P A R T 1 UN DERSTA N DIN G THE W ORKPLACE

CH A PTER 1

What Is
Organizat ional
Behaviour?
An organization decides it w ill hire people
w ith few skills and job experience. What
challenges might its managers face?

1 What is organizational behaviour?

Isn’t organizational behaviour common sense?

2 Or just like psychology?

How does know ing about organizational

3 behaviour make w ork and life more
understandable?

4 What challenges do managers and employees

face in the w orkplace of the tw enty-first century?
 innipeg-based Inner City

W Renovation (ICR) does renova-

tion and construction w ork on
rundow n inner city residential and com-
mercial buildings, w ith the aim of revital-
izing the area.1 As part of its mission, the
company employs and trains low -income
residents of the inner city. ICR is a for-
profit company that w as created by five
not-for-profit joint venture partners: North
End Housing Project (NEHP), W innipeg
Partners in Housing (WPH), Spence
Neighbourhood Association (SNA), West
Broadw ay Development Corporation
(WBDC), and Community Ow nership
Solutions (COS). ICR has completed over
50 residential and commercial projects
since opening its doors in August 2002.
Because ICR hires a number of employees w ho have The challenges that the managers at ICR face in
few skills and little job experience, managers must teach running a successful organization and getting people
the employees how to perform the role of employee. to w ork w ell together illustrate several concepts you
M anagers must also teach employees about teamw ork w ill find as you study the field of organizational behav-
and leadership w hile w orking side by side w ith them on iour. Let ’s t ake a look, t hen, at w hat organizat ional
construction projects. Can a company like ICR survive as behaviour is.
w ell as a company not as committed to social values?

D EFINING O RGANIZATIONAL BEHAVIOUR 1 What is organizational

Organizatio nal behavio ur ( o ften abbreviated as O B) is a field o f study that investi- behaviour?
gates ho w individuals, gro ups, and structure affect and are affected by behavio ur within
o rganizatio ns. Behavio ur refers to what peo ple do in the o rganizatio n, ho w they per- organizational behaviour A field
of study that investigates the impact
fo rm, and what their attitudes are. Because the o rganizatio ns studied are o ften business
of individuals, groups, and structure
o rganizatio ns, O B is frequently applied to address wo rkplace issues such as absenteeism, on behaviour within organizations;
turno ver, pro ductivity, mo tivatio n, wo rking in gro ups, and jo b satisfactio n. Managers the aim is to apply such knowledge
o ften apply the kno wledge gained fro m O B research to help them manage their o rgan- toward improving organizational
izatio ns mo re effectively. effectiveness.

O B IS FO R EV ERY O N E

Why do some people do well Do you know what a Doe s job satisfaction really Are you re ady to assume
in organizational settings “ typical” organization make a diffe re nce ? more re sponsibility at
while others have difficulty? looks like ? work?

What pe ople - re late d Why should you care about

challe nge s have you unde rstanding othe r
notice d in the workplace ? pe ople ?

3
4 Part 1 Underst anding t he Workplace

Inner City Renovation
www.mts.net/~ icri/
OB Is for Everyone
It may seem natural to think that the study o f O B is fo r lead-
* Why do some
pe ople do we ll in
ers and managers o f o rganizatio ns. After all, they o ften set
the agenda fo r everyo ne else. Ho wever, O B is fo r everyo ne.
organizational Fo r instance, m any em plo yees have info rm al leadership
settings while othe rs ro les. They are o ften expected to mo ve beyo nd simply pro -
have difficulty? viding labo ur to playing a mo re pro active ro le in achieving
o rganizatio nal success. As well, managers are increasingly
asking emplo yees to share in their decisio n-making pro cesses rather than simply fo llo w
o rders. Fo r instance, emplo yees in so me retail sto res can make decisio ns abo ut when to
accept returned item s o n their o wn, witho ut invo lving the m anager. Thus, in m any
o rganizatio ns, the ro les o f managers and emplo yees have beco me blurred.2
O B is no t just fo r managers and emplo yees. Entrepreneurs and self-emplo yed indi-
viduals may no t act as managers, but they certainly interact with o ther individuals and
o rganizatio ns as part o f their wo rk. In fact, much o f OB is relevant beyo nd the wo rkplace.
O B applies equally well to all situatio ns in which yo u interact with o thers. In fact, O B
is relevant anywhere that peo ple co me to gether and share experiences, wo rk o n go als,
o r meet to so lve pro blems. The study o f O B can shed light o n the interactio ns amo ng
fam ily m em bers, the vo luntary gro up that co m es to gether to do so m ething abo ut
reviving the do wnto wn area, students wo rking as a team o n a class pro ject, the parents

What is organizational behaviour?

It’s a field of study that focuses on
three levels of behaviour in organ-
izations. One level is the individ-
ual, such as the Wal-M art greeter
handing out smiley balloons.
Another level is the group, such
as the three employees of Praxair,
a distributor of bottled industrial
gases, w ho meet to discuss their
w ork. The third level is structure,
w hich is depict ed here by
employees w orking in cubicles at
Bloom berg, a f inancial m edia
company.
 Chapt er 1 W hat Is Organizat ional Behaviour? 5

who sit o n the bo ard o f their child’s daycare centre, o r even the members o f a lunchtime
pickup basketball team. Thro ugho ut the textbo o k, a feature called O B in the Street will
help yo u understand these bro ader co nnectio ns.

W hat Do We M ean b y Organization?

An organization is a co nscio usly co o rdinated so cial unit, made up o f a gro up o f peo ple, organization A consciously
who wo rk to gether o n co mmo n go als o n a relatively co ntinuo us basis. Manufacturing and coordinated social unit, made up of a
group of people, that functions on a
service firms are o rganizatio ns, and so are scho o ls, ho spitals, churches, military units,
relatively continuous basis to achieve
retail sto res, po lice departments, vo lunteer o rganizatio ns, start-ups, and lo cal, pro vin-
common goals.
cial, and federal go vernment agencies. Inner City Reno vatio n, which we discussed in the
o pening vignette, is a fo r-pro fit o rganizatio n, but its partners are no npro fit o rganiza-
tio ns. Thus, when we say “o rganizatio n” thro ugho ut this textbo o k, we are referring no t
o nly to large manufacturing firms but also to small mo m-and-po p sto res, as well as to the
variety o f o ther fo rms o f o rganizatio n that exist. Small businesses make up a significant
part o f the eco no my.3 Businesses that employ no mo re than 20 peo ple are respo nsible fo r
abo ut o ne-quarter o f all Canadian jo bs. Small businesses emplo ying 50 o r fewer peo ple
make up 24 percent o f Canada’s gro ss natio nal pro duct. Micro businesses ( co mpanies
with 5 o r fewer emplo yees managed by an o wner/ o perato r, o ften as so le pro prieto r-
ships) acco unt fo r abo ut 8 percent o f the emplo yment in this co untry.
The examples in this textbo o k present vario us o rgani-
zatio ns so that yo u gain a better understanding o f the

* Do you know
what a “ typical”
many types that exist. Tho ugh yo u might no t have co n-
sidered this befo re, the co llege o r university yo u attend is
organization looks every bit as much a “real” o rganizatio n as is Hudso n’s Bay
like ? Co mpany o r Air Canada o r the To ro nto Rapto rs. A small,
fo r-pro fit o rganizatio n that hires peo ple with limited skills
to reno vate and build in the inner city o f Winnipeg is as
much a real o rganizatio n as is Lo ndo n, O ntario -based EllisDo n, o ne o f No rth America’s
largest co nstructio n co mpanies. Therefo re, the theo ries we co ver sho uld be co nsidered
in light o f the variety o f o rganizatio ns yo u may enco unter. We try to po int o ut instances
where the theo ry may be less applicable ( o r especially applicable) to a particular type o f
o rganizatio n. Fo r the mo st part, ho wever, yo u sho uld expect that the discussio ns in this
textbo o k apply acro ss the bro ad spectrum o f o rganizatio ns. Thro ugho ut, we highlight
applicatio ns to a variety o f o rganizatio ns in o ur feature O B in the Workplace.

OB: MAKING SENSE OF BEHAVIOUR IN

O RGANIZATIONS
The managers at Inner City Renovation (ICR) quickly noticed that some of their employees had
special challenges, such as their unemployment rates, their inconsistent job records, and their
low education levels.4 M anagers interview ed employees about their career interests and their
needs for skill development. In addition, employees have had one-on-one meetings w ith the ICR
president and the employee support w orker. Interview s and meetings are w ays to collect data
about employee behaviour. While ICR managers are not researchers, they understand the need
for doing some research on their employees. How is OB research carried out, and in w hat sit-
uations does it apply?

We have thus far co nsidered why O B can be applied in a variety o f settings. In this next 2 Isn’t organizational
sectio n, we co nsider the o ther fields o f study that have co ntributed to O B and discuss the behaviour common
fact that O B is a scientific discipline, with careful research that is co nducted to test and sense? Or just like
evaluate theo ries. psychology?
6 Part 1 Underst anding t he Workplace

The Build ing Blo cks of OB

O B is an applied behavio ural science that is built upo n co ntributio ns fro m a number o f
behavio ural disciplines. The main areas are psycho lo gy, so cio lo gy, so cial psycho lo gy,
anthro po lo gy, and po litical science.5 As we will learn, psycho lo gy’s co ntributio ns have been
mainly at the individual o r micro -level o f analysis. The o ther fo ur disciplines have co n-
tributed to o ur understanding o f macro co ncepts, such as gro up pro cesses and o rgani-
zatio n. Exhibit 1-1 presents an o verview o f the majo r co ntributio ns to the study o f O B.

EXHIBIT 1-1 Tow ard an OB Discipline

Behavioural Contribution Unit of Output

science analysis

Learning
M otivation
Personality
Emotions
Perception
Training
Leadership effectiveness
Psychology Job satisfaction
Individual decision making
Performance appraisal
Attitude measurement
Employee selection
Work design
Work stress Individual

Group dynamics
Work teams
Communication
Pow er
Conflict
Intergroup behaviour
Sociology

Formal organization theory Study of

Organizational technology Group Organizational
Organizational change Behaviour
Organizational culture

Behavioural change
Attitude change
Social psychology Communication
Group processes
Group decision making
Organization
system
Comparative values
Comparative attitudes
Cross-cultural analysis
Anthropology
Organizational culture
Organizational environment

Conflict
Political science Intraorganizational politics
Pow er
 Chapt er 1 W hat Is Organizat ional Behaviour? 7

The Rigour of OB
Whether yo u want to respo nd to the challenges o f the Canadian wo rkplace, which we
discuss later in the chapter, manage well, guarantee satisfying and rewarding employment
fo r yo urself, o r kno w ho w to wo rk better in gro ups and teams, it pays to understand
o rganizatio nal behavio ur. O B pro vides a systematic appro ach to the study o f behav-
io ur in o rganizatio ns, as well as gro ups and teams. Underlying this systematic appro ach
is the belief that behavio ur is no t rando m. Thus research studies are co nducted and are
the basis fo r all o f the claims made in this textbo o k.

OB Lo o ks at Co nsistencies
Certainly there are differences amo ng individuals. Placed in similar situatio ns, peo ple
do n’t all act exactly alike. Ho wever, there are certain fundamental co nsistencies under-
lying the behavio ur o f mo st individuals that can be identified and then mo dified to
reflect individual differences.
These fundamental co nsistencies are very impo rtant because they allo w predictabil-
ity. Fo r instance, when yo u get into yo ur car, yo u make so me definite and usually highly
accurate predictio ns abo ut ho w o ther peo ple will behave.
What may be less o bvio us is that there are rules ( written and unwritten) in almo st
every setting. Thus, it can be argued that it’s po ssible to predict behavio ur ( undo ubtedly,
no t always with 100-percent accuracy) in supermarkets, classro o ms, do cto rs’ o ffices,
elevato rs, and in mo st structured situatio ns. Fo r instance, do yo u turn aro und and face
the do o rs when yo u get into an elevato r? Almo st everyo ne do es. Is there a sign inside the
elevato r that tells yo u to do this? Pro bably no t! Just as we make predictio ns abo ut driv-
ers, where there are definite rules o f the ro ad, so we can make predictio ns abo ut the
behavio ur o f peo ple in elevato rs, where there are few written rules. This example sup-
po rts a majo r fo undatio n o f this textbo o k: Behavio ur is generally predictable, and the
systematic study o f behavio ur is a means to making reaso nably accurate predictio ns.

OB Lo o ks Beyo nd Co mmo n Sense

When we use the phrase systematic study, we mean lo o king at relatio nships, attempt- systematic study The examina-
ing to attribute causes and effects, and basing o ur co nclusio ns o n scientific evidence— tion of behaviour in order to draw
conclusions, based on scientific evi-
that is, o n data gathered under co ntro lled co nditio ns, and measured and interpreted
dence, about causes and effects in
in a reaso nably rigo ro us manner— rather than relying o n co mmo n sense. O B uses sci-
relationships.
entific research to unco ver ho w behavio ur wo rks in o rganizatio ns. Exhibit 1-2 o n page 8
illustrates the co mmo n metho ds researchers use to study to pics in O B.
A systematic appro ach do es no t mean that tho se things yo u have co me to believe
in an unsystematic way are necessarily inco rrect. So me o f the co nclusio ns we make in
this textbo o k, based o n so lid research findings, will suppo rt what yo u always knew was
true. Yo u will also be expo sed to research evidence that runs co unter to what yo u might
have tho ught was co mmo n sense. In fact, o ne o f the challenges to teaching a subject such
as O B is to o verco me the no tio n, held by many, that “ it’s all co mmo n sense.” 6
Yo u will find that many o f the so -called co mmo n-sense views yo u ho ld abo ut human
behavio ur are wro ng, o n clo ser examinatio n. Mo reover, what o ne perso n co nsiders co m-
mo n sense frequently runs co unter to ano ther’s versio n. Are leaders bo rn o r made? What
is it that motivates people at work nowadays? You probably have answers to such questions,
and individuals who have no t reviewed the research are likely to differ o n their answers.
If understanding behavio ur were simply co mmo n sense, we wo uld no t o bserve many
o f the pro blems that o ccur in the wo rkplace, because managers and emplo yees wo uld
kno w ho w to behave. Fo r instance, we likely wo uld no t see peo ple being bullied in the
wo rkplace, managers who do n’t kno w ho w to manage, and team members who do n’t
info rm teammates when their wo rk is go ing to be late. Unfo rtunately, as yo u will see fro m
8 Part 1 Underst anding t he Workplace

EXHIBIT 1-2 Research M ethods in OB

Field Studies

in real-life
organizations

M eta-Analysis Laboratory Studies

using statistics to in simulated and

pool results of controlled settings
different studies
Sources of
research insight
in OB

Survey Studies Case Studies

using questionnaires looking in depth

and interview s in at single situations
sample populations

Source: J. R. Schermerhorn, J. G. Hunt , and R. N. Osborn, Organizat ional Behavior, 9t h ed., 2005, p. 4. Copyright © 2005 John W iley &
Sons, Inc. Reprint ed w it h permission of John W iley & Sons, Inc.

examples thro ugho ut the textbo o k, many individuals exhibit less than desirable behav-
io ur in the wo rkplace. With a stro nger gro unding in the systematic analysis o f O B, indi-
viduals wo uld be able to avo id so me o f these mistakes. This chapter’s Point/Counterpoint
o n page 22 lo o ks at ho w systematic O B is.
O ne o f the o bjectives o f this textbo o k is to expo se yo u to a systematic analysis o f
behavio ur, in the belief that such analysis will impro ve yo ur accuracy in explaining and
predicting behavio ur. Understanding O B may also help yo u behave better in o rgani-
zatio ns and gro ups as well. Fo r example, after studying O B, yo u may realize that yo u
sho uld no t discuss The Apprentice at 8:00 a.m. in the manager’s o ffice if yo ur manager
needs quiet time, is an intro vert, and is pro ductio n-o riented.7

OB Has Few Abso lutes

There are few, if any, simple and universal principles that explain O B. In co ntrast, the
physical sciences— chemistry, astro no my, and physics, fo r example— have laws that are
co nsistent and apply in a wide range o f situatio ns. Such laws allo w scientists to gener-
alize abo ut the pull o f gravity o r to co nfidently send astro nauts into space to repair
satellites. However, as o ne no ted behavio ural researcher co ncluded, “Go d gave all the easy
pro blems to the physicists.” Human beings are co mplex. Because we are no t alike, o ur
ability to make simple, accurate, and sweeping generalizatio ns is limited. Two peo ple
o ften act differently in the same situatio n, and the same perso n’s behavio ur changes
in different situatio ns.

OB Takes a Co ntingency Appro ach

Just because peo ple can behave differently at different times do es no t mean, o f co urse,
that we canno t o ffer reaso nably accurate explanatio ns o f human behavio ur o r make
 Chapt er 1 W hat Is Organizat ional Behaviour? 9

valid predictio ns. It do es mean, ho wever, that O B must co nsider behavio ur within the
co ntext in which it o ccurs— kno wn as a co ntingency appro ach . So , fo r example, O B contingency approach An
scho lars wo uld avo id stating that effective leaders sho uld always seek the ideas o f their approach taken by OB that considers
emplo yees befo re making a decisio n. Rather, we may find that in so me situatio ns a par- behaviour within the context in
which it occurs.
ticipative style is clearly superio r, but in o ther situatio ns an auto cratic decisio n style is
mo re effective. In o ther wo rds, as yo u will see in Chapter 8, the effectiveness o f a particular
leadership style depends o n the situatio n in which it is used. The O B scho lar wo uld
therefo re try to describe the situatio ns to which each style is suited.
Co nsistent with the co ntingency appro ach, the Point/Counterpoint feature included in
each chapter presents debates o n so me o f the mo re co ntro versial issues in O B. These
debates highlight the fact that within O B there is disagreement o n many issues. The
Point/Counterpoint fo rmat gives yo u the o ppo rtunity to explo re different po ints o f view
o n an issue, disco ver ho w diverse perspectives co mplement and o ppo se each o ther, and
gain insight into so me o f the current debates in the O B field.

H OW WILL KNOWING OB MAKE A

D IFFERENCE?
When we talk abo ut the impact o f O B in each chapter, we co nsider the impact o n bo th 3 How does knowing
the wo rkplace and the individual ( see o ur features O B in the Workplace and O B in the about organizational
Street) . So let’s begin o ur discussio n o f O B’s impact by lo o king bro adly at ho w kno wing behaviour make work
abo ut O B makes a difference in the wo rkplace, befo re we lo o k at ho w O B affects us
and life more
understandable?
individually.

In the Workpla ce
Fro m a management po int o f view, understanding O B can help yo u manage well. Still,
yo u might wo nder whether managing well really makes a difference. Markham, O ntario -
based Black Pho to Co rpo ratio n’s president, Ro d Smith, learned that no t listening to Black Photo Corporation
emplo yee demands can have undesirable co nsequences when he was co nfro nted with www.blackphoto.com
a unio n drive at Black’s. He no tes the difficulties he has experienced in wo rking with a
unio n. “ O ne o f the things that yo u lo se when yo u get unio nized is that ability to be
co mpassio nate, because the rules are the rules, and they catch peo ple in ways we prefer
no t to catch them.” 8
Co nsider ano ther manager’s perspective. Aris Kaplanis, president and CEO o f To ro nto -
based Teranet, understands the impo rtance o f managing well. In the high-tech industry, Teranet
where turno ver is typically 10 to 20 percent, Teranet’s annual turno ver rate is less than www.teranet.ca
1 percent. Kaplanis believes that his turnover is low because Teranet develo ped a co rpo rate
culture that is bo th humane and family-friendly. “My perspective is that the co mpany has
two assets— o ne is the custo mers, the o ther is o ur emplo yees. Bo th o f these assets have
to be serviced.” 9
The evidence indicates that m anaging peo ple well m akes fo r better co rpo ratio ns
overall. Exhibit 1-3 o n page 10 sho ws that many o f the firms that made the KPMG/ Ipso s
Reid list o f “ Mo st Respected Co rpo ratio ns fo r Hum an Reso urce Managem ent” also
sco red high o n financial perfo rmance and best lo ng-term investment value. Five o f the
co mpanies placed in the to p 10 o n bo th financial measures.
Each year, Report on Business ( ROB) magazine publishes a list o f the “50 Best Employers
in Canada.” The magazine’s 2005 survey identified three main traits o f best-lo ved co m-
panies: (1) they show appreciatio n fo r their employees, (2) they co ach employees to help
them mo ve up in the o rganizatio n, and ( 3) they have go o d leaders who present the
co rpo rate strategy clearly and co nsistently.10
10 Part 1 Underst anding t he Workplace
EXHIBIT 1-3 M ost Respected Corporations for Human Resource M anagement
(KPM G/Ipsos Reid’s 2005 Survey)
1 . RBC Financial Group
2. WestJet Airlines
3. Dofasco
4. TD Bank Financial Group
5. EnCana Corporation
6. M anulife Financial
7. IBM Canada
8. Toyota Canada
9. BM O Financial Group
Source: KPM G/Ipsos Reid, Eleventh Annual Survey of Canada’s M ost Respected Corporations,
w w w.mostrespected.ca/en/documents/CM RC2005En.pdf (accessed M ay 5, 2006).
organizational commitment
The degree to which an employee
identifies with the organization
and wishes to remain with the
organization.
affective commitment The
strength of an individual’s emotional
attachment to, identification with,
and involvement in the
organization.
Rank on Best
Rank on Financial Long-Term
Location Ind ustry Performance Investment Value
Toronto Financial Services 1 1
Calgary Air Transportation n/a n/a
Hamilton, ON Steelmaker n/a n/a
Toronto Financial Services 6 5
Calgary Oil and Gas 3 2
Toronto Financial Services 4 4
M arkham, ON Computers n/a n/a
Scarborough, ON Automotive n/a n/a
Toronto Financial Services 7 7
While the KPMG/ Ipso s Reid survey shows that managing well adds to the bo tto m line,
the RO B survey sho ws mo re directly that managing well pro vides managers with day-to -
day returns. ROB’s 50 best employers have low turnover, and employees want to stay with
their firm s— even when they are o ffered higher-paying jo b s by o ther co m panies.
Em plo yees with the 50 best em plo yers who participated in the RO B survey did no t
mentio n mo ney. Instead, they no ted that the co mpany reco gnizes their perfo rmance
in little ways that make a difference.
The message fro m bo th surveys is this: Managing peo ple well pays o ff. Do ing so may
also lead to greater o rganizatio nal co mmitment . We use this term to describe the
degree to which an emplo yee identifies with the o rganizatio n and wishes to maintain
membership in the o rganizatio n.11 This type o f co mmitment is o ften called affective
co mmitment , which describes the strength o f an individual’s emo tio nal attachment
to , identificatio n with, and invo lvement in the o rganizatio n. Emplo yees who are highly
co mmitted go beyo nd expected behavio urs to pro vide extra service, extra insight, o r
whatever else is needed to get the jo b do ne. There is so me co ncern that extreme o rga-
nizatio nal co mmitment can have negative effects, in that emplo yees with stro ng o rga-
nizatio nal co mmitment may behave unethically to pro tect the o rganizatio n. Ho wever,
this co ncern sho uld no t be a reaso n to avo id enco uraging co mmitment. O ne benefit o f
having co mmitted employees is that they are less resistant to change when o rganizatio ns
need to carry o ut changes.
Finally, managing well may impro ve o rganizatio nal citizenship behavio ur, a to pic
we discuss later in the chapter.
For You a s an In d ivid ual
Yo u may be wo ndering exactly ho w O B applies to yo u if yo u are still in scho o l and no t
yet wo rking. O r yo u may want to know how O B applies to yo u if yo u are planning to run
yo ur own business o r wo rk fo r a small no npro fit o rganizatio n, rather than a large o rgan-
izatio n. O r yo u may be asking yo urself ho w O B applies to yo u if yo u are no t planning
o n being a manager. We lo o k at each o f these scenario s belo w to help yo u see that O B
is relevant in a variety o f situatio ns.
 Chapt er 1 W hat Is Organizat ional Behaviour? 11

“What if I Am ‘Just’ a Student?”

Yo u may think that O B is o nly useful o nce yo u reach the wo rkplace. Ho wever, many o f
the co ncepts that apply to o rganizatio ns also apply to teamwo rk, so mething many stu-
dents have to do . As a team member, it’s impo rtant to kno w ho w perso nality differ-
ences affect the ability o f peo ple to wo rk to gether. Yo u may need to mo tivate members
o f yo ur team. Or yo u may want to know how to create a mo re effective team o r so lve co n-
flict in a team. Individually o r as part o f a team, yo u also have decisio ns to make and need
to kno w ho w to co mmunicate with o thers. All o f these to pics are co vered by O B.

“What if I Am No t Go ing to Wo rk in a Large Organizatio n?”

Yo u may think that when we say “o rganizatio n” we are referring to large financial firms
in o ffice to wers, to the exclusio n o f the variety o f o ther fo rms o f o rganizatio n that exist.
Yo u m ay be thinking that yo u want to wo rk in a sm all business, o r in yo ur fam ily’s
business, so O B has no relevance fo r yo u. But this wo uld be sho rt-sighted. Thro ugho ut
yo ur life yo u will wo rk with a variety o f o rganizatio ns, and O B will help yo u better
understand ho w tho se o rganizatio ns wo rk.

“What if I Do No t Want to Be a Manager?”

Many o f us carry aro und a simplistic view o f wo rk o rganizatio ns, with the participants
divided into set catego ries: o wners, leaders and/ o r m anagers, and em plo yees. These
distinct ro les are fo und mo st o ften in large, publicly held o rganizatio ns. Distinct o rga-
nizatio nal ro les beco me mo re blurred when we discuss smaller, privately o wned firms.
When we talk abo ut leadership in o rganizatio ns, we typically mean the perso n o r
perso ns respo nsible fo r setting the o verall visio n o f the o rganizatio n, altho ugh leader-
ship can co me fro m info rmal so urces as well. While managers and leaders have seen their
ro les expand as a result o f facto rs such as glo balizatio n and e-co mmerce, emplo yees
are also being asked to “ mo ve beyo nd their traditio nal ro le as inputs to the pro cess o f
achieving o rganizatio nal go als.” 12 Mo re and mo re emplo yees are taking o n this new
ro le and respo nsibility. In particular, The Co nference Bo ard o f Canada says that in high- The Conference Board of
perfo rm ance o rganizatio ns, “ Em plo yees are willing to be acco untable fo r their o wn Canada
www.conferenceboard.ca
and the o rganizatio n’s success.” 13 To be acco untable means that emplo yees “take charge
o f their o wn careers, decide what skills they need to acquire and determine where they
wish to emplo y these skills.” 14
Yo u may be thinking that yo u are no t planning to wo rk in an o rganizatio n at all
because yo u wo uld prefer to be self-emplo yed. While self-emplo yed individuals o ften
do no t act as managers, they certainly interact with o ther individuals and o rganizatio ns
as part o f their wo rk. Thus, the study o f O B is just as impo rtant fo r the so le pro prieto r
o r entrepreneur as fo r tho se who wo rk in large o rganizatio ns. It gives all o f us mo re
insight into ho w to wo rk with o thers, and ho w to prepare to beco me emplo yees in the
twenty-first-century wo rkplace.

TODAY’S CHALLENGES IN THE CANAD IAN

WORKPLACE
Inner City Renovation (ICR) employees are different from many typical for-profit organizations.15
Forty-seven percent have not completed high school, 58 percent have criminal records, 79 per-
cent w ere unemployed before being hired by ICR, and 37 percent had not held a job for more
than 2 years. Employees often have had jobs that last only a few days to a month; 26 percent
have held 30 jobs or more. The lives of these employees are marked by unstable employment,
and thus, within the first year of employment at ICR, 42 percent missed or were not able to work
because of domestic or family issues.
12 Part 1 Underst anding t he Workplace

Because many of its employees lack job experience, ICR needed to establish a culture that
w ould motivate employees to show up for w ork. M anagers recognized the need to create a sup-
portive w ork environment for its employees.
M any of ICR’s employees are Aboriginal peoples w ho live in the inner city. To better under-
stand the needs of these and its other employees, ICR managers conducted a formal survey of
all employees and had a staff retreat near the end of the first year of operation. Because of the
large number of Aboriginal peoples employed by ICR, the retreat incorporated certain Aboriginal
traditions as part of the event. All discussions w ere held in a circle format, and the retreat
included a sw eat (a ceremony done for meditation and cleansing). In addition, employees had
one-on-one meetings w ith the ICR president and the employee support w orker.
ICR is a very committed employer. The company w ants to change the life circumstances of
its employees. What factors affect employee motivation? How can ICR socialize its employees
to perform w ell in their jobs? How can ICR survive in the face of competition w hile maintain-
ing its goal of employing people w ith limited skills and job experience?

4 What challenges do
managers and
employees face in the
workplace of the
twenty-first century?
GM Woes
O B co nsiders that o rganizatio ns are made up o f levels, mo ving up fro m the individ-
ual, to the gro up, to the entire o rganizatio nal structure. Each level co ntributes to the
variety o f activities that o ccur in to day’s wo rkplace. Exhibit 1-4 presents the three levels
o f analysis we co nsider in this textbo o k, and sho ws that as we mo ve fro m the individ-
ual level to the o rganizatio n systems level, we deepen o ur understanding o f behavio ur
in o rganizatio ns. The three basic levels are like building blo cks: Each level is co nstructed
upo n the previo us level. Gro up co ncepts gro w o ut o f the fo undatio n we lay o ut in the
sectio n o n individual behavio ur. We then o verlay structural co nstraints o n the individ-
ual and gro up in o rder to arrive at O B.
When we lo o k at the different levels in the o rganizatio n, we reco gnize that each has
challenges that can affect how the levels above and/ o r below might o perate. We co nsider
the challenges at the individual, gro up, and o rganizatio nal levels.
This chapter’s CBC Video Case Incident further explo res o rganizatio nal challenges in
the twenty-first century.

Challenges at the In d ivid ual Level

At the individual level, managers and emplo yees need to learn ho w to wo rk with peo ple
who may be different fro m themselves in a variety o f dimensio ns, including perso nality,
perceptio n, values, and attitudes. This po int is illustrated by the employee situatio n at ICR,
where emplo yees have a variety o f experiences and co me fro m several cultures.
Individuals also have different levels o f jo b satisfactio n and mo tivatio n, and these
affect ho w managers manage emplo yees. Fo r instance, so me o f ICR’s emplo yees had
drug and alco ho l dependencies that affected their mo tivatio n and pro ductivity.
Mo re o rganizatio ns expect emplo yees to be empo wered and to take o n mo re respo n-
sibility than ever befo re. This expectatio n puts demands o n bo th managers and emplo y-
ees. ICR initially created three co m m ittees where em plo yees co uld give input o n a
variety o f issues, but the managers were so busy trying to make sure
EXHIBIT 1-4 Basic OB M odel the co mpany met financial go als that they didn’t have time to help the
emplo yees wo rk o n these co mmittees.
Perhaps the greatest challenge facing individuals ( and o rganiza-
Organization systems level
tio ns) is ho w to behave ethically, as the findings fro m the Go mery
Co mmissio n, lo o king into the $250-millio n spo nso rship scandal o f
Group level the Liberal party, sho w. At his sentencing hearing, Jean Brault, fo und
guilty o f defrauding the go vernment o f $1.23 millio n o n co ntracts
his co m pany, Mo ntreal-b ased Gro upactio n Marketing, o b tained
Individual level
claimed the external pressures he faced led to his actio ns: “I’m no t
trying to excuse what I did, but essentially it’s the po litical demands,
the demands o n me, that led me to take that first step.” 16
 Chapt er 1 W hat Is Organizat ional Behaviour? 13

Individual Differences
Peo ple enter gro ups and o rganizatio ns with certain char-
acteristics that influence their behavio ur, the mo re o bvio us
o f these being perso nality characteristics, perceptio n, val-
ues, and attitudes. These characteristics are essentially intact
when an individual jo ins an o rganizatio n, and fo r the mo st
part, there is little that tho se in the o rganizatio n can do to
alter them. Yet they have a very real impact o n behavio ur. In
this light, we lo o k at perceptio n, perso nality, values, and
attitudes, and their im pact o n individual b ehavio ur in
Chapters 2 and 3.

Jo b Satisfactio n
Em plo yees are increasingly
demanding satisfying jo bs. As

* Doe s job
satisfaction really
we discuss in Chapter 3, less
th an h alf o f C an ad ian
make a diffe re nce ? em plo yees are very satisfied with their jo bs. The belief Toronto-based Royal Bank of
Canada, Canada’s largest financial
that satisfied em plo yees are m o re pro ductive than dis-
institution in terms of assets,
satisfied emplo yees has been a basic assumptio n amo ng commands the respect of many
managers fo r years. Altho ugh there is evidence that ques- business leaders. In a 2004 KPM G/
tio ns that causal relatio nship,17 it can be argued that so ciety sho uld be co ncerned no t Ipsos Reid poll of 250 Canadian
o nly with the quantity o f life— that is, with co ncerns such as higher pro ductivity and CEOs, the company w as ranked
material acquisitio ns— but also with its quality. Researchers with stro ng humanistic first in six out of nine categories,
including “ Top of M ind M ost
values argue that satisfactio n is a legitimate o bjective o f an o rganizatio n. They believe
Respected Corporations,” “ Best
that o rganizatio ns sho uld be respo nsible fo r pro viding emplo yees with jo bs that are Long-Term Investment Value,” and
challenging and intrinsically rewarding. This chapter’s Ethical D ilemma Exercise, o n “ Human Resources M anagement.”
page 24, questio ns the extent to which o rganizatio ns sho uld be respo nsible fo r help-
ing individuals achieve balance in their lives.
Emplo yers can pay the price when emplo yees are no t satisfied with wo rking co ndi-
tio ns. Bank tellers at To ro nto -Do minio n Bank and Canadian Imperial Bank o f Co mmerce
in Sudb ury, O ntario , vo ted to jo in the United Steelwo rkers o f Am erica in 2005.
Emplo yees at a Sears Canada department sto re in Sudbury also pursued the po ssibility Sears Canada
o f jo ining the Steelwo rkers in 2005. Brian Whalen, a maintenance wo rker fo r the sto re, www.sears.ca
said that “jo b satisfactio n levels . . . have declined dramatically o ver the past two years.”
He no ted that employees were upset abo ut low ho urly wages, a benefits package that was
no t affo rdable, and jo b security.18 While unio nizatio n do es no t necessarily increase jo b
satisfactio n, it do es pro vide a mechanism fo r emplo yees to have so me bargaining po wer
with their emplo yers.

Mo tivatio n
An Angus Reid survey sho wed that 29 percent o f emplo yees do no t feel they receive
fair o r reaso nable rewards fo r the wo rk that they do .19 To address this co ncern, Chapter
4 discusses the impo rtance o f rewards in mo tivating emplo yees. Yo u may find the dis-
cussio n o f mo tivatio n and rewards particularly interesting in Case Incident— How a UPS
Manager Cut Turnover, o n page 25, where a manager faces the challenges o f mo tivating
different types o f emplo yees in o rder to reduce turno ver.

Empowerment
At the same time that managers are being held respo nsible fo r emplo yee satisfactio n
and happiness, they are also being asked to share mo re o f their po wer. If yo u read any
14 Part 1 Underst anding t he Workplace

empow erment Giving employees
responsibility for what they do.
American M anagement
Association
www.amanet.org
po pular business magazine no wadays, yo u will find that managers are referred to as
“co aches,” “advisers,” “ spo nso rs,” o r “ facilitato rs,” rather than “ bo sses.” 20
Emplo yees’ respo nsibilities are increasing to o . In many o rganizatio ns, emplo yees
have beco me “asso ciates” o r “ teammates.” 21 Decisio n making is being pushed do wn
to the o perating level, where emplo yees are being given the freedo m to make cho ices
abo ut schedules, pro cedures, and so lving wo rk-related pro blems.
What is happening is that m anagers are em po wering
em plo yees. Empo werment m eans m anagers are putting
* Are you re ady to
assume more
emplo yees in charge o f what they do . In the pro cess, man-
agers are learning how to give up co ntro l, and employees are
re sponsibility at
learning ho w to take respo nsibility fo r their wo rk and make
work?
appro priate decisio ns. The ro les fo r b o th m anagers and
emplo yees are changing, o ften witho ut much guidance o n
ho w to perfo rm these new ro les.
Ho w widespread are these changes in the wo rkplace? While we have no specific
Canadian data, a survey by the American Management Asso ciatio n o f 1040 executives
fo und that 46 percent o f their co mpanies were still using a hierarchical structure, but 31
percent defined their co mpanies as empo wered.22 O B in the Workplace lo o ks at ho w
WestJet Airlines empo wers its emplo yees.

O B I N T H E W O RK PL A C E

WestJet Airline’s Employees Work Together

What d o empow ered employees d o? Calgary-based WestJet Airlines emplo yees are
given lo ts o f freedo m to manage themselves.23 Clive Beddo e, the co mpany’s president
and CEO, was determined to create a co mpany “ where peo ple wanted to manage
themselves.”
At WestJet, emplo yees are asked to be respo nsible fo r their tasks, rather than rely
o n superviso rs to tell them what to do . That includes Beddo e: “I do n’t direct things,”
he says. “We set so me standards and expectatio ns, but [I] do n’t interfere in ho w o ur
peo ple do their jo bs.” Instead, emplo yees are given guidelines fo r behavio ur. Fo r
instance, flight attendants are directed to serve custo mers in a caring, po sitive, and
cheerful manner. Ho w do they carry that o ut? It’s up to them. Emplo yees also share
tasks. When a plane lands, all emplo yees o n the flight, even tho se who are flying
o ff-duty, are expected to prepare the plane fo r its next takeo ff.
O bvio usly, WestJet can lower its co sts by keeping the number o f superviso rs down.
The co mpany o perates with abo ut 60 emplo yees per aircraft, while a typical full-
service airline such as Air Canada needs mo re than 140. But allo wing emplo yees to
manage themselves has a bigger benefit. Beddo e believes it enco urages emplo yees
to take pride in what they do . “ They are the o nes making the decisio ns abo ut what
they’re do ing and ho w they’re do ing it,” says Beddo e.

Thro ugho ut the textbo o k yo u will find references to empo werment. We discuss it in
terms o f po wer in Chapter 7, and we discuss ho w leaders co ntribute to empo werment
in Chapter 8.

Behaving Ethically
In an o rganizatio nal wo rld characterized by cutbacks, expectatio ns o f increasing wo rker
pro ductivity, and to ugh co mpetitio n in the marketplace, it’s no t alto gether surprising that
many emplo yees feel pressured to cut co rners, break rules, and engage in o ther fo rms o f
questio nable practices.
 Chapt er 1 W hat Is Organizat ional Behaviour? 15

The Enro n scandal in the United States illustrated how casually so me peo ple treat the Enron
subject o f ethics. Enro n executives creatively changed ho w they repo rted their pro fits www.enron.com
and lo sses. When challenged, the co mpany’s chair, Kenneth Lay, cho se to lo o k the o ther
way. The reputatio n o f acco unting firm Arthur Andersen was destro yed because it failed
to questio n Enro n’s acco unting practices.
Ethics starts at the individual level. While the word refers to moral conduct, ethics is also ethics The study of moral values or
the study o f mo ral values o r principles that guide o ur behavio ur and info rm us whether principles that guide our behaviour
actio ns are right o r wro ng. Ethics helps us “do the right thing,” such as no t padding expense and inform us whether actions are
right or wrong.
repo rts, o r no t pho ning in sick to attend the o pening o f Superman Returns.
Individuals as well as o rganizatio ns can face ethical dilemmas. As we show in Chapter
9, the study of ethics does not come with black and white answers. Rather, many factors need
to be co nsidered in determining the ethical thing to do . Tho se individuals who strive hard
to create their own set o f ethical values and tho se o rganizatio ns that enco urage an ethical
climate in the face o f financial and o ther pressures will be mo re likely to do the right thing.
Thro ugho ut this textbo o k yo u will find references to ethical and unethical behav-
io ur. The Focus on Ethics vignettes pro vide tho ught-pro vo king illustratio ns o f ho w var-
io us o rganizatio ns deal with ethics.

Challenges at the G roup Level

The behavio ur o f peo ple in gro ups is mo re than the sum
* What people-
related challenges have
to tal o f all the individuals acting in their own way. Peo ple’s
behaviour when they are in a group differs from their behav-
you observed in the io ur when they are alo ne. Therefo re, the next step in devel-
organizations in which o p ing an und erstand ing o f O B is the stud y o f gro up
you have worked? behavio ur.
Chapter 5 lays the fo undatio n fo r an understanding
o f the dynam ics o f gro up and team behavio ur. That chapter discusses ho w individ-
uals are influenced by the patterns o f behavio ur they are expected to exhibit, what the
team co nsiders to b e acceptab le standards o f b ehavio ur, and ho w to m ake team s
m o re effective.
Chapters 6 and 7 examine so me o f the mo re co mplex issues o f interactio n: co m-
municatio n, co nflict, and nego tiatio n; and po wer and po litics. These two chapters give
yo u an o ppo rtunity to think abo ut ho w co mmunicatio n pro cesses so metimes beco me
co mplicated because o f o ffice po liticking and interperso nal and gro up co nflict.
Few peo ple wo rk entirely alo ne, and so me o rganizatio ns make widespread use o f
teams. Therefo re, mo st individuals interact with o thers during the wo rkday. This can
lead to a need fo r greater interperso nal skills. The wo rkplace is also made up o f peo ple
fro m a variety o f backgro unds. Thus, learning ho w to wo rk with peo ple fro m different
cultures has beco me mo re impo rtant. We review so me o f the challenges that o ccur at the
gro up level belo w.

Wo rking With Others

Much o f the success in any jo b invo lves develo ping go o d interperso nal, o r “ peo ple,”
skills. In fact, The Co nference Bo ard o f Canada identified the skills that fo rm the fo un-
datio n fo r a high-quality wo rkfo rce in to day’s wo rkplace as co mmunicatio n, thinking,
learning, and wo rking with o thers. Po sitive attitudes and behavio urs and an ability to
take respo nsibility fo r o ne’s actio ns are also key skills, acco rding to the Co nference
Bo ard.24 Because many peo ple will wo rk in small and medium-sized firms in the future,
Human Reso urces and Skills Develo pment Canada has no ted that additio nal impo r-
tant skills are team building and prio rity management.25
In Canada’s increasingly co mpetitive and demanding wo rkplace, neither managers no r
emplo yees can succeed o n their technical skills alo ne. They must also have go o d peo ple
16 Part 1 Underst anding t he Workplace
workforce diversity The mix of
people in organizations in terms of
gender, race, ethnicity, disability,
sexual orientation, and age, and
demographic characteristics such as
education and socio-economic status.
skills. Management pro fesso r Jin Nam Cho i o f McGill University repo rts that research
sho ws that 40 percent o f managers either leave o r sto p perfo rming within 18 mo nths o f
starting at an o rganizatio n “ because they have failed to develo p relatio nships with
bo sses, co lleagues o r subo rdinates.” 26 Cho i’s co mment undersco res the impo rtance o f
develo ping interperso nal skills. This bo o k has been written to help yo u develo p tho se
peo ple skills, whether as an emplo yee, manager, o r po tential manager.
To learn mo re abo ut the interperso nal skills needed in to day’s wo rkplace, read From
Concepts to Skills o n pages 27–29.
Wo rkfo rce Diversity
O rganizatio ns are b eco m ing m o re diverse, em plo ying a
greater variety o f peo ple in terms o f gender, race, ethnicity,
* Why should you
care about
sexual o rientatio n, and age. A diverse wo rkfo rce includes,
fo r instance, wo men, Abo riginal peo ples, Asian Canadians,
unde rstanding
African Canadians, Indo -Canadians, peo ple with disabili-
othe r pe ople ?
ties, gays and lesbians, and senio r citizens. It also includes
peo ple with different demo graphic characteristics, such as
educatio n and so cio -eco no mic status. The ability to adapt to
many different peo ple is o ne o f the mo st impo rtant and bro ad-based challenges facing
o rganizatio ns. We discuss wo rkfo rce diversity issues in Chapter 3.
O ne o f the challenges in Canadian wo rkplaces is the mix o f generatio ns wo rking
side by side: the Elders (tho se over 60), Baby Bo o mers (bo rn between the mid-1940s and
mid-1960s) , Generatio n Xers ( bo rn between the mid-1960s and early 1980s) , and the
Net Generatio n ( bo rn between 1977 and 1997) . Due to their very different life experi-
ences, they bring different values and different expectatio ns to the wo rkplace.
We used to assume that peo ple in o rganizatio ns who differed fro m the stereo typical
emplo yee wo uld so meho w simply fit in. We no w kno w that emplo yees do n’t set aside
their cultural values and lifestyle preferences when they co me to wo rk. O rganizatio ns
therefo re try to acco mmo date diverse gro ups o f peo ple by addressing their different
lifestyles, family needs, and wo rk styles.27 We need to keep in mind that what mo ti-
vates o ne perso n m ay no t m o tivate ano ther. O ne perso n m ay like a straightfo rward
and o pen style o f co mmunicatio n that ano ther finds unco mfo rtable and threatening. To
wo rk effectively with different peo ple, we need to understand ho w culture shapes them,
and learn to adapt o ur interactio n style.
The Focus on Diversity feature fo und thro ugho ut the textbo o k helps create awareness
o f the diversity issues that arise in o rganizatio ns. O ur first exam ple lo o ks at acco m -
m o datio ns m ade to help Abo riginal cadets feel welco m e at the RCMP training acad-
emy in Regina.
FO C U S O N D I V E R S I T Y
Bringing Aboriginal Culture to the RCM P
How d oes a Heritage Room promote RCM P d iversity? The sweet-smelling smo ke
o f burning buffalo sage cleansed the air at o pening ceremo nies fo r the Abo riginal
Heritage Ro o m in the RCMP’s Regina training academy. With cedar walls, Plains
Indian artifacts, and repro ductio ns o f o ld pho to graphs o f Abo riginal Canadians,
this is no t a typical ro o m in a po lice academy.28
The Heritage Ro o m was set up to help Abo riginal cadets engage in spiritual prac-
tices while they train. They can no w ho ld ceremo nies, meet with elders, and discuss
their culture in the Heritage Ro o m. Dustin Ward, a cadet fro m the Mi’kmaq reserve
 Chapt er 1 W hat Is Organizat ional Behaviour? 17

in New Brunswick, praised the o pening o f the ro o m as “ o ne m o re sign that the

RCMP welco mes First Natio ns Mo unties. It sho ws the children ho pe that they can
co me here so me day and be an RCMP cadet.”
The Heritage Ro o m is o ne o f a series o f RCMP pro grams to enco urage diversity. In
the late 1980s, the RCMP decided to allo w Abo riginal Mo unties to wear their hair in
braids, if they wanted. Saskatchewan-bo rn Abo riginal Pauline Busch, who helped
get the Heritage Ro o m o pened, rem em bered that decisio n. “ There’s no thing that
warms a child’s heart and pride as seeing ano ther Abo riginal perso n in the red serge,
fully o utlined with the braids.”

Wo rkfo rce diversity has impo rtant implicatio ns fo r management practice. Managers
need to shift their philo so phy fro m treating everyo ne alike to reco gnizing differences.
They need to respo nd to tho se differences in ways that will ensure emplo yee retentio n
and greater pro ductivity, while at the sam e tim e no t discrim inating against certain
gro ups. This shift includes, fo r instance, pro viding diversity training and revising ben-
efit pro grams to be mo re “ family-friendly.” At ICR, managers bro ught in a part-time
so cial suppo rt wo rker to help new emplo yees adjust to full-time emplo yment. Many
o f ICR’s emplo yees faced family issues, do mestic disputes, and substance abuse issues
that made it difficult to meet wo rk respo nsibilities. The suppo rt wo rker helped indi-
vidual emplo yees develo p steps to deal with perso nal issues.
Diversity, if po sitively managed, can increase creativity and inno vatio n in o rganiza-
tio ns, as well as impro ve decisio n making by pro viding different perspectives o n pro b-
lems.29 When diversity is no t managed pro perly, there is po tential fo r higher turno ver,
misco mmunicatio n, and mo re interperso nal co nflicts.

Challenges at the Organizational Level

O B beco mes mo re co mplex when we mo ve to the o rganizatio nal level o f analysis. Just
as gro ups are no t the sum to tal o f individuals, so o rganizatio ns are no t the sum to tal o f
individuals and gro ups. There are many mo re interacting facto rs that place co nstraints
o n individual and gro up behavio ur. In Chapter 8 we co nsider ho w leadership and man-
agement affect emplo yee behavio ur. In Chapter 9 we discuss decisio n making and cre-
ativity, and then lo o k at the issues o f ethics and co rpo rate so cial respo nsibility. In
Chapter 10 we lo o k at o rganizatio nal culture, which is generally co nsidered the glue
that ho lds o rganizatio ns to gether. We also discuss o rganizatio nal change in Chapter
10. As we have no ted already, and as will beco me clear thro ugho ut the textbo o k, change
has beco me a key issue fo r o rganizatio ns.
Canadian businesses face many challenges in the twenty-first century. Their ability to
be as pro ductive as US businesses is co nstantly tested.30 The need to develo p effective
emplo yees, and to manage human reso urce issues such as absenteeism and turno ver, is
critical. Meanwhile, Canadian businesses face greater co mpetitio n because o f the glo bal
eco no my. Many co mpanies have expanded their o peratio ns o verseas, which means they
have to learn ho w to manage peo ple fro m different cultures.

Pro ductivity
An o rganizatio n o r gro up is pro ductive if it achieves its go als and do es so by transferring productivity A performance
inputs (labo ur and raw materials) to o utputs (finished go o ds o r services) at the lowest co st. measure including effectiveness and
Pro ductivity implies a co ncern fo r bo th effectiveness ( achieving go als) and effi- efficiency.

ciency ( watching co sts) . The late management expert Peter Drucker stated that effec- effectiveness The achievement of
tiveness is “do ing the right thing,” while efficiency is “do ing things right.” 31 Fo r example, goals.
a ho spital is effective when it successfully meets the needs o f its patients. It is efficient when efficiency The ratio of effective
it can do so at a lo w co st. If a ho spital manages to achieve higher o utput fro m its pres- work output to the input required to
ent staff—say, by reducing the average number o f days a patient is co nfined to a bed, o r produce the work.
18 Part 1 Underst anding t he Workplace
organizational citizenship
behaviour (OCB) Discretionary
behaviour that is not part of an
employee’s formal job requirements,
but that nevertheless promotes
the effective functioning of the
organization.
BBDO Canada
www.bbdo.ca
by increasing the number o f staff-patient co ntacts per day— we say that the ho spital
has gained pro ductive efficiency. Sim ilarly, a student team is effective when it puts
to gether a gro up pro ject that gets a high m ark. It is efficient when all the m em bers
manage their time appro priately and are no t at each o ther’s thro ats. ICR faced effec-
tiveness issues because it started o ut by having o ne team leader fo r three wo rk teams. O n
paper, this appeared to be an efficient strategy. Ho wever, each team needed mo re super-
visio n than the m anager co uld pro vide while trying to m anage three team s, which
decreased each team’s pro ductivity. Therefo re, ICR’s strategy was no t effective.
As yo u study O B, yo u will begin to understand tho se facto rs that influence the effec-
tiveness and efficiency o f individuals, gro ups, and the o verall o rganizatio n.
Develo ping Effective Employees
O ne o f the majo r challenges facing o rganizatio ns in the twenty-first century is ho w to
engage emplo yees effectively so that they are co mmitted to the o rganizatio n. We use
the term o rganizatio nal citizenship behavio ur ( OCB) to describe discretio nary
behavio ur that is no t part o f an emplo yee’s fo rmal jo b requirements, but that never-
theless pro mo tes the effective functio ning o f the o rganizatio n.32 Recent research has
also lo o ked at expanding the wo rk o n O CB to team behavio ur.33
Successful organizations need employees who will go beyond their usual job duties, pro-
viding perfo rmance that is beyo nd expectatio ns. In to day’s dynamic wo rkplace, where
tasks are increasingly do ne in teams and where flexibility is critical, o rganizatio ns need
emplo yees who will engage in “go o d citizenship” behavio urs, such as making co nstruc-
tive statements abo ut their wo rk gro up and the o rganizatio n, helping o thers o n their
team, vo lunteering fo r extra jo b activities, avo iding unnecessary co nflicts, showing care fo r
o rganizatio nal pro perty, respecting the spirit as well as the letter o f rules and regulatio ns,
and gracefully to lerating the o ccasio nal wo rk-related impo sitio ns and nuisances.
To ro nto -based BBDO Canada enco urages an entrepreneurial spirit as a way o f inspir-
ing O CB. The ad agency’s president and CEO Gerry Frascio ne no tes that a team leader
o n the Campbell So up acco unt o verheard a Campbell’s representative musing abo ut a
pro gram that wo uld launch Cam pb ell’s So up ads when the tem perature dipped.
“ Instead o f waiting to get appro vals, she acted very entrepreneurially and to o k it upo n
herself and m ade the who le thing happen in o ne week,” says Frascio ne. “ She went
back to the client, analyzed the situatio n, fleshed o ut the o ppo rtunity, came up with an
integrated co mmunicatio n plan, came up with a budget, and it was all do ne within five
days.” 34
O rganizatio ns want and need emplo yees who will do tho se things that are no t in
any jo b descriptio n. The evidence indicates that o rganizatio ns that have such emplo y-
ees o utperfo rm tho se that do n’t.35 As a result, O B is co ncerned with o rganizatio nal cit-
izenship behavio ur.
Putting Peo ple First
Pro fesso r Jeffery Pfeffer o f the Stanfo rd Graduate Scho o l o f Business advo cates that
managers sho uld spend mo re time reco gnizing the value o f the peo ple who wo rk fo r
them. He emphasizes the need to “put peo ple first” in co nsidering o rganizatio nal o bjec-
tives and suggests the peo ple-first strategy no t o nly generates a co mmitted wo rkfo rce, but
also significantly affects the bo tto m line.36 Pfeffer no tes that research sho ws that when
o rganizatio ns co ncern themselves with develo ping their emplo yees, they are mo re suc-
cessful. Fo r instance, a study o f 968 US firms fo und that tho se that used peo ple-first
strategies had significantly less turnover, and significantly greater sales, market value, and
pro fits.37 Similar results were fo und in a study o f 100 German co mpanies.38
 Chapt er 1 W hat Is Organizat ional Behaviour? 19

Pfeffer explains that peo ple will wo rk harder when they feel
they have “ m o re co ntro l and say in their wo rk.” They wo rk O B I N A CTI ON
smarter when they are “enco uraged to build skills and co mpe-
tence.” They wo rk m o re respo nsibly when “ respo nsibility is Practices of Successful
placed in the hands o f emplo yees farther do wn in the o rgani- Organizations
zatio n.” O B in Action— Practices of Successful O rganizations o ut- According to professor Jeffery Pfeffer of the Stanford
lines the practices that successful peo ple-first o rganizatio ns use Graduate School of Business, the following practices char-
to enco urage their em plo yees to wo rk harder, sm arter, and acterize organizations that benefit from how they manage
mo re respo nsibly. Case Incident— Great Plains Software: Pursuing their employees:
a People-First Strategy o n the CD-RO M that acco mpanies this ➔ Providing employment security so that employ-
textbo o k asks yo u to examine the impact o f “ putting peo ple ees don’t fear loss of jobs
first” in managing an o rganizatio n. ➔ Hiring people who have the right skills and
abilities
Glo bal Co mpetitio n ➔ Creating self-managed teams that have
In recent years, Canadian businesses have faced to ugh co mpe- decision-making power
titio n fro m the United States, Euro pe, Japan, and even China, ➔ Paying w ell , and tying pay to organizational
as well as fro m o ther co mpanies within o ur bo rders. To sur- performance
vive, they have had to reduce co sts, increase pro ductivity, and ➔ Providing extensive training for skills, knowledge,
improve quality. A number o f Canadian co mpanies have fo und and initiative
it necessary to merge in o rder to survive. Fo r instance, Ro na,
➔ Reducing status differences so that all employees
the Bo ucherville, Q ueb ec-b ased ho m e im pro vem ent sto re, feel valued
bo ught o ut Lansing, Revy, and Revelsto ke in recent years in
➔ Sharing information about organizational per-
o rder to defend its turf against the Atlanta, Geo rgia-based Ho me
formance
Depo t. That may no t be eno ugh to keep it fro m being swal-
lo wed up by the Mo o resville, No rth Caro lina-based Lo we’s Source: Adapted from J. Pfeffer and J. F. Veiga, “ Putting
ho me impro vement co mpany, ho wever. People First for Organizational Success,” Academy of
M anagement Executive 13, no. 2 (M ay 1999), pp. 37–48.
So me employers are starting to o utso urce jo bs to o ther co un-
tries, where labo ur co sts are lo wer. Fo r instance, To ro nto -based
Dell Canada’s technical service lines are handled by technicians wo rking in India. To ro nto -
based Wall & Asso ciates, a full-service chartered acco unting and management co nsulting
firm, o utso urces do cument management to Uganda. Employees in Uganda are willing to
wo rk fo r $1 an ho ur to so rt and reco rd receipts. While these wages might seem lo w, o n
average, Ugandans make o nly $1 a day.
These changes in the wo rkplace, and the lo ss o f jo bs to internatio nal o utso urcing,
mean that the actual jo bs that employees perfo rm, and even tho se o f managers to who m
they repo rt, are in a permanent state o f change. To stay emplo yable under these co ndi-
tio ns, employees need to co ntinually update their knowledge and skills to meet new jo b
requirements.39 To day’s managers and emplo yees have to learn to live with flexibility,
spo ntaneity, uncertainty, and unpredictability.

Managing and Wo rking in a Multicultural Wo rld

Twenty o r 30 years ago , natio nal bo rders pro tected mo st firms fro m fo reign co mpetitive
pressures. This is no lo nger the case. Trading blo cks such as the No rth American Free
Trade Agreement (NAFTA) and the Euro pean Unio n (EU) have greatly reduced tariffs and North American Free Trade
barriers to trade, and No rth America and Euro pe are no lo nger the o nly co ntinents with Agreement (NAFTA)
www.nafta-sec-alena.org
highly skilled labo ur. The Internet also helps co mpanies beco me mo re glo bally co n-
nected, by o pening up internatio nal sales and by increasing o ppo rtunities to carry o n European Union (EU)
http://europa.eu
business. Even small firms can bid o n pro jects in different co untries and co mpete with
larger firms thro ugh the Internet. An implicatio n o f all these changes is that yo u co uld
find yo urself managing o r wo rking in a multicultural enviro nment.
 20 Part 1 Underst anding t he Workplace
SUMMARY AND IMPLICATIONS
SNAPSHOT SUM M ARY
1 Defining Organizational
Behaviour
OB Is for Everyone
What Do We Mean by
Organization?
2 OB: M aking Sense of
Behaviour in
Organizations
The Building Blocks of OB
The Rigour of OB
3 How Will Know ing OB
M ake a Difference?
In the Workplace
For You as an Individual
4 Today’s Challenges in
the Canadian Workplace
Challenges at the
Individual Level
Challenges at the
Group Level
Challenges at the
Organizational Level
1 What is organizational b ehaviour? O rganizatio nal behavio ur ( O B) is a field o f
study that investigates the impact that individuals, gro ups, and structure have o n
behavio ur within an o rganizatio n. It uses that kno wledge to make o rganizatio ns
wo rk mo re effectively. Specifically, OB fo cuses o n how to improve pro ductivity, reduce
bo th absenteeism and turnover, and increase employee jo b satisfactio n. OB also helps
us understand how peo ple can wo rk to gether mo re effectively in the wo rkplace.
O B reco gnizes differences, helps us see the value o f wo rkfo rce diversity, and calls
attentio n to practices that may need to be changed when managing and wo rking in
different co untries. It can help improve quality and employee pro ductivity by show-
ing managers how to empower their peo ple, as well as how to design and implement
change pro grams. It o ffers specific insights to impro ve peo ple skills.
2 IsnÕ
t organizational b ehaviour common sense? Or just like psychology? O B is
built o n co ntributio ns fro m a number o f behavio ural disciplines, including psy-
cho lo gy, so cio lo gy, so cial psycho lo gy, anthro po lo gy, and po litical science.
We all ho ld generalizatio ns abo ut the behavio ur o f peo ple. So me o f o ur gener-
alizatio ns may pro vide valid insights into human behavio ur, but many are wro ng.
If understanding behavio ur were simply co mmo n sense, we wo uld see fewer pro b-
lem s in the wo rkplace, because m anagers and em plo yees wo uld kno w ho w to
behave. O B pro vides a systematic appro ach to impro ving predictio ns o f behavio ur
that wo uld be made fro m co mmo n sense alo ne.
3 How d oes know ing ab out organizational b ehaviour make w ork and life more
und erstand ab le? Fro m a management po int o f view, kno wing O B can help yo u
manage well. Managing peo ple well pays o ff. It may also lead emplo yees to have
greater o rganizatio nal co mmitment. Fro m an individual po int o f view, knowing O B
can help yo u understand why the wo rkplace functio ns in the way it do es. OB can also
help yo u understand how to deal with o thers if yo u decide to start yo ur own business.
4 What challenges d o managers and employees face in the w orkplace of the
tw enty-first century? O B co nsiders three levels o f analysis— the individual, the
gro up, and the o rganizatio n— which, co mbined, help us understand behavio ur
in o rganizatio ns. Each level has different challenges. At the individual level, we
enco unter emplo yees who have different characteristics, and thus we co nsider ho w
to better understand and make the mo st o f these differences. Because emplo yees
have beco me mo re cynical abo ut their emplo yers, jo b satisfactio n and mo tivatio n
have beco me impo rtant issues in to day’s o rganizatio ns. Emplo yees are also co n-
fro nted with the trend to ward an empo wered wo rkplace. Perhaps the greatest chal-
lenge individuals ( and o rganizatio ns) face is ho w to behave ethically.
At the gro up level, individuals are increasingly expected to wo rk in teams, which
means that they need to do so effectively. Employees are expected to have go o d inter-
perso nal skills. The wo rkplace is no w made up o f peo ple fro m many different back-
gro unds, requiring a greater ability to understand tho se different fro m o urselves.
At the o rganizatio nal level, Canadian businesses face many challenges in the
twenty-first century. They face o ngo ing co mpetitio n at ho me and fro m US busi-
nesses, as well as gro wing co mpetitio n fro m the glo bal marketplace. Pro ductivity is
critical. It has beco me essential to develo p effective emplo yees who are co mmitted
to the o rganizatio n. By putting peo ple first, o rganizatio ns can generate a co mmitted
wo rkfo rce, but taking this appro ach beco mes a challenge fo r businesses that fo cus
so lely o n the bo tto m line. O rganizatio ns also have to learn how to be mo re sensitive
to cultural differences, no t o nly because Canada is a multicultural co untry, but also
because co mpetitive co mpanies o ften develo p glo bal alliances o r set up plants in
fo reign co untries, where being aware o f o ther cultures beco mes a key to success.
 O B A T W O RK
For Review
1 . Define organizational behaviour.

2. What is an organization? Is the family unit an organization? Explain.

3. “ Behaviour is generally predictable, so there is no need to formally study OB.” Do you agree or disagree w ith this
statement? Why?

4. What does it mean to say OB takes a contingency approach in its analysis of behaviour?

5. What are the three levels of analysis in our OB model? Are they related? If so, how ?

6. What are some of the challenges and opportunities that managers face as w e move into the tw enty-first century?

7. Why is job satisfaction an important consideration for OB?

8. What are effectiveness and efficiency, and how are they related to OB?

For Critical Thinking

1 . “ OB is for everyone.” Build an argument to support this statement.

2. Why do you think the subject of OB might be criticized as being “ only common sense,” w hen w e w ould rarely hear
such a comment about a course in physics or statistics? Do you think this criticism of OB is fair?

3. On a scale of 1 to 10, measuring the sophistication of a scientific discipline in predicting phenomena, mathematical
physics w ould probably be a 10. Where do you think OB w ould fall on the scale? Why?

4. Can empow erment lead to greater job satisfaction?

OB for You
■ As you journey through this course in OB, bear in mind that the processes w e describe are as relevant to you as an
individual as they are to organizations, managers, and employees.

■ When you w ork together w ith student teams, join a student organization, or volunteer time to a community group,
know that your ability to get along w ith others has an effect on your interactions w ith the other people in the group
and the achievement of the group’s goals.

■ If you are aw are of how your perceptions and personality affect your interactions w ith others, you can be more careful
in forming your initial impression of others.

■ By know ing how to motivate others w ho are w orking w ith you, how to communicate effectively, and w hen to negoti-
ate and compromise, you can get along in a variety of situations that are not necessarily w ork-related.
22 Part 1 Underst anding t he Workplace
O B A T W O RK
PO I N T
Lo o king fo r the Q uick Fix
to O B Issues
W alk int o your nearest major bookst ore. You w ill
undoubtedly find a large section of books devoted to
management and managing human behaviour. A close
look at the titles w ill find there is certainly no shortage of
popular books on topics related to OB. To illustrate the
point, consider the follow ing popular book titles that are
currently available on the topic of leadership:
• The Leadership Secrets of Attila the Hun (Warner,
1990)
• M ake It So: Leadership Lessons from Star Trek, The
Next Generation (Pocket Books, 1996)
• The Art of Leadership by Sun Tzu (Premier, 2000)
• Pow er Plays: Shakespeare’s Lessons in Leadership and
M anagement (Simon & Schuster, 2000)
• The Leadership Teachings of Geronimo (Sterling
House, 2002)
• Leadership Wisdom from the M onk Who Sold His
Ferrari (Hay House, 2003)
• Tony Soprano on M anagement: Leadership Lessons
Inspired by America’s Favorite M obster (Berkley, 2004)
Organizations are alw ays looking for leaders; and man-
agers and manager-w annabes are continually looking for
w ays to hone their leadership skills. Publishers respond to
this demand by offering hundreds of titles that proclaim
to provide insights into the complex subject of leadership.
People hope that there are “ shortcuts” to leadership suc-
cess and that books like these can provide them w ith the
secrets to leadership that others know about and w hich
they can quickly learn through these books.
CO U N TERPO I N T
Beware o f the Q uick Fix!
We all w ant to find quick and simple solutions to our
complex problems. But here’s the bad new s: On problems
related to OB, the quick and simple solutions are often
w rong because they fail to consider the diversity among
organizations, situations, and individuals. As Einstein said,
“ Everything should be made as simple as possible, but
not simpler.”
When it comes to trying to understand people at w ork,
there is no shortage of simplistic ideas that books and
consultants promote. And these books are not just on
leadership. Consider three recent bestsellers. Who M oved
M y Cheese? is a metaphor about tw o mice that is meant
to convey the benefits of accepting change. Fish! tells
how a fish market in Seattle made its jobs motivating.
And Whale Done! proposes that managers can learn a lot
about motivating people from techniques used by w hale
trainers at Sea World in San Diego. Are the “ insights”
from these books generalizable to people w orking in hun-
dreds of diff erent count ries, in a t housand diff erent
organizations, and doing a million different jobs? It’s very
unlikely.
Popular books on OB often have cute titles and are
fun to read. But they can be dangerous. They make the
job of managing people seem much simpler than it really
is. They are also often based on the authors’ opinions
rather than substantive research.
OB is a complex subject. There are few, if any, simple
statements about human behaviour that are generaliz-
able to all people in all situations. Should you really try to
apply leadership insight s you got f rom a book on
Shakespeare or Attila the Hun to managing softw are engi-
neers in the tw enty-first century?
The capitalist system ensures that w hen a need exists,
opport unist ic individuals w ill surf ace t o f ill t hat need.
When it comes to managing people at w ork, there is
clearly a need for valid and reliable insights to guide man-
agers and t hose aspiring t o managerial posit ions.
How ever, most of the offerings available at your local
bookstore tend to be simplistic solutions. To the degree
that people buy these books and enthusiastically expect
them to provide them w ith the secrets to effective man-
agement, they do a disservice to themselves and those
they are trying to manage.
 Chapt er 1 W hat Is Organizat ional Behaviour? 23

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE

The Co mpeting Values Framewo rk:

Identifying Yo ur Interperso nal Skills
From the list below, identify w hat you believe to be your strongest skills, and then identify those in w hich you think your per-
formance is w eak. You should identify about 4 strong skills and 4 w eak skills.

1 . Taking initiative 1 3. Understanding yourself and others

2. Goal setting 1 4. Interpersonal communication

3. Delegating effectively 1 5. Developing subordinates

4. Personal productivity and motivation 1 6. Team building

5. M otivating others 1 7. Participative decision making

6. Time and stress management 1 8. Conflict management

7. Planning 1 9. Living w ith change

8. Organizing 20. Creative thinking

9. Controlling 21 . M anaging change

1 0. Receiving and organizing information 22. Building and maintaining a pow er base

11 . Evaluating routine information 23. Negotiating agreement and commitment

1 2. Responding to routine information 24. Negotiating and selling ideas

Scoring Key:
These skills are based on the Competing Values Framew ork (pages 27–29), and they appear in detail in Exhibit 1-6 on
page 23. Below, you w ill see how the individual skills relate to various managerial roles. Using the skills you identified as
strongest, identify w hich roles you feel especially prepared for right now. Then, using the skills you identified as w eakest,
identify areas in w hich you might w ant to gain more skill. You should also use this information to determine w hether you are
currently more internally or externally focused, or oriented more tow ard flexibility or control.

Director: 1, 2, 3 M entor: 13, 14, 15

Producer: 4, 5, 6 Facilitator: 16, 17, 18

Coordinator: 7, 8, 9 Innovator: 19, 20, 21

M onitor: 10, 11, 12 Broker: 22, 23, 24

After review ing how your strengths and w eaknesses relate to the skills that today’s managers and leaders need, as illus-
trated in Exhibit 1-6, you should consider w hether you need to develop a broader range of skills.

Source: Created based on material from R. E. Quinn, S. R. Faerman, M . P. Thompson, and M . R. M cGrath, Becoming a M aster M anager: A
Competency Framew ork (New York: John W iley and Sons, 1990), chapter 1.
24 Part 1 Underst anding t he Workplace

O B A T W O RK

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Consider a group situation in w hich you have w orked. To w hat extent did the group rely on the technical skills of
the group members vs. their interpersonal skills? Which skills seemed most important in helping the group function
w ell?

2. Identify some examples of “ w orst jobs.” What conditions of these jobs made them unpleasant? To w hat extent
w ere these conditions related to behaviours of individuals?

3. Develop a list of “ organizational puzzles,” that is, behaviour you have observed in organizations that seemed to
make little sense. As the term progresses, see if you can begin to explain these puzzles, using your know ledge of OB.

W O RK I N G W I TH O T H ER S EX ERC I SE

Interperso nal Skills in the Wo rkplace

This exercise asks you to consider the skills outlined in the Competing Values Framew ork on pages 27–29 to develop an
understanding of managerial expertise. Steps 1–4 can be completed in 15–20 minutes.

1 . Using the skills listed in the Learning About Yourself Exercise, identify the 4 skills that you think all managers should
have.

2. Identify the 4 skills that you think are least important for managers to have.

3. In groups of 5–7, reach a consensus on the most-needed and least-needed skills identified in Steps 1 and 2.

4. Using Exhibit 1-6, determine w hether your “ ideal” managers w ould have trouble managing in some dimensions of
organizational demands.

5. Your instructor w ill lead a general discussion of your results.

ETH I C A L D I LEM M A EX ERC I SE

What Is the Right Balance Between

Wo rk and Perso nal Life?
When you think of w ork/life conflicts, you may tend to
think of people in low er levels of organizations w ho might
not have as much flexibility in determining their w orkdays.
How ever, a recent survey of 179 CEOs revealed that many
of them struggle w ith this issue. For instance, 31 percent
said they have a high level of stress in their lives; 47 percent
admitted that they w ould sacrifice some compensation for
more personal time; and 16 percent considered changing
jobs in the past 6 months to reduce stress or sacrifices made
in their personal lives.
M ost of these surveyed executives conceded that they
had given up, and continue to give up, a lot to get to the
top in their organizations. They are often tired from the
extensive and exhausting travel their jobs demand, not to
mention an average 60-hour w orkw eek. Yet most feel the
climb to the CEO position w as w orth w hatever sacrifices
they have had to make.
Jean Stone, w hile not representative of the group, indi-
cates the price that some of these executives have had to
pay. As senior VP and chief operating officer of Dukane
Corporation, an Illinois-based manufacturer of electronic
communications equipment, Stone describes herself as highly
achievement-oriented. She has an intense focus on her job
and admits to having lost sight of her personal life. Recently

divorced after a 10-year marriage, she acknow ledges that
“ career and w ork pressures w ere a factor in that.”
How much emphasis on w ork is too much ? What is the
right balance betw een w ork and personal life? How much
w ould you be w illing to give up to be CEO of a major com-
pany? And if you w ere a CEO, w hat ethical responsibilities,
CA S E I N C I D EN T
How a UPS Manager Cut Turnover
In 2002, Katriona Roeder w as promoted to district manager
for UPS’s operation in Buffalo, New York. She w as responsi-
ble for $225 million in revenue, 2300 employees, and the
processing of some 45 000 packages an hour. When she
took over in Buffalo, she faced a serious problem: turnover
w as out of control. Part-time employees—w ho load, unload,
and sort packages, and w ho account for half of Buffalo’s
w orkforce—w ere leaving at the rate of 50 percent a year.
Cutting this turnover rate became her highest priority.
The entire UPS organization relies heavily on part-time
employees. In fact, it has historically been the primary inroad
to becoming a full-time employee. M ost of UPS’s current
executives, for instance, began as part-timers w hile attend-
ing college or universit y, t hen moved int o f ull-t ime posi-
t ions. In addit ion, UPS has alw ays t reat ed it s part -t imers
w ell. They are given high pay, flexible w ork hours, full ben-
efits, and substantial financial aid to go back to school. Yet
these pluses did not seem to be enough to keep employees
at UPS in Buffalo.
Roeder developed a com prehensive plan t o reduce
turnover. It focused on improving hiring, communication,
the w orkplace, and supervisory training.
Roeder began by modifying the hiring process to screen
out people w ho essentially w anted full-time jobs. She rea-
soned that unfulfilled expectations w ere frustrating the hires
w hose preferences w ere for full-time w ork. Given that it
typically took new part-timers six years to w ork up to a full-
time job, it made sense to try to identify people w ho actually
preferred part-time w ork.
Next, Roeder analyzed the large database of information
that UPS had on her district’s employees. The data led her to
the conclusion that she had five distinct groups w orking for
her—differentiated by ages and stages in their careers. In
addition, these groups had different needs and interests. In
response, Roeder modified the communication style and moti-
vation techniques she used w ith each employee to reflect the
group to w hich he or she belonged. For instance, Roeder
Chapt er 1 W hat Is Organizat ional Behaviour? 25
O B A T W O RK
if any, do you think you have to help your employees bal-
ance their w ork/family obligations?
Source: Based on M . J. Critelli, “ Striking a Balance,” IndustryWeek,
November 20, 2000, pp. 26–36.
found that college students are most interested in building
skills that they can apply later in their careers. As long as these
employees saw that they w ere learning new skills, they w ere
content to keep w orking at UPS. So Roeder began offering
them Saturday classes for computer-skill development and
career-planning discussions.
M any new UPS employees in Buffalo w ere intimidated
by the huge w arehouse in w hich they had to w ork. To lessen
that intimidation, Roeder improved lighting throughout the
building and upgraded break rooms to make them more
user-f riendly. To f urt her help new employees adjust , she
turned some of her best shift supervisors into trainers w ho
provided specific guidance during new hires’ first w eek. She
also installed more personal computers on the floor, w hich
gave new employees easier access to training materials and
human-resource information on UPS’s internal netw ork.
Finally, Roeder expanded training so supervisors had the
skills to handle increased empow erment. Recognizing that
her supervisors— most of w hom w ere part -t imers t hem-
selves— w ere t he ones best equipped t o underst and t he
needs of part-time employees, supervisors learned how to
assess difficult management situations, how to communi-
cate in different w ays, and how to identify the needs of dif-
ferent people. Supervisors learned to demonstrate interest in
their employees as individuals. For instance, they w ere taught
to inquire about employees’ hobbies, w here they w ent to
school, and the like.
By 2006, Roeder’s program was showing impressive results.
Her district’s attrition rate had dropped from 50 percent to 6
percent. During the first quarter of 2006, not one part-timer
left a night shift. Annual savings attributed to reduced turnover,
based largely on lower hiring costs, are estimated to be around
$1 million. Additional benefits that the Buffalo district has gained
from a more stable workforce include a 20 percent reduction in
lost workdays due to work-related injuries and a drop from 4 per-
cent to 1 percent in packages delivered on the w rong day or
at the w rong time.
continued
26 Part 1 Underst anding t he Workplace
O B A T W O RK
Questions
1 . In dollars-and-cents’ terms, w hy did Katriona Roeder
w ant to reduce turnover?
2. What are the implications from this case for motivat-
ing part-time employees?
3. What are the implications from this case for manag-
ing in future years w hen there may be a severe labour
shortage?
CBC V I D EO CA SE I N C I D EN T
GM Woes
In 32 countries around the w orld, General M otors (GM ) pro-
duces approximately 20 000 cars and trucks each day. With
over 300 000 employees, it may be the largest employer on
the planet. However, once a highly profitable, successful com-
pany, GM is now struggling. Its inability to adapt to changing
times and changing tastes has led to a steadily shrinking mar-
ket share. Does GM have enough gas for the long haul?
Japanese and Korean automakers have muscled onto
GM ’s turf, outspending GM tw o to one on research & devel-
opment. For example, Toyota rolls out smaller, more fuel-
efficient cars that consumers w ant and continues to build
new assem bly plant s in Nort h Am erica. Toyot a Canada
enjoyed its biggest-ever Canadian sales month in April 2006,
despite overall industry sales being dow n by 5 percent from
last year. In contrast, GM took a major hit in April 2006
w hen it discontinued the deep discounts and incentives it
w as using to boost profits—sales for the month w ere 18.8
percent low er than sales in April 2005.
Joseph D’Cruz, business professor at the University of
Toronto, equates GM ’s situation to that of a huge pow erful
ship, stuck in a sea full of dangerous icebergs. The treach-
erous thing about an iceberg, D’Cruz notes, is that you can
see only 10 percent of it above the surface. D’Cruz sees five
key problems lurking below the surface at GM , divided into
tw o categories: people problems and production problems.
People problems include GM ’s crushing health care costs,
a pension plan that is seriously underfunded, and a rigid
top-dow n management structure know n more for bureau-
cracy than decisiveness. Health care costs for GM ’s American
w orkers have been in the spotlight, and for good reason.
GM spent $5 billion (US) on health care costs in 2005, w ith
more than $1 billion spent on drugs alone. Health care adds
$1500 t o t he cost s of every vehicle GM produces in t he
United States. It’s a cost that GM ’s Japanese and Korean
4. Is it unethical to teach supervisors “ to demonstrate
interest in their employees as individuals” ? Explain.
5. What facts in this case support the argument that
OB should be approached from a contingency
perspective?
Source: Based on K. H. Hammonds, “ Handle W ith Care,” Fast
Company, August 2002, pp. 103–107.
rivals, who have a younger workforce, don’t face. As a result,
GM is threatening to cut health care for tens of thousands
of its retired employees and is pressuring its unions to re-
open contracts and give back some of the health benefits
they w on at the bargaining table.
On the production front, GM produces too many brands
and a vehicle lineup that does not excite customers. Even
GM bosses admit their vehicles don’t have the same piz-
zazz they once did. The pressure to build more stylish vehi-
cles is urgent because the competition is doing so.
The spike in oil prices has also hurt sales of GM ’s most
important vehicle, the Sports Utility Vehicle (SUV). W ith gas
prices heading higher and higher, consum ers are now
demanding fuel-efficient vehicles.
The problems are deep and vast at GM , says D’Cruz, and
w ith all the menacing icebergs he believes it should seek
help from the courts and apply for bankruptcy protection
in the United States w hile it reorganizes itself. Sw amped
w ith so many problems, GM faces a turbulent future.
Questions
1 . GM w as compared w ith the Titanic. Do you agree
w ith this comparison? Why or w hy not?
2. What challenges does GM face at the organizational
level?
3. What challenges does GM face at the individual and
group levels?
Sources: “ GM Woes,” CBC—The National, July 6, 2005; “ Toyota
Canada Has Huge M onth,” Daily Courier (Kelow na), M ay 3, 2006,
p. B3; and J. Hyde, “ Foreign? American? Auto Parts Go Global: U.S.
Cars Add Content from Other Countries,” Knight Ridder Tribune
Business New s, M ay 7, 2006, p. 1.
 Chapt er 1 W hat Is Organizat ional Behaviour? 27

O B A T W O RK

Fr o m Co n ce p t s
t o Sk i l l s

Develo ping Interperso nal Skills

We note in the chapter that having a broad range of inter-
personal skills to draw on makes us more effective organi-
zational participants. So w hat kinds of interpersonal skills
does an individual need in t oday’s w orkplace? Robert
Quinn, Kim Cameron, and their colleagues have developed
a model know n as the “ Competing Values Framew ork”
that can help us identify some of the most useful skills.40
They note that the range of issues organizations face can
be divided along tw o dimensions: an internal-external and a
flexibility-control focus. This is illustrated in Exhibit 1-5. The
internal-external dimension refers to the extent that organ-
izations focus on one of tw o directions: either inw ardly,
tow ard employee needs and concerns and/or production
processes and internal systems; or outw ardly, tow ard such
factors as the marketplace, government regulations, and
the changing social, environmental, and technological con-
ditions of the future. The flexibility-control dimension refers
to the competing demands of organizations to stay focused
on doing w hat has been done in the past vs. being more
flexible in orientation and outlook.
Because organizations face the competing demands
show n in Exhibit 1-5, it becomes obvious that managers and
employees need a variety of skills to help them function
w ithin the various quadrants at different points. For instance,
the skills needed to operate an efficient assembly-line process
are not the same as those needed to scan the environment or
to create opportunities in anticipation of changes in the envi-
ronment. Quinn and his colleagues use the term master man-
ager to indicate that successful managers learn and apply
skills that w ill help them manage across the range of organi-
zational demands; at some times moving tow ard flexibility, at
others moving tow ard control, sometimes being more inter-
nally focused, sometimes being more externally driven.41
As organizations increasingly cut their layers, reducing
the number of managers w hile also relying more on the
use of teams in the w orkplace, the skills of the master man-
ager apply as w ell to the employee. In other w ords, consid-
ering the Competing Values Framew ork, w e can see that
both managers and individual employees need to learn new
skills and new w ays of interpreting their organizational

EXHIBIT 1-5 Competing Values Framew ork

Flexibility
External Focus
Internal Focus

Control

Source: Adapted from K. Cameron and R. E. Quinn, Diagnosing and Changing Organizational Culture: Based
on the Competing Values Framew ork (Reading, M A: Addison Wesley Longman, 1999).

continued
28 Part 1 Underst anding t he Workplace

O B A T W O RK

contexts. Continuing to use traditional skills and practices
that w orked in the past is not an option. The grow th in self-
employment also indicates a need to develop more inter-
personal skills, particularly for anyone w ho goes on to build
a business that involves hiring and managing employees.
Exhibit 1-6 outlines the many skills required of today’s
manager. It gives you an indication of the complex roles
that managers and employees fill in the changing w ork-
place. The skills are organized in terms of four major roles:
maintaining flexibility, maintaining control, maintaining an
ext ernal f ocus, and maint aining an int ernal f ocus. The
Learning About Yourself Exercise on page 23 helps you
identify your ow n strengths and w eaknesses in these skill
areas so that you can have a better sense of how close you
are to becoming a successful manager. For instance, on the
flexibility side, organizations w ant to inspire their employees
t ow ard high-perf ormance behaviour. Such behaviour
develop and implement systems to carry out the production
process. To be effective on the production side, employees
need to have the skills of monitors, coordinators, directors,
and producers. The Working With Others Exercise on page
24 w ill help you better understand how closely your view s
on the ideal skills of managers and leaders match the skills
needed to be successful in the broad range of activities that
managers and leaders encounter.
At this point, you may w onder w hether it is possible for
people to learn all of the skills necessary to become a mas-
ter manager. M ore important, you may w onder w hether
w e can change our individual style, say from more control-
ling to more flexible. Here’s w hat Peggy W itte, w ho used to
be chair, president, and CEO of the now -defunct Royal Oak
M ines, said about how her managerial style changed from
controlling to more flexible over time: “ I started out being

includes looking ahead to the future and imagining possible very dictatorial. Everybody in head office reported to me. I

new directions for the organization. To do these things,
employees need to think and act like mentors and facilita-
tors. It is also important to have the skills of innovators and
brokers. On the control side, organizations need to set clear
goals about productivity expectations, and they have to
had to learn to trust other executives so w e could w ork
out problems together.” 42 So, w hile it is probably true that
each of us has a preferred style of operating, it is also the
case that w e can enhance the skills w e have or develop
new ones if that is something w e choose to do. Learning to

EXHIBIT 1-6 Skills for M astery in the New Workplace

Flexibility
1. Underst anding
yourself and ot hers
2. Int erperson al 1. Living w it h ch ange
communi cat ion 2. Creat ive t hinking
3. Developing 3. M an aging ch ange
su bordin at es

1. Team building 1. Building and m aint aining

2. Part i cip at ive M ent or Innovat or a pow er base
decision m aking 2. Negot i at ing agreement
3. Conf li ct and commit ment
m an agement 3. Negot i at ing and
Facilit at or Broker
selling ideas
Internal External
M onit or Producer
1. Receiving and 1. Person al produ ct ivit y
org anizing inf orm at ion and mot ivat ion
2. Evalu at ing 2. M ot ivat ing ot hers
rout ine inf orm at ion 3. Time and st ress
3. Responding t o Coordinat or Direct or m an agement
rout ine inf orm at ion

1. Pl anning 1. Taking init i at ive

2. Org anizing 2. Go al set t ing
3. Cont rolling 3. Deleg at ing eff ect ively

Control

Source: R. E. Quinn, Beyond Rational M anagement (San Francisco: Jossey-Bass, 1988), p. 86.

w ork w ell w ith others, listening to others, and building trust
are skills that are certainly w orth trying to master.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
26. Am I likely to become an entrepreneur?
47. How motivated am I to manage?
48. Am I w ell-suited for a career as a global
manager?
Practising Skills
As t he f at her of t w o young children, M arshall Rogers
thought that serving on the board of M arysville Daycare
w ould be a good w ay to stay in touch w ith those w ho
cared f or his children during t he day. 43 But he never
dreamed that he w ould become involved in union-man-
agement negotiations w ith daycare-centre w orkers.
Late one Sunday evening, in his ninth month as presi-
dent of the daycare centre, Rogers received a phone call
from Grace Ng, a union representative of the Provincial
Government Employees’ Union (PGEU). Ng inf ormed
Rogers that the daycare w orkers w ould be unionized the
follow ing w eek. Rogers w as stunned to hear this new s.
Early the next morning, he had to present his new market-
ing plan to senior management at Techtronix Industries,
w here he w as vice-president of marketing. Somehow he
made it through the meeting, w ondering w hy he had not
been aw are of the employees’ unhappiness, and how this
action w ould affect his children.
Follow ing his presentation, Rogers received documen-
tation from the Labour Relations Board indicating that the
daycare employees had been w orking to unionize them-
selves for more than a year. Rogers immediately contacted
Xavier Breslin, the board’s vice-president, and together they
determined that no one on the board had been aw are that
the daycare w orkers w ere unhappy, let alone prepared to
join a union.
Hoping that there w as some sort of misunderstanding,
Rogers called Emma Reynaud, the M arysville supervisor.
Reynaud attended most board meetings, but had never
mentioned the union-organizing drive. Yet Reynaud now
told Rogers that she had actively encouraged the other day-
care w orkers to consider joining the PGEU because the
board had not been interested in the employees’ concerns,
had not increased their w ages sufficiently over the past tw o
Chapt er 1 W hat Is Organizat ional Behaviour? 29
O B A T W O RK
years, and had not maintained communication channels
betw een the board and the employees.
All of the board members had full-time jobs elsew here,
and many w ere upper- and middle-level managers in their
ow n companies. They w ere used to dealing w ith unhappy
employees in their ow n w orkplaces, although none had
experienced a union-organizing drive. Like Rogers, they had
chosen to serve on the board of M arysville to stay informed
about the day-to-day events of the centre. They had not
really t hought of t hemselves as t he cent re’s employer,
although, as board members, they represented all the par-
ents of children enrolled at M arysville. Their main tasks on
the daycare-centre board had been setting fees for the chil-
dren and w ages f or t he daycare employees. The board
members usually saw the staff members several times a
w eek, w hen they picked up their children, yet the unhappi-
ness represented by the union-organizing drive w as surpris-
ing to all of them. When they met at an emergency board
meeting that evening, they tried to evaluate w hat had gone
w rong at M arysville.
Questions
1 . If you w ere either a board member or a parent, how
w ould you know that the employees taking care of
your children w ere unhappy w ith their jobs?
2. What might you do if you learned about their
unhappiness?
3. What might Rogers have done differently as president
of the board?
4. In w hat w ays does this case illustrate that know ledge
of OB can be applied beyond your ow n w orkplace?
Reinforcing Skills
1 . Talk to several managers you know and ask them
w hat skills they think are most important in today’s
w orkplace. Ask them to specifically consider the use
of teams in their w orkplaces, and w hat skills their
team members most need to have but are least
likely to have. How might you use this information
to develop greater interpersonal skills?
2. Talk w ith several managers you know and ask them
w hat skills they have found most important in doing
their jobs. Why did they find these skills most
important? What advice w ould they give a w ould-
be manager about skills w orth developing?
CH A PTER 2

Percept ion ,
Personalit y , and
Em ot ions
At the Canadian Human Rights Commission,
employees w ere unhappy w ith their jobs. Why
w ould their dissatisfaction be regarded as
perception rather than fact?

