. 'SN-10: 1207460682 BBN-13:97813074¢0681 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Contents Introduction + 1_ Introduction to the Field of Organizational Behavior 2 2.ReviewCard 27 Individual Behavior and Processes 29 3. Individual Behavior, Personaiity, and Values 30 4. Review Card 57 5. Perceiving Ourselves and Others in Organizations 60 6. ReviewCard 85 7. Workplace Emotions, Attitudes, and Stress 88 8 RevewCard 117 9. Employoe Motivation 120 10. ReviewCard 149 Team Processes 151 11. Team Dynamics 152 12. ReviewCard 173 49. Power and Influence in the Workplace 162 44, ReviewCard 205 45. Conflict and Negotiation in the Workplace 208 16. Review Card 233 47. Leadership in Organizational Setings 236 18. ReviewCard 258 Organizational Processes _261 49. Organizational Cuture 252 20. Review Card 285 21. Organizational Change 268 22. Review Card 309 A. Organization Index. 311 B. Name Index 313 C. Glossary/Subject Index 326 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Credits Introduction + 1. Introduction to the Field of Organizational Behavior: Chapier 1 from Mt Organizational Behavior. Fourth Edition by McShane, Glinow, 2019. 2 2. Review Card: Chapter 1 from M: Organizational Behavior, Fourth Editon by McShane, Ginow, 2019 27 Individual Behavior and Processes 29 3. Individual Behavior, Personality, and Values: Chapter? from M: Owganlzational Behavior, Fourth Editon by McShane, Giinow, 201930 Review Card: Chapter? from M: Organizational Behavior, Fourth Editon by McShane, Ginow, 2019. $7 Perceiving Ourselves and Others in Organizations: Chapter 3 trom M: Organizational Behavicr, Fourth Editon by McShane. Ginow. 2019. 60 Review Card: Chapter from M: Organizational Behavior, Fourth Edition by McShane. Glinow, 2019 85 Workplace Emotions, Attitudes, and Stress: Chapter 4 rom M: Organizational Behavior, Fourth Ecition by MeShane, Ginow, 2010 88 Review Card: Chapter from M: Organizational Behavior, Fourth Editon by McShane, Ginow, 2019. 117 Employee Motivation: Chapter 5 fom M: Organizational Behavior, Fourth Edtion by McShane, Glinow, 2019120 410. Review Card: Chapter 5 from Mt: Organizational Behavior. Fourth Editon by McShane. Glinow, 2019 148 Team Processes 151 11. Team Dynamics: Chapter? from M: Organizational Behavior, Fourth Edition by McShane, Ginow. 2019 152 42. Review Card: Chapter 7 from Mt: Organizational Behavior, Fourth Edition by McShane, Glirow, 2019 178 43. Power and Influence in the Workplace: Chanter 9 from M: Organizational Behari. Fourth Editon by McShane, Glinow, 2019 182 414. Review Card: Chapter 8 from Mt: Organizational Behavior, Fourth Editon by McShane, Glitow, 2019 208 45. Conflict and Negoliation in the Workplace: Chapter 10 from M: Organizational Behavior, Fourth Edtion by McShane, Ginow, 2019 208 416. Review Card: Chapter 10 from M: Organizational Behavior, Fourth Edttion by McShane, Glinow, 2019 233 17. Leadership in Organizational Settings: Chapter 11 fom M: Organizational Behavior, Fourth Edition by McShane, Ginow, 2019. 236 18. Review Card: Chaptor 11 from M: Organizational Behavior, Fourth Edltion by MeShano, Glinow, 2019 259 Organizational Processes 261 Om No os Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. 19. Organizational Culture: Chapter 13 fom M: Organizational Behavior, Fourth Edltion by McShane, Glinow, 2019 262 20. Review Card: Chapter 13 from M: Organizational Behavior, Fourth Edition by McShane, Glinow, 2019 285 21. Organizational Change: Chapter 14 from M: Organizational Behavior, Fourth Ealtion by McShane, Glinow, 2019 288 22. Review Card: Chapter 14 from M: Organizational Behavior, Fourth Etition by McShane, Glinow, 2019 309 ‘A. Organization Index: Chapter from M: Organizational Behavier, Fourth Editon by McShane, Glinow, 2019 311 B. Name Index: Chepter from M: Organizational Behavior, Fourth Edition by McShane, Glinow, 2019 313, C. Glossary/Subject Index: Chapter from M: Organizational Behavior, Fourth Edition by McShane, Glinow, 2010 326 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Introduction Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. 2 organization Beaver | Introduction to the Field of Organizational Behavior ‘After you read this chapter, you should be ableto: Detveorganzatioal behavor and Debate the organizational Discuss the archos on which ‘oxganzatins and ascussine importance opgoruntes anacnatenges o oxganzaiona Detaver kowedge S ofthis onary technolgicachange.clbaizaion, based emerging employment elaionships, and Compareand const the four aon perspecivesofogoiationl sfectveness Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘pple ané Amazon are the two mast admired compa- nies in the world, according to Forune magazine's ‘anrual Ist Yet nether of these fims was on any- one’s adarscieentwo decades ago. Apple was on Ife sippot in fhe late 1990s, barely clinging to a few percentage points of market share in the computer indusry. Amazon started seling books onine 11935, 2 few months after ts founder, Jef Bezos, took a couse ‘tom the American Booksellers Assocation on how to start a bookstore!” ‘The dramatic growth of Apple and Amazon illustrates the many workplace activites that contribute to success ia today’s turbu lent economic environmert. In every sector of the economy, or- tanizatins need skilled and motivated people who can realize their potential, workin teams, and maintain a bealthy lifestyle. ‘They need leaders with foresight and vision, who suppor inno- vative work practices and make decisions that consider the in. terests of multiple stakeholders. In other words, the best companies succeed through the concepts and practices that ne {iseus in this organizational behavior book (Our purpose isto help you understand what goes on in orea- nizations. We examine the factors that make companies eflec- tive, imprave employee wellbeing, and drive successful ‘collaboration among co-workers. We look at organizations from numerous and diverse perspectives. from the deepest founda tions of employee thoughts aad behavior (personality, ‘The World's Most Admired Companies? 'Mcorgenizaional Behavior, Fourth Eon (08) tho sti oft peopl feel and in selfconcep,attindes ec) 10 Peak fet and the complex interplay between, Statens the organization's SiructiTe | gqganizations roi and culture and is extemal fpeolewhowert énvironment. Along this ur-_ilerdpendely toned ney, we emphasize why things happen and what you can do to predict and guide organiza- onal events ‘We begin this chapter by introducing you tothe fel of or ‘zanizaticnal behavior and why itis important to your career {nd (0 organizations. Ths is followed by an oferview of four major societal developments facing oreanzations: echnologi ‘al change, globalization, emerging employment relationships, and increasing workrorce diversity. We then descrive tour an chows that guide the development of organizational behavior knowledge. The latter part of this chapter describes the “ut ‘mate dependent variable” in organizational behavior by pee- tenting the four main perspectives of organizational fffectiveness. The chapter closes with an integrative model of organizational behavior, which serves as aroad map to guile you through the topics inthis book. cae THE FIELD OF ORGANIZATIONAL BEHAVIOR Orgenizational behavior (OB) is the study of what people think, feel, and do in and around organizations. It looks at ‘employee behavior, decisions, perceptions. and emoticnal re- sponses. It examines how individaals and teams in organiza- sions relate to each other and to their counterparts in other organizations. OB also encompasses the study of how organi zations interact wilh thei external environments, particularly in the eontett of employee behavior and decisions. OB re- searchers systematically study these topics at multiple levels of analysis, namely, the individual, team (including interper- sonal). and orgarization.* The definition of orgarizational behavior bess the question: What are organizaions? organizations ae groups of peorle wi work nterdependenty toward some purpose Notice that orzani- zations are not buildings or goverameat-repstered entities. In act. many’ organizations exist with geither pica walls nor gov- ernment documentation to confer their gal status. Organizations have existed for as long as people have worked together. Massive ‘temples dating buck to 3500 Ac were constructed trough the CHAPTER | Insoduaion‘o the! 3 OrganzatonalBehevior 3 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. organisation Behavier ‘organized actions of multitudes of people. Craftspeople and mer- chants in ancient Rome formed suids, complete with elected man- agers. More than 1,000 years age, (Chinese factories were producing 125,000 tons of ron each year ‘One key feature of all organ ations throughout history is that they are collective entities They consis of human beings-typically, but not necessurily, employees who interact with each other in fn organized way. This organized relationship requires communica tion, coordination, and eallabors- tion to achieve organizational objectives. As such, all organiza. tional members have degrees of interdependence: they accom pish goals by sharing materials, information, or expestise with _- (One key feature of all organizatonsis that they consist of human beings whe inigract wih each coworkers, ‘A-second key feature of og nizations i that their members have 4 collective sense of pur pose. This collective purpose isnt always well defined or agreed ‘08, Most companies have vision and aission statements, but they are sometimes out of date oF don't desecibe what employ- ees actualy tryto achieve. Sul, imagine an organization without a collective sense of purpase. It would be an assemblage of gxne: yan orgonea way hhad changed the name of ig MBA human relations course to “Orgasizational Bohavioe” ‘Although the field of OB is recent, experts in other fields hhave been studying organizations for many centuries. The Greek philosopher Plato (490 2c) wrote about the essence of A company is one of humanity's most amazing inventions. . [It's] this abstract construct we've invented, and it’s incredibly powerful.” ‘people without direction or unifying force. So, whether they are Aesigning and marketing the latest communication technology at Apple or seling almost anything on the Internet at Amazon, ‘people working in organizations do have some sense of collec tive purpose Historical Foundations of Organizational Behavior Ovganzationa behavior emerged asa distinct eld sometime around the early 194088 During that decade. afew researchers began describing their research as crpatizationa (raber thas scciologcal or psychological). Andy the late 1940s, Harvard 4 PARTY | inrocucton leadership, and the Chinese philosopher Confucius (500 5c) extolled the virtues of ethics and leadership. Economist Adan Smith (late 1700s) discussed the benefits of job specialization and division of lator. German sociologist Max Weter (early 1800s) wrote about rational organizations. the work ethic. ané charismatic leadership. Around the same time, industrial engi ner Frederick Winslow Taylor proposed systematic ways o OF anize work processes and motivate employees through goal siting and rewards? Poltical scientist Mary Parker Follett (1920s) offered new ways of thinking about constructive conflict. team dynamics power, and leadership. Harvard professor Elion Mayo and his calleagues (190s and 1940s) established the “human lations” Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. School of management, which pioneered re search on employee attitudes, formal team dynamics, informal groups, and supervisor leadership style. American executive and Haward associate Chester Barnard (1930s) wrote insight ful views regarding organizational communica tion. coordination. leadership and authority. organizations as open systems, and team dynam ies." This brie historical tour indicates thar OB has heen around for a loxg time: it just wasn't organized into a unified discipline until around World War IL Why Study Organizational Behavior? In all likelihood, you are reading this book as part of a required course in organizational be havior. Apart from degree or diploma require: meni. vhy should you leam the ideas and practices discussed in this book? After al, whe ever heard of a career path leading to a “vice president of OB" or a “chief OB officer"? Our snswer to this question begins with survey findings that stu dents who have been in the workforce for some time typically point to OB as one of their most valuable courses. Why? Be- ‘cause they have earned through experionce that OB does make 1 diference to one’s career success" There are three main ea- sons why OB theories and practices are personally important to you (see Exhitit 1. Exhibit 11 mpertance of Organizational Behavior ifuence rere wel wh ters Frederick Winslow Tayor "M.orgpnizaional Behavior, Fourth Eton Comprehend and Predict Workplace Events Everyone has an inherent drive to make sense of What is going on around lim or he. "* This aeed is particularly strone in oreanizations because they are highly complex and ambiguous contexs that have @ profound effect on ou lives. The feld of neanizationsl behavior uses sientifc esearch to discover systematic relationships, which gie us a valuable foundation for comprehending organiza ional life This knowledge satisfies our curiosity about why events occur and reduces our anxiety about circumstances that Would otherwise be unex pected aad unexplained. Furthermore, OR know! td improves our ability o predict and anticipate future events so we can get along with others, achieve our goals, and minimize uanecessary career risks, Adopt More Accurate Personal Theories A Froqucnt misunderstanding is that OB is common sense. Of course, some OB knowledge i very sini lar tothe theories you have developed through pe sonal experience. But personal theories are usually 20t quite as precise as they need tobe. Pechaps they explain and predict some situations, but not others: For example, one study found that whet liberal erts students und chief exceutive officers were asked to choose the prefered organizational ssucture in various situa tions their commonsense answers were typically wreng because they oversimplified welbinown theory and evidence on that topic! (We discuss organizational structures in Chapter 12.) Throughout this book you aso will J Gscover that OB research hus debunked some ‘eas that people thought were "common sense.” Overall, we believe the OB knowledge you will tin by reading this book wal hep you chllerge and refine your personal theories, and give you more accurate and complete perspectives of ‘rganizatnalevents. Influence Organizational Events Proba- Ly the ereatest value of OB knowledge is that {i helps us get things done inthe workplace by influencing organizational events. By defini tion, organizations are people who work to- gether Lo accomplish things, so we need a toolkit of knowledge and skills to work sue: cessfully with others, Studies consistently ob- serve that the most imporant knowledze and skills that employers desize in employees re late tothe topies we discuss in this book, such 4s buldirg teams, mouvating coworkers, han- dling workplace contlets, making decisions, and changing employee behavior. No matier ‘what eareer path you choose, youll find that CHAPTER | ne ll! of Organzatonal havior Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Setavier 08 concepts play an important role in performing your job and working more effectively within oranizations. Organizational Behavior Is for Everyone Organizational behavior is discussed by some witers as atopic for managers. Enfecive management does de ‘pend on OB concents and prac. tices, but this book pioneered the broader view that OB is valuable for everyone who works in and around organizations. Whether you are a sortware engineer, cus. tomer service representative. for eign exchange analyst, or chief executive officer, you need to usderstand and apply the many organizational bekavior topics that ae discussed inthis book. Infact OB knowledge is probably ‘more valuable than ever before becaute employees increas ingly need to be proactive, sel-motivated, and able to work clectwely with coworkers without management intervention. In the words of one forvardthizking OB weiter more than four decades ago: Everyone isa manager. ‘Colin inages/lendlmeges Le 0B and the Bottom Line Up to this poiat, cur answer to the question “Why atudy OB?" has focused on how organiza tional behavior knowledge benefits you 2s an individual However, OB is also vital to the organization's survival and success." For instance, the best 100 cospanies to work for in America (.e., companies with the highest levels of employee satisfaction) enjoy significantly higher financial performance than other businesses within the same industry. Companies with higher levels of employee engagement have