1 What is perception?

What causes people to have different

2 perceptions of the same situation?

3 Can people be mistaken in their perceptions?

4 Does perception really affect outcomes?

What is personality and how does it affect

5 behaviour?

6 Can emotions help or get in the w ay w hen w e’re

dealing w ith others?
 any employees at t he Canadian Human

M Rights Commission (CHRC) cheered in M ay

2001 w hen a commissioned report revealed
w idespread dissatisfaction in their w orkplace.1 Ordinarily
an exposé of on-the-job problems is not something to
cheer about, but the CHRC w orkers w ere grateful their
concerns w ere finally being made public.
M uch to the employees’ dismay, how ever, senior
managers at CHRC suggested that the w orkplace prob-
lems w ere only a matter of employee “ perception,” not
objective reality. M ichelle Falardeau-Ramsay, w ho w as
chief commissioner at the time, even said, “ It’s a report
t hat is based on percept ions and percept ions can
become facts at one point.” 2 The employees w ere left
to w onder w hether they and their managers w ere actu-
ally part of the same w orkplace.
All of our behaviour is somew hat shaped by our
perceptions, personalities, emotions, and experiences.
In this chapter, w e consider the role that perception
plays in affecting the w ay w e see the w orld and the
people around us. We also consider how personality
characteristics affect our attitudes tow ard people and
situations. We then consider how emotions shape many
of our w ork-related behaviours.

PERCEPTION D EFINED
Perceptio n is the pro cess by which individuals select, o rganize, and interpret their sen- 1 What is perception?
so ry impressio ns in o rder to give meaning to their enviro nment. Ho wever, what we per-
ceive can be substantially different fro m o bjective reality. We o ften disagree abo ut what perception The process by which
individuals select, organize, and
is real. As we have seen, emplo yees and senio r management at the Canadian Human
interpret their sensory impressions
Rights Co mmissio n had very different views o f their wo rkplace co nditio ns. Michelle in order to give meaning to their
Falardeau-Ramsay, the chief co mmissio ner, even said it was all a matter o f “perceptio n.” environment.
Why is perceptio n impo rtant in the study o f o rganizatio nal behavio ur ( O B) ? Simply
because peo ple’s behavio ur is based o n their perceptio n o f what reality is, no t o n real- Canadian Human Rights
Commission (CHRC)
ity itself. The world as it is perceived is the world that is behaviourally important. Paul Go dfrey, www.chrc-ccdp.ca
CEO o f To ro nto -based Sun Media Co rpo ratio n, no tes that “a lo t o f things in life are

O B IS FO R EV ERY O N E

Who do you te nd to blame Have you eve r misjudge d a Are pe ople born with the ir Do you think it is bette r to
whe n some one make s a pe rson? Do you know why? pe rsonalitie s? be a Type A or a Type B
mistake ? Eve r wonde r why? pe rsonality?

Eve r wonde r why the

groce ry cle rk is always
smiling?
31
32 Part 1 Underst anding t he Workplace
2 What causes people
to have different
perceptions of the
same situation?
perceptio n.” He claims that as chair o f Metro po litan To ro nto fo r 11 years, he had little
real po wer, but peo ple believed he co uld get things do ne, and so he did.3
FACTORS INFLUENCING PERCEPTION
Comments by employees and managers illustrate different perceptions of the environment at
the Canadian Human Rights Commission. For example, one unnamed employee said that Chief
Commissioner M ichelle Falardeau-Ramsay w as an absentee manager w ho lacked important job
skills. “ When she does conduct a meeting she w ill occupy the time describing entertainment
details of the latest trip she has taken at taxpayers’ expense. She’s out of touch.” 4
M eanw hile, in responding to negative employee comments, Falardeau-Ramsay told reporters
she felt complaints w ere directed against other senior managers, not her. “ I w as so over-
w helmed, [the report] w as so surprising that I didn’t even think in those terms,” she said. 5
Falardeau-Ramsay and her employees clearly had different perceptions of the same situation.
What factors might have influenced these different perceptions?
How do we explain that individuals may lo o k at the same thing, yet perceive it differently,
and bo th be right? A number o f facto rs affect perceptio n. These facto rs can be fo und in
the perceiver, in the o bject o r target being perceived, o r in the co ntext o f the situation in
which the perceptio n is made. Exhibit 2-1 summarizes the facto rs influencing percep-
tio n. This chapter’s Working W ith O thers Exercise o n page 67 will help yo u understand how
yo ur perceptio ns affect yo ur evaluatio n o f o thers.
The Perceiver
When an individual ( “ the perceiver” ) lo o ks at so m ething ( “ the target” ) and tries to
interpret what he o r she sees, that interpretatio n is heavily influenced by the perceiver’s
perso nal characteristics. Have yo u ever bo ught a new car and then suddenly no ticed a
large number o f cars like yo urs o n the ro ad? It’s unlikely that everyo ne else has sud-
denly bo ught the same mo del. Rather, yo ur o wn purchase has influenced yo ur percep-
tio n so that yo u are no w mo re likely to no tice the o ther cars. This is an example o f ho w
facto rs related to the perceiver influence what he o r she perceives.
EXHIBIT 2-1 Factors That Influence Perception
The Situation The Perceiver
• Time • Attitudes
• Work setting • M otives
• Social setting • Interests
• Experience
• Expectations
Perception
The Target
• Novelty
• M otion
• Sounds
• Size
• Background
• Proximity
 Chapter 2 Percept ion, Personalit y, and Em ot ions 33

A variety o f facto rs affects o ur perceptio ns. O ur atti-

tudes and motives, interests, and past experiences all shape
the way we perceive an event.6 When Chief Commissioner
Michelle Falardeau-Ramsay suggested that emplo yees’
co mplaints abo ut the CHRC were simply a matter o f their
perceptio n, she was thinking abo ut her own interests and
mo tives in the situatio n. As head o f the agency, she did
no t want to believe that she was respo nsible fo r any o f
the pro blems the employees repo rted.
We o ften interpret o thers’ behavio urs based o n o ur
o wn characteristics. Peo ple who take an o ptim istic
appro ach to life act as if o thers will be just as upbeat,
while tho se who are disho nest suspect o thers are equally
disho nest.
Expectatio ns can also disto rt o ur perceptio ns— we
see what we expect to see. Fo r exam ple, if yo u expect
po lice o fficers to be autho ritarian, yo ung peo ple to have People’s expectations about w hat employees w orking for a full-service
no ambitio ns, human reso urce directo rs to like peo ple, w eb development agency should look like often leave them startled
o r po liticians to be unethical, yo u may perceive indi- w hen they meet Jason Billingsley (left) and Justin Tilson (foreground),
viduals fro m these catego ries in this way, regardless o f tw o of the founders of Vancouver-based Elastic Path Softw are (formerly
Ekkon Technologies). Both men are in w heelchairs after a skiing accident
their actual traits.
for Billingsley and a mountain bike accident for Tilson. “ It’s an eye-
Finally, perceptio ns are likely to vary cro ss-culturally.
opener sometimes,” says Billingsley. “ You’ve been talking on the phone
Thus, so mething that yo u do in a friendly way may be for tw o or three w eeks before you meet someone and they have no clue,
viewed as to o aggressive, o r to o info rmal, by so meo ne and they kind of w alk in and you see a little ‘oh.’”
fro m ano ther co untry.

The Target
A target’s characteristics can affect what is perceived. Lo ud peo ple are mo re likely to be
no ticed in a gro up than are quiet o nes. So , to o , are extremely attractive o r unattractive
individuals. No velty, mo tio n, so und, size, and o ther attributes o f a target shape the way
we see it.
Because targets are no t lo o ked at in iso latio n, the relatio nship o f a target to its back-
gro und influences perceptio n. O bjects that are clo se to each o ther will tend to be per-
ceived to gether rather than separately. Events that are clo se in time may also be seen
as related, even if they are no t. Em plo yees in a particular departm ent are seen as a
gro up. If two peo ple in a fo ur-member department suddenly resign, we tend to assume
that their departures were related when, in fact, they may be to tally unrelated. Timing
may also imply dependence when, fo r example, a new sales manager is assigned to a ter-
rito ry and, so o n after, sales in that territo ry skyro cket. The assignment o f the new sales
manager and the increase in sales may no t be related— the increase may be due to the
intro ductio n o f a new pro duct line o r to o ne o f many o ther reaso ns—but peo ple wo uld
tend to see the two o ccurrences as related.
Perso ns, o bjects, o r events that are similar to each o ther also tend to be gro uped
to gether. The greater the similarity, the greater the pro bability that we will tend to per-
ceive them as a co mmo n gro up. Peo ple who are female, black, o r members o f any o ther
clearly distinguishable gro up will tend to be perceived as similar no t o nly in physical
terms but in o ther unrelated characteristics as well.

The Situation
The co ntext in which we see o bjects o r events is impo rtant. Elements in the surro unding
enviro nment influence o ur perceptio ns. Fo r instance, it might be entirely appro priate
to wear sho rts and T-shirts in a so cial setting, but no t appro priate in a wo rk setting.
34 Part 1 Underst anding t he Workplace

Therefo re, yo ur interpretatio n o f the same clo thes will vary with the co ntext. Similarly,
yo u are mo re likely to no tice yo ur emplo yees go o fing o ff if yo ur manager fro m head
o ffice happens to be in to wn. Yo ur emplo yees may be acting as they always do , but it
is the situatio n that affects yo ur perceptio n. The time at which an o bject o r event is
seen can influence attentio n, as can lo catio n, light, heat, o r any number o f situatio nal
facto rs. Thus, it is po ssible to say that truth is o ften in the eye o f the perceiver, rather than
so me o bjective fact. Fo r instance, a recent study co mpared ho w wo men managers were
perceived, depending upo n whether they were wearing flat sho es, slacks, and a turtle-
neck o r high heels, a tight skirt, and a lo w-cut blo use. Businesswo m en wearing the
sexy clo thes were viewed as less co m petent. “A fem ale m anager who se appearance
emphasized her sexiness elicited less po sitive emo tio ns, mo re negative emo tio ns, and
perceptio ns o f less co mpetence o n a subjective rating scale and less intelligence o n an
o bjective scale, the study’s autho rs repo rted.” 7

PERCEPTUAL ERRORS
In their w orkplace assessment report of the Canadian Human Rights Commission, consultants
Watson Wyatt Worldw ide identified numerous problems reported by employees. The employ-
ees suggested that three top managers should be replaced. They also claimed that female
employees w ere discriminated against. The problems w ere considered so severe that some
people outside the commission thought it should be closed. Chief Commissioner M ichelle
Falardeau-Ramsay disagreed. She said the findings w ere “ unpleasant” and “ painful,” but sug-
gested that those calling for the commission’s closing had read the report in a “ simplistic and
irresponsible manner.” These diff erences in response might suggest t hat t he employees,
Falardeau-Ramsay, or her critics w ere engaged in making perceptual errors. What might have
caused this to happen?

3 Can people be It’s difficult to perceive and interpret what o thers do . As a result, we develo p sho rtcuts
mistaken in their to make this task mo re manageable. These sho rtcuts are o ften very helpful—they allo w
perceptions? us to make accurate perceptio ns quickly and pro vide valid info rmatio n fo r making pre-
dictio ns. Ho wever, they are no t fo o lpro o f. They can and do get us into tro uble. Fo r
instance, when we make a bad first impressio n o n so meo ne, that perceptio n may lead
them to treat us po o rly, o r dismiss us as a pro spective emplo yee o r teammate. So me o f
the erro rs that disto rt the perceptio n pro cess include attributio n theo ry, selective per-
ceptio n, the halo effect, co ntrast effects, pro jectio n, and stereo typing.

Attrib ution Theory

attribution theory The theory Attributio n theo ry explains ho w we judge peo ple differ-
that when we observe what seems
to be atypical behaviour by an indi-
*to blame whe n
Who do you te nd ently, depending o n the cause we attribute to a given behav-
io ur.8 Basically, the theo ry suggests that when we o bserve
vidual, we attempt to determine some one make s a an individual’s behavio ur, we try to determine whether the
whether it is internally or externally
mistake ? Eve r individual is respo nsible fo r the behavio ur ( the cause is
caused.
wonde r why? internal) , o r whether so m ething o utside the individual
caused the behavio ur ( the cause is external) . Whether we
realize it o r no t, we use attributio n theo ry whenever we try to co me up with explanatio ns
fo r why peo ple behaved the way they did.
In trying to understand ano ther perso n’s behavio ur, then, we co nsider whether the
behavio ur was internally o r externally caused. Internally caused behavio ur is believed to
be under the perso nal co ntro l o f the individual; that is, the perso n chooses to engage in
the behavio ur. Externally caused behavio ur is believed to result fro m o utside causes;
that is, the perso n do es no t have co ntro l o ver his o r her actio ns and is forced into the
behavio ur by the situatio n. Fo r example, while waiting fo r o ne o f yo ur team members
 Chapter 2 Percept ion, Personalit y, and Em ot ions 35

who is late fo r a meeting, yo u co uld imagine either an internal o r an external reaso n fo r

the lateness. An internal reaso n might be that the team member must have partied into
the wee ho urs o f the mo rning and then o verslept. An external attributio n might be that
there was a majo r auto mo bile accident that tied up traffic.

Rules fo r Determining Attributio n

In trying to determine whether behavio ur is internally o r externally caused, we rely o n
three rules abo ut the behavio ur: ( 1) distinctiveness, ( 2) co nsensus, and ( 3) co nsistency.
Exhibit 2-2 summarizes the main elements in attributio n theo ry.

Dist inct iveness Distinctiveness refers to whether an individual acts similarly acro ss
a variety o f situatio ns. Is the student always underperfo rming ( being late fo r class, go o f- distinctiveness A behavioural
ing o ff in team meetings, no t answering urgent emails) o r is the student’s behavio ur rule that asks whether an individual
acts similarly across a variety of situ-
in o ne situatio n unusual fro m what he sho ws in o ther situatio ns? If the behavio ur is
ations.
unusual, the o bserver is likely to m ake an external attributio n. If this actio n is no t
unusual, the o bserver will pro bably judge it as internally caused.

Consensus Co nsensus co nsiders ho w an individual’s behavio ur co mpares with

o thers in the same situatio n. If everyo ne who is faced with a similar situatio n respo nds consensus A behavioural rule that
in the same way, we can say the behavio ur sho ws co nsensus. When co nsensus is high, asks if everyone faced with a similar
situation responds in the same way.
an external attributio n is given to an individual’s behavio ur. But if an individual’s behav-
io ur is different fro m everyo ne else’s, yo u wo uld co nclude the cause fo r that individual’s
behavio ur was internal.

Consist ency Finally, an o bserver lo o ks fo r co nsistency in an actio n that is repeated

o ver time. If a student is usually o n time fo r class ( she has no t been late all term) , being consistency A behavioural rule
10 minutes late will be perceived differently fro m the way it is when the student is ro u- that asks whether the individual has
been acting in the same way over
tinely late ( almo st every class) . If a student is almo st always late, the o bserver is likely to
time.
attribute lateness to internal causes. If the student is almo st never late, then lateness
will be attributed to external causes.

EXHIBIT 2-2 Attribution Theory

Attribution
Observation Interpretation of cause
High
(Seldom)
Distinctiveness External
(How of t en does t he
person do t his in
Internal
ot her sit u at ions?) Low
(Frequent ly)
High
(Frequent ly)
Consensus External
Individual (How of t en do ot her
behaviour people do t his in
Internal
simil ar sit u at ions?) Low
(Seldom)
High
(Frequent ly)
Consistency Internal
(How of t en did t he
person do t his in
External
t he p ast ?) Low
(Seldom)
36 Part 1 Underst anding t he Workplace
fundamental attribution error
The tendency to underestimate the
influence of external factors and
overestimate the influence of inter-
nal factors when making judgments
about the behaviour of others.
self-serving bias The tendency
for individuals to attribute their own
successes to internal factors while
putting the blame for failures on
external factors.
selective perception People’s
selective interpretation of what they
see based on their interests, back-
ground, experience, and attitudes.
M any day traders credited the gains they made in high-tech stocks betw een
1996 and early 2000 to their personal skills. But they blamed external sources
for their losses w hen the prices of high-tech stocks took a nosedive.
How Attributio ns Get Disto rted
O ne o f the mo re interesting findings fro m attributio n theo ry is that there are erro rs o r
biases that disto rt attributio ns. Fo r instance, there is substantial evidence that when we
judge the behavio ur o f o ther peo ple, we tend to put mo re emphasis o n internal o r per-
so nal facto rs and less emphasis o n external facto rs.9 This is called the fundamental
attributio n erro r and can explain why a sales manager is pro ne to attribute the po o r
perfo rmance o f his o r her sales agents to laziness rather than to the inno vative pro duct
line intro duced by a co mpetito r. Recent research suggests that jo urnalists o ften engage
in the fundamental attributio n erro r when they o ver-attribute firm perfo rmance to the
CEO ’s characteristics. This attributio n erro r results in the creatio n o f “celebrity CEO s.” 10
Research suggests that individuals tend to overestimate their own go o d behavio ur and
underestimate the good behaviour of others.11 We use self-serving bias when we judge our-
selves. This means that when we are successful, we are mo re likely to believe it was because
o f internal facto rs, such as ability o r effo rt. When we fail, however, we blame external fac-
to rs, such as luck. In general, peo ple tend to believe that their own behavio ur is mo re po s-
itive than the behavio ur o f tho se aro und them. In a recent study, managers suggested that
even tho ugh they were no t respo nsible fo r the past po o r perfo rmance o f employees, they
felt that they co uld help employees improve their behavio ur in the future.12
Attributio n theo ry was develo ped largely in the United States o n the basis o f experi-
ments with Americans, but there is no particular reaso n to believe it wo uld no t apply
in Canada. Ho wever, evidence fro m Japan 13 and Ko rea14 suggests we sho uld be careful
in making attributio n theo ry predictio ns in no nWestern co untries o r in tho se with stro ng
co llectivist traditio ns, such as Spain, Po rtugal, and so me Eastern Euro pean co untries.
Sele ctive Perception
Because it is impo ssible fo r us to abso rb everything we see,
we engage in selective perceptio n . Any characteristic that
* Have you eve r
misjudge d a pe rson?
makes a perso n, o bject, o r event stand o ut will increase the
pro bability that we see that characteristic, rather than the
Do you know why? who le package o f characteristics. This tendency explains
why, as we no ted earlier, yo u are mo re likely to no tice cars
like yo ur o wn.
Ho w do es selectivity wo rk as a sho rtcut in judging o ther peo ple? Since we canno t
abso rb all that we see, we take in bits and pieces. Tho se bits and pieces are no t cho sen ran-
do mly, but are selectively cho sen acco rding to o ur
interests, backgro und, experience, and attitudes.
Fo r instance, yo u are listening to yo ur instructo r
while surfing the net. The next thing yo u know, the
instructo r is calling o n yo u, asking a questio n, but
yo u have no idea what to answer because yo u go t
involved in an online auction on eBay and lost track
of the classroom discussion. While you were surfing,
the eBay auction became more important than what
yo ur instructo r was saying, and yo u tuned her o ut.
Ho wever, had she said “to mo rro w’s test will co ver
the fo llo wing to pics,” yo u might have snapped to
attention again, knowing that you needed that infor-
matio n to study effectively.
Selective perceptio n also allo ws us to “ speed-
read” o thers, but we may draw inaccurate pictures
as a result. Because we see what we want to see,
we can make unwarranted co nclusio ns abo ut an
 Chapter 2 Percept ion, Personalit y, and Em ot ions 37

ambiguo us situatio n. Suppo se there is a rumo ur go ing aro und the o ffice that yo ur co m-
pany’s sales are do wn and that large layo ffs may be co ming so o n. If a senio r executive
fro m head o ffice makes a ro utine visit aro und this time, it might be interpreted as man-
agement’s first step in identifying which peo ple to lay o ff. In reality, such an actio n
might be the furthest thing fro m the senio r executive’s mind. Selective perceptio n can
also make us draw wro ng co nclusio ns abo ut co -wo rkers who have suffered serio us ill-
nesses, as Focus on D iversity sho ws.

FO C U S O N D I V E R S I T Y

Underestimating Employees Who Have Been Seriously Ill

Doe s having ha d a seriou s illne ss mean that you cannot d o your jo b ? Lynda
Davidso n learned the hard way that suffering a mental illness and then getting treat-
ment fo r it do es no t necessarily give o ne a clean bill o f health at wo rk.15 When she
returned to wo rk after treatment, tho ugh she made her targets and earned her bo nuses,
her co ntract was no t renewed. She later to o k a jo b as pro gram m anager at the
Canadian Mental Health Asso ciatio n in To ro nto .
Ano ther To ro nto wo man suffered a similar fate when she was diagno sed with
acute leukemia. After treatment, she returned to wo rk at a large financial services
o rganizatio n o nly to find that she co uld no t get any pro mo tio ns. “I had the sense that
peo ple no lo nger to o k me serio usly. I think peo ple lo o ked at me and tho ught, ‘She’s
go ing to die,’” the wo man said. It to o k moving to a different department where no o ne
knew her befo re she co uld get ahead in her jo b.
It is no t unco mmo n fo r emplo yees with critical, chro nic illnesses to feel that their
jo bs have been harmed by their illnesses. Employers and co -wo rkers apparently perceive
that tho se emplo yees canno t functio n at the same level that they had prio r to the ill-
nesses. Describing a recent study do ne in the United States by the Natio nal Co alitio n
fo r Cancer Survivo rship, D r. Ro ss Gray, a research psycho lo gist at the To ro nto -
Sunnybro o k Regio nal Cancer Centre, no ted: “The study fo und that employers and co -
wo rkers overestimate the impact o f cancer o n peo ple’s lives. Decisio ns get made abo ut
advancement o r capability that are o ut o f line with the realities,” Dr. Gray says.

Halo Effect
When we draw a general impressio n abo ut an individual o n the basis o f a single char-
acteristic, such as intelligence, likeability, o r appearance, a halo effect is o perating. This halo effect Drawing a general
o ften happens when students evaluate their instructo r. Students may give mo re weight impression of an individual on the
to a single trait, such as enthusiasm, and allo w their entire evaluatio n to be affected by basis of a single characteristic.
how they judge the instructo r o n that o ne trait. Thus, an instructo r may be quiet, assured,
kno wledgeable, and highly qualified, but if his o r her presentatio n style lacks enthusi-
asm, tho se students wo uld pro bably give the instructo r a lo w rating.
The reality o f the halo effect was co nfirmed in a classic study. Subjects were given a
list o f traits and asked to evaluate the perso n to who m tho se traits applied.16 When
traits such as intelligent, skillful, practical, industrio us, determined, and warm were
used, the perso n was judged to be wise, humo ro us, po pular, and imaginative. When
co ld was substituted fo r warm, a co mpletely different set o f perceptio ns was o btained,
tho ugh o therwise the list was identical. Clearly, the subjects were allo wing a single trait
to influence their o verall impressio n o f the perso n being judged.
The halo effect do es no t o perate at rando m. Research suggests that it is likely to be
mo st extreme when the traits to be perceived are ambiguo us in behavio ural terms, when
the traits have mo ral o verto nes, and when the perceiver is judging traits with which he
o r she has had limited experience.17
38 Part 1 Underst anding t he Workplace
contrast effects The concept that
our reaction to one person is often
influenced by other people we have
recently encountered.
projection Attributing one’s own
characteristics to other people.
stereotyping Judging someone
on the basis of one’s perception of
the group to which that person
belongs.
Contrast Effect s
There is an o ld saying amo ng entertainers who perfo rm in variety sho ws: Never fo llo w
an act that has children o r animals in it.
This example demo nstrates ho w contrast effects can disto rt perceptio ns.18 We do n’t
evaluate a perso n in iso latio n. O ur reactio n to o ne perso n is o ften influenced by o ther
peo ple we have recently enco untered.
Co nsider what happens when a manager interviews jo b candidates fro m a po o l o f
applicants. The evaluatio n o f a candidate can be affected by his o r her place in the inter-
view schedule. The candidate is likely to receive a better evaluatio n if interviewed after
a medio cre applicant, and a wo rse evaluatio n if interviewed after a stro ng applicant.
Projection
It is easy to judge o thers if we assume that they are similar to us. Fo r instance, if yo u want
challenge and respo nsibility in yo ur jo b, yo u assume that o thers want the same. O r
yo u are ho nest and trustwo rthy, so yo u take it fo r granted that o ther peo ple are equally
ho nest and trustwo rthy. This tendency fo r peo ple to attribute their o wn characteristics
to o ther peo ple— which is called pro jectio n — can disto rt perceptio ns.
Peo ple who engage in pro jectio n tend to perceive o thers acco rding to what they
themselves are like rather than perceiving o thers as they really are. Because they always
judge peo ple as similar to themselves, when they o bserve so meo ne who is actually like
them their perceptio ns are naturally co rrect. But when they o bserve o thers who are no t
like them, their perceptio ns are no t so accurate.
Stereotyping
When we judge so meo ne o n the basis o f o ur perceptio n o f the gro up to which he o r
she belo ngs, we are using the sho rtcut called stereo typing . Stereo typing differs fro m
the halo effect in that the latter is based o n a single characteristic o f the individual, rather
than the individual’s membership in a particular gro up. Acco rding to a po pular literary
anecdo te, F. Sco tt Fitzgerald engaged in stereo typing when he to ld Ernest Hemingway, “the
rich are very different fro m yo u and me,” implying that the wealthy have values and
behavio ur unlike regular peo ple. Hemingway’s reply, “Yes, they have mo re mo ney,” indi-
cated that he refused to generalize characteristics o f peo ple o n the basis o f their wealth.
Generalizatio n, o f co urse, is no t witho ut advantages. It helps us simplify a co mplex
wo rld, and it permits us to maintain co nsistency. It is easier to deal with a large num-
ber o f stimuli if we use stereo types. As an example, assume yo u are a sales manager
lo o king to fill a sales po sitio n in yo ur territo ry and 100 peo ple have applied. Yo u want
to hire so meo ne who is ambitio us and hard-wo rking and who can deal well with adver-
sity witho ut spending to o much time interviewing candidates. Yo ur last five hires have
been very successful and participated in athletics at university. So yo u eliminate fro m co n-
sideratio n candidates who have no t participated in university spo rts, co nsiderably reduc-
ing yo ur search time. To the extent that athletes are ambitio us, hard-wo rking, and able
to deal with adversity, the use o f this stereo type can impro ve yo ur decisio n making.
The pro blem, clearly, is when we inaccurately stereo type.19 All university athletes
are not necessarily ambitio us, hard-wo rking, o r go o d at dealing with adversity, just as
all acco untants are not necessarily quiet and intro spective. Mo reo ver, when we stereo -
type like this, we run the risk o f o verlo o king highly qualified peo ple who do no t meet
o ur stereo types. Recent research examining ho w Ho llywo o d studio executives and pro -
ducers judge the creative po tential o f relatively unknown screenwriters makes this clear.20
When the screenwriters did no t meet the stereo type o f creative individuals in their pres-
entatio n o r appearance, they were judged as no t creative ( and o ften no t taken serio usly)
 Chapter 2 Percept ion, Personalit y, and Em ot ions 39

witho ut co nsideratio n o f the co ntent o f their ideas. The researchers no ted that this
co uld result in hiring uncreative individuals simply because they fit the creative stereo -
type, and failing to hire truly creative individuals who did no t fit the stereo type. A sim-
ilar example is pro vided in the bo o k Blink, in which tro mbo ne players auditio ned fo r a
seat in an o rchestra fro m behind a curtain so that their gender wo uld no t be appar-
ent.21 While the interviewers all agreed o n who was the best tro mbo ne player, they
were sho cked to disco ver that they had cho sen a wo man because in their view, “wo men
do n’t play the tro mbo ne.” In o rganizatio ns, we frequently hear co mments that represent
stereo types based o n gender, age, race, ethnicity, and even weight:22 “ Wo men wo n’t
relo cate fo r a pro m o tio n” ; “ m en aren’t interested in child care” ; “ o lder wo rkers are
mo re reliable”; “Asian immigrants are hard-wo rking and co nscientio us”; “overweight peo -
ple lack self-discipline.” Fro m a perceptual standpo int, if peo ple expect to see these
stereo types, that is what they will see, whether o r no t the stereo types are accurate.
O bvio usly, o ne o f the pro blems o f stereo types is that they are widespread, despite the
fact that they may no t co ntain a shred o f truth o r that they may be irrelevant. Perhaps
they are widespread o nly because many peo ple are making the same inaccurate perceptio n
based o n a false premise abo ut a gro up. Stanfo rd Graduate Scho o l o f Business pro fesso r
Jo hn Jo st has unco vered ano ther pro blem with stereo types: They can be used to suppo rt
the status quo .23 He no tes that when peo ple buy into stereo types abo ut disadvantaged
gro ups, they are less likely to challenge the co nsequences o f the stereo type. Fo r instance,
subjects expo sed to stereo types such as “po o r but happy,” were less likely to respo nd neg-
atively to ideas o f so cial inequality. O ne implicatio n o f Jo st’s research is that we need to
be aware o f the effects o f stereo types o n how we evaluate the wo rld aro und us. Stereo types
can lead to stro ng negative reactio ns, such as prejudice, which we describe belo w.

Prejudice
Prejudice is an unfo unded dislike o f a perso n o r gro up based o n their belo nging to a prejudice An unfounded dislike of
particular stereo typed gro up. Fo r instance, an individual may dislike peo ple o f a particular a person or group based on their
religio n, o r state that she do es no t want to wo rk with so meo ne o f a particular ethnicity. belonging to a particular stereotyped
group.
Prejudice can lead to negative co nsequences in the wo rkplace and, in particular, to dis-
criminatio n.24 Fo r instance, an individual o f a particular ethnic gro up might be passed
o ver fo r a management po sitio n because o f the belief that emplo yees might no t see
that perso n as a go o d manager. In ano ther instance, an individual in his fifties who is
lo o king fo r wo rk but canno t find a jo b may be discriminated against because o f the
belief that yo unger wo rkers are mo re appealing than o lder wo rkers. Prejudice gener-
ally starts with stereo types and then has negative emo tio nal co ntent added.

WHY D O PERCEPTION AND JUDGMENT MATTER?

The employees at the Canadian Human Rights Commission (CHRC) felt that Chief Commissioner
M ichelle Falardeau-Ramsay w as not living up to her role. They cited as evidence that she spent
meeting time describing entertainment details of the latest trip she had taken at taxpayers’
expense. This, and other perceptions of bad management, had led to high turnover at the
commission and low morale. About 63 percent of the employees had left in the previous tw o
years and 37 percent of those still w orking at the time of the survey w ere looking for other jobs.
Falardeau-Ramsay w as unaw are of employee unhappiness. She said she had regularly met
w ith employees and had never heard complaints of “ managers openly show ing favouritism, pro-
moting men over w omen, and nurturing ‘an anti-union culture.’” 25 Thus her perception led her
to the judgment that there w as nothing she needed to fix at the CHRC. It had not occurred to
her that perhaps employees w ould be reluctant to share bad new s w ith her. Did perceptions and
judgments by both Falardeau-Ramsay and her employees lead to actions that w ere harmful
to the organization?
40 Part 1 Underst anding t he Workplace
4 Does perception really
affect outcomes?
M cM aster University
www.mcmaster.ca
self-fulfilling prophecy A
concept that proposes a person will
behave in ways consistent with how
he or she is perceived by others.
Peo ple in o rganizatio ns are always judging each o ther. Fo r instance, peo ple typically
go thro ugh an emplo yment interview befo re being hired. Interviewers make percep-
tual judgments during the interview, which then affect whether the individual is hired.
Studies sho w that if negative info rmatio n is expo sed early in the interview, it tends to be
mo re heavily weighted than if that same info rmatio n co mes o ut later.26 When multiple
interviewers are present, agreement amo ng interviewers is o ften po o r; that is, different
interviewers see different things in the same candidate and thus arrive at different co n-
clusio ns abo ut the applicant. If the employment interview is an impo rtant input into the
hiring decisio n— and it usually is— yo u sho uld reco gnize that perceptual facto rs influ-
ence who is hired and, eventually, the quality o f an o rganizatio n’s labo ur fo rce.
An emplo yee’s perfo rmance appraisal is ano ther pro cess that depends very much o n
the perceptual pro cess.27 An employee’s future is clo sely tied to his o r her appraisal—pro -
mo tio ns, pay raises, and co ntinuatio n o f emplo yment are amo ng the mo st o bvio us
o utco mes. Altho ugh the appraisal can be o bjective ( e.g., a salesperso n is appraised o n
ho w many do llars o f sales he o r she generates in a given territo ry) , many jo bs are eval-
uated in subjective terms. Subjective measures are easier to implement, they pro vide
managers with mo re freedo m to do as they like, and many jo bs do no t readily lend
themselves to o bjective measures. Subjective measures are, by definitio n, judgmental. The
evaluato r fo rms a general impressio n o f an employee’s wo rk. To the degree that managers
use subjective measures in appraising emplo yees o r cho o sing who m to pro mo te, what
the evaluato r perceives to be go o d o r bad employee characteristics o r behavio urs will sig-
nificantly influence the o utco me o f the appraisal. O ne recent study fo und that man-
agers in bo th Ho ng Ko ng and the United States were mo re likely to pro mo te individuals
who were mo re similar to themselves.27 O ne’s behavio ur may also be affected by per-
ceptio ns. Belo w we discuss ho w the self-fulfilling pro phecy can lead to peo ple’s engag-
ing in behavio ur that is expected o f them.
Managers are no t the o nly peo ple making judgments at wo rk. When a new perso n
jo ins a wo rk team, he o r she is immediately “ sized up” by the o ther team members.
McMaster University Pro fesso r Kathleen Martin fo und that even small things can make
a difference in ho w a team member is viewed. In her study, students read descriptio ns
o f individuals and were then asked to evaluate 12 perso nality characteristics o f “ To m”
o r “ Mary.” 29 So me o f these descriptio ns included info rmatio n abo ut whether “ To m”
o r “ Mary” exercised. Students evaluated no nexercisers mo re negatively o n every per-
so nality and physical characteristic than tho se described as exercisers. In fact, tho se
described as no nexercisers were rated mo re negatively than tho se fo r who m no info r-
matio n abo ut exercise was provided. Martin no ted, “When Mary and To m were described
as exercisers, they were co nsidered to be harder wo rkers, mo re co nfident, braver, smarter,
neater, happier, and mo re so ciable than the no n-exerciser.”
Self-Fulfilling Prophe cy
There is an impressive amo unt o f evidence that demo nstrates that peo ple will attempt to
validate their perceptio ns o f reality, even when tho se perceptio ns are faulty.30 This char-
acteristic is particularly relevant when we co nsider perfo rmance expectatio ns o n the jo b.
The terms self-fulfilling prophecy o r Pygmalion effect have evo lved to characterize the
fact that peo ple’s expectatio ns determine their behavio ur. In o ther wo rds, if a manager
expects big things fro m his peo ple, they are no t likely to let him down. Similarly, if a man-
ager expects peo ple to perfo rm minimally, they will tend to behave so as to meet tho se
lo w expectatio ns. The result then is that the expectatio ns beco me reality.
An interesting illustratio n o f the self-fulfilling pro phecy is a study undertaken with
105 so ldiers in the Israeli Defense Fo rces who were taking a 15-week co mbat co mmand
co urse.31 The fo ur co urse instructo rs were to ld that o ne-third o f the specific inco ming
 Chapter 2 Percept ion, Personalit y, and Em ot ions 41

trainees had high po tential, o ne-third had no rmal po tential, and the po tential o f the rest
was unkno wn. In reality, the trainees were rando mly placed into tho se catego ries by
the researchers. The results co nfirmed the existence o f a self-fulfilling pro phecy. The
trainees who m instructo rs were to ld had high po tential sco red significantly higher o n
o bjective achievement tests, exhibited mo re po sitive attitudes, and held their leaders
in higher regard than did the o ther two gro ups. The instructo rs o f the suppo sedly high-
po tential trainees go t better results fro m them because the instructo rs expected better per-
fo rmance. Expectatio ns may no t be the o nly facto r leading to the self-fulfilling pro phecy,
ho wever. In so me cases, it is the treatment that individuals receive fro m instructo rs and
o thers that acco unts fo r higher perfo rmance. Fo r instance, instructo rs might put mo re
time and effo rt into tho se individuals who are expected to perfo rm better.
As yo u can see, perceptio n plays a large ro le in ho w peo ple are evaluated. Perso nality,
which we review belo w, is ano ther majo r facto r affecting ho w peo ple relate in the wo rk-
place.

PERSONALITY
Why are so m e peo ple quiet and passive, while o thers are lo ud and aggressive? Are 5 What is personality
certain perso nality types better adapted fo r certain jo b types? What do we know fro m the- and how does it affect
o ries o f perso nality that can help us explain and predict the behavio ur o f leaders such behaviour?
as Stephen Harper, Paul Martin, o r Geo rge W. Bush? Ho w do we explain the risk-taking
nature o f Do nald Trump, who still sees himself as the greatest businessman in America
even tho ugh his ho tel and casino businesses have go ne thro ugh two bankruptcies? In this
sectio n, we will attempt to answer such questio ns.

What Is Personality?
When we talk o f perso nality we do n’t mean that a perso n has charm, a po sitive atti-
tude to ward life, a smiling face, o r is a finalist fo r “ Miss Co ngeniality.” When psycho l-
o gists talk o f perso nality, they m ean a dynam ic co ncept describing the gro wth and
develo pment o f a perso n’s who le psycho lo gical system. Rather than lo o king at parts o f
the perso n, perso nality lo o ks at the who le perso n.
Go rdo n Allpo rt pro duced the mo st frequently used definitio n o f perso nality mo re
than 60 years ago . He said perso nality is “ the dynamic o rganizatio n within the indi-
vidual o f tho se psycho physical systems that determine his unique adjustments to his envi-
ro nment.” 32 Fo r o ur purpo ses, yo u sho uld think o f perso nality as the stable patterns personality The stable patterns of
o f behavio ur and co nsistent internal states that determine ho w an individual reacts to behaviour and consistent internal
and interacts with o thers. It is mo st o ften described in terms o f measurable traits that a states that determine how an indi-
vidual reacts to and interacts with
perso n exhibits. Fo r an interesting lo o k at ho w perso nality can affect business dealings,
others.
yo u might want to read this chapter’s Point/Counterpoint discussio n o n page 58.33 The dis-
cussio n centres o n ho w flexible and inflexible perso nality is. Yo u may want to read the
Case Incident— The Rise and Fall of Dennis Kozlowski to see how o ne man’s early life might
have affected ho w he later ran his business. In additio n, this chapter’s CBC Videw Case
Incident examines the perso nalities o f two business partners. NovaScotian Crystal

Personality Determinant s
An early argument in perso nality research centred o n whether an individual’s perso nality
was predetermined at birth, o r the result o f the individual’s interactio n with his o r her
enviro nment. Clearly, there is no simple answer. Perso nality appears to be a result o f bo th
influences. In additio n, to day we reco gnize a third facto r—the situatio n. Thus, an adult’s
perso nality is no w generally co nsidered to be made up o f bo th hereditary and envi-
ro nmental facto rs, mo derated by situatio nal co nditio ns.
42 Part 1 Underst anding t he Workplace

Early training and the culture in

w hich w e are raised are important
environmental factors that shape
our personalities. Other influences
are f amily norms and member-
ships in social groups.

Heredity
Heredity refers to tho se facto rs that were determined at co n-
ceptio n. Physical stature, facial attractiveness, gender, tem-

* Are pe ople born

with the ir
perament, muscle co mpo sitio n and reflexes, energy level,
and bio lo gical rhythms are characteristics that are generally
pe rsonalitie s? co nsidered to be either co mpletely o r largely influenced by
yo ur parents’ bio lo gical, physio lo gical, and inherent psy-
cho lo gical makeup. The heredity appro ach argues that the
ultimate explanatio n o f an individual’s perso nality is genetic.
If perso nality characteristics were completely dictated by heredity, they wo uld be fixed
at birth and no am o unt o f experience co uld alter them . If genetics resulted in yo ur
being tense and irritable as a child, fo r example, it wo uld no t be po ssible fo r yo u to
change tho se characteristics as yo u grew into an adult. But perso nality characteristics are
no t co mpletely dictated by heredity.

Enviro nmental Facto rs

Amo ng the facto rs that exert pressures o n o ur perso nality fo rmatio n are the culture in
which we are raised; o ur early co nditio ning; the no rms amo ng o ur family, friends, and
so cial gro ups; and o ther influences that we experience. The enviro nment we are expo sed
to plays a substantial ro le in shaping o ur perso nalities.
Fo r instance, No rth Americans have had the themes o f industrio usness, success, co m-
petitio n, independence, and the Pro testant wo rk ethic co nstantly drilled into them
thro ugh bo o ks, the scho o l system, family, and friends. No rth Americans, as a result,
tend to be ambitio us and aggressive co mpared with individuals raised in cultures that
have emphasized getting alo ng with o thers, co o peratio n, and the prio rity o f family o ver
wo rk and career.
If we carefully co nsider the arguments favo uring either heredity o r enviro nment as the
main determinant o f perso nality, we are fo rced to co nclude that bo th are impo rtant.
Heredity sets the parameters, o r o uter limits, but an individual’s full po tential will be
determ ined by ho w well he o r she adjusts to the dem ands and requirem ents o f the
enviro nment.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 43

Situatio nal Co nditio ns

A third facto r, the situatio n, influences the effects o f heredity and enviro nment o n per-
so nality. An individual’s perso nality, altho ugh generally stable and co nsistent, do es
change in different situatio ns. Mo re specifically, the demands o f different situatio ns
call fo rth different aspects o f an individual’s perso nality. We sho uld no t, therefo re, lo o k
at perso nality patterns in iso latio n.34

Personality Trait s
The early wo rk in the structure o f perso nality revo lved aro und attempts to identify and
label enduring characteristics that describe an individual’s behavio ur. Po pular charac-
teristics include shy, aggressive, submissive, lazy, ambitio us, lo yal, and timid. Tho se
characteristics, when they are exhibited in a large number o f situatio ns, are called per- personality traits Enduring char-
so nality traits .35 The mo re co nsistent the characteristic and the mo re o ften it o ccurs in acteristics that describe an individ-
different situatio ns, the mo re impo rtant that trait is in describing the individual. The ual’s behaviour.
“Myers-Briggs Type Indicato r” and “the Big Five Mo del,” which we discuss below, are two
metho ds that have been used to determine perso nality traits. A recent study suggests
that perso nality traits are co mmo n acro ss a variety o f cultures.36
O ur perso nality traits, by the way, are evaluated differently by different peo ple. This
is partly a functio n o f perceptio n, which we discussed earlier in the chapter. In Exhibit
2-3, yo u will no te that Lucy tells Linus a few things abo ut his perso nality.

The Myers-Briggs Type Indicato r

O ne o f the mo st widely used perso nality framewo rks is called the Myers-Briggs Type M yers-Briggs Type Indicator
Indicato r ( MBTI) .37 It is essentially a 100-questio n perso nality test that asks peo ple (M BTI) A personality test that taps
ho w they usually feel o r act in particular situatio ns. four characteristics and classifies
people into 1 of 16 personality
The MBTI classifies peo ple based o n ho w they prefer to fo cus their attentio n, co l-
types.
lect info rmatio n, pro cess and evaluate info rmatio n, and o rient themselves to the o uter
wo rld. These classificatio ns are then co mbined into 16 perso nality types. Briefly, per-
so nality is classified alo ng the fo llo wing dimensio ns:

• Extraversion/Introversion ( E or I) . This dimensio n refers to ho w peo ple fo cus

themselves: inside ( intro versio n) o r o utside ( extraversio n) .

• Sensing/Intuiting ( S or N) . This dimensio n refers to ho w peo ple gather info r-

matio n: very systematically ( sensing) o r relying o n intuitio n ( intuiting) .

• Thinking/Feeling ( T or F) . This dimensio n refers to ho w peo ple prefer to make

decisio ns: o bjectively and imperso nally ( thinking) o r subjectively and inter-
perso nally ( feeling) .

EXHIBIT 2-3

Source: Peanuts reprinted w ith permission of United Features Syndicate, Inc.

44 Part 1 Underst anding t he Workplace
Personality Pathw ays: Online
Personality Test
www.personalitypathways.com/type
_inventory.html
extraversion A personality factor
that describes the degree to which
someone is sociable, talkative, and
assertive.
agreeableness A personality
factor that describes the degree to
which someone is good-natured,
cooperative, and trusting.
conscientiousness A personality
factor that describes the degree to
which someone is responsible,
dependable, persistent, and achieve-
ment-oriented.
emotional stability A personality
factor that describes the degree to
which someone is calm, self-confi-
dent, and secure.
openness to experience A per-
sonality factor that describes the
degree to which someone is imagi-
native, artistically sensitive, and
intellectual.
• Judging/Perceiving ( J or P) . This dimensio n refers to ho w peo ple o rder their
daily lives: being decisive and planned ( judging) o r spo ntaneo us and flexible
( perceiving) .
Let’s take a lo o k at three examples o f MBTI perso nality types:
• INTJs are visionaries. They usually have o riginal minds and great drive fo r their
o wn ideas and purpo ses. They are characterized as skeptical, critical, inde-
pendent, determined, and o ften stubbo rn.
• ESTJs are organizers. They are realistic, lo gical, analytical, decisive, and have a
natural head fo r business o r mechanics. They like to o rganize and run activities.
• ENTPs are conceptualizers. They are inno vative, individualistic, versatile, and
attracted to entrepreneurial ideas. They tend to be reso urceful in so lving chal-
lenging pro blems but may neglect ro utine assignments.
Official Myers-Briggs tests can be administered o nly by trained pro fessio nals. However,
if yo u are interested in learning abo ut yo ur perso nality type, yo u can get so me under-
standing thro ugh the sho rt test at the Perso nality Pathways website. O ne o f the benefits
o f thinking abo ut individuals by type is that it will give yo u so me insight into how a par-
ticular perso n might react in a situatio n. If yo u browse in a library o r bo o ksto re, yo u will
find a number o f po pular bo o ks designed to help yo u identify bo th yo ur o wn and yo ur
co lleagues’ “perso nality types.” Ho wever, as we no ted abo ve in o ur discussio n o f stereo -
typing, relying so lely o n perso nality measures to judge peo ple can have its pro blems.
Iro nically, there is no hard evidence that the MBTI is a valid measure o f perso nal-
ity. But lack o f evidence do es no t seem to deter its use in a wide range o f o rganizatio ns.
The Big Five Mo del
The mo st widely accepted mo del o f perso nality is the five-facto r mo del o f perso nal-
ity— mo re typically called the “ Big Five.” 38 An impressive bo dy o f research suppo rts
the no tio n that five basic perso nality dimensio ns underlie all o thers and include mo st
o f the significant variatio ns in human perso nality.39 The Big Five perso nality facto rs
are as fo llo ws:
• Extraversion. This dimensio n captures a perso n’s co mfo rt level with relatio n-
ships. Extraverted individuals are so ciable, talkative, and assertive.
• Agreeableness. This dimensio n refers to ho w readily a perso n will go alo ng
with o thers. Highly agreeable peo ple are go o d-natured, co o perative, warm,
and trusting.
• Conscientiousness. This dimensio n is a measure o f a perso n’s reliability. Peo ple
who sco re high o n co nscientio usness are respo nsible, dependable, persistent,
and achievement-o riented.
• Emotional stability. This dimensio n taps a perso n’s ability to withstand stress.
Peo ple high o n emo tio nal stability are calm, self-co nfident, and secure.
• Openness to experience. The final dimensio n addresses a perso n’s range o f
interests and fascinatio n with no velty. Peo ple high o n o penness to experience
are imaginative, artistically sensitive, and intellectual.
Exhibit 2-4 o n page 45sho ws the characteristics fo r the high and lo w dimensio ns o f
each Big Five perso nality facto r.
In additio n to pro viding a unifying perso nality framewo rk, research o n the Big Five
has fo und impo rtant relatio nships between these perso nality dimensio ns and jo b per-
fo rmance.40 A bro ad spectrum o f o ccupatio ns was examined: pro fessio nals ( including
 Chapter 2 Percept ion, Personalit y, and Em ot ions 45

EXHIBIT 2-4 Big Five Personality Factors

Low High
Extraversion

Reserved Gregarious
Timid Assert ive
Quiet Sociable

Agreeableness

Cold Cooperat ive

Disagreeable Warm
Ant agonist ic Empat het ic
Trust ing
Conscientiousness

Easily dist ract ed Responsible

Disorganized Organized
Unreliable Dependable
Persist ent
Emotional Stability

Host ile Calm

Anxious Self -conf ident
Depressed Secure
Insecure

Openness to Experience

Unimaginat ive Creat ive

Inf lexible Flexible
Lit eral-minded Curious
Dull Art ist ic

engineers, architects, acco untants, and lawyers) , as well as po lice o fficers, managers,
salespeo ple, and semi-skilled and skilled emplo yees. Jo b perfo rmance was defined in
terms o f perfo rmance ratings, training pro ficiency ( perfo rmance during training pro -
grams) , and info rmatio n such as salary level.

It is not alw ays easy for friends to

share top management roles, but
Anton Rabie (left), president and
COO, and Ronnen Harary (right),
CEO, of Toront o-based Spin
M ast er like t he arrangement .
Rabie is an extravert, w hile Harary
is an int rovert . The childhood
f riends f eel t heir personalit ies
complement each other, making
an ideal management team.
46 Part 1 Underst anding t he Workplace
internals Individuals who believe
that they control their destinies.
\
externals Individuals who believe
that their lives are controlled by out-
side forces, such as luck or chance.
locus of control The degree to
which people believe they are in
control of their own fates.
machiavellianism The degree to
which an individual is pragmatic,
maintains emotional distance, and
believes that ends can justify means.
Niccolò M achiavelli
www.encyclopedia.com/html/M/
Machiave.asp
All o f the Big Five facto rs have been fo und to have at least so me relatio nship to per-
fo rmance in so me situatio ns.41 Research finds a stro ng relatio nship between so me o f the
Big Five facto rs and m o tivatio n. Lo wer em o tio nal stability is asso ciated with lo wer
mo tivatio n, while co nscientio usness appears to be po sitively related to mo tivatio n.42
Finally, evidence finds a relatively stro ng and co nsistent relatio nship between co nsci-
entio usness and o rganizatio nal citizenship behavio ur ( O CB) .43 This, ho wever, seems to
be the o nly perso nality dimensio n that predicts O CB.
M ajor Personality Attrib utes Influencing OB
In this sectio n, we will evaluate specific perso nality attributes that have been fo und to
be po werful predicto rs o f behavio ur in o rganizatio ns. The first is related to lo cus o f
co ntro l—ho w much po wer o ver yo ur destiny yo u think yo u have. The o thers are machi-
avellianism, self-esteem, self-mo nito ring, risk-taking, and Type A and pro active per-
so nalities. If yo u want to kno w m o re abo ut yo ur o wn perso nal characteristics, this
chapter’s Learning About Yourself Exercises o n pages 59–66 present yo u with a variety o f
perso nality measures to explo re.
Lo cus o f Co ntro l
So me peo ple believe that they are in co ntro l o f their o wn destinies. O ther peo ple see
themselves as pawns o f fate, believing that what happens to them in their lives is due to
luck o r chance. The first type, tho se who believe that they co ntro l their destinies, have
been labelled internals , whereas the latter, who see their lives as being co ntro lled by o ut-
side fo rces, have been called externals .44 A perso n’s perceptio n o f the so urce o f his o r
her fate is termed lo cus o f co ntro l .
Individuals with an internal lo cus o f co ntro l are mo re likely to pro blem so lve when
they enco unter an o bstacle while trying to achieve a go al. Individuals with an external
lo cus o f co ntro l are mo re likely to see the o bstacle as caused by o utside fo rces, and they
will no t necessarily kno w what to do in the face o f that o bstacle. Managers thus need to
be mo re aware o f o bstacles facing emplo yees who have an external lo cus o f co ntro l,
and do what they can to remo ve tho se o bstacles.
A large amo unt o f research has co mpared internals with externals. Internals repo rt
greater well-being, and this finding appears to be universal.45 Internals sho w greater
mo tivatio n, believe that their effo rts will result in go o d perfo rmance, and get higher
salaries and greater salary increases than externals.46 Externals are less satisfied with
their jo bs, have higher absenteeism rates, are mo re alienated fro m the wo rk setting,
and are less invo lved in their jo bs than are internals,47 likely because they feel they
have little co ntro l o ver o rganizatio nal o utco mes. Exhibit 2-5 o n page 47 sho ws the rela-
tio nship between lo cus o f co ntro l and jo b perfo rmance.
If yo u are interested in determining yo ur lo cus o f co ntro l, yo u might want to co mplete
Learning About Yourself Exercise #1 o n page 59.
Machiavellianism
The perso nality characteristic o f machiavellianism ( Mach) is nam ed after Nicco lò
Machiavelli, who wro te in the sixteenth century o n ho w to gain and use po wer. An indi-
vidual high in machiavellianism is highly practical, maintains emo tio nal distance, and
believes that ends can justify means. “If it wo rks, use it” is co nsistent with a high-Mach
perspective.
A co nsiderable amo unt o f research has been directed to ward relating high- and lo w-
Mach perso nalities to certain behavio ural o utco mes.48 High Machs manipulate mo re,
win mo re, are persuaded less, and persuade o thers mo re than do lo w Machs.49 Think o f
 Chapter 2 Percept ion, Personalit y, and Em ot ions 47

EXHIBIT 2-5 The Effects of Locus of Control on Performance

Cond itions Performance

Information Processing

The w ork requires complex information processing and complex Internals perform better.
learning.

The w ork is quite simple and easy to learn. Internals perform no better than externals.

Initiative

The w ork requires initiative and independent action. Internals perform better.

The w ork requires compliance and conformity. Externals perform better.

M otivation

The w ork requires high motivation and provides valued rew ards Internals perform better.
in return for greater effort; it offers incentive pay for greater
productivity.

The w ork does not require great effort and contingent rew ards Externals perform at least as w ell as internals.
are lacking; hourly pay rates are determined by collective bargaining.

Source: J. B. M iner, Industrial-Organizational Psychology (New York: M cGraw -Hill, 1992), p. 151. Reprinted w ith permission of The M cGraw -Hill
Companies.

Do nald Trump interacting with the characters o n The Apprentice. Yet these high-Mach o ut-
co mes are mo derated by situatio nal facto rs. It has been fo und that high Machs flo urish
( 1) when they interact face to face with o thers rather than indirectly; ( 2) when the sit-
uatio n has a m inim um num ber o f rules and regulatio ns, thus allo wing latitude fo r
impro visatio n; and ( 3) when lo w Machs get distracted by emo tio nal invo lvement with
details irrelevant to winning.50
Sho uld we co nclude that high Machs make go o d emplo yees? That answer depends
o n the type o f jo b and whether yo u co nsider ethical implicatio ns in evaluating per-
fo rmance. In jo bs that require bargaining skills ( such as labo ur nego tiatio n) o r that
o ffer substantial rewards fo r winning (as in co mmissio ned sales), high Machs will be pro -
ductive. But if the ends canno t justify the m eans, if there are abso lute standards o f
behavio ur, o r if the three situatio nal facto rs no ted in the preceding paragraph are no t in
evidence, o ur ability to predict a high Mach’s perfo rmance will be severely curtailed. If
yo u are interested in determining yo ur level o f machiavellianism, yo u might want to co m-
plete Learning About Yourself Exercise #2 o n page 60.

Self-Esteem
Peo ple differ in the degree to which they like o r dislike themselves. This trait is called self- self-esteem The degree to which
esteem .51 The research o n self-esteem (SE) o ffers interesting insights into OB. Fo r example, individuals like or dislike themselves.
self-esteem is directly related to expectatio ns fo r success. High SEs believe that they have the
ability to succeed at wo rk. Individuals with high self-esteem will take mo re risks in jo b
selectio n and are mo re likely to cho o se unco nventio nal jo bs than are peo ple with lo w
self-esteem. High SEs also tend to emphasize the po sitive when co nfro nted with failure.52
The mo st generalizable finding o n self-esteem is that lo w SEs are mo re easily influ-
enced by external facto rs than are high SEs. Lo w SEs are dependent o n the receipt o f
48 Part 1 Underst anding t he Workplace

Articles by Nathaniel Branden
www.nathanielbranden.com/catalog
/articles.php#
po sitive evaluatio ns fro m o thers. As a result, they are mo re likely than high SEs to seek
approval fro m o thers and mo re pro ne to co nfo rm to the beliefs and behavio urs o f tho se
they respect. In managerial po sitio ns, lo w SEs tend to be co ncerned with pleasing o th-
ers and, therefo re, are less likely to take unpo pular stands than are high SEs.
No t surprisingly, self-esteem has also been fo und to be related to jo b satisfactio n.
A number o f studies co nfirm that high SEs are mo re satisfied with their jo bs than are low
SEs. If yo u are interested in determining yo ur self-esteem sco re, yo u might want to co m-
plete Learning About Yourself Exercise #3 o n page 61. Recent research suggests that the
facto rs that are used to measure self-esteem can be applied cro ss-culturally.53
Can yo u increase yo ur self-esteem? Psycho lo gist Nathaniel Branden suggests that
peo ple can increase their self-esteem by fo llo wing his “Six Pillars o f Self-Esteem,” which
is sho wn in Exhibit 2-6. By fo llo wing the actio ns described, individuals can act with
mo re co nfidence and integrity, which will lead to greater self-esteem. While Branden
emphasizes that self-esteem co mes fro m the cho ices we make, no t fro m ho w o thers
treat us, so me recent research suggests that ho w leaders treat individuals in terms o f
fairness will have an impact o n an individual’s self-esteem.54

Self-Mo nito ring

self-monitoring A personality
trait that measures an individual’s
ability to adjust behaviour to exter-
nal, situational factors.
So me peo ple are better able to pay attentio n to the external enviro nment and respo nd
acco rdingly, a characteristic kno wn as self-mo nito ring .55 Individuals high in self-mo n-
ito ring sho w co nsiderable ability to adjust and adapt their behavio ur to the situatio ns
they are in. They are highly sensitive to external cues and can behave differently in dif-
ferent situatio ns. High self-mo nito rs are capable o f presenting striking co ntradictio ns
between their public perso nae and their private selves.
Lo w self-mo nito rs canno t disguise themselves in the same way. They tend to display
their true dispo sitio ns and attitudes in every situatio n; hence, there is high behavio ural
co nsistency between who they are and what they do .
Research suggests that high self-mo nito rs tend to pay clo ser attentio n to the behav-
io ur o f o thers and are mo re capable o f co nfo rming than are lo w self-mo nito rs.56 In
additio n, high self-mo nito ring managers tend to be mo re mo bile in their careers and
receive mo re pro mo tio ns ( bo th internal and cro ss-o rganizatio nal) .57 Recent research
fo und that self-mo nito ring is also related to jo b perfo rmance and emerging leaders.58
Specifically, high self-mo nito rs are mo re likely to be high perfo rmers and mo re likely to
beco me leaders. To determine whether yo u are a high o r lo w self-mo nito r, yo u might
want to co mplete Learning About Yourself Exercise #4 o n page 62.

EXHIBIT 2-6 Branden’s Six Pillars of Self-Esteem

1. Living consciously: Be aw are of everything that affects your values and goals, and act w ith aw areness.

2. Self-acceptance: Accept w ho you are w ithout criticism and judgment.

3. Personal responsibility: Take responsibility for the decisions you make and the things you do.

4. Self-assertiveness: Honour your w ants, needs, and values, and don' t be afraid to speak up for things that are important
to you.

5. Living purposefully: Develop short- and long-term goals, and make realistic plans to achieve your goals.

6. Personal integrity: Live up to your w ord and your values.

Source: Adapted from N. Branden, Self-Esteem at Work: How Confident People M ake Pow erful Companies (San Francisco: Jossey-Bass, 1998),
pp. 33–36.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 49

Risk-Taking
Peo ple differ in their willingness to take chances. Matthew
Barrett, the fo rmer CEO and chair o f Bank o f Mo ntreal, and
Frank Stro nach, chair o f Magna Internatio nal ( and the sub-
ject o f Case Incident— “ Frank Stronach, Risk-Taker and Fair
Enterprise Creator” o n the CD-RO M that acco m panies this
textbo o k) , are go o d exam ples o f high risk-takers. The ten-
dency to assum e o r avo id risk has been sho wn to have an
im pact o n ho w lo ng it takes m anagers to m ake a decisio n
and ho w much info rmatio n they require befo re making their
cho ice. Fo r instance, 79 managers wo rked o n simulated exer-
cises that required them to m ake hiring decisio ns.59 High
risk-taking m anagers m ade m o re rapid decisio ns and used
less info rm atio n in m aking their cho ices than did the lo w
risk-taking m anagers. Interestingly, the decisio n accuracy
was the sam e fo r bo th gro ups.
While it is generally co rrect to co nclude that managers in
o rganizatio ns are risk-aversive,60 there are still individual dif-
ferences within this dimensio n.61 As a result, it makes sense to
reco gnize these differences and even to co nsider matching risk- Richard Branson’s t endency t o t ake risks aligns w it h his job
taking tendencies with specific jo b demands. Fo r instance, high demands as an entrepreneur. Branson, founder and chairman of
risk-taking might lead to higher perfo rmance fo r a sto ck trader London-based Virgin Group, starts risky ventures that compete
against industry giants. His Virgin Atlantic airline, for example,
in a bro kerage firm because that type o f jo b demands rapid
has taken market share from British Airw ays and has earned a rep-
decisio n making. On the o ther hand, a willingness to take risks utation as one of the financially healthiest airlines in the w orld.
wo uld no t be suitable fo r an acco untant who perfo rms audit- Branson’s risk-taking personality extends to his leisure activities of
ing activities. O rganizatio ns also send messages abo ut ho w speedboat racing, skydiving, and ballooning.
much risk is to lerated. So me managers co nvey to emplo yees
that they will be punished if they take risks that fail. This can dampen o ne’s natural risk- risk-taking A person’s willingness
taking tendencies. If yo u are interested in determining where yo u stand o n risk-taking, to take chances or risks.
yo u might want to co mplete Learning About Yourself Exercise #5 o n pages 63–64.

Type A and Type B Perso nalities

Do yo u kno w any peo ple who are excessively co mpetitive
and always seem to be pushed fo r time? If yo u do , it’s a
* Do you think it is
bette r to be a Type A
go o d bet that tho se peo ple have a Type A perso nality. Type A personality A personality
An individual with a Type A perso nality is “aggressively with aggressive involvement in a
or a Type B chronic, incessant struggle to
invo lved in a chro nic, incessant struggle to achieve mo re
pe rsonality? achieve more and more in less and
and mo re in less and less time, and, if required to do so ,
less time and, if necessary, against
against the o ppo sing effo rts o f o ther things o r o ther per- the opposing efforts of other things
so ns.” 62 In No rth American culture, such characteristics or other people.
tend to be highly prized and po sitively asso ciated with ambitio n and the successful
acquisitio n o f material go o ds.
Type As
• Are always mo ving, walking, and eating rapidly

• Feel impatient with the rate at which mo st events take place

• Strive to think o r do two o r mo re things at o nce

• Canno t co pe with leisure time

• Are o bsessed with numbers, measuring their success in terms o f ho w many o r

ho w much o f everything they acquire
50 Part 1 Underst anding t he Workplace
proactive personality A person
who identifies opportunities, shows
initiative, takes action, and perse-
veres until meaningful change
occurs.
In co ntrast to the Type A perso nality is the Type B, who is exactly the o ppo site. Type
Bs are “rarely harried by the desire to o btain a wildly increasing number o f things o r par-
ticipate in an endless gro wing series o f events in an ever-decreasing amo unt o f time.” 63
Type Bs
• Never suffer fro m a sense o f time urgency with its acco mpanying impatience
• Feel no need to display o r discuss either their achievements o r acco mplish-
ments unless such expo sure is demanded by the situatio n
• Play fo r fun and relaxatio n, rather than to exhibit their superio rity at any co st
• Can relax witho ut guilt
Type As are o ften impatient, hurried, co mpetitive, and ho stile, but these traits tend
to emerge mo st o ften when a Type A individual experiences stress o r challenge.64 Type
As are fast wo rkers because they emphasize quantity o ver quality. In managerial po si-
tio ns, Type As demo nstrate their co mpetitiveness by wo rking lo ng ho urs and, no t infre-
quently, making po o r decisio ns because they make them to o fast. Stressed Type As are
also rarely creative. Because o f their co ncern with quantity and speed, they rely o n
past experiences when faced with pro blems. They will no t allo cate the time that is nec-
essary to develo p unique so lutio ns to new pro blems. They seldo m vary in their respo nses
to specific challenges in their enviro nment, and so their behavio ur is easier to predict
than that o f Type Bs.
Are Type As o r Type Bs mo re successful in o rganizatio ns? Despite the hard wo rk o f Type
As, Type Bs are the o nes who appear to make it to the to p. Great salespeo ple are usually
Type As; senio r executives are usually Type Bs. Why? The answer lies in the tendency o f
Type As to trade o ff quality o f effo rt fo r quantity. Pro mo tio ns in co rpo rate and pro fessio nal
o rganizatio ns “usually go to tho se who are wise rather than to tho se who are merely
hasty, to tho se who are tactful rather than to tho se who are ho stile, and to tho se who are
creative rather than to tho se who are merely agile in co mpetitive strife.” 65
Recent research has lo o ked at the effect o f jo b co m plexity o n the cardio vascular
health o f bo th Type A and Type B individuals to see whether Type As always suffered neg-
ative health co nsequences.66 Type B individuals did no t suffer negative health co nse-
quences fro m jo bs with psycho lo gical co mplexity. Type A wo rkers who faced high jo b
co mplexity had higher death rates fro m heart-related diso rders than Type As who faced
lo wer jo b co mplexity. These findings suggest that, health-wise, Type B wo rkers suffer
less when handling mo re co mplex jo bs than do Type As. It also suggests that Type As who
face lo wer jo b co mplexity do no t enco unter the same health risks as Type As who face
higher jo b co mplexity.
If yo u are interested in determining whether yo u have a Type A o r Type B perso nal-
ity, yo u might want to co mplete Learning About Yourself Exercise #6 o n page 00.
Pro active Perso nality
Did yo u ever no tice that so me peo ple actively take the initiative to improve their current
circumstances o r create new o nes while o thers sit by passively reacting to situatio ns?
The fo rmer individuals have been described as having pro active perso nalities.67
Peo ple with a pro active perso nality identify o ppo rtunities, sho w initiative, take
actio n, and persevere until meaningful change o ccurs. They create po sitive change in their
enviro nment, regardless o r even in spite o f co nstraints o r o bstacles.68
No t surprisingly, pro actives have many desirable behavio urs that o rganizatio ns lo o k
fo r. Fo r instance, the evidence indicates that pro actives are mo re likely to be seen as
leaders and are mo re likely to act as change agents within the o rganizatio n.69 O ther
actio ns o f pro actives can be po sitive o r negative, depending o n the o rganizatio n and the
situatio n. Fo r example, pro actives are mo re likely to challenge the status quo o r vo ice their
 Chapter 2 Percept ion, Personalit y, and Em ot ions 51

displeasure when situatio ns are no t to their liking.70 If an o rganizatio n requires peo ple
with entrepreneurial initiative, pro actives make go o d candidates; ho wever, these are
peo ple that are also mo re likely to leave an o rganizatio n to start their o wn business.71
As individuals, pro actives are mo re likely to achieve career success.72 This is because
they select, create, and influence wo rk situatio ns in their favo ur. Pro actives are mo re
likely to seek o ut jo b and o rganizatio nal info rmatio n, develo p co ntacts in high places,
engage in career planning, and demo nstrate persistence in the face o f career o bstacles.

Personality and National Culture

There are certainly no co m m o n perso nality types fo r a given co untry. Yo u can, fo r
instance, find high and lo w risk-takers in almo st any culture. Yet a co untry’s culture
sho uld influence the do minant perso nality characteristics o f its po pulatio n. Let’s build
this case by lo o king at o ne perso nality attribute— lo cus o f co ntro l.
There is evidence that cultures differ in terms o f peo ple’s relatio nship to their envi-
ro nment.73 In so me cultures, such as tho se in No rth America, peo ple believe that they can
do minate their enviro nment. Peo ple in o ther so cieties, such as Middle Eastern co un-
tries, believe that life is essentially preo rdained. No tice the clo se parallel to internal and
external lo cus o f co ntro l. We sho uld expect a larger pro po rtio n o f internals in the Canadian
and American wo rkfo rces than in the Saudi Arabian o r Iranian wo rkfo rces.
O ne caveat regarding perso nality tests is that they may be subject to cultural bias
when used o n samples o f peo ple o ther than tho se fo r who m the tests were designed. Fo r
instance, o n co mmo n American perso nality tests, British peo ple are characterized as
“less do minant, achievement-o rientated o r flexible than Americans, but mo re self-co n-
tro lled.” 74 An example o f a bias that can appear in such tests is that o nly 10 percent o f
British men answer “true” to the statement “I very much like hunting,” while 70 percent
o f American men agree.75 When these tests are used to select managers, they may result
in the selectio n o f individuals who are no t as suitable in the British wo rkplace as they
wo uld be in the American wo rkplace.

EMOTIONS
Each o f us has a range o f perso nality characteristics, but we also bring with us a range 6 Can emotions help or
o f emo tio ns. Given the o bvio us ro le that emo tio ns play in o ur everyday lives, it might get in the way when
surprise yo u to learn that, until very recently, the to pic o f emo tio ns was given little o r no we’re dealing with
attentio n in the field o f O B. When emo tio ns were co nsidered, the discussio n fo cused o n others?
stro ng negative emo tio ns—especially anger—that interfered with an emplo yee’s ability
to do his o r her jo b effectively. Emo tio ns were rarely viewed as co nstructive o r able to
stimulate perfo rmance-enhancing behavio urs.
Certainly so me emo tio ns, particularly when exhibited at the wro ng time, can reduce
emplo yee perfo rmance. But this do es no t change the reality that emplo yees bring an
emo tio nal co mpo nent with them to wo rk every day, and that no study o f O B co uld be
co mprehensive witho ut co nsidering the ro le o f emo tio ns in wo rkplace behavio ur.

What Are Emotions?

Emo tio ns are intense feelings that are directed at so meo ne o r so mething.76 Emo tio ns emotions Intense feelings that are
are different fro m mo o ds , which are feelings that tend to be less intense than emo - directed at someone or something.
tio ns and that lack a co ntextual stimulus.77 moods Feelings that tend to be
Emo tio ns are reactions to an o bject; they are no t lasting perso nality traits. Yo u sho w less intense than emotions and that
yo ur em o tio ns when yo u are “ happy abo ut so m ething, angry at so m eo ne, afraid o f lack a contextual stimulus.
so mething.” 77 Mo o ds, o n the o ther hand, are no t directed at an o bject. Emo tio ns can turn
into mo o ds when yo u lo se fo cus o n the co ntextual o bject. So when a co lleague criticizes
52 Part 1 Underst anding t he Workplace
emotional labour When an
employee expresses organizationally
desired emotions during interper-
sonal interactions.
University of California,
Berkeley
www.berkeley.edu
EXHIBIT 2-7 Emotion Continuum
Happine ss Surpri se Fear Sa d ne ss Anger Disgu st
Source: Based on R. D. Woodw orth, Experimental Psychology (New York: Holt, 1938).
yo u fo r the way yo u spo ke to a client, yo u might beco me angry at him. That is, yo u
show emo tio n ( anger) toward a specific o bject ( yo ur co lleague) . But later in the day, yo u
might find yo urself just generally dispirited. Yo u canno t attribute this feeling to any
single event; yo u are just no t yo ur no rmal, upbeat self. This state describes a mo o d.
Research has identified six universal emo tio ns: anger, fear, sadness, happiness, disgust,
and surprise.79 O ne facto r that has stro ngly shaped what is and isn’t listed in this basic
set is the manner in which the emo tio ns were identified. Researchers tended to lo o k
fo r universally identified facial expressio ns and then co nvert them into catego ries ( see
the facial expressio ns in From Concepts to Skills o n page 71) . Emo tio ns that co uld no t be
identified readily by o thers thro ugh facial expressio ns, o r that were co nsidered a subset
o f o ne o f the basic six, were no t selected.
Exhibit 2-7 illustrates that the six emo tio ns can be co nceptualized as existing alo ng
a co ntinuum.80 The clo ser any two emo tio ns are to each o ther o n this co ntinuum, the
mo re peo ple are likely to co nfuse them. Fo r instance, happiness and surprise are fre-
quently mistaken fo r each o ther, while happiness and disgust are rarely co nfused. Be
aware that cultural facto rs can also influence interpretatio ns o f facial expressio ns.
Choosing Emotions: Emotional Lab our
So metimes individuals are required to manage their emo -
tio ns. Fo r instance, yo u may be very angry with a co -wo rker o r
* Eve r wonde r why
the groce ry cle rk is
manager, but yo u may cho o se to suppress that anger in the
interest o f keeping the peace and/ o r yo ur jo b. Yo u may also
always smiling? decide no t to kiss a co -wo rker in a mo ment o f overwhelming
exuberance, to make sure that yo ur intentio ns are no t mis-
interpreted. The display of emotions is governed somewhat by
wo rkplace no rms and the demands o f particular situatio ns.
Fo r instance, crying is generally viewed as inappro priate in the wo rkplace, particularly
when it is a respo nse to being criticized. Crying wo uld be viewed mo re acceptably if
so meo ne were just no tified o f the death o f a clo se relative, ho wever. Peter Mackay was
expected to sho w no emo tio n fo llo wing his breakup with Belinda Stro nach after she
cro ssed the flo o r to the Liberal party. However, President Geo rge W. Bush was criticized fo r
showing little emo tio n immediately fo llowing the devastating effects o f Hurricane Katrina
o n New O rleans. Recent research suggests that negative emo tio ns, even when co ntro lled,
generally lead to po o rer perfo rmance.81
Emo tio nal labo ur refers to the requirement that emplo yees express particular emo -
tio ns at wo rk ( fo r instance, enthusiasm o r cheerfulness) to maximize o rganizatio nal
pro ductivity.82 This term was first co ined by Pro fesso r Arlie Ho chschild o f the University
o f Califo rnia, Berkeley, and refers to the demand o rganizatio ns make o n their emplo y-
ees to display “appro priate” emo tio ns during interperso nal transactio ns.83
The co ncept o f emo tio nal labo ur o riginally develo ped in relatio n to service jo bs. Flight
attendants, fo r instance, are expected to be cheerful, funeral co unsello rs sad, and do cto rs
emo tio nally neutral. Studies o f emo tio nal labo ur have explo red how smiling flight atten-
 Chapter 2 Percept ion, Personalit y, and Em ot ions 53

dants, cheerful gro cery clerks, go ssipy hairdressers, and nasty

bill collectors are expected to control their emotional expression
to impro ve pro ductivity, custo mer satisfactio n, efficiency, and
even pro fitability.84 But to day, the co ncept o f emo tio nal labo ur
seems relevant to almo st every jo b. Yo u are expected, fo r exam-
ple, to be co urteo us and no t ho stile in interactio ns with co -
wo rkers. And leaders are expected to draw o n emo tio nal labo ur
to “charge the tro o ps.” Almo st every great speech, fo r instance,
co ntains a stro ng emo tio nal co mpo nent that stirs feelings in
o thers.
As these studies sho w, ho wever, managing emo tio ns can
take a to ll when there is a discrepancy between the o utward
behavio ur the perso n is required to display as part o f his o r her
jo b and the inward feelings that the perso n has.85 Therefo re,
while emo tio nal labo ur can have po sitive implicatio ns within
the wo rkplace, it can also have negative perso nal co nsequences
when a perso n co nsistently hides real em o tio ns behind a
wo rk “face.” 86 Flight attendants use the phrase “go ro bo t” to
describe ho w they separate their private feelings fro m their
public behavio ur.87 O ther researchers have discussed bo th
the individual effects o f emo tio nal labo ur, such as distanc-
ing, burno ut, and pho niness,88 and the o rganizatio nal effects,
such as suppressed disagreements, reduced upward info rma-
tio n flow, and lo ss o f “vo ice.” 89 A Vanco uver Safeway employee Emotional labour is an important component of effective job per-
described her co mpany’s requirement to smile at all sho p- formance at the Happy Beauty Salon in Long Island, New York.
pers: “ My perso nal o pinio n is, they’re expecting us no t to be Ow ner Happy Nomikos, show n here serving customers straw ber-
human. I just can’t walk aro und with a smile o n my face all ries and grapes, requires that her nail technicians and hairstylists
90 build customer loyalty by being courteous and cheerful. In inter-
day.” To further co nsider the issue o f managing emo tio ns at
acting w ith her employees and customers, Nomikos says, “ I have
wo rk, yo u may want to wo rk o n this chapter’s Ethical Dilemma
to keep everyone happy.” She hugs loyal customers, jokes w ith
Exercise o n page 68. her staff, and offers customers pizza and cake in celebration of
Emo tio nal labo ur creates dilemmas fo r emplo yees when employees’ birthdays.
their jo bs require them to exhibit emo tio ns that are inco n-
sistent with their actual feelings. No t surprisingly, this is a frequent o ccurrence. There are Canada Safew ay
peo ple yo u have to wo rk with to who m yo u find it very difficult to be friendly. Maybe www.safeway.com
yo u co nsider their perso nalities abrasive. Maybe yo u kno w they have said negative
things abo ut yo u behind yo ur back. Regardless, yo ur jo b requires yo u to interact with
these peo ple o n a regular basis. So yo u are fo rced to pretend to be friendly.

Why Should We Care A b out Emotions in the

Workplace?
There are a number o f reaso ns to be co ncerned abo ut understanding emo tio ns in the
wo rkplace.91 Peo ple who kno w their o wn emo tio ns and are go o d at reading o thers’
emo tio ns may be mo re effective in their jo bs. That, in essence, is the theme underlying
recent research o n emo tio nal intelligence.92 The entire wo rkplace can be affected by
po sitive o r negative wo rkplace emo tio ns, ano ther issue we co nsider belo w. O ne recent
study fo und that when leaders were in a po sitive mo o d, individual gro up members
experienced better mo o ds, and gro ups had a mo re po sitive to ne. Gro ups who se leaders
had a po sitive mo o d also fo und it easier to co o rdinate tasks, and expended less effo rt
when do ing their wo rk.93
54 Part 1 Underst anding t he Workplace
emotional intelligence An
assortment of noncognitive skills,
capabilities, and competencies that
influence a person’s ability to suc-
ceed in coping with environmental
demands and pressures.
Bank of M ontreal
www.bmo.com
Emo tio nal Intelligence
Emo tio nal intelligence ( EI) refers to an asso rtment o f no nco gnitive skills, capabili-
ties, and co mpetencies that influence a perso n’s ability to succeed in co ping with envi-
ro nmental demands and pressures. It’s co mpo sed o f five dimensio ns:
• Self-awareness. Being aware o f what yo u are feeling. It is exhibited by self-co nfi-
dence, realistic self-assessment, and a self-deprecating sense o f humo ur.
• Self-management. The ability to manage yo ur o wn emo tio ns and impulses. It is
exhibited by trustwo rthiness and integrity, co mfo rt with ambiguity, and o pen-
ness to change.
• Self-motivation. The ability to persist in the face o f setbacks and failures. It is
exhibited by a stro ng drive to achieve, o ptimism, and high o rganizatio nal
co mmitment.
• Empathy. The ability to sense ho w o thers are feeling. It is exhibited by expertise
in building and retaining talent, cro ss-cultural sensitivity, and service to clients
and custo mers.
• Social skills. The ability to handle the emo tio ns o f o thers. It is exhibited by per-
suasiveness, and expertise in building and leading gro ups and teams.
EI differs fro m emo tio nal labo ur because the latter is a jo b requirement ( the demand
to smile, express enthusiasm, etc.) while the fo rmer is regarded as a perso nality trait. A
perso n with lo w EI m ay co ntro l his em o tio ns because o f a request fro m a m anager
( thus engaging in emo tio nal labo ur) , but might o therwise no t do so .
Several studies suggest EI m ay play an im po rtant ro le in jo b perfo rm ance.94 Fo r
instance, o ne study lo o ked at the characteristics o f Bell Labs engineers who were rated
as stars by their peers. The scientists co ncluded that stars were better at relating to o th-
ers. That is, it was EI, no t academic IQ , that characterized high perfo rmers.
Ano ther study o f US Air Fo rce recruiters generated similar findings. To p-perfo rming
recruiters exhibited high levels o f EI. Using these findings, the US Air Fo rce revamped its
selectio n criteria. A fo llo w-up investigatio n fo und that hires who had high EI sco res
were 2.6 times mo re successful than tho se who did no t.95
Co rpo ratio ns are acting o n the results o f these studies. A recent po ll o f human reso urce
managers asked: Ho w impo rtant is it fo r yo ur wo rkers to demo nstrate EI to mo ve up
the co rpo rate ladder? Fo rty percent replied “Very Impo rtant.” Ano ther 16 percent said
“Mo derately Impo rtant.” Irene Taylo r, a co nsultant with To ro nto -based Praxis Canada, says
her co mpany “has co nducted EQ assessments o n abo ut 300 Canadian lawyers o ver the
past five years.” She also says that demand to get into the co mpany’s EI co aching pro gram
is high. Pro fesso r Jo hn O esch o f the Jo seph L. Ro tman Scho o l o f Management at the
University o f To ro nto explains why co aching in EI has beco me po pular: “It’s a so lid psy-
cho lo gical co nstruct that can be measured and, to a certain extent, taught.” 96
To ny Co mper, president and CEO o f the Bank o f Mo ntreal, certainly agrees with the
impo rtance o f understanding EI. He cites Daniel Go leman’s W orking W ith Emotional
Intelligence97 as o ne o f his favo urite bo o ks o n leadership.98 This chapter’s From Concepts
to Skills gives yo u so me insight into reading the emo tio ns o f o thers. To find o ut abo ut
yo ur EI, co mplete Learning About Yourself Exercise #7 o n pages 65–66.
Negative Wo rkplace Emo tio ns
Negative emo tio ns can lead to a number o f deviant wo rkplace behavio urs. Anyo ne who
has spent much time in an o rganizatio n realizes that peo ple o ften engage in vo luntary
 Chapter 2 Percept ion, Personalit y, and Em ot ions 55

actio ns that vio late established no rms and threaten the o rganizatio n, its members, o r
bo th. These actio ns are called employee deviance .99 They fall into catego ries such as pro - employee deviance Voluntary
ductio n ( leaving early, intentio nally wo rking slo wly) ; pro perty ( stealing, sabo tage) ; actions that violate established
po litical ( go ssiping, blaming co -wo rkers) ; and perso nal aggressio n ( sexual harassment, norms and threaten the organiza-
tion, its members, or both.
verbal abuse) .100
Many o f these deviant behavio urs can be traced to negative emo tio ns. Fo r instance,
envy is an emo tio n that o ccurs when yo u resent so meo ne fo r having so mething that
yo u do n’t have but stro ngly desire.101 It can lead to malicio us deviant behavio urs. Envy,
fo r example, has been fo und to be asso ciated with ho stility, “backstabbing,” and o ther
fo rms o f po litical behavio ur, as well as with negatively disto rting o thers’ successes and
po sitively disto rting o ne’s o wn acco mplishments.102

SUMMARY AND IMPLICATIONS

1 What is perception? Perception is the pro cess by which individuals o rganize and
SNAPSHOT SUM M ARY
interpret their im pressio ns in o rder to give m eaning to their enviro nm ent.
Individuals behave in a given manner based no t o n the way their enviro nment
1 Perception Defined
actually is but, rather, o n what they see o r believe it to be. An o rganizatio n may
2 Factors Influencing
spend millio ns o f do llars to create a pleasant wo rk enviro nment fo r its emplo yees.
Perception
Ho wever, despite these expenditures, an emplo yee who believes that his o r her
The Perceiver
jo b is lo usy will behave acco rdingly.
The Target
2 W hat cau se s people to have d ifferent perception s of the same situation? The Situation
A number o f facto rs o perate to shape and so metimes disto rt perceptio n. These
3 Perceptual Errors
facto rs can be present in the perceiver, in the o bject o r target being perceived, o r in
Attribution Theory
the co ntext o f the situation in which the perceptio n is made. The perceiver’s attitudes,
Selective Perception
mo tives, interests, and past experiences all shape the way he o r she sees an event.
Halo Effect
The target’s characteristics also affect what is perceived. No velty, mo tio n, so unds,
Contrast Effects
size, and o ther characteristics o f a target shape the way it is seen. O bjects o r events
that are unrelated are o ften perceived to gether because they are clo se physically
Projection
o r in timing. Perso ns, o bjects, o r events that are similar to each o ther also tend to Stereotyping
be viewed as a gro up. The setting in which we see o bjects o r events also affects 4 Why Do Perception and
ho w they are perceived. Judgment M atter?
Self-Fulfilling Prophecy
3 Can people b e mistaken in their perceptions? Perceiving and interpreting what
o thers do is difficult and takes time. As a result, we develo p sho rtcuts to make this 5 Personality
task mo re manageable. These sho rtcuts, which include attributio n theo ry, selec- What Is Personality?
tive perceptio n, the halo effect, co ntrast effects, pro jectio n, and stereo typing, are Personality Determinants
o ften valuable—they can so metimes allow us to make accurate perceptio ns quickly Personality Traits
and pro vide valid data fo r making predictio ns. Ho wever, they are no t fo o lpro o f. Major Personality Attributes
They can and do get us into tro uble. Influencing OB
Personality and National
4 Does perception really affect out comes? The evidence suggests that what indi- Culture
viduals perceive abo ut their wo rk situatio n influences their pro ductivity mo re than
6 Emotions
the situatio ns do . Whether a jo b is actually interesting o r challenging is irrelevant.
What Are Emotions?
Whether a manager actually helps employees to structure their wo rk mo re efficiently
Choosing Emotions:
and effectively is far less impo rtant than ho w emplo yees perceive the manager’s Emotional Labour
effo rts. Similarly, issues such as fair pay, the validity o f perfo rmance appraisals, and Why Should We Care About
the adequacy o f wo rking co nditio ns are no t judged “o bjectively.” Rather, individu- Emotions in the Workplace?
als interpret co nditio ns surro unding their jo bs based o n how they perceive their jo bs.
56 Part 1 Underst anding t he Workplace

5 What is personality and how d oes it affect b ehaviour? Personality is the stable
patterns o f behavio ur and co nsistent internal states that determine ho w an indi-
vidual reacts to and interacts with o thers. A review o f the perso nality literature
o ffers general guidelines that can lead to effective jo b perfo rmance. As such, it can
impro ve hiring, transfer, and pro mo tio n decisio ns. Perso nality attributes give us a
framewo rk fo r predicting behavio ur. Perso nality affects ho w peo ple react to o thers
and the types o f jo bs that they may desire. Fo r example, individuals who are shy,
intro verted, and unco mfo rtable in so cial situatio ns wo uld pro bably make po o r
salespeo ple. Individuals who are submissive and co nfo rming might no t be effec-
tive as advertising “ idea” peo ple. Be aware, tho ugh, that measuring perso nality is
no t an exact science, and as yo u no do ubt learned fro m the discussio n o f attribu-
tio n theo ry it is easy to attribute perso nality characteristics in erro r.

6 Can emotions help or get in the w ay w hen w eÕ re d ealing w ith others? Emotions
are intense feelings that are directed at so meo ne o r so mething. Po sitive emo tio ns
can be mo tivating fo r everyo ne in the wo rkplace. Negative emo tio ns may make it
difficult to get alo ng with o thers. Can managers co ntro l the emo tio ns o f their co l-
leagues and employees? No . Emo tio ns are a natural part o f an individual’s makeup.
At the same time, managers err if they igno re the emo tio nal elements in O B and
assess individual behavio ur as if it were co mpletely ratio nal. Managers who under-
stand the ro le o f emo tio ns will significantly improve their ability to explain and pre-
dict individual behavio ur.
Do emo tio ns affect jo b perfo rmance? Yes. Emo tio ns, especially negative o nes, can
hinder perfo rmance. That’s pro bably why o rganizatio ns, fo r the mo st part, try to
remo ve emo tio ns fro m the wo rkplace. But emo tio ns can also enhance perfo rm-
ance. Ho w? Two ways.103 First, emo tio ns can increase aro usal levels, thus acting as
mo tivato rs to higher perfo rmance. Seco nd, emo tio nal labo ur reco gnizes that feel-
ings can be part o f a jo b’s required behavio ur. So , fo r instance, the ability to effec-
tively manage emo tio ns in leadership and sales po sitio ns may be critical to success
in tho se po sitio ns. Research also indicates the im po rtance o f em o tio nal intelli-
gence, the asso rtment o f no nco gnitive skills, capabilities, and co mpetencies that
influence a perso n’s ability to succeed in co ping with enviro nmental demands and
pressures.
 O B A T W O RK
For Review
1 . Define perception.

2. What is attribution theory? What are its implications for explaining behaviour in organizations?

4. What is stereotyping? Give an example of how stereotyping can create perceptual distortion.

5. Give some positive results of using shortcuts w hen judging others.

6 . Describe the factors in the Big Five model. Evaluate w hich factor show s the greatest value in predicting behaviour?

7. What behavioural predictions might you make if you knew that an employee had (a) an external locus of control? (b)
a low -M ach score? (c) low self-esteem? (d) a Type A personality?

8. To w hat extent do people’s personalities affect how they are perceived?

9. What is emotional labour and w hy is it important to understanding OB?

1 0. What is emotional intelligence and w hy is it important?

For Critical Thinking

1 . How might the differences in experience of students and instructors affect each of their perceptions of classroom
behaviour (e.g., students’ w ritten w ork and class comments)?

2. An employee does an unsatisfactory job on an assigned project. Explain the attribution process that this person’s
manager w ill use to form judgments about this employee’s job performance.

3. One day your boss comes in and he is nervous, edgy, and argumentative. The next day he is calm and relaxed. Does
this behaviour suggest that personality traits are not consistent from day to day?

4. What, if anything, can managers do to manage emotions? Are there ethical implications in any of these actions? If
so, w hat?

5. Give some examples of situations w here expressing emotions openly might improve job performance.

OB for You
■ The discussion of perception might get you thinking about how you view the w orld. When w e perceive someone as a
troublemaker, for instance, this may be only a perception and not a real characteristic of the other person. It is alw ays
good to question your perceptions, just to be sure that you are not reading something into a situation that is not
there.

■ One important thing to consider w hen looking for a job is w hether your personality w ill fit the organization to w hich
you are applying. For instance, it may be a highly structured organization. If you by nature are much less formal, this
may not be a good fit for you.

■ Sometimes personalities get in the w ay w hen w orking in groups. You may w ant to see if you can figure out w ays to
get personality differences w orking in favour of group goals.

■ Emotions need not alw ays be suppressed w hen w orking w ith others. While emotions can sometimes hinder perform-
ance, positive emotions can motivate you and those around you.
58 Part 1 Underst anding t he Workplace
O B A T W O RK
PO I N T
Traits Are Po werful
Predicto rs o f Behavio ur
The essence of trait approaches in OB is that employees
possess stable personality characteristics that significantly
influence their attitudes tow ard, and behavioural reac-
tions to, organizational settings. People w ith particular
traits tend to be relatively consistent in their attitudes and
behaviour over time and across situations.104
Of course, trait theorists recognize that all traits are
not equally pow erful. They tend to put traits into one of
three categories. Cardinal traits are those so strong and
generalized that they influence every act a person per-
forms. Primary traits are generally consistent influences
on behaviour, but they may not show up in all situations.
Finally, secondary traits are attributes that do not form a
vital part of the personality, but come into play only in
particular situations. For the most part, trait theories have
f ocused on t he pow er of primary t rait s t o predict
employee behaviour.
Trait theorists do a fairly good job of meeting the aver-
age person’s common-sense beliefs. Think of friends, rela-
tives, and acquaintances you have know n for a number of
years. Do they have traits that have remained essentially
stable over time? M ost of us w ould answ er that question
in the affirmative. If cousin Anne w as shy and nervous
w hen w e last saw her 10 years ago, w e w ould be sur-
prised to find her outgoing and relaxed now.
M anagers seem to have a strong belief in the pow er
of traits to predict behaviour. If managers believed that
situations determined behaviour, they w ould hire people
almost at random and put great effort into structuring
situations properly. But the employee selection process in
most organizations places a great deal of emphasis on
how applicant s perf orm in int erview s and on t est s.
Assume you are int erview ing job candidat es and ask
yourself: What kind of person am I looking for? If you
answ er w ith terms such as conscientious, hard-w orking,
persist ent , conf ident , and dependable, you are a trait
theorist!
CO U N TERPO I N T
Behavio ur Is Determined
by the Situatio n
Few people w ould dispute that there are some stable indi-
vidual attributes that affect reactions to the w orkplace.
But trait theorists go beyond that generality and argue
that individual behaviour consistencies are w idespread
and account f or much of t he diff erence in behaviour
among people.105
There are tw o important problems w ith using traits to
explain a large proportion of behaviour in organizations.
First, organizational settings are strong situations that
have a large impact on employee behaviour. Second, indi-
viduals are highly adaptive and personality traits change in
response to organizational situations.
It has been w ell know n for some time that the effects
of traits are likely to be strongest in relatively w eak situa-
t ions, and w eakest in relat ively st rong sit uat ions.
Organizat ional set t ings t end t o be st rong sit uat ions
because they have rules and other formal regulations that
define acceptable behaviour and punish deviant behav-
iour; and they have informal norms that dictate appropri-
ate behaviours. These formal and informal constraints
minimize the effects of personality traits.
By arguing that employees possess stable traits that
lead to cross-situational consistencies in behaviours, trait
theorists are implying that individuals don’t really adapt to
different situations. But there is a grow ing body of evi-
dence that an individual’s traits are changed by the organ-
izations in w hich an individual participates. If the
individual’s personality changes as a result of exposure to
organizational settings, in w hat sense can that individual
be said to have traits that persistently and consistently
affect his or her reactions to those very settings? M oreover,
people typically belong to multiple organizations, w hich
often include very different kinds of members. They adapt
to those different situations. Instead of being the prisoners
of a rigid and stable personality framew ork, as trait theo-
rists propose, people regularly adjust their behaviour to
reflect the requirements of various situations.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 59

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 1

Assess Yo ur Lo cus o f Co ntro l

Read the follow ing statements and indicate w hether you agree more w ith choice A or choice B.

A B

1 . M aking a lot of money is largely a matter of get- 1 . Promotions are earned through hard w ork and
ting the right breaks. persistence.

2. I have noticed that there is a direct connection 2. M any times, the reactions of teachers seem hap-
betw een how hard I study and the grades I get. hazard to me.

3. The number of divorces indicates that more and 3. M arriage is largely a gamble.
more people are not trying to make their mar-
riages w ork.

4. It is silly to think that one can really change 4. When I am right, I can convince others.
another person’s basic attitudes.

5. Getting promoted is really a matter of being a 5. In our society, a person’s future earning pow er
little luckier than the next person. depends on his or her ability.

6 . If one know s how to deal w ith people, they are 6 . I have little influence over the w ay other people
really quite easily led. behave.

7. The grades I make are the result of my ow n 7. Sometimes I feel that I have little to do w ith the
efforts; luck has little or nothing to do w ith it. grades I get.

8. People like me can change the course of w orld 8. It is only w ishful thinking to believe that one can
affairs if w e make ourselves heard. readily influence w hat happens in our society.

9. A great deal that happens to me is probably a 9. I am in control of my destiny.

matter of chance.

1 0. Getting along w ith people is a skill that must be 1 0. It is almost impossible to figure out how to please
practised. some people.

Scoring Key:
Give yourself 1 point for each of the follow ing selections: 1B, 2A, 3A, 4B, 5B, 6A, 7A, 8A, 9B, and 10A.
Scores can be interpreted as follow s:

8–1 0 = High internal locus of control

6 –7 = M od erate internal locus of control

5 = M ixed

3–4 = M od erate external locus of control

1 –2 = High external locus of control

Source: Adapted from J. B. Rotter, “ External Control and Internal Control,” Psychology Today, June 1971, p. 42. Copyright 1971 by the American
Psychological Association. Adapted w ith permission.
60 Part 1 Underst anding t he Workplace

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 2

Ho w Machiavellian Are Yo u?
For each statement, circle the number that most closely resembles your attitude.

Disagree Agree

Statement A Lot A Little Neutral A Little A Lot

1 . The best w ay to handle people is to tell them

w hat they w ant to hear. 1 2 3 4 5

2. When you ask someone to do something for you,

it is best to give the real reason for w anting it rather
than giving reasons that might carry more w eight. 1 2 3 4 5

3. Anyone w ho completely trusts anyone else is

asking for trouble. 1 2 3 4 5

4. It is hard to get ahead w ithout cutting corners

here and there. 1 2 3 4 5

5. It is safest to assume that all people have a

vicious streak, and it w ill come out w hen
given a chance. 1 2 3 4 5

6 . One should take action only w hen it is

morally right. 1 2 3 4 5

7. M ost people are basically good and kind. 1 2 3 4 5

8. There is no excuse for lying to someone else. 1 2 3 4 5

9. M ost people more easily forget the death of

their fathers than the loss of their property. 1 2 3 4 5

1 0. Generally speaking, people w ill not w ork hard

unless they are forced to do so. 1 2 3 4 5

Scoring Key:
To obtain your M ach score, add the number you have checked on questions 1, 3, 4, 5, 9, and 10. For the other 4 questions,
reverse the numbers you have checked: 5 becomes 1, 4 is 2, 2 is 4, and 1 is 5. Total your 10 numbers to find your score. The
higher your score, the more machiavellian you are. Among a random sample of American adults, the national average w as 25.

Source: R. Christie and F. L. Geis, Studies in M achiavellianism (New York: Academic Press, 1970). Reprinted by permission.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 61

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 3

Ho w’s Yo ur Self-Esteem?
Answ er each of the follow ing questions honestly. Next to each question w rite a 1, 2, 3, 4, or 5, depending on w hich answ er
best describes you.

1 = Very often
2 = Fairly often
3 = Sometimes
4 = Once in a great w hile
5 = Practically never

______ 1 . How often do you have the feeling that there is nothing that you can do w ell?

______ 2. When you talk in front of a class or group of people your ow n age, how often do you feel w orried or
afraid?

______ 3. How often do you feel that you have handled yourself w ell at social gatherings?

______ 4. How often do you have the feeling that you can do everything w ell?

______ 5. How often are you comfortable w hen starting a conversation w ith people you don’t know ?

______ 6 . How often do you feel self-conscious?

______ 7. How often do you feel that you are a successful person?

______ 8. How often are you troubled w ith shyness?

______ 9. How often do you feel inferior to most people you know ?

______ 1 0. How often do you feel that you are a w orthless individual?

______ 11 . How often do you feel confident that your success in your future job or career is assured?

______ 1 2. How often do you feel sure of yourself w hen among strangers?

______ 1 3. How often do you feel confident that some day people w ill look up to you and respect you?

______ 1 4. In general, how often do you feel confident about your abilities?

______ 1 5. How often do you w orry about how w ell you get along w ith other people?

______ 16 . How often do you feel that you dislike yourself?

______ 1 7. How often do you feel so discouraged w ith yourself that you w onder w hether anything is w orthw hile?

______ 1 8. How often do you w orry about w hether other people like to be w ith you?

______ 1 9. When you talk in front of a class or a group of people of your ow n age, how often are you pleased w ith
your performance?

______ 20. How often do you feel sure of yourself w hen you speak in a class discussion?

Scoring Key:
Add up your score for the follow ing 10 items: 1, 2, 6, 8, 9, 10, 15, 16, 17, and 18. For the other 10 items, reverse your scor-
ing (that is, a 5 becomes 1, 4 is 2, 2 is 4, and 1 is 5). The higher your score, the higher your self-esteem.

Source: Developed by A. H. Eagly and adapted from J. R. Robinson and P. R. Shaver, M easures of Social Psychological Attitudes (Ann Arbor, M I:
Institute of Social Research, 1973), pp. 79–80. W ith permission.
62 Part 1 Underst anding t he Workplace

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 4

Are Yo u a High Self-Mo nito r?

Indicate the degree to w hich you think the follow ing statements are true or false by circling the appropriate number. For
example, if a statement is alw ays true, circle the 5 next to that statement.

0 = Certainly, alw ays false

1 = Generally false

2 = Somew hat false, b ut w ith exceptions

3 = Somew hat true, b ut w ith exceptions
4 = Generally true
5 = Certainly, alw ays true

1 . In social situations, I have the ability to alter my behaviour

if I feel that something else is called for. 0 1 2 3 4 5

2. I am often able to read people’s true emotions correctly

through their eyes. 0 1 2 3 4 5

3. I have the ability to control the w ay I come across to

people, depending on the impression I w ish to give them. 0 1 2 3 4 5

4. In conversations, I am sensitive to even the slightest change

in the facial expression of the person I’m conversing w ith. 0 1 2 3 4 5

5. M y pow ers of intuition are quite good w hen it comes to

understanding others’ emotions and motives. 0 1 2 3 4 5

6 . I can usually tell w hen others consider a joke in bad taste,

even though they may laugh convincingly. 0 1 2 3 4 5

7. When I feel that the image I am portraying isn’t w orking,

I can readily change it to something that does. 0 1 2 3 4 5

8. I can usually tell w hen I’ve said something inappropriate

by reading the listener’s eyes. 0 1 2 3 4 5

9. I have trouble changing my behaviour to suit different

people and different situations. 0 1 2 3 4 5

1 0. I have found that I can adjust my behaviour to meet the

requirements of any situation I find myself in. 0 1 2 3 4 5

11 . If someone is lying to me, I usually know it at once

from that person’s manner of expression. 0 1 2 3 4 5

1 2. Even w hen it might be to my advantage, I have difficulty

putting up a good front. 0 1 2 3 4 5

1 3. Once I know w hat the situation calls for, it’s easy for me
to regulate my actions accordingly. 0 1 2 3 4 5

Scoring Key:
To obtain your score, add up the numbers circled, except reverse scores for questions 9 and 12. On those, a circled 5
becomes a 0, 4 becomes 1, and so forth. High self-monitors are defined as those w ith scores of 53 or higher.

Source: R. D. Lennox and R. N. Wolfe, “ Revision of the Self-M onitoring Scale,” Journal of Personality and Social Psychology, June 1984, p. 1361.
Copyright 1984 by the American Psychological Association. Reprinted by permission.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 63

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 5

Are Yo u a Risk-Taker?
For each of the follow ing situations, indicate the minimum odds of success you w ould demand before recommending that
one alternative be chosen over another. Try to place yourself in the position of the adviser to the central person in each of
the situations.

1 . M r. B, a 45-year-old accountant, has recently been informed by his physician that he has developed a severe heart
ailment. The disease w ill be sufficiently serious to force M r. B to change many of his strongest life habits—reducing
his w orkload, drastically changing his diet, giving up favourite leisure-time pursuits. The physician suggests that a
delicate medical operation could be attempted. If successful, the operation w ould completely relieve the heart con-
dition. But its success cannot be assured, and in fact the operation might prove fatal.
Imagine that you are advising M r. B. Listed below are several probabilities or odds that the operation w ill prove
successful. Check the low est probability that you w ould consider acceptable for the operation to be performed.

_______ Place a check mark here if you think that M r. B should not have the operation, no matter w hat the
probabilities.
_______ The chances are 9 in 10 that the operation w ill be a success.
_______ The chances are 7 in 10 that the operation w ill be a success.
_______ The chances are 5 in 10 that the operation w ill be a success.
_______ The chances are 3 in 10 that the operation w ill be a success.
_______ The chances are 1 in 10 that the operation w ill be a success.

2. M r. D is the captain of University X’s varsity football team. University X is playing its traditional rival, University Y, in
the final game of the season. The game is in its final seconds, and M r. D’s team, University X, is behind in the score.
University X has time to make one more play. M r. D, the captain, must decide on a strategy. Would it be best to try
a play that w ould be almost certain to w ork and try to settle for a tie score? Or, on the other hand, should he try a
more complicated and risky play that w ould bring victory if it succeeded or defeat if it failed?
Imagine that you are advising M r. D. Listed below are several probabilities or odds that the risky play w ill w ork.
Check the low est probability that you w ould consider acceptable for the risky play to be attempted.

_______ Place a check mark here if you think that M r. D should not attempt the risky play, no matter w hat the
probabilities.
_______ The chances are 9 in 10 that the risky play w ill w ork.
_______ The chances are 7 in 10 that the risky play w ill w ork.
_______ The chances are 5 in 10 that the risky play w ill w ork.
_______ The chances are 3 in 10 that the risky play w ill w ork.
_______ The chances are 1 in 10 that the risky play w ill w ork.

3. M s. K is a successful businessw oman w ho has taken part in a number of civic activities of considerable value to the
community. M s. K has been approached by the leaders of her political party as a possible candidate in the next
provincial election. M s. K’s party is a minority party in the constituency, though the party has w on occasional elec-
tions in the past. M s. K w ould like to hold political office, but to do so w ould involve a serious financial sacrifice,
since the party does not have enough campaign funds. She w ould also have to endure the attacks of her political
opponents in a heated campaign.

continued
64 Part 1 Underst anding t he Workplace

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 5 ( C o n t i n u e d )

Imagine that you are advising M s. K. Listed below are several probabilities or odds of M s. K’s w inning the elec-
tion in her constituency. Check the low est probability that you w ould consider acceptable to make it w orthw hile for
M s. K to run for political office.

_______ Place a check mark here if you think that M s. K should not run for political office, no matter w hat the
probabilities.
_______ The chances are 9 in 10 that M s. K w ill w in the election.
_______ The chances are 7 in 10 that M s. K w ill w in the election.
_______ The chances are 5 in 10 that M s. K w ill w in the election.
_______ The chances are 3 in 10 that M s. K w ill w in the election.
_______ The chances are 1 in 10 that M s. K w ill w in the election.

4. M s. L, a 30-year-old research physicist, has been given a five-year appointment by a major university laboratory. As
she considers the next five years, she realizes that she might w ork on a difficult long-term problem. If a solution to
the problem could be found, it w ould resolve basic scientific issues in the field and bring high scientific honours. If
no solution w ere found, how ever, M s. L w ould have little to show for her five years in the laboratory, and it w ould
be hard for her to get a good job afterw ard. On the other hand, she could, as most of her professional associates
are doing, w ork on a series of short-term problems for w hich solutions w ould be easier to find. Those solutions
w ould be of lesser scientific importance.
Imagine that you are advising M s. L. Listed below are several probabilities or odds that a solution w ill be found
to the difficult long-term problem that M s. L has in mind. Check the low est probability that you w ould consider
acceptable to make it w orthw hile for M s. L to w ork on the more difficult long-term problem.
_______ Place a check mark here if you think M s. L should not choose the long-term, difficult problem, no
matter w hat the probabilities.
_______ The chances are 9 in 10 that M s. L w ill solve the long-term problem.
_______ The chances are 7 in 10 that M s. L w ill solve the long-term problem.
_______ The chances are 5 in 10 that M s. L w ill solve the long-term problem.
_______ The chances are 3 in 10 that M s. L w ill solve the long-term problem.
_______ The chances are 1 in 10 that M s. L w ill solve the long-term problem.

Scoring Key:
These situations w ere based on a longer questionnaire. Your results are an indication of your general orientation tow ard risk
rather than a precise measure. To calculate your risk-taking score, add up the chances you w ere w illing to take and divide by
4. (For any of the situations in w hich you w ould not take the risk, regardless of the probabilities, give yourself a 10.) The
low er your number, the more risk-taking you are.

Source: Adapted from N. Kogan and M . A. Wallach, Risk Taking: A Study in Cognition and Personality (New York: Holt, Rinehart and W inston,
1964), pp. 256–261.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 65

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 6

Are Yo u a Type A?
Circle the number on the scale below that best characterizes your behaviour for each trait.

1. Casual about appointments 1 2 3 4 5 6 7 8 Never late

2. Not competitive 1 2 3 4 5 6 7 8 Very competitive

3. Never feel rushed 1 2 3 4 5 6 7 8 Alw ays feel rushed

4. Take things one at a time 1 2 3 4 5 6 7 8 Try to do many things at once

5. Slow doing things 1 2 3 4 5 6 7 8 Fast (eating, w alking, etc.)

6. Express feelings 1 2 3 4 5 6 7 8 “ Sit on” feelings

7. M any interests 1 2 3 4 5 6 7 8 Few interests outside w ork

Scoring Key:
Total your score on the 7 questions. Now multiply the total by 3. A total of 120 or more indicates that you are a hard-core
Type A. Scores below 90 indicate that you are a hard-core Type B. The follow ing gives you more specifics:

Point s Personality Type

120 or more A1
106–119 A
100–105 A2
90–99 B1
Less than 90 B

Source: Adapted from R. W. Bortner, “ Short Rating Scale as a Potential M easure of Pattern A Behavior,” Journal of Chronic Diseases, June 1969,
pp. 87–91. W ith permission.

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 7

What’s Yo ur EI at Wo rk?
Evaluating the follow ing 25 statements w ill allow you to rate your social skills and self-aw areness, the components of emo-
tional intelligence (EI). EI, the social equivalent of IQ, is complex, in no small part because it depends on some pretty slippery
variables—including your innate compatibility, or lack thereof, w ith the people w ho happen to be your co-w orkers. But if
you w ant to get a rough idea of how your EI stacks up, this quiz w ill help.
As honestly as you can, estimate how you rate in the eyes of peers, bosses, and subordinates on each of the follow ing
traits, on a scale of 1 to 4, w ith 4 representing strong agreement, and 1 representing strong disagreement.

_______ I usually stay composed, positive, and unflappable even in trying moments.

_______ I can think clearly and stay focused on the task at hand under pressure.

_______ I am able to admit my ow n mistakes.

continued
66 Part 1 Underst anding t he Workplace

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE # 7 ( C o n t i n u e d )

_______ I usually or alw ays meet commitments and keep promises.

_______ I hold myself accountable for meeting my goals.

_______ I am organized and careful in my w ork.

_______ I regularly seek out fresh ideas from a w ide variety of sources.

_______ I am good at generating new ideas.

_______ I can smoothly handle multiple demands and changing priorities.

_______ I am results-oriented, w ith a strong drive to meet my objectives.

_______ I like to set challenging goals and take calculated risks to reach them.

_______ I am alw ays trying to learn how to improve my performance, including asking advice from people younger
than I am.

_______ I readily make sacrifices to meet an important organizational goal.

_______ The company’s mission is something I understand and can identify w ith.

_______ The values of my team—or of our division or department, or the company—influence my decisions and clarify
the choices I make.

_______ I actively seek out opportunities to further the overall goals of the organization and enlist others to help me.

_______ I pursue goals beyond w hat is required or expected of me in my current job.

_______ Obstacles and setbacks may delay me a little, but they don’t stop me.

_______ Cutting through red tape and bending outdated rules are sometimes necessary.

_______ I seek fresh perspectives, even if that means trying something totally new.

_______ M y impulses or distressing emotions don’t often get the best of me at w ork.

_______ I can change tactics quickly w hen circumstances change.

_______ Pursuing new information is my best bet for cutting dow n on uncertainty and finding w ays to do things better.

_______ I usually don’t attribute setbacks to a personal flaw (mine or someone else’s).

_______ I operate from an expectation of success rather than a fear of failure.

Scoring Key:
Total your score. A score below 70 indicates very low EI. EI can be improved. Says Daniel Goleman, author of Working With
Emotional Intelligence, “ Emotional intelligence can be learned, and in fact w e are each building it, in varying degrees,
throughout life. It’s sometimes called maturity. EQ is nothing more or less than a collection of tools that w e can sharpen to
help ensure our ow n survival.”

Source: A. Fisher, “ Success Secret: A High Emotional IQ,” Fortune, October 26, 1998, p. 298. Reprinted w ith permission of Time Warner Inc.
 Chapter 2 Percept ion, Personalit y, and Em ot ions 67

O B A T W O RK

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Think back to your perception of this course and your instructor on the first day of class. What factors might have
affected your perceptions of w hat the rest of the term w ould be like?

2. Describe a situationi in w hich your perception turned out to be w rong. What perceptual errors did you make that
might have caused this to happen?

3. Compare your scores on the Learning About Yourself Exercises at the end of the chapter. What conclusions could
you draw about your group based on these scores?

W O RK I N G W I TH O T H ER S EX ERC I SE

Evaluating Yo ur Stereo types

1 . Your instructor w ill choose 4 volunteers w illing to reveal an interesting true-life background fact about themselves.
Examples of such background facts are as follow s:

• I can perform various dances, such as polka, rumba, bossa nova, and salsa.

• I am the youngest of four children, and I attended a Catholic high school.

• Neither of my parents attended school beyond grade 8.

• M y mother is a homemaker and my father is an author.

2. The instructor w ill put the 4 facts on the board w ithout revealing to w hich person each belongs, and the 4 students
w ill remain in the front of the room for the first part of the group discussion below.

3. Students in the class should silently decide w hich fact belongs to w hich person.

4. Students should break into groups of about 5 or 6 and try to reach consensus about w hich fact belongs to w hich
person. M eanw hile, the 4 students can serve as observers to group discussions, listening in on rationales for how
students decide to link the facts w ith the individuals.

5. After 15 minutes of group discussion, several groups w ill be asked to present their consensus to the class, w ith jus-
tifications.

6 . The classroom discussion w ill focus on perceptions, assumptions, and stereotyping that led to the decisions made.

7. At the end of the discussion, the instructor w ill reveal w hich fact belongs to each student.
68 Part 1 Underst anding t he Workplace
O B A T W O RK
ETH I C A L D I LEM M A EX ERC I SE
Managing Emo tio ns at Wo rk
Our understanding of emotions at w ork has increased rap-
idly in the past decade. We are now at the point that w e
are capable (or close to it) of managing the emotions of
employees. For instance, companies that w ant to create
open and f riendly w orkplaces are using t he select ion
process to “ select out” job applicants w ho are not outgo-
ing and enthusiastic, and are providing training to teach
employees how to smile and appear cheerful. Some organ-
izations are going further in trying to create “ emotionally
humanistic” w ork environments not only by shaping the
emotions that employees evoke in their daily contacts w ith
customers but also by selecting employee applicants w ith
high emot ional int elligence; cont rolling t he emot ional
atmosphere of teams and w ork groups; and using similar
emotion-management practices.
Groucho M arx once joked that “ the secret of success in
show business is honesty and sincerity. Once you learn how
to fake that, you’ve got it made.” In many service organi-
zat ions t oday, Groucho’s remark is being applied. For
instance, telephone-sales staff in a number of insurance
companies are trained to evoke positive feelings from cus-
tomers—to make it easy for them to say “ yes.” Employees
are taught to avoid w ords w ith negative connotations and
CA S E I N C I D EN T
The Rise and Fall of Dennis Kozlowski
The Dennis Kozlow ski story could be titled “ The Good, the
Bad, and the Ugly.” The good: As CEO of Tyco International,
Kozlow ski oversaw the grow th of a corporate giant. At its
peak, Tyco w as gobbling up 200 companies a year. Under
his leadership, the value of Tyco increased 70-fold. In 2001,
Kozlow ski proclaimed his desire to be remembered as the
w orld’s greatest business executive.
The bad: Things turned sour w hen Kozlow ski and his
f ormer chief f inancial off icer w ere accused of running a
criminal enterprise w ithin Tyco. The tw o w ere charged w ith
stealing $170 million (US) directly from the company and
pocketing an additional $430 million through manipulated
sales of stock, and found guilty in June 2005.
replace them w ith upbeat and confidence-building w ords
such as “ cert ainly,” “ rest assured,” “ immediat e,” and
“ great.” M oreover, employees are taught to convey these
“ scripts” in a w ay that seems natural and spontaneous. To
ensure that these “ authentic” positive feelings are consis-
tently evoked, the phone calls of these salespeople are
often monitored.
Organizat ions such as M cDonald’s, Disney, and
Starbucks select and program employees to be upbeat and
friendly. They allow employees no choices. M oreover, these
organizations export their emotional expectations to w her-
ever they locate in the w orld. When the hamburgers or
lattes come to tow n, the typical grimace of the M oscovite
or shyness of the Finnish employee is subject to a similar
genre of smile-training.
Is asking people to feign specific job-related emotions
unet hical if it conf lict s w it h t heir basic personalit ies? Is
exporting standardized emotional “ rule books” to other
cultures unethical? What do you think?
Source: This dilemma is based on S. Fineman, “ M anaging Emotions at
Work: Some Political Reflections” (paper presented at a symposium at
the Academy of M anagement Conference, Washington, DC, August
2001).
The ugly: Kozlow ski’s actions almost destroyed the com-
pany w here he w orked for 27 years. In 2002 alone, the value
of the company’s stock dropped $90 billion!
To understand Kozlow ski’s behaviour, w e should look at
the events that shaped his personality. He spent his early
years in humble circumstances. He grew up in the 1950s
and 1960s in New ark, New Jersey. He said he w as the son of
a New ark cop turned police detective. Only after he w as
indicted did it come out that his father w as never a police
officer in New ark or anyw here else. How ever, his mother
did work for the Newark Police Department as a school cross-
ing guard. His father, in actuality, w as a w heeler-dealer w ho
w as a practised deceiver and an effective persuader. He had

a strong personality but, for the most part, kept his mis-
deeds to little w hite lies.
Friends remember Dennis as an easygoing kid who did well
in school without trying very hard. He was elected “ class politi-
cian” by his high school graduating class in 1964. He w ent to
Seton Hall, paying his way through college by playing guitar in
a band. He served in Vietnam, held a few accounting jobs,
and eventually joined Tyco in 1975.
Over t he course of t he 1980s, Kozlow ski’s happy-go-
lucky demeanor disappeared. As he climbed the ladder at
Tyco, he became a corporate tough guy, both respected and
feared. He eventually become CEO in 1992 and oversaw
the rapid expansion of the company.
M eanw hile, Kozlow ski learned to live big. He had a $17
million apartment in New York, a $30 million mansion in
Florida, and a $15 million yacht. He spent $20 million on art
f o r h is lu xu r y h o m es. He t o o k ext r avag an ce t o t h e
extreme—for instance, spending $6000 on a show er cur-
tain! The more he made, the more he spent—and the more
he allegedly st ole. Alt hough his t ot al compensat ion w as
$170 million in 1999, it w as not enough. He manipulated
the company’s employee relocation fund and Key Employee
Loan Program (t he lat t er creat ed t o help execut ives pay
taxes due on stock options) to take hundreds of millions
in int erest -f ree f unds. In 2001, f or inst ance, he gave his
w ife $1.5 million to start a restaurant, spent $2.1 million on
CBC V I D EO CA SE I N C I D EN T
NovaScotian Crystal
Do o p p o sit es at t ract ? M eet Den is Ryan an d Ro d
M cCulloch—partners in NovaScotian Crystal, a small com-
pany situated on the quaint w aterfront of Halifax.
NovaScotian Crystal makes fine crystal the traditional,
old-fashioned, expensive w ay, w ith trained craftspeople. It is
the only company in Canada that produces mouth-blow n,
hand-cut crystal.
Ryan st art ed t he com pany in t he lat e 1990s on an
impulse. He had already had successful careers in the enter-
tainment and the financial services sectors. W ith a vision,
intrigue, creativity, an impulsive nature, and a contagious
enthusiasm for making crystal the traditional w ay, Ryan set
up his glassw orks. He even convinced craftspeople to come
from Ireland to w ork for him.
After a few years of making crystal, but not many sales,
Ryan found himself facing a serious financial crisis and pos-
Chapter 2 Percept ion, Personalit y, and Em ot ions 69
O B A T W O RK
a birthday party in the Greek Islands for his w ife, and gave
aw ay $43 million in corporate funds to make philanthropic
contributions in his ow n name.
A f orm er Harvard prof essor suggest s Kozlow ski w as
undone by a rampant sense of entitlement: “ By entitlement
I mean an aspect of a narcissistic personality w ho comes to
believe that he and the institution are one” and thus “ that
he can take w hat he w ants w hen he w ants it.”
Questions
1 . How did Kozlow ski’s past shape his personality?
2. Does this case contradict the view that personality is
largely genetically derived? Explain.
3. What does this case say about corporate ethics?
4. In the movie Wall Street, M ichael Douglas’s character
says, “ Greed is good.” Is this true? How does this
apply to Kozlow ski?
5. “ Kozlow ski just did w hat anybody w ould do if they
had the chance. The people at fault in this story are
Tyco’s Board of Directors for not controlling their
CEO.” Do you agree or disagree? Discuss.
Source: Based on A. Bianco, W. Symonds, and N. Byrnes, “ The Rise
and Fall of Dennis Kozlow ski,” BusinessWeek, December 23, 2002,
pp. 64–77.
sible bankruptcy. He needed someone w ho could focus on
the financial side of the business. On another impulse, Ryan
hired Rod M cCulloch and a new partnership w as born. Ryan
t ook on t he role of chair, f igurehead, and liaison, w hile
M cCulloch became president.
M cCulloch—a details, numbers, cost-conscious, organ-
ized kind of guy— looked f or w ays t o t urn t he company
around. Using his years of experience as an accountant, he
thought about how to manage the company better, make
it more efficient, and iron out production. He then began
searching for more w ays to cut costs and increase sales.
With each taking on different roles, Ryan and M cCulloch
w orked w ell together. While M cCulloch presented tough
cost-cutting measures, Ryan brought impulsive ideas about
new markets and, often, much-needed personal and emo-
tional support. Even in the face of continuous failures and
continued
70 Part 1 Underst anding t he Workplace
O B A T W O RK
disappointments, the team never gave up. Out on the w ater-
front, over a mug of tea, Ryan could often be found giving
M cCulloch encouragement, a moment of peace, inspiration,
and yet more creative, impulsive ideas for meeting their chal-
lenges. Take, for instance, how Ryan encouraged M cCulloch
to call investors for more money, or the suggestion to mar-
ket their product to a high-end retail store in Toronto.
At long last, after a spring trade show, creative selling
strategies, an expanded product line, and a Christmas craft
show, NovaScotian Crystal finally turned a profit in the fall of
2001. Ryan and M cCulloch celebrated their success over
something stronger than tea. And w ouldn’t you know it:
They didn’t drink the same brand of beer.
Today, after years of operating near bankruptcy, NovaScotian
Crystal has expanded its product lines, launched a series of
online catalogues, and markets its products w orldw ide.
Fr o m Co n ce p t s
t o Sk i l l s
Reading Emo tio ns
Understanding another person’s felt emotions is very diffi-
cult . But w e can learn t o read ot hers’ displayed
emotions.106 We do this by focusing on verbal, nonverbal,
and paralanguage cues.
The easiest w ay to find out w hat someone is feeling is to
ask. Saying something as simple as “ Are you OK? What’s
the problem?” can often provide you w ith the information to
assess an individual’s emotional state. But relying on a verbal
response has tw o draw backs. First, almost all of us conceal
our emotions to some extent for privacy and to reflect social
expectations. So w e might be unw illing to share our true
feelings. Second, even if w e w ant to verbally convey our feel-
ings, w e may be unable to do so. As w e noted earlier, some
people have difficulty understanding their ow n emotions
and, hence, are unable to express them verbally. So, at best,
verbal responses provide only partial information.
You are talking w ith a co-w orker. Does the fact that his
back is rigid, his teeth are clenched, and his facial muscles
tight tell you something about his emotional state? It proba-
bly should. Facial expressions, gestures, body movements,
and physical distance are nonverbal cues that can provide
additional insights into w hat a person is feeling. The facial
expressions show n in Exhibit 2-8, for instance, are a w indow
Questions
1 . How w ould you describe the personalities of Denis
Ryan and Rod M cCulloch? Describe the extent to
w hich personality plays a role in how Ryan and
M cCulloch run NovaScotian Crystal.
2. Evaluate the emotional side of running the business.
How do Ryan and M cCulloch each deal w ith the
stress of running the business?
3. Explain the perceptions of each of these men. What
role do these perceptions play in how each runs the
company?
Sources: “ NovaScotian Crystal,” CBC Venture, April, 2002, 822; and
NovaScotian Crystal, “ About Us,” http://w w w.novascotiancrystal.com
(accessed October 25, 2005).
into a person’s feelings. Notice the difference in facial fea-
tures: the height of the cheeks, the raising or low ering of
the brow, the turn of the mouth, the positioning of the lips,
and the configuration of muscles around the eyes. Even
something as subtle as the distance someone chooses to
put betw een him- or herself and you can convey how much
intimacy, aggressiveness, repugnance, or w ithdraw al that
person feels.
When you speak w ith someone, you may notice a sharp
change in the tone of her voice and the speed at w hich she
speaks. You are tapping into the third source of information
on a person’s emotions—paralanguage. This is communi-
cat ion t hat goes beyond t he specif ic spoken w ords. It
includes pitch, amplitude, rate, and voice quality of speech.
Paralanguage reminds us that people convey their feelings
not only in w hat they say, but also in how they say it.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
1. What’s M y Basic Personality?
23. What’s M y Emotional Intelligence Score?
 Chapter 2 Percept ion, Personalit y, and Em ot ions 71

O B A T W O RK

EXHIBIT 2-8 Facial Expressions and Emotions

Each picture portrays a different emotion. Try to identify them before looking at the answ ers.

Top, left to right: neutral, surprise, happiness. Bottom: fear, sadness, anger.

Source: S. E. Taylor, L. A. Peplan, and D. O. Sears, Social Psychology, 9th ed. (Upper Saddle River, NJ: Prentice
Hall, 1997), p. 98; photographs by Paul Eikman, Ph.D. Used w ith permission.

Practising Skills
Part A. Form groups of tw o. Each person is to spend a
couple of minutes thinking of a time in the past w hen she
or he w as emotional about something. Examples might
include being upset w ith a parent, sibling, or friend; being
excit ed or disappoint ed about an academic or at hlet ic
achievement; being angry w ith someone over an insult or
slight; being disgusted by something someone has said or
done; or being happy because of something good that
happened. Do not share this event w ith the other person in
your group.
Part B. Now you w ill conduct tw o role plays. Each w ill
be an interview. In the first, one person w ill play the inter-
view er and the other w ill play the job applicant. The job is
for a summer management internship w ith a large retail
chain. Each role play w ill last no longer than 10 minutes.
The interview er is to conduct a normal job interview, except
you are to continually rethink the emotional episode you
envisioned in Part A. Try hard to convey this emotion w hile,
at the same time, being professional in interview ing the job
applicant.
Part C. Now reverse positions for the second role play.
The interview er becomes the job applicant and vice versa.
The new interview er w ill conduct a normal job interview,
except that he or she w ill continually rethink the emotional
episode chosen in Part A.
Part D. Spend 10 minutes analyzing the interview, w ith
specific attention focused on these questions: What emo-
tion(s) do you think the other person w as conveying? What
cues did you pick up? How accurate w ere you in reading
those cues?
Reinforcing Skills
1 . Rent a DVD of an emotionally laden film such as
Death of a Salesman or 12 Angry M en. Carefully
w atch the actors for clues to the emotions they are
exhibiting. Try to determine the various emotions
projected and explain how you arrived at your
conclusion.
2. Spend a day specifically looking for emotional cues
in the people w ith w hom you interact. Did this
improve communication?
CH A PTER 3

Values, At t it udes,
and Their Effect s
in the Workplace
At Procter & Gamble Canada, diversity is
valued and respected. How does this affect
the company’s w orkplace?

1 What are values?

How can w e understand values across

2 cultures?

3 Are there unique Canadian values?

4 What are attitudes and w hy are they important?

 imot hy Penner is president of

T Toronto-based Procter & Gamble

(P&G) Canada. He leads a com-
pany t hat values diversit y in it s w ork-
place. Consider P&G’s st at ement on
employee diversity:

Developing and managing a

strong, diverse organization is
essential to achieving our business
purpose. We value the different
perspectives that the diversity of
Procter & Gamble people bring to
the business. At Procter & Gamble,
w e operate on the fundamental
belief that these diverse view points are
P&G’s case, they back up their value statements w ith con-
needed for organization creativity w hich pro-
crete policies and actions to show support for their values.
duces genuine competitive advantage.1
Does having strong values make for a better w orkplace?
Generally, w e expect that an organization’s values, In this chapter, w e look more carefully at how val-
like those of an individual, w ill be reflected in correspon- ues influence behaviour, and consider the relationship
ding behaviour and attitudes. If a company stated that it betw een values and attitudes. We then consider tw o
valued w orkforce diversity and yet no behaviour follow ed specific issues that arise from our discussion of values
from that statement, w e w ould question w hether that and at t it udes: job sat isf act ion and organizat ional
value w as really so important to the company. How ever, in commitment.

VALUES
Is capital punishment right o r wro ng? Ho w abo ut emplo yment equity guidelines in 1 What are values?
hiring? If a perso n likes po wer, is that go o d o r bad? The answers to these questio ns are
value-laden. So me might argue, fo r example, that capital punishment is right because it Procter & Gamble Canada
www.pg.com/en_CA
is a suitable punishment fo r crimes such as murder. Ho wever, o thers might argue just as
stro ngly that no go vernment has the right to take anyo ne’s life.
Values are co ncepts o r beliefs that guide ho w we make decisio ns abo ut and evalua- values Concepts or beliefs that
tio ns o f behavio urs and events.2 An individual’s values can be ranked acco rding to guide how we make decisions about
impo rtance. Values tend to be relatively stable and enduring.3 Mo st o f o ur values are and evaluations of behaviours and
events.
fo rmed in o ur early years— with input fro m parents, teachers, friends, and o thers. As
children, we are to ld that certain behavio urs o r o utco mes are always desirable o r always
undesirable. There are few grey areas. It is this abso lute o r “black-o r-white” learning o f
values that mo re o r less ensures their stability and endurance.
We examine two framewo rks fo r understanding values: Milto n Ro keach’s terminal and
instrumental values and Kent Ho dgso n’s general mo ral principles.

O B IS FO R EV ERY O N E
How do countries differ in What can you learn about What would you need to Are Gen- Xers really
their values? OB from Aboriginal know to set up a business in different from their elders?
culture? Asia?

73
74 Part 1 Underst anding t he Workplace

EXHIBIT 3-1 Terminal and Instrumental Values in Rokeach Value Survey

Terminal Values Instrumental Values
A comfortable life (a prosperous life) Ambitious (hard-w orking, aspiring)
An exciting life (a stimulating, active life) Broad-minded (open-minded)
A sense of accomplishment (lasting contribution) Capable (competent, effective)
A w orld at peace (free of w ar and conflict) Cheerful (lighthearted, joyful)
A w orld of beauty (beauty of nature and the arts) Clean (neat, tidy)
Equality (brotherhood, equal opportunity for all) Courageous (standing up for your beliefs)
Family security (taking care of loved ones) Forgiving (w illing to pardon others)
Freedom (independence, free choice) Helpful (w orking for the w elfare of others)
Happiness (contentedness) Honest (sincere, truthful)
Inner harmony (freedom from inner conflict) Imaginative (daring, creative)
M ature love (sexual and spiritual intimacy) Independent (self-reliant, self-sufficient)
National security (protection from attack) Intellectual (intelligent, reflective)
Pleasure (an enjoyable, leisurely life) Logical (consistent, rational)
Salvation (saved, eternal life) Loving (affectionate, tender)
Self-respect (self-esteem) Obedient (dutiful, respectful)
Social recognition (respect, admiration) Polite (courteous, w ell-mannered)
True friendship (close companionship) Responsible (dependable, reliable)
W isdom (a mature understanding of life) Self-controlled (restrained, self-disciplined)

Source: M . Rokeach, The Nature of Human Values (New York: Free Press, 1973), p. 56.

Rokeach Value Survey

terminal values Goals that indi-
viduals would like to achieve during
their lifetimes.
instrumental values Preferable
ways of behaving.
Milto n Ro keach classified the values that peo ple ho ld into two sets, with each set co n-
taining 18 individual value items.4 O ne set, called terminal values , refers to desirable
end-states o f existence. These are the go als that individuals wo uld like to achieve during
their lifetime, such as a co mfo rtable life, o r happiness. The o ther set, called instrumental
values , refers to preferable ways o f behaving, such as being co urageo us o r helpful.
Exhibit 3-1 gives co mmo n examples fo r each o f these sets.
Several studies co nfirm that these sets o f values vary amo ng gro ups.5 Peo ple in the
sam e o ccupatio ns o r catego ries ( e.g., co rpo rate m anagers, unio n m em bers, parents,
students) tend to ho ld similar values. Fo r instance, o ne study co mpared co rpo rate exec-
utives, m em bers o f the steelwo rkers’ unio n, and m em bers o f a co m m unity activist
gro up. Altho ugh a go o d deal o f o verlap was fo und amo ng the three gro ups,6 there were
also so me very significant differences (see Exhibit 3-2). The activists had value preferences

EXHIBIT 3-2 M ean Value Ranking of Executives, Union M embers, and Activists (Top Five Only)

EXECUTIVES UNION M EM BERS ACTIVISTS

Terminal Instrumental Terminal Instrumental Terminal Instrumental

1. Self-respect 1. Honest 1. Family security 1. Responsible 1. Equality 1. Honest

2. Family security 2. Responsible 2. Freedom 2. Honest 2. A w orld of peace 2. Helpful
3. Freedom 3. Capable 3. Happiness 3. Courageous 3. Family security 3. Courageous
4. A sense of 4. Ambitious 4. Self-respect 4. Independent 4. Self-respect 4. Responsible
accomplishment
5. Happiness 5. Independent 5. M ature love 5. Capable 5. Freedom 5. Capable
Source: Based on W. C. Frederick and J. Weber, “ The Values of Corporate M anagers and Their Critics: An Empirical Description and Normative
Implications,” in Business Ethics: Research Issues and Imperative Studies, ed. W. C. Frederick and L. E. Preston (Greenw ich, CT: JAI Press, 1990),
pp. 123–144.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 75

that were quite different fro m tho se o f the o ther two gro ups.
They ranked “equality” as their mo st impo rtant terminal value;
executives and unio n members ranked this value 12 and 13,
respectively. Activists ranked “ helpful” as their seco nd-highest
instrumental value. The o ther two gro ups bo th ranked it 14.
These differences are im po rtant, because executives, unio n
members, and activists all have a vested interest in what co r-
po ratio ns do . These differences make it difficult when these
gro ups have to nego tiate with each o ther and can create serio us
co nflicts when they co ntend with each o ther o ver the o rgani-
zatio n’s eco no mic and so cial po licies.7
Ethical Value s
Ethics is the study o f mo ral values o r principles that guide o ur
behavio ur and info rm us whether actio ns are right o r wro ng.
Thus ethical values are related to mo ral judgments abo ut right
and wro ng.
In recent years, there has b een co ncern that individuals
are no t gro unded in mo ral values. It is believed that this lack
o f m o ral ro o ts has resulted in a num b er o f b usiness scan-
d als, su c h as th o se at Wo rld C o m , En ro n , H o llin ger
O B I N A CTI ON
The M agnificent Seven Principles
➔ Dignity of human life. The lives of people are to
be respected.
➔ Autonomy. All persons are intrinsically valuable
and have the right to self-determination.
➔ Honesty. The truth should be told to those who
have a right to know it.
➔ Loyalty. Promises, contracts, and commitments
should be honoured.
➔ Fairness. People should be treated justly.
➔ Humaneness. Our actions ought to accomplish
good, and we should avoid doing evil.
➔ The common good. Actions should accomplish the
greatest good for the greatest number of
people.
Source: K. Hodgson, “ Adapting Ethical Decisions to a
Global M arketplace,” M anagement Review 81, no. 5 (M ay
1992), pp. 53–57. Reprinted by permission.

Internatio nal, and in the spo nso rship scandal o f the Canadian
go vernm ent.
Management co nsultant Kent Ho dgso n has identified seven general mo ral princi- ethics The study of moral values or
ples that individuals sho uld fo llo w when making decisio ns abo ut behavio ur. He calls principles that guide our behaviour
these “the Magnificent Seven” and suggests that they are universal values that managers and inform us whether actions are
8 right or wrong.
sho uld use to make principled, appropriate, and defensible decisio ns. They are presented
in O B in Action— The Magnificent Seven Principles. We discuss the issue o f ethics further
in Chapter 9.

ASSESSING CULTURAL VALUES

Procter & Gamble (P&G) Canada’s decision to value diversity in its w orkplace reflects a dominant
value of Canada as a multicultural country. This value is very different from the United States,
w hich considers itself a melting pot w ith respect to different cultures. P&G Canada has other
values that guide employees. These include integrity, trust, ow nership, leadership, and pas-
sion for w inning. What do w e know about the values of other countries? What values make
Canada unique?

In Chapter 1, we no ted that managers have to beco me capable o f wo rking with peo ple 2 How can we
fro m different cultures. Thus it is im po rtant to understand ho w values differ acro ss understand values
cultures. across cultures?
O ne o f the mo st widely referenced appro aches fo r analyzing variatio ns amo ng cul-
tures has co me fro m Geert Ho fstede.9 He surveyed mo re than 116 000 IBM emplo yees IBM Canada
in 40 co untries abo ut their wo rk-related values. He fo und that managers and emplo y- www.ibm.com/ca/
ees vary o n five value dimensio ns o f natio nal culture.
Ho fstede’s o riginal findings are based o n research that is nearly three decades o ld.
Ho wever, his wo rk was updated and reaffirm ed when a Canadian researcher at the
Chinese University o f Ho ng Ko ng, Michael Bo nd, co nducted research o n values in 22
co untries o n 5 co ntinents.10
76 Part 1 Underst anding t he Workplace

EXHIBIT 3-3 GLOBE Highlights

Countries
Countries Rating Countries
Dimension Rating Low M od erate Rating High

Assertiveness Sw eden Egypt Spain

New Zealand Ireland United States
Sw itzerland Philippines Greece
Future orientation Russia Slovenia Denmark
Argentina Egypt Canada
Poland Ireland The Netherlands
Gender differentiation Sw eden Italy South Korea
Denmark Brazil Egypt
Slovenia Argentina M orocco
Uncertainty avoidance Russia Israel Austria
Hungary United States Denmark
Bolivia M exico Germany
Pow er distance Denmark England Russia
The Netherlands France Spain
South Africa Brazil Thailand
Individualism/collectivism * Denmark Hong Kong Greece
Singapore United States Hungary
Japan Egypt Germany
In-group collectivism Denmark Japan Egypt
Sw eden Israel China
New Zealand Qatar M orocco
Performance orientation Russia Sw eden United States
Argentina Israel Taiw an
Greece Spain New Zealand
Humane orientation Germany Hong Kong Indonesia
Spain Sw eden Egypt
France Taiw an M alaysia

* A low score on individualism is synonymous w ith collectivism.

Source: M . Javidan and R. J. House, “ Cultural Acumen for the Global M anager: Lessons from Project
GLOBE,” Organizational Dynamics, Spring 2001, pp. 289–305. Reprinted w ith permission from Elsevier.

Mo re recently, the Glo bal Leadership and O rganizatio nal

Behavio r Effectiveness ( GLO BE) research pro ject identi-
fied nine dim ensio ns o n which natio nal cultures differ.11
* How do countries
differ in their values? This study is an o ngo ing cro ss-cultural investigatio n o f
leadership and natio nal culture that has used data fro m
825 o rganizatio ns in 62 co untries. The GLO BE study co n-
firm s that Ho fstede’s five dim ensio ns are still valid ( his
fo ur o riginal o nes, plus the lo ng-term o rientatio n added thro ugh the merger o f Bo nd’s
research with Ho fstede’s) .12 However, the GLO BE study has added fo ur dimensio ns and
pro vides us with an updated m easure o f where co untries rate o n each dim ensio n.
Exhibit 3-3 presents ratings by co untry o n each o f the dim ensio ns.
The GLO BE dimensio ns are defined as fo llo ws:

• Assertiveness. The extent to which a so ciety enco urages peo ple to be to ugh,
co nfro ntatio nal, assertive, and co mpetitive vs. mo dest and tender.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 77

• Future orientation. The extent to which a so ciety enco urages and rewards
future-o riented behavio urs such as planning, investing in the future, and
delaying gratificatio n. This is essentially equivalent to Ho fstede’s lo ng-
term/ sho rt-term o rientatio n.

• Gender differentiation. The extent to which a so ciety maximizes gender ro le dif-

ferences. This is essentially equivalent to Ho fstede’s masculinity/ femininity
dimensio n.

• Uncertainty avoidance. As identified by Ho fstede, the GLO BE team defined this

term as a so ciety’s reliance o n so cial no rms and pro cedures to alleviate the
unpredictability o f future events.

• Power distance. As did Ho fstede, the GLO BE team defined this as the extent to
which members o f a so ciety expect po wer to be shared unequall .

• Individualism/collectivism. Again, this term was defined, as was Ho fstede’s, as

the extent to which individuals are enco uraged by so cietal institutio ns to be
integrated into gro ups within o rganizatio ns and so ciety.

• In-group collectivism. In co ntrast to fo cusing o n so cietal institutio ns, this

dimensio n enco mpasses the extent to which members o f a so ciety take pride
in membership in small gro ups, such as their families and circles o f clo se
friends, and the o rganizatio ns in which they are emplo yed.

• Performance orientation. The extent to which a so ciety enco urages and rewards
gro up members fo r perfo rmance impro vement and excellence.

• Humane orientation. The extent to which a so ciety enco urages and rewards
individuals fo r being fair, altruistic, genero us, caring, and kind to o thers. This
clo sely appro ximates Ho fstede’s quality-o f-life dimensio n.

An awareness o f the GLO BE study findings rem inds us that ( 1) no t all o rganiza-
tio nal behavio ur theo ries and co ncepts are universally applicable to managing peo ple
aro und the wo rld, especially in co untries where wo rk values are co nsiderably different
fro m tho se in Canada; and ( 2) yo u sho uld co nsider cultural values when trying to
understand the behavio ur o f peo ple in different co untries. To help yo u with this seco nd
po int, we will sto p regularly to co nsider the generalizability o f theo ries and co ncepts pre-
sented in this bo o k to different cultures.
In this chapter’s Working W ith O thers Exercise o n page 95, yo u have the o ppo rtunity
to co mpare the cultural values o f two co untries and determine ho w differences might
affect gro up behavio ur. The Ethical D ilemma Exercise, also o n page 95 asks yo u to co n-
sider when so mething is a gift and when it is a bribe. Different cultures take different
appro aches to this questio n.

VALUES IN THE CANAD IAN WORKPLACE

Studies have sho wn that when individual values align with o rganizatio nal values, the 3 Are there unique
results are po sitive. Individuals who have an accurate understanding o f the jo b require- Canadian values?
ments and the o rganizatio n’s values adjust better to their jo bs, and have greater levels o f
satisfactio n and o rganizatio nal co mmitment.13 In additio n, shared values between the
emplo yee and the o rganizatio n lead to mo re po sitive wo rk attitudes,14 lo wer turno ver,15
and greater pro ductivity.16
Individual and o rganizatio nal values do no t always align. Mo reo ver, within o rgani-
zatio ns, individuals can have very different values. Two majo r facto rs lead to a po tential
clash o f values in the wo rkplace: cultural differences and generatio nal differences. Let’s
lo o k at the implicatio ns o f bo th facto rs in the Canadian wo rkplace.
78 Part 1 Underst anding t he Workplace

Cultural Differen ce s
Canada is a multicultural co untry. “ O ne in six Canadians in their 20s are immigrants,
and o ne in five are the children o f at least o ne immigrant parent.” 17 In 2001, 44 percent
o f Metro po litan To ro nto ’s po pulatio n, 38 percent o f Vanco uver’s, and 18.6 percent o f
Mo ntreal’s were made up o f immigrants.18 The 2001 census fo und that 17 percent o f
Canada’s po pulatio n o ver age five spo ke neither o f the co untry’s two o fficial languages
as their first language. In Vanco uver and To ro nto , this rate was 38 percent and 41 per-
cent, respectively, so co nsiderably mo re than o ne-third o f the po pulatio n o f tho se two
cities do es no t speak either English o r French as a first language.19 O f tho se who speak
o ther languages, 16 percent speak Chinese ( mainly Mandarin o r Canto nese) . The o ther
do minant languages in Canada are Italian in fo urth place, fo llowed by German, Punjabi,
and Spanish.20 These figures indicate the very different cultures that are part o f the
Canadian fabric o f life.
Tho ugh we live in a multicultural so ciety, there are so me tensio ns amo ng peo ple
fro m different races and ethnic gro ups. Fo r instance, a 2002 Statistics Canada survey
o n ethnic diversity fo und that while mo st Canadians ( 93 percent) say they have never
o r rarely experienced unfair treatment because o f their ethnicity o r culture 20 percent o f
visible mino rities repo rted having been unfairly treated so metimes o r o ften.21
Canadians o ften define themselves as “ no t Americans” and po int o ut differences in
the values o f the two co untries. A recent study, the Pew Glo bal Attitudes Pro ject, iden-
tified a number o f differences between Canadian and American values.22 Exhibit 3-4 o n
page 79 sho ws so me o f the highlights o f that study.
In his recent bo o k Fire and Ice, po llster Michael Adams finds that there is a growing dis-
similarity between Canadian and American values. The two gro ups differ in 41 o f the 56
values that Adams examined. Fo r 24 values the gap has actually widened between 1992
and 2000, indicating that Canadians’ so cial values are gro wing mo re distinct fro m tho se
o f Americans.23 Adams suggests that the September 11, 2001, attacks have affected the
perso nality o f Americans. He finds Americans are mo re accepting o f patriarchy and hier-
archy these days, and he co ncludes
W omen w earing t he hajib, t he that it is “the suppo sedly bo ld, indi-
traditional head cover of M uslim vidualistic Am ericans who are the
w omen, f ace discriminat ion in no dding co nfo rmists, and the sup-
getting a job in Canada. A recent
po sedly shy, deferential and law-abid-
st udy f ound t hat visibly M uslim
w omen w ere eit her t old t here ing Canadians who are mo st likely to
w ere no jobs available or not assert their perso nal auto no my and
given a chance to apply for a job political agency.” 24 This chapter’s CBC
almost 40 percent of t he t ime Video Case Incident gives yo u addi-
t hat t hey asked an employer
tio nal insights into the differences
w hether a job w as available.
between Canadians and Americans.
In what fo llo ws, we id entify a
number o f cultural values that influ-
GM Woes ence wo rkplace behavio ur in Canada.
Be aware that these are generaliza-
tio ns, and it wo uld be a mistake to
assume that everyo ne co ming fro m
the sam e cultural backgro und acts
similarly. Rather, these overviews are
m eant to enco urage yo u to think
abo ut cultural differences and simi-
larities so that yo u can better under-
stand peo ple’s behavio ur.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 79

EXHIBIT 3-4 Canadian and American Value Differences

Percentage Who Completely
Agree With Statement

Statement Canad ians Americans

The impact of globalization on their country can be described as very good. 36 21

People are better off in a free market, despite inequality. 19 28

It is more important that government ensure that nobody is in need than that
government stay out of the w ay. 52 34

It is the responsibility of government to tend to the very poor w ho cannot take care
of themselves. 43 29

Immigrants have a very good influence on how w ell things are going. 19 8

Religion should be a matter of private faith, kept separate from government policy. 71 55

Homosexuality is a w ay of life that should be accepted by society. 69 51

Source: The Pew Research Center for the People and the Press, View s of a Changing World 2003 (Washington, DC: The Pew Research Center for
the People and the Press, June 2003).

Franco pho ne and Anglo pho ne Values

O ne o f the larger cultural issues that co nfro nts Canada is the questio n o f Q uebec sep-
aratism and anglo pho ne-franco pho ne differences. Thus, it may be o f interest to managers
and emplo yees in Canadian firms to be aware o f so me o f the po tential cultural differ-
ences when managing in franco pho ne enviro nments co mpared with anglo pho ne envi-
ro nm ents. A num b er o f studies have sho wn that English-speaking Canadians and
French-speaking Canadians have distinctive values. Franco pho nes have been fo und to
be m o re co llectivist, o r gro up-o riented, with a greater need fo r achievem ent, while
anglo pho nes have been fo und to be mo re individualist, o r I-centred.25 Franco pho nes
have also been sho wn to be m o re co ncerned abo ut the interperso nal aspects o f the
wo rkplace than task co mpetence.26 They have also been fo und to be mo re co mmitted
to their wo rk o rganizatio ns.27 Anglo pho nes have been sho wn to take mo re risks.28 By
co ntrast, a recent study examining wo rk values in French- and English-speaking Canada
fo und that French-speaking Canadians were no t risk-takers and had the highest values
fo r “ reducing o r avo iding ambiguity and uncertainty at wo rk.” 29
O ther studies have fo und that anglo pho ne managers tended to value auto no my and
intrinsic jo b values, such as achievement, and thus were mo re achievement-o riented,
while franco pho ne managers tended to value affiliatio n and extrinsic jo b values, such
as technical supervisio n.30
A study co nducted at the University o f O ttawa and Laval University suggests that
so m e o f the differences repo rted in previo us research m ay be decreasing.31 Ano ther
study indicates that French Canadians have beco me mo re like English Canadians in
valuing auto no my and self-fulfillment.32 Ho wever, there is evidence o f so me co ntinu-
ing differences in lifestyle values. A recent Canadian Institute fo r Health Info rmatio n
repo rt no ted that Q uebecers experience mo re stress than o ther Canadians.33 The study
also fo und that Q uebecers smo ke mo re, have the highest wo rkplace absenteeism rate,
and are less physically active than the rest o f the co untry. Ano ther study fo und that
80 Part 1 Underst anding t he Workplace
Asked to define the fundamentals
that give National Bank Financial
its edge, senior vice-president and
company direct or John Wells
believes M ontreal-based National
Bank Financial’s edge comes from
company management t hat is
largely f rancophone. He argues
that French-speaking Canadians
treat their employees w ell and w ill
try to find any means of reducing
expenses rather than lay off staff,
in sharp contrast to the cost-cut-
t ing mechanisms of eit her
English-speaking Canadian or
American firms.
First Nations Bank of Canada
www.firstnationsbank.com/index.jsp
French-speaking Canadians and English-
speaking Canadians have different values
regarding cultural activities. Fo r example,
franco pho nes are mo re likely to attend
sympho nic, classical, o r cho ral music per-
formances than anglophones. Anglophones
are more likely to read newspapers, maga-
zines, and books than francophones.34
Even tho ugh they have so me cultural
and lifestyle value d ifferences, fran-
co p ho ne and anglo p ho ne m anagers
to day have been expo sed to similar types
o f o rganizatio nal theo ries during their
po st-seco ndary scho o l training, which
m ight also influence their o utlo o ks as
managers. Thus we wo uld no t expect to
find large differences in the way that
firms in franco pho ne Canada are man-
aged, co mpared with tho se in the rest o f
Canada. Thro ugho ut the textbo o k, yo u will see a number o f examples o f Q uebec-based
businesses that suppo rt this co nclusio n.
Abo riginal Values
Entrepreneurial activity amo ng Canada’s Abo riginal peo -
ples has been gro wing, as has the number o f partnerships
* What can you
learn about OB from
and alliances between Abo riginal and no nAbo riginal busi-
nesses. There are no w mo re than 27 000 Abo riginal-o wned
Aboriginal culture? businesses in Canada. Fo urteen percent o f Abo riginal busi-
ness o wners live o n reserves, while 86 percent live o ff
reserves. Between 1 9 9 6 an d 20 01 , th e gro wth rate o f
Abo riginal businesses was huge: They increased by nearly 31
percent, a rate nine times higher than Canadian businesses o verall.35
With this stro ng increase in bo th the number o f Abo riginal businesses and the num-
ber o f partnerships and alliances between Abo riginal and no nAbo riginal businesses, it
is impo rtant to examine whether and how each culture manages differently.36 “Abo riginal
values are usually perceived ( by no n-Abo riginals) as an impediment to eco no mic devel-
o pment and o rganizatio nal effectiveness.” 37 Such values include reluctance to co m-
pete, a time o rientatio n different fro m the Western o ne, and an emphasis o n co nsensus
decisio n making.38 Abo riginal peo ples do no t necessarily agree that these values are
business impediments, ho wever. Saskato o n-based First Natio ns Bank o f Canada, fo r
example, po sted its fifth straight year o f pro fitability in 2005.
Altho ugh Canadian businesses and go vernment have histo rically assumed that “no n-
Native peo ple must teach Native peo ple ho w to run their o wn o rganizatio ns,” the First
Natio ns o f Canada are no t co nvinced.39 They believe that traditio nal culture, values,
and languages can help build a self-sustaining eco no my. Mo reo ver, they believe that
their cultural values may actually be a po sitive fo rce in co nducting business.40
In recent years, Canadian businesses facing Native land claims have met so me diffi-
culties in trying to acco mmo date demands fo r appro priate land uses. In so me cases,
accommodation can m ean less lo gging o r m ining by businesses until land claim s are
wo rked o ut. In o rder to achieve better co mmunicatio n between businesses and native
leaders, Cliff Hickey and David Natcher, two anthro po lo gists fro m the University o f
Alberta, co llabo rated with the Little Red River Cree Natio n in no rthern Alberta to develo p
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 81

a new mo del fo r fo restry o peratio ns o n First Natio ns land.41

Th e an th ro p o lo gists so ugh t to b alan ce th e N ative O B I N A CTI ON
co mmunity’s traditio nal lifestyle with the eco no mic co ncerns
o f fo restry o p eratio n s. O B in Action— G round Rules for
Ground Rules for Developing
D eveloping Business Partnerships W ith Aboriginal Peoples o ut- Business Partnerships With
lines several o f Hickey and Natcher’s reco mmended gro und Aboriginal Peoples
rules, which they say co uld be used in o il and gas develo p- ➔ Modify management operations to reduce negative
ments as well. Jo hnso n Sewepegaham, chief o f the Little Red impact on w ildlife species.
River Cree, said his co mmunity will use these reco mmenda- ➔ Modify operations to ensure community access to
tio ns to reso lve difficulties o n treaty lands fo r which Verno n, lands and resources.
BC-based To lko Industries and High Level, Alberta-based ➔ Protect all those areas identified by community
Fo o tner Fo rest Pro ducts jo intly ho ld fo rest tenure. members as having biological, cultural, and historical
Lindsay Redpath o f Athabasca University has no ted that significance.
Abo riginal cultures are mo re co llectivist in o rientatio n than ➔ Recognize and protect Aboriginal and treaty
are no nAb o riginal cultures in Canad a and the United rights to hunting, fishing, trapping, and gathering
States.42 Abo riginal o rganizatio ns are m uch m o re likely to activities.
reflect and advance the go als o f the co m m unity. There is ➔ Increase forest-based economic opportunities
also a greater sense o f fam ily within the wo rkplace, with for community members.
greater affiliatio n and lo yalty. Po wer distance in Abo riginal ➔ Increase the involvement of community mem-
cultures is smaller than in no nAbo riginal cultures o f Canada bers in decision making.
and the United States, and there is an em phasis o n co n-
Source: D. C. Natcher and C. G. Hickey, “ Putting the Community
sensual decisio n m aking. Abo riginal cultures are lo wer o n Back into Community-Based Resource M anagement: A Criteria and
uncertainty avo id ance than no nAb o riginal cultures in Indicators Approach to Sustainability,” Human Organization 61, no.
4 (2002), pp. 350–363.
Canada and the United States. Abo riginal o rganizatio ns and
cultures tend to have fewer rules and regulatio ns. Each o f
these differences suggests that businesses created by Abo riginal peo ples will differ Little Red River Cree Nation
http://lrrcn.ab.ca/
fro m no nAbo riginal businesses, and bo th research and anecdo tal evidence suppo rt this
view.43 Fo r instance, Richard Pro ko panko , directo r o f co rpo rate affairs fo r Mo ntreal- Alcan
www.alcan.ca
based Alcan, says that a m o ve fro m handling issues in a generally legalistic, co ntract-
o riented manner to valuing mo re dialo gue and co llabo ratio n has helped ease so me o f
the tensio n that had built up o ver 48 years between Alcan and First Natio ns peo ple.44

Asian Values
The largest visible mino rity gro up in Canada are the Chinese. O ver 1 millio n peo ple o f
this gro up live in Canada and represent 26 percent o f the co untry’s visible mino rity
po pulatio n.45 The Chinese in this co untry are a diverse gro up; they co me fro m different
co untries (e.g., China, Ho ng Ko ng, Malaysia), speak different languages, and practise dif-
ferent religio ns. The Chinese are o nly o ne part o f the entire influence o f East and
So utheast Asian values that Canadian so ciety affect. It is predicted that by 2017, almo st
o ne-half o f all visible mino rities in Canada will co me fro m two gro ups, So uth Asian
and Chinese, and that these gro ups will be represented in almo st equal numbers.46 As
well, many Canadian o rganizatio ns, particularly tho se in British Co lumbia, co nduct
significant business with Asian firms. Asian cultures differ fro m Canadian culture o n
many o f the GLO BE dimensio ns discussed earlier. Fo r instance, Asian cultures tend to
exhibit greater po wer distance and greater co llectivism. These differences in values can
affect individual interactio ns.
Pro fesso r Ro salie Tung o f Simo n Fraser University and her student Irene Yeung exam- Simon Fraser University
ined the impo rtance o f guanxi ( perso nal co nnectio ns with the appro priate autho rities www.sfu.ca
o r individuals) fo r a sample o f No rth American, Euro pean, and Ho ng Ko ng firms do ing
business with co mpanies in mainland China.47 They suggest that their findings will
also be relevant in understanding ho w to develo p relatio nships with firms fro m Japan,
So uth Ko rea, and Ho ng Ko ng.
82 Part 1 Underst anding t he Workplace

“ Guanxi refers to the estab lishm ent o f a co nnectio n

between two independent individuals to enable a bilateral
* What would you
need to know to flo w o f perso nal o r so cial transactio ns. Bo th parties must
set up a business derive benefits fro m the transactio n to ensure the co ntinua-
in Asia? tio n o f such a relatio nship.” 48 Guanxi relatio ns are based o n
recipro catio n, unlike Western netwo rked relatio nships, which
may be characterized mo re by self-interest. Guanxi relatio n-
ships are meant to be lo ng-term and enduring, in co ntrast with the immediate gains
so metimes expected in Western relatio nships. Guanxi also relies less o n institutio nal law,
and mo re o n perso nal power and autho rity, than do Western relatio nships. Finally, guanxi
relatio ns are go verned mo re by the no tio n o f shame ( i.e., external pressures o n perfo rm-
ance), while Western relatio ns o ften rely o n guilt (i.e., internal pressures o n perfo rmance)
to maintain agreements. Guanxi is seen as extremely impo rtant fo r business success in
China—mo re than such facto rs as right lo catio n, price, o r strategy, o r pro duct differenti-
atio n and quality. Fo r Western firms wanting to do business with Asian firms, an under-
standing o f guanxi and an effo rt to build relatio nships are impo rtant strategic advantages.
O ur discussio n abo ut differences in cro ss-cultural values sho uld suggest to yo u that
understanding o ther cultures matters. When Canadian firms develo p o peratio ns acro ss
Canada, so uth o f the bo rder, o r o verseas, emplo yees need to understand o ther cultures
in o rder to wo rk mo re effectively and get alo ng with o thers.

Generational Differen ces

In his bo o k Sex in the Snow, po llster Michael Adams attempted to identify the so cial
values o f to day’s Canadians.49 He fo und that within three bro ad age gro ups o f adult
Canadians—the Elders (tho se over 60), Baby Bo o mers (bo rn between the mid-1940s and
the m id-1960s) , and Generatio n Xers ( bo rn between the m id-1960s and the early
1980s) — there are at least 12 quite distinct “ value tribes.” We present the age gro ups
and discuss so me o f their values in the next few pages. Fo r further info rmatio n o n these
different value tribes and an o ppo rtunity to see where yo u might be classified in terms
Environics Research Group
o f yo ur so cial values, visit the Enviro nics Research Gro up website.
http://erg.environics.net In the discussio n o f values that fo llo ws, bear in mind that we present bro ad general-
izatio ns, and yo u sho uld certainly avo id stereo typing individuals o n the basis o f these
generalizatio ns. There are individual differences in values. Fo r instance, no t every Baby
Bo o mer thinks alike, and neither do es every member o f Generatio n X. Thus, the impo r-
tant po int abo ut the values discussio n is that yo u sho uld try to understand ho w o thers
might view things differently fro m yo u, even when they are expo sed to the same situatio n.

The Elders
These individuals are characterized as “ playing by the rules,” and their co re values are
belief in o rder, autho rity, discipline, the Judeo -Christian mo ral co de, and the Go lden Rule
( do unto o thers as yo u wo uld have o thers do unto yo u) . Abo ut 80 percent o f the Elders
resemble this descriptio n o f traditio nal values, altho ugh there are variatio ns within that
80 percent in the strength o f fit.

Baby Bo o mers
The view o f Baby Bo o mers as a so mewhat spo iled, hedo nistic, rebellio us gro up belies
the fo ur catego ries o f Bo o mers: auto no mo us rebels ( 25 percent) , anxio us co mmuni-
tarians ( 20 percent) , co nnected enthusiasts ( 14 percent) , and disengaged Darwinists
( 41 percent) . So , unlike the Elders, the Bo o m ers are a bit m o re fragm ented in their
views. Yet all but the disengaged Darwinists reflect, to so me extent, the stereo types o f this
generatio n: rejectio n o f autho rity, skepticism regarding the mo tives o f big business and
go vernment, a stro ng co ncern fo r the enviro nment, and a stro ng desire fo r equality in
the wo rkplace and so ciety. O f co urse, the disengaged Darwinists, the largest single
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 83

gro up, do no t fit this descriptio n well. The Darwinists are characterized as angry, intim-
idated by change, and anxio us abo ut their pro fessio nal and financial futures.

Generatio n X
Altho ugh this gro up is q uite fragm ented in its values,
research sho ws that the co m m o n values are experience-

* Are Gen- Xers

really different from
seeking, adaptability, and co ncern with perso nal im age
amo ng peers. Despite these co mmo n values, Generatio n
their elders? Xers can be divided into five tribes. Thrill-seeking materialists
(25 percent) desire mo ney and material po ssessio ns, as well
as reco gnitio n, respect, and adm iratio n. Aim less depen-
dants ( 27 percent) seek financial independence, security, and stability. So cial hedo nists
( 15 percent) are experience-seeking, co mmitted to their o wn pleasure, and seek imme-
diate gratificatio n. New Aquarians (13 percent) are experience-seeking, and also egalitarian
and eco lo gically minded. Finally, auto no mo us po st-materialists (20 percent) seek perso nal
auto no my and self-fulfillment, and are co ncerned abo ut human rights.

The Ne( x) t Generatio n

Since Adam s’ bo o k appeared, ano ther generatio n has been identified. Labelled the
Net Generatio n,50 millennials,51 Generatio n Y, o r the Echo Bo o mers, this generatio n,
bo rn between 1977 and 1997, co nsists o f “creato rs, no t recipients. And they are curi-
o us, co ntrarian, flexible, co llabo rative and high in self-esteem.” 52 This generatio n is
defined by its ease with techno lo gy, having gro wn up with cellpho nes, text messag-
ing, and Internet access ( hence the name “ Net” ) . They are team players and o ptimists
with a desire fo r o rder.53
In this chapter’s Learning About Yourself Exercise o n page 94, yo u have the o ppo rtunity
to examine so me o f the things that yo u value.