higher sales aad profitability (see Chapter 5). OB practices also are asso- ciated with vasious indicators of hospital performance, such as lower patient mortality rates and higher patient satisfac tion, Other studies have consistently Sound a positive rela tonship between the quality ofleadership and tie company’s financial performance The bottomline value of organizational behavior is supported by research into the best predicirs of investment portfolio performance. These investizations sugrest that leadership, performance-based revards, employee develop- ‘ment, employee attitudes, and other specific OB characteris tics are imporiant “positive screens” for selecting companies with the highest and most consistent longterm investment guins. Overall, the organizational bebavier concepts, theo- ries, and practices presented throughout this book make + positive dilference to you personally tothe organization. and lukimately to society 6 pants Probably the greatest value of OB knowledge is hat thes us get things conein the workplace by imuercing organizational events CONTEMPORARY DEVELOPMENTS FACING ORGANIZATIONS Organizations ae experiencing unprecedented change. Techno- logical developments, consumer expectations, global compet: tioa, and many other factors have substantially altered business steategy and everyday workplace activities The field of organiza- tional bebavior plays a vital role in guiding organizations through this continuous turbulence. As we wll explain in more etal later inthis chapter. organizations are deeply affected by the exernal environment. Consequently, they need to maintain 1 good organization-environmest fithy anticipating aad adjust ing to changes in society. Over the next few pages. we introduce four major environmental developments facing organizations: technological change, globalization, emeiging employment rela tionships, and increasing workforce diversity Technological Change Technoloscal change has always bees a isruatve force in orea- niatcns, 8 well sin society. Waterwheels cotton gis, tears engines, microprocessors (ch asin avfonsatedsysems and artical irtelgence), and many other innovations dramatically boost produetinty, but also usually dspace employees and ren der obsolete entire occupational groups. Othe technologies, Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. such as the telegraph, smartphone, and the Internet, have in- ‘creased productivity but abo altered work relationships and pat terns of behavior with coworlers, clients, and supotiers. Sul ‘other technologies aim to improve heath anf wellbeing. such as the development of better medicines and medical equipmeat, new leisure apparatus, and environmentally safer materials. Information technology is ene of the mest significant forms of technological change in recent times.” As we discuss in Chapter 8, communication patterns and power dymamics have tubstantially changed due to the introduction of email and other fooms of digital messaging. Social media and other col laboraton technologies are slowly replacing email, and will ur- ther reskape how people associate and coordinate with each other. Some OB experts argue that information technology ives employees a stionger voice through direct communica tion with executives and broader distribution of thei opinions 1 coworkers and beyond. Information technology also has ereated challenges, such as tethering people to their jobs for longer hours, reducing their attention spans at work, and increasing technostress. We cis- cuss these concems below and in Chapter 4 (workplace stress). ‘At a macrolevel, information technology bas reconfigured en. tire organizations by integrating suppliers and other external ntti into the tansformation process. Eventually, technology ‘may tender organizations less ofa place where people work and more of a process or network where people colaborate across space and time (see Chapler 12) Globalization Globalization refers to economic, social and cultural comeetiv- ity with people in other parts of the world. Organizations Social Media Technology Reshapes the Workplace” BB. osccimen ‘bes teal ener) scl 42% 10 BIG screens Anetta ats ay hy spond between ‘posi appcaton thea bt hj AG srsceronnes traventy ereeued Got peur, wovilcecolatorton GOV enrrccernssirniicnis Canats ip fom Ste preusyeer ane in 2006) (phot: pclae Get knages 'Mcorgenizaional Behavior, Fourth Eon lobalize when they actively Participate in otber eountries and cultures. Although tus nesses have traded goods across borders for centusies, the degree of globalization 1o- day is unprecedented because information tecknology and ‘ansportation systems allow a much more intense level of con- neetvityand intenlependence around the planet? Globelization offers numerous benefits to organizations in terms of larger markets, lower costs, and greater access to knovledge and innovation. Atthe same time. there is consider- able debate about whether globalization berefits developing na- tions and the extent to which it is responsible for increasing Work intensification, reduced job security, and poor work-life balance in developed countres* “The field of organizational behavior focuses on the eflects of ‘lobalizaion on organizations and how to lead and work effec lively in this emerging realiy. Throughout ths book, we wil refer to the effects of ghbalization on teamwork, diversity, cultural va os, organizational structure, leadership, and other themes. Glo- balization has broaght more complesity and new ways of working to the workplice. It also requires additional inowledge and skils ‘that we will diseus in this book, such as emctions intelligence, a ‘loba mindset, ncaverbal communication, and confit handling. Emerging Employment Relationships Technology, lotlizatio, aad several other developments eve subaualy alied ie mplyent rlatonahip in eet courte, Before the digital ep, nost employers wold ih work afer cit or ane Rous and Could vpart i pero ine fen thar employment. Today, thy are tee lly to be coneced to work on t'24(7 schedule. Globalization in Eases Gapeaive petewe weal Tonge and ceaes 1 2¢hour schedule teense coworkers. supplicrs and el cats wort in diferent ine zones, nfo tation technology enables employes fit orbs wo cay ted uckly cour truncate with empoyect wend the tralitonl workday. ite wonder ha on of he most sorta employment ass oe the est Aecade has been work-ie balenc. ‘Wort-etalance cceurs wen people dre able to minimize cone between the work and nonwork demands Most employees lack tis talance be ae eal ee eae tert performing o thinking abou thet Joo whether athe workplace, at home, CHAPTER | ntocuctonta te Fil of Organizational Behavior 7 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Betavior ff on vacation. This focus on work leaves too litle time to ‘ull nonwork needs and ob It gations. Our discussion of work-related stress (Chapter 4) will examine work-life bal ance issis in more detail. Another employment relationship tread is for employees to Work away [rom the organization's traditional common work ste2 One form of this remote work arrangement invalves er forming most job duties a liet sites throughout the day. Re pir technicians and management consulants regaarly work at client sites. for example. Longersterm remote work occurs where employees are assigned to partner organizations. For in- stance, biotechnology firm Anieo Diagnostics dispatches its scientists for several weeks ar months ta partner companies around the world, where they jointly investigate the effestive- ness of Anteo's patented nano glue products on the partner fem point ofcaretechnolegy. Telecommuting The best-known form of remote work is telecommuting (alto eilled teleworking) whereby information technology enables employees to work from home one or more workdhys per month rather than commute tothe office. An est- muted 37 percent of US. workers telecommute, with almost fonethird of them working from home at least six days each ‘month. The U.S. government reports that 23 percent of employ- cet perform some or all oftheir workat home (bu that includes taking work home after attending the office, not just telecommuting) 1s telecommutisg good for employers and orgarizationst This question continues to be debated because it produces “Most employees lack work-He alance because they spend too many hours each week performing or thinking about thet job, whether atthe workplace, athome, o: on vacation 8 PARTS | itroduction Exhibit 12 Potertal Benefits and Risks of Telecormiing Potent! Benefits Potential Risks etter employee wore + More scialislaton ance + Lewereamcanesion + Atradtve benefit fejob Water a applicants cess + Mare sressts du to tame + Low employee tanorer sface an les + Hier employee productity + Reduced geentouse ges 1 Reduced eorporte res cstateandofiecoss several potential benefits and risks (see Exhibit 12)2" One ad- vantage is that telosommuters usually experience better work- life balance because they have more time and somewhat more contralto jugale work with family obligations. For example, 2 study of 25,000 IBM employees found that female teleconsmut ers with children were able to work 40 hours per week. whereas female employees with children who work solely at the office could mazage only 30 hours before feeling work-life balance tension. Work-life balance is less likely to imprave when tele- ‘commuters lack sulficient workspace and privacy at home and hove increased family respossibilities on telecommuting days Job applicants-particulaly millemnials—identfytelecommut- ing as an attractive job feature, and turnover is usually lower among telecommuting employets. Research also indicates that, telecommutershave higher productivity than rontelecommaters, likely because they experience les stress and tend to transfer ‘cme former commuting time to worktime. Telecommuting also {improves productivity by enabling employees to work at times when the weather or natural disasters block accesso the office. Several companies report thut telecommuting has reduced sreenhouse gas emissions and office expenses. For instnce. health insurer Aetna estimates that its telecemmating employ. es GI percent of te workforce) anauay avoid using two mi- lion gallons of gas. thereby reducing carbon dioxide emissions bby more than 23,000 metric tons. With many employees work: ‘ng from home, Aetna also has been able o reduce its realestate and related costs by between 15 and 25 perceat Telecommuting also has several disadvantages. Telecom ters frequently report more socal soltion. They also receive less worchafmouth information, which may have implications for promotional opportunities and workplace relations. Tele ‘commuting also tends 1o Weaken relaioaships among cowork- fer, resulting in lower team cohesion. Onganizational culture is also potenially wesker when most emplayees work from home fora sgnificant part of their workweek, Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Telecommuting sucess depends on several characteristics of the employee, job, and organization.” Employees who work ffTecivelyfrem ome typically have higher selemouiration, ser ‘organization, need for autonomy. and information techaoleey skis. Those who telecommute most of the time also full thei social needs more from sources outside the workplace. Jobs are better suited to telecommuting when the tasks do not require resources at the workplace, the work is performed independently trom coworkers, and tsk performance is measurable. COnganizations improve telecommuting suceets by rewarding and promoting employees based on their performance rather than their presence in the office (face time). Eifecive compa- nies aso help telecommuters maintain sufficient cohesion with ‘their team and psychological connectedness withthe organiza- tion. This occurs by limiting the number of telecommuting days, having special meetings orevents where all employees asiemble atthe workplace, and regularly using video communication and other technology that improves personal relatedness. Fount Edon "Mcorgenizationa Behav (currently 18 percent, If percent will be of Asian deseent (cus rently 6 percent), and 13 per cent will be African American {eurrently 14 percent)2™ Diversity aso includes di ferences in personalities. be liefs, values, and attimdes.” We can't irestly see this ceep- level diversity. but itis evident in a person's choices, words and actions. Deep-evel civer sity revealed when employees have different pereeptions and attitudes about the same situation (see Chapter 10) and when they form like-minded informal social groups (see Chapter 7). Some deep-evl diversity isassocated with sirface- level attributes. For example, studies report significant differ- fences between men and women reparding their preference of Employees who work effectively from home typically have higher self-motivation, self-organization, need for autonomy, and information technology skills. benefts for both companies and telecom, ‘ultod than others to telecommuting a Increasing Workforce Diversity Immigrants tothe Uned States and many other counties have snuch more multicultural arias than afew deesdes ago, result ing in a much more diverse workforce in most organizations In AAditon sloaliztion has increased the diversi of people ea- ployee interact wih ia partner orguization (suppliers, clients fc.) located esewnere inthe worl ‘When disassine workforce diversity, we usualy think about surface evel veretty-the observable detographic and othe over diferences song members ofa group, such as tek race, ethnicity, gender ag. and physical capabilites Sula evel d- ‘ersiy inthe United Stas aad many other counties has in- ‘eased substantially over the past few decades. For instance, people with non Caucsianor Hispanic eign cuent represent tlmest 40 percent of the American population, Within the next 50 years an estimatedonequarer cf Americans wll be Hispanic {an increasingly popular workplace relation conflict handling syls, ethical principles, and approaches to communicating with other peoplein various situations. t ‘An example of deep-lvel di- o> s SOM —_vesity isthe variations in bells fofremote and expectations across genera remote work ‘ons. Exhibit 13 dustrates the ay your instructor. distribution of the American ‘workforce ty major generational cohorts: Baby Boomers (bern from 1946 t0 1964). Generation Xers(boen from 1865 t9 1990), nd Milemniah (ls elled Gener tion Yer, born between 1981 and 1997). Generational deep vel divesty does exist to some extent, but ic tends to be subuer than the popular press woul! suggest. Alo, Some generational diflereaces are actually due to ate. not €o- hor.” For instance, Millennials have a strenger motivation for personal development, advancement, and recognition, whereas Baby Boomers are more motivated by interesting and meaningul Work Research indicates that as Millennials age, their motvation for learning and advancement wil vane and their metivaton for interesting and meanireful work wil inerease. Consequences of Diversity Workforce diversity offer. numerous advantages to orzanira tions Teams with high iformational dvesty-membess have dierent knowledge and skltend to be more creative and CHAPTER! | Intodueton othe Fel of Orga nal ehavor ° Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Setavier Exhibit 13 America's Muttgenerational Workforce™ "AN ‘make better decisions in complex situations compared to teams with less informational divessity. A workforce with surface-and deep-evel diversity s ako more representative of most commu- nkies, so companies are better able to recognize and adress ‘community needs. These and other benefits may explain why ‘companies that win diversity avards have higher financial re ‘ues, at lest inthe short run. Dinersiy also peses challenges in the workplace.