The Generatio ns Meet in the Wo rkplace

Baby Bo o mers currently do minate the wo rkplace, but their years o f being in charge are
limited. In 2013, half o f them will be at least 55 and 18 percent will be o ver 60.54 As

Vancouver-based M ainf rame

Ent ert ainment , t he company
behind Reboot and Zixx, under-
st ands t he values of it s
Generation X employees: experi-
ence, recognit ion, respect , and
admiration. M ainframe’s anima-
tors get leadership opportunities,
including t he opport unit y t o
direct show s, w hich they w ould
not get at higher-paying studios
in Los Angeles. M ainf rame has
one of the low est turnover rates
in the animation business because
of it s emphasis on giving it s
young employees the opportunity
to acquire new skills.
84 Part 1 Underst anding t he Workplace

Bo o mers mo ve into head o ffices, the “play-by-the-rules,” “bo ss-kno ws-best” Elders are
being replaced by so mewhat mo re egalitarian Bo o mers. They dislike the co mmand-and-
co ntro l rules that were part o f their parents’ lives, altho ugh the Bo o mers have also been
described as wo rkaho lics. Meanwhile, the Generatio n Xers in the wo rkplace are co m-
fo rtable in adapting, but also want mo re experiences. They are no t in awe o f autho rity.
Mo st impo rtant, they are no t interested in co pying the wo rkaho lic behavio ur o f their
parents. Managing the expectatio ns o f each o f these very different gro ups is no t an easy
task. It requires managers to be flexible, o bservant, and willing to adjust mo re to the
individual needs o f these different emplo yees. Members o f the Net Generatio n will cer-
tainly change the face o f the wo rkplace in significant ways. They have mastered a co m-
municatio n and info rmatio n system that many o f their parents have yet to understand.

ATTITUD ES
The management at Procter & Gamble (P&G) Canada consider diversity a competitive advan-
tage. They “ believe that a diverse company w ill outperform a homogeneous company by inspir-
ing more creative and innovative solutions.” 55 To help employees foster a similar attitude
tow ard diversity, P&G conducts mandatory diversity training for all employees. Thus, P&G
recognizes the link betw een organizational values and employee attitudes. The training is
meant to help employees have greater aw areness of cultural and style differences. M anagers
are given additional training to help them improve their leadership in a diverse w orkplace. So
how do attitudes get formed, and can they really be changed?

4 What are attitudes Attitudes are po sitive o r negative feelings abo ut o bjects, peo ple, o r events. When I say
and why are they “ I like my jo b,” I am expressing my attitude to wo rk. Attitudes are thus judgm ent
important? respo nses to situatio ns.
Attitudes are no t the same as values because values are co nvictio ns abo ut what is
attitudes Positive or negative impo rtant, but the two are interrelated. In o rganizatio ns, attitudes are impo rtant because
feelings about objects, people, or
they affect jo b behavio ur. Emplo yees may believe, fo r example, that superviso rs, audi-
events.
to rs, managers, and time-and-mo tio n engineers are all co nspiring to make emplo yees
wo rk harder fo r the same o r less mo ney. This may then lead to a negative attitude toward
management when an emplo yee is asked to stay late and help o n a special pro ject. Case
Incident— Gourmet Foods Works on Employee Attitudes o n page 96 highlights ho w changes
in attitudes can help a co mpany’s bo tto m line.
Emplo yees may be negatively affected by the attitudes o f their co -wo rkers o r clients.
Fo r instance, Debra Krako w, an architect with Kingsto n, O ntario -based Mill & Ro ss
Architects, no tes that client attitudes to ward the co mpetency o f female architects dis-
co urage wo m en fro m staying in that pro fessio n. “ In my experience, if yo u’re m ale,
yo u’re presumed co mpetent o r yo u wo uldn’t be there. If yo u’re female, yo u’re presumed
inco mpetent until pro ven o therwise,” she says.56 In From Concepts to Skills o n page 98,
we discuss whether it is po ssible to change so meo ne’s attitude, and ho w that might
happen in the wo rkplace. Focus on D iversity lo o ks at ho w attitudes to ward who can
make pro per sushi affect who gets hired to be a sushi maker.

FO C U S O N D I V E R S I T Y

Nontraditional Sushi M akers

What d etermines a good sushi maker? Fo r many sushi restaurants in Japan and in
No rth America, a sushi chef “sho uld” be male.57 It’s what’s expected, and it’s what’s
o bserved. Yo ko O gawa, 30, a female sushi chef at Yamaguchi in Midtown Manhattan,
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 85

explains the pro blem wo men face: “They say that wo men canno t make sushi because
their hands are to o warm and that will ruin the fish.”
Hiro mi Suzuki, who se father is the chef and o wner o f Mie in the East Village o f
New Yo rk, shared so me o f her father’s sto ries abo ut wo men sushi makers: “ Wo men
can’t make sushi because they wear perfume and makeup, and the smell o f the per-
fum e and m akeup will ruin the fo o d.” O thers believe that wo m en can’t beco m e
sushi chefs because the area behind the co unter is sacred.
These attitudes have made it difficult no t o nly fo r wo men but also fo r no nJapanese
to beco me sushi makers in Japan and No rth America, altho ugh that is starting to
change. When To shi Sugiura started the Califo rnia Sushi Academy in Venice, Califo rnia,
in 1998, he expected that his students wo uld be Asian immigrants. Instead, mo st o f
the students were American. This required him to change his visio n: “Sushi is beco m-
ing a wo rldwide fo o d. Why can’t black peo ple and white peo ple make sushi?”
All o f these examples suggest that who gets hired into any po sitio n can be affected
by attitudes abo ut what the “ right” perso n sho uld lo o k like.

A perso n can have tho usands o f attitudes, but o rganizatio nal behavio ur fo cuses o ur
attentio n o n a limited number o f jo b-related attitudes. These jo b-related attitudes tap po s-
itive o r negative evaluatio ns that emplo yees ho ld abo ut aspects o f their wo rk enviro n-
ment. In the fo llo wing, we co nsider two impo rtant attitudes that affect o rganizatio nal
perfo rmance: jo b satisfactio n and o rganizatio nal co mmitment.

Job Satisfa ction

The term job satisfaction refers to an individual’s general attitude toward his o r her jo b. job satisfaction An individual’s
A perso n with a high level o f jo b satisfactio n ho lds po sitive attitudes toward the jo b, while general attitude toward his or her
a perso n who is dissatisfied with his o r her jo b ho lds negative attitudes to ward the jo b. job.

When peo ple speak o f emplo yee attitudes, mo re o ften than no t they mean jo b satis-
factio n. In fact, the terms are frequently used interchangeably.
A recent Canadian Po licy Research Netwo rks survey o n jo b satisfactio n fo und that o nly Canadian Policy Research
40 percent o f Canadian emplo yees are very satisfied with their jo bs. By co mpariso n, Netw orks
www.cprn.com/en/
47 percent o f American emplo yees are happy with their wo rk and 54 percent o f Danish
emplo yees are highly satisfied.58 O n the o ther hand, almo st 40 percent o f Canadian
employees wo uld no t reco mmend their co mpanies as go o d places to wo rk. Fo rty percent
also believe that they never see any o f the benefits fro m their co mpanies’ making mo ney.
Almo st 40 percent repo rt that red tape and bureaucracy are amo ng the biggest barriers
to jo b satisfactio n. A majo rity o f the wo rkfo rce ( 55 percent) says that they feel the “pres-
sure o f having to o much to do .”
So what are the co nsequences o f lo wer jo b satisfactio n? We examine this questio n
belo w.

Jo b Satisfactio n and Individual Pro ductivity

The evidence suggests that the link between an individual’s jo b satisfactio n and his o r
her pro ductivity is very slightly po sitive.59 It turns o ut the pro ductivity can be affected
as much by external co nditio ns as it is by jo b satisfactio n. Fo r instance, a sto ckbro ker’s
pro ductivity is largely affected by the general mo vement o f the sto ck market. When the
market is mo ving up and vo lume is high, bo th satisfied and dissatisfied bro kers will
earn lo ts o f co mmissio ns. Co nversely, when the market is do wn, the level o f bro ker
satisfactio n is no t likely to mean much. O ne’s po sitio n in the o rganizatio n also seems
to be an impo rtant mo derating variable.
The relatio nship between jo b satisfactio n and pro ductivity is stro nger when the
emplo yee’s behavio ur is no t co ntro lled by o utside facto rs. An emplo yee’s pro ductivity
86 Part 1 Underst anding t he Workplace
perceived organizational support
The degree to which employees believe
that the employer values their contribu-
tion to the organization and cares
about employee well-being.
organizational citizenship
behaviour (OCB) Discretionary
behaviour that is not part of an
employee’s formal job requirements,
but that nevertheless promotes
the effective functioning of the
organization.
o n machine-paced jo bs, fo r instance, will be much mo re influenced by the speed o f
the machine than by his o r her level o f satisfactio n.
The evidence also sho ws that the satisfactio n-pro ductivity co rrelatio n is stro nger fo r
higher-level emplo yees. Thus, we might expect the relatio nship to be mo re relevant fo r
individuals in pro fessio nal, superviso ry, and managerial po sitio ns.
There is ano ther co m plicatio n in the satisfactio n-pro ductivity link. So m e studies
have fo und that pro ductivity leads to satisfactio n rather than the o ther way aro und.60 In
o ther wo rds, an employee who do es a go o d jo b feels go o d abo ut it. Additio nally, assum-
ing that the o rganizatio n rewards pro ductivity, higher pro ductivity sho uld increase ver-
bal reco gnitio n, pay level, and pro babilities fo r pro m o tio n. These rewards, in turn,
increase the emplo yee’s level o f satisfactio n with the jo b.
So m e recent research has also lo o ked at the idea o f perceived o rganizatio nal
support and its effect o n perfo rmance, absenteeism, jo b stress, and turnover.61 Perceived
o rganizatio nal suppo rt reflects the degree to which emplo yees believe that the o rgani-
zatio n values their co ntributio n and cares abo ut their well-being. An emplo yee who
believes the employer is suppo rtive tends to perfo rm better and feel a much stro nger co m-
mitment to the o rganizatio n.
O ur Point/Counterpoint discussio n o n page 93 investigates the debate over whether jo b
satisfactio n is created by the situatio n o r by an individual’s characteristics.
Jo b Satisfactio n and Organizatio nal Pro ductivity
The link between jo b satisfactio n and pro ductivity is much stro nger when we lo o k no t
at individuals, but at the o rganizatio n as a who le.62 When satisfactio n and pro ductivity
data are gathered fo r the o rganizatio n as a who le, rather than at the individual level, we
find that o rganizatio ns with mo re-satisfied emplo yees tend to be mo re effective than
o rganizatio ns with less-satisfied emplo yees.
Jo b Satisfactio n and Organizatio nal Citizenship Behavio ur
In Chapter 1, we defined o rganizatio nal citizenship behavio ur ( OCB) as discre-
tio nary behavio ur that is no t part o f an emplo yee’s fo rmal jo b requirements and is no t
usually rewarded, but that nevertheless pro mo tes the effective functio ning o f the o rgan-
izatio n.63 Individuals who are high in O CB will go beyo nd their usual jo b duties, pro -
viding perfo rmance that is beyo nd expectatio ns. Examples o f such behavio ur include
helping co lleagues with their wo rklo ads, taking o nly limited breaks, and alerting o thers
to wo rk-related pro blems.64 Mo re recently O CB has been asso ciated with the fo llo wing
wo rkplace behavio urs: “altruism, co nscientio usness, lo yalty, civic virtue, vo ice, func-
tio n al p articip atio n, sp o rtsm an sh ip , co urtesy, an d ad vo cacy p articip atio n.” 6 5
O rganizatio nal citizenship is impo rtant, as it can help the o rganizatio n functio n mo re
efficiently and mo re effectively.66 Recent wo rk by Yo rk University pro fesso rs Sabrina
Salamo n and Yuval Deutsch suggest that O CB may be a way fo r individuals to signal to
managers and co -wo rkers abilities that might no t be immediately o bservable.67
It seems lo gical to assume that jo b satisfactio n sho uld be a majo r determinant o f
an emplo yee’s O CB.68 Satisfied emplo yees wo uld seem mo re likely to talk po sitively
abo ut an o rganizatio n, help o thers, and go beyo nd the no rmal expectatio ns in their
jo bs.69 Mo reo ver, satisfied emplo yees might be mo re pro ne to go beyo nd the call o f
duty because they want to recipro cate their po sitive experiences. Co nsistent with this
thinking, early discussio ns o f O CB assum ed that it was clo sely linked with satisfac-
tio n.70 So m e evidence, ho wever, suggests that satisfactio n do es influence O CB, but
thro ugh perceptio ns o f fairness.71
There is, then, a mo dest o verall relatio nship between jo b satisfactio n and O CB.72
But jo b satisfactio n is unrelated to O CB when fairness is co nsidered.73 What do es this
mean? Basically, jo b satisfactio n co mes down to a belief that there are fair o utco mes, treat-
m ent, and pro cedures in the wo rkplace.74 If yo u do no t feel that yo ur m anager, the
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 87

o rganizatio n’s pro cedures, o r its pay po licies are fair, yo ur jo b satisfactio n is likely to suf-
fer significantly. Ho wever, when yo u perceive o rganizatio nal pro cesses and o utco mes to
be fair, trust is develo ped. When yo u trust yo ur employer, yo ur jo b satisfactio n increases,
and yo u are mo re willing to vo luntarily engage in behavio urs that go beyo nd yo ur fo r-
mal jo b requirements. Recent research suggests that O CB can be applied cro ss-culturally,
altho ugh the exact fo rm o f O CB might be different in no n–No rth American co untries.75

Jo b Satisfactio n and Custo mer Satisfactio n

Emplo yees in service jo bs o ften interact with custo mers. Since the management o f serv-
ice o rganizatio ns sho uld be co ncerned with pleasing tho se custo mers, it is reaso nable
to ask: Is emplo yee satisfactio n related to po sitive custo mer o utco mes? Fo r fro nt-line
emplo yees who have regular co ntact with custo mers, the answer is yes.
The evidence indicates that satisfied employees increase custo mer satisfactio n and loy-
alty.76 Why? In service o rganizatio ns, custo m er retentio n and defectio n are highly
dependent o n ho w fro nt-line emplo yees deal with custo mers. Satisfied emplo yees are
mo re likely to be friendly, upbeat, and respo nsive—which custo mers appreciate. Because
satisfied emplo yees are less pro ne to turno ver, custo mers are mo re likely to enco unter
familiar faces and receive experienced service. These qualities build custo mer satisfactio n
and lo yalty. In additio n, the relatio nship seems to apply in reverse: Dissatisfied cus-
to m ers can increase an em plo yee’s jo b dissatisfactio n. Em plo yees who have regular
co ntact with custo mers repo rt that rude, tho ughtless, o r unreaso nably demanding cus-
to mers adversely affect the emplo yees’ jo b satisfactio n.77

How Employees Can Express Dissatisfactio n

Dissatisfied emplo yees are mo re likely to miss wo rk, but the co rrelatio n is mo derate—
usually less than –0.40.78 Dissatisfied emplo yees are also mo re likely to quit their jo bs,
and the co rrelatio n is stro nger than what we fo und fo r absenteeism.79 Ho wever, a per-
so n’s general dispo sitio n to ward life mo derates the jo b satisfactio n-turno ver relatio n-
ship.80 So me individuals gripe mo re than o thers and such individuals, when dissatisfied
with their jo bs, are less likely to quit than tho se who are m o re po sitively dispo sed
toward life. So if two employees are equally dissatisfied, the o ne mo st likely to quit is the
o ne with the highest predispo sitio n to be happy o r satisfied with life in general. Likely
these individuals do no t feel trapped and are willing to exert mo re co ntro l o ver the sit-
uatio n and lo o k fo r ano ther jo b.
The evidence suggests that emplo yees express dissatisfactio n in a number o f ways.81
Fo r example, rather than quit, emplo yees can co mplain, be insubo rdinate, steal o rga-
nizatio nal pro perty, o r avo id so me o f their wo rk respo nsibilities. Exhibit 3-5 o n page 88
illustrates a mo del that can be used to examine individual respo nses to dissatisfactio n
alo ng two dimensio ns: whether they are co nstructive o r destructive and whether they are
active o r passive. Fo ur types o f behavio ur result:82
exit Dissatisfaction expressed by
• Exit . Actively attempting to leave the o rganizatio n, including lo o king fo r a actively attempting to leave the
new po sitio n as well as resigning. This is a destructive actio n fro m the po int o f organization.
view o f the o rganizatio n.
voice Dissatisfaction expressed by
• Voice. Actively and co nstructively trying to impro ve co nditio ns, including actively and constructively attempt-
suggesting impro vements, discussing pro blems with superio rs, and so me ing to improve conditions.
fo rms o f unio n activity.
loyalty Dissatisfaction expressed
• Loyalty. Passively but o ptimistically waiting fo r co nditio ns to impro ve, by passively waiting for conditions to
including speaking up fo r the o rganizatio n in the face o f external criticism improve.
and trusting the o rganizatio n and its management to do the right thing.
neglect Dissatisfaction expressed
• Neglect . Passively allo wing co nditio ns to wo rsen, including chro nic absen- by passively allowing conditions to
teeism o r lateness, reduced effo rt, and increased erro r rate. worsen.
88 Part 1 Underst anding t he Workplace
organizational commitment
A state in which an employee identi-
fies with a particular organization
and its goals, and wishes to main-
tain membership in the
organization.
Exit and neglect behavio urs enco m pass o ur perfo rm ance variables— pro ductivity,
absenteeism , and turno ver. But this list expands em plo yee respo nse to include vo ice
and lo yalty— co nstructive behavio urs that allo w individuals to to lerate unpleasant
situatio ns o r to revive satisfacto ry wo rking co nditio ns. It helps us to understand sit-
uatio ns, such as tho se so metimes fo und amo ng unio nized emplo yees, where lo w jo b
satisfactio n is co upled with lo w turno ver.83 Unio n m em bers o ften express dissatis-
factio n thro ugh the grievance pro cedure o r thro ugh fo rm al co ntract nego tiatio ns.
These vo ice m echanism s allo w the unio n m em bers to co ntinue in their jo bs while
co nvincing them selves that they are acting to im pro ve the situatio n.
Organizational Commitment
Organizatio nal co mmitment is defined as a state in which an emplo yee identifies
with a particular o rganizatio n and its go als, and wishes to maintain membership in
the o rganizatio n.84
Pro fesso r Jo hn Meyer at the University o f Western O ntario and his co lleagues have
identified and develo ped measures fo r three types o f co mmitment:85
• Affective commitment. An individual’s relatio nship to the o rganizatio n: his o r
her emo tio nal attachment to , identificatio n with, and invo lvement in the
o rganizatio n.
• Normative commitment. The o bligatio n an individual feels to staying with the
o rganizatio n.
• Continuance commitment. An individual’s calculatio n that it is in his o r her
best interest to stay with the o rganizatio n based o n the perceived co sts o f
leaving the o rganizatio n.
Affective co mmitment is stro ngly asso ciated with po sitive wo rk behavio urs such as
perfo rm ance, attendance, and citizenship. No rm ative co m m itm ent is less stro ngly
asso ciated with po sitive wo rk behavio urs. Ho wever, when affective and no rm ative
co mmitment decline, individuals are much mo re likely to quit their jo bs.86
Because co ntinuance co mmitment reflects an individual’s calculatio n that it is in
his o r her best interest to stay with the o rganizatio n ( perhaps because it wo uld be dif-
ficult to find a jo b elsewhere) , it is o ften asso ciated with negative wo rk behavio urs.
EXHIBIT 3-5 Responses to Job Dissatisfaction
Active
EXIT VOICE
Destructive Constructive
NEGLECT LOYALTY
Passive
Source: Reprinted w ith permission from Journal of Applied Social Psychology 15, no. 1, p. 83. V. H.
W inston and Sons, 360 South Beach Boulevard, Palm Beach, FL 33480. All rights reserved.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 89

Arnold Carbone (centre) receives

a high level of job satisfaction and
has a positive attitude about his
job. Carbone, as “ Conductor of
Bizarre and D” at Ben & Jerry’s,
t ravels t he w orld and eat s as
many desserts as he can in his job
as developer of new ice-cream
f lavours f or Ben & Jerry’s.
Carbone created flavours such as
Phish Food and Wavy Gravy.

Peo ple in highly paid jo bs and unio n members with go o d benefits may exhibit co n-
tinuance co mmitment because o f the rewards received fro m the jo b, rather than their
preference fo r the jo b itself.87
The no tio n o f o rganizatio nal co m m itm ent has changed in recent years. Twenty
years ago , emplo yees and emplo yers had an unwritten lo yalty co ntract, with emplo y-
ees typically remaining with a single o rganizatio n fo r mo st o f their careers. This no tio n
has beco me increasingly o bso lete. As such, “measures o f employee-firm attachment, such
as co m m itm ent, are pro blem atic fo r new em plo ym ent relatio ns.” 88 Canadian busi-
ness co nsultant Barbara Mo ses no tes that “40-so methings still value lo yalty: they think
peo ple sho uld be prepared to make sacrifices, to earn their way. The 20-so methings
are saying, ‘No , I want to be paid fo r my wo rk; I have no belief in the go o dness o f
o rganizatio ns, so I’m go ing to be here as lo ng as my wo rk is meaningful.’” 89
Ho w can co mpanies increase o rganizatio nal co mmitment? Research o n a number
o f co mpanies kno wn fo r emplo yees with high o rganizatio nal co mmitment identified
five reaso ns why emplo yees co mmit themselves:90

• They are pro ud o f [the co mpany’s] aspiratio ns, acco mplishments, and legacy;
they share its values.

• They kno w what each perso n is expected to do , ho w perfo rmance is meas-

ured, and why it matters.

• They are in co ntro l o f their o wn destinies; they savo ur the high-risk, high-
reward wo rk enviro nment.

• They are reco gnized mo stly fo r the quality o f their individual perfo rmance.

• They have fun and enjo y the suppo rtive and highly interactive enviro nment.

These findings suggest a variety o f ways fo r o rganizatio ns to increase the co mmitment

o f emplo yees. Additio nally, a recent study co nducted in five co untries suggests that an
individual’s o rganizatio nal co mmitment is stro ngly asso ciated with whether the employee
finds the wo rk interesting.91 Earlier in the chapter we discussed the ro le o f satisfactio n
o n o rganizatio nal citizenship behavio ur ( O CB) . We sho uld also no te that when individ-
uals have high o rganizatio nal co mmitment, they are likely to engage in mo re O CB.
 90 Part 1 Underst anding t he Workplace

SUMMARY AND IMPLICATIONS

1 What are values? Values guide ho w we make decisio ns abo ut and evaluatio ns o f
SNAPSHOT SUM M ARY behavio urs and events. They represent basic co nvictio ns abo ut what is impo rtant,
right, and go o d to the individual. Altho ugh they do no t have a direct impact o n
1 Values
behavio ur, values stro ngly influence a perso n’s attitudes. So kno wledge o f an indi-
Rokeach Value Survey vidual’s values can pro vide insight into his o r her attitudes.
Ethical Values
2 How can w e und erstand values across cultures? Geert Ho fstede fo und that
2 Assessing Cultural
managers and emplo yees vary o n five value dimensio ns o f natio nal culture. His
Values
insights were expanded by the GLO BE pro ject, an o ngo ing cro ss-cultural investi-
3 Values in the Canadian gatio n o f leadership and natio nal culture. That study has identified nine dimensio ns
Workplace
in which cultures can vary: assertiveness, future o rientatio n, gender differentia-
Cultural Differences
tio n, uncertainty avo idance, po wer distance, individualism/ co llectivism, in-gro up
Generational Differences
co llectivism, perfo rmance o rientatio n, and humane o rientatio n.
4 Attitudes
3 Are there unique Canad ian values? In his recent bo o ks, po llster Michael Adams
Job Satisfaction
identifies the so cial values o f to day’s Canadians. He finds that within three bro ad age
Organizational
Commitment gro ups o f adult Canadians—the Elders (tho se over 60), Baby Bo o mers (bo rn between
the mid-1940s and mid-1960s), and Generatio n Xers (bo rn between the mid-1960s
and the early 1980s)—there are at least 12 quite distinct “value tribes.” Mo re recently,
discussio n has turned to the Net Generatio n, no w in their early 20s, who are the
newest entrants to the wo rkplace. Canada is a multicultural co untry, and there are
a number o f gro ups that co ntribute to its diverse values, such as Abo riginal peo -
ples, French Canadians, and vario us immigrant gro ups. Canadian values differ fro m
American values and tho se o f its o ther trading partners in a variety o f ways.

4 What are attitud es and w hy are they important? Attitudes are po sitive o r neg-
ative feelings abo ut o bjects, peo ple, o r events. Attitudes affect the way peo ple
respo nd to situatio ns. When I say “ I like my jo b,” I am expressing my attitude to
wo rk and I am likely to be mo re co mmitted in my behavio ur than if my attitude
was o ne o f no t liking my jo b. A perso n can have tho usands o f attitudes, but O B
fo cuses o ur attentio n o n a lim ited num ber o f jo b-related attitudes. These jo b-
related attitudes tap po sitive o r negative evaluatio ns that emplo yees ho ld abo ut
aspects o f their wo rk enviro nment. Mo st o f the research in O B has been co ncerned
with two attitudes: jo b satisfactio n and o rganizatio nal co mmitment.
 O B A T W O RK
For Review
1 . Describe the GLOBE project’s dimensions of national culture.

2. Compare Aboriginal and nonAboriginal values.

3. How might differences in generational values affect the w orkplace?

4. What might explain low levels of employee job satisfaction in recent years?

5. Are satisfied employees productive employees? Explain your answ er.

6. What is the relationship betw een job satisfaction and absenteeism? Job satisfaction and turnover? Which is the
stronger relationship?

7. Contrast exit, voice, loyalty, and neglect as employee responses to job satisfaction.

For Critical Thinking

1 . “ Thirty-five years ago, young employees w e hired w ere ambitious, conscientious, hard-w orking, and honest. Today’s
young employees don’t have the same values.” Do you agree or disagree w ith this manager’s comments? Support
your position.

2. Do you think there might be any positive and significant relationship betw een the possession of certain personal val-
ues and successful career progression in organizations such as M errill Lynch, the Canadian Union of Postal Workers
(CUPW), and the City of Regina’s police department? Discuss.

3. “ M anagers should do everything they can to enhance the job satisfaction of their employees.” Do you agree or dis-
agree? Support your position.

4. When employees are asked w hether they w ould again choose the same w ork or w hether they w ould w ant their chil-
dren to follow in their footsteps, few er than half typically answ er “ yes.” What, if anything, do you think this implies
about employee job satisfaction?

OB for You
■ You w ill encounter many people w ho have values different from yours in the classroom, in various kinds of activities in
w hich you participate, as w ell as in the w orkplace. You should try to understand value differences, and to figure out
w ays to w ork positively w ith people w ho are different from you.

■ Though w e often try to generalize about people’s values based on either their generation or their culture, not all peo-
ple in a group hold the same values. Be prepared to look beyond the group characteristics to understand the person.

■ The variety of possible responses to dissatisfaction (exit, voice, loyalty, neglect) gives you alternatives to consider w hen
you are feeling dissatisfied w ith a situation. Neglect may be an easy w ay to respond, but consider w hether voice might
be more effective.
92 Part 1 Underst anding t he Workplace
O B A T W O RK
PO I N T
Managers Create Jo b
Satisfactio n
A review of the evidence has identified four factors con-
ducive to high levels of employee job satisfaction: men-
t ally challenging w ork, equit able rew ards, support ive
w orking condit ions, and support ive colleagues. 92
Importantly, each of these factors is controllable by man-
agement.
M entally challenging w ork. People prefer jobs that give
them opportunities to use their skills and abilities and
offer a variety of tasks, freedom, and feedback on how
w ell they are doing. These characteristics make w ork men-
tally challenging.
Equitable rew ards. Employees w ant pay systems and
promotion policies that they perceive as just, unambigu-
ous, and in line w ith their expectations. When pay is seen
as fair based on job demands, individual skill level, and
community pay standards, satisfaction is likely to result.
Similarly, employees seek fair promotion policies and prac-
t ices. Promot ions provide opport unit ies f or personal
grow th, more responsibilities, and increased social status.
Individuals w ho perceive that promotion decisions are
made in a fair and just manner, therefore, are likely to
experience satisfaction from their jobs.
Supportive w orking conditions. Employees w ant w ork
environments that support personal comfort and good
job performance. Studies demonstrate that employees
prefer physical surroundings that are not dangerous or
uncomfortable. M ost employees also prefer w orking rela-
tively close to home, in clean and relatively modern facili-
ties, and w ith adequate tools and equipment.
Supportive colleagues. People get more out of w ork
than merely money or tangible achievements. For most
employees, w ork also fills the need for social interaction.
Not surprisingly, therefore, having friendly and supportive
co-w orkers leads to increased job satisfaction. The behav-
iour of an employee’s manager is also a major determi-
nant of satisfaction. Studies generally find that employee
satisfaction increases w hen the immediate supervisor is
understanding and friendly, offers praise for good per-
formance, listens to employees’ opinions, and show s a
personal interest in them.
CO U N TERPO I N T
Satisfactio n Is Individually
Determined
The notion that managers and organizations can control
the level of employee job satisfaction is inherently attrac-
tive. It fits nicely w ith the view that managers directly
inf luence organizat ional processes and out comes.
Unfortunately there is a grow ing body of evidence chal-
lenging the notion that managers control the factors that
inf luence employee job sat isf act ion. Cont emporary
research indicates that employee job satisfaction is largely
genetically determined.93
Whether people are happy or not is essentially deter-
mined by their gene structure. You either have happy
genes or you don’t. Approximately 80 percent of people’s
diff erences in happiness, or subject ive w ell-being, has
been found to be attributable to their different genes.
Analysis of satisfaction data for a selected sample of
individuals over a 50-year period found that individual
result s w ere consist ent ly st able over t ime, even w hen
these people changed employers and occupations. This
and other research suggests that an individual’s disposi-
tion tow ard life—positive or negative—is established by
his or her genetic makeup, holds over time, and carries
over into his or her disposition tow ard w ork.
Given these findings, there is probably little that most
managers can do to influence employee satisfaction. In
spite of the fact that managers and organizations go to
extensive lengths to try to improve employee job satisfac-
tion through manipulating job characteristics, w orking
conditions, and rew ards, these actions are likely to have
little effect. The only place w here managers w ill have sig-
nificant influence is through their control of the selection
process. If managers w ant satisfied employees, they need
to make sure their selection process screens out the nega-
tive, maladjusted, troublemaking fault-finders w ho derive
little satisfaction in anything job-related. This is probably
best achieved through personality testing, in-depth inter-
view ing, and careful checking of applicants’ previous w ork
records.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace 93

O B A T W O RK

LEA RN I N G A B O U T Y O U RSELF EX ERC I SE

What Do Yo u Value?
There are 16 items in the list below. Rate how important each one is to you on a scale of 0 (not important) to 100 (very
important). Write a number betw een 0 and 100 on the line to the left of each item.

Not Import ant Somew hat Import ant Very Import ant

0 10 20 30 40 50 60 70 80 90 1 00

______ 1. An enjoyable, satisfying job.

______ 2. A high-paying job.
______ 3. A good marriage.
______ 4. M eeting new people; social events.
______ 5. Involvement in community activities.
______ 6. M y religion.
______ 7. Exercising, playing sports.
______ 8. Intellectual development.
______ 9. A career w ith challenging opportunities.
______ 1 0. Nice cars, clothes, home, and so on.
______ 11 . Spending time w ith family.
______ 1 2. Having several close friends.
______ 1 3. Volunteer w ork for nonprofit organizations, such as the Canadian Cancer Society.
______ 1 4. M editation, quiet time to think, pray, and so on.
______ 1 5. A healthy, balanced diet.
______ 1 6. Educational reading, television, self-improvement programs, and so on.

Scoring Key:
Transfer the numbers for each of the 16 items to the appropriate column; then add up the 2 numbers in each column.

Professional Financial Family Social

1 . __________ 2. __________ 3. __________ 4. __________

9. __________ 1 0. __________ 11 . __________ 1 2. __________

Totals __________ __________ __________ __________

Community Spiritual Physical Intellectual

5. __________ 6. __________ 7. __________ 8. __________

1 3. __________ 1 4. __________ 1 5. __________ 1 6. __________

Totals __________ __________ __________ __________

The higher the total in any value dimension, the higher the importance you place on that value set. The closer the
numbers are in all 8 dimensions, the more w ell rounded you are.

Source: R. N. Lussier, Human Relations in Organizations: A Skill Building Approach, 2nd ed. (Homew ood, IL: Richard D. Irw in, 1993). Reprinted by
permission of the M cGraw -Hill Companies, Inc.
94 Part 1 Underst anding t he Workplace

O B A T W O RK

B REA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor. Each person in the group should first iden-
tify 3 to 5 key personal values.

1 . Identify the extent to w hich values overlap in your group.

2. Try to uncover w ith your group members the source of some of your key values (e.g., parents, peer group, teachers,
church).

3. What kind of w orkplace w ould be most suitable for the values that you hold most closely?

W O RK I N G W I TH O T H ERS EX ERC I SE

Understanding Cultural Values

Objective To compare the cultural values of tw o countries, and determine how differences might affect group
behaviour.
Time Approximately 30 minutes.
Proced ure

1 . Break into groups of 5 or 6.

2. Pretend that you are a group of students w orking on a project. Half of you are from Canada and hold typically
“ Canadian” cultural values; the other half are from the country assigned and hold that country’s cultural values.

3. Consider the values of pow er distance, individualism /collectivism, and uncertainty avoidance, and discuss the dif-
ferences betw een Canadian cultural values and the values of the country assigned to you. (Refer to Exhibit 3-3 on
page 76 to identify the values of your assigned country.)

4. Answ er the follow ing questions: What challenges might you expect in w orking together? What steps could be
taken to w ork together more effectively?

ETH I C A L D I LEM M A EX ERC I SE

Is It a Bribe o r a Gift?
The Corruption of Foreign Public Officials Act prohibits
Canadian firms from making payments to foreign government
officials w ith the aim of gaining or maintaining business. But
payments are acceptable if they don’t violate local law s. For
instance, payments to officers w orking for foreign corporations
are legal. M any countries don’t have such legal guidelines.
Bribery is a common w ay of doing business in many under-
developed countries. Government jobs there often don’t pay
very w ell, so it’s tempting for officials to supplement their
income w ith bribes. In addition, in many countries, the penal-
ties for demanding and receiving bribes are few or nonexistent.
You are a Canadian w ho w orks for a large European multi-
national computer manufacturer. You are currently w orking to
sell a $5 million system to a government agency in Nigeria.
The Nigerian official w ho heads up the team that w ill decide
w ho get s t his cont ract has asked you f or a payment of
$20 000. He says this payment w ill not guarantee you get the
order, but w ithout it he cannot be very encouraging. Your
company’s policy is very flexible on the issue of “ gifts” to
facilitate sales. Your boss says that it’s OK to pay the $20 000,
but only if you can be relatively assured of the order.
You are not sure w hat you should do. The Nigerian official
has told you specifically that any payment to him is not to be
mentioned to anyone else on the Nigerian team. You know
for certain that three other companies are also negotiating,
but it’s unconfirmed w hether tw o of those companies have
turned dow n the payment request.
What w ould you do?
Source: This exercise is based on M . Allen, “ Here Comes the Bribe,”
Entrepreneur, October 2000, p. 48.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace
CA SE I N C I D EN T
Gourmet Foods Works on Employee Attitudes
Gourmet Foods is a huge grocery and drug company.
It has more than 2400 supermarkets, and its Premier
and Polar brands make it the fifth-largest drugstore
company in North America. In a typical year, shoppers
w ill make 1.4 billion trips through its stores.
Gourmet Foods competes against tough businesses.
Wal-M art, in particular, has been eating aw ay at its
market share. In 2001, w ith revenues flat and profits
falling, the company hired Larry Johnston to turn the
business around.
Johnst on came t o Gourmet Foods f rom General
Living M edical Systems. It w as w hile he w as at General
Living that Johnston met a training specialist named
Roger Nelson. Nelson endeared himself to Johnston
w hen the latter hired Nelson to help him w ith a serious
problem. At the time, Johnston had been sent to Paris
to fix General Living’s European division. The division
made CT scanners. Over t he previous decade, f our
executives had been brought in to turn the division
around and try to make it profitable. All had failed.
Johnston responded to the challenge by initiating some
important changes—he made a number of acquisi-
tions, he closed dow n inefficient plants, and he moved
factories to Eastern European countries to take advan-
tage of low er labour costs. Then he brought in Nelson
to charge up the troops. “ After w e got Roger in,” says
Johnston, “ people began to live their lives differently.
They came t o w ork w it h a spring in t heir st ep.” In
three years, the division w as bringing in annual prof-
its of $100 million. Johnston gives a large part of the
credit for this turnaround to Nelson.
W hat is Nelson’s secret ? He provides mot ivat ion
and attitude training. Here is an example of Nelson’s
primary program—called the Successful Life Course.
It lasts three days and begins each morning at 6 a.m.
The first day begins w ith a chapter from an inspira-
tional handout, follow ed by 12 minutes of yoga-like
stretching. Then participants march up a hill, chant-
ing, “ I know I can, I know I can.” This is follow ed by
breakfast and then a variety of lectures on attitude,
diet, and exercise. But the primary focus of the pro-
gram is on attitude. Says Nelson, “ It’s your attitude,
95
O B A T W O RK
not your apt it ude, t hat det ermines your alt it ude.”
Other parts of the program include group hugs, team
activities, and mind-control relaxation exercises.
Johnst on believes st rongly in Nelson’s program.
“ Positive attitude is the single biggest thing that can
change a business,” says Johnston. He sees Nelson’s
program as being a critical bridge linking employees
w it h cust omers: “ We’re in t he business of maint e-
nance and acquisition of customers.” W ith so many
shoppers going through his stores, Johnston says there
are “ a lot of opportunities for customer service. We’ve
got to energize the associates.” To prove he is w illing
to put his money w here his mouth is, Johnston has
committed $10 million to this training. By the end of
2006, 10 000 managers w ill have taken the course.
They, in turn, w ill train all 190 000 Gourmet Foods
“ associates,” w ith the help of tapes and books.
Nelson claims his program w orks. He cites success
at companies such as Allst at e, M illiken & Co., and
Abbott Labs. “ The goal is to improve mental, physi-
cal, and emotional w ell-being,” he says. “ We as indi-
viduals det ermine t he success of our lives. Posit ive
thoughts create positive actions.”
Questions
1 . Explain the logic as to how Nelson’s three-day
course could positively influence Gourmet Foods’
profitability.
2. Johnston says, “ Positive attitude is the single biggest
thing that can change a business.” How valid and
generalizable do you think this statement is?
3. If you w ere Johnston, w hat could you do to evaluate
the effectiveness of your $10 million investment in
Nelson’s training program?
4. If you w ere a Gourmet Foods employee, how w ould
you feel about going through Nelson’s course?
Explain your position.
Source: Based on M . Burke, “ The Guru in the Vegetable Bin,” Forbes,
M arch 3, 2003, pp. 56–58.
96 Part 1 Underst anding t he Workplace
O B A T W O RK
CBC V I D EO CA SE I N C I D EN T
Diverging Ideologies
When it comes to w hat Canadians and Americans say is
important, there is a continental divide, one that is grow ing
ever w ider, every day. Although Canada has become more
integrated economically w ith its largest trading partner, it
appears that Canadians and Americans have diverging ide-
ologies. Canadians and Americans have distinct points of
view s on a variety of issues, such as the Kyoto Accord, the
decriminalization of marijuana, and same sex marriage.
L’École nationale de cirque, a circus school founded in
M ontreal over 20 years ago, is symbolic of the ideological dif-
ferences betw een Canada and the United States. The school
encourages risk-taking and boundary-breaking and is com-
pletely different from anything found south of the border.
The unique circus arts taught at the school speak to the
new Canadian image: bilingual, multinational, government-
funded, postmodern, multicultural, and avant-garde.
Pollster M ichael Adams states that although most polls
show that Canadians believe they are gradually becoming
m ore and m ore like Am ericans, his research show s t he
opposit e: Canadians are quest ioning and t urning aw ay
from traditional hierarchies and old authorities and are actu-
ally becoming more like Europeans. So w here are the gaps
on values, perspectives, and w orld view betw een the tw o
countries?
In Canada, t he belief in t he f at her’s suprem acy is in
decline, w hereas in the United States it is grow ing. What is
the significance of this finding? It has implications for how
Canadians and Americans perceive the role of w omen in
societ y, w ho should be boss in t he w orkplace, and w ho
should be the leader of the country.
Relig io n is an o t h er area in w h ich Can ad ian s an d
Americans show differences. Americans are becoming more
religious than Canadians, w ith w eekly church attendance
in the United States at 50 percent. In contrast, w eekly church
attendance in Canada is at 20 percent.
Adams points out other distinctions, including the view
of urban life. Canadians are comfortable w ith ethnicity and
diversity, settling in cities w here they can find a sense of
co m m u n it y in b o t h t h e d o w n t o w n an d t h e su b u rb s.
Americans, driven by racial issues in dow ntow n cores, are
moving to the suburbs and beyond.
A n o t h er d if f eren ce, acco rd in g t o A d am s, is t h at
Canadians believe governm ent can provide solut ions—
national daycare, Old Age Security, revitalized cities—whereas
Americans w ant less government intervention in their lives.
M ichael Byers, political scientist at the University of British
Columbia, says Canadians are becoming more socially tol-
erant. The Canadian political spectrum, Byers states, is also
further to the left as a w hole than the American system.
According to M ichael Adams, the American ideal of rugged
individualism and emphasis on moral values, terrorism, and
economy excludes the social agenda. In contrast, Canadian
values are more tailored to compromise, accommodation,
and shared responsibility. In terms of values and beliefs, it
appears that Canadians and Americans are, more often than
not, on different paths.
Questions
1 . Are Canadian values becoming more similar or dis-
similar to American values? Explain.
2. Suppose a large Canadian telecommunications firm
merges w ith a large American telecommunications
firm. To w hat extent might the differences in values
betw een these Canadian and American employees
affect how they interact and w ork together?
3. Imagine that a Canadian company is producing com-
puter products and shipping them across the border
to the United States and overseas to Europe. Should
management be concerned about the impact of
Canadian values on customer relations? What should
customer service representatives keep in mind w hen
dealing w ith American and European customers?
Sources: Based on “ Diverging Ideologies,” CBC—The National, November
30, 2004; and S. M aich, “ The Worst President in 100 Years?” M aclean’s,
April 17, 2006, pp. 28–33.
 Chapt er 3 Values, At t it udes, and Their Eff ect s in t he Workplace
Changing Attitudes
Can you change unf avourable employee at t it udes?
Sometimes! It depends on w ho you are, the strength of
the employee’s attitude, the magnitude of the change, and
the technique you choose to try to change the attitude.
People are most likely to respond to changes suggested
by someone w ho is liked, credible, and convincing. If peo-
ple like you, they are more apt to identify and adopt your
message. Credibility implies trust, expertise, and objectivity.
So you are more likely to change someone’s attitude if that
person view s you as believable, know ledgeable about w hat
you’re saying, and unbiased in your presentation. Finally,
successful attitude change is enhanced w hen you present
your arguments clearly and persuasively.
It’s easier to change a person’s attitude if he or she is not
strongly committed to it. Conversely, the stronger the belief in
the attitude, the harder it is to change it. Also, attitudes that
have been expressed publicly are more difficult to change
because doing so requires admitting having made a mistake.
It’s also easier to change attitudes w hen the change
required is not very significant. To get a person to accept a
new attitude that varies greatly from his or her current position
requires more effort. It may also threaten other deeply held
attitudes.
All attitude-change techniques are not equally effective
across sit uat ions. Oral persuasion t echniques are most
effective w hen you use a positive, tactful tone; present
strong evidence to support your position; tailor your argu-
ment to the listener; use logic; and support your evidence
by appealing to the person’s fears, frustrations, and other
emotions. But people are more likely to embrace change
w hen they can experience it. The use of training sessions
w here employees share and personalize experiences, and
practise new behaviours, can be pow erful stimulants for
change. Consistent w ith self-perception theory, changes in
behaviour can lead to changes in attitudes.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM .
6. What Do I Value?
7. How Involved Am I in M y Job?
97
O B A T W O RK
Fr o m Co n ce p t s
t o Sk i l l s
8. How Satisfied Am I W ith M y Job?
9. What Are M y Attitudes Tow ard Workplace
Diversity?
1 6. What’s M y Attitude Tow ard Achievement?
45. How Committed Am I to M y Organization?
Practising Skills
Form groups of 2. Person A is to choose any topic that he
or she feels strongly about and state his or her position on
the topic in 30 w ords or less. Person B’s task w ill be to try to
change Person A’s attitude on this topic. Person B w ill have
10 minutes to make his or her case. When the time is up,
the roles are reversed. Person B picks the topic and Person
A has 10 minutes to try to change Person B’s attitude.
Potential topics (you can choose either side of a topic)
include the follow ing: politics; the economy; w orld events;
social practices; or specific management issues, such as that
organizations should require all employees to undergo reg-
ular drug testing, there is no such thing as organizational
loyalty any more, the customer is alw ays right, and layoffs
are an indication of management failures.
Questions
1 . Were you successful in changing the other person’s
attitude? Why or w hy not?
2. Was the other person successful in changing your
attitude? Why or w hy not?
3. What conclusions can you draw about changing the
attitudes of yourself and others?
Reinforcing Skills
1 . Try to convince a friend or relative to go w ith you to
see a movie or play that you know he or she does not
w ant to see.
2. Try to convince a friend or relative to try a different
brand of toothpaste.
98
O B O N TH E ED G E

Stress at
Work
Celebrated clothing designer and entrepreneur Linda Lundström (show n relax-
ing above), founder of Toronto-based Linda Lundström, knew she w as under
too much stress the day she started crying uncontrollably after she couldn’t find
a parking spot near her doctor’s office.1 “ It w as the proverbial last straw,” she
says about the parking incident. At the time, she w as dealing w ith success,
recognition, a grow ing business, and tw o small children. She had started to
develop physical symptoms: skin rashes, intestinal disorders, neuralgia, and
insomnia. That day, she w alked into her doctor’s office chanting over and over
again, “ I can’t do it any more.” Lundström has since learned to manage her
stress and help her employees do the same.

Calgary school bus driver M arvin Franks had a much more negative response to
stress.2 Franks w as arrested in M arch 2002 w hen a scared student on his bus
phoned 911 from her cellphone after smelling alcohol on his breath and find-
ing his driving erratic. When police stopped Franks, his blood alcohol level w as
three times the legal limit. Franks’ excuse? “ If you had these kids on your bus,
you’d drink too.” He admitted that he w as unable to control the children, but
said that he smelled of alcohol only because he had a hangover, and had
drunk only tw o beers before starting his route.
 99

Are We Overstressed? ingly asked to do nate labo ur to their o n pro ductivity.10 A 2001 study co n-
em plo yers, acco rding to Pro fesso r ducted in 15 develo ped co untries
Stress appears to be a m ajo r facto r
Linda Duxbury of Carleton University’s found that individuals who report that
in the lives o f m any Canadians. A
Sprott School of Business and Professor they are stressed in their jo bs are 25
recent survey co nducted by Statistics
Chris Higgins o f the Richard Ivey percent more likely to quit and 25 per-
Canada fo und that Canadians expe-
Scho o l o f Business at the University o f cent m o re likely to m iss d ays o f
rience a great d eal o f stress, with
Western Ontario. Their survey of 31 571 wo rk. 11 Canad ian, French, and
tho se fro m Q uebec to pping the list.3
Canadians fo und that in the previo us Swedish employees reported the high-
The survey also fo und that wo m en
mo nth half o f them had wo rked an est stress levels. In Canada, 41 percent
were m o re stressed than m en. The
extra 2.5 days o f unpaid overtime, and o f employees no ted that they “o ften”
in set Stress Across the C ountry,
mo re than half had do nated 3.5 days o r “always” experience stress at wo rk,
2001– 2002 repo rts the findings.
o f wo rking at ho m e to catch up . 8 while o nly 31 percent o f emplo yees
Fo r emplo yees, stress is also a fact
Canadians are frequently reporting that in Denmark and Switzerland repo rted
o f life— and it co ntinues to increase
they want mo re balance in their wo rk stress levels this high. “In the wake o f
over time. Recent research co nducted
and family lives.9 years o f fiscal do wnsizing, wo rkers
at the University o f Mo ntreal fo und
acro ss all secto rs are wo rking harder
that o f the 12 jo b catego ries exam-
ined, including unskilled white- and
The M ost St ressf ul Jobs and lo nger than ever while trying to
Ho w do jo bs rate in terms o f stress? balance family respo nsibilities,” said
b lue-co llar em p lo yees and sem i-
The inset The Most Stressful Jobs shows Sco tt Mo rris, fo rm er head o f the
skilled blue-co llar em plo yees, o nly
ho w selected o ccupatio ns ranked in Vanco uver-b ased co nsulting firm
upper-level m anagers repo rted no
an evaluatio n o f 250 jo bs. Am o ng Prio rity Managem ent System s. 1 2
increase in stress levels fro m 1987 to
the criteria used in the rankings were Daniel O ndrack, a pro fesso r at the
1998.4 A 2001 survey do ne by Ipso s-
o vertim e, q uo tas, deadlines, co m - University o f To ro nto ’s Jo sep h L.
Reid o f 1 5 0 0 Can ad ian s w ith
petitiveness, physical demands, envi- Rotman School of Management, notes
em p lo yer-sp o n so red h ealth care
ro n m en tal co n d itio n s, h azard s that “ o ne o f the m ajo r reaso ns fo r
plans fo und that 62 percent repo rted
enco untered , initiative req uired , absenteeism is the lo gistical pro blems
experiencing “a great deal o f stress
stamina required, win-lo se situatio ns, wo rkers face in just getting to wo rk,
o n the jo b.” Wo rkplace stress was
and wo rking in the public eye. including transpo rting children to
bad eno ugh to cause 34 percent o f
Stress is no t so mething that can be school and finding daycare. Single par-
tho se surveyed to say that it had
igno red in the wo rkplace. A 2005 po ll ents, especially female, have to juggle
made them physically ill.5 In a 2000
by Ipso s-Reid fo und that 66 percent all the daycare and family respo nsi-
Statistics Canada survey, o ne-third o f
o f the CEOs surveyed said that “stress, bilities, and that makes it extremely
em p lo yees b lam ed lo ng ho urs o r
burno ut o r o ther physical and men- difficult fo r peo ple to keep up with
o verwo rk fo r th eir stress, w h ile
tal health issues” have a negative effect wo rk demands.” 13
1 5 p ercen t b lam ed “ p o o r in ter-
perso nal relatio ns,” and 13 percent
blam ed risk o f accident o r injury.6
Fro nt-line em p lo yees are no t the
o nly m em bers o f the o rganizatio n
St re ss A cro ss t he Co unt r y, 2 0 0 1 –2 0 0 2
who experience stress, ho wever. In a
Region % w ith no life stresses % w ith quite a lot of stress
stud y co n d ucted b y research ers
Darren Laro se and Bernadette Schell Albert a 9.8 26.0
at O ntario ’s Laurentian University, At lant ic Canada 14.6 18.7
88 percent o f the executives surveyed Brit ish Columbia 12.0 23.6
Ont ario 10.7 25.7
indicated elevated levels o f stress
The Prairies 8.7 24.5
and/ o r unhealthy perso nality traits.7 Quebec 18.0 30.0
They also had higher levels o f pre-
dispo sitio n to serio us illnesses such Source: Compiled using data from Statistics Canada, “ Life Stress, by Sex, Household
Population Aged 18 and Over, Canada, Provinces, Territories, Health Regions and Peer
as cancer and heart disease.
Groups, 2000/01,” w w w.statcan.ca/english/freepub/82-221-XIE/00503/tables/html/
Perhaps one of the biggest problems 2336.htm (accessed August 4, 2005).
fo r employees is that they are increas-
100
O B O N TH E ED G E

riences. Individuals who frequently

The M o st St re ssf ul Jo b s go thro ugh alarm , resistance, and
exhaustio n cycles are mo re likely to
How do jobs rate in terms of stress? The follow ing show s how selected occu- b e susceptib le to fatigue, disease,
pat ions ranked in an evaluat ion of 250 jobs. Crit eria used in t he rankings aging, and o ther negative physical
included overtime, quotas, deadlines, competitiveness, physical demands, envi- and psycho lo gical co nsequences.
ronmental conditions, hazards encountered, initiative required, stamina required, Stress is no t necessarily bad in and
w in-lose situations, and w orking in the public eye. o f itself. It is typically discussed in a
negative co ntext, b ut it also has a
Rank Stress Rank Stress
Score Score Score Score po sitive value. Co nsider, fo r exam -
ple, athletes o r stage perfo rmers who
1. US president 176.6 47. Aut o salesperson 56.3
use stress po sitively to rise to the
2. Firef ight er 110.9 50. College prof essor 54.2
o ccasio n and perfo rm at o r near their
3. Senior execut ive 108.6 60. School principal 51.7
6. Surgeon 99.5 103. M arket research analyst 42.1 m axim um po tential. O n the o ther
10. Air t raff ic cont roller 83.1 104. Personnel recruit er 41.8 hand, students who put o ff studying
12. Public relat ions execut ive 78.5 113. Hospit al administ rat or 39.6 fo r exams until the last mo ment and
16. Advert ising account execut ive 74.6 119. Economist 38.7 then develo p the flu are no t able to
17. Real est at e agent 73.1 122. M echanical engineer 38.3 use their stress to perfo rm at a max-
20. St ockbroker 71.7 124. Chiropract or 37.9 imum level.
22. Pilot 68.7 132. Technical w rit er 36.5
25. Archit ect 66.9 149. Ret ail salesperson 34.9
31. Law yer 64.3 173. Account ant 31.1 Causes of St ress
33. General physician 64.0 193. Purchasing agent 28.9 A variety of sources of stress have been
35. Insurance agent 63.3 229. Broadcast t echnician 24.2 identified, including “wo rk overlo ad;
42. Advert ising salesperson 59.9 245. Act uary 20.2
ro le co nflict; ineffective, ho stile and
inco mpetent bo sses; lack o f perso nal
Source: Reprinted by permission of the Wall Street Journal, © 1996 Dow Jones & Company.
All rights reserved w orldw ide. fit with a jo b; lack o f reco gnitio n; lack
o f a clear jo b descriptio n o r chain o f
co m m and ; fear, uncertainty, and

What Is St ress?
Stress is usually defined in terms o f a
situatio n that creates excessive psy-
cho lo gical o r physio lo gical demands
o n a perso n. Thus the situatio n, o ften
referred to as the stresso r, and the
respo nse together create the stress that
an individual experiences. This dis-
tinctio n is impo rtant because what
is stressful to o ne p erso n m ay b e
enjo yable o r at least viewed as neu-
tral by ano ther. Altho ugh almo st any-
o ne might feel stress if fo llo wed by
a stranger in a dark alley, no t every-
o ne feels stressed when given the
o ppo rtunity fo r public speaking.
Dr. Hans Selye, a Mo ntreal-based
researcher, pio neered the study o f
stress and its effects. His mo del, the
general adaptatio n syndro me ( GAS) ,
suggests that stress o ccurs in three
stages: alarm, resistance, and exhaus- do ubt abo ut career pro gress; and prej-
udice based o n age, gender, ethnicity
tio n.14 The alarm stage o ccurs when
o r religio n.” 15 In their research o n
the bo dy tries to meet the initial chal-
stress, Pro fesso rs D uxb ury and
lenge o f the stresso r. The brain reacts
Higgins fo und that mo re than 50 per-
by sending a message to the rest o f
cent o f emplo yees feel they will no t
the b o d y’s system s, causing such
advance unless they put in long hours,
sympto ms as increased respiratio n,
and that turning do wn extra wo rk is
raised blo o d pressure, dilated pupils,
unacceptable.16 They also fo und that
and tensed muscles.
altho ugh o nly 10 percent o f emplo y-
The resistance stage o ccurs if the
ees wo rked 50 o r mo re ho urs a week
stresso r co ntinues. At this stage, a per-
in 1991, 25 percent were wo rking
so n feels such sympto ms as fatigue,
tho se ho urs in 2001.17
anxiety, and tensio n due to the bo dy’s
A variety o f changes in the wo rk-
attem p t to fight the stresso r. The
p lace have resulted in ad d itio nal
exhaustio n stage o ccurs fro m pro -
causes o f stress. We identify so me o f
lo nged and co ntinual expo sure to the
these key changes belo w:18
sam e stresso r. The im po rtant thing
to remember abo ut ho w GAS wo rks • Competition and change. With
is that it puts heavy demands o n the glo balizatio n has co me increas-
bo dy. The mo re that GAS is activated ing pressure to co mpete and
and the lo nger that it go es o n, the inno vate, which has led to an
mo re wear and tear yo ur bo dy expe- increase in re-engineering and

restructuring. Alicja Muszynski,
a so cio lo gy pro fesso r at the
University o f Waterlo o , no tes
that “as co rpo ratio ns, including
universities, have been asked to
tighten their belts, there are
fewer jo bs and peo ple that are
left have to take o n mo re
respo nsibility.” 19 Meanwhile,
she adds, “ peo ple are afraid to
take o n less in the wo rkplace, o r
to co mplain, because they’re
afraid they’re go ing to get
do wnsized.”
• Technological change. Emplo yees
are o ften expected to learn new
techno lo gies witho ut being
given adequate training. O r they
are no t co nsulted when new
techno lo gy is intro duced. In
additio n, emplo yees at all levels
are flo o ded with info rmatio n
because o f techno lo gical
changes. As well, emplo yees are
frequently asked to be “ o n” fo r
their jo bs mo re ho urs each day:
Pagers, vo ice mail, faxes, email,
the Internet, and intranets make
it po ssible to stay in to uch with
the wo rkplace 24 ho urs a day.
Research by Pro fesso r Christina
Cavanagh o f the Richard Ivey
Scho o l o f Business at the
University o f Western O ntario
sho ws that email is an increas-
ing cause o f stress. Individuals
receive an average o f 80 o r 90
emails daily, and devo te an ho ur
mo re each day to handling it
than they did two years ago . The
frustratio n is no t just with quan-
tity o r time. When Cavanagh
asked 10 middle managers to
keep track o f their emails, she
disco vered that nearly half o f
the messages were “ junk o r
no tes with little relevance.” 20
• Increasingly diverse workforce. “ If
diversity is no t managed effec-
tively it may lead to interper-
so nal stress, co mpetitio n amo ng
different gro ups fo r attentio n
and reso urces, and decreased
interactio n because o f the per-
ceived need fo r po litical co rrect-
ness in speech, interactio n, and
reco gnitio n.” In diverse gro ups,
individuals experience differ-
ences in beliefs and values, dif-
ferences in ro le expectatio ns,
and differences in perceptio ns
abo ut fairness in pro cedures.
• D ownsizing. With do wnsizing
seemingly a ro utine pro cedure
in many co mpanies, even the
threat o f layo ffs can be stressful.
Mo reo ver, after do wnsizing,
firms o ften increase the wo rk-
lo ad o f remaining emplo yees,
which leads to mo re stress.
• Employee empowerment and team-
work. Bo th empo werment and
teamwo rk require greater deci-
sio n-making respo nsibility and
interactio n skills fro m emplo y-
ees. Altho ugh this alo ne is
stressful, it is particularly stress-
ful fo r individuals who “ have
little o r no interest in empo wer-
ment o r teamwo rk structures
and pro cesses. Many peo ple do
no t functio n well in a gro up set-
ting, and they and their wo rk
may suffer if fo rced into a team
enviro nment.”
• Work/home conflict. Trying to bal-
ance wo rk life and family life is
difficult at the best o f times, but
mo re emplo yees are finding that
their jo bs are demanding lo nger
ho urs, either fo rmally o r info r-
mally. This makes it difficult to
manage the no nwo rk parts o f
life. Families with children
where bo th parents wo rk, o r
where parents are raising chil-
dren alo ne, o ften have the
added stress o f managing child-
care arrangements.
101
Abo ut o ne in eight wo rkers was
respo nsible fo r providing so me fo rm
o f care fo r aging parents in 1997, and
o ne survey fo und that o ne in three
was do ing so in 2002.21 Being a care-
giver is an additio nal stress bo th at
ho me and at wo rk. Studies indicate
that tho se who have difficulties find-
ing effective child care o r eldercare
have lo wer wo rk perfo rm ance and
increased absenteeism, decreased sat-
isfactio n, and lower physical and psy-
cho lo gical well-being.22 A fact that
tends to be o verlo o ked when stres-
so rs are reviewed individually is that
stress is an additive pheno meno n.23
Stress builds up. Each new and per-
sistent stresso r adds to an individ-
ual’s stress level. A single stresso r may
seem relatively unimpo rtant in and
o f itself, b ut if it is ad d ed to an
already high level o f stress, it can be
“ the straw that b reaks the cam el’s
back.” Yo u may recall that the final
straw fo r Linda Lundströ m was no t
being able to find a parking space.
Consequences of St ress
Stress manifests itself in a number o f
ways. Fo r instance, an individual who
is experiencing a high level o f stress
m ay develo p high b lo o d pressure,
ulcers, irritability, difficulty in making
ro utine decisio ns, lo ss o f appetite,
accid ent p ro neness, and the like.
These sympto ms can be placed under
three general catego ries: physio lo gi-
cal, psycho lo gical, and behavio ural
sympto ms.24
• Physiological symptoms. Mo st o f the
research o n stress suggests that it
can create changes in metabo -
lism, increase heart and breathing
rates, increase blo o d pressure,
cause headaches, and induce
heart attacks. An interesting
aspect o f illness in to day’s wo rk-
place is the co nsiderable change
in ho w stress sho ws up. In the
past, o lder wo rkers were the o nes
102
O B O N TH E ED G E
claiming sick leave, wo rkers’
co mpensatio n, and sho rt- and
lo ng-term disability—mo st o ften
in cases o f catastro phic illness
such as heart attacks, cancer, and
majo r back surgeries. These days,
ho wever, it is no t unusual fo r
lo ng-term disability pro grams to
be filled with emplo yees in their
20s, 30s, and 40s. Emplo yees are
claiming illnesses that are either
psychiatric ( such as depressio n)
o r mo re difficult to diagno se
( such as chro nic fatigue syn-
dro me o r fibro myalgia, a muscu-
lo skeletal disco mfo rt) . The
increase in disability claims may
be the result o f do wnsizing tak-
ing its to ll o n the psyches o f
tho se in the wo rkfo rce.25
• Psychological symptoms. Jo b dissat-
isfactio n is “the simplest and
mo st o bvio us psycho lo gical
effect” o f stress.26 Ho wever, stress
also manifests itself in o ther psy-
cho lo gical states—fo r instance,
tensio n, anxiety, irritability, bo re-
do m, and pro crastinatio n.
The evidence indicates that when
peo ple are placed in jo bs that make
multiple and co nflicting demands o r
in which there is a lack o f clarity as to
the perso n’s duties, autho rity, and
respo nsibilities, bo th stress and dis-
satisfactio n increase.27 Similarly, the
less co ntro l that peo ple have over the
pace of their work, the greater the stress
and dissatisfactio n. Mo re research is
needed to clarify the relatio nship, but
the evidence suggests that jo bs pro -
viding a lo w level o f variety, signifi-
cance, auto no m y, feed b ack, and
identity create stress and reduce satis-
factio n and invo lvement in the jo b.28
• Behavioural symptoms.
Behavio urally related stress
sympto ms include changes in
pro ductivity, absence, and
turno ver, as well as changes in
eating habits, increased smo king
o r co nsumptio n o f alco ho l, rapid
speech, fidgeting, and sleep dis-
o rders. Mo re recently stress has
been linked to aggressio n and
vio lence in the wo rkplace.
Why Do Individuals
Dif f er in Their
Experience of St ress?
So me peo ple thrive o n stressful situ-
atio ns, while o thers are overwhelmed
by them. What is it that differentiates
peo ple in term s o f their ab ility to
handle stress? What individual dif-
ference variables mo derate the rela-
tio nship between potential stresso rs
and experienced stress? At least five
variables—perceptio n, jo b experience,
so cial suppo rt, belief in lo cus o f co n-
tro l, and ho stility—have been fo und
to be relevant mo derato rs.
• Perception. Individuals react in
respo nse to their perception o f
reality rather than to reality itself.
Perceptio n, therefo re, mo derates
the relatio nship between a
po tential stress co nditio n and an
emplo yee’s reactio n to it. Fo r
example, o ne perso n might fear
lo sing his jo b because the co m-
pany is laying o ff staff, while
ano ther might perceive the situa-
tio n as an o ppo rtunity to receive
a large severance allo wance and
start a small business. Similarly,
what o ne emplo yee perceives as a
challenging jo b may be viewed as
threatening and demanding by
o thers.29 So the stress po tential
in enviro nmental, o rganiza-
tio nal, and individual facto rs
do es no t lie in o bjective co ndi-
tio ns. Rather, it lies in an
emplo yee’s interpretatio n o f
tho se facto rs.
• Job experience. Experience o n the
jo b tends to be negatively
related to wo rk stress. Two
explanatio ns have been
o ffered.30 First, peo ple who
experience mo re stress o n the
jo b when they are first hired
may be mo re likely to quit.
Therefo re, peo ple who remain
with the o rganizatio n lo nger are
tho se with mo re stress-resistant
traits o r tho se who are mo re
resistant to the stress characteris-
tics o f their o rganizatio n.
Seco nd, peo ple eventually
develo p co ping mechanisms to
deal with stress. Because this
takes time, senio r members o f
the o rganizatio n are mo re likely
to be fully adapted and sho uld
experience less stress.
• Social support. There is increasing
evidence that so cial suppo rt—
that is, co llegial relatio nships
with co -wo rkers o r supervi-
so rs— can buffer the impact o f
stress.31 The lo gic underlying
this mo derating variable is that
so cial suppo rt helps ease the
negative effects o f even high-
strain jo bs.
Fo r individuals who se wo rk asso -
ciates are unhelpful o r even actively
ho stile, so cial suppo rt may be fo und
o utside the jo b. Invo lvem ent with
family, friends, and co mmunity can
pro vide the suppo rt— especially fo r
tho se with a high so cial need— that
is missing at wo rk, and this can make
jo b stresso rs mo re to lerable.
• Belief in locus of control. The per-
so nality trait lo cus o f co ntro l
determines the extent to which
individuals believe they have
co ntro l o ver the things that hap-
pen in their lives. Tho se with an
internal lo cus o f co ntro l believe
they co ntro l their o wn destiny.
Tho se with an external lo cus o f
co ntro l believe their lives are
co ntro lled by o utside fo rces.
Evidence indicates that internals
perceive their jo bs to be less
stressful than do externals.32

When internals and externals co n-
fro nt a similar stressful situatio n, the
internals are likely to b elieve that
they can have a significant effect o n
the results. They therefo re act to take
co ntro l o f events. Externals are mo re
likely to experience stress b ecause
they frequently act helpless, o ften by
being passive and defensive, while
feeling helpless.
• Hostility. So me peo ple’s perso n-
ality includes a high degree o f
ho stility and anger. These peo ple
are chro nically suspicio us and
mistrustful o f o thers. Recent evi-
dence indicates that such hostility
significantly increases a perso n’s
stress and risk fo r heart
disease.33 Mo re specifically, peo -
ple who are quick to anger,
maintain a persistently ho stile
o utlo o k, and pro ject a cynical
mistrust o f o thers are mo re likely
to experience stress in situatio ns.
How Do We M anage
St ress?
Bo th the individual and the o rgani-
zatio n can take steps to help the indi-
vid ual m an age stress. Belo w we
discuss ways that individuals can
manage stress, and then we examine
pro grams that o rganizatio ns use to
help emplo yees manage stress.
Individual Approaches
An em p lo yee can take p erso n al
respo nsibility fo r reducing his o r her
stress level. Individual strategies that
have pro ven effective include tim e
m anagem ent techniq ues, physical
exercise, relaxatio n training, and a
clo se so cial suppo rt netwo rk.
• Time management. Many peo ple
manage their time po o rly. The
things we have to acco mplish in
any given day o r week are no t
necessarily beyo nd co mpletio n
if we manage o ur time pro perly.
The well-o rganized emplo yee,
like the well-o rganized student,
can o ften acco mplish twice as
much as the perso n who is
po o rly o rganized. So under-
standing and using basic time
management principles can help
individuals co pe better with ten-
sio ns created by jo b demands.34
A few o f the mo re well-kno wn
time management principles
are: ( 1) making daily lists o f
activities to be acco mplished;
( 2) prio ritizing activities by
impo rtance and urgency; ( 3)
scheduling activities acco rding
to the prio rities set; and ( 4)
kno wing yo ur daily cycle and
handling the mo st demanding
parts o f yo ur jo b during the high
part o f yo ur cycle, when yo u are
mo st alert and pro ductive.35
• Physical activity. No nco mpetitive
physical exercise, such as aero -
bics, walking, jo gging, swim-
ming, and riding a bicycle, has
lo ng been reco mmended by
physicians as a way to deal with
excessive stress levels. These
fo rms o f physical exercise increase
heart capacity, lo wer at-rest heart
rate, pro vide a mental diversio n
fro m wo rk pressures, and o ffer a
means to “ let o ff steam.” 36
• Building social supports. Having
• Relaxation techniques. Individuals
can teach themselves to reduce
tensio n thro ugh relaxation tech-
niques such as meditatio n, hyp-
no sis, and bio feedback. The
o bjective is to reach a state o f
deep relaxatio n, where yo u feel
physically relaxed, so mewhat
detached fro m the immediate
enviro nment, and detached
fro m bo dy sensatio ns.37 Fifteen
o r 20 minutes a day o f deep
relaxatio n releases tensio n and
pro vides a perso n with a pro -
no unced sense o f peacefulness.
Impo rtantly, significant changes
103
Fa ct Bo x 38
• One in three Canadians
betw een the ages of 25 and
44 claims to be a w orkaholic.
• 38% of people in management
report being w orkaholics.
• 85% of married w omen w ho
are employed full-time and have
at least one child at home, and
75% of similarly situated men,
say that w eekdays are too short
to accomplish w hat needs to get
done.
• The financial cost to companies
because employees are trying to
balance w ork and family obliga-
tions is estimated to be at least
$2.7 billion a year.
• 1/3 of Canadians don’t take all
of their vacation days, saving
their employers $8 billion a year.
• When Canadians do go on holi-
day, 36% of them take w ork,
and check their office voice mail
and email.
in heart rate, blo o d pressure,
and o ther physio lo gical facto rs
result fro m achieving the deep
relaxatio n co nditio n.
friends, family, o r co lleagues to
talk to pro vides an o utlet when
stress levels beco me excessive.
Expanding yo ur social support
network, therefo re, can be a
means fo r tensio n reductio n. It
pro vides yo u with so meo ne to
listen to yo ur pro blems and to
o ffer a mo re o bjective perspec-
tive o n the situatio n. Research
also demo nstrates that so cial
suppo rt mo derates the stress-
burno ut relatio nship.39 That is,
high suppo rt reduces the likeli-
ho o d that heavy wo rk stress will
result in jo b burno ut.
104
O B O N TH E ED G E
The inset Tips for Reducing Stress
o ffers additio nal ideas fo r reducing
stress.
Organizat ional
Approaches
Em plo yees who wo rk at To ro nto -
based BCS Co mmunicatio ns, a pub-
lishing, ad vertising, and p ub lic
relatio ns agency, receive biweekly shi-
atsu massages, paid fo r by the co m-
pany. The co m pany spends ab o ut
$ 70 0 a m o nth fo r the m assages,
equivalent to the amo unt it used to
spend providing coffee to the employ-
ees. “It’s in my co mpany’s best inter-
est to have my employees be healthy,”
says Caro line Tapp-McDo ugall, the
BCS gro up publisher.40
Van co uver-b ased Q LT, w h ich
develo ps pharm aceuticals that are
activated when expo sed to light, has
an in-ho use gym and o ffers aero bics
Tip s f o r Re d ucing
St re ss
• At least tw o or three times a
w eek, spend time w ith sup-
portive friends or family.
• Ask for support w hen you are
under pressure. This is a sign
of health, not w eakness.
• If you have spiritual or reli-
gious beliefs, increase or
maintain your involvement.
• Use a variety of methods to
reduce stress. Consider exer-
cise, nutrition, hobbies, posi-
tive thinking, and relaxation
techniques such as medita-
tion or yoga.
Source: J. Lee, “ How to Fight That
Debilitating Stress in Your Workplace,”
The Vancouver Sun, April 5, 1999,
p. C3. Reprinted w ith permission .
an d stretch classes an d Frid ay-
mo rning shiatsu massage treatments
to its emplo yees. Q LT’s cafeteria has
healthy fo o d cho ices, and Weight
Watchers pro ducts. Ro byn Crisanti,
a Q LT spo kesperso n, explains the
co m pany’s investm ent in wellness:
“ Co rp o rate welln ess is go o d fo r
em p lo yees an d th ere is a lo t o f
research that sho ws healthy emplo y-
ees take fewer sick days and are mo re
pro ductive.” 41 The pro gram s also
make it easier fo r Q LT to attract tal-
ented emplo yees.
Mo st firms that have intro duced
wellness pro gram s have fo und sig-
nificant b enefits. Health Canad a
rep o rts th at b usin esses get b ack
$3.39 fo r each co rpo rate do llar they
invest in wellness initiatives. Fo r indi-
viduals with three to five risk facto rs
(such as high cho lestero l, being over-
weight, o r smo king) the return was
$2.04 fo r each do llar spent.42 The
savings co me abo ut because there is
less turno ver, greater pro ductivity,
and reduced medical claims.43 Abo ut
64 percent o f Canadian co mpanies
surveyed by Health Canada o ffered
so m e so rt o f welln ess in itiative,
including sto p-sm o king pro gram s,
stress co urses, and back-pain m an-
agement pro grams; 17.5 percent o f
co mpanies o ffered o n-site wellness
pro grams.44
So what can o rganizatio ns do to
reduce emplo yee stress? In general,
strategies to reduce stress include
im p ro ved p ro cesses fo r cho o sing
emplo yees, placement o f emplo yees
in appro priate jo bs, realistic go al set-
ting, designing jo bs with emplo yee
needs and skills in mind, increased
em plo yee invo lvem ent, im pro ved
o rganizatio nal co mmunicatio n, and,
as mentio ned, establishment o f co r-
po rate wellness pro grams.
Certain jo b s are m o re stressful
than o thers, but individuals also dif-
fer in their respo nse to stress situa-
tio ns. We kno w, fo r exam ple, that
individuals with little experience o r
an external lo cus o f co ntro l tend to
b e m o re pro ne to stress. Selectio n
and placement decisio ns sho uld take
th ese facts in to co n sid eratio n .
Altho ugh m anagem ent sho uld no t
restrict hiring to o nly experienced
individuals with an internal lo cus o f
co ntro l, such individuals may adapt
better to high-stress jo bs and perfo rm
tho se jo bs mo re effectively.
Research sho ws that individuals
perfo rm better when they have spe-
cific an d ch allen gin g go als an d
receive feedback o n ho w well they
are pro gressing to ward them.45 The
use o f go als can reduce stress as well
as pro vide mo tivatio n. Specific go als
that are perceived as attainable clar-
ify p erfo rm an ce exp ectatio n s.
Additio nally, go al feedback reduces
uncertainties as to actual jo b per-
fo rmance. The result is less employee
frustratio n, ro le ambiguity, and stress.
Creating jo bs that give emplo yees
mo re respo nsibility, mo re meaning-
ful wo rk, m o re auto n o m y, an d
increased feedback can reduce stress
b ecause th ese facto rs give th e
emplo yee greater co ntro l o ver wo rk
activities and lessen dependence o n
o thers. O f co urse, no t all emplo yees
want jo bs with increased respo nsi-
bility. The right jo b fo r em plo yees
with a lo w need fo r gro wth might be
less respo nsibility and increased spe-
cializatio n. If individuals prefer struc-
ture and ro utine, m o re structured
jo bs sho uld also reduce uncertain-
ties and stress levels.
O ne idea that has received co n-
siderable recent attentio n is allo w-
ing em p lo yees to take sho rt nap s
d uring the wo rkd ay. 4 6 Nap tim e,
apparently, isn’t just fo r prescho o l
kids any mo re! An increasing num-
b er o f co m panies are finding that
allowing employees to catch 10 to 30
m inutes o f sleep in the afterno o n
 105

programs? Did you find any

Re d ucing St re ss in t he Wo r k p la ce unusual programs? To w hat
extent are these programs tailored
• Avoid electronic monitoring of staff. Personal supervision generates con-
to the needs of the employees in
siderably less stress. those industries?
• Allow w orkers time to recharge after periods of intense or demanding w ork.

• Deliver important information that significantly affects employees face to
face.
• Encourage positive social interactions betw een staff to promote problem
solving around w ork issues and increase emotional support.
• Keep in mind that staff need to balance privacy and social interaction at
w ork. Extremes can generate stress.
Source: J. Lee, “ How to Fight That Debilitating Stress in Your Workplace,” Vancouver Sun ,
April 5, 1999, p. C3. Reprinted w ith permission of the Vancouver Sun .
increases pro ductivity and m akes
them less pro ne to erro rs.
Increasing fo rmal o rganizatio nal
co m m unicatio n with em p lo yees
reduces uncertainty by lessening ro le
ambiguity and ro le co nflict. Given the
impo rtance that perceptio ns play in
mo derating the stress-respo nse rela-
tio nship, management can also use
effective co mmunicatio ns as a means
to shap e em p lo yee p ercep tio ns.
Remember that what emplo yees cat-
egorize as demands, threats, or oppor-
tunities are m erely interpretatio ns,
and tho se interp retatio ns can b e
affected by the symbo ls and actio ns
co mmunicated by management.
O ur final suggestio n is to o ffer
o rganizatio nally suppo rted wellness
pro grams, such as tho se pro vided by
Q LT and BCS Co m m unicatio ns.
These p ro gram s fo cus o n the
employee’s to tal physical and mental
co nditio n.47 Fo r example, they typi-
cally include wo rksho ps to help peo -
ple quit smo king, co ntro l alco ho l use,
lo se weight, eat better, and develo p a
regular exercise program. The assump-
tio n underlying mo st wellness pro -
grams is that emplo yees need to take
perso nal respo nsibility fo r their phys-
ical and mental health. The o rgani-
zatio n is merely a vehicle to make this
happen. The inset Reducing Stress in
the Workplace o ffers additio nal ideas.
Research Exercises
1 . Look for data on stress levels in
other countries. How do these
data compare w ith the Canadian
data presented above? Are the
sources of stress the same in dif-
ferent countries? What might you
conclude about how stress affects
people in different cultures?
2. Find out w hat three Canadian
organizations in three different
industries have done to help
employees manage stress. Are
there common themes in these
FA CEOFF
When organizations provide on-site
daycare f acilit ies, t hey are f illing a
needed role in parent s’ lives, and
m ak in g it easier f o r p aren t s t o
attend to their job demands rather
t h an w o r r y ab o u t ch ild - care
arrangements.
Your Perspective
1 . Think of all of the technological
changes that have happened in
the w orkplace in recent years,
including email, BlackBerrys, and
intranets. What are the positive
benefits of this change? What are
the dow nsides? As an employee
facing the demand to “ stay con-
nected” to your w orkplace, how
w ould you try to maintain a bal-
ance in your life?
2. How much responsibility should
individuals take for managing
their ow n stress? To w hat extent
should organizations become
involved in the personal lives of
their employees w hen trying to
help them manage stress? What
are the pros and cons for w hether
employees or organizations take
responsibility for managing
stress?
Want to Know M ore?
If you are w ondering how stressed you
are, go to w w w.heartandstroke.ca
and click on “ Your Heart & Stroke Risk
Assessment.” The site also offers tips
on how to relax and manage stress.
When employees expect organiza-
tions to provide child care, they are
shifting their responsibilities to their
employers, rather than keeping their
family needs and concerns private.
M oreover, it is unfair to give child-
care benefits w hen not all employ-
ees have children.
P A R T 2 STRIVING FOR PERFORM A NCE

CH A PTER 4

M o t i v a t i n g Se l f
and Ot hers

The BC Lions football team holds one of the

longest w inning streaks in CFL history. How
does motivation affect how the team
performs?

1 What is motivation?

2 How do needs motivate people?

Are there other w ays to motivate

3 people?

4 Do equity and fairness matter?

How can rew ards and job design

5 motivate employees?

6 What kinds of mistakes are made in rew ard

systems?
 y most accounts, Vancouver-based

B BC Lions head coach Wally Buono

is not a particularly w arm person.1
Buono is a hard taskmaster w ith his BC
Lions players and coaches, and is not afraid
to make tough decisions. “ In this business,
if you stay with the status quo you haven’t
improved yourself,” he said after his team
lost in the 2005 Western final.
Buono w ants to coach w inners, not
losers. As a coach, Buono has one of the
w inningest records in the Canadian
Football League (CFL). His teams have
been to seven Grey Cups, and the BC
Lions had the third-longest w inning streak
in CFL history by the middle of the season
in 2005. But then they started losing games.
Buono seems to motivate by being tough. He’s not Players spent hours in training each day because “ guys
afraid to criticize his players publicly, and w ill give them a w anna get better,” explained slotback Geroy Simon.
long list of their faults during contract negotiations. He Then the team fell apart.
claims that he gives only two performance reviews to play- This chapter examines the subject of motivation and
ers: “ Once w hen I w arn you and once w hen I cut you.” rew ards in some detail. It looks at w hat motivation is, key
Buono’s players may not like him personally, but at motivation theories, and how motivation theories and
the beginning of the 2005 season they performed w ell. rew ard systems can be used effectively in the w orkplace.

D EFINING MOTIVATION
Fo llo wing the lead o f pro fesso rs Gary Latham o f the Jo seph L. Ro tm an Scho o l o f 1 What is motivation?
Management at the University o f To ro nto and Craig Pinder o f the Faculty o f Business at
the University o f Victo ria, we define mo tivatio n as the internal and external facto rs BC Lions
that lead an individual to engage in go al-related behavio ur. Mo tivatio n can affect the www.bclions.com
intensity, directio n, and persistence a perso n sho ws in wo rking to ward a go al.2 Intensity motivation The internal and
is co ncerned with how hard a perso n tries. This is what mo st o f us fo cus o n when we talk external forces that lead an individ-
abo ut mo tivatio n. Ho wever, high intensity is unlikely to po sitively affect jo b perfo rm- ual to work toward a goal.

ance unless the effo rt is channelled in a direction that is useful. Finally, the effo rt requires
persistence. This is a m easure o f ho w lo ng a perso n can m aintain his o r her effo rt.
Mo tivated individuals stay with a task lo ng eno ugh to achieve their go al.