*® One prob- Jem i that employees with dverse backgrounds usually take lon- er to perform effectively together because they experience ‘humerous communication problems and create “faulines™ informal group dynamics (see Chapter 7), Some forms of diver- sity alo increase the risk of dysfunctional confit, which re- {duces information sharing and satisfaction with coworkers (See (Chapter 10). Research suggests that these problems can offset the advantages of diversity ia some stuatons. ‘Buteven wit these challenges, companies need vo make diver Siva priogity because sirfaeevel diversity and some forms dcepevel diversity are moral and legal imperatives. Companies ‘ut ofer an inclusive Workplace are, Et essence, fling the tht ca standard of fairess in their decisions reeardine employment and the allocation of rewards. Inclusive workplace practices im prove ihe quality ofhirig and promodon, and increase employee ‘stitaction and loyalty. Companies that create an inclusive work: plice also nurture 2 culture of respect, which, in turn, improves ‘cooperation and coordiation among employes 40 PARTS | osuctan THEORY TO PRACTICE ANCHORS OP ORGANIZATIONAL BEHAVIOR KNOWLEDGE Technological change, globalization, emerging employment re ltlonships. and increasing workforce diversity are just a few of the societal changes that make organizational behavior knowl edge more useful than ever before. To understand these and loter 1opics, the Held oF organizational behavior relies oma set offasc beliefs or knowiedge structures (see Exhibit 14). These conceptual anchors represent the prisciples on which OB ‘knowledgeis developed and refined = Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. The Systematic Research Anchor ‘A key feature of OB knovledge is that it should be based on systematic research, which typically i volves forming research questions, systematically collecting data, and testing hypotheses against those data Systematic research investigation isthe bax sis for evidence-based management, which invoNes making decisions and taking ac- lions guided by research evidence. It makes perfect sense that management practice should be founded on the best availble systematic knowledge. Yet many of us who study organizations using y+ tematic methods are azazed at how often \ corporat leaders and ether staff embrace i fads, unteste¢ consulting models, and their own pet hells without bothering to find out if they actully work’ ‘Why dont decision makers consis. tently apply evidence-based management? One reason is that they are bombarled with ideas from consultant reports, popular business books, newspaper articles, and other sources which makes it difficult to figure out which ones are based on good evidence. A second reacon is that geod OB research is necessarily ‘enerc; itis rarely deseribed in the context of & specific problem ina specific organi - ration. Decision makers therefore have the difficult task of figuring out Which theories are relevant to their unique situation, ‘A thisd reason why organizational leadets follow popular management management. ‘Akay feature of OB knowledge f thst it should bbe based on systematic researc, which becomes the founcation for evidence-based ‘Enaveveskmed LtgPH26LiAuny Stack Photo {ads that lack reseacch evidence is because the sources ofthese fads are rewarded for marketing their ideas, not for testing 10 “BRI 14 anctorsot crgrzatnai Behav "M.orgpnizaional Behavior, Fourth Eton management the pace ‘if the ully work. Is as ae soci thy sctty wort im eed, some management | tates concepts have become pop- tar ome have even found thelr way into OB textbooks!) because of heavy marketing, aot because of any evidence that ‘they ae valid. A fourth reason i that human beings are affected by several perceptual errors and devision- ‘making biases. as we wil lar in Chapter 3 and ‘Chapter 6. For instance, decsion makers have a ‘natural tendency to lock for evidence that supports their pet bef and ig- nore evidence that opposes those betes. OB experts have identified several vays to create a more evidence-based organization * Fs, be skeptical hype, which is apparent when socalled experts say the idea is “new.” “revolutionary.” and “proven.” In realty, mest ‘management ideas are adaptations, evolutionary, sod never proven (science ean digprove but never prove; it can only find evidence to support a prac- tice) Second, the company should embrace collec- ‘ive expertise eather than cay on charismatic stirs and management gurus. Thied, stories provide useful illustrations and possibly preliminary en- dence ofa useful practice, but they should never becom the main foundation to suppert ranage- ‘ment action. Instead, rly on more s}- tematic investigation with a larger sample. Finally, take a neutral stance toward popular trends and ideclogies. Exocutives tend to get caught up in hat thei: counterparts at other com- panies are doing vithout determining the validity of those tendy practices or ther relevance to their own organizations. al The Multidisciplinary Anchor “Another organizational behavior anchor is {hat the field should welcome theories and Knowledge from other disciplines. not just fom its own isolated research base. For in- stance, psychological researc has aided our understanding of individual and inierpet- sonal behavior. Sociologists have contrib- luted to our knowledge of team dynamics, organizational socialization. organizational power, and other aspects of the socal s)s- tem. OB krowedge also has benefited from Knowledge in emerging fields such as com- munications, marketing, and information systems. CHAPTER! |. Intoducion Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Betavior ‘Altiough OB research and writing pee each variable within OB THEORY TO PRACTICE one of thse levels of snaus mos varebles ae undentood best by thinking of them from al thre levels of analysis.” Com ‘munication is located inthis book asa team (interpersonal) pro cess, for instance, but it also includes individual and ‘organizational processes. Therefore, you should ty to ink about each OB topic atthe individual. team. and organizational levels, not just atone ofthese levels aed This practice of borrowing theory ftom other disciplines is inevitable. Organizations have central roles in seeety.sothey | PERSPECTIVES OF ‘re studied in many social sciences. Furthermore organizations consist of people who interact with each otter, so teres an | ORGANIZATIONAL inherent intersection between OB and most disciplines tha sniy timan tongs Hower ty eynetoomucton tears | ERFECTIVENESS developed in other fields, OB faces the risk of lagging rather Almost all organizational behavior theories have the implicit or tan leading ia knowledge production. In contast, OBbred | explicit objective of making organizations more effective” Ta Lieories allow researchers toconcentatcon the quality and use- | fact, organizational effectiveness is considered the “ultimate fulness ofthe theo, and be the fis to understand and apply | dependent variable” in organizational behavior. This means that knowledge that organizational effectiveness is the outceme that most OB ‘theories are ulumately uying o-achieve. Mary theories use dit The Contingency Anchor ferent labels—organizational performance. success. goodness, People and ther work environments are complex, and the field | health, competitiveness excellence-but they are basically pre- ‘of organizational behavior recognizes this by stating tat the ef | senting modelsand recemmendations thst help organizations to fect of one variable on another variable often depends on the | he move effective characteristics ofthe siuation or people involved. In practice, Many years ago, OB experts thought the best indicator of this means thai we can't count on having the same result ine. | company’ effectiveness was how well it achieved its stated ob- ry situation when We apply/an intervention. Instead, particu | jeetives According to this definition, Delta Air Lines would be la action may have different consequences under different | an effective organization if it met of exceeded its annual sales conditions” For evample, earlier inthis chapter we said that | and profit targets. Today, we know that this goal perspective the suceess of telecommuting depends on specific characteris. | might not indicate organizational eMactiveness at all. Any lead- tics ofthe employee. jeb, aad organization. Contingencies are | ership team could set corporate goals that are easy to achieve, identified in many OB theories, such as the best leadership style, | "yet the company would be left inthe dusi by competitors’ more the best conflicthandling syle, and the best orgarizational | aggressive objectives. Worse stil. ome goals might ultimately structure. Of eourse, it would be so much simpler ifwe could | put the compaay out of business. For example, they may focus rely on “one best way” theores, in which a particuareoneept or | employees on reducing costs whereas success may require more practice has tho same rosulls in every situation. OB experts do | focus on product or service quality tty to keep theories as simple as possible, bt the contingency | The best yardstick of organizational eflectiveness is compos anchor is always on their mind * ite of four perspectives: open systems, organizational eaming, high-performance work practices, and stakeholdes.