O B IS FO R EV ERY O N E

Are managers manipulating Why do some manage rs do How important is fairne ss What can you do if you
employees when they link a bette r job of motivating to you? think your salary is
rewards to productivity? pe ople than othe rs? “ unfair” ?
Is this ethical

Whe n might job re de sign Eve r wonde r why e mploye e s

be most appropriate and do some strange things?
motivational too?
107
108 Part 2 St riving f or Perf orm ance
Theory X The assumption that
employees dislike work, will attempt
to avoid it, and must be coerced,
controlled, or threatened with pun-
ishment to achieve goals.
Theory Y The assumption that
employees like work, are creative,
seek responsibility, and will exercise
self-direction and self-control if they
are committed to the objectives.
intrinsic motivators A person’s
internal desire to do something, due
to such things as interest, challenge,
and personal satisfaction.
extrinsic motivators Motivation
that comes from outside the person
and includes such things as pay,
bonuses, and other tangible
rewards.
2 How do needs
motivate people?
Many peo ple inco rrectly view mo tivatio n as a perso nal trait—that is, so me have it and
o thers do n’t. Alo ng these lines, Do uglas McGrego r has pro po sed two distinct views o f
human beings. Theo ry X, which is basically negative, suggests that emplo yees dislike
wo rk, will try to avo id it, and must be co erced, co ntro lled, o r threatened with punish-
ment to achieve go als. Theory Y, which is basically po sitive, suggests that employees will
use self-directio n and self-co ntro l if they are co mmitted to the go als.3
O ur kno wledge o f mo tivatio n tells us that neither o f these theo ries fully acco unts
fo r employee behavio ur. What we know is that mo tivatio n is the result o f the interactio n
o f the individual and the situatio n. Certainly, individuals differ in their basic mo tivatio nal
drives. But the same emplo yee who is quickly bo red when pulling the lever o n a drill
press may enthusiastically pull a slo t machine lever in Casino Windso r fo r ho urs. Yo u
may read a thriller at o ne sitting, yet find it difficult to co ncentrate o n a textbo o k fo r mo re
than 20 minutes. It’s no t necessarily yo u— it’s the situatio n. So as we analyze the co n-
cept o f mo tivatio n, keep in mind that the level o f mo tivatio n varies bo th between indi-
viduals and within individuals at different times. What mo tivates peo ple will also vary
fo r bo th the individual and the situatio n.
Mo tivatio n theo rists talk abo ut intrinsic mo tivato rs and extrinsic mo tivato rs .
Extrinsic m o tivato rs co m e fro m o utside the perso n and include such things as pay,
bo nuses, and o ther tangible rewards. Intrinsic mo tivato rs co me fro m a perso n’s inter-
nal desire to do so mething, mo tivated by such things as interest, challenge, and per-
so nal satisfactio n. Individuals are intrinsically mo tivated when they genuinely care abo ut
their wo rk, lo o k fo r better ways to do it, and are energized and fulfilled by do ing it well.4
The rewards the individual gets fro m intrinsic mo tivatio n co me fro m the wo rk itself,
rather than fro m external facto rs such as increases in pay o r co mpliments fro m the bo ss.
Are individuals mainly intrinsically o r extrinsically mo tivated? Theo ry X suggests
that peo ple are almo st exclusively driven by extrinsic mo tivato rs. Ho wever, Theo ry Y
suggests that peo ple are mo re intrinsically mo tivated. Intrinsic and extrinsic mo tiva-
tio n may reflect the situatio n, ho wever, rather than individual perso nalities.
Fo r example, suppo se yo ur mo ther has asked yo u to take her to a meeting an ho ur away
and then dro p o ff yo ur twin bro ther so mewhere else. Yo u may be willing to drive her, with-
o ut any tho ught o f co mpensatio n, because it will make yo u feel nice to do so mething fo r
her. That is intrinsic mo tivatio n. But if yo u have a love-hate relatio nship with yo ur bro ther,
you may insist that he buy you lunch for helping out. Lunch would then be an extrinsic moti-
vato r—so mething that came fro m o utside yo urself and mo tivated yo u to do the task.
Recent research suggests that perceptio ns o f managers regarding whether employees are
intrinsically o r extrinsically mo tivated vary by culture.5 No rth American managers per-
ceive employees as mo re extrinsically than intrinsically mo tivated, and tend to give better
perfo rmance appraisals to emplo yees who m they perceive to be intrinsically mo tivated.
Asian managers perceive emplo yees as equally mo tivated by intrinsic and extrinsic fac-
to rs. Latin American managers perceive employees as mo re intrinsically than extrinsically
mo tivated, and give higher perfo rmance evaluatio ns to tho se they believe are mo re intrin-
sically mo tivated. Tho ugh managers fro m the three cultures have different perceptio ns
o f their employees, employees in all three cultures said that they were mo tivated mo re by
intrinsic than extrinsic rewards. If yo u think mo ney is a po werful mo tivato r, yo u may be
surprised to read an o ppo sing viewpo int in this chapter’s Point/Counterpoint o n page 142.
N EED S THEORIES OF MOTIVATION
The main theo ries o f mo tivatio n fall into o ne o f two catego ries: needs theo ries and
pro cess theo ries. Needs theories describe the types o f needs that must be met in o rder to
mo tivate individuals. Process theories help us understand the actual ways in which we and
o thers can be mo tivated. There are a variety o f needs theo ries, including Maslo w’s hier-
archy o f needs, Alderfer’s ERG theo ry,6 McClelland’s theo ry o f needs,7 and Herzberg’s
 Chapt er 4 M ot ivat ing Self and Ot hers 109

mo tivatio n-hygiene theo ry (so metimes called the two-factor theory). We briefly review these
to illustrate the basic pro perties o f needs theo ries.

M a slow ’s Hierarchy of Needs Theory

It is pro bably safe to say that the best-known theo ry o f mo tivatio n is Abraham Maslow’s Abraham M aslow
hierarchy o f needs.8 He hypo thesized that every human being has a hierarchy o f five www.ship.edu/~ cgboeree/
maslow.html
needs:

• Physiological. Includes hunger, thirst, shelter, sex, and o ther bo dily needs.

• Safety. Includes security and pro tectio n fro m physical and emo tio nal harm.

• Social. Includes affectio n, belo ngingness, acceptance, and friendship.

• Esteem. Includes internal esteem facto rs such as self-respect, auto no my, and
achievement; and external esteem facto rs such as status, reco gnitio n, and
attentio n.

• Self-actualization. Includes gro wth, achieving o ne’s po tential, and self-fulfill-

ment. This is the drive to beco me what o ne is capable o f beco ming.

As each o f these needs beco mes substantially satisfied, the next need beco mes mo re
impo rtant to fulfill. In terms o f Exhibit 4-1, the individual mo ves up the steps o f the
needs hierarchy. Fro m the perspective o f mo tivatio n, the theo ry wo uld say that while no
need is ever fully satisfied, a substantially satisfied need no lo nger mo tivates. So if yo u
want to mo tivate so meo ne, acco rding to Maslow, yo u need to understand what level o f the
hierarchy that person is currently on and focus on satisfying the needs at or above that level.
Maslo w’s needs theo ry co ntinues to be widely reco gnized so me 60 years after he
pro po sed it, particularly am o ng practising m anagers. The practical significance o f
Maslo w’s theo ry is widely accepted.9 The theo ry is intuitive and easy to understand.
Unfo rtunately, research do es no t generally validate the theo ry, altho ugh research do es
suggest that peo ple have basic needs that are impo rtant to them and mo tivate them to
get alo ng with o thers.10 Maslo w himself pro vided no empirical evidence fo r his the-
o ry. Several studies that examined the theo ry fo und little suppo rt fo r the predictio n
that needs fo rm the hierarchy pro po sed by Maslo w, that unsatisfied needs mo tivate, o r
that a satisfied need mo ves a perso n to seek satisfactio n at a new need level.11

EXHIBIT 4-1 M aslow ’s Hierarchy of Needs

Self-
actualization

Esteem

Social

Safety

Physiological
110 Part 2 St riving f or Perf orm ance
ERG theory A revised-need hier-
archy theory that emphasizes the
core needs of existence, relatedness,
and growth.
M cClelland’s theory of needs
Achievement, power, and affiliation
are three important needs that help
explain motivation.
need for achievement The drive
to excel, to achieve in relation to a
set of standards, to strive to succeed.
need for pow er The need to
make others behave in a way that
they would not have behaved
otherwise.
need for affiliation The desire
for friendly and close interpersonal
relationships.
ERG Theory
Clayto n Alderfer has rewo rked Maslo w’s hierarchy o f needs to align it m o re clo sely
with the empirical research. His revised need hierarchy is called ERG theo ry. 12
Alderfer argues that there are three gro ups o f co re needs—existence, relatedness, and
gro wth—hence, the name: ERG theo ry. The existence gro up is co ncerned with o ur basic
material existence requirements. They include the items that Maslo w co nsidered to be
physio lo gical and safety needs. The relatedness gro up is co ncerned with o ur desire fo r
m aintaining im po rtant interperso nal relatio nships. These so cial and status desires
require interactio n with o thers if they are to be satisfied, and they align with Maslo w’s
so cial need and the external co mpo nent o f Maslo w’s esteem need. Finally, the growth
gro up is co ncerned with o ur intrinsic desire fo r perso nal develo pm ent. This gro up
includes the intrinsic co m po nent o f Maslo w’s esteem need and the characteristics
included under self-actualizatio n.
Aside fro m substituting three needs fo r five, how do es Alderfer’s ERG theo ry differ fro m
Maslo w’s? In co ntrast to the hierarchy o f needs theo ry, the ERG theo ry demo nstrates
that ( 1) mo re than o ne need may be wo rking at the same time, and ( 2) if the gratifica-
tio n o f a higher-level need is stifled, the desire to satisfy a lower-level need increases. ERG
theo ry is mo re co nsistent with o ur kno wledge o f individual differences amo ng peo ple.
Variables such as educatio n, family backgro und, and cultural enviro nment can alter
the impo rtance o r driving fo rce that a gro up o f needs ho lds fo r a particular perso n.
Several studies have suppo rted ERG theo ry,13 but there is also evidence that it do es
no t wo rk in so m e o rganizatio ns.14 O verall, ho wever, ERG theo ry represents a m o re
valid versio n o f the need hierarchy.
M cClellan d ’s Theory of Needs
McClelland’s theo ry o f needs was develo ped by David McClelland and his asso ci-
ates to help explain m o tivatio n.15 The theo ry fo cuses o n three needs: achievem ent,
po wer, and affiliatio n. They are defined as fo llo ws:
• Need for achievement . The drive to excel, to achieve in relatio n to a set o f
standards, to strive to succeed.
• Need for power . The need to make o thers behave in a way that they wo uld no t
have behaved o therwise.
• Need for affiliation. The desire fo r friendly and clo se interperso nal relatio nships.
So m e peo ple have a co m pelling drive to succeed. They are striving fo r perso nal
achievement rather than the rewards o f success per se. They have a desire to do so mething
better o r mo re efficiently than it has been do ne befo re. This drive is the achievement need
( nAch) . Fro m research into the achievement need, McClelland fo und that high achiev-
ers differentiate themselves fro m o thers by their desire to do things better.16
The need fo r po wer ( nPow) is the desire to have impact, to be influential, and to
co ntro l o thers. Individuals high in nPow enjoy being “in charge,” strive fo r influence over
o thers, prefer to be placed in co mpetitive and status-o riented situatio ns, and tend to
be mo re co ncerned with prestige and gaining influence o ver o thers than with effective
perfo rmance.
The third need iso lated by McClelland is affiliatio n ( nAff) . This need has received
the least attentio n fro m researchers. Individuals with a high affiliatio n mo tive strive
fo r friendship, prefer co o perative situatio ns rather than co mpetitive o nes, and desire
relatio nships that invo lve a high degree o f mutual understanding.
 Chapt er 4 M ot ivat ing Self and Ot hers 111

EXHIBIT 4-2 Contrasting View s of Satisfaction and Dissatisfaction

Traditional view

Dissatisfaction Satisfaction

Herzberg's view
Hygiene Fact ors

Dissatisfaction No Dissatisfaction

M ot ivat ors

No Satisfaction Satisfaction

Relying o n an extensive amo unt o f research, so me reaso nably well-suppo rted pre-
dictio ns can be m ade based o n the relatio nship o f these needs to jo b perfo rm ance.
First, individuals with a high need to achieve prefer and will be mo tivated by jo b situ-
atio ns with perso nal respo nsibility, feedback, and an intermediate degree o f risk. Seco nd,
peo ple with a high achievement need are interested in ho w well they do perso nally
and no t in influencing o thers to do well. Thus, they may no t make go o d managers.17
Third, the best managers are high in their need fo r po wer and lo w in their need fo r
affiliatio n.18

M otivation-Hygiene Theory
The mo tivatio n-hygiene theo ry was pro po sed by psycho lo gist Frederick Herzberg.19 Frederick Herzberg
Herzberg investigated the questio n “What do peo ple want fro m their jo bs?” in an effo rt www.lib.uwo.ca/business/
herzberg.html
to determine what might lead to a perso n’s success o r failure at wo rk.
He fo und that intrinsic facto rs— such as achievement, reco gnitio n, the wo rk itself,
respo nsibility, advancement, and growth—seem to be related to jo b satisfactio n. Herzberg
also fo und that there were characteristics that led to jo b dissatisfactio n. The facto rs that
caused dissatisfactio n were extrinsic— such as co m pany po licy and adm inistratio n,
supervisio n, interperso nal relatio ns, and wo rking co nditio ns.
Herzberg’s research led him to co nclude that the o ppo site o f satisfactio n is no t dis-
satisfactio n, as was traditio nally believed. Remo ving dissatisfying characteristics fro m a
jo b do es no t necessarily make the jo b satisfying. As illustrated in Exhibit 4-2, Herzberg
pro po ses a dual co ntinuum: the o ppo site o f “ Satisfactio n” is “ No Satisfactio n,” and
the o ppo site o f “ Dissatisfactio n” is “ No Dissatisfactio n.”
Herzberg explained that the facto rs leading to jo b satisfactio n were motivators that
are separate and distinct fro m the hygiene factors that lead to jo b dissatisfactio n. Thus man-
agers who try to get rid o f facto rs that create jo b dissatisfactio n can create mo re pleas-
ant wo rkplaces, but no t necessarily m o re m o tivated o nes. Hygiene facto rs include
co mpany po licy and administratio n, supervisio n, interperso nal relatio ns, wo rking co n-
ditio ns, and salary. When these facto rs are adequate, peo ple will no t be dissatisfied;
ho wever, neither will they be satisfied. Mo tivating facto rs include achievement, reco g-
nitio n, the wo rk itself, respo nsibility, and gro wth. These are the characteristics that peo -
ple find intrinsically rewarding o r mo tivating.
112 Part 2 St riving f or Perf orm ance

Herzberg’s theo ry has received so me criticism.20 Ho wever, it has been widely read
and few managers are unfamiliar with his reco mmendatio ns. O ver the past 40 years
the po pularity o f jo bs that allo w emplo yees greater respo nsibility in planning and co n-
tro lling their wo rk can pro bably be attributed largely to Herzberg’s findings and rec-
o mmendatio ns.

Summarizing Nee ds Theorie s

All needs theo ries o f mo tivatio n, including Maslo w’s hierarchy o f needs, Alderfer’s ERG
theo ry, McClelland’s theo ry o f needs, and Herzberg’s mo tivatio n-hygiene theo ry ( o r
the two -facto r theo ry) , pro po se a similar idea: Individuals have needs that, when unsat-
isfied, will result in mo tivatio n. Fo r instance, if yo u have a need to be praised, yo u may
wo rk harder at yo ur task in o rder to receive reco gnitio n fro m yo ur manager o r o ther
co -wo rkers. Similarly, if yo u need mo ney and yo u are asked to do so mething, within rea-
so n, that o ffers mo ney as a reward, yo u will be mo tivated to co mplete the task in o rder
to earn the mo ney. Where needs theo ries differ is in the types o f needs they co nsider, and
whether they pro po se a hierarchy o f needs ( where so m e needs have to be satisfied
befo re o thers) o r simply a list o f needs. Exhibit 4-3 illustrates the relatio nship o f the fo ur
needs theo ries to each o ther. While the theo ries use different names fo r the needs, and
also have different numbers o f needs, we can see that they are so mewhat co nsistent in
the types o f needs addressed. Exhibit 4-4 o n page 113 indicates the co ntributio n o f and
empirical suppo rt fo r each theo ry.

Needs Theories in the Workplace

What can we co nclude fro m the needs theo ries? We can safely say that individuals
have needs and that they can be highly mo tivated to achieve tho se needs. The types o f
needs, and their im po rtance, vary by individual, and pro bably vary o ver tim e fo r the
same individual as well. When rewarding individuals, o ne sho uld co nsider their spe-
cific needs. So m e em plo yees m ay be struggling to m ake ends m eet, while o thers are
lo o king fo r m o re o ppo rtunities to reach self-actualizatio n. Individual needs also
change o ver time, depending o n o ne’s stage in life. O bvio usly, in a wo rkplace it wo uld
be difficult to design a reward structure that co uld co mpletely take into acco unt the spe-
TELUS cific needs o f each em plo yee. At Burnaby, BC-based TELUS, em plo yees earn po ints
www.telus.com thro ugh a variety o f jo b-related activities. They then cho o se gifts fro m a catalo gue

EXHIBIT 4-3 Relationship of Various Needs Theories

M aslow Alderfer Herzberg M cClelland

Self-Actualization
G row th
Need for Achievement
M otivators
Esteem
Need for Pow er
Social Relatedness
Hygiene
Need for Affiliation
Factors
Safety
Existence
Physiological
 Chapt er 4 M ot ivat ing Self and Ot hers 113

EXHIBIT 4-4 Summarizing the Various Needs Theories

Theory M aslow Herzb erg Ald erfer M cClelland

Is there a The theory argues that Hygiene factors must M ore than one need People vary in the
hierarchy of low er-order needs be met if a person is can be important at types of needs they
needs? must be satisfied not to be dissatisfied. the same time. If a have. Their motivation
before one progresses They w ill not lead to higher-order need and how w ell they
to higher-order needs. satisfaction, how ever. is not being met, perform in a w ork sit-
M otivators lead the desire to satisfy uation are related to
to satisfaction. a low er-level w hether they have a
need increases. need for achievement,
pow er, or affiliation.

What is the The theory enjoys The popularity of The theory is seen as The theory tells us that
theory’s w ide recognition giving employees a more valid version high need achievers
impact/ among practising greater responsibility of the need hierarchy. do not necessarily
contrib ution? managers. M ost for planning and con- It tells us that achiev- make good managers,
managers are familiar trolling their w ork can ers w ill be motivated since high achievers
w ith it. be attributed to his by jobs that offer per- are more interested
findings (see, for sonal responsibility, in how they do
instance, the job char- feedback, and moder- personally.
acteristics model on ate risks.
page 134). It show s
that more than one
need may operate
at the same time.

What empirical Research does not It is not really a It ignores situational It has mixed empirical
support/ generally validate theory of motiva- variables. support, but the theory
criticism s exist? the theory. In particu- tion: It assumes is consistent w ith
lar, there is little a link betw een sat- our know ledge of indi-
support for the hierar- isfaction and pro- vidual differences
chical nature of needs. ductivity that w as among people. Good
The theory is criticized not measured empirical support exists
for how data w ere col- or demonstrated. on needs achievement
lected and interpreted. in particular.

that lists rewards and their po int values. To get an idea o f the facto rs that might mo ti-
vate yo u in the wo rkplace, turn to this chapter’s Learning About Yourself Exercise o n
page 143.

PROCESS THEORIES OF MOTIVATION

What does the life of a Canadian Football League assistant coach look like? It’s definitely not
glamorous. 21 The coaches w ork long hours, they can be fired w ithout notice if the team’s
owner or the head coach think they are responsible for the poor play of the team, and they work
long hours w ithout pensions or benefits.
Dan Dorazio, an offensive line coach w ith the BC Lions, faced a choice after his team beat
the Calgary Stampeders in August 2005: stay in Calgary overnight, or drive home to Abbotsford,
BC, and arrive just before midnight. Tired after a long day of coaching, he still w as not able to
114 Part 2 St riving f or Perf orm ance

rest. He w as expected to have the Calgary game tape analyzed before sunrise, so that the
coaches could plan the post-game practice w ith the players later in the afternoon. Dorazio
chose to drive home, and, after a brief nap, go into his office at 4 a.m.
What would make an assistant coach show up for work, day after day, under these conditions?

3 Are there other ways
to motivate people?
While needs theo ries identify the different needs that co uld be used to mo tivate indi-
viduals, pro cess theo ries fo cus o n the bro ader picture o f how so meo ne can set abo ut
mo tivating ano ther individual. Pro cess theo ries include expectancy theory and goal-setting
theory. Fo cusing greater attentio n o n these pro cess theo ries might help yo u understand
ho w to mo tivate yo urself o r so meo ne else.

expectancy theory The theory
that individuals are motivated based
upon their evaluation of whether
their effort will lead to good per-
formance, whether good perform-
ance will be followed by a given
outcome, and whether that outcome
is attractive to them.
Expectan cy Theory
Currently, o ne o f the mo st widely accepted explanatio ns o f mo tivatio n is Victo r Vro o m’s
expectancy theo ry.22
Fro m a practical perspective, expectancy theo ry says that an emplo yee will be mo ti-
vated to exert a high level o f effo rt when he o r she believes the fo llo wing:
• That the effo rt will lead to go o d perfo rmance
• That go o d perfo rmance will lead to o rganizatio nal rewards, such as a bo nus, a
salary increase, o r a pro mo tio n
• That the rewards will satisfy his o r her perso nal go als
• The theo ry, therefo re, fo cuses o n the three relatio nships ( expectancy, instrumen-
tality, and valence) illustrated in Exhibit 4-5 o n page 115 and described belo w.
This exhibit also pro vides an example o f ho w yo u might apply the theo ry.

Effo rt-Perfo rmance Relatio nship

expectancy The belief that effort
is related to performance.
The effo rt-perfo rmance relatio nship is co mmo nly called expectancy. It refers to the indi-
vidual’s perceptio n o f ho w pro bable it is that exerting a given amo unt o f effo rt will lead
to go o d perfo rmance. Fo r example, emplo yees are so metimes asked to perfo rm tasks fo r
which they do no t have suitable skills o r training. When that is
the case, they will be less mo tivated to try hard, because they
already believe that they will no t be able to acco mplish what
they are being asked to do . Expectancy can be expressed as a
pro bability, and ranges fro m 0 to 1.
In the o pening vignette, we saw that the BC Lio ns players
were willing to wo rk hard fo r a demanding co ach. These play-
ers likely felt that their effo rts, such as spending extra tim e
training, wo uld lead to go o d perfo rmance.
In general, an emplo yee’s expectancy is influenced by the
fo llo wing:

• Self-esteem

• Previo us success

• Help fro m superviso rs and subo rdinates

Golfers such as Prince Edw ard Island’s Lorie Kane illustrate the
effectiveness of the expectancy theory of motivation, w here • Info rmatio n
rew ards are tied to effort and outcome. Players on the LPGA
tour are paid strictly according to their performance, unlike mem-
• Pro per materials and equipment23
bers of professional team sports. Kane’s first LPGA tour victory
Co ach Wally Buo no ’s o bservatio n o n mo tivatio n highlights
came in 2000, at the M ichelob Light Classic. It ended a string of
nine runner-up finishes. She had tw o more victories in 2000 and the impo rtance o f the expectancy link in mo tivating individu-
w on the 2001 LPGA Takefuji Classic. As Kane has put more effort als. Acco rding to Buo no , mo tivatio n “ is really the functio n o f
into her play, she has been increasing her earnings each year. the perso n that yo u hire . . . Yo u need to be able to give [staff and
 Chapt er 4 M ot ivat ing Self and Ot hers 115

EXHIBIT 4-5 How Does Expectancy Theory Work?

M y prof essor of f ers me $1 million if I memorize t he t ext book by t omorrow morning.

Expectancy Instrumentality Valence

Ef f ort Perf ormance Link Perf ormance Rew ards Link Rew ards Personal Goals Link

No m at t er how mu ch eff ort M y prof essor does not look There are a lot of w onderf ul t hings
I put in, pro bably not possi ble like someone w ho h as $1 million. I could do w it h $1 million.
t o memorize t he t ext in 24 hours.
E= 0 I=0 V=1

Conclusion: Though I value t he rew ard, I w ill not be mot ivat ed t o do t his t ask.

players] the pro per setting . . . atmo sphere . . . to o ls so they’re no t hindered fro m do ing
what they have to do .” 24

Perfo rmance-Rewards Relatio nship

The perfo rmance-rewards relatio nship is co mmo nly called
* Are managers mani-
pulating employees
instrumentality. It refers to the individual’s perceptio n o f
whether perfo rming at a particular level will lead to the
instrumentality The belief that
performance is related to rewards.
when they link rewards attainment o f a desired o utco me. In particular, will the per-
to productivity? Is this fo rmance be acknowledged by tho se who have the power to
ethical? allo cate rewards? Instrumentality ranges fro m –1 to +1. A
negative instrumentality indicates that high perfo rmance
reduces the chances o f getting the desired o utco me. An instrumentality o f 0 indicates
that there is no relatio nship between perfo rmance and receiving the desired o utco me.
In a study by the Angus Reid Gro up, o nly 44 percent o f employees said the wo rkplace
reco gnizes emplo yees who excel at their jo b.25 Thus, o ne po ssible so urce o f lo w mo ti-
vatio n is the emplo yee’s belief that no matter ho w hard he o r she wo rks, the perfo rm-
ance will no t be reco gnized. BC Lio ns o ffensive line co ach Dan Do razio wo rks lo ng
ho urs at his jo b because he do es feel that his effo rts are reco gnized by the head co ach
and by the players o n the team.

Rewards–Perso nal Go als Relatio nship

The rewards–perso nal go als relatio nship is co mmo nly called
valence . It refers to the degree to which o rganizatio nal valence The value or importance
* Why do some
manage rs do a bette r
rewards satisfy an individual’s personal goals or needs and the an individual places on a reward.
attractiveness o f tho se po tential rewards fo r the individual.
job of motivating
Unfo rtunately, many managers are limited in the rewards
pe ople than othe rs?
they can distribute, which makes it difficult to perso nalize
rewards. Moreover, some managers incorrectly assume that all
employees want the same thing. They overlo o k the mo tivatio nal effects o f differentiating
rewards. In either case, employee mo tivatio n may be lower because the specific need the
employee has is no t being met thro ugh the reward structure. Valence ranges fro m –1 (very
undersirable reward) to +1 (very desirable reward).
Vanco uver-based Radical Entertainment, creato r o f such digital entertainment as The Radical Entertainment
Incredible Hulk and The Simpsons Road Rage, makes sure it meets the needs o f its emplo y- www.radical.ca
ees, because it do es no t want to lo se them to the United States.26 The co mpany emplo ys
116 Part 2 St riving f or Perf orm ance
EXHIBIT 4-6 Steps to Increasing M otivation, Using Expectancy Theory
Improving Expectancy
Improve t he abilit y of t he
individual t o perf orm.
• M ake sure employees h ave skills
f or t he t ask.
• Provide t r aining.
• Assign reason able t asks and go als.
goal What an individual is trying
to accomplish.
Improving Instrumentality Improving Valence
Increase t he individual’s belief t hat M ake sure t hat t he rew ard is
perf ormance w ill lead t o rew ard. meaningf ul t o t he individual.
• Observe and recognize perf orm an ce. • Ask employees w h at rew ards t hey
• Deliver rew ards as promised. value.
• Indi cat e t o employees how previous • Give rew ards t h at are valued.
good perf orm an ce led t o great er
rew ards.
a “Radical fun guru” who se jo b is to make the wo rkplace so much fun that no o ne wants
to leave. The co mpany provides free fo o d all day, including catered lunches a few times a
week, and there is a lo g cabin o n-site, fitted o ut with big screens, DVDs, and gaming equip-
ment, where employees can take time o ut to recharge during their lo ng wo rkdays. Radical
Entertainment o ffers these benefits to meet the needs o f its yo ung employees, who find
greater mo tivatio n fro m being part o f a co o l wo rkplace than having a bigger pensio n plan.
Expectancy Theo ry in the Wo rkplace
Do es expectancy theo ry wo rk? Altho ugh it has its critics,27 mo st o f the research evi-
dence suppo rts the theo ry.28 Research in cro ss-cultural settings has also indicated sup-
po rt fo r expectancy theo ry.29
Exhibit 4-6 shows how managers can increase the motivation of employees, using insights
fro m expectancy theo ry. Managers can take steps to improve expectancy, instrumentality, and
valence. To further appreciate ho w expectancy theo ry might apply in the wo rkplace, see
this chapter’s Case Incident— Wage Reduction Proposal o n the CD-RO M that acco mpanies
this textbo o k fo r an example o f what happens when expected rewards are withdrawn.
Goal-Setting Theory
Yo u have heard the phrase a number o f times: “Just do yo ur best. That’s all anyo ne can
ask.” But what do es “ do yo ur best” mean? Do we ever kno w if we have achieved that
vague go al? Might yo u have do ne better in yo ur high scho o l English class if yo ur parents
had said, “ Yo u sho uld strive fo r 75 percent o r higher o n all yo ur wo rk in English”
instead o f “ do yo ur best” ?
The research o n go al setting by Edwin Lo cke and his co lleague Pro fesso r Gary Latham
at the University o f To ro nto sho ws that intentio ns to wo rk to ward a go al are a majo r
so urce o f wo rk mo tivatio n.30 A go al is “what an individual is trying to acco mplish; it is
the o bject o r aim o f an actio n.” 31 Go als tell an employee what needs to be do ne and how
much effo rt will need to be expended.32
How Do es Go al Setting Mo tivate?
Acco rding to Lo cke, go al setting mo tivates in fo ur ways ( see Exhibit 4-7 o n page 117) :33
• Goals direct attention. Go als indicate where individuals sho uld direct their
effo rts when they are cho o sing amo ng things to do . Fo r instance, reco gnizing
that an impo rtant assignment is due in a few days, go al setting may enco urage
yo u to say no when friends invite yo u to a mo vie this evening.
• Goals regulate effort. Go als suggest ho w much effo rt an individual sho uld put
into a given task. Fo r instance, if earning a high mark in acco unting is mo re
impo rtant to yo u than earning a high mark in o rganizatio nal behavio ur ( O B) ,
yo u will likely put mo re effo rt into studying acco unting.
 Chapt er 4 M ot ivat ing Self and Ot hers 117

EXHIBIT 4-7 Locke’s M odel of Goal Setting

Directing attention

G oals Regulating effort

Task
motivate
performance
by . . . Increasing persistence

Encouraging the development

of strategies and action plans

Source: Adapt ed f rom E. A. Locke and G. P. Lat ham, A Theory of Goal Set t ing and Task Perf ormance
(Englew ood Cliffs, NJ: Prentice Hall, 1980). Reprinted w ith permission of Edw in A. Locke.

• Goals increase persistence. Persistence represents the effo rt spent o n a task o ver
time. When peo ple keep go als in mind, they will wo rk hard o n them, even in
the face o f o bstacles.
• Goals encourage the development of strategies and action plans. O nce go als are set,
individuals can develo p plans fo r achieving tho se go als. Fo r instance, a go al to
beco me mo re fit may include plans to jo in a gym, wo rko ut with friends, and
change eating habits.

In o rder fo r go als to be effective, they sho uld be “ SMART.” SMART stands fo r

• Specific: Individuals kno w exactly what is to be achieved.

• Measurable: The go als pro po sed can be tracked and reviewed.
• Attainable: The go als, even if difficult, are reaso nable and achievable.
• Results-o riented: The go als sho uld suppo rt the visio n o f the o rganizatio n.
• Time-bo und: The go als are to be achieved within a stated time.

Employees can respo nd quite po sitively to frequent go al-setting, as OB in the Workplace

sho ws.

O B I N T H E W O RK PL A C E

Employees Hold M eetings to Achieve Goals

Will employees police themselves to meet goals? Raj Narayanaswamy, CEO of Calgary-
based Replico n, which develo ps time-management so ftware, thinks so .34 He o ffered his Replicon
emplo yees a deal in the last quarter o f 1998. His emplo yees wanted him to clo se the www.replicon.com
o ffice over Christmas ho lidays. He wanted to make sure all o f his shipments go t o ut o n
time. “Meet these go als befo re then, and we will think abo ut it,” he to ld them.
To achieve this go al, the emplo yees develo ped a plan, and scheduled daily 10-
minute meetings to make sure everything stayed o n track. They ended up surpassing
their go al, and getting the vacatio n days they wanted.
Narayanaswamy has enco uraged his emplo yees to set departmental and perso nal
go als to increase revenue and so lve pro blems each quarter ever since. He rewards
them with trips and events when go als are met. The emplo yees co ntinue to ho ld
daily m eetings to assess ho w well the go als are being m et, and Narayanaswamy
thinks the “cringe facto r” mo tivates individuals. “It’s difficult fo r so meo ne to attend
a daily meeting and say every day, ‘I didn’t get it do ne,’” he po ints o ut. Because the
emplo yees set the go als, they are also mo re likely to wo rk hard to achieve them.
118 Part 2 St riving f or Perf orm ance
self-efficacy An individual’s belief
that he or she is capable of perform-
ing a task.
From Concepts to Skills o n pages 148–149 gives further ideas o f ho w to effectively
engage in go al setting.
Go al-setting theo ry is co nsistent with expectancy theo ry. The go als can be co nsid-
ered the effo rt-perfo rmance link— in o ther wo rds, the go als determine what must be
do ne. Feedback can be co nsidered the perfo rmance-rewards relatio nship, where the
individual’s effo rts are reco gnized. Finally, the implicatio n o f go al setting is that the
achievement o f the go als will result in intrinsic satisfactio n (and may o f co urse be linked
to external rewards) .
Co ntingency Facto rs in Go al Setting
Are there any co ntingencies in go al-setting theo ry, o r can we take it as a universal truth
that difficult and specific go als will always lead to higher perfo rmance? Feedback is o ne
o f the mo st impo rtant facto rs that influences the relatio nship between go als and per-
fo rmance. Recent research suggests that when individuals receive negative feedback,
they lo wer their go als, and when they receive po sitive feedback, they raise their go als.35
Self-efficacy may explain ho w feedback affects go al behavio ur. Self-efficacy refers
to an individual’s belief that he o r she is capable o f perfo rming a task.36 The higher
yo ur self-efficacy, the mo re co nfidence yo u have in yo ur ability to succeed in a task. So ,
in difficult situatio ns, we find that peo ple with lo w self-efficacy are mo re likely to lessen
their effo rt o r give up alto gether, while tho se with high self-efficacy will try harder to mas-
ter the challenge.37 In additio n, individuals high in self-efficacy seem to respo nd to
negative feedback with increased effo rt and mo tivatio n, whereas tho se lo w in self-effi-
cacy are likely to lessen their effo rt when given negative feedback.38
In additio n to feedback, fo ur o ther facto rs have been fo und to influence the go als-per-
fo rmance relatio nship. These are go al co mmitment, adequate self-efficacy, task char-
acteristics, and natio nal culture. Go al-setting theo ry presuppo ses that an individual is
co mmitted to the go al; that is, he o r she is determined no t to lo wer o r abando n the
go al. This is mo st likely to o ccur when go als are made public, when the individual has
an internal lo cus o f co ntro l, and when the go als are self-set rather than assigned.39
Research indicates that individual go al setting do es no t wo rk equally well o n all
tasks. The evidence suggests that go als seem to have a greater effect o n perfo rmance
when tasks are simple rather than co mplex, well-learned rather than new, and inde-
pendent rather than interdependent.40 O n interdependent tasks, gro up go als are prefer-
able. Finally, go al-setting theo ry is culture bo und. It’s well adapted to co untries like
Canada and the United States because its key co mpo nents align reaso nably well with
No rth American cultures. Fo llowing the GLOBE measures fro m Chapter 3, it assumes that
employees will be reaso nably independent (no t to o high a sco re o n power distance), that
managers and emplo yees will seek challenging go als ( lo w in uncertainty avo idance) ,
and that perfo rmance is co nsidered impo rtant by bo th (high in perfo rmance o rientatio n).
So do n’t expect go al setting to necessarily lead to higher em plo yee perfo rm ance in
co untries such as Po rtugal o r Chile, where the o ppo site co nditio ns exist.
O ur overall co nclusio n is that intentio ns—as articulated in terms o f hard and specific
go als— are a po tent mo tivating fo rce. Under the pro per co nditio ns, they can lead to
higher perfo rmance.
RESPONSES TO THE REWARD SYSTEM
As one of four quarterbacks for the BC Lions football team, Casey Printers was not a happy player
w hen the football season started in summer 2005.41 He w as the CFL’s most outstanding player
in the 2004 season, after stepping in w hen starting quarterback Dave Dickenson w as injured.
Subsequently, Printers led the BC Lions to an eight-game w inning streak, and he thought that
should have entitled him to a better contract for 2005.
 Chapt er 4 M ot ivat ing Self and Ot hers 119

Printers signed his first contract w ith the BC Lions in 2004, for $65 000 a year. He asked for
a new four-year contract that w ould pay him more than $400 000 a year. The team turned him
dow n, countering w ith an offer of $1 million over three years. Printers turned that dow n.
Printers’ rationale for the seemingly high salary demand w as that his teammate and fel-
low quarterback Dave Dickenson makes $400 000 a year, as does Edmonton Eskimos quar-
terback Ricky Ray and M ontreal Alouettes quarterback Anthony Calvillo. “ M y value is just as
equal as these guys, so w hy not try to get equal or more? It just makes perfect business sense,”
he explains. W ill Printers continue to be motivated to play for the BC Lions? And is he making
the right salary comparisons?

To a large extent, mo tivatio n theo ries are abo ut rewards. The theo ries suggest that indi- 4 Do equity and fairness
viduals have needs, and will exert effo rt to have tho se needs met. The needs theo ries matter?
specifically identify tho se needs. Go al-setting and expectancy theo ries po rtray pro cesses
by which individuals act and then receive desirable rewards (intrinsic o r extrinsic) fo r their
behavio ur.
Three additio nal pro cess theo ries ask us to co nsider ho w individuals respo nd to
rewards. Equity theory suggests that individuals evaluate and interpret rewards. Fair process
go es o ne step further, suggesting that emplo yees are sensitive to a variety o f fairness
issues in the wo rkplace that extend beyo nd the reward system but also affect emplo yee
mo tivatio n. Co gnitive evaluatio n theo ry examines how individuals respo nd to the intro -
ductio n o f extrinsic rewards fo r intrinsically satisfying activities.

Equity Theory
Equity theo ry suggests that em plo yees co m pare their equity theory Individuals com-
jo b inputs ( i.e., effo rt, experience, educatio n, co m pe- pare their job inputs and outcomes
with those of others and then
tence, creativity) and o utco mes ( i.e., salary levels, raises,
* How important is
fairne ss to you? reco gnitio n, challenging assignm ents, wo rking co ndi-
respond so as to eliminate any
inequities.
tio ns) with tho se o f o thers. We perceive what we get fro m
a jo b situatio n ( the o utco mes mentio ned abo ve) in rela-
tio n to what we put into it ( the inputs mentio ned abo ve) ,
and then we co m pare o ur o utco m e-input ratio with the
o utco me-input ratio o f relevant o thers. ( This idea is illustrated in Exhibit 4-8.) If we

EXHIBIT 4-8 Equity Theory

Ratio of Output to Input Person 1ís Perception

Person 1
Inequit y, underrew arded
Person 2

Person 1
Equit y
Person 2

Person 1
Inequit y, overrew arded

Person 2
120 Part 2 St riving f or Perf orm ance

Because of the financial crisis in perceive o ur ratio to be equal to that

Russia, many firms do not have o f the relevant o thers with who m we
money to pay their employees.
co m pare o urselves, a state o f equity
Instead of receiving a salary,
employees get paid in goods the
is said to exist. We perceive o ur sit-
factories produce. Velta Company, uatio n as fair— that justice prevails.
a bicycle maker in Russia, gives When we see the ratio as uneq ual,
w orkers one bicycle a month we experience this as inequity.
instead of a paycheque. Workers
Im agine that yo u wro te a case
then have to sell their bikes for
analysis fo r yo ur marketing pro fesso r
cash or barter it for food. Some
w orkers deal w ith the inequity of and spent 18 ho urs researching and
not getting a salary by using a dif- writing it up. Yo ur classmate spent 6
ferent referent. “ We are luckier ho urs do ing her analysis. Each o f yo u
than people over at the chemical received a m ark o f 75 percent. It is
plant,” says one Velta employee.
likely that yo u wo uld perceive this as
“ At least our factory gives us
something w e can sell.”
unfair, as yo u wo rked co nsiderably
harder ( i.e., exerted mo re effo rt) than
your classmate. J. Stacy Adams has pro-
po sed that tho se experiencing inequity
are mo tivated to do so mething to co r-
rect it.42 Thus, yo u might be inclined
to spend co nsiderably less time o n yo ur next assignment fo r yo ur marketing pro fesso r.

What Happens When We Feel Treated Inequitably?

W h en in d ivid uals feel th at th ey h ave b een treated
inequitably, they generally act to reduce that inequity. Based
o n equity theo ry, they can be predicted to make o ne o f six
*if you
What can you do
think your
cho ices, with so m e o f them b eing m o re negative to the
o rganizatio n than o thers.43 We can illustrate these cho ices
salary is “ unfair” ?
by no ting po ssible respo nses that quarterback Casey Printers
co uld have had when he co mpared his salary with the higher
salaries o f o ther quarterbacks in his reference gro up.

• Change their inputs ( fo r example, Casey Printers co uld have decided to exert
less effo rt playing quarterback) .

• Change their outcomes ( fo r example, Printers co uld have tried to renego tiate his
co ntract to get himself a higher salary) .

• Adjust perceptions of self ( fo r example, Printers co uld have tho ught, “ I’ve o nly
been in the Canadian Fo o tball League fo r two years. Maybe I do n’t really have
the same experience as the o ther guys” ) .

• Adjust perceptions of others ( fo r example, Printers co uld have tho ught, “Antho ny
Cavillo o f the Alo uettes has been a quarterback fo r a lo t lo nger, and maybe he
deserves greater pay” ) .

• Choose a different referent ( fo r example, Printers co uld have co nsidered what

o ther quarterbacks who have been in the league fo r o nly two years receive) .

• Leave the field ( fo r example, Printers co uld ho pe that he wo uld be picked up

by ano ther team at the end o f the seaso n, which in fact is what happened
when he decided to leave the BC Lio ns fo r the Kansas City Chiefs in 2006) .

Case Incident— Frustrated at Age 32 o n page 147 describes what happens when a
Generatio n Xer feels he do es no t have the same o ppo rtunities in the wo rkplace as a
Baby Bo o mer.
 Chapt er 4 M ot ivat ing Self and Ot hers 121

Bear in mind that being treated equitably is no t the same as being treated equally.
Equity theo ry tells us that peo ple who perfo rm better sho uld o bserve that they are
rewarded better than tho se who do no t perfo rm as well. Thus po o r perfo rmers sho uld
also o bserve that they receive lesser rewards than tho se who perfo rm at a higher level.
Paying equally wo uld mean that everyo ne is paid the same, regardless o f perfo rmance.

RESEARCH FINDINGS Equit y Theory

Equity theo ry has generally been suppo rted, with a few mino r qualificatio ns.44 First,
inequities created by o verpayment do no t seem to have a significant impact o n behav-
io ur in mo st wo rk situatio ns. Apparently, peo ple have a great deal mo re to lerance o f
overpayment inequities than o f underpayment inequities, o r are better able to ratio nalize
them. Seco nd, no t all peo ple are equity sensitive.45 Fo r example, so me emplo yees sim-
ply do no t wo rry abo ut how their rewards co mpare with tho se o f o thers. Predictio ns fro m
equity theo ry are unlikely to be very accurate with these individuals.

Equity Theo ry in the Wo rkplace

It is impo rtant to no te that while mo st research o n equity theo ry has fo cused o n pay,
emplo yees seem to lo o k fo r equity in the distributio n o f o ther o rganizatio nal rewards.
Fo r instance, it has been sho wn that the use o f high-status jo b titles, as well as large
and lavishly furnished o ffices, may functio n as desirable o utco mes fo r so me emplo yees
in their equity equatio ns.46
Equity theo ry demo nstrates that, fo r mo st emplo yees, mo tivatio n is influenced sig-
nificantly by relative rewards, as well as by abso lute rewards. Ho wever, so me key issues
are still unclear.47 Fo r instance, ho w do emplo yees handle co nflicting equity signals,
such as when unio ns po int to o ther emplo yee gro ups who are substantially better off,
while management argues ho w much things have improved? Ho w do emplo yees define
inputs and o utco mes? Ho w do they co mbine and weigh their inputs and o utco mes to
arrive at to tals? Despite these pro blems, equity theo ry co ntinues to o ffer so me impo r-
tant insights into emplo yee mo tivatio n.

Fair Pro cess an d Treatment

Recent research has been directed at redefining what is meant by equity, o r fairness.48
Histo rically, equity theo ry fo cused o n distributive justice , o r the perceived fairness o f distributive justice The perceived
the amount and allocation o f rewards amo ng individuals. But peo ple also care abo ut fairness of the amount and allocation
of rewards among individuals.
pro cedural justice — the perceived fairness o f the process used to determine the distri-
butio n o f rewards. ( This includes having a vo ice in a decisio n and finding accuracy in
decisio n making.) And they care, to o , abo ut interactio nal justice — the quality o f the procedural justice The perceived
fairness of the process used to
interpersonal treatment received fro m a manager.49 (Being treated sensitively and being pro -
determine the distribution of
vided an explanatio n fo r decisio ns are examples.)
rewards.
The evidence indicates that distributive justice has a greater influence o n emplo yee
satisfactio n than pro cedural justice, while pro cedural and interactio nal justice tend to interactional justice The quality
of the interpersonal treatment
affect an employee’s o rganizatio nal co mmitment, trust in his o r her manager, and inten-
received from a manager.
tio n to quit.50 Researchers have fo und that when managers and emplo yees believed
that the co mpany’s pro cesses were fair, they were mo re likely to show a high level o f trust
and co mmitment to the o rganizatio n. Emplo yees engaged in negative behavio ur when
they felt the pro cess was unfair.51
Fo r example, employees at Vo lkswagen’s plant in Puebla, Mexico , staged a lengthy walk- Volksw agen Canada
o ut after being o ffered a 20-percent raise. The reaso n? Their unio n leaders had agreed to www.vw.ca
wo rk-rule co ncessio ns witho ut co nsulting them. The employees, even tho ugh happy abo ut
the raise, did not believe that the process leading to the change in the work rules was fair. This
behavio ur is co nsistent with eco no mist Alan Blinder’s findings that “Changing the way
wo rkers are treated may bo o st pro ductivity mo re than changing the way they are paid.” 52
122 Part 2 St riving f or Perf orm ance
W . L. Gore, maker of Gore-Tex
fabric and Elixir guitar strings, has
a compensation and rew ard sys-
tem based on procedural justice.
At Gore, motivation comes from
approval of co-w orkers. Com-
pensat ion is det ermined by
employees, w ho rank their team
members each year. Gore openly
shares inf ormat ion about how
pay decisions are made based
on consistent procedures. Proce-
dural f airness helps creat e a
st rong organizat ional commit -
ment among employees.
Sauder School of Business
www.sauder.ubc.ca
Air Canada Employee M orale
Flies Low
cognitive evaluation theory
Offering extrinsic rewards (e.g., pay)
for work effort that was previously
rewarding intrinsically will tend to
decrease the overall level of a per-
son’s motivation.
To increase emplo yees’ perceptio n o f pro cedural justice, managers sho uld co nsider
o penly sharing info rmatio n o n ho w allo catio n decisio ns are made and fo llo w co nsis-
tent and unbiased pro cedures. With increased pro cedural and interactio nal fairness,
emplo yees are likely to view their managers and the o rganizatio n as po sitive, even if
they are dissatisfied with pay, pro m o tio ns, and o ther perso nal o utco m es. Pro fesso r
Daniel Skarlicki at the Sauder Scho o l o f Business at the University o f British Co lumbia
has fo und that it is when unfavo urable o utco mes are co mbined with unfair pro cedures
o r po o r interperso nal treatment that resentment and retaliatio n (e.g., theft, bad-mo uthing,
sabo tage) are m o st likely.53 This explains why Casey Printers left the BC Lio ns and
signed a three-year co ntract with the Kansas City Chiefs: He did no t think he was being
treated fairly and suggested that the co aching staff did no t have co nfidence in him.54
This chapter’s CBC Video Case Incident sho ws what can happen when emplo yees feel
they have treated unfairly.
Cognitive Evaluation Theory
Several researchers suggest that the intro ductio n o f extrinsic rewards, such as pay, fo r wo rk
effo rt that was previously rewarding intrinsically ( i.e., that was perso nally satisfying) will
tend to decrease the o verall level o f a perso n’s mo tivatio n.55 This pro po sal—which has
co me to be called co gnitive evaluatio n theo ry—has been extensively researched, and
a large number o f studies have been suppo rtive.56 Additio nally, Alfie Ko hn, o ften cited
fo r his wo rk o n rewards, argues that peo ple are actually punished by rewards, and do infe-
rio r wo rk when they are enticed by mo ney, grades, o r o ther incentives. His extensive
review o f incentive studies co ncluded that “rewards usually impro ve perfo rmance o nly
at extremely simple—indeed, mindless—tasks, and even then they impro ve o nly quan-
titative perfo rmance.” 57
Extrinsic vs. Intrinsic Rewards
Histo rically, mo tivatio n theo rists have generally assumed that intrinsic mo tivato rs are
independent o f extrinsic mo tivato rs. That is, the stimulatio n o f o ne wo uld no t affect
the o ther. But co gnitive evaluatio n theo ry suggests o therwise. It argues that when extrin-
sic rewards are used by o rganizatio ns as payo ffs fo r superio r perfo rmance, the intrinsic
rewards, which are derived fro m individuals do ing what they like, are reduced.
In o ther wo rds, when extrinsic rewards are given to so meo ne fo r perfo rming an inter-
esting task, it causes intrinsic interest in the task itself to decline. Fo r instance, altho ugh
a taxi driver expects to be paid fo r taking yo ur best friend to the airpo rt, yo u do no t
 Chapt er 4 M ot ivat ing Self and Ot hers 123

expect yo ur friend to pay yo u if yo u vo lunteer to drive her to the airpo rt. In fact, the
o ffer o f pay might diminish yo ur pleasure in do ing a favo ur fo r yo ur friend.
Why wo uld such an o utco me o ccur? The po pular explanatio n is that the individual
experiences a lo ss o f co ntro l o ver his o r her o wn behavio ur when it is being rewarded by
external so urces. This causes the previo us intrinsic mo tivatio n to diminish. Extrinsic
rewards can pro duce a shift—fro m an internal to an external explanatio n—in an indi-
vidual’s perceptio n o f why he o r she wo rks o n a task. If yo u are reading a no vel a week
because your contemporary literature instructor requires you to, you can attribute your read-
ing behaviour to an external source. If you stop reading novels the moment the course ends,
this is mo re evidence that yo ur behavio ur was due to an external so urce. Ho wever, if yo u
find yo urself co ntinuing to read a novel a week when the co urse ends, yo ur natural incli-
natio n is to say, “I must enjo y reading no vels because I’m still reading o ne a week! ”

RESEARCH FINDINGS Ext rinsic and Int rinsic Rew ards

Altho ugh further research is needed to clarify so me o f the current ambiguity, the evidence
do es lead us to co nclude that the interdependence o f extrinsic and intrinsic rewards is
a real pheno meno n.58 A large bo dy o f research sho ws that large external rewards can
undermine the po sitive perfo rmance o f emplo yees.59 When emplo yees wo rk fo r a large
reward, they will explain their behavio ur thro ugh that reward—“I did it fo r the mo ney.”
However, in the absence o f large rewards, employees are mo re likely to reflect o n the inter-
esting nature o f the wo rk o r the benefits o f being an o rganizatio nal member to explain
their behavio ur. When an o rganizatio n pro vides emplo yees with intrinsically interest-
ing wo rk, they will o ften wo rk lo nger and harder than o ne might predict fro m the actual
external rewards.
In studies dating back to the 1940s, emplo yees have always ranked o ther items, such
as being shown appreciatio n fo r wo rk do ne, feeling “in” o n things, and having interesting
wo rk, as b eing m o re im po rtant to them than their salaries. 6 0 Em plo yees at b o th
So uthwest Airlines and AES, an independent pro ducer o f electrical po wer with o ffices in
the United States, Argentina, China, Hungary, and o ther co untries, indicated that they
appreciated the po sitive wo rking climates o f these o rganizatio ns mo re than the finan-
cial rewards they received.61

In crea sing Intrin sic M otivation

O ur discussio n o f mo tivatio n theo ries and o ur discussio n o f ho w to apply mo tivatio n
theo ries in the wo rkplace fo cuses mainly o n impro ving extrinsic mo tivatio n. Recently
Pro fesso r Kenneth Tho mas o f the Naval Po stgraduate Scho o l in Mo nterey, Califo rnia, has
develo ped a mo del o f intrinsic mo tivatio n that draws fro m the jo b characteristics mo del
and co gnitive evaluatio n theo ry.62 He identifies fo ur key rewards that increase an indi-
vidual’s intrinsic mo tivatio n:

• Sense of choice. The o ppo rtunity to select what o ne will do , and perfo rm the way
o ne thinks best. Individuals can use their o wn judgment to carry o ut the task.

• Sense of competence. The feeling o f acco mplishment fo r do ing a go o d jo b.

Peo ple are mo re likely to feel a sense o f acco mplishment when they carry o ut
challenging tasks.

• Sense of meaningfulness. The o ppo rtunity to pursue wo rthwhile tasks.

Individuals feel go o d abo ut what they are do ing, and believe that what they
are do ing matters.

• Sense of progress. The feeling o f acco mplishment that o ne is making pro gress
o n a task, and that it is mo ving fo rward. Individuals feel that they are spend-
ing their time wisely in do ing their jo bs.
124 Part 2 St riving f or Perf orm ance

EXHIBIT 4-9 Building Blocks for Intrinsic Rew ards

Leading f or Choice Leading f or Com pet ence

• Delegated authority • Know ledge

• Trust in w orkers • Positive feedback
• Security (no punishment) for honest mistakes • Skill recognition
• A clear purpose • Challenge
• Information • High, noncomparative standards

Leading f or M eaningf ulness Leading f or Progress

• A noncynical climate • A collaborative climate

• Clearly identified passions • M ilestones
• An exciting vision • Celebrations
• Relevant task purposes • Access to customers
• Whole tasks • M easurement of improvement

Source: Reprinted w ith permission from the publisher. From Intrinsic M otivation at Work: Building Energy
and Commitment. Copyright © K. Thomas. Berrett-Koehler Publishers Inc., San Francisco, CA. All rights
reserved. w w w.bkconnection.com.

Tho mas also identified fo ur sets o f behavio urs managers can use to create intrinsic
rewards fo r their emplo yees:

• Leading for choice. Empo wering emplo yees and delegating tasks

• Leading for competence. Suppo rting and co aching emplo yees

• Leading for meaningfulness. Inspiring emplo yees and mo delling desired

behavio urs

• Leading for progress. Mo nito ring and rewarding emplo yees

Exhibit 4-9 presents the building blo cks that increase the likeliho o d that intrinsic
rewards are mo tivatio nal.

CREATING A MOTIVATING WORKPLACE:

5 How can rewards and
job design motivate
employees?
REWARD S AND JOB RED ESIGN
O rganizatio ns use specific incentives to m o tivate individuals, team s, and the entire
o rganizatio n to achieve o rganizatio nal go als such as pro ductivity, reduced turno ver,
and leadership effectiveness. They can also redesign jo bs to create m o re m o tivating
wo rkplaces.

Employee Recognition: Show ing People That They M atter

Expectancy theo ry tells us that a key co mpo nent o f mo tivatio n is the link between per-
fo rmance and reward ( that is, having yo ur behavio ur reco gnized) . Emplo yee reco gni-
tio n pro grams co ver a wide spectrum o f activities. They range fro m a spo ntaneo us and
private “thank yo u” o n up to widely publicized fo rmal pro grams in which specific types
o f behavio ur are enco uraged and the pro cedures fo r attaining reco gnitio n are clearly
identified.63
Reco gnitio n may no t be eno ugh fo r so me jo bs, ho wever, as Exhibit 4-10 o n page 125
suggests.
 Chapt er 4 M ot ivat ing Self and Ot hers 125

So m etim es, ho wever, the link between reward and

EXHIBIT 4-10
perfo rmance is unclear, as Ethical D ilemma Exercise o n
page 146 sho ws.
A survey o f Can ad ian firm s in 2 0 0 4 b y H ew itt
Asso ciates fo und that 34 percent o f co m panies reco g-
nized individual o r gro up achievem ents with cash o r
merchandise.64 At the same time, reco gnizing emplo y-
ees can co st little o r no mo ney. To ro nto -based KPMG is
o ne co mpany that has created a “ thank-yo u culture” to
reco gnize go o d wo rk and deeds. Reco gnitio n is a way o f
“ reinfo rcing o ur co rpo rate values,” says Val D uffey,
KPMG’s To ro nto -based hum an reso urce directo r. “ We
ackno wledge that reco gnitio n is critical to mo tivating,
satisfying and retaining the best emplo yees.” 65 No t all
emplo yees feel they get reco gnitio n, ho wever. In a recent
Globe and Mail Web po ll, 27 percent o f respo ndents said
that they had never received a co mpliment fro m their
bo sses, and 10 percent said that they had received the
last co mpliment fro m their bo sses o ver a year ago .66 Source: From the Wall Street Journal, October 21, 1997. Reprinted
O rganizatio ns can reco gnize emplo yees in numero us by permission of Cartoon Features Syndicate.
ways. The Globe and Mail awards the Stephen Go dfrey
Prize fo r Newsro o m Citizenship. Vanco uver-based Purdy’s
Cho co lates reco gnizes emplo yees o n their birthdays and when they mo ve, get married, Hew itt Associates
o r have children. As well, Purdy’s reco gnizes employees who reach their five-year anniver- www.hewitt.com/canada
sary with the co mpany at an annual luncheo n, with o ut-o f-town employees flown in fo r
the event.67 O ther ways o f reco gnizing perfo rmance include sending perso nal no tes o r
emails fo r go o d perfo rmance, putting emplo yees o n prestigio us co mmittees, sending
them fo r training, and giving so meo ne an assistant fo r a day to help clear backlo gs.
Em plo yee reco gnitio n m ay reduce turno ver in o rganizatio ns, particularly that o f
go o d emplo yees. When executives were asked the reaso ns why emplo yees left fo r jo bs
with o ther co m panies, 34 percent said it was due to lack o f reco gnitio n and praise,

At Toront o-based Snap Promo-

tions, rew ards are given sponta-
neously, for extraordinary effort.
CEO Warren Kotler (kneeling at
right , w it h employees Leilani
Nolan and M ez Lalji) show s his
deep appreciation for his entire
t eam by giving t hem t icket s t o
show s and concerts, buying them
lunch, and even sending a
masseuse t o someone’s home.
Kotler recently organized a “ Steak
& Beans” cont est , dividing t he
company int o t w o t eams t hat
received points for meetings set,
quot es generat ed, and sales
achieved. At t he end of t he
period, the losing team ate beans
at M ort on’s St eakhouse in
Toront o (a w ell-know n upscale
rest aurant ) w hile w at ching t he
w inners feast on steak.
126 Part 2 St riving f or Perf orm ance
variable-pay programs Reward
programs in which a portion of an
employee’s pay is based on some
individual and/or organizational
measure of performance.
piece-rate pay plan An
individual-based incentive plan in
which employees are paid a fixed
sum for each unit of production
completed.
co mpared with 29 percent who mentio ned lo w co mpensatio n, 13 percent who men-
tio ned limited autho rity, and 8 percent who cited perso nality pro blems.68
Variab le-Pay Program s: Improving Pro d u ctivity
A large bo dy o f research suggests that pay is far mo re mo tivatio nal than so me mo tiva-
tio n theo rists such as Maslo w and Herzberg suggest.69 Co nsistent with this research,
managers generally lo o k at ways to manipulate pay to impro ve perfo rmance by co n-
sidering a variety o f incentive schemes. So me o f these are individually based, so me are
team based, and so me reward all members o f the o rganizatio n fo r wo rking to gether
to ward pro ductivity go als. The rewards used are all fo rms o f variable-pay pro grams .
What differentiates these fo rms o f co mpensatio n fro m mo re traditio nal pro grams is
that they do no t pay a perso n o nly fo r time o n the jo b o r senio rity. Instead, a po rtio n o f
an emplo yee’s pay is based o n so me individual and/ o r o rganizatio nal measure o f per-
fo rmance. Unlike mo re traditio nal base-pay pro grams, with variable pay there is no
guarantee that just because yo u made $60 000 last year, yo u will make the same amo unt
this year. Instead, earnings fluctuate annually, based o n perfo rmance.70
The num b er o f em plo yees who have variab le-pay pro gram s has b een rising in
Canada. A 2005 survey o f 360 firm s by Hewitt Asso ciates fo und that 81 percent o f
them have variable-pay pro grams in place, co mpared with 43 percent in 1994.71 That
same year, 80 percent o f large US co mpanies had so me fo rm o f variable-pay pro gram.72
Abo ut 22 percent o f Japanese co mpanies have co mpany-wide pay-fo r-perfo rmance ( o r
variable-pay) pro grams.73
These pro gram s are m o re co m m o n am o ng no n-unio nized co m panies, altho ugh
m o re than 30 percent o f unio nized co m panies had such plans in 2002. 7 4 Prem
Benimadhu, an analyst with The Co nference Bo ard o f Canada, no tes, “Canadian unio ns
have been very allergic to variable co mpensatio n.” 75 Under variable-pay pro grams, indi-
viduals are no t guaranteed specific annual wages, making their wo rk experience riskier.
Peo ple paid under a variable-pay structure may wo rry abo ut no t being able to predict
wages ahead o f time. Ho wever, the Co nference Bo ard study suggests that in a unio nized
setting, variable pay is used as an add-o n to base pay, which means there is so mewhat
less uncertainty abo ut wages. Tho se wo rking under a variable-pay structure may also
be co ncerned that facto rs o ut o f their co ntro l might affect whether bo nuses are awarded,
and whether rewards are set by po litical pro cesses rather than o bjective facto rs.
Variable-based pay can be applied at individual, team, and co mpany-wide levels,
making it po ssible to link rewards to the appro priate level o f perfo rmance. Belo w, we
briefly describe so me examples o f incentives at these different levels o f the o rganizatio n.
Individual-Based Incentives
Pie ce-Rat e Wages Piece-rate wages are o ne o f the earliest fo rms o f individual per-
fo rmance pay. They have lo ng been po pular as a means fo r co mpensating pro ductio n
emplo yees. In a piece-rate pay plan , emplo yees are paid a fixed sum fo r each unit o f
pro ductio n co mpleted. When an emplo yee gets no base salary and is paid o nly fo r what
he o r she pro duces, this is a pure piece-rate plan. Peo ple who wo rk at baseball parks sell-
ing peanuts and so ft drinks freq uently are paid this way. They m ight get to keep
25 cents fo r every bag o f peanuts they sell. If they sell 200 bags during a game, they
make $50. If they sell o nly 40 bags, their take is a mere $10. Sales asso ciates who are paid
co mmissio ns based o n sales also have a fo rm o f piece-rate pay plan.
Many o rganizatio ns use a m o dified piece-rate pay plan, where em plo yees earn a
base ho urly wage plus a piece-rate differential. Fo r example, a legal typist might be paid
an ho urly wage plus a certain rate per typed page. O r a sales asso ciate might be paid a
base salary plus co mmissio ns o n sales. Such mo dified plans pro vide a basic security
net, while still o ffering a pro ductivity incentive.
 Chapt er 4 M ot ivat ing Self and Ot hers 127

Even though the cost of the gun

registry grew from $2 million to
over $1 billion and an int ernal
Justice Department investigation
report ed problems w it h t he
usability of the data, 96 percent
of civil servants at the Department
of Just ice received bonuses f or
their performance in 2002. This
calls int o quest ion w het her t he
federal government actually uses
a pay-f or-perf ormance syst em
w hen giving out rew ards t o
employees.

Bonuses Bo nuses are beco ming an increasingly po pular fo rm o f individual incentive

in Canada.76 They are used by such co mpanies as Mo lso n Co o rs Brewing Co mpany,
O ntario Hydro Energy, and the Bank o f Mo ntreal. Bo nuses are mo re co mmo n in the
United States than in Canada, with mo re emplo yees receiving them and larger rewards
given.77 This is because Canada has a mo re unio nized eco no my, a relative lack o f co m-
petitio n, and a large public secto r. Until recently, the o nly bo nus fo r federal civil servants
was $800, awarded to tho se in bilingual jo bs. Mo re recently, bo th federal and pro vin-
cial go vernments intro duced bo nuses fo r public secto r emplo yees to ackno wledge sup-
erio r perfo rmance.
Bo nuses can be used fo r reaso ns o ther than impro ving perfo rmance. A recent study
sho wed that 39 percent o f small and medium-sized co mpanies used bo nuses as a reten-
tio n strategy, so that employees wo uld no t lo o k fo r jo bs elsewhere.78 In spring 2006, in the
ho pes o f having no labo ur unrest during the 2010 Olympics, the BC provincial government
offered bonuses of about $3000 to every public sector employee whose union signed a four-
year (o r lo nger) co llective agreement. As a result o f the bo nus o ffer, all affected unio ns set-
tled their co ntracts befo re the March 31 deadline set by the pro vincial go vernment.
Bo nuses are no t free fro m o rganizatio nal po litics (which we discuss in Chapter 7), and
they can so metimes result in negative behavio ur. When using bo nuses, managers sho uld
be mindful o f po tential unexpected behavio urs that may arise when emplo yees try to
ensure that they will receive bo nuses.

Gro up-Based Incentives

Gainsha r ing The variable-pay pro gram that has received the mo st attentio n in recent
years is undo ubtedly gainsharing .79 This is a fo rm ula-based gro up incentive plan. gainsharing A group-based incen-
Improvements in gro up pro ductivity—fro m o ne perio d to ano ther—determine the to tal tive plan in which improvements in
am o unt o f m o ney that is to be allo cated. The pro ductivity savings can be divided group productivity determine the
total amount of money to be shared.
between the co mpany and emplo yees in any number o f ways, but 50-50 is fairly typical.
Gainsharing differs fro m pro fit-sharing, discussed o n the next page. Gainsharing
fo cuses o n pro ductivity gains rather than pro fits, and so it rewards specific behavio urs
128 Part 2 St riving f or Perf orm ance
profit-sharing plan An organiza-
tion-wide plan in which the employer
shares profits with employees based
on a predetermined formula.
IKEA Canada
www.ikea.ca
employee stock ownership plan
(ESOP) A company-established
benefit plan in which employees
acquire stock as part of their benefits.
M ercer Human Resource
Consulting
www.mercerhr.com
that are less influenced by external facto rs. Emplo yees in a gainsharing plan can receive
incentive awards even when the o rganizatio n is no t pro fitable.
Gainsharing was initially po pular o nly in large unio nized manufacturing co mpa-
nies,80 such as Mo ntreal-based Mo lso n Co o rs Brewing Co mpany and Mo ntreal-based
Hydro -Q uébec. This has changed in recent years, with sm aller co m panies, such as
D elta, BC-b ased Avco rp Industries, and go vernm ents, such as O ntario ’s Kingsto n
To wnship and To wn o f Ajax, also intro ducing gainsharing. Gainsharing has been fo und
to im pro ve pro ductivity in a m ajo rity o f cases and o ften has a po sitive im pact o n
emplo yee attitudes.81
Organizatio nal-Based Incentives
There are two m ajo r fo rm s o f o rganizatio nal-based pay-fo r-perfo rm ance pro gram s:
pro fit-sharing and sto ck o ptio n plans, including emplo yee sto ck o wnership plans.
Pr of it -Sha r ing Plans A profit-sharing plan is an o rganizatio n-wide plan in which
the emplo yer shares pro fits with emplo yees based o n a predetermined fo rmula. The
plan can distribute direct cash o utlays o r sto ck o ptio ns. Tho ugh senio r executives are mo st
likely to be rewarded thro ugh pro fit-sharing plans, emplo yees at any level can be recip-
ients. Fo r instance, IKEA divided every penny rung up in its 152 sto res o n O cto ber 8,
1999, am o ng its 44 000 staffers in 28 co untries. This am o unted to $2500 fo r each
emplo yee.82
Be aware that pro fit-sharing plans fo cus o n past financial results. They do n’t neces-
sarily fo cus emplo yees o n the future, because emplo yees and managers lo o k fo r ways to
cut co sts to day, witho ut co nsidering lo nger-term o rganizatio nal needs. They also tend
to igno re facto rs such as custo mer service and emplo yee develo pment, which may no t
be seen as directly linked to pro fits. In additio n, emplo yees who wo rk in co mpanies
in cyclical industries wo uld see inco nsistent rewards in such a plan. Fo r exam ple, a
financial services co mpany wo uld o ffer few o r no rewards during slumping eco no mic
perio ds, and substantial rewards during times o f eco no mic gro wth. Fluctuating rewards
may no t wo rk fo r all emplo yees. Emplo yees at St. Jo hn’s, Newfo undland-based Fishery
Pro ducts Internatio nal were quite upset when the $750 pro fit-sharing cheques they
received in 2000 were reduced to just 10 percent o f that fo r 2001 because o f lo wer pro f-
its. Allan Mo ulto n, a unio n representative o f the employees, said, “It’s extremely hard fo r
[em plo yees] . . . to see that [the co m pany] realized pro fits, and they expected to see
so me benefits fro m the pro fits they generated.” 83
St o ck Opt ions and Em ployee St o ck Ow ne r ship Plans So me co mpanies try
to enco urage emplo yees to ado pt the values o f to p management by making them o wn-
ers o f their firms. The idea is that emplo yees will be mo re likely to think abo ut the co n-
sequences o f their behavio ur o n the bo tto m line if they o wn part o f the co m pany.
Em plo yees can beco m e o wners o f the co m pany either thro ugh being granted sto ck
o ptio ns o r thro ugh an employee sto ck ownership plan ( ESOP) .84 Sto ck o ptio ns give
emplo yees the right to buy sto cks in the co mpany at a later date fo r a guaranteed price.
ESO Ps are co mpany-established benefit plans in which emplo yees acquire sto ck as part
o f their benefits.
Canadian co mpanies lag far behind the United States in the use o f ESO Ps because
Canada’s tax enviro nment is less co nducive to such plans. Mo re recently, bo th the do t-
co m meltdo wn and the high-tech meltdo wn have made emplo yees mo re reluctant to
accept sto ck o ptio ns instead o f cash. Lisa Slipp, head o f executive co m pensatio n at
To ro nto -based co nsulting firm Mercer Human Reso urce Co nsulting, no tes that “peo ple
are reco gnizing the reality o f sto ck o ptio ns, that they are attractive in an up market and
less so in a do wn market.” 85
 Chapt er 4 M ot ivat ing Self and Ot hers 129

RESEARCH FINDINGS ESOPs

The research o n ESO Ps indicates that they increase emplo yee satisfactio n.86 But their
impact o n perfo rmance is less clear. Fo r instance, o ne study co mpared 45 co mpanies
with ESO Ps against 238 co mpanies witho ut ESO Ps.87 Co mpanies with ESO Ps o utper-
fo rmed tho se witho ut, bo th in terms o f emplo yment and sales gro wth. O ther studies o n
co mpanies with ESO Ps have shown disappo inting results.88 Mo re impo rtant, ESO Ps can
so metimes fo cus emplo yees o n trying to increase sho rt-term sto ck prices, while no t wo r-
rying about the impact of their behaviour on the long-term effectiveness of the organization.
ESO Ps have the po tential to increase emplo yee jo b satisfactio n and wo rk mo tiva-
tio n. Fo r this po tential to be realized, emplo yees need to experience o wnership psy-
cho lo gically.89 So me employees may no t be fully aware o f how their perfo rmance affects
co mpany perfo rmance, o r they may no t feel that they have any co ntro l over co mpany per-
fo rmance. So , in additio n to having a financial stake in the co mpany, emplo yees need
to be kept regularly info rmed o n the status o f the business and also have the o ppo rtu-
nity to exercise influence o ver the business.

Linking Pro d u ctivity-Related In centives to

M otivation Theories
Variable pay is pro bably mo st co mpatible with expectancy theo ry predictio ns. Specifically,
under these plans, individuals sho uld perceive a stro ng relatio nship between their per-
fo rmance and the rewards they receive, and thus be mo re mo tivated. They sho uld also
be mo re pro ductive.
However, the evidence is mixed, at best.90 One recent study that fo llowed the careers o f
1000 top economists found that they put in more effort early in their careers, at a time when
pro ductivity-related incentives had a larger impact.91 A recent study o f Finnish white co l-
lar emplo yees fo und that higher levels o f pay and mo re frequent payments po sitively
affected pro ductivity, while lo wer levels o f pay did no t impro ve pro ductivity.92 O ther
studies generally suppo rt that o rganizatio ns with pro fit-sharing plans o r gainsharing plans
have higher levels o f pro fitability and pro ductivity than tho se witho ut.93 But there are
studies that questio n the effectiveness o f pay-fo r-perfo rmance appro aches, suggesting
they can lead to less gro up co hesiveness.94 Altho ugh so me researchers no te that much
o f the evidence suppo rting pay fo r perfo rmance “is based o n anecdo tal testimo nials and
o ne-time co mpany cases, rather than o n metho do lo gically mo re rigo ro us empirical stud-
ies,” 95 a number o f researchers have sho wn that the co nnectio n between pay and per-
fo rmance is linked to pro ductivity impro vement.96 This is suppo rted by a recent study
in Canada that lo o ked at bo th unio nized and no n-unio nized wo rkplaces, and fo und that
variable-pay plans result in “increased pro ductivity, a safer wo rk enviro nment, a better
understanding o f the business by employees, and little risk o f employees lo sing base pay,”
acco rding to Prem Benimadhu, an analyst with The Co nference Bo ard o f Canada.97
Using pay fo r perfo rmance can be difficult fo r so me managers. They wo rry abo ut
what sho uld co nstitute perfo rmance and how it sho uld be measured. There is also so me
belief by managers and emplo yees alike that wages sho uld keep pace with inflatio n,
independent o f perfo rmance issues. O ther barriers include salary scales keyed to what
the co mpetitio n is paying; traditio nal co mpensatio n systems that rely heavily o n specific
pay grades and relatively narrow pay ranges; and perfo rmance appraisal practices that pro -
duce inflated evaluatio ns and expectatio ns o f full rewards.
O f co urse, fro m the emplo yees’ perspective, the majo r co ncern abo ut pay-fo r-per-
fo rmance pro grams is a po tential dro p in earnings. Pay for performance means employees
must share in the risks as well as the rewards o f their emplo yers’ businesses. They are
no t guaranteed the same salary each year under this system. A recent Co nference Bo ard
o f Canada study may ease so me fears abo ut this particular co ncern. There was no evidence
that pay fo r perfo rmance led to a reductio n in salary in unio nized settings. Instead, it
130 Part 2 St riving f or Perf orm ance
National Bank of Canada
www.nbc.ca
Canadian Labour Congress
www.clc-ctc.ca
skill-based pay Pay based on
how many skills an employee has or
how many jobs he or she can do.
“is used as an ‘add-o n’ to the employees’ base salary.” 98 Pay fo r perfo rmance may also be
mo re successful when o rganizatio ns are mo re transparent abo ut financial co nditio ns.
O ttawa-based Lee Valley To o ls, which has a pay-fo r-perfo rmance pro gram, uses quar-
terly newsletters to let emplo yees kno w ho w much pro fit is fo recast. Being info rmed
helps emplo yees understand ho w their effo rts will pay o ff fo r them. Ro bin Lee, the co m-
pany’s president, says “ sharing info rm atio n and pro fits pro m o tes an atm o sphere in
which hard wo rk, inno vatio n and efficiency pay o ff fo r everybo dy.” 99
What Abo ut Teamwo rk?
Incentive pay, especially when it is awarded to individuals, can have a negative effect o n
gro up co hesiveness and pro ductivity, and in so me cases may no t o ffer significant ben-
efits to a co mpany.100 Fo r example, Mo ntreal-based Natio nal Bank o f Canada o ffered a
$5 emplo yee bo nus fo r every time emplo yees referred clients fo r lo ans, mutual funds,
o r o ther bank pro ducts. But the bo nus so upset em plo yees that the plan was aban-
do ned after just three mo nths.101 Tellers co mplained that the bo nus caused co lleagues
to co mpete against o ne ano ther. Meanwhile, the bank co uld no t determine whether
the referrals actually generated new business.
O rganized labo ur is, in general, co o l to the idea o f pay fo r perfo rmance. Andrew
Jackso n, directo r o f the So cial and Eco no mic Po licy Department at the Canadian Labo ur
Co ngress, explains that “it hurts co -o peratio n in the wo rkplace. It can lead to co mpeti-
tio n between wo rkers, speeding up the pace o f wo rk. It’s a bad thing if it creates a stress-
ful wo rk enviro nment where o lder wo rkers can’t keep up.” 102 Pay fo r perfo rmance can also
be pro blematic if wo rk is speeded up to such unfair levels that emplo yees can injure
themselves. Still, no t all unio ns o ppo se pay fo r perfo rmance, and the benefits and draw-
backs o f such incentive plans must be carefully co nsidered befo re they are intro duced.
If an o rganizatio n wants a gro up o f individuals to functio n as a “ team” ( which we
define in Chapter 5) , emphasis needs to be placed o n team-based rewards rather than
individual rewards. We will discuss the nature o f team-based rewards in Chapter 5.
M otivating Beyon d Pro d u ctivity
In recent years, o rganizatio ns have been paying fo r perfo rmance o n bases o ther than strict
pro ductivity. Co mpensatio n experts Patricia Zingheim and Jay Schuster no te the fo l-
lo wing activities that merit additio nal co mpensatio n:103
• Commissions beyond sales. Co mmissio ns might be determined by custo mer satis-
factio n and/ o r sales team o utco mes, such as meeting revenue o r pro fit targets.
• Leadership effectiveness. Rewards can be determined by emplo yee satisfactio n o r
measures o f ho w the manager handles his o r her emplo yees.
• New goals. Rewards go to all emplo yees who co ntribute to specific o rganiza-
tio nal go als, such as custo mer satisfactio n, cycle time, o r quality measures.
• Knowledge workers in teams. Rewards are linked to the perfo rmance o f kno wl-
edge wo rkers and/ o r pro fessio nal emplo yees who wo rk o n teams.
• Competency and/or skills. Rewards are based o n emplo yees’ abstract kno wledge
o r co mpetencies— fo r example, kno wledge o f techno lo gy, the internatio nal
business co ntext, custo mer service, o r so cial skills.
Exhibit 4-11 o n page 131 co mpares the strengths and weaknesses o f variable-pay
pro grams, team-based rewards, and skill-based pay pro grams. Skill-based pay is based
o n ho w many skills an emplo yee has o r ho w many jo bs he o r she can do .
While rewarding individuals fo r so mething o ther than perfo rmance may make sense
in so me instances, no t everyo ne agrees that these rewards are fair. O B in the Street ques-
tio ns whether athletic scho larships sho uld be given fo r athletic skills o nly, with little co n-
cern fo r academic merit o r financial need.
 Chapt er 4 M ot ivat ing Self and Ot hers 131

O B I N T H E ST REET

Scholarships for Jocks: Skills or Smarts?

Should university athletes b e aw ard ed money just for their athletic ab ilities? Jack
Dro ver, athletic directo r at Mo unt Alliso n University in Sackville, New Brunswick,
thinks no t.104 He o bjects to student-athlete awards that are o ften o ffered because o f
what co aches and teams need rather than what the individual student needs.
Many university presidents react negatively to scho o ls using financial rewards to
recruit athletes. So me high scho o l athletes can get full-tuitio n scho larships to uni-
versity, even tho ugh they have no t achieved high marks in scho o l. While no t every
university finds this pro blematic, o thers feel awarding scho larships that do n’t rec-
o gnize academic achievement o r financial need is “an affro nt to the values o f higher
educatio n.”
Scho o ls acro ss the co untry interpret the rules fo r scho larships differently, which may
affect the quality o f scho o l spo rts teams. Universities in O ntario ( which rarely give
scho larships to first-year students) have had particular difficulty co m peting with
scho o ls acro ss the co untry. Fo r exam ple, since 1995 o nly two fo o tball team s in
O ntario have wo n the Vanier Cup: the O ttawa Gee Gees ( 2000) and the Wilfrid
Laurier Go lden Hawks ( 2005) ; the University o f O ttawa is o ne o f the few scho o ls
in the pro vince that gives many athletic scho larships. In co ntrast, the Saint Mary’s
Huskies o f Halifax, No va Sco tia, has been in the Vanier Cup final fo ur times since
1999, winning twice. Rivals claim that a reaso n fo r the team’s successes is its “ plen-
tiful” athletic scho larships.105 So m e m em bers o f Canadian Interuniversity Spo rt
( CIS) suggest that a level playing field, with no scho larships granted to first-year ath-
letes except in cases o f financial need and academ ic m erit, wo uld be fairer to all
teams. CIS president Marg MacGrego r, ho wever, argues that “ We’re asking a lo t o f
o ur students when we say co mpete every weekend and practise all the time witho ut
any suppo rt.”

EXHIBIT 4-11 Comparing Various Pay Programs

Approach Strengths Weaknesses

Variab le pay • M otivates for performance. • Individuals do not alw ays have control
• Cost-effective. over factors that affect productivity.

• Clearly links organizational goals and • Earnings vary from year to year.
individual rew ards. • Can cause unhealthy competition among
employees.

Team-b ased rew ards • Encourages individuals to w ork together • Difficult to evaluate team performance
effectively. sometimes.
• Promotes goal of team-based w ork. • Equity problems could arise if all
members paid equally.

Skill-b ased pay • Increases the skill levels of employees. • Employers may end up paying for
• Increases the flexibility of the w orkforce. unneeded skills.

• Can reduce the number of • Employees may not be able to learn some
employees needed. skills, and thus feel demotivated.
132 Part 2 St riving f or Perf orm ance

job characteristics model (JCM )
A model that identifies five core job
dimensions and their relationship to
personal and work outcomes.
job enrichment The vertical
expansion of jobs.
skill variety The degree to which
the job requires a variety of different
activities.
task identity The degree to which
the job requires completion of a
whole and identifiable piece of work.
task significance The degree to
which the job has a substantial
impact on the lives or work of other
people.
De signing M otivating Jo bs
Either as an alternative o r a supplement to vario us reward
pro grams, managers can co nsider redesigning jo bs to make
* Whe n might job
re de sign be an
them mo re mo tivating. O B researchers Richard Hackman
fro m H arvard University and Greg O ld ham fro m the
appropriate University o f Illino is explo red the nature o f go o d jo b s
motivational tool? thro ugh their jo b characteristics mo del ( JCM) .106 The
JCM identifies five co re jo b dimensio ns and their relatio n-
ship to perso nal and wo rk o utco mes. Building o n Herzberg’s
mo tivatio n-hygiene theo ry, the JCM fo cuses o n the co ntent o f jo bs, rather than the co n-
text o f jo bs and can be co nsidered as a way o f mo tivating emplo yees and increasing
jo b satisfactio n.
Jo b enrichment , an applicatio n o f the JCM, refers to the vertical expansio n o f
jo bs. It increases the degree to which emplo yees co ntro l the planning, executio n, and
evaluatio n o f their wo rk. An enriched jo b o rganizes tasks so that an emplo yee do es a
co mplete activity. It expands emplo yees’ freedo m and independence, increases respo n-
sibility, and pro vides feedback, so individuals will be able to assess and co rrect their
o wn perfo rm ance.107
Co re Jo b Dimensio ns
Acco rding to the JCM, any jo b can be described in terms o f five co re jo b dimensio ns:
• Skill variety. The degree to which the jo b requires a variety o f different activi-
ties so the emplo yee can use a number o f different skills and talents.
• Task identity. The degree to which the jo b requires co mpletio n o f a who le
and identifiable piece o f wo rk.

autonomy The degree to which
the job provides substantial free-
dom, independence, and discretion
to the individual in scheduling the
work and determining the proce-
dures to be used in carrying it out.
• Task significance. The degree to which the jo b has a substantial impact o n
the lives o r wo rk o f o ther peo ple.
• Autonomy. The degree to which the jo b pro vides substantial freedo m, inde-
pendence, and discretio n to the individual in scheduling the wo rk and deter-
mining the pro cedures to be used in carrying it o ut.