° Organiza The Multiple Levels of Analysis Anchor | tions are eective when they have a good fit with their external Organizational behavior recognizes that what goes on in organi | environment, are learning organizations, have efficent and adap- zations caa be placed into three levels of analy: individual | tive internal subsystems (Le. high-performance work practices), team (including interpersonal). and organization. Infact, ad- | and sétisy the needs of key stakeholders. Over the next few vanced empirical research currently being conducted carefully | pages. we examine cach of these perspectives in more detail {dzntiies the appropriate level of analyss foreach variable tn ‘ the study and then measures at that level of analysis. For eam | Open Systems Perspective ple, team norms and cohesion are measured as team variables, | The open systems perspective of organizational eTectivensss is ‘ot as characteristics of indwiduals within each team, one of the earlest and mostentienched ways of thinking about 12 PARTY | ntrosucten Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. 'Mcorgenizaional Behavior, Fourth Eon organizations Indeed, the other major erganizational effec tiveness perspectives mainly provide more detail to specific se- lions of the open systems mod:l. This perspective views, ‘organizations as complex organisms that “Ive” within an exter nal environment, as Exhibit 1.5 ibustrates. The word open de- seribes this permeable relationship, whereas closed systems operate vithout dependence on or inteaction vith an external environment. ‘As open systems, organizations depend on the external env ronment for resources. including raw materials. job applicants. ‘inareial resource, information, and equipment. The external ‘environment also consists of rules and expectations, such as laws and cultural norms. that place demands on how oreaniza- sions should operate. Sonte resources (e.g. raw materials) are imported from the exiernal enviroameat, are transformed into product or services, and then hecame outputs exported to the ‘external envionment. Other resources (eg., job applicants, ‘quipmeat) become subsystems in the transformation process. Teside the organization are numerous subsystems, sich as departments, teams, informal groups, information systems, work processes, and technological processes. These subsys- tems are dependent on each other as they transform inputs into outputs. Some outputs (€... products and services) may >be valued by the external enviconment. whereas other outputs (eg. employee layoff, pollution) are undesirable by-products that may have adverse eflects on the environment and the or ‘zanization’s relationship with that environment. Throughout is process, organizations receive feedback feom the extereal environment regarding the value of their outputs, the [Exhublt 15 open Systems Perspective of Organizations “External Environment Ce eet availabilty of future inputs and the appropriateness of the transformation process. Organization-Environment FFit The open systems perspec tive states that organizations are effective when they maintain a ‘004 “it” with their external en- vironm@it®®, Good fit existe ‘when the organization's inputs, processes, and outputs are aligned with the external envi- ‘ronment’ needs, expectations, and resources. Organizations maintain a good environmental Jit in three ways: + Adaptto the emironnent tec. tie organizations cosely and cantinuously moter Be enviar ent or emergag condtiens ttt pse aihrest or appetunty. Tren {hey reconfigure theta subtest aln move sey wit that stiing envionment. Thereare many naysthat companies are adaptive (called their dyramic copii, suchas by changing the type or lume of products produced, shiing tb diferet input resources that ate mere plete or liable, and cesignng beter preducton (uanstarmaton processes. Influence the ervronmert: Efecine organizations dost merely spond to emerging condtons, they actvely try to inluence thet CHAPTER! | nruductonto teFiel of Organizational Bava 13 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Betavior Ti & ‘The open systems perspective states that organizations are effective when they maintain a good “ft” with their extemal fenvironment. atari iagee energy. Another indicator is their adaplabiliy. Organizations need t adapt to their esterrl environment, and this usually in- cludes a uansformation process that adapts to new products and sometimes new wars of making those products. A thitd in- dicator of an effective vansformation process is mnonativenes. Innovation involves the discovery design, and creation of prou- ucts and work processes that are superior to wht competitors can offer. ‘Animportatreeturé ofan enlectve transtormation process hhow well the iaternal subsystems coordinate with each other. Coordination is one ofthe mast important OB concepts because organizations consist of people Working tozether to achieve collective goals. As companies grow. they develop in- creasingly complexsubsjstems, which makes coordination more and more dificult. Complexity increases the risk that informa- tion gets lot, ideas and recources are hoarded, messages are mis imerpreted, and revards are distibuted unfair. Subsystems are interconnected, so small work practice changes in one subsystes ‘may spplethrough the organization and undermine the effetive. ness of other subsjstems. Consequently, organizations rely on An important feature of an effective transformation process is how well the internal subsystems coordinate with each other. ‘mard forthe poaicsor sence. Sore fis gan excise rich a paral resurces fe, sole provider ofa popular trand| or rast competi cress fo valid resources. tl otheslbby fr lepton that strengthens ther estion inthe marketplace try day legisla ronment becomes so challenging that oganzatiors cannot zdaptor in fluence Renough tosure For instance,thecurrentendronnentmiht Inns eitrome resource arc, oe mary conpotiorb la demand forthe fis products, ar onerous rules tha mak te transformation process oo expensve. Under hese creumstances, rcanztions often ‘move 18 more benevolent eminent that ca suport tei utr. Foraxarpl, Tage loved te Canadian busness afer afew years be tion process (istrbution an inventory chalenges) and nismetched ‘consume expectations feat, ing * Effective Transformation Process In addition to maiatain- {ng a good fit with the external environment, effective organiza- tons Have a transformation process that does well at converting inputs to outputs The most common indicator of effective in- ternal subsystems is their effcincy. Efficient organizations pro- duce more goods or services vith less labor, materials, and M4 PARTY | stocueton coordinating mochenisms to maintain an efficient adaptive, and innovative transformation process (see Chapter 12) Organizational Learning Perspective “Tas open stems perspective has tratonall ocased on bys cal esoures that enter the organization and ate proceed inta Diysel gcods (ouput. But whether ter oxtpus ae physica ‘or cognitine, sccesful companies rely on knowledge 383 Key Ingredient to succes. This second perspective of organizational eflectvenes, called organizational leaning, sates that the bes. ‘organizations find ways to acquite, hare. use, and store kaon ‘edge. Knowledge is a resource or asset, called intellectual capital, that eit in three forms: human capital, structural capa and rettionship capital’? abities hat employees carry around inthe heads. his a competitive ‘ovantage because employees are essen fr me organzton’ su ‘val andsuccess, nd heir lent ate dificult to fin, o cap, nd te ‘replace wit techncogyS' Human capi is a ahugersk or mos ot (gonzatios because orl leaves the exgenizton every day when employees gohomet? + Structural capita: Even every employeelet the organization, some Intellectial capita remains as structural capt. incudes the Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. "M.orgpnizaional Behavior, Fourth Eton organizational Intellectual capital 2 human capital thestock structural capital ‘relationship capital loarsing apospodve companys srk of enouiedge, Sie, and nous mbdded inthe luo dora ram ar fhatholstatrganiation! knowedge, nludeg bitesamong enployses arorganiaaton’ssystams organs eating fMlecivenes depends on furan apa srudural_—« at prove sconmic. =a sutures wan case supplies, ‘he ganizations capacty captal,andreatorship _vatetothe rgarization andather ‘o acuue,stare use, and captal krowledge captured and fetaire in an orgaizatin’s systems end ‘An owanizaton’s intellectual capital develops and is main. ucts ich a thedocumanted vor pocature.physieal yout ot | tained through the four organizational Isarning