M cDonald’s sends its employees

to Hamburger University to train
t hem t o give good service.
Employees w orking in fast-food
st ores are of t en part -t ime, and
they view their jobs as temporary.
M cDonald’s uses the experience
at Hamburger U and other train-
ing opportunities to help employ-
ees feel part of the organization
and more commit t ed t o t heir
w ork.
 Chapt er 4 M ot ivat ing Self and Ot hers 133

EXHIBIT 4-12 Examples of High and Low Job Characteristics

Skill Variety
High variety The ow ner-operator of a garage w ho does electrical repair, rebuilds engines, does body w ork, and
interacts w ith customers

Low variety A body shop employee w ho sprays paint eight hours a day

Task Id entity
High identity A cabinet maker w ho designs a piece of furniture, selects the w ood, builds the object, and finishes
it to perfection

Low identity An employee in a furniture factory w ho operates a lathe solely to make table legs

Task Significance
High significance Nursing the sick in a hospital intensive care unit

Low significance Sw eeping hospital floors

Autonomy
High autonomy A telephone installer w ho schedules his or her ow n w ork for the day, makes visits w ithout supervision,
and decides on the most effective techniques for a particular installation

Low autonomy A telephone operator w ho must handle calls as they come according to a routine, highly specified
procedure

Feedb ack
High feedback An electronics factory employee w ho assembles a radio and then tests it to determine if it operates
properly

Low feedback An electronics factory employee w ho assembles a radio and then routes it to a quality control
inspector w ho tests it for proper operation and makes needed adjustments

Source: G. Johns, Organizational Behavior: Understanding and M anaging Life at Work, 4th ed. Copyright © 1997. Adapted by permission of
Pearson Education, Inc., Upper Saddle River, NJ.

• Feedback . The degree to which carrying o ut the wo rk activities required by the feedback The degree to which
jo b results in the individual’s o btaining direct and clear info rmatio n abo ut the individuals obtain direct and clear
effectiveness o f his o r her perfo rmance. information about the effectiveness
of their performance.
Jo bs can be rated as high o r low o n these dimensio ns. Examples o f jo bs with high and
lo w ratings appear in Exhibit 4-12.

Critical Psycho lo gical States

The JCM, presented in Exhibit 4-13 o n page 134, links the five co re jo b dimensio ns to
three critical psycho lo gical states:108

• Experienced meaningfulness. The mo del predicts that if an emplo yee’s task is

meaningful, the emplo yee will view the jo b as impo rtant, valuable, and
wo rthwhile. ( No tice ho w in Exhibit 4-13 skill variety, task identity, and task
significance co mbine to create meaningful wo rk.)

• Experienced responsibility for outcomes. Emplo yees feel a sense o f perso nal
respo nsibility fo r results when their jo bs give them greater auto no my.

• Knowledge of the actual results. Feedback helps emplo yees kno w whether they
are perfo rming effectively. The feedback can co me fro m managers, clients, co -
wo rkers, o r the nature o f the task itself.
134 Part 2 St riving f or Perf orm ance

EXHIBIT 4-13 The Job Characteristics M odel

Core jo b Criti cal Per sonal an d

d imen sion s p sy chologi cal state s w ork out come s

Skill variety Experien ce d High internal

Ta sk i d entity meaningfulne ss w ork motivation
Ta sk signifi can ce of the w ork

High quality
Experien ce d w ork performan ce
Autonomy re spon si b ility
for out come s
High sati sfa ction
of the w ork
w ith the w ork

Know le d ge of the Low a bsenteei sm

Fee db a ck a ctual re sult s of an d turnover
the w ork a ctivitie s

Employee grow th-

nee d strength

Source: J. R. Hackman and G. R. Oldham, Work Design (excerpted from pages 78–80). Copyright © 1980 by Addison-Wesley Publishing Co.
Reprinted by permission of Addison-Wesley Longman.

The mo del suggests that the mo re emplo yees experience meaningfulness, respo nsi-
bility, and knowledge o f the actual results, the greater their mo tivatio n, perfo rmance, and
satisfactio n, and the lo wer their absenteeism and likeliho o d o f leaving the o rganiza-
tio n.109 As Exhibit 4-13 sho ws, the links between the jo b dimensio ns and the o utco mes
are mo derated o r adjusted by the strength o f the individual’s gro wth need— in o ther
wo rds, the em plo yee’s desire fo r self-esteem and self-actualizatio n. This m eans, fo r
example, that no t every emplo yee will respo nd favo urably to a jo b with skill variety,
task identity, task significance, auto no my, o r feedback. Tho se with high self-esteem and
self-actualizatio n needs will respo nd mo re favo urably than o thers with different needs.

EVALUATING THE U SE OF REWARD S IN

THE WORKPLACE
6 What kinds of mistakes When applying mo tivatio n theo ries in the wo rkplace, managers sho uld be aware o f the
are made in reward kinds o f signals rewards send, how rewards are viewed in different cultures, and whether
systems? rewards are essential.

Bew are the Signals That Rew ards Sen d

In 1998, Vanco uver’s bus drivers claimed, o n average, 18.6
sick days. Victo ria’s b us drivers averaged o nly 16.6 sick
days.110 Are Vanco uver’s drivers m o re likely to catch co ld
*e mploye
Eve r wonde r why
e s do some than Victo ria’s? No t likely! Rather, differences in the way
strange things? that sick days are paid m ay acco unt fo r the differences.
Victo ria’s drivers get paid in full fo r six sick days, no mat-
ter ho w the days are taken. But o nce Vanco uver drivers take
 Chapt er 4 M ot ivat ing Self and Ot hers 135

their seco nd “sick time,” they are paid o nly if they are o ff mo re than three days fo r their
illness, so it makes sense fo r them to stay ho me sick lo nger. At Carignan, Q uebec-based
hardware sto re Centre de réno vatio n Po inte et Meunier, o wner Daniel Blais had to
revise his plan to give co mmissio ns to employees based o n pro fit per sales. An “employee
[who ] happened to be near so meo ne who was lo o king at a big-ticket item tended to
shado w that perso n rather than go ing to help the next custo mer who was lo o king at
so mething less co stly,” says Blais. He fo und that emplo yees gave better o verall service
when he switched the perfo rmance plan to a gro up co mmissio n divided evenly amo ng
staff and based o n o verall pro fits fo r the department.111
Perhaps m o re o ften than we wo uld like, o rganizatio ns engage in what has been
called “ the fo lly o f rewarding A, while ho ping fo r B.” 112 O rganizatio ns do this when
they ho pe that emplo yees will engage in o ne type o f behavio ur, yet they reward ano ther
type. Managers o f Vanco uver’s bus drivers had ho ped that by increasing the number o f
days a driver had to be o ut sick to get paid, bus drivers wo uld take fewer days o ff.
Instead, managers might have co nsidered giving bo nuses fo r perfect attendance. Ho ping
fo r a behavio ur yo u are no t rewarding is unlikely to make it happen to any great extent.
In fact, as expectancy theo ry suggests, individuals will generally perfo rm in ways to raise
the pro bability o f receiving the rewards o ffered.
Exhibit 4-14 pro vides further exam ples o f co m m o n m anagem ent reward fo llies.
Research suggests that there are three majo r o bstacles to ending these fo llies:113

• Individuals are unable to break out of old ways of thinking about reward and recog-
nition practices. This appro ach is demo nstrated when management emphasizes
quantifiable behavio urs, to the exclusio n o f no nquantifiable behavio urs;
when management is reluctant to change the existing perfo rmance system;
and when emplo yees have an entitlement mentality ( i.e., they do n’t suppo rt
changing the reward system because they are co mfo rtable with the current
behavio urs that are rewarded) .

EXHIBIT 4-14 M anagement Rew ard Follies

We hope for . . . But w e rew ard . . .

Teamw ork and collaboration The best team members

Innovative thinking and risk-taking Proven methods and not making mistakes

Development of people skills Technical achievements and accomplishments

Employee involvement and Tight control over operations and resources

empow erment

High achievement Another year’s effort

Long-term grow th; environmental Quarterly earnings

responsibility

Commitment to total quality Shipping on schedule, even w ith defects

Candour; surfacing bad new s early Reporting good new s, w hether it’s true or
not; agreeing w ith the manager, w hether or
not (s)he’s right

Sources: Constructed from S. Kerr, “ On the Folly of Rew arding A, While Hoping for B,” Academy of
M anagement Executive 9, no. 1 (1995), pp. 7–14; and “ M ore on the Folly,” Academy of M anagement
Executive 9, no. 1 (1995), pp. 15–16. Reprinted by permission.
136 Part 2 St riving f or Perf orm ance

• O rganizations often do not look at the big picture of their performance system. Thus,
rewards are allo cated at subunit levels, with the result that units o ften co m-
pete against each o ther.

• Both management and shareholders often focus on short-term results. They do n’t
reward emplo yees fo r lo nger-range planning.

O rganizatio ns wo uld do well to ensure that they do no t send the wro ng message
when o ffering rewards. When o rganizatio ns o utline an o rganizatio nal o bjective o f “team
perfo rm ance,” fo r exam ple, but reward each em plo yee acco rding to individual pro -
ductivity, do es this send a message that teams are valued? O r when a retailer tells co m-
missio ned emplo yees that they are respo nsible fo r mo nito ring and replacing sto ck as
necessary, are emplo yees mo re likely to co ncentrate o n making sales o r sto cking the
flo o r? Emplo yees mo tivated by the pro mise o f rewards will do tho se things that earn
them the rewards they value.

Caveat Emptor: M otivation Theories Are Culture-Boun d

Reward strategies that have been used successfully in Canada and the United States do
no t always wo rk successfully in o ther cultures. Take, fo r instance, a study co mparing
sales representatives at a large electro nics co mpany in the United States with o ne in
Japan. The study fo und that while Ro lex watches, expensive dinners, and fancy vaca-
tio ns were valued rewards fo r star perfo rmers in the United States, taking the who le
sales team bo wling was m o re appreciated in Japan. The study’s autho rs fo und that
“ being a member o f a successful team with shared go als and values, rather than finan-
cial rewards, is what drives Japanese sales representatives to succeed.” 114
Why do o ur mo tivatio n theo ries perfo rm less well when we lo o k at their use in co un-
tries beyo nd Canada and the United States? Mo st current m o tivatio n theo ries were
develo ped in the United States and so take US cultural no rms fo r granted.115 That may
acco unt fo r why Canada and the United States, which have mo re individualistic cul-
tures, rely mo re heavily o n extrinsic mo tivating facto rs than so me o ther co untries.116
Japanese and German firms rarely make use o f individual wo rk incentives because their
cultures are mo re co llectivist.117
Many o f the so cial-psycho lo gical theo ries o f mo tivatio n rely heavily o n the idea o f
mo tivating the individual thro ugh individual rewards. Thus they emphasize, particu-
larly in an o rganizatio nal co ntext, the meaning o f “ pay,” and give little attentio n to
the info rmal rewards that co me fro m gro up no rms and prestige fro m peers.118 Exhibit
4-15 o n page 137 presents a quick summary o f the cultural differences in mo tivatio n
o bserved by a number o f studies.
Mo tivatio n theo ries also assume that needs are similar acro ss so cieties. Fo r instance,
Maslo w’s needs hierarchy argues that peo ple start at the physio lo gical level and then
mo ve pro gressively up the hierarchy in this o rder: physio lo gical, safety, so cial, esteem,
and self-actualizatio n. This hierarchy, if it applies at all, aligns well with American cul-
ture and reaso nably well with Canadian culture. Ho wever, in co untries such as Austria,
Denmark, and Germany, where uncertainty avo idance characteristics are stro ng, security
needs wo uld be at the to p o f the needs hierarchy. Co untries that sco re high o n humane
o rientatio n characteristics— Indo nesia, Egypt, and Malaysia— wo uld have so cial needs
o n to p.119 We wo uld predict, fo r instance, that gro up wo rk will mo tivate emplo yees
mo re when the co untry’s culture sco res high o n the humane o rientatio n criterio n.
Equity theo ry has gained a relatively stro ng fo llowing in Canada and United States. That
is no surprise, since No rth American reward systems assume that employees are highly sen-
sitive to equity in the granting o f rewards, and expect pay to be tied clo sely to perfo rm-
ance. Ho wever, recent evidence suggests that in co llectivist cultures, especially in the
fo rmer so cialist co untries o f Central and Eastern Euro pe, emplo yees expect rewards to
 Chapt er 4 M ot ivat ing Self and Ot hers 137

EXHIBIT 4-15 Snapshots of Cultural Differences in M otivation

Japan: Sales representatives prefer being members of a successful team

w ith shared goals and values, rather than receiving financial rew ards.

Russia: Cotton mill employees given either valued extrinsic rew ards
(North American T-shirts w ith logos, children’s sw eatpants, tapes of
North American music, etc.) or praise and recognition are more
productive. How ever, rew ards do not help for those w ho w ork on
Saturdays.

China: Bonuses are often given to everyone, regardless of individual

productivity. M any employees expect jobs for life, rather than jobs based
on performance.

M exico: Employees prefer immediate feedback on their w ork. Therefore

daily rew ards for exceeding quotas are preferred.

Canada and the United States: M anagers rely more heavily on extrinsic
motivators.

Japan and Germany: Firms rarely give rew ards based on individual
performance.

reflect their individual needs as well as their perfo rmance.120 Mo reo ver, co nsistent with
a legacy o f Co mmunism and centrally planned eco no mies, emplo yees sho w an entitle-
ment attitude—they expect o utco mes to be greater than their inputs.121 These findings sug-
gest that Canadian- and US-style pay practices may need mo dificatio n, especially in
Russia and fo rmer Co mmunist co untries, in o rder to be perceived as fair by emplo yees.
These internatio nal findings indicate that it is impo rtant to co nsider the internal
no rms o f a co untry when develo ping an incentive plan rather than simply impo rt a
plan that wo rks well in Canada and the United States.

Can We Ju st Eliminate Rew ards?

Alfie Ko hn, in his bo o k Punished by Rewards, argues that “ the desire to do so mething, Alfie Kohn
much less to do it well, simply canno t be impo sed; in this sense, it is a mistake to talk www.alfiekohn.org
abo ut mo tivating o ther peo ple. All we can do is set up certain co nditio ns that will max-
imize the pro bability o f their develo ping an interest in what they are do ing and remo ve
the co nditio ns that functio n as co nstraints.” 122

Creating a Mo tivating Wo rk Enviro nment

Based o n his research and co nsulting experience, Ko hn pro po ses actio ns that o rgani-
zatio ns can take to create a mo tivating wo rk enviro nment.123

Abolish In cent ive Pay Paying peo ple genero usly and fairly makes sure they do n’t
feel explo ited, and takes pay o ff their minds. As a result, emplo yees will be mo re able to
focus on the goals of the organization rather than have their paycheques as their main goal.

Re-evaluat e Evaluat ion Instead o f making perfo rmance appraisals lo o k and feel
like a punitive effo rt—who gets raises, who gets pro mo ted, who is to ld he o r she is per-
fo rming po o rly—the perfo rmance evaluatio n system might be structured mo re like a two -
way co nversatio n to trade ideas and questio ns, do ne co ntinuo usly, no t as a co mpetitio n.
The discussio n o f perfo rmance sho uld no t be tied to co mpensatio n. “Providing feedback
that emplo yees can use to do a better jo b o ught never to be co nfused o r co mbined with
co ntro lling them by o ffering ( o r withho lding) rewards.” 124
138 Part 2 St riving f or Perf orm ance

Cr eat e t he Condit ions f o r Aut hent i c M ot ivat ion A no ted eco no mist recently
summarized the evidence abo ut pay fo r pro ductivity as fo llows: “Changing the way wo rk-
ers are treated may bo o st pro ductivity mo re than changing the way they are paid.” 125 There
is so me co nsensus abo ut what the co nditio ns fo r creating authentic mo tivatio n might
be: helping employees rather than putting them under surveillance; listening to employee
co ncerns and thinking abo ut pro blems fro m their viewpo int; and pro viding plenty o f
feedback so they kno w what they have do ne right and what they need to impro ve.126

Suppo r t Collabo r at ion Peo ple are m o re likely to perfo rm better in well-func-
tio ning gro ups where they can get feedback and learn fro m each o ther.127 Therefo re, it
is impo rtant to pro vide the necessary suppo rts to create well-functio ning teams.

Pay Attention to Content Peo ple are generally the mo st mo tivated when their jo bs
give them an o ppo rtunity to learn new skills, pro vide variety in the tasks that are per-
fo rmed, and enable them to demo nstrate co mpetence. So me o f this can be fo stered by
carefully matching peo ple to their jo bs and by giving them the o ppo rtunity to try new
jo bs. It is also po ssible to increase the meaningfulness o f many jo bs.
But what abo ut jo bs that do n’t seem inherently interesting? O ne psycho lo gist suggests
that in cases where the jo bs are fundamentally unappealing, the manager might acknowl-
edge frankly that the task is no t fun, give a meaningful ratio nale fo r why it must be do ne,
and then give people as much choice as possible in how the task is completed.128 One soci-
o lo gist studying a gro up o f garbage co llecto rs in San Francisco disco vered that they were
quite satisfied with their wo rk.129 Their satisfactio n came fro m the way the wo rk and the
co mpany were o rganized: Relatio nships amo ng the crew were impo rtant, the tasks and
ro utes were varied to provide interest, and the co mpany was set up as a co o perative, so that
each emplo yee o wned a share o f the co mpany, and thus felt “pride o f o wnership.”

Pr ovide Choi ce “ We are m o st likely to beco m e enthusiastic abo ut what we are

do ing— and all else being equal, to do it well— when we are free to make decisio ns
abo ut the way we carry o ut a task.” 130 Extrinsic rewards ( and punishments to o ) actually
remo ve cho ice, because they fo cus us o n rewards, rather than o n tasks o r go als. Research
suggests that burno ut, dissatisfactio n, absenteeism, stress, and co ro nary heart disease are
related to situatio ns where individuals did no t have eno ugh co ntro l o ver their wo rk.131
By choice we do no t mean lack o f management, but rather invo lving peo ple in the deci-
sio ns that are to be made. A number o f case studies indicate that participative man-
agement, when it includes full participatio n by everyo ne, is successful.132

These actio ns represent an alternative to simply pro viding mo re and different kinds o f
incentives to try to induce peo ple to wo rk mo re effectively. They suggest that pro viding
the pro per enviro nment may be mo re impo rtant than the reward structure.

Putting It All Together

While it is always dangero us to synthesize a large number o f co mplex ideas into a few
simple guidelines, the fo llo wing suggestio ns summarize the essence o f what we kno w
abo ut mo tivating emplo yees in o rganizatio ns:

• Recognize individual differences. Emplo yees have different needs and sho uld no t
be treated alike. Managers sho uld spend the time necessary to understand
what is impo rtant to each emplo yee and then align go als, level o f invo lve-
ment, and rewards with individual needs. This chapter’s Working W ith O thers
Exercise o n pages 146–147 gives yo u an o ppo rtunity to understand the differ-
ent needs o f a diverse wo rkfo rce.
 Chapt er 4 M ot ivat ing Self and Ot hers 139

• Use goals and feedback. Emplo yees sho uld have hard, specific go als, as well as
feedback o n ho w well they are faring in pursuit o f tho se go als.

• Allow employees to participate in decisions that affect them. Emplo yees can co n-
tribute to a number o f decisio ns that affect them: setting wo rk go als, cho o sing
their o wn benefits packages, so lving pro ductivity and quality pro blems, and
the like. This can increase emplo yee pro ductivity, co mmitment to wo rk go als,
mo tivatio n, and jo b satisfactio n.

• W hen giving rewards, be sure that they are clearly related to the performance
desired. It is im po rtant that em plo yees perceive a clear link between rewards
and the type o f perfo rm ance expected. Ho w clo sely rewards are actually co r-
related to perfo rm ance criteria is less im po rtant than the perception o f this
relatio nship. If individuals perceive that there is little relatio n between the
perfo rm ance desired and the rewards they receive, the results will be lo w
perfo rm ance, a decrease in jo b satisfactio n, and an increase in turno ver and
absenteeism .

• Check the system for equity. Emplo yees sho uld be able to perceive rewards as
matching the inputs they bring to the jo b. At a simplistic level, this means that
experience, skills, abilities, effo rt, and o ther o bvio us inputs sho uld explain dif-
ferences in perfo rmance and, hence, pay, jo b assignments, and o ther o bvio us
rewards.

SUMMARY AND IMPLICATIONS

1 What is motivation? Mo tivatio n is the pro cess that acco unts fo r an individual’s SNAPSHOT SUM M ARY
intensity, directio n, and persistence o f effo rt to ward reaching a go al. Intensity is
co ncerned with ho w hard a perso n tries. This is the element mo st o f us fo cus o n 1 Defining M otivation
when we talk abo ut m o tivatio n. Ho wever, high intensity is unlikely to lead to 2 Needs Theories of
go o d jo b perfo rmance unless the effo rt is channelled in a useful direction. Finally, M otivation
the effo rt requires persistence. Maslow’s Hierarchy of
Needs Theory
2 How d o needs motivate people? All needs theo ries o f mo tivatio n, including
ERG Theory
Maslo w’s hierarchy o f needs, Alderfer’s ERG theo ry, McClelland’s theo ry o f needs,
McClelland’s Theory of
and Herzberg’s mo tivatio n-hygiene theo ry ( so metimes called the two-factor the- Needs
ory) pro po se a similar idea: Individuals have needs that will result in mo tivatio n. Motivation-Hygiene Theory
Needs theo ries suggest that mo tivatio n will be high to the degree that the rewards
Summarizing Needs
individuals receive fo r high perfo rmance satisfy their do minant needs. Theories
3 Are there other w ay s to motivate people? Pro cess theo ries fo cus o n the Needs Theories in the
Workplace
bro ader picture o f ho w so m eo ne can set abo ut m o tivating ano ther individual.
Pro cess theo ries include expectancy theo ry and go al-setting theo ry. Expectancy the- 3 Process Theories of
o ry says that an em plo yee will be m o tivated to exert a high level o f effo rt when M otivation
he o r she believes ( 1) that the effo rt will lead to go o d perfo rm ance; ( 2) that Expectancy Theory
go o d perfo rm ance will lead to o rganizatio nal rewards, such as a bo nus, a salary Goal-Setting Theory
increase, o r a pro m o tio n; and ( 3) that the rewards will satisfy his o r her per- 4 Responses to the
so nal go als. Rew ard System
Go al-setting theo ry suggests that intentio ns to wo rk to ward a go al are a majo r Equity Theory
so urce o f wo rk mo tivatio n. That is, go als tell an emplo yee what needs to be do ne Fair Process and Treatment
and ho w much effo rt will need to be expended. Specific go als increase perfo rm- Cognitive Evaluation Theory
ance; difficult go als, when accepted, result in higher perfo rm ance than do easy Increasing Intrinsic
go als; and feedback leads to higher perfo rmance than do es no nfeedback. Motivation
 140 Part 2 St riving f or Perf orm ance

4 Do equity and fairness matter? Individuals lo o k fo r fairness in the reward sys-

5 Creating a M otivating tem. Rewards sho uld be perceived by emplo yees as related to the inputs they bring
Workplace: Rew ards
to the jo b. At a simplistic level, this means that experience, skills, abilities, effo rt,
and Job Redesign
and o ther o bvio us inputs sho uld explain differences in perfo rmance and, hence, pay,
Employee Recognition:
Showing People That jo b assignments, and o ther o bvio us rewards.
They Matter
5 How can rew ards and job d esign motivate employees? When o rganizatio ns
Variable-Pay Programs: want to reward individuals fo r specific high perfo rm ance, they o ften turn to
Improving Productivity
emplo yee reco gnitio n pro grams. Reco gnizing an emplo yee’s superio r perfo rmance
Linking Productivity-Related
Incentives to Motivation o ften co sts little o r no mo ney.
Theories When o rganizatio ns want to improve pro ductivity, they o ften use variable-pay pro -
Motivating Beyond grams. With these pro grams, a po rtio n o f an emplo yee’s pay is based o n so me indi-
Productivity vidual and/ o r o rganizatio nal measure o f perfo rmance.
Designing Motivating Jobs Managers can enrich jo bs fo llo wing the jo b characteristics mo del. The mo del
6 Evaluating the Use of tells us that jo bs that o ffer skill variety, task identity, task significance, auto no my, and
Rew ards in the feedback tend to be mo re mo tivating fo r emplo yees.
Workplace
6 What kinds of mistakes are mad e in rew ard systems? Individuals are respo n-
Beware the Signals That
sive to the signals sent o ut by o rganizatio ns, and if they determine that so me activ-
Rewards Send
ities are no t valued, they m ay no t engage in them , even when the firm expects
Caveat Emptor: Motivation
Theories Are Culture-Bound employees to do so . Rewards sho uld be linked to the type o f perfo rmance expected.
Can We Just Eliminate Rewards are also culture-bo und. Individuals respo nd to rewards in general, and
Rewards? specific rewards, differently, depending upo n what culture they co me fro m. Finally,
Putting It All Together rewards are no t always necessary. In the right co ntext, individuals o ften mo tivate
themselves intrinsically and can achieve quite high levels o f perfo rmance do ing
so . We also kno w that giving rewards fo r things that were previo usly do ne fo r
intrinsic mo tivatio n will decrease mo tivatio n.
 O B A T W O RK
For Review
1 . What are the implications of Theories X and Y for motivation practices?

2. Identify the variables in expectancy theory.

3. Describe the four w ays in w hich goal setting motivates.

4. Explain cognitive evaluation theory. How applicable is it to management practice?

5. What are the pluses and minuses of variable-pay programs from an employee’s view point? From management’s view -
point?

6 . What is an ESOP? How might it positively influence employee motivation?

7. Define the five core dimensions in the JCM .

8. Describe three jobs that score high on the JCM . Describe three jobs that score low.

9. What can firms do to create more motivating environments for their employees?

For Critical Thinking

1 . Identify three activities you really enjoy (for example, playing tennis, reading a novel, going shopping). Next, identify
three activities you really dislike (for example, visiting the dentist, cleaning the house, follow ing a low -fat diet). Using
expectancy theory, analyze each of your answ ers to assess w hy some activities stimulate your effort w hile others don’t.

2. Identify five different bases by w hich organizations can compensate employees. Based on your know ledge and expe-
rience, is performance the basis most used in practice? Discuss.

3. “ Employee recognition may be motivational for the moment, but it doesn’t have any staying pow er. Why? Because
employees can’t take recognition to Roots or The Bay! ” Do you agree or disagree? Discuss.

4. “ Performance can’t be measured, so any effort to link pay w ith performance is a fantasy. Differences in performance
are often caused by the system, w hich means the organization ends up rew arding the circumstances. It’s the same
thing as rew arding the w eather forecaster for a pleasant day.” Do you agree or disagree w ith this statement?
Support your position.

5. Your textbook argues for recognizing individual differences. It also suggests paying attention to members of diverse
groups. Does this view contradict the principles of equity theory? Discuss.

OB for You
■ To motivate yourself to finish a particularly long and dry chapter in a textbook, plan a snack break. Or buy yourself a
new CD once that major accounting assignment is finished.

■ The people you interact w ith appreciate recognition. Consider including a brief note on a nice card to show thanks for
a job w ell done. Or you might send a basket of flow ers. Sometimes just sending a pleasant, thankful email is enough
to make a person feel valued. All of these things are easy enough to do, and appreciated greatly by the recipient.

■ Be aw are of the kinds of things that motivate you, so you can choose jobs and activities that suit you better.
142 Part 2 St riving f or Perf orm ance
O B A T W O RK
PO I N T
Mo ney Mo tivates!
The importance of money as a motivator has been consis-
tently dow ngraded by most behavioural scientists. They
prefer to point out the value of challenging jobs, goals,
participation in decision making, feedback, cohesive w ork
teams, and other nonmonetary factors as stimulants to
employee mot ivat ion. We argue ot herw ise here— t hat
money is the crucial incentive to w ork motivation. As a
medium of exchange, it is the vehicle by w hich employees
can purchase the numerous need-satisfying things they
desire. M oney also performs the function of a scorecard,
by w hich employees assess the value that the organization
places on their services and by w hich employees can com-
pare their value to others.133
M oney’s value as a medium of exchange is obvious.
People may not w ork only for money, but remove the
money and how many people w ould come to w ork? A
study of nearly 2500 employees found that w hile these
people disagreed over w hat their primary motivator w as,
they unanimously ranked money as their number tw o.134
This study reaffirms that for the vast majority of the w ork-
force, a regular paycheque is absolutely necessary in order
to meet basic physiological and safety needs.
The best case for money as a motivator is presented by
Prof essor Ed Locke at t he Robert H. Smit h School of
Business at the University of M aryland, w ho review ed a
number of studies.135 Locke looked at four methods of
motivating employee performance: money, goal setting,
participation in decision making, and redesigning jobs to
give employees more challenge and responsibilit y. He
found that the average improvement from money w as 30
percent; goal setting increased performance 16 percent;
participation improved performance by less than 1 per-
cent; and job redesign positively affected performance by
an average of 17 percent. M oreover, every study Locke
review ed that used money as a method of motivation
resulted in some improvement in employee performance.
Such evidence demonstrates that money may not be the
only motivator, but it’s difficult to argue that it does not
motivate!
CO U N TERPO I N T
Mo ney Do esn’t Mo tivate
Mo st Emplo yees To day!
M oney can motivate some people under some conditions,
so the issue isn’t really w hether money can motivate. The
answ er to that is “ It can! ” The more relevant question is
this: Does money motivate most employees in the w ork-
force today to higher performance? The answ er to this
question, w e w ill argue, is “ no.” 136
For money to motivate an individual’s performance,
certain conditions must be met. First, money must be
important to the individual. Second, money must be per-
ceived by the individual as being a direct rew ard for per-
formance. Third, the marginal amount of money offered
for the performance must be perceived by the individual
as significant. Finally, management must have the discre-
tion to rew ard high performers w ith more money. Let’s
take a look at each of these conditions.
M oney is not important to all employees. High achiev-
ers, for instance, are intrinsically motivated. M oney should
have little impact on these people. Similarly, money is rel-
evant to those individuals w ith strong low er-order needs;
but for most of the w orkforce, low er-order needs are sub-
stantially satisfied.
M oney w ould mot ivat e if employees perceived a
strong link betw een performance and rew ards in organi-
zations. Unfortunately, pay increases are far more often
determined by levels of skills and experience, community
pay standards, the consumer price index, and the organi-
zation’s current and future financial prospects than by
each employee’s level of performance.
For money to motivate, the marginal difference in pay
increases betw een a high performer and an average per-
former must be significant. In practice, it rarely is. How much
motivation is there in know ing that if you w ork really hard
you w ill end up w ith $20 a w eek more than someone w ho is
doing just enough to get by? For a large number of people,
not much! Research indicates that merit raises must be at
least 7 percent of base pay for employees to perceive them as
motivating. Unfortunately, recent surveys find nonmanagerial
employees averaging merit increases of only 4.9 percent.137
In most organizations, managers have a very small area
of discretion w ithin w hich they can rew ard their higher-
performing employees. So money might be theoretically
capable of motivating employees to higher levels of per-
formance, but most managers are not given enough flex-
ibility to do much about it.
 Chapt er 4 M ot ivat ing Self and Ot hers 143

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE

What Mo tivates Yo u?
Circle the number that most closely agrees w ith how you feel. Consider your answ ers in the context of your current job or
a past w ork experience.
Strongly Strongly
Disagree Agree

1. I try very hard to improve on my past

performance at w ork. 1 2 3 4 5

2. I enjoy competition and w inning. 1 2 3 4 5

3. I often find myself talking to those around me about

nonw ork matters. 1 2 3 4 5

4. I enjoy a difficult challenge. 1 2 3 4 5

5. I enjoy being in charge. 1 2 3 4 5

6. I w ant to be liked by others. 1 2 3 4 5

7. I w ant to know how I am progressing as I complete tasks. 1 2 3 4 5

8. I confront people w ho do things I disagree w ith. 1 2 3 4 5

9. I tend to build close relationships w ith co-w orkers. 1 2 3 4 5

1 0. I enjoy setting and achieving realistic goals. 1 2 3 4 5

11 . I enjoy influencing other people to get my w ay. 1 2 3 4 5

1 2. I enjoy belonging to groups and organizations. 1 2 3 4 5

1 3. I enjoy the satisfaction of completing a difficult task. 1 2 3 4 5

1 4. I often w ork to gain more control over the events around me. 1 2 3 4 5

1 5. I enjoy w orking w ith others more than w orking alone. 1 2 3 4 5

Scoring Key:
To determine your dominant needs—and w hat motivates you— place the number 1 through 5 that represents your score for
each statement next to the number for that statement.

Achievement Pow er Affiliation

1 . __________ 2. __________ 3. __________

4. __________ 5. __________ 6 . __________

7. __________ 8. __________ 9. __________

1 0. __________ 11 . __________ 1 2. __________

1 3. __________ 1 4. __________ 1 5. __________

Totals: __________ __________ __________

Add up the total of each column. The sum of the numbers in each column w ill be betw een 5 and 25 points. The column
w ith the highest score tells you your dominant need.

Source: Based on R. Steers and D. Braunstein, “ A Behaviorally Based M easure of M anifest Needs in Work Settings,” Journal of Vocational
Behavior, October 1976, p. 254; and R. N. Lussier, Human Relations in Organizations: A Skill Building Approach (Homew ood, IL: Richard D. Irw in,
1990), p. 120.
144 Part 2 St riving f or Perf orm ance

O B A T W O RK

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . One of the members of your team continually arrives late for meetings and does not turn drafts of assignments in
on time. Choose one of the available theories and indicate how the theory explains the member’s current behaviour
and how the theory could be used to motivate the group member to perform more responsibly.

2. You are unhappy w ith the performance of one of your instructors and w ould like to encourage the instructor to pre-
sent livelier classes. Choose one of the available theories and indicate how the theory explains the instructor’s current
behaviour. How could you as a student use the theory to motivate the instructor to present livelier classes?

3. Harvard University recently changed its grading policy to recommend to instructors that the average course mark
should be a B. This w as the result of a study show ing that more than 50 percent of students w ere receiving an A or
A– for coursew ork. Harvard students are often referred to as “ the best and the brightest,” and they pay $27 000
(US) for their education, so they expect high grades. Discuss the impact of this change in policy on the motivation
of Harvard students to study harder.

W O RK I N G W I TH O T H ER S EX ERC I SE

Rewards fo r a Diverse Wo rkfo rce

Purpose To learn about the different needs of a diverse w orkforce.

Time Approximately 40 minutes.

Directions Divide the class into groups of approximately 6 students. Each group is assigned 1 of the follow ing people
and is to determine the best benefits package for that person.

• Lise is 28 years old. She is a divorced mother of 3 children, aged 3, 5, and 7. She is the department head. She earns
$37 000 a year in her job and receives another $3600 a year in child support from her ex-husband.

• Ethel is a 72-year-old w idow. She w orks 25 hours a w eek to supplement her $8000 annual pension. Including her
hourly w age of $7.75, she earns $18 075 a year.

• John is a 34-year-old black male born in Trinidad w ho is now a Canadian resident. He is married and the father of tw o
small children. John attends college at night and is w ithin a year of earning his bachelor’s degree. His salary is $24 000
a year. His w ife is an attorney and earns approximately $54 000 a year.

• Sanjay is a 26-year-old physically impaired Indo-Canadian male. He is single and has a master’s degree in education.
Sanjay is paralyzed and confined to a w heelchair as a result of a car accident. He earns $29 000 a year.

• Wei M ei is a single 22-year-old immigrant. Born and raised in China, she came to Canada only three months ago. Wei
M ei’s English needs considerable improvement. She earns $18 000 a year.

• M ike is a 16-year-old w hite male in his 2nd year of high school. He w orks 15 hours a w eek after school and during
vacations. He earns $7.75 an hour, or approximately $6045 a year.

Background
Our 6 participants w ork for a company that has recently installed a flexible benefits program. Instead of the traditional “ one
benefits package fits all,” the company is allocating an additional 25 percent of each employee’s annual pay to be used for
discretionary benefits. Those benefits and their annual costs are listed below.
 Chapt er 4 M ot ivat ing Self and Ot hers 145

O B A T W O RK

Benefit Yearly Cost

Extended medical care (for services such as private hospital room, eyeglasses, and dental care that are not provided by the
province’s health insurance plan) for employee:

Plan A (No deductible and pays 90% ) $3000

Plan B ($200 deductible and pays 80% ) $2000
Plan C ($1000 deductible and pays 70% ) $ 500

Extended medical care for dependants (same deductibles and percentages as above):

Plan A $2000
Plan B $1500
Plan C $ 500
Supplementary dental plan $ 500

Life insurance:

Plan A ($25 000 coverage) $ 500

Plan B ($50 000 coverage) $1000
Plan C ($100 000 coverage) $2000
Plan D ($250 000 coverage) $3000
M ental health plan $ 500
Prepaid legal assistance $ 300
Vacation 2% of annual pay for each w eek,
up to 6 w eeks a year

Pension at retirement equal to approximately 50% of $1500

final annual earnings
Four-day w orkw eek during the three summer months 4% of annual pay (available
only to full-time employees)

Daycare services (after company contribution)

for all of an employee’s children, regardless of number $2000
Company-provided transportation to and from w ork $ 750
University tuition reimbursement $1000
Language class tuition reimbursement $ 500

The Task
1 . Each group has 15 minutes to develop a flexible benefits package that consumes 25 percent (and no more! ) of its
character’s pay.

2. After completing Step 1, each group appoints a spokesperson w ho describes to the entire class the benefits pack-
age the group has arrived at for its character.

3. The entire class then discusses the results. How did the needs, concerns, and problems of each participant influence
the group’s decision? What do the results suggest for trying to motivate a diverse w orkforce?

Source: Exercise developed by Steve Robbins, w ith special thanks to Professor Penny Wright (San Diego State University) for her suggestions dur-
ing the development of this exercise. Exercise modified by Nancy Langton.
146 Part 2 St riving f or Perf orm ance

O B A T W O RK

ETH I C A L D I LEM M A EX ERC I SE

Are CEO s Paid To o Much?

Critics have described the astronomical pay packages given
to Canadian and American CEOs as “ rampant greed.” In
2004, the average compensation of CEOs of Canadian com-
panies that make up the S&P/TSX index w as $5.5-million,
nearly doubling the $3.5 million in compensation aw arded in
2003. By comparison, the S&P/TSX index rose 14.5 in 2004
and profits at TSX companies w ere up 30 percent.
How do you explain such large pay packages to CEOs?
Some say this represents a classic economic response to a sit-
uation in w hich the demand is great for high quality top-
executive talent and the supply is low. Other arguments in
favour of paying executives $1 million a year or more are the
need to compensate people for the tremendous responsibil-
ities and stress that go w ith such jobs; the motivating poten-
tial that 7- and 8-figure annual incomes provide to senior
executives and those w ho might aspire to be; and the influ-
ence of senior executives on the company’s bottom line. (For
example, research findings cited on page 271 of Chapter 8
attribute a 15- to 25-percent variation in profitability to the
leadership quality of CEOs.)
Crit ics of execut ive pay pract ices in Canada and t he
Unit ed St at es argue t hat CEOs choose board members
w hom they can count on to support ever-increasing pay for
top management. If board members fail to “ play along,”
they risk losing their positions, their fees, and the prestige
and pow er inherent in board membership.
In addition, it is not clear that executive compensation is
tied to firm performance. For instance, KPM G found in one
survey that for 40 percent of the respondents, there w as no
correlation betw een the size of the bonus and how poorly or
w ell the company fared. Consider the data in Exhibit 4-16,
w hich illustrates the disconnect that can sometimes happen
betw een CEO compensation and firm performance. National
Post Business w riters calculated that the CEOs noted in the
exhibit w ere overpaid, based on their companies perform-
ances for the year.
Is high compensation of CEOs a problem? If so, does the
blame for the problem lie w ith CEOs or w ith the sharehold-
ers and boards t hat know ingly allow t he pract ice? Are
Canadian and American CEOs greedy? Are these CEOs act-
ing unethically? Should their pay reflect more closely some
multiple of their employees’ w ages? What do you think?
Sources: E. Church, “ M arket Recovery Delivers Executive Payout
Bonanza,” Globe and M ail, M ay 4, 2005, pp. B1, B9; “ Gimme
Gimme: Greed, the M ost Insidious of Sins, Has Once Again Embraced
a Decade,” Financial Post, September 28/30, 1996, pp. 24–25; and I.
M cGugan, “ A Crapshoot Called Compensation,” Canadian Business,
July 1995, pp. 67–70.

EXHIBIT 4-16 2005 Compensation of Canada’s “ M ost Overpaid” CEOs

CEO(s) Was Paid Should Have Amount
(3-Yr Avg.) Been Paid * Overpaid

1. Ian Telfer/Robert M cEw en $32 823 000 $1 313 000 $31 510 000
Goldcorp
Vancouver, British Columbia

2. E. M elnyk $23 392 000 $1 404 000 $21 988 000

Biovail
M ississauga, Ontario

3. Richard Smith/David Stein $9 647 000 $675 000 $8 972 000

CoolBrands
M arkham, Ontario

4. Jeffrey Orr/Robert Gratton $76 139 000 $9 898 000 $66 241 000
Pow er Financial Corporation
M ontreal, Quebec

5. Gerald Schw artz $26 163 000 $4 709 000 $21 454 000
Onex
Toronto, Ontario

* National Post Business’s calculations take into account CEO performance variables.

Source: D. Dias, “ CEO Scorecard 2005,” National Post Business, November 2005, p. 79. M aterial reprinted w ith the express permission of
National Post Company, a CanWest Partnership.

CA S E I N C I D EN T
Frustrated at Age 32
Bob Wood is 32. But if you listened to him, you w ould think
he w as 65 and w ashed up. “ I graduated from university at
a g reat t im e. It w as 1 9 9 6 . I st art ed as an an alyst f o r
Accenture, w orked as a health care IT consultant for tw o
other firms, and then became chief technology officer at
Claimshop.com, a medical claims processor.” By 2001, Bob
w as making $80 000 a year plus bonus, driving an expensive
European sports car, and optimistic about his future. But
Bob Wood has become a statistic. He’s one of the Canadians
born betw een 1966 and 1975 w hose peak earnings may
be behind them. Bob now makes $44 000 as a technology
analyst at a hospital and is trying to adjust to the fact that the
go-go years of the late 1990s are history.
Like many of his generation, Bob is mired in debt. He
ow es $23 000 on his university loans and has run up more
than $4500 on his credit cards. He faces a w orld very dif-
ferent from the one his father found w hen he graduated
from college in the early 1960s.
“ The rules have changed. And w e Generations Xers are
getting hit hard. We had to go to university to get a decent
job. But the majority of us graduated w ith tuition debt. The
good new s w as that w hen w e graduated, the job market
w as great. I got a $5000 hiring bonus on my first job! The
competition by employers for good people drove salaries
up. W hen I w as 28, I w as making more money t han my
dad, w ho had been w ith the same company for over 20
years. But my dad has job security. And he has a nice retire-
ment plan that w ill pay him a guaranteed pension w hen
he turns 58. Now look at me. I don’t know if I’ll ever make
$80 000 again. If I do, it’ll be in 20 or more years. I have no
job securit y. I’ m paying $350 a mont h on my universit y
CBC V I D EO CA SE I N C I D EN T
Air Canada Employee Morale Flies Low
Air Canada, Canada’s national airline, has cut costs exten-
sively in recent years w hile fighting possible bankruptcy.
How ever, the difficulties faced by Air Canada have taken a
toll on employee morale to the extent that staff could derail
the company’s current course of action.
Chapt er 4 M ot ivat ing Self and Ot hers 147
O B A T W O RK
loans. I’m paying another $250 more in payments on my
BM W. And my girlfriend says it’s time for us to settle dow n
and get married. It w ould be nice to ow n a house, but how
can I commit myself to a 30-year mortgage w hen I don’t
know if I’ll have a job in six months?”
“ I‘m very frustrated. I feel like my generation got a bad
deal. We init ially got great jobs w it h unrealist ically high
pay. I admit it; w e w ere spoiled. We got used to w orking
one job for six months, quitting, then taking another and
get t ing ourselves a 25 or 30 percent raise. We t hought
w e’d be rich and retired by 40. The truth is that w e’re now
lucky t o have a job and, if w e do, it probably pays half
w hat w e w ere making a few years ago. We have no job
securit y. The compet it ion f or jobs, combined w it h pres-
sures by business to keep costs dow n, means a future w ith
minimal salary increases. It is pret t y w eird t o be only 32
years old and to have your best years behind you! ”
Questions
1 . Analyze Bob using M aslow ’s hierarchy of needs.
2. Analyze Bob’s lack of motivation using equity theory
and expectancy theory.
3. If you w ere Bob’s boss, w hat could you do to posi-
tively influence his motivation?
4. What are the implications of this case for employers
hiring Generation Xers?
Source: Ideas for this case are based on N. Watson, “ Generation
Wrecked,” Fortune, October 14, 2002, pp. 183–190.
M uch of employee anger is directed tow ard CEO Robert
M ilt on. Employees w ere part icularly upset w hen M ilt on
negotiated a $20 million bonus for himself from proposed
new investor Victor Li of Li Investments, on the condition
that M ilton remain in the top leadership position for four
continued
148 Part 2 St riving f or Perf orm ance
O B A T W O RK
years. M eanw hile, M ilton asked his employees to take over
$1 billion in cuts to their pay and benefits.
Despite severe financial trouble in the airline industry in
recent years, some airlines have been a success. For exam-
ple, Southw est Airlines of Texas has been listed among the
100 best companies to w ork for in America. The company
uses a no-layoff policy as a positive motivator. Southw est is
a profitable airline know n for recruiting the best and bright-
est people it can find, and has a reputation for providing
its staff w ith excellent compensation packages, opportuni-
ties for rapid advancement and professional grow th, and
challenging and interesting assignments. M anagement uses
special interview ing and screening methods to hire people
w ho can have fun on the job and demonstrate outgoing
personality traits that create a high-spirited, fun-loving in-
flight atmosphere for passengers. The hiring process is so
select ive t h at o n ly 3 p ercen t o f p eo p le w h o ap p ly at
Southw est are offered jobs.
While Air Canada employees may question M ilton’s style,
the CEO does have supporters. Karl M oore, a leadership
and aviation expert, claims that M ilton is one of the top air-
line CEOs in t he w orld. Sunny Gordon of Li Invest ment s
believes that leaders should have a stake in their compa-
nies to produce expected results. He also believes M ilton
deserves a bonus if results are appropriate and M ilton is
able to repair relationships w ith employees.
Canadian-born Don Carty provides an example of w hat
happens w hen airline employees feel they have not been
treated fairly. Carty joined American Airlines (AA) as CEO
in 1998. His employees agreed to almost $2 billion in con-
cessions in 2003 to try to save the company from bank-
Fr o m Co n c e p t s
t o Sk i l l s
Setting Go als
You can be more effective at setting goals if you use the
follow ing eight suggestions.
1 . Identify the key tasks you w ant to accomplish . Goal
setting begins by defining w hat it is that you w ant
to accomplish.
2. Establish specific and challenging goals for each key
task . Identify the level of performance you w ant to
accomplish for each task. Specify the targets tow ard
w hich you are w orking.
ruptcy before discovering that the year before, Carty and
other senior executives w ere quietly offered big bonuses
($1.6 million just for Carty) to encourage them to keep their
jobs. Outraged employees threatened to back out of their
agreements and Carty resigned. For Carty, the mistake w as
not just in accept ing t he bonus but in hiding it as w ell.
Carty’s message to M ilton: “ If you take a bonus w hile your
employees take cuts, your credibility is shot.”
Questions
1 . Using needs theories of motivation, explain how
Southw est Airlines motivates its employees.
2. How can expectancy theory, equity theory, and fair
process explain the outrage employees at American
Airlines felt w hen they found out about Don Carty’s
hidden executive bonus? What could senior manage-
ment do at American Airlines to improve motivation?
3. One Air Canada employee stated, “ M ilton treats us
all the same—complete disregard and hatred.” Using
the lessons and examples from Southw est Airlines
and American Airlines, how can CEO Robert M ilton
rebuild morale and improve motivation?
Sources: “ The Hostile Skies,” CBC Venture, February 15, 2004, VA2070D,
914; A. A. Thompson Jr., A. J. Strickland III, and J. E. Gamble, Crafting
and Executing Strategy: The Quest for Competitive Advantage, Concepts
and Cases (Boston: M cGraw -Hill Irw in, 2005); and “ M ajor Investor Walks
Aw ay f rom Air Canada Deal,” CTV.ca, April 4, 2004, ht t p://w w w.
ctv.ca/servlet/ArticleNews/story/CTVNews/1080943752094_76352952///?
hub=Canada (accessed June 7, 2006).
3. Specify the deadlines for each goal. Putting dead-
lines on each goal reduces ambiguity. Deadlines,
how ever, should not be set arbitrarily. Rather, they
need to be realistic given the tasks to be completed.
4. Allow the employee to participate actively. When
employees participate in goal setting, they are more
likely to accept the goals. How ever, it must be sin-
cere participation. That is, employees must perceive
that you are truly seeking their input, not just going
through the motions.
continued

5. Prioritize goals. When you have more than one
goal, it’s important to rank the goals in order of
importance. The purpose of prioritizing is to encour-
age you to take action and expend effort on each
goal in proportion to its importance.
6 . Rate goals for difficulty and importance. Goal set-
ting should not encourage people to choose easy
goals. Instead, goals should be rated for their diffi-
culty and importance. When goals are rated, indi-
viduals can be given credit for trying to reach
difficult goals, even if they don’t fully achieve them.
7. Build in feedback mechanisms to assess goal
progress. Feedback lets you know w hether your level
of effort is sufficient to attain the goal. Set deadlines
for w hen you w ill evaluate how you are performing.
You should review your progress frequently.
8. Link rew ards to goal attainment. It’s natural for you
to get discouraged w hen w orking tow ard your
goals. Link rew ards to the achievement of goals to
help encourage you more.
Source: Based on S. P. Robbins and D. A. DeCenzo, Fundamentals of
M anagement, 4th ed. (Upper Saddle River, NJ: Prentice Hall, 2004), p. 85.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM .
1 0. What M otivates M e?
11 . What Are M y Dominant Needs?
1 2. What Rew ards Do I Value M ost?
1 3. What’s M y View on the Nature of People?
1 4. What Are M y Course Performance Goals?
1 7. How Sensitive Am I to Equity Differences?
Practising Skills
Tammie Arnold w orked her w ay t hrough college w hile
holding dow n a part-time job bagging groceries at the Food
Chapt er 4 M ot ivat ing Self and Ot hers 149
O B A T W O RK
Tow n supermarket chain. She liked w orking in the food
industry, and w hen she graduated she accepted a position
w ith Food Tow n as a management trainee. Over the next
three years, Arnold gained experience in the grocery store
industry and in operating a large supermarket. About a
year ago, Arnold received a promotion to store manager at
one of the chain’s locations. One of the things she has liked
about Food Tow n is that it gives store managers a great
deal of autonomy in running their stores. The company pro-
vides very general guidelines to its managers. Top manage-
ment is concerned w ith the bottom line; for the most part,
how the store manager gets there is up to him or her. Now
that Arnold is finally a store manager, she w ants to use
goal setting to motivate her employees. She likes the idea
that everyone should have clear goals to w ork tow ard and
then be evaluated against those goals.
The store employs 70 people, although except for the
managers most w ork only 20 to 30 hours per w eek. There
are 6 people reporting to Arnold: an assistant manager; a
w eekend manager; and grocery, produce, meat, and bakery
managers. The only highly skilled jobs belong to the butch-
ers, w ho have st rict t raining and regulat ory guidelines.
Other less skilled jobs include cashier, shelf stocker, mainte-
nance employee, and grocery bagger.
Arnold has come to you for advice on how to design a
goal-setting program for her store. Specifically describe how
she should go about setting goals in her new position.
Include examples of goals for the jobs of butcher, cashier,
and bakery manager.
Reinforcing Skills
1 . Set personal and academic goals you w ant to
achieve by the end of this term. Prioritize and rate
them for difficulty.
2. Where do you w ant to be in five years? Do you
have specific five-year goals? Establish three goals
you w ant to achieve in five years. M ake sure these
goals are specific, challenging, and measurable.
CH A PTER 5

Working in Team s

How do you get t eenagers t o devot e t heir

spare time to learning more about science and
t echnology? M ake it a compet it ion and put
them on a team.

1 What are teams and groups?

2 Does everyone use teams?

Do groups and teams go through

3 stages w hile they w ork?

4 How do w e create effective teams?

5 How do virtual teams w ork?

6 Are teams alw ays the answ er?

 he students at Glenforest

T Secondary School in M ississauga,

Ontario, took part in the ninth
annual Canada FIRST Robotics Games in
spring 2002.1 They had eight w eeks to
design and build a remotely operated
robot that w ould compete w ith other
robots built by secondary school teams
across the country. The students w anted
to do a better job than they had in 2001.
The team’s previous robot moved well, but
it could not meet the challenge of firing
balls at pie plates. The students suspected
that to improve their entry, they needed a
better team and more coaching from
adults. Although they knew little about
teamw ork, they had support and encouragement from resources, and a w ay to solve problems. Team members
teachers, engineering mentors, and corporate sponsors. need to be dedicated, and they need to build trust. In this
What factors could help the students have a better team chapter, w e examine w hy teams have become so popular
and build a better robot than their previous attempt? in the w orkplace, how groups and teams develop, how to
For teams to excel, a number of conditions need to create effective teams, how virtual teams w ork, and w hen
be met. Effective teams need w ise leadership, a variety of a team is your best option to get w ork done.

TEAMS VS. GROUPS: WHAT’S THE D IFFERENCE?

There is so m e deb ate whether gro ups and team s are really separate co ncepts, o r 1 What are teams and
whether the term s can be used interchangeably. We think that there is a subtle dif- groups?
ference between the term s. A gro up is two o r m o re peo ple with a co m m o n relatio n- Glenforest Secondary School
ship. Thus a gro up co uld be co -wo rkers o r peo ple meeting fo r lunch o r standing at the www.glenforestlibrary.com
b us sto p. Unlike team s, gro ups do no t necessarily engage in co llective wo rk that group Two or more people with a
requires interdependent effo rt. common relationship.
A team is “a small number o f peo ple with co mplementary skills who are co mmitted team A small number of people
to a co mmo n purpo se, perfo rmance go als, and appro ach fo r which they ho ld them- who work closely together toward a
common objective and are account-
able to one another.

O B IS FO R EV ERY O N E

Eve r wonde r what cause s Should individuals be paid Why do som e te am s se e m Is building a te am just from
flurrie s of activity in groups? for the ir “ te amwork” or to ge t along be tte r than pe ople who are frie nds a
the ir individual othe rs? good ide a?
pe rform ance ?

Why don’t som e te am

m e m be rs pull the ir
we ight?

151
152 Part 2 St riving f or Perf orm ance

selves mutually acco untable.” 2 Gro ups beco me teams when they meet the fo llo wing
co nditio ns:3

• Team members share leadership.

• Bo th individuals and the team as a who le share accountability fo r the wo rk o f

the team.

• The team develo ps its o wn purpose o r mission.

• The team wo rks o n problem solving co ntinuo usly, rather than just at scheduled
meeting times.

• The team’s measure o f effectiveness is the team’s o utco mes and go als, no t indi-
vidual o utco mes and go als.

Thus while no t all gro ups are teams, all teams can be co nsidered gro ups. Much o f what
we discuss in this chapter applies equally well to bo th. We will o ffer so me suggestio ns
o n creating effective team s later in the chapter. This chapter’s Point/Counterpoint o n
page 177 discusses whether spo rts teams are go o d mo dels fo r helping us understand how
teams functio n in the wo rkplace.

WHY H AVE TEAMS BECOME SO POPULAR?

When Glenforest Secondary School teachers decided that students should enter the Canada
FIRST Robotics Games, they could have asked each of the smartest kids in the science class to
build their ow n robots. This is not w hat the teachers and students chose to do, how ever.
Instead, they created a team. Was this a reasonable w ay for Glenforest Secondary to proceed?

2 Does everyone use Pick up almo st any business newspaper o r magazine to day and yo u will read ho w teams
teams? have beco me an essential part o f the way business is do ne in co mpanies such as Zellers,
Xero x, Sears Canada, General Electric, AT&T, Hewlett-Packard, Mo to ro la, Apple Co mputer,
Daim lerChrysler AG, 3M, Australian Airlines, Jo hnso n & Jo hnso n, and Lo ndo n Life

M any employees are asked t o

w ork in teams in order to accom-
plish t heir t asks. In a self -man-
aged w ork team, such as the one
from Xerox show n here, members
make decisions about how t o
manage and schedule production,
and also monit or t he qualit y of
their output.
 Chapter 5 Working in Team s 153

Insurance Co mpany. A Co nference Bo ard o f Canada repo rt fo und that mo re than 80 per-
cent o f its 109 respo ndents used teams in the wo rkplace.4 This finding is similar in the
United States, where 80 percent o f Fortune 500 co mpanies have half o r mo re o f their
emplo yees o n teams. As well, 68 percent o f small US manufacturers use teams in their
pro ductio n areas.5 Thus, it is no t surprising that Glenfo rest Seco ndary also selected a team
to build a ro bo t. The extensive use o f teams creates the potential fo r an o rganizatio n to
generate greater o utputs with no increase in inputs. No tice, however, we said “po tential.”
Creating a team do es no t lead magically to po sitive results. As well, merely calling a
gro up a team will no t auto matically increase its perfo rmance.
Do teams wo rk? The evidence suggests that teams typically o utperfo rm individuals
when the tasks being do ne require multiple skills, judgment, and experience.6 As o rgan-
izatio ns have restructured to co mpete mo re effectively and efficiently, they have turned
to teams as a way to better usse emplo yee talents. Management has fo und that teams are
mo re flexible and respo nsive to changing events than traditio nal departments o r o ther
fo rms o f permanent gro upings. Teams can quickly assemble, deploy, refo cus, and disband.
Team s also can be m o re m o tivatio nal. Recall fro m the jo b characteristics m o del in
Chapter 4 that having greater task identity is o ne way o f increasing mo tivatio n. Teams
allo w fo r greater task identity, with team members wo rking o n tasks to gether.
As we sho w later in this chapter, successful, o r high-perfo rming, teams have certain
co mmo n characteristics. If management ho pes to gain increases in o rganizatio nal per-
fo rmance thro ugh the use o f teams, it must ensure that its teams po ssess these charac-
teristics.

STAGES OF GROUP AND TEAM D EVELOPMENT

Consider w hen the Glenforest Secondary School students first started w orking together to
build the robot. If they w ere anything like most ordinary teams, they all might not have know n
each other, or trusted each other. They might not have know n w ho should be the leader or how
to form the plans for w hat they had to do. Besides building a successful robot, they had to raise
$16 000 to take part in the Canada FIRST Robotics Games. They also had several deadlines to
meet. To build a successful team that w ould achieve their goals, the students w ould have had
to go through several stages. So w hat stages do teams go through as they develop?

While we make a distinctio n between gro ups and teams, so me o f the stages o f devel- 3 Do groups and teams
o pment they go thro ugh are similar. In this sectio n, we discuss two mo dels o f gro up go through stages
develo pment. The five-stage mo del describes the standardized sequence o f stages gro ups while they work?
pass thro ugh. The recently disco vered punctuated-equilibrium mo del describes the pat-
tern o f develo pment specific to tempo rary gro ups with deadlines. These mo dels apply
as readily to teams.

The Five-Stage M od el
Fro m the mid-1960s, it was believed that gro ups passed thro ugh a standard sequence o f
five stages.7 As sho wn in Exhibit 5-1 o n page 154, these five stages have been labelled
forming, storming, norming, performing, and adjourning. Altho ugh we no w kno w that no t
all gro ups pass thro ugh these stages in a linear fashio n, the five-stage mo del o f gro up
develo pment can still help in addressing yo ur anxieties abo ut wo rking in gro ups and
teams. The mo del sho ws ho w individuals mo ve fro m being independent to wo rking
interdependently with gro up members.

• Stage I: Forming. Think abo ut the first time yo u met with a new gro up that had
been put to gether to acco mplish a task. Do yo u remember ho w so me peo ple
seemed silent and o thers felt co nfused abo ut the task yo u were to acco mplish?
Tho se feelings arise during the first stage o f gro up develo pment, kno w as
154 Part 2 St riving f or Perf orm ance

EXHIBIT 5-1 Stages of Group Development and Accompanying Issues

Adjourning

Performing

Norming
Return to
independence
Storming

Forming Dependence/
interdependence
Pre-group

Independence

Individual issues “ How do I “ What ’s my “ What do t he “ How do I “ What ’s next ?”

f it in?” role here?” ot hers expect best perf orm?”
of me?”

Group issues “ Why are “ Who is in “ Can w e agree “ Can w e do “ How do w e

w e here?” charge and w ho on roles and t he job disband?”
does w hat ?” w ork as a properly?”
t eam?”

forming The first stage in group fo rming. Fo rming is characterized by a great deal o f uncertainty abo ut the
development, characterized by much gro up’s purpo se, structure, and leadership. Members are “ testing the waters”
uncertainty. to determine what types o f behavio ur are acceptable. This stage is co mplete
when members have begun to think o f themselves as part o f a gro up.

• Stage II: Storming. Do yo u remember ho w so me peo ple in yo ur gro up just

storming The second stage in
group development, characterized by
intragroup conflict.
didn’t seem to get alo ng, and so metimes po wer struggles even emerged? These
reactio ns are typical o f the sto rming stage, which is o ne o f intragro up co n-
flict. Members accept the existence o f the gro up, but resist the co nstraints that
the gro up impo ses o n individuality. Furthermo re, there is co nflict o ver who
will co ntro l the gro up. When this stage is co mplete, a relatively clear hierarchy
o f leadership will emerge within the gro up.
So me gro ups never really emerge fro m the sto rming stage, o r they mo ve
back and fo rth thro ugh sto rming and the o ther stages. A gro up that remains
fo rever planted in the sto rming stage may have less ability to co mplete the
task because o f all the interperso nal pro blems.

• Stage III: Norming. Many gro ups reso lve the interperso nal co nflict and reach
the third stage, in which clo se relatio nships develo p and the gro up demo n-
norms Acceptable standards of strates co hesiveness. There is no w a stro ng sense o f gro up identity and cama-
behaviour within a group that are raderie. The gro up develo ps no rms , acceptable standards o f behavio ur that
shared by the group’s members. are shared by the gro up’s members. All gro ups have established no rms that
 Chapter 5 Working in Team s 155

tell members what they o ught and o ught no t to do under certain circum-
stances. When agreed to and accepted by the gro up, no rms act as a means o f
influencing the behavio ur o f gro up members with a minimum o f external
co ntro ls. This no rming stage is co mplete when the gro up structure so lidifies, norming The third stage in group
and the gro up has assimilated a co mmo n set o f expectatio ns abo ut what development, characterized by close
defines co rrect member behavio ur. relationships and cohesiveness.

• Stage IV: Performing. Next, and yo u may have no ticed this in so me o f yo ur o wn

gro up interactio ns, so me gro ups just seem to co me to gether well and start to
do their wo rk. This fo urth stage, when significant task pro gress is being made,
is called perfo rming . The structure at this po int is fully functio nal and performing The fourth stage in
accepted. Gro up energy has mo ved fro m getting to kno w and understand each group development, when the group
o ther to perfo rming the task at hand. In this chapter’s o pening vignette, when is fully functional.

Glenfo rest Seco ndary Scho o l raced its ro bo t in the Canada FIRST Ro bo tics
Games, it was perfo rming.

• Stage V: Adjourning. Fo r permanent wo rk gro ups, perfo rming is the last stage in
their develo pment. Ho wever, fo r tempo rary co mmittees, teams, task fo rces, and
similar gro ups that have a limited task to perfo rm, there is an adjo urning stage. adjourning The final stage in
In this stage, the gro up prepares to split up. High task perfo rmance is no lo nger group development for temporary
the gro up’s to p prio rity. Instead, attentio n is directed to ward wrapping up activi- groups, where attention is directed
toward wrapping up activities rather
ties. Gro up members’ respo nses vary at this stage. So me members are upbeat,
than task performance.
basking in the gro up’s acco mplishments. O thers may be depressed o ver the lo ss
o f camaraderie and friendships gained during the wo rk gro up’s life.

Putting the Five-Stage Mo del into Perspective

Many interpreters o f the five-stage mo del have assumed that a gro up beco mes mo re
effective as it pro gresses thro ugh the first fo ur stages. While that is usually true, what
makes a gro up effective is mo re co mplex than this mo del acknowledges. Under so me co n-
ditio ns, high levels o f co nflict lead to high gro up perfo rmance, as lo ng as the co nflict is
directed to ward the task and no t to ward gro up members. So we might expect to find sit-
uatio ns in which gro ups in Stage II o utperfo rm tho se in Stages III o r IV. Similarly, gro ups
do no t always pro ceed clearly fro m o ne stage to the next. So metimes, in fact, several
stages go o n simultaneo usly, as when gro ups are sto rming and perfo rming at the same
tim e. Gro ups even o ccasio nally m o ve backwards to previo us stages. Therefo re, yo u
sho uld no t assume that all gro ups fo llo w the five-stage pro cess precisely o r that Stage IV
is always the mo st preferable.
The five-stage mo del igno res o rganizatio nal co ntext.8 Fo r instance, a study o f a co ck-
pit crew in an airliner fo und that, within 10 m inutes, three strangers assigned to fly
to gether fo r the first time had beco me a high-perfo rming gro up. Ho w co uld a gro up
co m e to gether so q uickly? The answer lies in the stro ng o rganizatio nal co ntext
surro unding the tasks o f the co ckpit crew. This co ntext pro vided the rules, task defini-
tio ns, info rmatio n, and reso urces needed fo r the gro up to perfo rm. They didn’t need to
develo p plans, assign ro les, determine and allo cate reso urces, reso lve co nflicts, and set
no rms the way the five-stage mo del predicts.
Within the wo rkplace, so me gro up behavio ur takes place within a stro ng o rganiza-
tio nal co ntext, and the five-stage develo pment mo del might have limited applicability
fo r tho se gro ups. Ho wever, there are a variety o f situatio ns in the wo rkplace in which
gro ups are assigned to tasks, and the individuals do no t kno w each o ther. They must
therefo re wo rk o ut interperso nal differences at the same time that they wo rk thro ugh the
assigned tasks.
156 Part 2 St riving f or Perf orm ance

EXHIBIT 5-2 The Punctuated-Equilibrium M odel

(High)

Perf orm ance

Phase 2
Completion
First
meeting
Transition
Phase 1

(Low )
A (A+B)/ 2 B
Tim e

The Punctuated -Equilibrium M od el

Tem po rary gro ups with deadlines do n’t seem to fo llo w the previo us m o del. Studies
indicate that tempo rary gro ups with deadlines have their own unique sequence o f actio n
( o r inactio n) :9

• The first meeting sets the gro up’s directio n.

• The first phase o f gro up activity is o ne o f inertia.

• A transitio n takes place at the end o f the first phase, which o ccurs exactly
when the gro up has used up half its allo tted time.

• The transitio n initiates majo r changes.

• A seco nd phase o f inertia fo llo ws the transitio n.

• The gro up’s last meeting is characterized by high levels o f pro ductive activity.

This pattern is called the punctuated-equilibrium model,

develo ped by Pro fesso r Co nnie Gersick, a Visiting Scho lar
*cause
Eve r wonde r what
s flurrie s of
at the Yale University Scho o l o f Management, and is sho wn
in Exhibit 5-2.10 It is impo rtant fo r yo u to understand these
activity in groups?
shifts in gro up behavio ur. If yo u are ever in a gro up that is no t
wo rking well, knowing abo ut the shifts co uld help yo u think
o f ways to make the gro up move to a mo re pro ductive phase.

Phase 1
As a gro up member and po ssibly a gro up leader, yo u need to reco gnize that the first
meeting sets the gro up’s directio n. A framewo rk o f behavio ural patterns and assumptio ns
thro ugh which the gro up will appro ach its pro ject emerges in this first meeting. These
lasting patterns can appear as early as the first few seco nds o f the gro up’s life.
O nce set, the gro up’s directio n beco mes accepted and is unlikely to be re-examined
thro ugho ut the first half o f the gro up’s life. This is a perio d o f inertia—that is, the gro up
tends to stand still o r beco me lo cked into a fixed co urse o f actio n. Even if it gains new
insights that challenge initial patterns and assumptio ns, the gro up do es no t act o n these
new insights in Phase 1. Yo u may reco gnize that in so me gro ups, during the early perio d
o f trying to get things acco mplished, no o ne really did his o r her assigned tasks. Yo u may
also reco gnize this phase as o ne where everyo ne carries o ut the tasks, but no t in a very
co o rdinated fashio n. Thus, the gro up is perfo rming at a relatively low level. This do es no t
necessarily mean that it is do ing no thing at all, ho wever.
 Chapter 5 Working in Team s 157

Phase 2
At so me po int, the gro up mo ves o ut o f the inertia stage and reco gnizes that wo rk needs
to get co mpleted. O ne o f the mo re interesting disco veries made in these studies was that
each gro up experienced its transitio n at the same po int in its calendar—precisely halfway
between its first meeting and its o fficial deadline. The similarity o ccurred despite the
fact that so me gro ups spent as little as an ho ur o n their pro ject while o thers spent six
mo nths. It was as if the gro ups universally experienced a mid-life crisis at this po int. The
midpo int appears to wo rk like an alarm clo ck, heightening members’ awareness that
their time is limited and that they need to “get mo ving.” When yo u wo rk o n yo ur next
gro up pro ject, yo u might want to examine when yo ur gro up starts to “get mo ving.”
This transitio n ends Phase 1 and is characterized by a co ncentrated burst o f changes,
dro pping o f o ld patterns, and ado ptio n o f new perspectives. The transitio n sets a revised
directio n fo r Phase 2, which is a new equilibrium o r perio d o f inertia. In this phase,
the gro up executes plans created during the transitio n perio d. The gro up’s last meet-
ing is characterized by a final burst o f activity to finish its wo rk. There have been a num-
ber o f studies that suppo rt the basic premise o f punctuated equilibrium, tho ugh no t
all o f them fo und that the transitio n in the gro up o ccurred exactly at the midpo int.11

Applying the Punctuated-Equilibrium Mo del

Let’s use this mo del to describe so me o f yo ur experiences with student teams created fo r
do ing gro up term pro jects. At the first meeting, a basic timetable is established. Members
size up o ne ano ther. They agree they have nine weeks to co mplete their pro jects. The
instructo r’s requirements are discussed and debated. Fro m that po int, the gro up meets
regularly to carry o ut its activities. Abo ut fo ur o r five weeks into the pro ject, ho wever,
pro blems are co nfro nted. Criticism begins to be taken serio usly. Discussio n beco mes
m o re o pen. The gro up reassesses where it has been and aggressively m o ves to m ake
necessary changes. If the right changes are made, the next fo ur o r five weeks find the gro up
develo ping a first-rate pro ject. The gro up’s last meeting, which will pro bably o ccur just
befo re the pro ject is due, lasts lo nger than the o thers. In it, all final issues are discussed
and details reso lved.
In sum m ary, the punctuated-equilibrium m o del characterizes deadline-o riented
gro ups and teams as exhibiting lo ng perio ds o f inertia interspersed with brief revo lu-
tio nary changes triggered primarily by members’ awareness o f time and deadlines. To use
the termino lo gy o f the five-stage mo del, the gro up begins by co mbining the forming
and norming stages, then go es thro ugh a perio d o f low performing, fo llo wed by storming,
then a perio d o f high performing, and, finally, adjourning.
Several researchers have suggested that the five-stage and punctuated-equilibrium
mo dels are at o dds with each o ther.12 Ho wever, it makes mo re sense to view the mo d-
els as co mplementary: The five-stage mo del co nsiders the interperso nal pro cess o f the
gro up, while the punctuated-equilibrium mo del co nsiders the time challenges that the
gro up faces.13 Gro up members and managers may want to use the implicatio ns o f the
punctuated-equilibrium mo del to either sho rten the deadlines fo r tasks ( so that less
time is wasted getting to the midpo int o f the time perio d) o r to build in mo re go als
and rewards fo r the first half o f the time perio d ( to help overco me the inertia that o ccurs
during that phase) .

CREATING EFFECTIVE TEAMS

Beatrice Sze, Glenforest Secondary School’s robotics team co-captain, gave her teammates a
sense of responsibility and ow nership over their w ork. For example, w hen a team member
came to her w ith questions about w hat to do next, she w ould say encouragingly, “ Use your
brain. You can figure this out. You know how to do this.”
158 Part 2 St riving f or Perf orm ance

The students at Glenforest Secondary also had to be resourceful. One team member’s par-
ents provided the family basement for a team gathering place. That enabled the students to
get extra parts from the family’s snow blow er and dehumidifier. Sometimes they w orked so late
into the evening that they had sleepovers on the basement floor, huddled in sleeping bags.
They also got a mentor—a computer and electrical engineer w ith Bell M obility—w ho tried to
guide the students in the right direction w ithout telling them w hat to do. What other factors
might have contributed to the effectiveness of Glenforest Secondary’s robotics team?

4 How do we create When we co nsider team effectiveness, we refer to such o bjective measures as the team’s
effective teams? pro ductivity, managers’ ratings o f the team’s perfo rmance, and aggregate measures o f
member satisfactio n. So me o f the co nsideratio ns necessary to create effective teams are
o utlined next. Ho wever, we are also interested in team pro cess. Exhibit 5-3 pro vides a
checklist o f the characteristics o f an effective team.
There is no sho rtage o f effo rts that try to identify the facto rs that lead to team effec-
tiveness.14 Ho wever, studies have taken what was o nce a “veritable laundry list o f char-
acteristics” 15 and o rganized them into a relatively fo cused m o del with fo ur general
catego ries ( summarized in Exhibit 5-4 o n page 159) :16

• Reso urces and o ther co ntextual influences that make teams effective

• The team’s co mpo sitio n

EXHIBIT 5-3 Characteristics of an Effective Team

1. Clear purpose The vision, mission, goal, or task of the team has been defined and is now accepted by every-
one. There is an action plan.

2. Informality The climate tends to be informal, comfortable, and relaxed. There are no obvious tensions or
signs of boredom.

3. Participation There is much discussion, and everyone is encouraged to participate.

4. Listening The members use effective listening techniques such as questioning, paraphrasing, and sum-
marizing to get out ideas.

5. Civilized There is disagreement, but the team is comfortable w ith this and show s no signs of avoiding,
d isagreement smoothing over, or suppressing conflict.

6. Consensus For important decisions, the goal is substantial but not necessarily unanimous agreement
d ecisions through open discussion of everyone’s ideas, avoidance of formal voting, or easy compromises.

7. Open Team members feel free to express their feelings on the tasks as w ell as on the group’s operation.
communication There are few hidden agendas. Communication takes place outside meetings.

8. Clear rules and There are clear expectations about the roles played by each team member. When action is
w ork assignment s taken, clear assignments are made, accepted, and carried out. Work is distributed among team
members.

9. Shared lead ership While the team has a formal leader, leadership functions shift from time to time depending on
the circumstances, the needs of the group, and the skills of the members. The formal leader
models the appropriate behaviour and helps establish positive norms.

10. External relations The team spends time developing key outside relationships, mobilizing resources, and building
credibility w ith important players in other parts of the organization.

11. Style d iversity The team has a broad spectrum of team-player types including members w ho emphasize attention
to task, goal setting, focus on process, and questions about how the team is functioning.

12. Self-assessment Periodically, the team stops to examine how w ell it is functioning and w hat may be interfering
w ith its effectiveness.

Source: G. M . Parker, Team Players and Teamw ork: The New Competitive Business Strategy (San Francisco: Jossey-Bass, 1990), table 2, p. 33.
Copyright © 1990 by Jossey-Bass, Inc., Publishers. Reprinted by permission of John W iley & Sons, Inc.
 Chapter 5 Working in Team s 159

EXHIBIT 5-4 A M odel of Team Effectiveness

Context Composition

• Adequate resources • Skills

• Leadership and structure • Personality
• Climate of trust • Roles
• Performance • Diversity
evaluation • Size
and rew ards • M em b ers’ flexib ility
• M em b ers’ preference for
teamw ork
Team
effectiveness
Work design Process

• Autonomy • Common purpose

• Skill variety • Specific goals
• Task identity • Team efficacy
• Task significance • M anaged level of conflict
• Accounta b ility

• Wo rk design

• Pro cess variables ( tho se things that go o n in the team that influence ho w
effective the team is)

Beco ming a team player is no t easy, as O B in the Street demo nstrates.

O B I N T H E ST REET

Top Skeleton Racer Finds Teamw ork a Real Challenge

Is being a team player all that tough? Jeff Pain spent much o f the 2000s so far try-
ing his best no t to be a team player.17 Befo re the 2006 O lympic Winter Games, Pain
was ranked the to p skeleto n racer in Canada.
Much o f Pain’s negativity to ward teamwo rk was directed at team member Duff
Gibso n. The two have been intense rivals fo r o ver five years.
“When Duff started skeleto n [in 1999], I had a difficult time with my team dynam-
ics because I felt that I knew a lo t m o re than the peo ple I was sliding with,” says
Pain. “ I didn’t want to share info rm atio n with them and I carried that m istaken
belief right up to last year [2004]. That was pro bably my and Duff’s wo rst year.” 18
In summer 2004, Pain, Gibso n, and fello w team member Paul Bo ehm decided
to wo rk to gether to share info rmatio n abo ut the tracks they were co mpeting o n, and
then tried to help each o ther o ut.
Pain and Gibso n impro ved their times and reached the highest level in interna-
tio nal standings. Pain adm its that learning ho w to be m o re o f a team player has
helped him improve in a spo rt that he was thinking o f quitting because o f his unhap-
piness with o ther team members. “ I really insulated myself, and that didn’t create a
go o d enviro nment fo r me o r the team,” Pain says.19 At the 2006 O lympics, the two
teammates wo und up taking the to p spo ts in skeleto n racing: Gibso n wo n go ld, and
Pain wo n silver.
160 Part 2 St riving f or Perf orm ance

At M ontreal-based PEAK Financial

Group, CEO Robert Frances (left)
lets his teams do their ow n hiring.
Everyone w ho might w ork w ith
the potential hire, including sub-
ordinates, is invited to sit in on
t he int erview. “ If a t eam is t o
w ork properly as a t eam, t hen
they should have a say in w ho the
other team members are,” says
Frances. His philosophy is that if
t hose involved don’t t hink t hey
w ill get along at the start, it’s bet-
ter to know this before they are
hired. At right, w e see a couple
of PEAK’s client services employ-
ees get t ing ready f or t he RRSP
season.

PEAK Financial Group

www.peakgroup.com

Keep in mind two caveats as yo u review the issues that lead to effective teams:

• First, teams differ in fo rm and structure. Since the mo del we present attempts
to generalize acro ss all varieties o f teams, yo u need to be careful no t to rigidly
apply the mo del’s predictio ns to all teams.20 The mo del sho uld be used as a
guide, no t as an inflexible prescriptio n.

• Seco nd, the mo del assumes that it’s already been determined that teamwo rk is
preferable o ver individual wo rk. Creating “effective” teams in situatio ns in
which individuals can do the jo b better is equivalent to so lving the wro ng
pro blem perfectly.

O B in Action— Harming Your Team presents actio ns that can make a team ineffective.
Yo u might want to evaluate yo ur o wn team experiences against this checklist to give
yo u so me idea o f ho w well yo ur team is functio ning o r to understand what might be
causing pro blems fo r yo ur team. Then co nsider the facto rs that lead to mo re effective
teams belo w. Fo r an applied lo o k at the pro cess o f building an effective team, see the
Working W ith O thers Exercise o n pages 179–180, which asks yo u to build a paper to wer
with teammates and then analyze ho w the team perfo rmed.

Context
Teams can require a great deal o f maintenance to functio n pro perly. They need man-
agement suppo rt as well as an o rganizatio nal structure that suppo rts teamwo rk. The fo ur
co ntextual facto rs that appear to be mo st significantly related to team perfo rmance are ade-
quate reso urces, effective leadership, a climate o f trust, and a perfo rmance evaluatio n
and reward system that reflects team co ntributio ns. Hamilto n, O ntario -based Do fasco is
Dofasco a clear example o f getting the co ntext right fo r team perfo rmance. Do fasco started using
www.dofasco.ca teams in the early 1990s, putting almo st 7000 employees thro ugh team-building exercises.
To day, multidisciplinary teams are given impro vement go als; the teams assume respo n-
sibility fo r develo ping plans to reach the go als. To a large extent, the teams are self-man-
aged. “ The superviso r becam e less o f an ass-kicker and m o re o f a reso urce perso n,”
explained fo rmer CEO Jo hn Mayberry.21 Pay is tied partly to ho w well Do fasco do es
 Chapter 5 Working in Team s 161

each year, which helps mo tivate emplo yees to wo rk with their

teams, rather than as individuals.
Adequate Reso urces
All wo rk teams rely o n reso urces o utside the team to sustain
them. A scarcity o f reso urces directly reduces the ability o f a
team to perfo rm its jo b effectively. As o ne set o f researchers
co ncluded, after lo o king at 13 facto rs po tentially related to
team perfo rmance, “ perhaps o ne o f the mo st impo rtant char-
acteristics o f an effective wo rk gro up is the suppo rt the gro up
receives fro m the o rganizatio n.” 22 This includes techno lo gy,
adequate staffing, administrative assistance, enco uragement,
and timely info rmatio n.
Team s m ust receive the necessary suppo rt fro m m anage-
ment and the larger o rganizatio n if they are go ing to succeed in
achieving their go als. Yo u may recall fro m the o pening vignette
that o ne o f the reaso ns fo r the Glenfo rest Seco ndary Scho o l
team’s failure in 2001 was that it didn’t have the kind o f co ach-
ing it needed to build a great ro bo t. Fo r the 2002 co mpetitio n,
the team fo und a mento r and also created a wo rksho p at o ne
o f the team member’s ho mes.
Leadership and Structure
Leadership plays a crucial ro le in the develo pment and success
o f teams. Pro fesso r Richard Hackman o f Harvard University,
who is the leading expert o n teams, suggests that the ro le o f
team leader invo lves the fo llo wing:23
O B I N A CTI ON
Harming Your Team
➔ Refuse to share issues and concerns. Team mem-
bers refuse to share information and engage in
silence, avoidance, and meetings behind closed
doors where not all members are included.
➔ Depend too much on the leader . Members rely
too much on the leader and do not carry out their
responsibilities.
➔ Fail to follow through on decisions. Teams do not
take action after decision making, showing that the
needs of the team have low priority, or members are
not committed to the decisions that were made.
➔ Hide conflict . Team members do not reveal that
they have a difference of opinion and this causes
tension.
➔ Fail at conflict resolution. Infighting, put-downs,
and attempts to hurt other members damage the
team.
➔ Form subgroups. The team breaks up into smaller
groups that put their needs ahead of the team as a
whole.
Source: Based on W. G. Dyer, R. H. Daines, and W. C.
Giauque, The Challenge of M anagement (New York:
Harcourt Brace Jovanovich, 1990), p. 343.

• Creating a real team rather than a team in name o nly

• Setting a clear and meaningful directio n fo r the team’s wo rk

• Making sure that the team structure will suppo rt its wo rking effectively

• Ensuring that the team o perates within a suppo rtive o rganizatio nal co ntext

• Pro viding expert co aching

There are so m e practical pro blem s that m ust be reso lved when a team first starts
wo rking to gether. Team members must agree o n who is to do what and ensure that all
m em bers co ntribute equally in sharing the wo rklo ad. The team also needs to deter-
mine ho w schedules will be set, what skills need to be develo ped, ho w the team will
reso lve co nflicts, and ho w the team will make and mo dify decisio ns. Agreeing o n the
specifics o f wo rk and ho w they fit to gether to integrate individual skills requires team
leadership and structure. This, incidentally, can be pro vided directly by management
o r by the team members themselves. In the case o f the Glenfo rest Seco ndary Scho o l
students in this chapter’s vignette, the team was led by two student co -captains. The
adult advisers did no t try to tell the students what to do .
O n traditio nally managed teams, we find that two facto rs seem to be impo rtant in
influencing team perfo rmance—the leader’s expectatio ns and his o r her mo o d. Leaders
who expect go o d things fro m their team are mo re likely to get them! Fo r instance, mil-
itary plato o ns under leaders who held high expectatio ns perfo rmed significantly better
in training than plato o ns who se leaders did no t set expectatio ns.24 Additio nally, stud-
ies have fo und that leaders who exhibit po sitive mo o ds get better team perfo rmance
and lower turnover.25 The Learning About Yourself Exercise o n pages 178–179 will help yo u
evaluate ho w suited yo u are to building and leading a team.
162 Part 2 St riving f or Perf orm ance

Recent research suggests that wo men may make better team

O B I N A CTI ON leaders than men. “The mo re wo men participating equally in a
pro ject, the better the o utco m e,” suggests Pro fesso r Jennifer
Building Trust Berdahl, o f the Jo seph L. Ro tman Scho o l o f Management at the
The following actions, in order of importance, help build University o f To ro nto .26 Berdahl’s research, which lo o ked at
one’s trustworthiness. 169 students enro lled in her o rganizatio nal behavio ur co urses,
➔ Integrity— built through honesty and truthful- fo und that in predo minantly female teams, wo men shared lead-
ness. ership ro les and were m o re egalitarian in ho w they wo rked.
➔ Competence — demonstrated by technical and Male-led teams, whether they were predo minantly male gro ups
interpersonal know ledge and skills. o r mixed-gender gro ups, received po o rer grades o n their pro jects
➔ Consistency— shown by reliability, predictabil- than teams where wo men shared leadership ro les.27
ity, and good judgment in handling situations. So metimes teams need co aches mo re than they need lead-
➔ Loyalty— one’s willingness to protect and stand ers. Tho ugh wo rkplace teams o ften repo rt that they receive lit-
up for another person. tle co aching co mpared with leadership,28 pro ductivity-related
➔ Openness— one’s willingness to share ideas and co aching may help teams perfo rm mo re effectively. In particu-
information freely. lar, co aching may be best at three particular stages in the team’s
histo ry: “at the beginning fo r effo rt-related (mo tivatio nal) inter-
Source: P. L. Schindler and C. C. Thomas, “ The Structure of ventio ns, near the midpo int fo r strategy-related ( co nsultative)
Interpersonal Trust in the Workplace,” Psychological
interventio ns, and at the end o f a task cycle fo r ( educatio nal)
Reports, October 1993, pp. 563–573.
interventio ns that address kno wledge and skill.” 29
Team s do no t always need a leader. Fo r instance, the evi-
dence indicates that self-managed wo rk teams o ften perfo rm better than teams with
fo rmally appo inted leaders.30 Leaders can also o bstruct high perfo rmance when they
interfere with self-managed teams.31 O n self-managed teams, team members abso rb
many o f the duties typically assumed by managers.