proossses shown roducion and efce space, anf the ished products (ich canbe | in Exhibit 1.6 acquiring sharing, using, and storing knowledge ‘evereengneerd to lecover ow they were mage) Acquiring Knowledse Acquiring knowledge refers to bring ing in knowledge from the external environment as well as through discovery It occurs daily ven employees casually b- ‘gerizaion’s goodwil bard image, and combinain of relaonsipa | _s€F¥€ changes in the external environment as well as when they that erganizatinal members have with peosle outside the | receive formal tring from sources outside the organization. cgantaton™ Knowledge acquisition also occurs through environmental Relationship capital: Relationship captl isthe vale dened frm ar organization's relationships with customer, suples. ane oters whe provide added mutual alefor he organization It indudes hear sas scanning, suen as actively Exhibit 1.6 Four Organizational Learning Processes monitoring consumer trends, proposed govern ‘meat legislation, and com. petitor activities. A tied ae ‘method is to hire skilled Observing staf and buy complemen- = Enaronmnent scanning tary businesses (called + Gafting rafting). Finally, know pera edge zequisition occurs through experimentation generating new ideas and produets through creative += Communication discovery and testing “+ fndivdualleaming finternad > Teining + Obsening + bfermation systems Sharing Knowledge ‘Sharing knowledge refers to distributing knovledge woughout the organiza: tioa. This mainly occurs through formal and infor ‘mal communication with coworkers. as well as through various forms of ‘n-touse learning (training dobservation. ete). Comp nies encourage informal communication through + Sensenaking Requisite eile + Autonomy + Learning otentauon CHAPTER | nvecucton to onal Behavior 1S Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Betavior ee a thsi organizational strectue, workspace design, corporat: cub ture, and social activities * Company intranets and digital infor ‘mation repositories also support knowledge sharing Using Knowledge Knowledge is a competitive alvantage only when it is applied to improve organizational processes. To use knowledge, employees need a mental map (scase making) so they are avare the knowkdge exists and kaow where to find iin the organization. Knowledge use ao requires employees wih sufficient prerequisite Lnowledge and sills. For example, financial analysts reed foundation Inowledge in mathematics and financial products to use new knowledge on asset valuation ‘methods, Autonomy is another important condition for knowl edge use: employees must have enough freedom to try out new ideas. Knowledge use also Nousishes where workplace norms stongly support crganizational learning. These belies and ‘norms represeat a learning orientation, which we discuss fur ther on the topics of creativity (Chapter 6) and organizational culture (Chapter 13)" Storing Knowledge Storing knowledge isthe process of re ‘aining knowledge for later retrieval. Stored knowledge, often called orzanizatonal memory includes knowledge that employ- ees recall as well as knowledge embedded in the organization's systems and sirucures Effective organizations also retain [krowiedge in human capital by motivating employees to stay with the company. Furthermore, organizations encourage em- ployees to share what they Lnov so valuable knowledge is held by covorkers when an employee does quit or retire. Another seategy iso actively decument Lnowledge when ii created by ‘debresing eam on details of their kxowledge of cents or prod: ‘uct development. ‘One last point about the organizational leering perspective: elective organizations pot only earn: they also unleara routines 16 PART | trosucten ne ea land patterns of behavior that are no longe® epptopriate.” Un- learning removes knowiedge that no longer adds value and, in fact, may undermine the organization's effectiveness. Some forms of unlearning involve replacing dysfunctional polices, procedures, and routines. Other forms of unlearning erase at tues, belies, and assumptions that are no longer valid. Organi- ational unleaming is particulary inporant for organizational change, which we diseuss in Chapter 14, High-Performance Work Practices Perspective The open systems perspective sttes that succesful companies ae efficest and adaptive a transforming inputs inte outputs. Howeter, it does not offer guidance about specific subsystem haracterisies or orgazatonal practices that make the wan: formation process moreeffetv. These detail are addresed by another perspective of ergatizatonal effectiveness, called nigh- performance work practices (HPWPs). The HPWP perspective Fs founded on the belie that human eapitathe knowledge, slills and abiities that employees possessis an important scarce of competitne advantage for organizations." Motivated ad slled employees offer competitive advantage by vansfra {ng inputs outputs beter, by being mor sensitive tothe exter nal environment, and by having etter relalons with key stakebolders. The HPWP perspective identifies specific ways to generate se most yale om human capita. The four most equenly ‘dentifed HPWP practces are employee involvement, job att tonomy, competency development, and rewards for perfor ‘mance and competency development Each ofthese ur work practices alone improves oraniatinal effeiveness. but stud- jet sugges that they have a stronger effect when bundled topetter” Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. "M.orgpnizaional Behavior, Fourth Eton The first two factors— invoWving employees indecision making and giving them more autonomy over their work sctivities-strengtben employee motivation as well as improve decisions. organizational re- sponsiveness.and commitment ‘o-change. n highperformance workplaces. employee involve- ment and job autonomy often take the form of self-directed jeams (see Chapter 7). The ‘third factor employee competency development, refers to recruit. Ing, selecting. and traning so employees are equipped with the relevant inowledge and skis, The fourth high-performance work pracice & linking performance and skil development to various ‘he tour mosttrequenty identtea HP We pracvces areerpioyee | financial and nonfinancal rewards valued by employees. "volvement, job autonmy, competency development and High-performance work practices improve an atganization’s seuarcs fr performance aad competency cova effectiveness in three ways.” Firs, as we mentioned earlier, High Performance Work Practices in Selected OECD and Partner Countries’ sweden} Denmark Noway| NewZesiand United States ‘Average composite score on reported by employees in selected countries Higher scores in that country. Ths scale represens "work organization” HPWP practices, which exclude rewards but incluce wore one’s own work, exoperating and sharing information with owerkers, rd training others Data were colected fram more partrer counties with a minimum 44000 respondents per country. the 34 countries measuredin the study. spain Japan| sngapore Tukey] hay France| Greece CHAPTER! | Invaducion tothe Field of Crgarzatinal Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Setavier stoketolders inte gun, andar ntstha fect or xe sicasreseiec ass oe eve activites develop em Ghechesoociens lovee skill and Kaowiedge (Gnuman capi), which directly improve individual behavior and performance. Second, com panies with superior human capital ead 9 adapt better to ‘rapidly changing environments. This adaptability cceurs because employees are better at performing diverse tasks in unfamiliar situations When they are highly stilled and have more freedom to perform thei work. A third explanation is that HPWP practices stengthen employee motivation and positive attudes toward th: employer. HPWPs represent the company's investment nits workforce. which motivates employees to reciprocate through greater effort in ther jobs and assistance to coworkers. “The HPWP perspective 6 sUll developing. but i already re veals important information about specific oanizational prac. tices that improve an organization’s effectiveness through its employees. Sti this perspective offers an incompete picture of ‘organizational effestivenese. The remaining gape are filled by the stakeholder perspective of organizational effectiveness. Stakeholder Perspective The open systems perspective says that effective organizatir adapt 10 the external envieonment. However, it doesnt offer ‘much