Climate o f Trust
Members o f effective teams trust each o ther. Fo r team members to do this, they must feel
that the team is capable o f getting the task do ne and they must believe that “ the team
will no t harm the individual o r his o r her interests.” 32 Interperso nal trust amo ng team
members facilitates co o peratio n, reduces the need to mo nito r o ne ano ther’s behavio ur,
and bo nds members aro und the belief that o thers o n the team wo n’t take advantage o f
them. Team members are mo re likely to take risks and expo se vulnerabilities when they
believe they can trust o thers o n their team . O B in Action— Building Trust sho ws the
dimensio ns that underlie the co ncept o f trust.
Team members must also trust their leaders.33 Trust in leadership is impo rtant in that
it allows the team to be willing to accept and co mmit to their leader’s go als and decisio ns.

Perfo rmance Evaluatio n and Rewards

Ho w do yo u get team members to be bo th individually and

* Should individuals
be paid for the ir
jo intly acco untable? The traditio nal individually o riented
evaluatio n must be mo dified to reflect team perfo rmance.34
“ te amwork” or Individual perfo rmance evaluatio ns, fixed ho urly wages,
the ir individual individual incentives, and the like are no t co nsistent with the
pe rform ance ? develo pment o f high-perfo rmance teams. So in additio n to
evaluating and rewarding em plo yees fo r their individual
co ntributio ns, management sho uld co nsider gro up-based
appraisals, pro fit sharing, gainsharing, small-gro up incentives, and o ther system mo d-
ificatio ns that will reinfo rce team effo rt and co mmitment. Igno ring these facto rs may
affect the level o f trust that develo ps in the team.35
O ne additio nal co nsideratio n when deciding whether and how to reward team mem-
bers is the effect o f pay dispersio n o n team perfo rmance. Research by Nancy Langto n,
 Chapter 5 Working in Team s 163

yo ur Vanco uver-based autho r, sho ws that when there is a large discrepancy in wages
amo ng gro up members, co llabo ratio n is lo wered.36 A study o f baseball players’ salaries
also fo und that teams where players were paid mo re similarly o ften o utperfo rmed teams
with highly paid “ stars” and lo wly paid “ scrubs.” 37

Composition
This catego ry includes variables that relate to ho w team s
* Why do som e
te am s se e m to ge t
sho uld be staffed. In this sectio n, we address the skills,
perso nality, and ro les o f team members, the diversity and
along be tte r than size o f the team , m em ber flexibility, and m em bers’ pref-
othe rs? eren ce fo r team wo rk. Th is ch ap ter’s C BC Video C ase
Incident dem o nstrates ho w putting to gether a go o d team Earth Buddies
can lead to a very successful co m pany.

Skills
To perfo rm effectively, a team requires three different types o f skills:

1. It needs peo ple with technical expertise.

2. It needs peo ple with the problem-solving and decision-making skills to be able to
identify pro blems, generate alternatives, evaluate tho se alternatives, and make
co mpetent cho ices.

3. It needs peo ple with go o d listening, feedback, co nflict reso lutio n, and o ther
interpersonal skills. 38

No team can achieve its perfo rmance po tential witho ut develo ping all three types
o f skills. The right mix is crucial. To o much o f o ne at the expense o f o thers will result in
lo wer team perfo rmance. But teams do n’t need to have all the co mplementary skills in
place at the beginning. It’s no t unco mmo n fo r o ne o r mo re members to take respo nsi-
bility to learn the skills in which the gro up is deficient,
thereby allo wing the team to reach its full po tential.

Perso nality
Teams have different needs, and peo ple sho uld be selected
fo r the team o n the basis o f their perso nalities and pref-
erences, as well as the team’s needs fo r diversity and spe-
cific ro les. We demo nstrated in Chapter 2 that perso nality
has a significant influence o n individual employee behav-
io ur. Perso nality also influences team behavio ur. Many o f
the dimensio ns identified in the Big Five mo del o f per-
so nality have been sho wn to be relevant to team effec-
tiveness. Specifically, teams that rate higher in mean levels
o f extraversio n, agreeableness, co nscientio usness, and
emo tio nal stability tend to receive higher managerial rat-
ings fo r team perfo rmance.39
Very interestingly, the evidence indicates that the vari-
ance in perso nality characteristics may be mo re impo r-
tant than the mean.40 So , fo r example, altho ugh higher
mean levels o f co nscientio usness o n a team are desirable, Being a gracious team member can make a difference. When Atlanta-
based CNN decided to revise its morning program American M orning in
m ixing b o th co nscientio us and no t-so -co nscientio us
summer 2005, CNN/US President Jonathan Klein decided to replace co-
members tends to lo wer perfo rmance. Including just o ne
anchor Bill Hemmer, w ho had held the anchor position for several years.
perso n who is low o n agreeableness, co nscientio usness, o r In explaining the decision, Klein noted that he w anted a male anchor
extraversio n can result in strained internal pro cesses and w ho w ould w ork w ith female co-anchor Soledad O’Brien and help her
decreased o verall perfo rmance.41 look good too, rather than trying to take all the attention himself.
164 Part 2 St riving f or Perf orm ance
role A set of expected behaviours
of a person in a given position in a
social unit.
task-oriented roles Roles per-
formed by group members to ensure
that the tasks of the group are
carried out.
maintenance roles Roles per-
formed by group members to main-
tain good relations within the group.
individual roles Roles performed
by group members that are not pro-
ductive for keeping the team on task.
role expectations How others
believe a person should act in a
given situation.
role conflict A situation in which an
individual finds that complying with
one role requirement may make it
more difficult to comply with another.
group diversity The hetero-
geneous mix of individuals within a
group.
Ro les
In gro ups, each individual fills a particular ro le . By this term, we mean a set o f expected
behavio ur patterns o f a perso n in a given po sitio n in a so cial unit. Within almo st any
gro up, two sets o f ro le relatio nships need to be co nsidered: task-o riented ro les and
maintenance ro les. Task-oriented roles are perfo rmed by gro up members to ensure that
the tasks o f the gro up are acco m plished. These ro les include initiato rs, info rm atio n
seekers, info rm atio n pro viders, elab o rato rs, sum m arizers, and co nsensus m akers.
Maintenance ro les are carried o ut to ensure that gro up members maintain go o d rela-
tio ns. These ro les include harmo nizers, co mpro misers, gatekeepers, and enco uragers. Yo u
may recall fro m this chapter’s vignette that Beatrice Sze was an enco urager— helping
team members achieve their best.
Effective teams maintain so me balance between task o rientatio n and maintenance o f
relatio ns. Exhibit 5-5 o n page 165 identifies a num ber o f task-o riented and m ainte-
nance behavio urs in the key ro les that yo u might find in a team.
O n many teams, there are individuals who will be flexible eno ugh to play multiple
ro les and/ o r co mplete each o ther’s tasks. This is an o bvio us plus to a team because it
greatly im pro ves its adaptability and m akes it less reliant o n any single m em ber.42
Selecting members who themselves value flexibility, and then cro ss-training them to
be able to do o ne ano ther’s jo bs, sho uld lead to higher team perfo rmance o ver time.
O ccasio nally within teams, yo u will see peo ple take o n individual ro les that are
no t pro ductive fo r keeping the team o n task. When this happens, the individual is
demo nstrating mo re co ncern fo r himself o r herself than the team as a who le.
Mo st ro les, whether in the wo rkplace o r in o ur perso nal lives, are go verned by ro le
expectatio ns , that is, ho w o thers believe a perso n sho uld act in a given situatio n. Ro le
co nflict exists when an individual finds that co mplying with o ne ro le requirement may
make it mo re difficult to co mply with ano ther.43 At the extreme, it can include situatio ns
in which two o r mo re ro le expectatio ns are mutually co ntradicto ry! Case Incident— Role
Conflict Among Telephone Service Employees o n the CD-RO M that acco mpanies this text-
bo o k lo o ks at ho w ro le co nflict affects o ne’s wo rk life.
Diversity
Gro up diversity refers to the presence o f a hetero geneo us mix o f individuals within a
gro up.44 Individuals can be different no t o nly in functio nal characteristics ( jo bs, po si-
tio ns, expertise, o r wo rk experiences) but also in demo graphic o r cultural characteristics
( age, race, sex, and citizenship) .
RESEARCH FINDINGS Team Diversit y
Managing diversity o n teams is a balancing act (see Exhibit 5-6 o n page 166).45 On the o ne
hand, a number of researchers have suggested that diversity brings a greater number of ideas,
perspectives, knowledge, and skills to the gro up, which can be used to perfo rm at a higher
level.46 On the other hand, researchers have suggested that diversity can lead people to recall
stereo types and therefo re bring bias into their evaluatio ns o f peo ple who are different
fro m them.47 Diversity can thus make it mo re difficult to unify the team and reach agree-
ments.48 We co nsider so me o f the evidence to help us reso lve these o ppo sing views.
In a stud y exam in in g th e effectiven ess o f team s o f
strangers and team s o f friends o n bargaining, researchers
fo und that team s o f strangers gained greater pro fit than
* Is building a te am
just from pe ople who team s o f friends, when team s repo rted to a superviso r.49
are frie nds a good However, teams o f friends were mo re co hesive than teams o f
ide a? strangers. Ano ther study o f 60 teams fo und that in effective
teams, abo ut 50 percent o f the individuals co nsidered them-
selves friends, which undersco res the impo rtance o f teams’
 Chapter 5 Working in Team s 165

EXHIBIT 5-5 Roles Required for Effective Team Functioning

Function Description Example

Roles Initiating Stating the goal or problem, “ Let’s set up an agenda for
that build task making proposals about discussing each of the problems
accomplishment how to w ork on it, setting w e have to consider.”
time limits.

Seeking Asking group members for “ What do you think w ould be

information specific factual information the best approach to this,
and opinions related to the task or problem, Jack?”
or for their opinions about it.

Providing Sharing information or “ I w orked on a similar problem

information opinions related to the task last year and found . . .”
and opinions or problems.

Clarifying Helping one another under- “ What you mean, Sue, is that
stand ideas and suggestions w e could . . . ?”
that come up in the group.

Elaborating Building on one another’s “ Building on Don’s idea, I think

ideas and suggestions. w e could . . .”

Summarizing Review ing the points covered Appointing a recorder to take

by the group and the different notes on a blackboard.
ideas stated so that decisions
can be based on full
information.

Consensus testing Providing periodic testing on “ Is the group ready to decide

w hether the group is nearing a about this?”
decision or needs to continue
` discussion.

Roles Harmonizing M ediating conflict among “ Don, I don’t think you and Sue
that build other members, reconciling really see the question that
and maintain disagreements, relieving differently.”
a team tensions.

Compromising Admitting error at times of “ Well, I’d be w illing to change if

group conflict. you provided some help on . . .”

Gatekeeping M aking sure all members have “ Sue, w e haven’t heard from
a chance to express their ideas you on this issue.”
and feelings and preventing
members from being interrupted.

Encouraging Helping a group member make “ I think w hat you started to

his or her point. Establishing a say is important, Jack. Please
climate of acceptance in the group. continue.”

Source: “ Team Processes,” in M anaging for the Future, ed. D. Ancona, T. Kochan, M . Scully, J. Van M aanen, and D. E. Westney (Cincinnati, OH:
South-Western College Publishing, 1996), p. 9.

develo ping friendships.50 However, the researchers also fo und that in teams that repo rted
almo st 100 percent friendship, perfo rmance was much lower. These gro ups tended to iso -
late themselves fro m o thers and no t seek o utside influences. The research o n friend-
ships in teams suggests that teams o f friends may be less co ncerned with pro ductivity and
mo re co ncerned with maintaining their relatio nship than are teams o f strangers.
166 Part 2 St riving f or Perf orm ance
Haskayne School of Business,
University of Calgary
www.haskayne.ucalgary.ca
EXHIBIT 5-6 Advantages and Disadvantages of Diversity
Ad vantages Disad vantages
M ultiple perspectives Ambiguity
Greater openness to new ideas Complexity
M ultiple interpretations Confusion
Increased creativity M iscommunication
Increased flexibility Difficulty in reaching a single agreement
Increased problem-solving skills Difficulty in agreeing on specific actions
Source: Adapted from N. J. Adler, International Dimensions of Organizational Behavior, 4th ed., p. 109.
Copyright © 2002. By permission of South-Western College Publishing, a division of International
Thomson Publishing, Cincinnati, OH 45227.
Recent studies have examined the effect o f hetero geneo us values o n perfo rmance
and suggest that value differences may have a greater influence than functio nal, demo -
graphic, o r cultural differences.51 Pro fesso r Margaret Neale o f Stanfo rd University’s
Graduate Scho o l o f Business examined the impact o f three types o f diversity o n gro up
perfo rmance: info rmatio nal, demo graphic, and value-go al diversity.52 She fo und that
these different fo rm s o f diversity generate different types o f co nflict. Info rm atio nal
diversity is asso ciated with co nstructive co nflict, with team members debating abo ut
the best co urse o f actio n. Neale co nsiders this po sitive co nflict. Demo graphic diversity
can result in interperso nal co nflict, which, if left unreso lved, can destro y the gro up.
Gro ups that have value-go al diversity m ay face the m o st dam age fro m the diversity.
When team members do no t agree o n values and go als, it is hard fo r them to functio n.
Ho wever, if a team wo rks thro ugh differences to reach co nsensus o n values and go als,
team members then kno w o ne ano ther’s intentio ns.
O verall, studies suggest that the stro ngest case fo r diversity o n wo rk teams can be made
when these team s are engaged in pro b lem -so lving and decisio n-m aking tasks. 5 3
Heterogeneous teams may have qualities that lead to creative or unique solutions.54 The lack
o f a co mmo n perspective also means diverse teams usually spend mo re time discussing
issues, which decreases the po ssibility that a weak alternative will be cho sen. Altho ugh
diverse gro ups have mo re difficulty wo rking to gether and so lving pro blems, this fades
with time as the members co me to know o ne ano ther. A recent study suppo rts this idea;
teams with high expertise diversity were fo und to perfo rm better when team members
were co mmitted to the team than when team members showed low co mmitment.55
Recent research suggests that when team members share a co mmo n belief that diver-
sity will po sitively affect their perfo rm ance, they set the fo undatio n fo r the team to
manage the diversity in a po sitive way. Specifically, if team members set o ut early to
try to learn abo ut o ne ano ther in o rder to understand and make the mo st o f their dif-
ferences, this will have a po sitive effect o n the team.56 Laurie Milto n, at the Haskayne
Scho o l o f Business at the University o f Calgary, and several co -autho rs fo und that even
10 minutes spent sharing perso nal info rmatio n when gro up members first started wo rk-
ing to gether lo wered gro up co nflict and impro ved creative perfo rmance.57 When gro up
members didn’t share perso nal info rmatio n at the beginning o f their wo rk, they were less
likely to do so later.
The research findings, taken as a who le, suggest that diversity can bring added ben-
efits to the team, but to do so , team members must have so me co mmo n values, and they
need to be willing to share info rmatio n abo ut themselves early o n. Thus we can expect
that diversity begins to pro vide extra value to the team o nce team members get to kno w
o ne ano ther and the team beco m es m o re co hesive. Focus on D iversity exam ines the
impact o f diversity o n learning to wo rk to gether in teams.
 Chapter 5 Working in Team s 167

FO C U S O N D I V E R S I T Y

Questioning the Impact of Diversity

Do d iverse teams really have more d ifficulty learning how to w ork together? The late
Pro fesso r Barbara Kelsey o f Ryerso n University studied gro ups o f Caucasian and
Chinese men living in Canada to see ho w being a to ken ethnic member in a gro up
(the o nly Chinese o r the o nly Caucasian) wo uld affect participatio n and influence lev-
els in gro ups.58 So me gro ups wo rked face to face, o thers by co mputer o nly.
What Kelsey fo und in the face-to -face gro ups was that Caucasian males, whether
to kens o r do minants in their gro ups, had higher participatio n levels o n average than
Chinese males. Ho wever, in face-to -face gro ups do minated by Chinese males, the
Chinese males also had relatively high participatio n rates. O nly the to ken Chinese
males sco red lo w in participatio n o r influence o n their gro ups.
In the co m puter-o nly gro ups, the ethnicity o f gro up m em bers co uld be deter-
mined in so me gro ups, while fo r o thers it co uld no t. In tho se gro ups where the eth-
nicity o f team members was unkno wn, there were no differences in the participatio n
rates o f Chinese and Caucasian men.
Kelsey’s research suggests that participatio n and influence may be less a cultural
issue, and mo re related to ho w individuals respo nd to visible differences when inter-
acting with diverse team members.

Size
Generally speaking, the mo st effective teams have fewer than 10 members. And experts
suggest using the smallest number o f peo ple who can do the task. Unfo rtunately, there
is a tendency fo r managers to make teams to o large. While a minimum o f fo ur o r five
members may be necessary to develo p a diversity o f views and skills, managers seem to
serio usly underestimate ho w co o rdinatio n pro blems can dramatically increase as team
m em b ers are added. When team s have excess m em b ers, co hesiveness and m utual
acco untability decline, so cial lo afing increases, and mo re and mo re peo ple do less talk-
ing co mpared to o thers. So in designing effective teams, managers sho uld try to keep the
number o f members at less than 10. If a wo rk unit is larger and yo u want a team effo rt,
co nsider breaking the unit into subteams. Uneven numbers in teams may help build in
a mechanism to break ties and reso lve co nflicts, while an even number o f team mem-
bers may fo ster the need to create mo re co nsensus.

Separated w orkstations, such as these at a Hong Kong toy factory, reduce w ork group interactions.
168 Part 2 St riving f or Perf orm ance
social loafing The tendency of
individuals to expend less effort
when working collectively than
when working individually.
Size and So cial Loaf ing O ne o f the mo st impo rtant findings related to the size o f
a team has been labelled so cial lo afing . So cial lo afing is the tendency o f individuals to
expend less effo rt when wo rking co llectively than when wo rking individually. 59 It
directly challenges the lo gic that the pro ductivity o f the team as a who le sho uld at least
equal the sum o f the pro ductivity o f each individual in that team.
What causes this so cial lo afing effect? It may be due to a
belief that o thers in the team are no t carrying their fair share.
If yo u view o thers as lazy o r inept, yo u can re-estab lish
* Why don’t som e
te am m e m be rs pull equity by reducing yo ur effo rt. Ano ther explanatio n is the
the ir we ight? dispersio n o f respo nsibility. Because the results o f the team
canno t be attributed to any single perso n, the relatio nship
b etween an individual’s input and the team ’s o utput is
clo uded. In such situatio ns, individuals may be tempted to
beco m e “ free riders” and co ast o n the team ’s effo rts. In o ther wo rds, there will be a
reductio n in efficiency when individuals believe that their co ntributio n canno t be
measured. To reduce so cial lo afing, teams sho uld no t be larger than necessary, and indi-
viduals sho uld be held acco untable fo r their actio ns.
Member Flexibility
Teams made up o f flexible individuals have members who can co mplete each o ther’s
tasks. This is an o bvio us plus to a team because it greatly impro ves its adaptability and
makes it less reliant o n any single member.60 So selecting members who themselves
value flexibility, then cro ss-training them to be able to do each o ther’s jo bs, sho uld
lead to higher team perfo rmance o ver time.
Members’ Preference fo r Teamwo rk
No t every employee is a team player. Given the o ptio n, many employees will “select them-
selves out” of team participation. When people who would prefer to work alone are required
to team up, there is a direct threat to the team’s mo rale.61 This suggests that, when select-
ing team members, individual preferences sho uld be co nsidered, as well as abilities, per-
so nalities, and skills. High-perfo rming teams are likely to be co mpo sed o f peo ple who
prefer wo rking as part o f a team.
Work Design
Effective team s need to wo rk to gether and take co llective respo nsibility to co m plete
significant tasks. They must be mo re than a “team-in-name-o nly.” 62 The wo rk design cat-
ego ry includes variables such as freedo m and auto no my, the o ppo rtunity to use a vari-
ety o f skills and talents, the ability to co mplete a who le and identifiable task o r pro duct,
and the participatio n in a task o r pro ject that has a substantial impact o n o thers. The evi-
dence indicates that these characteristics enhance m em ber m o tivatio n and increase
team effectiveness.63 These wo rk design characteristics m o tivate team s because they
increase members’ sense o f respo nsibility fo r and o wnership o f the wo rk, and because
they make the wo rk mo re interesting to perfo rm.64 These reco mmendatio ns are co nsistent
with the jo b characteristics mo del we presented in Chapter 4.
Process
Pro cess variables make up the final co mpo nent o f team effectiveness. The pro cess cat-
ego ry includes member co mmitment to a co mmo n purpo se; establishment o f specific
go als; team efficacy; a managed level o f co nflict; and a system o f acco untability.
Co mmo n Purpo se
Effective teams have a common and meaningful purpose that provides direction, momentum,
and co mmitment fo r members.65 This purpo se is a visio n. It’s bro ader than specific go als.
 Chapter 5 Working in Team s 169

Members o f successful teams put a tremendo us amo unt o f time

and effo rt into discussing, shaping, and agreeing o n a purpo se that
belo ngs to them bo th co llectively and individually. This co mmo n
purpo se, when accepted by the team , beco m es the equivalent o f
what celestial navigatio n is to a ship’s captain— it pro vides direc-
tio n and guidance under any and all co nditio ns.

Specific Go als
Successful team s translate their co m m o n purpo se into specific,
m easurable, and realistic perfo rm ance go als. Just as we dem o n-
strated in Chapter 4 ho w go als lead individuals to higher perfo rm-
ance, so go als also energize team s. These specific go als facilitate
clear co mmunicatio n. They also help teams maintain their fo cus
o n achieving results.
Co nsistent with the research o n individual go als, team go als
sho uld be challenging. Difficult go als have been fo und to raise team
perfo rmance o n tho se criteria fo r which they are set. So , fo r instance,
go als fo r quantity tend to raise quantity, go als fo r speed tend to
raise speed, go als fo r accuracy tend to raise accuracy, and so o n.66 A recent study of 23 National Basketball Association (NBA)
teams found that “ shared experience” — tenure on the
Teams sho uld also be enco uraged to develo p milesto nes—tangible
team and time on court—tended to reduce turnover and
steps toward co mpletio n o f the pro ject. This allows teams to fo cus o n
boost w in-loss performance significantly. Why do you think
their go als and evaluate pro gress to ward the go als. The milesto nes teams that stay together longer tend to play better?
sho uld be sufficiently impo rtant and readily acco mplished that teams
can celebrate so me o f their acco mplishments alo ng the way.

Team Efficacy
cohesiveness The degree to
Effective team s have co nfidence in them selves. They believe which team members are attracted
they can succeed. We call this team efficacy. 67 to one another and are motivated to
Success breeds success. Teams that have been successful raise stay on the team.
their beliefs abo ut future success which, in turn, mo tivates them
to wo rk harder. O ne o f the facto rs that helps teams build their
efficacy is co hesiveness — the degree to which m em bers are
O B I N A CTI ON
attracted to o ne ano ther and are mo tivated to stay o n the team.68 Creating a Team Charter
Tho ugh teams differ in their co hesiveness, it is impo rtant because When you form a new team, you may want to develop
it has been fo und to be related to the team’s pro ductivity.69 a team charter, so that everyone agrees on the basic
Studies co nsistently sho w that the relatio n between co he- norms for group performance. Consider including answers
siveness and pro ductivity depends o n the perfo rmance-related to the following in your charter:
no rms established by the gro up.70 If perfo rmance-related no rms ➔ What are team members’ names and contact
are high ( fo r example, high o utput, quality wo rk, co o peratio n information (phone, email)?
with individuals o utside the gro up) , a co hesive gro up will be ➔ How will communication among team members
mo re pro ductive than a less co hesive gro up. If co hesiveness is take place (phone, email)?
high and perfo rmance no rms are lo w, pro ductivity will be lo w. ➔ What will the team ground rules be (where and
If co hesiveness is lo w and perfo rmance no rms are high, pro - when to meet, attendance expectations, workload
ductivity increases—but less than in the high co hesiveness–high expectations)?
no rms situatio n. Where co hesiveness and perfo rmance-related ➔ How will decisions be made (consensus, majority
no rms are bo th lo w, pro ductivity will tend to fall into the lo w- vote, leader rules)?
to -m o derate range. These co nclusio ns are sum m arized in ➔ What potential conflicts may arise within the
Exhibit 5-7 o n page 170. O B in Action— Creating a Team Charter team? Among team members?
pro vides a way fo r teams to develo p pro ductivity no rms when ➔ How will conflicts be resolved by the group?
the team first fo rms.
Mo st studies o f co hesiveness fo cus o n socio-emotional cohe- Source: Submitted by Don M iskiman, Chair and U-C
siveness, the “ sense o f to getherness that develo ps when indi- Professor of M anagement, M alaspina University College,
Nanaimo, BC. W ith permission.
vid uals d erive em o tio n al satisfactio n fro m gro up
170 Part 2 St riving f or Perf orm ance

EXHIBIT 5-7 Relationship Among Team Cohesiveness, Performance Norms,

and Productivity
Cohesiveness

High Low

Performance Norms
High M oderate
High
productivity productivity

Low M oderate to
Low
productivity low productivity

participatio n.” 71 There is also instrumental cohesiveness: the “ sense o f to getherness that
develo ps when gro up members are mutually dependent o n o ne ano ther because they
believe they co uld no t achieve the gro up’s go al by acting separately.” Teams need to
achieve a balance o f these two types o f co hesiveness to functio n well. O B in Action—
Increasing Group Cohesiveness indicates ho w to increase bo th so cio -emo tio nal and instru-
mental co hesiveness.
What, if anything, can management do to increase team effi-
cacy? Two po ssible o ptio ns are helping the team to achieve
O B I N A CTI ON small successes and skill training. Small successes build team
Increasing Group Cohesiveness co nfidence. As a team develo ps an increasingly stro nger per-
fo rmance reco rd, it also increases the co llective belief that future
Increasing socio-emotional cohesiveness effo rts will lead to success. In additio n, managers sho uld co n-
➔ Keep the group relatively small . sider pro viding training to im pro ve m em bers’ technical and
interperso nal skills. The greater the abilities o f team members,
➔ Strive for a favourable public image to increase
the status and prestige of belonging. the greater the likeliho o d that the team will develo p co nfi-
dence and the capability to deliver o n that co nfidence.
➔ Encourage interaction and cooperation.
➔ Emphasize members’ common characteristics
Managed Level o f Co nflict
and interests.
Co nflict o n a team is no t necessarily bad. Tho ugh relatio nship
➔ Point out environmental threats (e.g., competi- co nflicts—tho se based o n interperso nal inco mpatibilities, ten-
tors’ achievements) to rally the group.
sio n, and anim o sity to ward o thers— are alm o st always dys-
Increasing instrumental cohesiveness functio nal, teams that are co mpletely vo id o f co nflict are likely
to be less effective, with the members beco ming withdrawn and
➔ Regularly update and clarify the group’s goal(s).
o nly superficially harmo nio us. O ften, if there were no co nflict,
➔ Give every group member a vital “ piece of the
the alternative was no t agreement, but apathy and disengage-
action.”
ment. Teams that avo id co nflict also tend to have lo wer per-
➔ Channel each group member’s special talents
fo rmance levels, fo rget to co nsider key issues, o r remain unaware
toward the common goal(s).
o f impo rtant aspects o f their situatio n.72 So effective teams are
➔ Recognize and equitably reinforce every mem- characterized by an appro priate level o f co nflict.73
ber’s contributions.
Kathleen Eisenhardt o f the Stanfo rd Graduate Scho o l o f
➔ Frequently remind group members they need one Business and her co lleagues studied to p m anagem ent team s
another to get the job done. in techno lo gy-based co mpanies to understand ho w they man-
age co nflict.74 Their research identified six tactics that helped the
Source: R. Kreitner and A. Kinicki, Organizational Behavior,
6th ed. (New York: Irw in, 2004), p. 460. Reprinted by per- teams successfully manage the interperso nal co nflict that can
mission of M cGraw Hill Education. acco mpany gro up interactio ns. These are presented in O B in
Action— Reducing Team Conflict. By handling the interperso nal
 Chapter 5 Working in Team s 171

co nflict well, the teams were able to achieve their go als witho ut
letting co nflict get in the way.
Gro ups need m echanism s by which they can m anage the
co nflict, ho wever. Fro m the research repo rted abo ve, we co uld
co nclude that sharing info rmatio n and go als and striving to be
o pen and get alo ng are helpful strategies fo r nego tiating o ur
way thro ugh the m aze o f co nflict. A sense o f hum o ur and a
willingness to understand the po ints o f o thers witho ut insist-
ing that everyo ne agree o n all po ints are also impo rtant. Gro up
members sho uld try to fo cus o n the issues rather than o n per-
so nalities, and strive to achieve fairness and eq uity in the
gro up pro cess.
Acco untability
Successful team s m ake m em b ers individually and jo intly
acco untable fo r the team ’s purpo se, go als, and appro ach.75
O B I N A CTI ON
Reducing Team Conflict
➔ Work with more, rather than less, information,
and debate on the basis of facts.
➔ Develop multiple alternatives to enrich the level
of debate.
➔ Develop commonly agreed-upon goals.
➔ Use humour when making tough decisions.
➔ Maintain a balanced pow er structure.
➔ Resolve issues w ithout forcing consensus.
Source: Based on K. M . Eisenhardt, J. L. Kahw ajy, and L. J.
Bourgeois III, “ How M anagement Teams Can Have a Good
Fight,” Harvard Business Review, July–August 1997, p. 78.

They clearly define what they are individually respo nsible fo r

and what they are jo intly respo nsible fo r. From Concepts to Skills
o n pages 182–183 discusses ho w to co nduct effective team meetings.

TWENTY-FIRST CENTURY TEAMWORK:

VIRTUAL TEAMS
When we think o f team s, we o ften picture face-to -face interactio ns. Virtual teams , 5 How do virtual teams
ho wever, seldo m interact face-to -face and they use co mputer techno lo gy to tie to gether work?
physically separated members in o rder to achieve a co mmo n go al.76 They enable peo - virtual teams Teams that seldom
ple to co llabo rate o nline— using co m m unicatio n links such as wide-area netwo rks, interact face-to-face and use com-
video co nferencing, and email— whether team members are o nly a ro o m away o r co n- puter technology to tie together
physically dispersed members in
tinents apart. With the greater availability o f techno lo gy and increasing glo balizatio n,
order to achieve a common goal.
virtual teams have beco me no t o nly po ssible, but necessary. To the extent that wo rk is
kno wledge-based rather than pro ductio n-o riented, virtual team s are also beco m ing
mo re co mmo n.
Pro viding that team members are co mfo rtable with using techno lo gy, virtual teams
can do all the things that o ther teams do — share info rmatio n, make decisio ns, co m-
plete tasks. They can include members fro m the same o rganizatio n o r link an o rgani-
zatio n’s members with employees fro m o ther o rganizatio ns (suppliers and jo int partners).
They can co nvene fo r a few days to so lve a pro blem, a few mo nths to co mplete a pro j-
ect, o r exist permanently.77 O ften they can be mo re efficient at tasks as well, because o f
the ease o f sharing info rmatio n thro ugh email and vo ice mail. Virtual teams also make
it po ssible fo r peo ple who are in different geo graphical and time zo nes to wo rk to gether.
Virtual teams can suffer fro m the limited so cial co ntact o f team members. This can
lead to bo nding pro blems, which the research o n teams suggests is impo rtant fo r team
perfo rmance. O ne recent meta-analysis o f 27 studies o f virtual teams questio ned whether
members o f virtual teams ever bo nded in the traditio nal sense.78 Lack o f bo nding can
lead to slo wer and less accurate perfo rmance than is the case fo r face-to -face teams.
Virtual teams can also suffer fro m the absence o f paraverbal and nonverbal cues in
their co m m unicatio ns. In face-to -face co nversatio n, peo ple use paraverbal ( to ne o f
vo ice, inflectio n, vo ice vo lume) and no nverbal ( eye mo vement, facial expressio n, hand
gestures, and o ther bo dy language) cues to pro vide increased meaning. In virtual co m-
municatio ns, team members are no t able to duplicate the no rmal give-and-take o f face-
to -face discussio n. As a result, virtual team members o ften have less so cial rappo rt and
are mo re at risk o f misunderstanding o ne ano ther.
172 Part 2 St riving f or Perf orm ance

Virtual Team s and Trust

There has been so me co ncern that, because virtual teams lack face-to -face interactio n,
it may be mo re difficult to build trust amo ng individuals. Ho wever, two recent studies
examining ho w virtual teams wo rk o n pro jects indicate that virtual teams can develo p
clo se interactio n and trust; these qualities simply evo lve differently than in face-to -face
gro ups.79 In face-to -face gro ups, trust co mes fro m direct interactio n, o ver time. In virtual
team s, trust is either established at the o utset o r it generally do es no t develo p. The
researchers fo und that initial electro nic m essages set the to ne fo r ho w interactio ns
o ccurred thro ugho ut the entire pro ject. In o ne team, fo r instance, when the appo inted
leader sent an intro ducto ry message that had a distrustful to ne,
the team suffered lo w mo rale and po o r perfo rmance thro ugh-
O B I N A CTI ON o ut the duratio n o f the pro ject. The researchers suggest that
virtual teams sho uld start with an electro nic “co urtship,” where
M anaging Virtual Teams
members pro vide so me perso nal info rmatio n. Then the teams
Establishing trust and commitment, encouraging com-
sho uld assign clear ro les to m em bers, helping m em bers to
munication, and assessing team members pose tremen-
identify with each o ther. Finally, the researchers no ted that
dous challenges for virtual team managers. Here are a
few tips to make the process easier: team s who se m em b ers had a po sitive attitude ( eagerness,
enthusiasm, and intense actio n o rientatio n in messages) did
➔ Establish regular times for group interaction.
co nsiderab ly b etter than team s that had o ne o r m o re pes-
➔ Set up firm rules for communication.
sim ists. The article by S. L. Jarvenpaa, K. Kno ll, and D . E.
➔ Use visual forms of communication where pos- Leidner cited in endno te 79 o f this chapter pro vides m o re
sible. detail o n this sub ject; yo u m ight find the team experience
➔ Copy the good points of on-site teams. For repo rted there interesting.
example, allow time for informal chitchat and
socializing, and celebrate achievements.
Creating Virtual Workspaces
➔ Give and receive feedback and offer assistance
It is o bvio us that virtual teams must rely o n techno lo gy to co m-
on a regular basis. Be persistent with people who
are not communicating with you or each other. municate. But what is the best way to do this? Team members can
be overwhelmed with email, drowning in messages to the po int
➔ Agree on standard technology so all team mem-
o f failing to read them. To better understand the pro blem, a
bers can work together easily.
recent study lo o ked at 54 teams fro m 26 co mpanies o perating in
➔ Consider using 360-degree feedback to better
a wide variety o f industries.80 The researchers fo und that 83 per-
understand and evaluate team members. This type
cent o f the team s they studied used virtual wo rkspaces ( also
of feedback comes from the full circle of daily con-
kno wn as virtual meeting ro o ms) to co mmunicate. The virtual
tacts that an employee might have, including super-
visors, peers, subordinates, and clients. wo rkspace is a team website o n a co mpany’s intranet, designed
to help remind team members o f their “decisio ns, ratio nales,
➔ Provide a virtual w orkspace via an intranet, web-
and co mmitments.” The virtual wo rkspace can have “walls” o r
site, or bulletin board.
links to info rmatio n abo ut each perso n, and discussio n fo rums
➔ Note which employees effectively use email to
with to pic threads that co ver impo rtant issues and pro blems.
build team rapport.
The discussio n fo rums can also serve as places to po st wo rk-in-
➔ Smooth the w ay for the next assignment if
pro gress to get feedback. Exhibit 5-8 o n page 173 shows an exam-
membership on the team, or the team itself, is not
ple o f a virtual wo rkspace fo r a pro ject at Shell.
permanent.
Tips fo r m anagers who want to im pro ve the way virtual
➔ Be available to employees, but don’t wait for team s functio n include the fo llo wing: ensure that the team
them to seek you out.
addresses feelings o f iso latio n that members might have; ensure
➔ Encourage informal, off-line conversation that team members have a mix o f interperso nal and technical
between team members. skills; and pay careful attentio n to evaluating perfo rmance and
pro viding reco gnitio n and feedback.81 By engaging in spo nta-
Source: C. Joinson, “ M anaging Virtual Teams,” HR
M agazine, June 2002, p. 71. Reprinted w ith the permission neo us co mmunicatio n with virtual team members, managers
of HR M agazine, published by the Society for Human can also reduce the likeliho o d and im pact o f co nflict.82 Fo r
Resource M anagement, Alexandria, VA.
m o re tips o n im pro ving the way virtual team s functio n, see
O B in Action— Managing Virtual Teams.
 Chapter 5 Working in Team s 173

EXHIBIT 5-8 An Illustration of a Virtual Workspace

Source: Reprinted by permission of Shell Chemical LP.

Case Incident— A Virtual Team at T. A. Sterns o n pages 180–181 further explo res ho w
virtual teams wo rk.

BEWARE! TEAMS ARE N OT ALWAYS THE ANSWER

When the Glenfo rest Seco ndary Scho o l students go t to gether to build a ro bo t, it made 6 Are teams always the
sense fo r them to fo rm a team. No student had all the kno wledge and skills required to answer?
co mplete the task, as we saw in the o pening vignette. But do es every task need a team?
Despite co nsiderable success in the use o f teams, they are no t necessarily appro pri-
ate in all situatio ns, as Exhibit 5-9 o n page 174 suggests. Teamwo rk takes mo re time
and o ften mo re reso urces than individual wo rk. Teams, fo r instance, have greater co m-
municatio n demands, co nflicts to be managed, and meetings to be run. In their enthu-
siasm to enjoy the benefits o f teams, so me managers have intro duced them into situatio ns
where the wo rk is better do ne by individuals. A 2003 study do ne by Statistics Canada
fo und that the intro ductio n o f teamwo rk lo wered turno ver in the service industries, fo r
bo th high- and lo w-skilled emplo yees. Ho wever, manufacturing co mpanies experienced
higher turno ver if they intro duced teamwo rk and fo rmal teamwo rk training, co mpared
with no t do ing so ( 15.8 percent vs. 10.7 percent) .83
Ano ther co nsideratio n is ethics. This chapter’s Ethical Dilemma Exercise o n page 180
asks yo u to think abo ut whether it is ethical to fo rce emplo yees to be team players.
Ho w do yo u kno w if the wo rk o f yo ur gro up wo uld be better do ne in teams? It has
been suggested that three tests be applied to see if a team fits the situatio n:84

• Can the work be done better by more than one person? Simple tasks that do n’t
require diverse input are pro bably better left to individuals.
174 Part 2 St riving f or Perf orm ance

EXHIBIT 5-9

Source: S. Adams, Build a Better Life by Stealing Office Supplies (Kansas City: M O: Andrew s and
M cM eal, 1991), p. 31. Dilbert reprinted w ith permission of United Features Syndicate.

• D oes the work create a common purpose or set of goals for the people in the group
that is more than the sum of individual goals? Fo r instance, the service depart-
m ents o f m any new-car dealers have intro duced team s that link custo m er
service perso nnel, m echanics, parts specialists, and sales representatives.
Such team s can better m anage co llective respo nsibility fo r ensuring that
custo m ers’ needs are pro perly m et.

• Are the members of the group interdependent? Teams make sense where there is
interdependence between tasks— where the success o f the who le depends o n
the success o f each o ne, and the success o f each o ne depends o n the success o f
the o thers. So ccer, fo r instance, is an o bvio us team spo rt because o f the inter-
dependence o f the players. Swim teams, by co ntrast, are no t really teams, but
gro ups o f individuals who se to tal perfo rmance is merely the sum o f the indi-
vidual perfo rmances. O thers have o utlined the co nditio ns under which o rgan-
izatio ns wo uld find teams mo re useful: “ when wo rk pro cesses cut acro ss
functio nal lines; when speed is impo rtant ( and co mplex relatio nships are
invo lved) ; when the o rganizatio n mirro rs a co mplex, differentiated, and rap-
idly changing market enviro nment; when inno vatio n and learning have prio r-
ity; and when the tasks that have to be do ne require o nline integratio n o f
highly interdependent perfo rmers.” 85
 Chapter 5 Working in Team s 175

SUMMARY AND IMPLICATIONS

1 What are teams and groups? Gro ups and teams differ. The o utput o f a gro up is
simply the sum o f individual effo rts. A team, because o f the clo se co llabo ratio n
SNAPSHOT SUM M ARY
amo ng members, pro duces o utput that is greater than the sum o f individual effo rts.
1 Team vs. Groups:
2 Does everyone use team s? Team s have beco m e an essential part o f the way What’s the Difference?
business is being do ne these days. A Co nference Bo ard o f Canada repo rt fo und 2 Why Have Teams
that mo re than 80 percent o f its 109 respo ndents used teams in the wo rkplace. Become So Popular?
This finding is similar in the United States, where 80 percent o f Fortune 500 co m-
3 Stages of Group and
panies have half o r mo re o f their emplo yees o n teams. As well, 68 percent o f small Team Development
US manufacturers use teams in their pro ductio n areas. The Five-Stage Model
3 Do groups and teams go through stages w hile they w ork? Two different mo d- The Punctuated-Equilibrium
els illustrate how teams and gro ups develo p. The first, the five-stage mo del, describes
Model
the standard sequence o f stages gro ups pass thro ugh: fo rming, sto rming, no rm- 4 Creating Effective
ing, perfo rming, and adjo urning. Thro ugh these stages, gro up members learn ho w Teams
to settle co nflicts and develo p no rms, which enable them to perfo rm. The seco nd, Context
the punctuated-equilibrium mo del, describes the pattern o f develo pment specific Composition
to tem po rary gro ups with deadlines. In this m o del, the gro up sho ws two great Work Design
perio ds o f activity. The first peak in activity takes place after the midpo int o f the pro j- Process
ect, a time in which the team perfo rms at a higher level than it did previo usly. The 5 Tw enty-First Century
seco nd peak takes place right befo re the pro ject co mes due. Teamw ork: Virtual
Teams
4 How d o w e create effective teams? Fo r teams to be effective, careful co nsider-
Virtual Teams and Trust
atio n must be given to reso urces, the team’s co mpo sitio n, wo rk design, and pro cess
Creating Virtual Workspaces
variables. The fo ur co ntextual facto rs that appear to be mo st significantly related to
team perfo rmance are the presence o f adequate reso urces, effective leadership, a cli- 6 Bew are! Teams Are Not
mate o f trust, and a perfo rmance evaluatio n and reward system that reflects team Alw ays the Answ er
co ntributio ns. Effective teams are neither to o large no r to o small— typically they
range in size fro m 5 to 12 peo ple. They have members who fill ro le demands, are
flexible, and who prefer to be part o f a gro up. Teams will be mo re effective if mem-
bers have freedo m and auto no my to do their tasks and believe that the task will have
a substantial impact o n o thers. Finally, effective teams have members co mmitted
to a co mmo n purpo se and specific team go als.

5 How d o virtual team s w ork? Virtual team s can do m any o f the sam e things
face-to -face teams can, but they have mo re challenges, especially when it co mes to
team-member bo nding and building trust. To help build understanding amo ng
teammates, members sho uld pro vide so me perso nal info rmatio n early o n, and
they sho uld also be clear o n each o ther’s ro les fro m the o utset. Researchers have
fo und that virtual teams with members who have po sitive attitudes do better than
teams with pessimistic members. O ften, virtual teams co mmunicate, discuss ideas,
po st wo rk-in-pro gress, and exchange feedback thro ugh a virtual wo rkspace via an
intranet, website, o r bulletin bo ard.

6 Are teams alw ays the answ er? Teams are no t necessarily appro priate in every sit-
uatio n. How do yo u know if the wo rk o f yo ur gro up wo uld be better do ne in teams?
It’s been suggested that three tests be applied to see if a team fits the situatio n:
( 1) Can the wo rk be do ne better by mo re than o ne perso n? ( 2) Do es the wo rk cre-
ate a co mmo n purpo se o r set o f go als fo r the peo ple in the gro up that is mo re than
the sum o f individual go als? and (3) Are the members o f the gro up interdependent?
This third test asks whether the success o f the who le depends o n the success o f each
o ne and the success o f each o ne depends o n the success o f the o thers.
O B A T W O RK
For Review
1 . How can teams increase employee motivation?

2. Describe the five-stage model of group development.

3. Describe the punctuated-equilibrium model of group development.

4. What are the characteristics of an effective team?

5. How can team members harm their team?

6 . What is the difference betw een task-oriented roles and maintenance roles?

7. What are the effects of team size on performance?

8. How can a team minimize social loafing?

9. Contrast virtual and face-to-face teams.

1 0. What conditions favour creating a team, rather than letting an individual perform a given task?

For Critical Thinking

1 . How could you use the punctuated-equilibrium model to understand group behaviour better?

2. Have you experienced social loafing as a team member? What did you do to prevent this problem?

3. Would you prefer to w ork alone or as part of a team? Why? How do you think your answ er compares w ith that of
others in your class?

4. What effect, if any, do you expect that w orkforce diversity has on a team’s performance and satisfaction?

OB for You
■ Know that you w ill be asked to w ork on teams and groups both during your post-secondary years and later in life, so
understanding how teams w ork is an important skill to have.

■ Think about the roles that you play on teams. Teams need task-oriented people to get the job done, but they also
need maintenance-oriented people w ho help keep people w orking together and feeling committed to the team.

■ Help your team set specific, measurable, realistic goals, as this leads to more successful outcomes.

PO I N T
Spo rts Teams Are Go o d
Mo dels fo r Wo rkplace Teams
Studies from hockey, football, soccer, basketball, and base-
ball have found a number of elements in successful sports
teams that can be applied to successful w ork teams.86
Successful teams integrate cooperation and com-
petition. Effective team coaches get athletes to help one
another but also push one another to perform at their
best. Sports teams w ith the best w in-loss records had
coaches w ho promoted a strong spirit of cooperation and
a high level of healthy competition among their players.
Successful teams score early w ins. Early successes
build teammates’ faith in themselves and their capacity as
a team. For instance, research on hockey teams of rela-
tively equal ability found that 72 percent of the time the
team that w as ahead at the end of the first period w ent
on to w in the game. So managers should provide teams
w ith early tasks that are simple and provide “ easy w ins.”
Successful teams avoid losing streaks. Losing can
become a self-fulfilling prophecy. A couple of failures can
lead to a dow nw ard spiral if a team becomes demoralized
and believes it is helpless to end its losing streak. M anagers
need to instill the confidence in team members that they
can turn things around w hen they encounter setbacks.
Practice makes perfect. Successful sports teams exe-
cute on game day but learn from their mistakes in prac-
tice. A w ise manager carves out time and space in w hich
w ork teams can experiment and learn.
Su cce ssful team s u se halftime break s. The best
coaches in basketball and football use halftime during a
game t o reassess w hat is w orking and w hat is not .
M anagers of w ork teams should build in similar assess-
ments at about the halfw ay point in a team project to
evaluate how the team can improve.
Winning teams have a stable membership. Studies
of professional basketball teams have found that the more
stable a team’s membership, the more likely the team is to
w in. The more time teammates have together, the more
able they are to anticipate one another’s moves and the
clearer they are about one another’s roles.
Successful team s d ebrief after failures and suc-
cesses. The best sports teams study the game video.
Similarly, w ork teams need to take time to routinely reflect
on both their successes and failures and to learn from them.
Chapter 5 Working in Team s 177
O B A T W O RK
CO U N TERPO I N T
Spo rts Teams Are No t the
Mo del fo r All Teams
There are flaw s in using sports as a model for developing
effective w ork teams. Here are just four caveats.87
All sport team s are not alike. In baseball, f or
inst ance, t here is lit t le int eract ion among t eammat es.
Rarely are more than tw o or three players directly involved
in a play. The performance of the team is largely the sum
of the performance of its individual players. In contrast,
basketball has much more interdependence among play-
ers. Usually all players are involved in every play, team
members have t o be able t o sw it ch f rom off ence t o
defence at a moment’s notice, and there is continuous
movement by all, not just the player w ith the ball. The
performance of the team is more than the sum of its indi-
vidual players. So w hen using sports teams as a model for
w ork teams, you have to make sure you are making the
correct comparison.
Work teams are more varied and complex. In an
at hlet ic league, t eams vary lit t le in t heir cont ext , t he
design of the team, and the design of the task. But from
one w ork team to the next, these factors can vary tremen-
dously. As a result, coaching plays a much more significant
part in a sports team’s performance than in the w ork-
place. Performance of w ork teams is more a function of
getting the team’s structural and design variables right.
So, in contrast to sports, managers of w ork teams should
focus less on coaching and more on getting the team set
up for success.
A lot of employee s cannot relate to sport s
metaphors. Not everyone on w ork teams is conversant in
sports. Team members from different cultures also may
not know t he sport s met aphors you are using. M ost
Canadians, for instance, are unfamiliar w ith the rules and
terminology of Australian football.
Work team out comes are not easily d efined in
terms of w ins and losses. Sports teams usually measure
success in terms of w ins and losses. Such measures of
success are rarely as clear for w ork teams. M anagers w ho
try to define success in w ins and losses imply that the
w orkplace is ethically no more complex than the playing
field, w hich is rarely true.
178 Part 2 St riving f or Perf orm ance

O B A T W O RK

LEA RN I N G A B O U T Y O U RSELF EX ERC I SE

Ho w Go o d Am I at Building and Leading a Team?

Use the follow ing rating scale to respond to the 18 questions on building and leading an effective team:

Strongly Disagree Disagree Slightly Disagree Slightly Agree Agree Strongly Agree
1 2 3 4 5 6

1. I am know ledgeable about the different stages of development that teams

can go through in their life cycles. 1 2 3 4 5 6

2. When a team forms, I make certain that all team members are introduced to
one another at the outset. 1 2 3 4 5 6

3. When the team first comes together, I provide directions, answ er team
members’ questions, and clarify goals, expectations, and procedures. 1 2 3 4 5 6

4. I help team members establish a foundation of trust among themselves and

betw een themselves and me. 1 2 3 4 5 6

5. I ensure that standards of excellence, not mediocrity or mere acceptability,

characterize the team’s w ork. 1 2 3 4 5 6

6. I provide a great deal of feedback to team members regarding their

performance. 1 2 3 4 5 6

7. I encourage team members to balance individual autonomy w ith

interdependence among other team members. 1 2 3 4 5 6

8. I help team members become at least as committed to the success of

the team as to their ow n personal success. 1 2 3 4 5 6

9. I help team members learn to play roles that assist the team in
accomplishing its tasks, as w ell as building strong interpersonal relationships. 1 2 3 4 5 6

1 0. I articulate a clear, exciting, passionate vision of w hat the team can achieve. 1 2 3 4 5 6

11 . I help team members become committed to the team vision. 1 2 3 4 5 6

1 2. I encourage a w in-w in philosophy in the team; that is, w hen one member
w ins, every member w ins. 1 2 3 4 5 6

1 3. I help the team avoid making the group’s survival more important than
accomplishing its goal. 1 2 3 4 5 6

1 4. I use formal process-management procedures to help the group become

faster, more efficient, and more productive, and to prevent errors. 1 2 3 4 5 6

1 5. I encourage team members to represent the team’s vision, goals, and

accomplishments to outsiders. 1 2 3 4 5 6

16 . I diagnose and capitalize on the team’s core competence. 1 2 3 4 5 6

1 7. I encourage the team to achieve dramatic breakthrough innovations, as

w ell as small continuous improvements. 1 2 3 4 5 6

1 8. I help the team w ork tow ard preventing mistakes, not just correcting them
after the fact. 1 2 3 4 5 6
 Chapter 5 Working in Team s 179

O B A T W O RK

Scoring Key:
The authors of this instrument propose that it assesses team development behaviours in five areas: diagnosing team devel-
opment (items 1, 16); managing the forming stage (items 2–4); managing the storming stage (items 10–12, 14, 15); man-
aging the norming stage (items 6–9, 13); and managing the performing stage (items 5, 17, 18). Add up your score. Your
total score w ill range betw een 18 and 108.
Based on a norm group of 500 business students, the follow ing can help estimate w here you are relative to others:

95 or above = You are in the top quartile of being able to build and lead a team
72–94 = You are in the second quartile
6 0–71 = You are in the third quartile
Below 6 0 = You are in the bottom quartile

Source: Adapted from D. A. Whetten and K. S. Cameron, Developing M anagement Skills, 3rd ed. © 1995, pp. 534–535. Adapted by permission
of Pearson Education, Inc., Upper Saddle River, NJ.

B REA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . One of the members of your team continually arrives late for meetings and does not turn drafts of assignments in
on time. In general this group member is engaging in social loafing. What can the members of your group do to
reduce social loafing?

2. Consider a team w ith w hich you’ve w orked. Using the information in Exhibit 5-5, consider w hether there w ere more
task-oriented or maintenance-oriented roles in the group. What impact did this have on the group’s performance?

3. Identify 4 or 5 norms that a team could put into place near the beginning of its life to help it function better over time.

W O RK I N G W I TH O T H ERS EX ERC I SE

The Paper To wer Exercise

Step 1 Each group w ill receive 20 index cards, 12 paper clips, and 2 marking pens. Groups have 10 minutes to
plan a paper tow er that w ill be judged on the basis of 3 criteria: height, stability, and beauty. No physi-
cal w ork (building) is allow ed during this planning period.

Step 2 Each group has 15 minutes for the actual construction of the paper tow er.

Step 3 Each tow er w ill be identified by a number assigned by your instructor. Each student is to individually
examine all the paper tow ers. Your group is then to come to a consensus as to w hich tow er is the w in-
ner (5 minutes). A spokesperson from your group should report its decision and the criteria the group
used in reaching it.

Step 4 In your small groups, discuss the follow ing questions (your instructor may choose to have you discuss
only a subset of these questions):
a. What percentage of the plan did each member of your group contribute, on average?
b. Did your group have a leader? Why or w hy not?
c. How did the group generally respond to the ideas that w ere expressed during the planning period?
d . To w hat extent did your group follow the five-stage model of group development?

continued
180 Part 2 St riving f or Perf orm ance

O B A T W O RK

e. List specific behaviours exhibited during the planning and building sessions that you felt w ere help-
ful to the group. Explain w hy you found them helpful.
f. List specific behaviours exhibited during the planning and building sessions that you felt w ere dys-
functional to the group. Explain w hy you found them dysfunctional.

Source: This exercise is based on “ The Paper Tow er Exercise: Experiencing Leadership and Group Dynamics” by Phillip L. Hunsaker and Johanna S.
Hunsaker, unpublished manuscript. A brief description is included in “ Exchange,” Organizational Behavior Teaching Journal 4, no. 2 (1979), p. 49.
Reprinted by permission of the authors. The materials list w as suggested by Sally M aitlis, Sauder School of Business, UBC.

ETH I C A L D I LEM M A EX ERC I SE

Pressure to Be a Team Player

“ OK I admit it. I’m not a team player. I w ork best w hen I
w ork alone and am left alone,” says Zach Sanders.
Zach’s employer, an off ice f urnit ure manuf act urer,
recently reorganized around teams. All production in the
company’s W innipeg factory is now done in teams. Zach’s
design department has been broken up into three design
teams.
“ I‘ve w orked here for four years. I’m very good at w hat
I do. And my performance review s confirm that. I’ve scored
96 percent or higher on my evaluations every year I’ve been
here. But now everything is changing. I’m expected to be
part of our modular-office design team. M y evaluations and
pay raises are going to depend on how w ell the team does.
And, get this, 50 percent of my evaluation w ill be on how
w ell I facilitate the performance of the team. I’m really frus-
trated and demoralized. They hired me for my design skills.
They knew I w asn’t a social type. Now they’re forcing me to
be a team player. This doesn’t play to my strengths at all.”
Is it unethical for Zach’s employer to force him to be a
team player? Is Zach’s employer breaking an implied con-
tract that it made w ith him at the time he w as hired? Does
the employer have any responsibility to provide Zach w ith
an alternative that w ould allow him to continue to w ork
independently?

CA SE I N C I D EN T

A Virtual Team at T. A. Stearns

T. A. Stearns is a national tax accounting firm whose main busi-
ness is tax preparation services for individuals. Stearns’ superior
reputation is based on the high quality of its advice and the
excellence of its service. Key to the achievement of its reputa-
tion are the state-of-the-art computer databases and analysis
tools that its people use w hen counselling clients. These pro-
grams w ere developed by highly trained individuals.
The programs are highly technical, in terms of both the
code in w hich they are w ritten and the tax law s they cover.
Perfecting them requires high levels of programming skill as
w ell as the ability to understand the law. New law s and inter-
pretations of existing law s have to be integrated quickly and
flaw lessly into the existing regulations and analysis tools.
The creation of these programs is carried out in a virtual
environment by four programmers in the greater Vancouver
area. The f our w ork at home and are connect ed t o each
other and to the company by email, telephone, and confer-
ence softw are. Formal on-site meetings among all of the pro-
grammers take place only a few times a year, although the
w orkers sometimes meet informally at other times. The four
members of the team are Tom Andrew s, Cy Crane, M arge
Dector, and M egan Harris.
These four people exchange email messages many times
every day. In fact, it’s not unusual for them to step aw ay from
guests or family to log on and check in w ith the others. Often
their emails are amusing as w ell as w ork-related. Sometimes,
for instance, w hen they w ere facing a deadline and one of
M arge’s kids w as home sick, they helped each other w ith the
w ork. Tom has occasionally invited the others to visit his farm;
and M arge and Cy have gotten their families together sev-
eral times for dinner. About once a month the w hole team
gets together for lunch.
All four of these Stearns employees are on salary, w hich,
consistent w ith company custom, is negotiated separately
and secretly w ith management. Although each is required
to check in regularly during every w orkday, they w ere told

w hen they w ere hired that they could w ork w herever they
w anted. Clearly, flexibility is one of the pluses of these jobs.
When the four get together, they often joke about the man-
agers and w orkers w ho are tied to the office, referring to
them as “ face timers” and to themselves as “ free agents.”
When the programmers are asked to make a major pro-
gram change, they often develop programming tools called
macros to help them do their w ork more efficiently. These
macros greatly enhance the speed at w hich a change can
be w ritten into the programs. Cy in particular really enjoys
hacking around w it h macros. On one recent project , f or
instance, he became obsessed w ith the prospect of creat-
ing a shortcut that could save him a huge amount of time.
One w eek after turning in his code and his release notes to
the company, Cy bragged to Tom that he had created a new
macro that had saved him eight hours of w ork that w eek.
Tom w as skeptical of the shortcut, but after trying it out he
found that it actually saved him many hours too.
Stearns has a suggestion program that rew ards employ-
ees for innovations that save the company money. The pro-
gram gives an employee 5 percent of the savings generated
by his or her innovation over three months. The company
also has a profit-sharing plan. Tom and Cy felt that the small
amount of money that w ould be generated by a company
rew ard w ould not off set t he f ree t im e t hat t hey gained
using their new macro. They w anted the time for leisure or
consulting w ork. They also feared their group might suffer
if m anagem ent learned about t he innovat ion. It w ould
enable three people to do the w ork of four, w hich could
lead to one of them being let go. So they didn’t share their
innovative macro w ith management.
Although Tom and Cy w ouldn’t share the innovation w ith
management, they w ere concerned that they w ere entering
their busy season and they knew everyone on the team would
be stressed by the heavy w orkload. They decided to distrib-
ute the macro to the other members of their team and sw ore
them to secrecy.
CBC V I D EO CA SE I N C I D EN T
Earth Buddies
On December 11, 1998, Anton Rabie, Ronnen Harary, and
Ben Varadi f ound t hemselves on t he cover of Canadian
Business magazine. In the article, they w ere referred to as
“ M arketing M aniacs,” examples of the young and enthu-
siastic entrepreneurs in today’s marketplace.
Fresh out of business school in 1993 and based in Toronto,
the partnership betw een Rabie, Harary, and Varadi quickly
Chapter 5 Working in Team s 181
O B A T W O RK
Over lunch one day, the team set itself a level of production
that it felt w ould not arouse management’s suspicion. Several
months passed and the four used some of their extra time to
push the quality of their w ork even higher. But they also now
had more time to pursue their ow n personal interests.
Dave Regan, the in-house manager of the w ork group,
picked up on the innovation several w eeks after it w as first
implemented. He had w ondered w hy production time had
gone dow n a bit w hile quality had shot up, and he got his
first inkling of an answ er w hen he saw an email from M arge
to Cy thanking him for saving her so much time w ith his
“ brilliant mind.” Not w anting to embarrass his employees,
the manager hinted to Tom that he w anted to know w hat
w as happening, but he got now here. He did not tell his ow n
manager about his suspicions, reasoning t hat since bot h
quality and productivity w ere up he did not really need to
pursue the matter further.
Dave very recently learned that Cy had boasted about his
trick to a member of another virtual w ork group in the com-
pany. Suddenly, the situation seemed to have gotten out of
control. Dave decided to take Cy to lunch. During the meal,
Dave asked Cy to explain w hat w as happening. Cy told him
about the innovation, but he insisted the group’s actions had
been justified to protect itself.
Dave knew that his ow n boss w ould soon hear of the situ-
ation and that he w ould be looking for answ ers—from him.
Questions
1 . Is this group a team?
2. What role have norms played in how this team acted?
3. Has anyone in this case acted unethically?
4. What should Dave do now ?
Source: Adapted from “ The Virtual Environment Work Team,” a case
prepared by R. Andre, professor, Northeastern University. With
permission.
flourished with the initial success of their product release: Earth
Buddy, a small novelty head that sprouted grass hair w hen set
in w ater. Thanks to successful negotiations w ith retail giants
such as K-M art, Canadian Tire, and Zellers, sales grew steadily
for the first few years. In 1995, the partnership changed the
company name to Spin M aster Toys. After only four years of
operating, Spin M aster reported $10 million in sales in 1998.
continued
182 Part 2 St riving f or Perf orm ance
O B A T W O RK
Over the years, the friends have had their share of dis-
agreement s, t riumphs, and f ailures. Toget her, t hey have
recruited talented outsiders to join their executive commit-
tee, researched and successfully launched innovative toy
products from Asia, and nurtured the company to w here it
is today. Although a private company, Spin M aster reported
$103 million in sales in 2000.
Today, the executive team at Spin M aster has grown to 12
members. Rabie is the president, Harary is the CEO, and
Varadi is the executive vice-president. In 2002, the firm intro-
duced a variety of new products, including the Air Hogs
Helicopt er, Air Hogs Radio Cont rol, and Air Hogs Quick
Charge. In addition, the company re-branded itself by chang-
ing the corporate logo and name. In 2004, Rabie, Harary,
and Varadi celebrated Spin M aster’s 10-year anniversary,
the achievements of their fledgling business, and w hat it
truly means to w ork together as a team.
Fr o m Co n c e p t s
t o Sk i l l s
Co nducting a Team Meeting
Team meet ings have a reput at ion f or ineff iciency. For
inst ance, not ed Canadian-born economist John Kennet h
Galbraith has said, “ M eetings are indispensable w hen you
don’t w ant to do anything.”
When you are responsible for conducting a meeting, w hat
can you do to make it more efficient and effective? Follow
these 12 steps:88
1 . Prepare a meeting agenda. An agenda defines w hat
you hope to accomplish at the meeting. It should
state the meeting’s purpose; w ho w ill be in atten-
dance; w hat, if any, preparation is required of each
participant; a detailed list of items to be covered; the
specific time and location of the meeting; and a spe-
cific finishing time.
2. Distribute the agenda in advance. Participants
should have the agenda far enough in advance that
they can adequately prepare for the meeting.
3. Consult w ith participants before the meeting. An
unprepared participant cannot contribute to his or
her full potential. It is your responsibility to ensure
that members are prepared, so check w ith them
ahead of time.
Questions
1 . Describe the partnership norms at Spin M aster Toys.
2. Describe the roles displayed by the firm’s executive
team members: Anton Rabie, Ronnen Harary, and
Ben Varadi.
3. Using the five-stage model of group development,
analyze the changes on the executive team. Be sure
to address how the team’s decision-making process
w as affected by the introduction of M ichelle (Harary’s
sister) and Austin (M ichelle’s husband) to the team.
Sources: Based on “ Earthbuddies,” CBC Venture, July 21, 2002,
VA2035H & I; Spin M aster Toys, “ Company History,”
http://w w w.spinmaster.com; and S. Steinberg and J. Chidley, “ Fun for
the M oney,” Canadian Business, December 11, 1998, pp. 44–52.
4. Get participants to go over the agenda. The first
thing to do at the meeting is to have participants
review the agenda, make any changes, and then
approve the final agenda.
5. Establish specific time limits. M eetings should begin
on time and have a specific time for completion. It is
your responsibility to specify these times and to hold
to them.
6. M aintain focused discussion. It is your responsibility
to give direction to the discussion; to keep it focused
on the issues; and to minimize interruptions, disrup-
tions, and irrelevant comments.
7. Encourage and support participation of all members.
To maximize the effectiveness of problem-oriented
meetings, each participant must be encouraged to
contribute. Quiet or reserved personalities need to be
draw n out so their ideas can be heard.
8. M aintain a balanced style. The effective group leader
pushes w hen necessary and is passive w hen need be.
9. Encourage the clash of ideas. You need to encour-
age different points of view, critical thinking, and
constructive disagreement.

1 0. Discourage the clash of personalities. An effective
meeting is characterized by the critical assessment of
ideas, not attacks on people. When running a meet-
ing, you must quickly intercede to stop personal
attacks or other forms of verbal insult.
11 . Be an effective listener. You need to listen w ith
intensity, empathy, and objectivity, and do w hatever
is necessary to get the full intended meaning from
each participant’s comments.
1 2. Bring proper closure. You should close a meeting by
summarizing the group’s accomplishments; clarifying
w hat actions, if any, need to follow the meeting;
and allocating follow -up assignments. If any deci-
sions are made, you also need to determine w ho w ill
be responsible for communicating and implement-
ing them.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessment on your enclosed CD-ROM :
31 . Do I Trust Others?
32. Do Others See M e as Trustw orthy?
Practising Skills
Jameel Saumur is the leader of a five-member project team
that has been assigned the task of moving his engineering
firm into the booming area of high-speed intercity rail con-
st ruct ion. Saum ur and his t eam m em bers have been
researching the field, identifying specific business opportu-
nities, negotiating alliances w ith equipment vendors, and
evaluating high-speed rail experts and consultants from
Chapter 5 Working in Team s 183
O B A T W O RK
around the w orld. Throughout the process, Tonya Eckler, a
highly qualified and respected engineer, has challenged a
number of things Saumur has said during team meetings
and in t he w orkplace. For exam ple, at a m eet ing t w o
w eeks ago, Saumur presented the team w ith a list of 10
possible high-speed rail projects and started evaluating the
company’s ability to compete for them. Eckler contradicted
virtually all of Saumur’s comments, questioned his statistics,
and w as quite pessimistic about the possibility of getting
contracts on these projects. After this latest display of dis-
pleasure, t w o ot her group members, Bryan Wort h and
M aggie Ames, are complaining that Eckler’s actions are
damaging the team’s effectiveness. Eckler w as originally
assigned to the team for her unique expertise and insight.
If you had to advise this team, w hat suggestions w ould
you make to get the team on the right track to achieve its
fullest potential?
Reinforcing Skills
1 . Interview three managers at different organiza-
tions. Ask them about their experiences in manag-
ing teams. Have each describe teams that they
thought w ere effective and w hy they succeeded.
Have each also describe teams that they thought
w ere ineffective and the reasons that might have
caused this.
2. Contrast a team you have been in w here members
trusted one another w ith another team you have
been in w here members lacked trust in one another.
How did the conditions in each team develop?
What w ere the consequences in terms of interaction
patterns and performance?
P A R T 3 INTERACTING EFFECTIVELY

CH A PTER 6

Com m unicat ion ,

Conflict , and
Negot iat ion
What do you do w hen a group of former
employees think they have been treated
unfairly and current employees are thinking
about joining a union? W ill communication
help reduce tensions?

1 How does communication w ork?

2 What are the barriers to communication?

3 What are other issues in communication?

4 What is conflict?

5 How can conflict be resolved?

6 How does one negotiate effectively?

 n late 1997, mill employees of Hamilton, Ontario-

I based Dofasco w ere unhappy w ith the company.1

The number of jobs had fallen from 10 300 to 7000
in the previous five years. Former employees had started
a group called SHAFT (So How M any Are Fired
Tomorrow ) to press grievances against the company for
w hat they claimed w as unfair dismissal. The Canadian
Auto Workers and the United Steelw orkers unions w ere
approached by employees w ith requests to form a union
at Dofasco.
John M ayberry, then CEO, show ed little respect for
his employees. From his early days as a manager, he w as
not popular: He w as disliked “ for his habit of springing
surprise inspections, and there w ere rumours that he
had t hreat ened t o f ire employees he t hought w ere
malingering.”
The culture at Dofasco in the early 1990s did not
support open communication, and there w as a great
deal of conflict betw een M ayberry and his employees.
M ayberry tended to use one-w ay communication: He
w ould talk and employees w ere to listen. His concern
that employees had been treated too kindly by the pre-
vious management meant t hat he w as not open t o
negotiating resolutions to the challenges the company In this chapter w e explore the foundations of com-
faced. Would M ayberry learn to w ork w ith his employ- munication and then consider the effects of communi-
ees more effectively? cation on conflict and negotiation.

THE COMMUNICATION PROCESS

Research indicates that po o r co m m unicatio n is pro bably the m o st frequently cited 1 How does
so urce o f interperso nal co nflict.2 Individuals spend nearly 70 percent o f their waking communication work?
ho urs co mmunicating— writing, reading, speaking, listening— which means that they
have many o ppo rtunities in which to engage in po o r co mmunicatio n. A Wo rkCanada Dofasco
survey o f 2039 Canadians in six industrial and service catego ries explo red the state o f www.dofasco.ca

O B IS FO R EV ERY O N E
What information should
be se nt by which
communication channe l?
How can you Eve r notice that Doe s body language re ally
communicate be tte r whe n communicating via e mail make a diffe re nce ?
you’re stre sse d out? can le ad to
misunde rstandings?

What factors hinde r cross- Is conflict always bad?

Should you try to win at
cultural communication?
any cost whe n you
bargain?

185
186 Part 3 Int eract ing Eff ect ively

EXHIBIT 6-1 The Communication Process M odel

Chooses a Encodes the Chooses the

message message channel

Considers the receiver

Sender Receiver

Considers the sender

Provides Decodes the

feedback message

co mmunicatio n in Canadian businesses.3 The survey fo und that 61 percent o f senio r exec-
utives believed they did a go o d jo b o f co mmunicating with emplo yees. Ho wever, tho se
communication The transfer and who wo rked belo w the senio r executives did no t share this feeling— o nly 33 percent
understanding of a message o f the managers and department heads believed that senio r executives were effective
between two or more people. co mmunicato rs. Lo wer-level emplo yees repo rted that co mmunicatio n was even wo rse:
O nly 22 percent o f ho urly wo rkers, 27 percent o f cler-
ical emplo yees, and 22 percent o f pro fessio nal staff
repo rted that senio r executives did a go o d jo b o f co m-
municating with them. Mo reover, a recent study fo und
that Canadians repo rted less favo urable perceptio ns
abo ut their co m panies’ co m m unicatio ns than did
Americans.4
Despite these co mmunicatio n pro blems, no gro up
can exist witho ut communication , which is the trans-
fer and understanding o f a message between two o r
mo re peo ple. Co mmunicatio n can be tho ught o f as a
pro cess, o r flo w, as sho wn in Exhibit 6-1. The mo del
indicates that co mmunicatio n is bo th an interactive
and iterative pro cess. The sender has to keep in mind
the receiver ( o r audience) and in finalizing the co m-
municatio n, may decide to revisit decisio ns abo ut the
m essage, the enco ding, and/ o r the feedb ack. Fo r
instance, a manager may want to co nvey a message
face to face, and then m ay no t be able to do so fo r
so me reaso n. The message sent by email o r vo ice mail
may need to be framed differently than the message
that wo uld have been delivered face to face. Similarly,
yo u m ay decide o n a m essage, and then realize the
medium that yo u have cho sen will make the message
to o co mplicated. Writing 10 emails to set up a sim-
ple lunch appo intm ent m ay co nvince yo u m idway
thro ugh the pro cess to pick up the telepho ne to final-
ize the details.
We discussed perceptio n in Chapter 2. The co m-
m unicatio n pro cess is significantly affected by the
The former Canadian Alliance learned in its early days that it’s easy to com-
sender’s perceptio n o f the receiver and the receiver’s
municate unintended messages. The party’s first choice of name, Canadian
Conservat ive Ref orm Alliance Part y, caused quit e a st ir f or it s acronym perceptio n o f the sender. Fo r instance, if the receiver
(CCRAP). People across the country w ondered w hat the new party w as try- do es no t trust the sender, he o r she m ay interpret
ing to communicate about its objectives. intended po sitive statements in a negative manner.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 187

Enco ding and Deco ding

Messages are encoded (co nverting a message to symbo lic fo rm) by a sender and decoded encoding Converting a message
( interpreting a sender’s message) by a receiver. Fo ur facto rs have been described that to symbolic form.
affect message enco ding and deco ding: skill, attitudes, knowledge, and the so cio -cultural decoding Interpreting a sender’s
system . Fo r exam ple, o ur success in co m m unicating to yo u depends o n o ur writing message.
skills and yo ur reading skills. Co mmunicatio n success also includes speaking, listen-
ing, and reaso ning skills. As we discussed in Chapter 3, o ur interactio ns with o thers
are affected by o ur attitudes, values, and beliefs. Thus, the attitudes o f the sender and
receiver to ward each o ther will affect ho w the m essage is transm itted. Clearly, the
amo unt o f kno wledge the so urce and receiver ho ld abo ut a subject will affect the clar-
ity o f the message that is transferred. Finally, o ur po sitio n in the so cial-cultural system
affects o ur ability to successfully engage in co mmunicatio n. Messages sent and received
by peo ple o f equal rank are so metimes interpreted differently than messages sent and
received by peo ple in very different po sitio ns.

The Message
The message is the actual physical pro duct fro m the so urce enco ding. “When we speak, message What is communicated.
the speech is the message. When we write, the writing is the message. When we paint, the
picture is the message. When we gesture, the mo vements o f o ur arms, the expressio ns o n
o ur face are the message.” 5 O ur message is affected by the co de, o r gro up o f symbo ls, that
we use to transfer meaning; the co ntent o f the message itself; and the decisio ns that
we make in selecting and arranging bo th co des and co ntent. A po o r cho ice o f symbo ls,
and co nfusio n in the co ntent o f the message, can cause pro blems. McDo nald’s recently
settled a lawsuit o ver its cho ice o f wo rds, as Focus on Ethics reveals.

FO C U S O N E T H I C S

Vegetarian or Not Vegetarian?

Does “no b eef” really mean w hat it implies? In March 2002, O ak Bro o k, Illino is-
based McDo nald’s Co rpo ratio n agreed to pay $19 millio n ( CDN) to settle lawsuits
fro m vegetarians who suggested the co mpany had deceived them abo ut ho w it pro -
duced french fries.6 Under the agreem ent, McDo nald’s had to pay $10 m illio n to
charities that suppo rt vegetarianism. The co mpany was also o rdered to publicly apo l-
o gize and learn abo ut vegetarian dietary issues.
McDo nald’s co mmunicatio n practices were questio ned in the lawsuit. In 1990,
the co mpany had anno unced that its restaurants wo uld no lo nger use beef fat to co o k
french fries. Instead, o nly pure vegetable o il wo uld be used. What the co mpany did no t
say was that it wo uld co ntinue to add beef tallo w to the fries as a flavo uring agent.
When vegetarians disco vered that they had been unwittingly eating beef-flavo ured
fries, they were upset. McDo nald’s claimed that it never said the french fries were
vegetarian. The co mpany did apo lo gize fo r any co nfusio n its anno uncement caused,
ho wever.

Messages can also get “lo st in translatio n” when two parties fo rmalize their under-
standing thro ugh co ntracts. Co ntracts are meant to be written in legal terms, fo r lawyers, but
these may no t always capture the underlying meaning o f the parties’ understandings.
Co llective agreements written between management and unio ns so metimes suffer fro m this
pro blem as well. When either management o r unio n leaders po int to the co llective agree-
ment fo r every interactio n in the wo rkplace, they are relying o n the enco ding o f their nego -
tiatio ns, but this may no t permit so me o f the flexibility that was intended in so me cases.
188 Part 3 Int eract ing Eff ect ively

channel The medium through
which a message travels.
communication apprehension
Undue tension and anxiety about
oral communication, written commu-
nication, or both.
channel richness The amount of
information that can be transmitted
during a communication episode.
The Channel
The channel is the medium thro ugh which a message travels. It is selected by the so urce,
who must determine which channel is fo rmal and which o ne is info rmal. Fo rmal chan-
nels are established by o rganizatio ns to transmit messages abo ut the jo b-related activ-
ities o f members. Traditio nally, they fo llow the autho rity netwo rk within the o rganizatio n.
O ther fo rms o f messages, such as perso nal o r so cial messages, fo llo w the info rmal chan-
nels in the o rganizatio n. Exam ples o f channels include fo rm al m em o s, vo ice m ail,
email, and meetings. Cho o sing a po o r channel, o r o ne with a high no ise level, can dis-
to rt co mmunicatio n.
Why do peo ple cho o se o ne channel o f co mmunicatio n o ver ano ther— fo r instance,
a pho ne call instead o f a face-to -face talk? O ne answer might be anxiety! An estimated
5 to 20 percent o f the po pulatio n suffers fro m debilitating co mmunicatio n appre-
hension , o r anxiety, which is undue tensio n and anxiety abo ut o ral co mmunicatio n, writ-
ten co mmunicatio n, o r bo th.7 We all kno w peo ple who dread speaking in fro nt o f a
gro up, but so me peo ple may find it extremely difficult to talk with o thers face to face o r
beco me extremely anxio us when they have to use the telepho ne. As a result, they may
rely o n memo s, letters, o r email to co nvey messages when a pho ne call wo uld no t o nly
be faster but also mo re appro priate.
But what abo ut the 80 to 95 percent o f the po pulatio n who do no t suffer fro m this
pro blem? Is there any general insight we might be able to pro vide regarding cho ice o f
co mmunicatio n channel? The answer is a qualified “yes.” A mo del o f media richness has
been develo ped to explain channel selectio n amo ng managers.8
Research has fo und that channels differ in their capacity to co nvey info rm atio n.
So me are rich in that they have the ability to ( 1) handle multiple cues at the same time,
(2) allow rapid feedback, and (3) be very perso nal. O thers are lean in that they sco re low
o n these three facto rs. As Exhibit 6-2 illustrates, face-to -face co nversatio n sco res highest
in terms o f channel richness because it pro vides fo r the maximum amo unt o f info r-
matio n to be transmitted during a co mmunicatio n episo de. That is, it o ffers multiple
info rmatio n cues ( wo rds, po stures, facial expressio ns, gestures, into natio ns) , immedi-
ate feedback ( bo th verbal and no nverbal) , and the perso nal to uch o f “ being there.”
Imperso nal written media such as fo rmal repo rts and bulletins rate lo west in richness.

EXHIBIT 6-2 Information Richness of Communication Channels

Formal reports, Prerecorded Online discussion

Live speeches Video conferences
bulletins speeches groups, groupware

Low High
channel channel
richness richness

Telephone Face-to-face
Memos, letters Email Voice mail
conversations conversations

Sources: Based on R. H. Lengel and R. L. Daft, “ The Selection of Communication M edia as an Executive Skill,” Academy of M anagement
Executive, August 1988, pp. 225–232; and R. L. Daft and R. H. Lengel, “ Organizational Information Requirements, M edia Richness, and Structural
Design,” M anagerial Science, M ay 1996, pp. 554–572. Reproduced from R. L. Daft and R. A. Noe, Organizational Behavior (Fort Worth, TX:
Harcourt, 2001), p. 311.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 189

The cho ice o f o ne channel o ver ano ther depends o n

whether the message is ro utine o r no nro utine. Ro utine mes-

* What information
should be se nt
sages tend to be straightfo rward and have a minimum o f
ambiguity. No nro utine messages are likely to be co mpli-
by which communi-
cated and have the p o tential fo r m isund erstand ing.
cation channe l?
Individuals can co mmunicate ro utine messages efficiently
thro ugh channels that are lower in richness. However, they
can co mmunicate no nro utine messages mo re effectively by
selecting rich channels. Evidence indicates that high-perfo rming managers tend to be mo re
media-sensitive than lo w-perfo rming managers.9 In o ther wo rds, they are better able to
match appro priate media richness with the ambiguity invo lved in the co mmunicatio n.
A 1999 study at Bo sto n University revealed that managers fo und it easier to deliver
bad news (layo ffs, pro mo tio n denials, and negative feedback) via email, and that the mes-
sages were delivered mo re accurately this way. This do es no t mean that sending negative
info rmatio n thro ugh email is always reco mmended. O ne o f the co -autho rs o f the study
no ted that “ o ffering negative co m m ents face-to -face is o ften taken as a sign that the
news is impo rtant and the deliverer cares abo ut the recipient.” 10

The Feedback Lo o p
The final link in the co m m unicatio n pro cess is the feedback lo o p . Feedback lets us feedback loop The final link in
kno w whether understanding has been achieved. If the feedback lo o p is to succeed the communication process; it puts
in preventing m isco m m unicatio n, the receiver needs to give feedback and the sender the message back into the system as
a check against misunderstandings.
needs to check fo r it. Many receivers fo rget that there is a respo nsibility invo lved in
co m m unicatio n: to give feedback. Fo r instance, if yo u sit in
a bo ring lecture, but never discuss with the instructo r ways
that the delivery co uld be impro ved, yo u have no t engaged in
co m m unicatio n with yo ur instructo r.
When either the sender o r the receiver fails to engage in the
feedback pro cess, the co m m unicatio n is effectively o ne-way
co mmunicatio n. Two -way co mmunicatio n invo lves bo th talk-
ing and listening. Many managers co mmunicate badly because
they fail to use two -way co mmunicatio n.11
O ne o f the greatest difficulties managers have is pro viding
perfo rm ance feedb ack. In From Concepts to Skills, o n pages
217–218, we discuss strategies fo r pro viding perfo rmance feed-
back. We also pro vide so me practice exercises fo r do ing so .