detail about the extemal environment. The stzkeholder Exhibit 17 St unites Key Organizational Stakeholders perspective offers more specific information and guidance by focusing on the organizations relationships with stakeholders, ‘Stakenolders include organizations, groups, and other entities that affect, or are affected by, the company’s objectives and ac- tions.” The stakeholder pesspetive personalize the open sys tems perspective: it identifes specific social enites in the cexterml environment as ella employees and otbers within the ‘organization (the iaternal environment). This perspective also recogaizes that staLeholde reaons are dynarnic; they can be negotiated andinfluenced, not jst taken asa fixed condition. tn general, the stakeholder perspective sates that organizations are ‘more effective when they undersiand, manage, and satisy take. holder needs and expectations.” ‘There are many types of stakeholders, and they are costinu- ously evolving. Consider the 4ey stakeholcers identified by (CSL Limite in Exhibit 1.7. The global leader in blood.elated products and vaccines pays attention to more than a dozen groups, and likely others that aren't included inthis diagram. Understanding, managing, and satisfying the interests of stake- hholdes is challenging because they have conflicting interests and organizations lack suficien: resources ta satisfy everyone. ‘Therefore, orginizetional leders need to decide how much pri ofity to give to each group Research has identified several factors that influence the prioritization of stakeholders, includ- ing the entity's power and urgeney for action, ite legitimate claim to oganizational resources, how executives perceive the te paRTs Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. "M.orgpnizaional Behavior, Fourth Eton organization's environment, the oreanization’s culture, and the personal values of the corpo- rate board und CEO. Values, Ethics, and Corporate Social Responsibility The stakeholder perspective provides valuable details about features ofthe ‘external environment that are missing fom the ‘pen systems perspective. Equally important, the stakeholder perspective incorporates values, ethics, and corporate socal re. sponsibility into the organizational effectiveness equation. As ‘mentioned, personal values infuence how corporate boards and CEOs allocate organizational resources to stakeholders” Values are relatively stable evaluative beliefs that guide cur preterences for outcomes or courses of action ina viel of st ‘uations. Values help us know what is ‘ight or wrong. of good ot bad, in the world. Chapter 2 explains how values anchor our thoughts and to some extent motivate our actions. Although values exist within inivid- ual, groups of people often hold sim lar values, so we tend to ascribe these shared values to the team, department, orgasization, profession, or entire soci. ‘ay. For example, Chapter 13 diseusses ‘the importance and dynamics of organi- taticnal culture, Which inludes shared. ‘values across the company. Many firms strive to become valuesdriven organiza- tions, whereby empleyee decisions and behavior are guided mainly by the collective values identified as critical 1 the orga- nizaion’s success" By focusing on values, the stakeholder perspective also highlights the importance of ethies and corporate social e- sponsibility. In fect, the stakeholder perspective emerged out High Expectations for Corporate Social Responsibility GA ys oscorcons eal espomsbey =e to el ‘anes oth antane tere | sureyedso/canpanie hve 2 ma VT Worse consmersurvojed they ‘mpi hey baeves nlsoey ‘phot: Cost Gey ges Corporate social oe Ning ne arcs Parte ee) oneness een terms Peace ty remiss Ertetetrsent BO Sraccacnes pment rine enn ere fo berespnae toc ondihe of earlier writing on those two topics. Ethics refers tothe study ‘of moral principles or values that determine whether actions are fight or wrong and outcomes are good or bad. We rely on our ethical values to determine “the right thing to do.” Ethical behaviors driven by the moral principles we use tomale deci- sions. These moral principles represent fundamestal values. One recent survey of 7.700 employed Millennials in 29 coun ‘ries reported that 87 percent believe “the success of a business should be measured in terms of more thin just its nancial performance.” However, ‘only 58 percest of them believe that businesses "behave in an ethical man- rer." Chapter 2 discusses the main influences om ethical decisions and be- havior in the workplace. Clrppiete sociel responsibility (CSR) consists of organizational activi- ‘Hes intended to benefit society and the seviroameat beyond the firm's immed ate financial interests or legal obliga- tions. Ie is the view that companies havea cout with society, in which they must serve takcholders ‘beyond stockholders and exstomers. In some situations, the ine {sts of the firm's stockholders should be secondary 0 those of ‘other stakeholders." As part of CSR, many companies have ad- opted the triplebottomine philosophy. They try to support or "earn positive returns” in the economic, social, and environmen ‘ul spheres of sustainability. Firms ‘that adopt the triple bottom line ‘im to survive and be profitable In the markesplace (economic, but they also intend to maintain ‘or improve conditions for society (Gocial) as well she physical ceavironment® ‘Not everyone agrees that orga- nizations need to cater to a wide variely of stakeholders. Many years ago, economist Milton Friedman pronounced that “there ‘sone and only one social respon- bility of business-to use its sources and engage in acuvives designed to increase its prof- iis."" Friedman is highly re- spected for developing economic CHAPTER! | invooucton to theFiee of Organzatinal Behavior 19 Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. ‘Organisation Betavior theory, but few writer take this extreme view today. Almost al Farture SOO companies publish sustainability reports, and the view among most execttves is that corporate social reporsibi- ity is critically important to being competitive in todays market place. The emerging evidence is that companies with a postive (CSR reputation Lend wo have beter Financial performance, more loyal employees (stronger organizational identification), and better relations with customers, job applicants, and other sakeholders* Connecting the Dots: An Integrative Model of Organizational Behavior (Open systems organiaional lernag bih-erformance wort pmetces, and statholders represent te oar perspectives of ‘reanizatonal effectiveness. Oraniational efeciveness the timate dependent variable in organizational behave, siti Aiecty of indecty predicted by al other OB variables, The Exhibit 18 An integrative Mode! of Organizational Behavior eed + Open systems ft + Organizational learning 20 PARTY | Introduction Parenter ‘relationship between organizational effectiveness and other OB variables is shown in Exhibs 1.8. This diagram isan integrative road map for the Feld of organizational behavier, ard forthe structure ef this book. It is a metamodel ofthe various OB top- {cs and concepts, each of which has its own explanatory mod- els For instance, you will eam about employee motivation theories and practices in Chapter and leadership theories and sills in Chapter IL. Exhibit L8 gives you a bird’seye view of ‘the book and its various topics, to see how tey ft Logethe. ‘As Exhibit 18 lustrates, individual inputs and processes in- ‘luence individual outcomes, which in turn have a direct effect, fn the onginization'seectveness. For example, how well orga: nizations transform inpats to outputs and satisfy Ley stakehold- ns is depeadest on how well employees perform their jobs and ‘make logical and creaive decisions. Individual inputs, processes, and outcomes ae identified in the two lftside boxes of oar in- tegrating OB model and are the centr of atention in Part 2 of this ‘book. After introducing 2 model individual behavior and results, we will ears about personality and values-two of the most important individual characteristics-and later examine various individual processes, such as selfeoncept, perceptions. emotions, attitudes, ‘motivation, and selfleadership. Part 3 of this book directs our attention to team and interper sonal iaputs, processes, and out ‘comes. These topics are found in the two boxes on the right side of Exhibit 1.8. The chepter on tears

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