The Co ntext
All co mmunicatio n takes place within a co ntext, and vio latio ns
o f that co ntext may create additio nal pro blems in sending and
receiving m essages. Fo r instance, the co ntext o f a wo rkplace
presents different expectatio ns abo ut ho w to interact with peo -
ple than do es the co ntext o f a bus sto p. The wo rkplace m ay
demand mo re fo rmal interactio n, while co mmunicatio n at a
bus sto p is generally expected to be info rmal. In so me situa-
tio ns, info rmal co mmunicatio n can lo o k unpro fessio nal, and
thus be viewed negatively. In o ther situatio ns, fo rmal co mmu-
nicatio n can make o thers feel awkward, if the fo rmality is o ut o f
place. Thus, it is impo rtant to co nsider co ntext in bo th enco d-
ing the message and cho o sing the channel.
Companies use the technique of 360-degree feedback to ensure
that individuals get feedback from co-w orkers and subordinates.
As a senior vice-president w it h Scot iabank, Claude Norf olk
found that sometimes feedback hurts. “ I w as really surprised, for
example, to find out that I needed to w ork on my listening skills,
because I thought I w as a pretty good listener.” Turns out his
w ife agreed w ith Norfolk’s colleagues. Still, he found value in the
exercise. Feedback almost alw ays brings w ith it valuable insights,
w hich w e can use for greater understanding.
190 Part 3 Int eract ing Eff ect ively
2 What are the barriers
to communication?
filtering A sender’s manipulation
of information so that it will be seen
more favourably by the receiver.
BARRIERS TO EFFECTIVE COMMUNICATION
Dofasco’s former CEO, John M ayberry, initially had difficulty communicating w ith his employ-
ees. He didn’t really respect them, because he felt they represented an entitlement culture
(“ good day’s w ork, a day’s pay, nice retirement package” ).12 Thus, he used selective perception
w hen evaluating their concerns. Because he carried out surprise inspections, employees w or-
ried they w ould be fired for any little problem. This made them defensive. What are other
w ays that communication can be negatively affected?
A num ber o f facto rs have been identified as barriers to co m m unicatio n. The m o re
pro minent o nes are filtering, selective perceptio n, defensiveness, info rmatio n o verlo ad,
and language.
Filtering
Filtering o ccurs when a sender manipulates info rmatio n so that the receiver will view
it mo re favo urably. Fo r example, when a manager tells a senio r executive what the man-
ager thinks the executive wants to hear, the manager is filtering info rmatio n. Do es this
happen much in o rganizatio ns? Sure! As info rmatio n is passed up to senio r executives,
emplo yees must co ndense and summarize it so that tho se o n to p do n’t beco me o ver-
lo aded with info rmatio n. The perso nal interests and perceptio ns o f what is impo rtant
by tho se do ing the summarizing will result in filtering.
The majo r determinant o f filtering is the number o f levels in an o rganizatio n’s struc-
ture. The mo re levels in an o rganizatio n’s hierarchy, the mo re o ppo rtunities there are fo r
filtering info rmatio n.
Selective Perception
Receivers in the co mmunicatio n pro cess selectively see and hear based o n their needs,
mo tivatio ns, experience, backgro und, and o ther perso nal characteristics. Receivers also
pro ject their interests and expectatio ns into co mmunicatio ns as they deco de them. Fo r
example, the emplo yment interviewer who believes that yo ung peo ple are mo re inter-
ested in spending time o n leisure and so cial activities than wo rking extra ho urs to fur-
ther their careers is likely to be influenced by that stereo type when interviewing yo ung
jo b applicants. As we discussed in Chapter 2, we do no t see reality; rather, we interpret
what we see and call it “ reality.”
Enro n’s fo rmer CEO, Jeff Skilling, is a go o d example o f a perso n with selective per-
ceptio n. When he was interviewed in No vember 2001 as info rmatio n abo ut Enro n’s
acco unting pro blems was just starting to emerge, he refused to ackno wledge that any-
thing wro ng had go ne o n at the co mpany. To him, Enro n represented “a to tally differ-
ent way o f thinking abo ut business—we go t it,” he said.13 His implicatio n was that it was
everyo ne else who was using selective perceptio n in failing to reco gnize Enro n’s great-
ness. As the scandal co ntinued to unfo ld, it became o bvio us that it was Skilling who was
using selective perceptio n.
Defensiveness
When peo ple feel that they are being threatened, they tend to react in ways that reduce
their ability to achieve mutual understanding. That is, they beco me defensive— engag-
ing in behavio urs such as verbally attacking o thers, m aking sarcastic rem arks, being
o verly judgm ental, and questio ning o thers’ m o tives. So when individuals interpret
ano ther’s message as threatening, they o ften respo nd in ways that hinder effective co m-
municatio n. O B in the Workplace sho ws ho w defensiveness between the new head o f
FPI and the co mpany’s emplo yees led to the breakdo wn o f an acquisitio ns deal.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 191

O B I N T H E W O RK PL A C E

Seafood Companies Fail to Reach Acquisition Agreement

Why d oes d efensiveness harm communication? Jo hn Risley, chair and co -fo under o f
Halifax-based Clearwater Seafo o d, aimed to create a seafo o d giant by acquiring St. Clearw ater Seafood
Jo hn’s, Newfo undland-based Fishery Pro ducts Internatio nal ( FPI) .14 www.clearwater.ca
At first Risley was successful in his go al, when in May 2001 he engineered a takeover
o f the FPI bo ard. Immediately, he pro mised Newfo undlanders that they wo uld lo se
no jo bs. This was a relief to the fishery wo rkers, who had seen jo bs tumble by two -
thirds in the past decades.
Ho wever, in January 2002 unio n representatives were to ld that to cut co sts, up to
580 jo bs wo uld be lo st fro m three rural Newfo undland plants. This anno uncement
angered wo rkers and po liticians alike. Risley defensively argued that the culture o f
Newfo undland was the real pro blem: “This is a culture in which peo ple think there’s
value in the num ber o f jo bs that beco m e eligible fo r unem plo ym ent insurance,”
he said.
Allan Mo ulto n, a unio n leader and em plo yee at FPI’s Marysto wn plant fo r 30
years, spo ke up at a public hearing o n the FPI-Clearwater acquisitio n: “ We’re no t
the o nly seaso nal wo rkers in Canada and it’s unfo rtunate Newfo undland really go t
pegged with this,” he added. “ We wo rked lo ng ho urs in this industry and every sin-
gle wo rker wo rked hard to save Fishery Pro ducts Internatio nal, and we were suc-
cessful and we want to get back to do ing that.”
During 2002, the acquisitio n was called o ff because the two co mpanies co uld no t
reach agreement, and plans to mo dernize FPI’s plants were scrapped. In mid-2006,
FPI was still having difficulties and ho ping to sell o ff so me o f its ho ldings. Mo re co n-
siderate co mmunicatio n by Risley might have led to fewer pro blems and less defen-
siveness, and m ight have allo wed his planned acquisitio n to go thro ugh.

Information Overload
Individuals have a finite capacity fo r pro cessing data. When the info rmatio n we have to
wo rk with exceeds o ur ability to pro cess it, the result is info rmatio n overlo ad . With information overload The state
emails, pho ne calls, faxes, meetings, and the need to keep current in o ne’s field, mo re of having more information than one
and mo re managers and pro fessio nals are co mplaining that they are suffering fro m to o can process.
much info rmatio n. A related issue is the questio n o f ho w much info rmatio n managers
sho uld share with emplo yees.
What happens when individuals have mo re info rmatio n than they can so rt o ut and
use? They tend to select o ut, igno re, pass o ver, o r fo rget info rmatio n. O r they may put
o ff further pro cessing until the o verlo ad situatio n is o ver. Regardless, the result is lo st
info rmatio n and less effective co mmunicatio n.

Language
Wo rds m ean different things to different peo ple. “ The m eanings o f wo rds are no t in
the wo rds; they are in us.” 15 Age, educatio n, and cultural backgro und are three o f
the m o re o bvio us variables that influence the language a perso n uses and the defi-
nitio ns he o r she gives to wo rds. Fo r instance, when Alanis Mo rissette sang “ Isn’t It
Iro nic?” m iddle-aged English pro fesso rs co m plained that she co m pletely m isunder-
sto o d the m eaning o f “ iro ny” — b ut the m illio ns who b o ught her CD understo o d
what she m eant.
192 Part 3 Int eract ing Eff ect ively

Even with a co mmo n language, such as English, o ur usage

EXHIBIT 6-3
Source: The Far Side by Gary Larson, Copyright © 1994 for
Works, Inc. All rights reserved. Used w ith permission.
o f that language is far fro m unifo rm . Fo r exam ple, in m any
o rganizatio ns, em plo yees co m e fro m diverse backgro unds
and, therefo re, have different patterns o f speech. Additio nally,
the gro uping o f em plo yees into departm ents creates spe-
cialists who develo p their o wn jargo n o r technical language.
In large o rganizatio ns, m em bers are also o ften widely dis-
persed geo graphically— even o perating in different co un-
tries— and individuals in each lo catio n will use term s and
phrases that are unique to their area. In hierarchical o rgan-
izatio ns, so m etim es the language o f senio r executives can
be co nfusing to o perative emplo yees who are unfamiliar with
m anagem ent jargo n.
Senders tend to assume that the wo rds and terms they use
mean the same to the receiver that they do to them. This, o f
co urse, is o ften inco rrect and can create co mmunicatio n diffi-
culties. The multicultural enviro nment o f many o f to day’s wo rk-
places makes co mmunicatio n issues even mo re co mplex. In
m any wo rkplaces, there are peo ple who se first language is
so m ething o ther than English. This m eans that even m o re
o ppo rtunities arise fo r co nfusio n abo ut meaning. It is there-
fo re impo rtant to be aware that yo ur understanding o f the par-
ticular meaning o f a wo rd o r phrase may no t be shared by all.
Exhibit 6-3 sho ws individuals who have very different views
o n what wo rds to use.

Communicating Und er Stress

O ne o f the mo st difficult times to co mmunicate pro perly
is when o ne is under stress. While stress can arise fro m any
*communicate
How can you
be tte r
number o f situatio ns, it can be particularly stressful to have
to co m m unicate in so m ething o ther than o ne’s first lan-
whe n you’re stre sse d guage. O ne co nsultant has identified several tips fo r co m-
out? municating under stress. These tips are also appro priate fo r
less stressful co mmunicatio n.16

• Speak clearly. Be direct abo ut what yo u want to say, and avo id hiding behind
wo rds. Fo r instance, as difficult as it might be to say “ Yo u did no t receive the
po sitio n,” the listener is better able to pro cess the info rmatio n when it is spo -
ken that directly.

• Be aware of the nonverbal part of communicating. To ne, facial expressio n, and

bo dy language send signals that may o r may no t be co nsistent with yo ur mes-
sage. In a stressful situatio n, it is best to speak in a neutral manner.

• Think carefully about how you state things. In m any situatio ns, it is better to
be restrained so that yo u do no t o ffend yo ur listener. Fo r instance, when
yo u threaten so m eo ne if they do no t do exactly what yo u want ( “ I insist o n
speaking to yo ur m anager this m inute” ) , yo u sim ply escalate the situatio n.
It is better to state what yo u want calm ly, so that yo u can be heard
accurately.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 193

CURRENT ISSUES IN COMMUNICATION

Ho w are electro nics changing the way peo ple co mmunicate with each o ther in o rgan- 3 What are other issues
izatio ns? Ho w impo rtant is no nverbal co mmunicatio n? What do es silence have to do in communication?
with co mmunicating? Why do men and wo men o ften have difficulty co mmunicating
with each o ther? Ho w can individuals im pro ve their cro ss-cultural co m m unicatio n?
We address each o f these issues belo w.

Electronic Communications
Since the early 1980s, we have been subjected to an o nslaught o f new electro nic ways to
co mmunicate. Electro nic co mmunicatio ns ( including pagers, fax machines, video co n-
ferencing, electro nic meetings, email, cellpho nes, vo ice mail, and BlackBerrys) make it
po ssible fo r yo u to wo rk even if yo u are away fro m yo ur wo rkstatio n. These techno lo -
gies are largely reshaping the way we co m m unicate in o rganizatio ns.17 Yo u can be
reached when yo u are in a meeting; having a lunch break; visiting a custo mer’s o ffice
acro ss to wn; watching a m o vie in a cro wded theatre; o r playing go lf o n a Saturday
mo rning. The line between an emplo yee’s wo rk and no nwo rk life is no lo nger distinct,
meaning all emplo yees theo retically can be “ o n call” 24 ho urs a day.
O rganizatio nal bo undaries beco me less relevant as a result o f electro nic co mmuni-
catio ns. Why? Because netwo rked co mputers allo w emplo yees to jump vertical levels
within the o rganizatio n, wo rk full-time at ho me o r so meplace o ther than “ the o ffice,”
and have o ngo ing co mmunicatio ns with peo ple in o ther o rganizatio ns.

Email
Em ail has added co nsiderably to the num ber o f ho urs wo rked per week, acco rding to
Christina Cavanagh: Thinking
a recent study by Christina Cavanagh, pro fesso r o f management co mmunicatio ns at the Outside the Inbox
Richard Ivey Scho o l o f Business, University o f Western O ntario . Between 2000 and www.christinacavanagh.com
2002, business pro fessio nals and executives said they were
wo rkin g six m o re h o urs a week, resp o n d in g to em ail. 1 8
Researchers calculate that 141 billio n em ail m essages circu-
late the glo be each day. Five years ago , that number was 5.1 bil-
lio n email messages.19 O ne researcher suggests that kno wledge
wo rkers devo te abo ut 28 percent o f their days to em ail.20
Despite the large investment o f time, email is no t always the
best way to co mmunicate. It do es no t pro vide either the verbal
o r no nverbal nuances that a face-to -face meeting do es. There
has been so me attempt to remedy this thro ugh the develo p-
ment o f “emo tico ns” ( fo r example, the smiley face :-) ) to indi-
cate a friendly to ne, and abbreviatio ns ( fo r example, IMHO, “in
my humble o pinio n”) to indicate that individuals are respectfully
trying to co nvey their o wn viewpo ints. There is also the stan-
dard warning no t to write emails in ALL CAPS, as do ing so is an
indicatio n that o ne is sho uting. Exhibit 6-4 o n page 194 illus-
trates so me o f the co nventio nal symbo ls used in email.
Th e in fo rm atio n o verlo ad Investment bank M organ Stanley uses the company’s intranet to
caused by the use o f email in the distribute data and information to employees at its 600 offices
around the w orld. For example, the global netw ork allow s traders
* Eve r notice that
communicating via
wo rkplace deserves greater co n-
sid eratio n b y m an agers an d
in Japan to receive up-to-the-minute information on securities
transactions from colleagues in New York. M organ Stanley has
e mail can le ad to employees alike. Individuals may also connected its “ hoot-and-holler” w orldw ide voice-messaging
misunde rstandings? use em ail to hid e fro m d irect system to its intranet, allow ing salespeople to receive messages
in teractio n , to p ro tect th eir from their w orkstation speakers on the trading floor.
194 Part 3 Int eract ing Eff ect ively

po wer, o r to create a o ne-way co m m unicatio n to o l. Em ail

EXHIBIT 6-4 Emoticons: has also beco me a to o l to create paper trails fo r interactio n,
Show ing Emotions in Email allo wing peo ple to avo id face-to -face co mmunicatio n o n dif-
ficult to pics. Mo reo ver, fo r peo ple with a high need fo r so cial
Electronic mail need not be emotion-free. Over the years,
email users have developed a set of symbols (emoticons) co ntact, a heavy reliance o n electro nic co m m unicatio ns is
for expressing emotions. For instance, the use of all caps likely to lead to lo wer jo b satisfactio n.
(as in THIS PROJECT NEEDS YOUR IM M EDIATE ATTEN- So m e m anagers are starting to respo nd to the negative
TION! ) is the email equivalent of shouting. The follow ing effects o f em ail in the wo rkplace. At the beginning o f 2005,
highlights some emoticons: Jo n C o lem an , vice-p resid en t an d gen eral m an ager o f
Markham, O ntario -based Pfizer Co nsumer Healthcare, asked
:) Smile :-| Disappointed his staff to cut the number o f emails they sent by 25 percent
<g> Grin :-@ Scream
o ver the next year. In July 2005, Co leman’s gro up intro duced
:( Frow n :-0 Yell
;) W ink :-D Shock or surprise Freedo m Six to Six to help m eet their go al. This pro gram
:-[ Really sad face :’( Crying b ans em plo yees fro m sending em ail m essages b etween 6
p.m . and 6 a.m ., and o n weekends. Co lem an no tes that
em plo yees sho uld no t m easure their pro ductivity based o n
the number o f emails they handle. Rather, they sho uld spend
Pfizer Canada m o re tim e do ing their actual wo rk.21
www.pfizer.ca
Considerat ions f or Writ ing and Sending Em ail Despite many advantages to
email, it is impo rtant to realize that it is virtually indestructible o nce it gets backed up o n
yo ur co mpany’s server. Also , its very speed and accessibility can cause misco mmunicatio n
and misdirected messages. Individuals o ften make stro nger negative statements when
using email than they wo uld in ho lding a face-to -face co nversatio n.22 Individuals o ften
give little tho ught to ho w their emails might be interpreted, and assume that their intent
will be readily apparent to the recipient, even tho ugh this is no t always the case.23
With these issues in mind, co nsider the fo llo wing tips fo r writing and sending email
o ffered by business pro fesso r Christina Cavanagh o f the University o f Western O ntario :24

• Do n’t send emails witho ut a subject line.

• Be careful in yo ur use o f emo tico ns and acro nyms fo r business co mmunicatio n.
• Write yo ur message clearly, and briefly.
• Co py emails to o thers o nly if they really need the info rmatio n.
• Sleep o n angry emails befo re sending to be sure yo u are sending the right
message.

Case Incident— Emailing “Lazy” Employees o n page 216 asks yo u to evaluate o ne man-
ager’s use o f email to tell his emplo yees to wo rk harder.
Emplo yees sho uld also be aware that email is no t necessarily private, and co mpa-
nies o ften take the po sitio n that they have the right to read yo ur email. So me wo nder,
ho wever, whether reading em plo yee em ail is ethical. Focus on Ethics illustrates that
emplo yees canno t assume that their email is private.

FO C U S O N E T H I C S

Your Email Can Get You Fired

Canadian Auto Workers (CAW)
www.caw.ca Should your email b e safe from your manager’s eyes? The Canadian Auto Wo rkers

Canadian National Railw ay (CN) ( CAW) unio n expressed o utrage in early 1998 when it disco vered that Mo ntreal-
www.cn.ca based Canadian Natio nal Railway ( CN) was reading emplo yees’ email messages.25
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 195

“Our peo ple feel vio lated. Yo u’re given an email address and yo u have a passwo rd, and
it’s yo urs. It’s perso nal” is the view o f Abe Ro sner, a natio nal CAW representative.
CN, ho wever, disagrees: “ Em ail is to be used fo r CN business-appro ved activities
o nly. Flo wing fro m this is that any co m m unicatio n exchanged o n the system is
viewed as co mpany pro perty,” explains Mark Hallman, a CN spo kesperso n.
While mo st emplo yees do no t think managers sho uld listen to their subo rdinates’
vo ice m ail m essages o r read their em ails, so m e m anagers disagree. Mo re than 20
percent o f m anagers surveyed recently said that they m o nito red their em plo yees’
vo ice mail, email, and/ o r co mputer files. The managers argue that the co mpany o wns
the systems used to pro duce this material, and therefo re they sho uld have access to
the info rmatio n.
Fred Jo nes ( no t his real name) was fired fro m a Canadian co mpany fo r fo rward-
ing dirty jo kes to his clients.26 Until this incident, Jo nes had been a high-perfo rming
emplo yee who so ld netwo rk co mputers fo r his co mpany. Jo nes tho ught that he was
o nly sending the jo kes to clients who liked them, and assumed the clients wo uld
tell him if they didn’t want to receive the jo kes. Instead, a client co mplained to the
co mpany abo ut receiving the dirty jo kes. After an investigatio n, the co mpany fired
Jo nes. Jo nes is still puzzled abo ut being fired. He views his email as private; to him,
sending jo kes is the same as telling them at the water co o ler.
Jo nes was no t aware that under current law, em plo yee info rm atio n, including
em ail, is no t necessarily private. Mo st federal em plo yees, pro vincial public secto r
emplo yees, and emplo yees wo rking fo r federally regulated industries are co vered by
the federal Privacy Act and Access to Info rmatio n Act, in place since 1985. Many pri-
vate secto r emplo yees are no t co vered by privacy legislatio n, ho wever.

Ann Cavo ukian, Info rm atio n and Privacy Co m m issio ner o f O ntario , no tes that
“emplo yees deserve to be treated like adults and co mpanies sho uld limit surveillance to
rare instances, such as when there is suspicio n o f criminal activity o r harassment.” 27
She suggests that em plo yers use respect and co urtesy when dealing with em plo yees’
email, and she likens email to o ffice pho ne calls, which generally are no t mo nito red by
the em plo yer. It is clearly im po rtant, in any event, that em plo yees be aware o f their
co mpanies’ po licies o n email.

Instant Messaging
Instant messaging ( IM) , which has been po pular amo ng teens fo r mo re than a decade,
is no w rapidly mo ving into business.28
Instant messaging is essentially real-time email. Its gro wth has been spectacular. In
2002 Canadians sent 174 m illio n text m essages, in 2003 they sent 352 m illio n text
messages, and in 2004 they sent mo re than 710 millio n text messages.29 Experts estimate
that by 2005, mo re peo ple will be using IM than email as their primary co mmunicatio n
to o l at wo rk.30
IM is a fast and inexpensive means fo r managers to stay in to uch with emplo yees and
fo r emplo yees to stay in to uch with each o ther. It also pro vides several advantages o ver
email. There’s no delay, no inbo x clutter o f messages, and no uncertainty as to whether
the message was received. Managers also find that IM is an excellent means fo r mo nito ring
emplo yees’ physical presence at their wo rkstatio ns. “With a glance at their co ntact lists,
users can tell who ’s lo gged o n and available right no w.” 31 Service technicians at Ajax,
O ntario -based Pitney Bo wes Canada started using IM rather than pagers, because “it’s
cheaper and it’s two -way.” 32 The co mpany kno ws if messages are received.
IM isn’t go ing to replace email. Email is still pro bably a better device fo r co nveying
lo ng messages that need to be saved. IM is preferred fo r sending o ne o r two -line mes-
sages that wo uld just clutter up an email inbo x. O n the do wnside, so me IM users find
the techno lo gy intrusive and distracting. IM’s co ntinual o nline presence can make it
196 Part 3 Int eract ing Eff ect ively
nonverbal communication
Messages conveyed through body
movements, facial expressions, and
the physical distance between the
sender and the receiver.
kinesics The study of body
motions, such as gestures, facial
configurations, and other move-
ments of the body.
proxemics The study of physical
space in interpersonal relationships.
hard fo r em plo yees to co ncentrate and stay fo cused. Managers also express co ncern
that IM will be used by emplo yees to chat with friends and co lleagues abo ut no nwo rk
issues. Finally, because instant messages are easily bro ken into , many o rganizatio ns are
co ncerned abo ut IM security.33
Nonverb al Communication
Anyo ne who has ever paid a visit to a singles bar o r a nightclub is aware that co mmu-
nicatio n need no t be verbal in o rder to co nvey a message. A glance, a stare, a smile, a
fro wn, a pro vo cative bo dy mo vement— they all co nvey meaning. This example illus-
trates that no discussio n o f co mmunicatio n wo uld be co mplete witho ut a discussio n o f
no nverbal co mmunicatio n . This includes bo dy mo vements, facial expressio ns, and
the physical distance between the sender and the receiver.
The academ ic study o f bo dy m o tio ns has been labelled kinesics . It refers to ges-
tures, facial co nfiguratio ns, and o ther mo vements o f the bo dy. Because it is a relatively
new field, there is no t co m plete agreem ent o n findings. Still, bo dy m o vem ent is an
impo rtant segment o f the study o f co mmunicatio n.
It has been argued that every bo dy movement has a mean-
ing and that no mo vement is accidental.34 Thro ugh bo dy
language, we can say “Help me, I’m co nfused,” o r “Leave me
* Doe s body
language re ally alo ne, I’m really angry.” Rarely do we send o ur m essages
make a diffe re nce ? co nscio usly. We act o ut o ur state o f being with no nverbal
bo dy language, even if we are no t aware o f do ing so . In No rth
America, we lift o ne eyebro w fo r disbelief. We rub o ur no ses
fo r puzzlement. We clasp o ur arms to iso late o urselves o r to
pro tect o urselves. We shrug o ur sho ulders fo r indifference, wink o ne eye fo r intimacy, tap
o ur fingers fo r impatience, slap o ur fo reheads fo r fo rgetfulness.35 Babies and yo ung chil-
dren pro vide ano ther go o d illustratio n o f effective use o f no nverbal co mmunicatio n.
Altho ugh they lack develo ped language skills, they o ften use fairly so phisticated bo dy lan-
guage to co mmunicate their physical and emo tio nal needs. Such use o f bo dy language
undersco res its impo rtance in co mmunicating needs thro ugho ut life.
While we may disagree o n the specific meaning o f these movements (and different cul-
tures may interpret specific bo dy mo vements differently) , bo dy language adds to and
o ften co mplicates verbal co mmunicatio n. Fo r instance, if yo u read the transcript o f a
meeting, yo u do no t grasp the impact o f what was said in the same way yo u wo uld if yo u
had been there o r had seen the meeting o n video . Why? There is no reco rd o f no nverbal
co mmunicatio n. The intonations, o r emphasis, given to wo rds o r phrases is missing.
The facial expression o f a perso n also co nveys meaning. A snarling face says so me-
thing different fro m a smile. Facial expressio ns, alo ng with into natio ns, can sho w arro -
gance, aggressiveness, fear, shyness, and o ther characteristics that wo uld never b e
co mmunicated if yo u read a transcript o f the meeting.
Studies indicate that tho se who maintain eye contact while speaking are viewed with
mo re credibility than tho se who se eye co ntact wanders. Peo ple who make eye co ntact
are also deemed mo re co mpetent than tho se who do no t.
The way individuals space themselves in terms o f physical distance, co mmo nly called
pro xemics , also has meaning. What is co nsidered pro per spacing largely depends o n
cultural no rm s. Fo r instance, studies have sho wn that tho se fro m “co ntact” cultures
( e.g., Arabs, Latin Americans, so uthern Euro peans) are mo re co mfo rtable with bo dy
clo seness and to uch than tho se fro m “ no nco ntact” cultures ( Asians, No rth Americans,
no rthern Euro peans) .36 These differences can lead to co nfusio n. If so m eo ne stands
clo ser to yo u than expected acco rding to yo ur cultural no rms, yo u may interpret the
actio n as an expressio n o f aggressiveness o r sexual interest. Ho wever, if the perso n
stands farther away than yo u expect, yo u might think he o r she is displeased with yo u
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 197

o r uninterested. So meo ne who se cultural no rms differ fro m yo urs might be very surprised
by yo ur interpretatio n.
Enviro nmental facto rs such as seating arrangements o r the co nditio ns o f the ro o m can
also send intended o r unintended messages. A perso n who se desk faces the do o rway
demo nstrates co mmand o f his o r her physical space, while perhaps also co nveying that
o ne sho uld no t co me to o clo se.
It is impo rtant fo r the receiver to be alert to these no nverbal aspects o f co mmunica-
tio n. Yo u sho uld lo o k fo r no nverbal cues as well as listen to the literal meaning o f a
sender’s wo rds. In particular, yo u sho uld be aware o f co ntradictio ns between the mes-
sages. The m anager m ay say that she is free to talk to yo u abo ut that raise yo u have
been seeking, but yo u may see no nverbal signals fro m her (such as lo o king at her watch)
that suggest that this is no t the time to discuss the subject. It is no t unco mmo n fo r peo -
ple to express o ne em o tio n verbally and ano ther no nverbally. These co ntradictio ns
o ften suggest that actio ns speak lo uder ( and mo re accurately) than wo rds.
We sho uld mo nito r bo dy language with so me care. Fo r instance, while it is o ften
tho ught that individuals who cro ss their arms in fro nt o f their chests are sho wing resist-
ance to a message, they might also do this if they are feeling co ld, regardless o f their
reactio ns to a message.

Silen ce a s Communication
Sherlo ck Ho lmes o nce so lved a murder mystery based no t o n what happened but o n
what didn’t happen. Ho lmes remarked to his assistant, Dr. Watso n, abo ut “ the curio us
incident o f the do g in the nighttime.” Watso n, surprised, respo nds, “ But the do g did
no thing in the nighttime.” To which Ho lmes replied, “ That was the curio us incident.”
Ho lmes co ncluded the crime had to be co mmitted by so meo ne with who m the do g
was familiar because the watchdo g did no t bark.
The do g that did no t bark in the night is o ften used as a metapho r fo r an event that
is significant by reaso n o f its absence. That sto ry is also an excellent illustratio n o f the
impo rtance o f silence in co mmunicatio n.
Pro fesso rs Craig Pinder o f the University o f Victo ria and Karen Harlo s o f McGill
University have no ted that silence— defined here as an absence o f speech o r no ise—
generally has been igno red as a fo rm o f co mmunicatio n in o rganizatio nal behavio ur
because it represents inactio n o r nonbehavio ur. But silence is no t necessarily inactio n. No r
is it, as many believe, a failure to co mmunicate. Silence can, in fact, be a po werful fo rm
o f co mmunicatio n.37 It can mean so meo ne is thinking o r co ntemplating a respo nse to
a questio n. It can mean a perso n is anxio us and fearful o f speaking. It can signal agree-
ment, dissent, frustratio n, o r anger.
In terms o f o rganizatio nal behavio ur, we can see several links between silence and
wo rk-related behavio ur. Fo r instance, silence is a critical element o f gro upthink because
it implies agreement with the majo rity. It can be a way fo r emplo yees to express dissat-
isfactio n, as when they “suffer in silence.” It can be a sign that so meo ne is upset, as when
a typically talkative perso n suddenly says no thing— “What’s the matter with him? Is he
all right?” It’s a po werful to o l used by individuals to signal disfavo ur by shunning o r
igno ring so meo ne with “silent insults.” As well, it’s a crucial element o f gro up decisio n
making, allo wing individuals to think o ver and co ntemplate what o thers have said.
Failing to pay clo se attentio n to the silent po rtio n o f a co nversatio n can result in
missing a vital part o f the message. Astute co mmunicato rs watch fo r gaps, pauses, and
hesitatio ns. They hear and interpret silence. They treat pauses, fo r instance, as analo -
go us to a flashing yello w light at an intersectio n— they pay attentio n to what co mes
next. Is the perso n thinking, deciding ho w to frame an answer? Is the perso n suffering
fro m co mmunicatio n apprehensio n? So metimes the real message in a co mmunicatio n
is buried in the silence.
198 Part 3 Int eract ing Eff ect ively

Communication Barriers Betw een Women and M en

Research by Debo rah Tannen pro vides us with impo rtant insights into
differences in the co nversatio n styles o f men and wo men.38 In partic-
ular, Tannen has been able to explain why gender o ften creates o ral
co mmunicatio n barriers. Her research do es no t suggest that all men o r
all wo men behave the same way in their co mmunicatio n, but she illus-
trates so me impo rtant generalizatio ns.
The essence o f Tannen’s research is that men use talk to emphasize
status, while wo men use it to create co nnectio n. Acco rding to Tannen,
wo men speak and hear a language o f co nnectio n and intimacy, while
men speak and hear a language o f status and independence. So , fo r
many men, co nversatio ns are primarily a way to preserve independence
and maintain status in a hierarchical so cial o rder. Fo r many wo men,
ho wever, co nversatio ns are nego tiatio ns fo r clo seness in which peo ple
try to seek and give co nfirmatio n and suppo rt. The fo llowing examples
will illustrate Tannen’s thesis.
Men o ften co mplain that wo men talk o n and o n abo ut their pro b-
lem s. Wo m en criticize m en fo r no t listening. What is happening is
that when men hear a pro blem, they o ften assert their desire fo r inde-
pendence and co ntro l by o ffering so lutio ns. Many wo m en, o n the
o ther hand, view telling a pro blem as a means to pro mo te clo seness.
The wo men present the pro blem to gain suppo rt and co nnectio n, no t
Research indicates that w omen use language to create to get the male’s advice. Mutual understanding, as so ught by wo men,
connection w hile men use language to emphasize sta- is symmetrical. But giving advice is asymmetrical—it sets up the (male)
tus and pow er. The businessw omen conversing here advice giver as mo re kno wledgeable, mo re reaso nable, and mo re in
illustrate that w omen speak and hear a language of co ntro l; this co ntributes to distancing men and wo men in their effo rts
connection and intimacy.
to co mmunicate.
Men o ften criticize wo men fo r seeming to apo lo gize all the time. Men
tend to see the phrase “I’m so rry” as a weakness because they interpret the phrase to mean
the wo man is accepting blame. However, wo men typically use “I’m so rry” to express empa-
thy: “I know yo u must feel bad abo ut this. I pro bably wo uld to o in the same po sitio n.”
While Tannen has received wide ackno wledgment o f her wo rk, so me suggest that it
is anecdo tal and/ o r based o n faulty research. Go ldsmith and Fulfs argue that men and
wo m en have m o re sim ilarities than differences as co m m unicato rs, altho ugh they
ackno wledge that when co mmunicatio n difficulties do appear, it is appealing to attrib-
ute them to gender.39 Despite this, Nancy Langto n, yo ur Vanco uver-based autho r, has
no ted, based o n evidence fro m ro le plays, that m en and wo m en m ake requests fo r
raises differently, and men are mo re likely to state that men were mo re effective at mak-
ing requests, while wo men are mo re likely to indicate that it was wo men who handled
the interactio n mo re favo urably.40

Cro ss-Cultural Communication

Effective co mmunicatio n is difficult under the best o f co nditio ns. Cro ss-cultural fac-
to rs clearly create the po tential fo r increased co mmunicatio n pro blems.

Cultural Barriers
O ne autho r has identified fo ur specific pro blems related to
language difficulties in cro ss-cultural co m m unicatio ns.41

*hinde
What factors
r cross- cultural
First, there are barriers caused by semantics. As we have no ted
previo usly, wo rds m ean different things to different peo -
communication? p le. This is p articularly true fo r p eo p le fro m d ifferent
natio nal cultures. So me wo rds, fo r instance, do no t translate
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 199

Ottaw a-based Donna Cona made

hist ory w hen it designed and
inst alled t he comput er net w ork
for the Government of Nunavut.
Tw o-thirds of the firm’s softw are
engineers are Aboriginal. Pet er
Baril, Nunavut’s director of infor-
mat ics services, not es: “ Donna
Cona’s quiet and know ledgeable
approach w as perhaps the most
import ant skill brought t o our
project. No other style could have
w orked in t his predominant ly
Aboriginal environment.”

between cultures. Fo r instance, the new capitalists in Russia may have difficulty co m-
municating with their English-speaking co unterparts because English terms such as effi-
ciency, free market, and regulation canno t be translated directly into Russian.
Seco nd, there are barriers caused by word connotations. Wo rds imply different things in
different languages. The Japanese wo rd hai translates as “ yes,” but its co nno tatio n may
be “yes, I am listening,” rather than “yes, I agree.” Western executives may be hampered
in their nego tiatio ns if they do no t understand this co nno tatio n.
Third are barriers caused by tone differences. In so me cultures language is fo rmal, and
in o thers it’s info rmal. In so me cultures, the to ne changes depending o n the co ntext:
Peo ple speak differently at ho me, in so cial situatio ns, and at wo rk. Using a perso nal,
info rmal style in a situatio n where a mo re fo rmal style is expected can be embarrassing
and o ffensive.
Fo urth, there are barriers caused by differences in perceptions. Peo ple who speak differ-
ent languages actually view the wo rld in different ways. The Inuit perceive sno w differ-
ently because they have m any wo rds fo r it. They also perceive “ no ” differently fro m
English speakers because the Inuit have no such wo rd in their vo cabulary.

Overco ming Cro ss-Cultural Difficulties

When co mmunicating with peo ple fro m a different culture, what can yo u do to reduce
misperceptio ns, misinterpretatio ns, and misevaluatio ns? Fo llo wing these fo ur rules can
be helpful:42

• Assume differences until similarity is proven. Mo st o f us assume that o thers are

mo re similar to us than they actually are. But peo ple fro m different co untries
o ften are very different fro m us. So yo u are far less likely to make an erro r if
yo u assume o thers are different fro m yo u rather than assuming similarity until
difference is pro ven.

• Emphasize description rather than interpretation or evaluation. Interpreting o r eval-

uating what so meo ne has said o r do ne, in co ntrast with describing, is based
mo re o n the o bserver’s culture and backgro und than o n the o bserved situa-
tio n. As a result, delay judgment until yo u have had sufficient time to o bserve
and interpret the situatio n fro m the differing viewpo ints o f all the cultures
invo lved.
200 Part 3 Int eract ing Eff ect ively
4 What is conflict?
conflict A process that begins
when one party perceives that
another party has negatively
affected, or is about to negatively
affect, something that the first party
cares about.
functional conflict Conflict that
supports the goals of the group and
improves its performance.
dysfunctional conflict Conflict
that hinders group performance.
• Be empathetic. Befo re sending a message, put yo urself in the recipient’s sho es.
What are his o r her values, experiences, and frames o f reference? What do yo u
kno w abo ut his o r her educatio n, upbringing, and backgro und that can give
yo u added insight? Try to see the o ther perso n as he o r she really is.
• Treat your interpretations as a working hypothesis. O nce yo u have develo ped an
explanatio n fo r a new situatio n o r think yo u empathize with so meo ne fro m a
fo reign culture, treat yo ur interpretatio n as a hypo thesis that needs further
testing rather than as a certainty. Carefully assess the feedback pro vided by
recipients to see if it co nfirms yo ur hypo thesis. Fo r impo rtant decisio ns o r
co mmuniqués, yo u can also check with o ther fo reign and ho me-co untry co l-
leagues to ensure that yo ur interpretatio ns are o n target.
H OW COMMUNICATION BREAKD OWN
LEAD S TO CONFLICT
In response to massive layoffs in the 1990s, Dofasco’s mill employees became unhappy and
sought w ays to press grievances against the company and protect their jobs. Employees w ere
kept out of the loop, felt they w ere not respected, and looked to alternative arrangements to
get their voices heard by management. The communication breakdow n led to a major conflict
betw een the employees and the company’s CEO. What can be done about conflict to make sure
it does not get out of control?
Co nflict can be a serio us pro blem in any o rganizatio n. It might no t lead to co -CEO s
go ing after each o ther in co urt, as happened when bro thers Wallace and Harriso n
McCain battled o ver co mmand o f McCain Fo o ds, the New Brunswick-based french-fry
empire they had built to gether. Still, it can certainly hurt an o rganizatio n’s perfo rm-
ance and lead to the lo ss o f go o d emplo yees.
Conflict Defined
Several co mmo n themes underlie mo st definitio ns o f co nflict.43 Co nflict must be per-
ceived by the parties to it; if no o ne is aware o f a co nflict, it is generally agreed that no
co nflict exists. Co nflict also invo lves o ppo sitio n o r inco mpatibility, and so me fo rm o f
interactio n between the parties.44 These facto rs set the co nditio ns that determine the
beginning po int o f the co nflict pro cess. We can define co nflict , then, as a pro cess that
begins when o ne party perceives that ano ther party has negatively affected, o r is abo ut
to negatively affect, so mething that the first party cares abo ut.45
This definitio n is deliberately bro ad. It describes that po int in any o ngo ing activity
when an interactio n “cro sses o ver” to beco me co nflict. It includes the wide range o f
co nflicts that peo ple experience in gro ups and o rganizatio ns—inco mpatibility o f go als,
differences over interpretatio ns o f facts, disagreements based o n behavio ural expectatio ns,
and the like. Finally, o ur definitio n is flexible eno ugh to co ver the full range o f co nflict
levels— fro m subtle fo rms o f disagreement to o vert and vio lent acts.
Co nflict has po sitive sides and negative sides, which we will discuss further when
we co ver functio nal and dysfunctio nal co nflict. Fo r mo re o n this debate, refer to the
Point/Counterpoint discussio n o n page 212.
Functional vs. Dysfunctional Conflict
No t all co nflict is bad. So me co nflicts suppo rt the go als o f the gro up and impro ve its per-
fo rmance; these are functional, o r co nstructive, fo rms o f co nflict. But there are co nflicts that
hinder gro up perfo rmance; these are dysfunctional, o r destructive, fo rms o f co nflict. The
criterio n that differentiates functio nal fro m dysfunctio nal co nflict is gro up perfo rmance. If
a gro up is unable to achieve its go als because o f co nflict, then the co nflict is dysfunctio nal.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 201

Exhib it 6-5 pro vides a way o f

EXHIBIT 6-5 Conflict Intensity Continuum
visualizing co nflict behavio ur. All
co nflicts exist so m ewhere alo ng Annihilatory Overt effort s to d e stroy
* Is conflict always
bad? this co ntinuum. At the lo wer part
confli ct the other party

o f the co ntinuum, we have co nflicts Aggre ssive phy sical atta ck s

characterized by sub tle, indirect,
Threat s an d ultimatum s
and highly co ntro lled fo rm s o f
tensio n. An illustratio n might be a student po litely o bjecting to A ssertive ver b al atta ck s
a po int the instructo r has just made in class. Co nflict intensities
Overt que stioning or
escalate as they mo ve upward alo ng the co ntinuum, until they challenging of other s
beco me highly destructive. Strikes and lo cko uts, rio ts, and wars
M inor d isagreement s or
clearly fall into this upper range. Fo r the mo st part, yo u sho uld No misun d er stan d ing s
assume that co nflicts that reach the upper ranges o f the co ntin- confli ct

uum are alm o st always dysfunctio nal. Functio nal co nflicts are
typically co nfined to the lo wer range o f the co ntinuum . Case
Incident— Managing Conflict at Schneider National o n the CD-RO M
that acco mpanies this textbo o k describes ho w functio nal co n-
flict impro ves an o rganizatio n.
Sources: Based on S. P. Robbins, M anaging Organizational
Conflict: A Nontraditional Approach (Upper Saddle River, NJ:
Prentice Hall, 1974), pp. 93–97; and F. Glasl, “ The Process of
Conflict Escalation and the Roles of Third Parties,” in Conflict
M anagement and Industrial Relations, ed. G. B. J. Bomers and
R. Peterson (Boston: Kluw er-Nijhoff, 1982), pp. 119–140.

RESEARCH FINDINGS Conf lict

Research o n co nflict has yet to clearly identify tho se situatio ns in which co nflict is mo re
likely to be co nstructive than destructive. Ho wever, there is gro wing evidence that the
so urce o f the co nflict is a significant facto r determ ining functio nality.46 Co gnitive cognitive conflict Conflict that
co nflict , which is task-o riented and o ccurs because o f differences in perspectives and is task-oriented and related to
judgments, can o ften result in identifying po tential so lutio ns to pro blems. Thus it wo uld differences in perspectives and
judgments.
be regarded as functio nal co nflict. Affective co nflict , which is emo tio nal and aimed at
a perso n rather than an issue, tends to be dysfunctio nal co nflict. affective conflict Conflict that is
O ne study o f 53 teams fo und that co gnitive co nflict, because it generates mo re alterna- emotional and aimed at a person
rather than an issue.
tives, led to better decisio ns, mo re acceptance o f the decisio ns, and o wnership o f the deci-
sions. Teams experiencing affective conflict, where members had personality incompatibilities
and disputes, sho wed po o rer decisio ns and lo wer levels o f acceptance o f the decisio ns.47
Because co nflict can invo lve o ur emo tio ns in a variety o f ways, it can also lead to stress.
Yo u may want to refer to the O B on the Edge— Stress at Work o n pages 98–105 to get so me
ideas o n ho w to manage the stress that might arise fro m co nflicts yo u experience.

CONFLICT RESOLUTION
Co nflict in the wo rkplace can affect the effectiveness o f individuals, teams, and the entire 5 How can conflict be
organization.48 One study found 20 percent of managers’ time is spent managing conflict.49 resolved?
O nce co nflict arises, what can be do ne to reso lve it? The way a co nflict is defined
go es a lo ng way toward establishing the so rt o f o utco mes that might settle it. Fo r instance,
if I define o ur salary disagreement as a zero -sum o r win-lose situation— that is, if yo u get
the increase in pay yo u want, there will be just that amo unt less fo r me— I am go ing to
be far less willing to lo o k fo r mutual so lutio ns than if I frame the co nflict as a po tential
win-win situation. So individual attitudes to ward a co nflict are impo rtant, because atti-
tudes typically define the set o f po ssible settlements.

Conflict M anagement Strategies

Co nflict researchers o ften use dual co ncern theo ry to describe peo ple’s co nflict man-
agement strategies. Dual co ncern theo ry co nsiders how o ne’s degree o f cooperativeness (the
degree to which o ne tries to satisfy the o ther perso n’s co ncerns) and assertiveness ( the
202 Part 3 Int eract ing Eff ect ively

degree to which o ne tries to satisfy o ne’s o wn co ncerns) determine ho w a co nflict is

handled.50 The five co nflict-handling strategies identified by the theo ry are as fo llo ws:51

• Forcing. Impo sing o ne’s will o n the o ther party.

• Problem solving. Trying to reach an agreement that satisfies bo th o ne’s o wn and
the o ther party’s aspiratio ns as much as po ssible.
• Avoiding. Igno ring o r minimizing the impo rtance o f the issues creating the
co nflict.
• Yielding. Accepting and inco rpo rating the will o f the o ther party.
• Compromising. Balancing co ncern fo r o neself with co ncern fo r the o ther party
in o rder to reach a so lutio n.

Fo rcing is a win-lo se so lutio n, as is yielding, while pro blem so lving seeks a win-win
so lutio n. Avo iding co nflict and pretending it do es no t exist, and co mpro mising, so that
neither perso n gets what they want, can yield lo se-lo se so lutio ns. Exhibit 6-6 illustrates
these five strategies, alo ng with specific actio ns that o ne might take when using them.
Cho o sing a particular strategy fo r reso lving co nflict depends o n a variety o f facto rs.
Research sho ws that while peo ple may cho o se amo ng the strategies, they have an under-
lying dispo sitio n to handle co nflicts in certain ways.52 In additio n, so me situatio ns call
fo r particular strategies. Fo r instance, when a small child insists o n trying to run into the
street, a parent may need a fo rcing strategy to restrain the child. Co -wo rkers who are

EXHIBIT 6-6 Conflict-Handling Strategies and Accompanying Behaviours

Assertive

Forcing Problem solving

Sat isf ying one’s ow n int erest s
w it hout concern f or t he ot her’s
int erest s
• M ake t hreat s and bluf f s
Trying to satisfy one’s ow n concerns
Clarif ying dif f erences t o f ind
mut ually benef icial out comes
• Exchange inf ormat ion about
priorit ies and pref erences

• M ake persuasive argument s • Show insight s

• M ake posit ional commit ment s • M ake t rade-of f s bet w een
import ant and unimport ant issues
ASSERTIVENESS

Compromising
Giving up somet hing t o reach an
out come (done by bot h part ies)
• M at ch ot her’s concessions
• M ake condit ional promises
and t hreat s
• Search f or a middle ground

Avoiding Yielding
Wit hdraw ing f rom or ignoring Placing t he ot her’s int erest s above
Unassertive

conf lict one’s ow n

• Don’t t hink about t he issues • M ake unilat eral concessions
• M ake uncondit ional promises
• Of f er help

Uncooperative Cooperative

COOPERATIVENESS
Trying to satisfy the other person’s concerns

Sources: Based on K. W. Thomas, “ Conflict and Negotiation Processes in Organizations,” in Handbook of

Industrial and Organizational Psychology, vol. 3, 2nd ed., ed. M . D. Dunnette and L. M . Hough (Palo
Alto, CA: Consulting Psychologists Press, 1992), p. 668; C. K. W. De Dreu, A. Evers, B. Beersma, E. S.
Kluw er, and A. Nauta, “ A Theory-Based M easure of Conflict M anagement Strategies in the Workplace,”
Journal of Organizational Behavior 22, no. 6 (September 2001), pp. 645–668; and D. G. Pruitt and J.
Rubin, Social Conflict: Escalation, Stalemate and Settlement (New York: Random House, 1986).
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 203

having a co nflict o ver setting deadlines to co mplete a pro ject o n time may decide that
pro blem so lving is the best strategy to use.
This chapter’s Learning About Yourself Exercise o n page 213–214 gives yo u the o ppo rtu-
nity to discover yo ur preferred co nflict-handling strategy. As well, this chapter’s CBC Video
Case Incident shows tow men’s preference in handling their co nflic. OB in Action— Choosing Buggy Wars
Strategies to Deal W ith Conflicts indicates the situatio ns in which each strategy is best used.
The disagreem ent between the City o f Vanco uver and develo per Peter Wall pro -
duced a co m pro m ise that co uld be called a lo se-lo se so lutio n, as the fo llo wing O B in
the Street sho ws.

O B I N T H E ST REET

One Wall Centre Goes Tw o-Toned

Is compromise necessarily the b est w ay to go? When develo per Peter Wall hired
architect Peter Busby to design O ne Wall Centre in do wnto wn Vanco uver, the two
planned a massive glass skyscraper.53 City co uncil reviewed the plans and o kayed
the design, even granting a building height co nsiderably higher than tho se in the
surro unding neighbo urho o d.
The plans m ade the building lo o k translucent, but as the to wer went up, the
glass lo o ked black and im penetrable. Co m plaints started co m ing in to City Hall,
because the assumptio n had been that the building wo uld use clear glass. The archi-
tect said that Wall had changed his m ind abo ut the co lo ur o f the glass o nce co n-
structio n started. Wall claim ed, ho wever, that the city had
appro ved the darker glass sample in use. Unfo rtunately, no
o ne co uld find the glass sam ples. O B I N A CTI ON
A planned lawsuit by the city was sto pped fo r lack o f evi-
Choosing Strategies to Deal With
dence. So the two sides reached a co mpro mise: The 48-sto rey 55
building wo uld have its lo wer levels in blackened glass, and
Conflicts
the to p 17 flo o rs in lighter glass, rather than tearing down the Forcing
building and starting o ver. Neither the city no r the devel- ➔ In emergencies
o per o btained their preferred so lutio n, and meanwhile res- ➔ On important but unpopular issues
idents o f Vanco uver will have the two -to ne building, a visible
➔ On vital issues when you know you are right
rem inder o f the o utco m e o f co m pro m ise, to wering o ver
➔ Against people who take advantage of noncompeti-
them fo r many years to co me.
tive behaviour

What Can Ind ivid uals Do to M anage Problem solving

Conflict? ➔ If both sets of concerns are too important to be
compromised
There are a number o f co nflict reso lutio n techniques that indi-
➔ To merge different perspectives
viduals can use to try to defuse co nflict inside and o utside the
➔ To gain commitment through a consensus
wo rkplace. These include the fo llo wing:54
➔ To mend a relationship
• Problem solving. Requesting a face-to -face meeting to
identify the pro blem and reso lve it thro ugh o pen Avoiding
discussio n. ➔ When an issue is trivial
➔ When your concerns won’t be met
• Developing superordinate goals. Creating a shared go al
that requires bo th parties to wo rk to gether, and mo ti- ➔ When potential disruption outweighs the benefits of
resolution
vates them to do so .
➔ To let people cool down and regain perspective
• Smoothing. Playing do wn differences while emphasiz-
continued
ing co mmo n interests with the o ther party.
204 Part 3 Int eract ing Eff ect ively

• Compromising. Agreeing with the o ther party that each

Choosing Strategies to Deal With
Conflicts (continued)
Yielding
➔ When you find you are wrong
➔ To show your reasonableness
➔ When issues are more important to others than
yourself
➔ To build social credits for later issues
➔ When harmony and stability are especially important
Compromising
➔ When goals are important but not worth more
assertive approaches
➔ When opponents are committed to mutually exclu-
sive goals
➔ To achieve temporary settlements to complex issues
➔ To arrive at expedient solutions under time pressure
Sources: Based on K. W. Thomas, “ Tow ard M ultidimensional
Values in Teaching: The Example of Conflict Behaviors,”
Academy of M anagement Review, July 1977, p. 487; and
C. K. W. De Dreu, A. Evers, B. Beersma, E. S. Kluw er, and A.
Nauta, “ A Theory-Based M easure of Conflict M anagement
Strategies in the Workplace,” Journal of Organizational
Behavior 22, no. 6 (September 2001), pp. 645–668.
will give up so mething o f value to reach an acco rd.
• Avoidance. Withdrawing fro m, o r suppressing, the co nflict.
The cho ice o f technique may depend o n ho w serio us the
issue is to yo u, whether yo u take a win-win o r a win-lo se
appro ach, and yo ur preferred co nflict management style.
When the co nflict is specifically wo rk-related, there are
additio nal techniques that might be used:
• Expansion of resources. The scarcity o f a reso urce— say,
mo ney, pro mo tio n o ppo rtunities, o ffice space— can cre-
ate co nflict. Expansio n o f the reso urce can create a win-
win so lutio n.
• Authoritative command. Management can use its fo rmal
autho rity to reso lve the co nflict and then co mmunicate
its desires to the parties invo lved.
• Altering the human variable. Behavio ural change tech-
niques such as human relatio ns training can alter atti-
tudes and behavio urs that cause co nflict.
• Altering the structural variables. The fo rmal o rganizatio n
structure and the interactio n patterns o f co nflicting par-
ties can be changed thro ugh jo b redesign, transfers, cre-
atio n o f co o rdinating po sitio ns, and the like.

Resolving Personality Conflict s

Perso nality co nflicts are an everyday o ccurrence in the wo rkplace. While there is no
available data fo r Canada, superviso rs in the United States spend abo ut 18 percent o f their
time handling perso nality co nflicts amo ng emplo yees.56 A variety o f facto rs leads to
perso nality co nflicts, including the fo llo wing:57
• Misunderstandings based o n age, race, o r cultural differences
• Into lerance, prejudice, discriminatio n, o r bigo try
• Perceived inequities
• Misunderstandings, rumo urs, o r falseho o ds abo ut an individual o r gro up
• Blaming fo r mistakes o r mishaps ( finger-po inting)

Perso nality co nflicts can result in lo wered pro ductivity when peo ple find it difficult
to wo rk to gether. The individuals experiencing the co nflict may seek sympathy fro m
o ther members o f the wo rk gro up, causing co -wo rkers to take sides. The ideal so lutio n
wo uld be fo r the two peo ple in co nflict to wo rk it o ut between them selves, witho ut
invo lving o thers, but this do es no t always happen. Ho wever, it is no t always po ssible fo r
peo ple to talk things o ut, and it may be a Western cultural bias to expect that individ-
uals sho uld generally be able to do so .57 O B in Action— Handling Personality Conflicts
o n page 205 suggests ways o f dealing with perso nality co nflicts in the wo rkplace.

N EGOTIATION
When management-employee relations break down, it is not unusual that employees start to con-
sider joining a labour union. If the employees are successful in their bid for unionization, then it is the
labour union that negotiates with management over wage and working conditions. While Dofasco’s
mill employees did consider joining either the Canadian Auto Workers or the United Steelworkers
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 205

union, they have not done so yet. One reason might be that CEO John M ayberry worked hard to
negotiate effectively with his employees and to foster a supportive environment for all. He did this
by creating a performance culture, where employee bonuses and pay are tied to how well the com-
pany does. He also encouraged employees to learn from other companies, and even sent a few
employees around the world to see what other companies do and how they do it. M ayberry organ-
ized employees into teams, getting them to be accountable and to work together to solve prob-
lems, make plans and schedules, and provide team members with feedback. In other words, Mayberry
created a win-win situation. What steps can help ensure negotiations are effective?

When parties are po tentially in co nflict, they m ay cho o se to nego tiate a reso lutio n. 6 How does one
Nego tiatio n o ccurs in the interactio ns o f almo st everyo ne in gro ups and o rganizatio ns: negotiate effectively?
Labo ur bargains with m anagem ent; m anagers nego tiate with em plo yees, peers, and
senio r management; salespeo ple nego tiate with custo mers; purchasing agents nego tiate
with suppliers; em plo yees agree to answer a co lleague’s pho ne fo r a few m inutes in
negotiation A process in which
exchange fo r so me past o r future benefit. In to day’s team-based o rganizatio ns, nego ti- two or more parties exchange goods
atio n skills beco me critical so that teams can wo rk to gether effectively. or services and try to agree upon the
We define nego tiatio n as a pro cess in which two o r mo re parties try to agree o n the exchange rate for them.
exchange rate fo r go o ds o r services they are trading.59 No te
that we use the terms negotiation and bargaining interchangeably.
Within a nego tiatio n, o ne sho uld be aware that individu- O B I N A CTI ON
als have issues, positions, and interests. Issues are item s that are
specifically placed o n the b argaining tab le fo r discussio n.
Handling Personality Conflicts
Positions are the individual’s stand o n the issues. Fo r instance, Tips for employees having a personality
salary m ay be an issue fo r discussio n. The salary yo u ho pe to conflict
receive is yo ur po sitio n. Finally, interests are the underlying ➔ Communicate directly with the other person to
co ncerns that are affected by the nego tiatio n reso lutio n. Fo r resolve the perceived conflict (emphasize problem
instance, the reaso n that yo u m ight want a six-figure salary solving and common objectives, not personalities).
is that yo u are trying to buy a ho use in Vanco uver, and that is ➔ Avoid dragging co-workers into the conflict.
yo ur o nly ho pe o f being able to m ake m o rtgage paym ents. ➔ If dysfunctional conflict persists, seek help from
Nego tiato rs who reco gnize the underlying interests o f them- direct supervisors or human resource specialists.
selves and the o ther party may have mo re flexibility in achiev-
ing a reso lutio n. Fo r instance, in the exam ple just given, an Tips for third -party observers of a
emplo yer who o ffers yo u a mo rtgage at a lo wer rate than the personality conflict
bank do es, o r who pro vides yo u with an interest-free lo an that ➔ Do not take sides in someone else’s personality
can be used against the mo rtgage, may be able to address yo ur conflict.
underlying interests witho ut actually meeting yo ur salary po si- ➔ Suggest the parties w ork things out them-
tio n. Yo u may be satisfied with this alternative, if yo u under- selves in a constructive and positive way.
stand what yo ur interest is. ➔ If dysfunctional conflict persists, refer the prob-
In terest-b ased b argain in g en ab led Van co uver-b ased lem to the parties’ direct supervisors.
No rskeCanada ( no w Catalyst Paper Co rpo ratio n) to sign a
Tips for managers w hose employees are
m utually b en eficial five-year co n tract w ith th e having a personality conflict
Co mmunicatio ns, Energy and Paperwo rkers Unio n o f Canada
➔ Investigate and document conflict.
in fall 2002, after just nine days o f nego tiatio ns.60 While the
➔ If appropriate, take corrective action (e.g., feed-
unio n and No rkseCanada had experienced bitter co nflict in
back or behaviour shaping).
previo us nego tiatio ns, in this particular situatio n bo th sides
➔ If necessary, attempt informal dispute
agreed to fo cus m o re o n the interests o f the parties, rather
resolution.
than o n dem ands and co ncessio ns. Bo th sides were pleased
with the o utco m e. ➔ Refer difficult conflicts to human resource spe-
cialists or hired counsellors for formal resolution
attempts and other interventions.
Bargaining Strategies
There are two general appro aches to nego tiatio n— distributive Source: R. Kreitner and A. Kinicki, Organizational Behavior,
6th ed. (New York: M cGraw Hill, 2004), p. 492, table 14-1.
bargaining and integrative bargaining.61 These are co mpared in Reprinted by permission of M cGraw Hill Education.
Exhibit 6-7 o n page 206.
206 Part 3 Int eract ing Eff ect ively

EXHIBIT 6-7 Distributive vs. Integrative Bargaining

Bargaining Distrib utive Integrative

Characteristic Bargaining Bargaining

Available resources Fixed amount of resources to be divided Variable amount of resources to be divided

Primary motivations I w in, you lose I w in, you w in

Primary interests Opposed to each other Convergent or congruent w ith each other

Focus of relationships Short-term Long-term

Source: Based on R. J. Lew icki and J. A. Litterer, Negotiation (Homew ood, IL: Irw in, 1985), p. 280.

Distributive Bargaining
distributive bargaining Distributive bargaining is a nego tiating strategy that o per-
Negotiation that seeks to divide up ates under zero -sum ( win-lo se) co nditio ns. That is, any gain
a fixed amount of resources; a win-
lose solution. * Should you try to
win at any cost whe n
I make is at yo ur expense, and vice versa. Pro bably the mo st
widely cited example o f distributive bargaining is in labo ur-
you bargain? management nego tiatio ns o ver wages. Typically, manage-
ment co mes to the bargaining table determined to keep its
labo ur co sts as lo w as po ssible. Since every cent mo re that
labo ur nego tiates increases management’s co sts, each party
bargains aggressively and treats the o ther as an o ppo nent who must be defeated.
When engaged in distributive bargaining, a party fo cuses o n trying to get the o ppo -
nent to agree to a specific target po int, o r to get as clo se to it as po ssible. Examples o f such
tactics are persuading yo ur o ppo nent o f the impo ssibility o f reaching his o r her target
po int and the advisability o f accepting a settlement near yo urs; arguing that yo ur target
is fair, while yo ur o ppo nent’s is no t; and trying to get yo ur o ppo nent to feel emo tio n-
ally genero us to ward yo u and thus accept an o utco me clo se to yo ur target po int.

integrative bargaining
Negotiation that seeks one or more
settlements that can create a win-
win solution.
Integrative Bargaining
In co ntrast to distrib utive b argaining, integrative bargaining o perates under the
assumptio n that there exists o ne o r mo re settlements that can create a win-win so lutio n.
In terms o f intrao rganizatio nal behavio ur, all things being equal, integrative bargaining
is preferable to distributive bargaining. Why? Because the fo rmer builds lo ng-term rela-
tio nships and m akes wo rking to gether in the future easier. It bo nds nego tiato rs and
allo ws bo th sides to leave the bargaining table feeling that they have achieved a vic-
to ry. Fo r instance, in unio n-management nego tiatio ns, bo th sides might sit do wn to
figure o ut o ther ways to reduce co sts within an o rganizatio n, so that it is po ssible to
have greater wage increases. Distributive bargaining, o n the o ther hand, leaves o ne party
a lo ser. It tends to build anim o sities and deepen divisio ns when peo ple m ust wo rk
to gether o n an o ngo ing basis.

How to Negotiate
Exhibit 6-8 o n pagae 207 pro vides a sim plified m o del o f the nego tiatio n pro cess. It
views nego tiatio n as m ade up o f five steps: ( 1) develo ping a strategy; ( 2) defining
gro und rules; ( 3) clarificatio n and justificatio n; ( 4) bargaining and pro blem so lving;
and ( 5) clo sure and implementatio n.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 207

EXHIBIT 6-8 The Negotiation Process

Developing a Defining Clarification and Bargaining and Closure and

strategy ground rules justification problem solving implementation

Source: This model is based on R. J. Lew icki, “ Bargaining and Negotiation,” Exchange: The Organizational Behavior Teaching Journal 6, no. 2
(1981), pp. 39–40.

Develo ping a Strategy

Befo re yo u start nego tiating, yo u need to do yo ur ho mewo rk. What is the nature o f the
co nflict? What is the histo ry leading up to this nego tiatio n? Who is invo lved and what
are their perceptio ns o f the co nflict? What do yo u want fro m the nego tiatio n? What
are your go als? It o ften helps to put yo ur go als in writing and develo p a range o f o ut-
co mes—fro m “mo st ho peful” to “minimally acceptable”—to keep yo ur attentio n fo cused.
Yo u also want to prepare an assessment o f what yo u think the o ther party to yo ur
nego tiatio n’s go als are. What are they likely to ask fo r? Ho w entrenched are they likely to
be in their po sitio n? What intangible o r hidden interests may be impo rtant to them?
What might they be willing to settle fo r? When yo u can anticipate yo ur o ppo nent’s po si-
tio n, yo u are better equipped to co unter his o r her arguments with the facts and figures
that suppo rt yo ur po sitio n.
In determ ining go als, parties are well advised to co nsider their “ target and resist-
ance” po ints, as well as their best alternative to a nego tiated agreement ( BATNA) .62 The BATNA The best alternative ao a
buyer and the seller represent two nego tiato rs. Each has a target point that defines what negotiated agreement; the outcome
he o r she wo uld like to achieve. Each also has a resistance point, which marks the lo west an individual faces if negotiations fail.

o utco me that is acceptable— the po int belo w which each wo uld break o ff nego tiatio ns
rather than accept a less favo urable settlement. The area between these two po ints makes
up each nego tiato r’s aspiratio n range. As lo ng as there is so m e o verlap between the
buyer’s and seller’s aspiratio n ranges, there exists a bargaining zo ne where each side’s bargaining zone The zone
aspiratio ns can be met. Referring to Exhibit 6-9 o n page 208, if the buyer’s resistance po int between each party’s resistance
is $450, and the seller’s resistance po int is $500, then the two may no t be able to reach point, assuming there is overlap in
this range.
agreement because there is no overlap in their aspiratio n ranges. Recent research suggests
that having an attractive BATNA is particularly po werful to a nego tiato r when the bar-
gaining zo ne is sm all.63 The lengthy and bitter nego tiatio ns between the Natio nal
Ho ckey League Players’ Asso ciatio n and the Natio nal Ho ckey League o wners under- Eric C. Gould’s Negotiation Site
sco red that there was no o verlap in the bargaining zo ne o n where the salary cap sho uld www.batna.com
be set, as the fo llo wing O B in the Workplace sho ws.

EXHIBIT 6-9 Staking Out the Bargaining Zone

$400 $475 $525 $600

Buyerís aspir ation r ange

Seller ’s aspir ation r ange
Barg aining
zone

Buyer’s Seller’s Buyer’s Seller’s

target resistance resistance target
point point point point
208 Part 3 Int eract ing Eff ect ively

O B I N T H E W O RK PL A C E

Hockey Union and M anagement Fail to Score a Goal

How could an entire hockey season be cancelled? In early February 2005, Gary Bettman,
Natio nal Ho ckey League (NHL) co mmissio ner, was signalling to ho ckey fans thro ugh-
o ut No rth America that the 2004–2005 ho ckey seaso n was abo ut to be called o ff.64
Hockey players had been trying to negotiate a new contract with NHL management since
2003, meeting 14 times in 2003, 14 in 2004, and 9 times by early February to try to
reso lve their differences. Little success had been made, despite all o f tho se meetings.
Each side blam ed the o ther fo r the stalem ate and indi-
cated that their BATNA—no t playing any ho ckey at all fo r an
entire seaso n— was mo re desirable than ending the dispute.
“Their [the ho ckey players’] o utright rejectio n o f o ur pro -
po sal yesterday [February 9, 2005] I think speaks mo re to
the fact that the unio n is never, ever, ever, ever—under any cir-
cumstances— prepared to play under any kind o f co st-cer-
tain , eco n o m ic p artn ersh ip , salary cap — yo u p ick th e
term— type o f system,” said Bill Daly, executive vice-presi-
dent and chief legal o fficer o f the NHL.
Ho ckey players saw the issue so mewhat differently. “They
[management] have made it clear they have o nly o ne way
o f do ing things, and that’s thro ugh their hard-cap system,”
claim ed Natio nal Ho ckey League Players’ Asso ciatio n
( NHLPA) senio r directo r Ted Saskin.
The NHL and the NHLPA settled their differences in July
2005, and the players agreed to a salary cap, so mething they
had said they abso lutely wo uld no t do thro ugho ut mo st o f
the nego tiatio ns. The 2004–2005 seaso n’s 1230 regular-sea-
Gary Bettman (left), the NHL commissioner, shakes hands w ith for-
so n gam es were cancelled and there was no Stanley Cup
mer head of the NHLPA, Bob Goodenow, after they finally reached
an end t o t he st alemat e t hat led t o t he cancellat ion of t he
cham p io n fo r the first tim e since 1 91 9 , when the final
2004–2005 hockey season. Neither man seemed able to celebrate between Mo ntreal and Seattle was cancelled because o f a flu
victory at the end of their lengthy negotiations. epidemic.

Negotiation skills are critical in the

buyer-seller relationship. At this
open-air cheese market in
Alkmaar, the Netherlands, tw o
purchasing agents for food buyers
taste a sample of Edam cheese
before they negotiate prices w ith
the seller of the cheese.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 209

O ne’s BATNA represents the alternative that an individual will face if nego tiatio ns fail.
Fo r instance, during the winter 2005 ho ckey nego tiatio ns, fo r bo th ho ckey players and
o wners, the BATNA was the lo ss o f the 2004–2005 seaso n.
As part o f yo ur strategy, yo u sho uld determine no t o nly yo ur BATNA but so me esti-
mate o f the o ther side’s as well.65 If yo u go into yo ur nego tiatio n having a go o d idea o f
what the o ther party’s BATNA is, yo u will have a better understanding o f how far yo u can
press to achieve the results yo u desire.
Yo u can practise yo ur nego tiating skills in the Working W ith O thers Exercise o n page
214–215.

Defining Gro und Rules

O nce yo u have do ne yo ur planning and develo ped a strategy, yo u are ready to begin
defining the gro und rules and pro cedures with the o ther party o ver the nego tiatio n
itself. Who will do the nego tiating? Where will it take place? What time co nstraints, if
any, will apply? To what issues will nego tiatio n be limited? Will there be a specific pro -
cedure to fo llo w if an im passe is reached? D uring this phase, the parties will also
exchange their initial pro po sals o r demands. The Ethical Dilemma Exercise o n page 215
co nsiders whether it is ever appro priate to lie during nego tiatio ns.

Clarificatio n and Justificatio n

When initial po sitio ns have been exchanged, bo th yo u and the o ther party will explain,
amplify, clarify, bo lster, and justify yo ur o riginal demands. This part o f the pro cess need
no t be co nfro ntatio nal. Rather, it is an o ppo rtunity fo r educating and info rming each
o ther o n the issues, why they are im po rtant, and ho w each arrived at their initial
demands. This is the po int at which yo u might want to pro -
vide the o ther party with any do cumentatio n that helps suppo rt
yo ur po sitio n. O B I N A CTI ON
Bargaining and Pro blem So lving
Tips for Getting to Yes
R. Fisher and W. Ury present four principles for win-win
The essence o f the nego tiatio n pro cess is the actual give and
negotiations in their book Getting to Yes:
take in trying to hash o ut an agreement. It is here that co nces-
sio ns will undo ubtedly need to be made by bo th parties. O B in • Separate the people from the problem . Work
on the issues at hand, rather than getting involved
Action— Tips for Getting to Yes gives yo u further ideas o n ho w
in personality issues between the parties.
to make nego tiating wo rk fo r yo u, based o n the po pular bo o k
Getting to Yes. 66 • Focus on interests, not positions. Try to identify
what each person needs or wants, rather than com-
ing up with an unmovable position.
Clo sure and Implementatio n
The final step in the nego tiatio n pro cess is fo rm alizing the • Look for ways to achieve mutual gains. Rather
than focusing on one “ right” solution for your posi-
agreem ent that has been wo rked o ut and develo ping pro ce-
tion, brainstorm for solutions that will satisfy the
dures that are necessary fo r implementatio n and mo nito ring.
needs of both parties.
Fo r m ajo r nego tiatio ns— which wo uld include everything
• Use objective criteria to achieve a fair solution.
fro m labo ur-management nego tiatio ns such as in the Natio nal
Try to focus on fair standards, such as market value,
Ho ckey League situatio n, to bargaining o ver lease term s, to
expert opinion, norms, or laws to help guide deci-
buying real estate, to nego tiating a jo b o ffer fo r a senio r man-
sion making.
agem ent p o sitio n— this will req uire ham m ering o ut the
specifics in a fo rm al co ntract. In m o st cases, ho wever, clo s- Source: R. Fisher and W. Ury, Getting to Yes (New York:
ing o f the nego tiatio n pro cess is no thing m o re fo rm al than Penguin Books, 1991).

a handshake.
210 Part 3 Int eract ing Eff ect ively

SUMMARY AND IMPLICATIONS

1 How d oes communication w ork? Findings in this chapter suggest that the go al
SNAPSHOT SUM M ARY o f perfect co mmunicatio n is unattainable. Yet there is evidence that demo nstrates
a po sitive relatio nship between effective co mmunicatio n ( which includes facto rs
1 The Communication such as perceived trust, perceived accuracy, desire fo r interactio n, to p-management
Process
receptiveness, and upward info rmatio n requirements) and emplo yee pro ductiv-
2 Barriers to Effective ity.67 Therefo re, cho o sing the co rrect channel, being a go o d listener, and using
Communication feedback well may make fo r mo re effective co mmunicatio n.
Filtering
Selective Perception 2 What are the b arriers to communication? Human beings will always be sub-
Defensiveness ject to erro rs in co mmunicatio n because o f filtering, selective perceptio n, defen-
siveness, info rm atio n o verlo ad, and language. What is said m ay no t be what is
Information Overload
heard. Whatever the sender’s expectatio ns, the deco ded message in the mind o f the
Language
receiver represents his o r her reality. This “reality” will determine the individual’s reac-
Communicating Under
Stress tio ns, including perfo rmance, mo tivatio n, and degree o f satisfactio n in the wo rkplace.

3 Current Issues in 3 What are other issues in communication? The big to pics in co mmunicatio n
Communication are electro nic co mmunicatio ns, the impo rtance o f no nverbal co mmunicatio n and
Electronic Communications silence, gender differences in co m m unicatio n, and cro ss-cultural differences in
Nonverbal Communication co mmunicatio n. As we saw in this chapter, email, amo ng o ther electro nic co m-
Silence as Communication municatio ns, has beco me far mo re prevalent, is causing mo re stress, and can be mis-
Communication Barriers used so that it is no t always the mo st effective means o f co mmunicatio n. No nverbal
Between Women and Men cues help pro vide a clearer picture o f what so meo ne is trying to say. Silence can be
Cross-Cultural an im po rtant co m m unicatio n clue, and failing to pay attentio n to silence can
Communication result in missing so me o r all o f a message. Go o d co mmunicato rs hear and interpret
4 How Communication silence. We can make so me generalizatio ns abo ut differences in the co nversatio nal
Breakdow n Leads to style o f m en and wo m en; m en are m o re likely to use talk to em phasize status,
Conflict while wo men use talk to create co nnectio n. We no ted that there are a variety o f bar-
Conflict Defined riers when co mmunicating with so meo ne fro m a different culture, and that it is best
Functional vs. Dysfunctional to assume differences until similarity is pro ven, emphasize descriptio n rather than
Conflict interpretation or evaluation, practise em pathy, and treat yo ur interpretatio ns as a
5 Conflict Resolution wo rking hypo thesis.
Conflict Management
Strategies 4 What is conflict? Co nflict o ccurs when o ne perso n perceives that ano ther perso n’s
actio ns will have a negative effect o n so mething the first party cares abo ut. Many
What Can Individuals Do to
Manage Conflict? peo ple auto m atically assum e that all co nflict is bad. Ho wever, co nflict can be
Resolving Personality either functio nal ( co nstructive) o r dysfunctio nal ( destructive) to the perfo rmance
Conflicts o f a gro up o r unit. An o ptimal level o f co nflict enco urages co mmunicatio n, prevents
6 Negotiation stagnatio n, stim ulates creativity, allo ws tensio ns to be released, and plants the
seeds o f change, yet no t so much as to be disruptive o r to deter activities.
Bargaining Strategies
How to Negotiate 5 How can conflict b e resolved ? The way a co nflict is defined go es a lo ng way
to ward establishing the so rt o f o utco mes that might settle it. O ne can wo rk to ward
a win-lose solution o r a win-win solution. Co nflict management strategies are deter-
mined by the extent to which o ne wants to co o perate with ano ther party, and the
extent to which o ne asserts his o r her o wn co ncerns.

6 How d oes one negotiate effectively? Nego tiatio n is a pro cess in which two o r
mo re parties try to agree o n the exchange rate fo r go o ds o r services they are trad-
ing. Nego tiatio n is an o ngo ing activity in gro ups and o rganizatio ns. Distributive bar-
gaining can reso lve disputes, but it o ften negatively affects o ne o r mo re nego tiato rs’
satisfactio n because it is fo cused o n the sho rt term and because it is co nfro nta-
tio nal. Integrative bargaining, by co ntrast, tends to pro vide o utco mes that satisfy
all parties and build lasting relatio nships.
 O B A T W O RK
For Review
1 . Describe the communication process and identify its key components. Give an example of how this process operates
w ith both oral and w ritten messages.

2. Contrast encoding and decoding.

3. What are the advantages and disadvantages of email? Of instant messaging?

4. What is nonverbal communication? Does it aid or hinder verbal communication?

5. What does the phrase “ sometimes the real message in a communication is buried in the silence” mean?

6 . What are the managerial implications from the research contrasting male and female communication styles?

7. List four specific problems related to language difficulties in cross-cultural communication.

8. What is the difference betw een functional and dysfunctional conflict? What determines functionality?

9. What defines the bargaining zone in distributive bargaining?

1 0. How can you improve your negotiating effectiveness?

For Critical Thinking

1 . “ Ineffective communication is the fault of the sender.” Do you agree or disagree? Discuss.

2. Using the concept of channel richness, give examples of messages best conveyed by email, in face-to-face communi-
cation, and on the company bulletin board.

3. Why do you think so many people are poor listeners?

4. Assume one of your co-w orkers had to negotiate a contract w ith someone from China. What problems might he or
she face? If the co-w orker asked for advice, w hat suggestions w ould you make to help facilitate a settlement?

5. From your ow n experience, describe a situation you w ere involved in w here the conflict w as dysfunctional. Describe
another example, from your experience, w here the conflict w as functional. Would the other parties in the conflicts
agree w ith your assessment of w hat is functional or dysfunctional?

OB for You
■ If you are having difficulty communicating w ith someone, you might consider that both you and the other person are
contributing something to that breakdow n. This tends to be true even if you are inclined to believe that the other per-
son is the party more responsible for the breakdow n.

■ Often either selective perception or defensiveness gets in the w ay of communication. As you w ork in your groups on
student projects, you may w ant to observe communication flow s more critically to help you understand w ays that
communication can be improved and dysfunctional conflict avoided.

■ It may seem easier, but avoiding conflict does not necessarily have a more positive outcome than w orking w ith some-
one to resolve the conflict.

■ Trying to achieve a w in-w in solution in a conflict situation tends to lead to better relationships and greater trust.
212 Part 3 Int eract ing Eff ect ively
O B A T W O RK
PO I N T
Co nflict Is Go o d fo r an
O rganizatio n
We have made considerable progress in the last 25 years
tow ard overcoming the negative stereotype given to conflict.
M ost behavioural scientists and an increasing number of prac-
tising managers now accept that the goal of effective man-
agement is not to eliminate conflict. Rather, it is to create the
right intensity of conflict so as to reap its functional benefits.
Let’s briefly review how stimulating conflict can provide
benefits to the organization.68
• Conflict is a means by w hich to bring about radical
change. It is an effective device by w hich management
can drastically change the existing pow er structure,
current interaction patterns, and entrenched attitudes.
• Conflict facilitates group cohesiveness. While conflict
increases hostility betw een groups, external threats tend
to cause a group to pull together as a unit. Intergroup
conflicts raise the extent to w hich members identify w ith
their ow n group and increase feelings of solidarity, w hile,
at the same time, internal differences and irritations
dissolve.
• Conflict improves group and organizational effectiveness.
The stimulation of conflict sparks the search for new
means and goals and clears the w ay for innovation. The
successful resolution of a conflict leads to greater effec-
tiveness, to more trust and openness, to greater attraction
of members for on another, and to the depersonalization
of future conflicts. In fact, it has been found that as the
number of minor disagreements increases, the number
of major clashes decreases.
• Conflict brings about a slightly higher, more construc-
tive level of tension. Constructive levels of tension
improve the chances of solving the conflicts in a w ay
satisfactory to all parties concerned. When the level of
tension is very low, the parties are not sufficiently moti-
vated to do something about a conflict.
These points are clearly not comprehensive. As noted in this
chapter, conflict provides a number of benefits to an organi-
zation. However, groups or organizations that lack conflict are
likely to suffer from apathy, stagnation, groupthink, and other
debilitating problems. In fact, more organizations probably fail
because they have too little conflict rather than too much.
CO U N TERPO I N T
All Co nflicts Are
Dysfunctio nal!
It may be true that conflict is an inherent part of any group or
organization. It may not be possible to eliminate it com-
pletely. How ever, just because conflicts exist is no reason to
w orship them. All conflicts are dysfunctional, and it is one of
management’s major responsibilities to keep conflict intensity
as low as humanly possible. A few points support this case:
• The negative consequences from conflict can be devas-
tating. The list of negatives associated w ith conflict is
impressive. Obvious negatives include increased
turnover, decreased employee satisfaction, labour
grievances and strikes, sabotage, physical aggression,
and inefficiencies betw een w ork units.
• Effective managers build teamw ork. A good manager
builds a coordinated team. Conflict w orks against such
an objective. A successful w ork group is like a success-
ful sports team: Each member know s his or her role and
supports his or her teammates. When a team w orks
w ell, the w hole becomes greater than the sum of the
parts. M anagement creates teamw ork by minimizing
internal conflicts and facilitating internal coordination.
• Competition is good for an organization, but not conflict.
Competition and conflict should not be confused w ith
each other. Conflict is behaviour directed against another
party, w hereas competition is behaviour aimed at obtain-
ing a goal w ithout interference from another party.
Competition is healthy; it is the source of organizational
vitality. Conflict, on the other hand, is destructive.
• M anagers w ho accept and stimulate conflict don’t sur-
vive in organizations. The w hole argument over the
value of conflict may be open to question as long as
most senior executives in organizations view conflict tra-
ditionally. In the traditional view, any conflict is seen as
bad. Since the evaluation of a manager’s performance is
made by higher-level executives, those managers w ho
do not succeed in eliminating conflicts are likely to be
appraised negatively. This in turn w ill reduce opportuni-
ties for advancement. Any manager w ho aspires to
move up in such an environment w ould be w ise to fol-
low the traditional view and eliminate any outw ard signs
of conflict. Failure to follow this advice might result in
the premature departure of the manager.
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 213

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE

What Is Yo ur Primary Co nflict-Handling Style?

Indicate how often you rely on each of the follow ing tactics by circling the number you feel is most appropriate.
When I have a conflict at w ork, I do the follow ing:

Not at All Very M uch

1. I give in to the w ishes of the other party. 1 2 3 4 5

2. I try to realize a middle-of-the-road solution. 1 2 3 4 5

3. I push my ow n point of view. 1 2 3 4 5

4. I examine issues until I find a solution that really satisfies

me and the other party. 1 2 3 4 5

5. I avoid a confrontation about our differences. 1 2 3 4 5

6. I concur w ith the other party. 1 2 3 4 5

7. I emphasize that w e have to find a compromise solution. 1 2 3 4 5

8. I search for gains. 1 2 3 4 5

9. I stand for my ow n and the other party’s goals and interests. 1 2 3 4 5

1 0. I avoid differences of opinion as much as possible. 1 2 3 4 5

11 . I try to accommodate the other party. 1 2 3 4 5

1 2. I insist w e both give in a little. 1 2 3 4 5

1 3. I fight for a good outcome for myself. 1 2 3 4 5

1 4. I examine ideas from both sides to find a mutually optimal solution. 1 2 3 4 5

1 5. I try to make differences loom less large. 1 2 3 4 5

16 . I adapt to the other party’s goals and interests. 1 2 3 4 5

1 7. I strive w henever possible tow ard a 50-50 compromise. 1 2 3 4 5

1 8. I do everything to w in. 1 2 3 4 5

1 9. I w ork out a solution that serves my ow n as w ell as the other

party’s interests as w ell as possible. 1 2 3 4 5

20. I try to avoid a confrontation w ith the other party. 1 2 3 4 5

Scoring Key:
To determine your primary conflict-handling strategy, place the number 1 through 5 that represents your score for each
statement next to the number for that statement. Then add up the columns.

continued
214 Part 3 Int eract ing Eff ect ively

O B A T W O RK

Yield ing Compromising Forcing Prob lem solving Avoid ing

1 . ______ 2. ______ 3. ______ 4. ______ 5. ______

6 . ______ 7. ______ 8. ______ 9. ______ 1 0. ______

11 . ______ 1 2. ______ 1 3. ______ 1 4. ______ 1 5. ______

16 . ______ 1 7. ______ 1 8. ______ 1 9. ______ 20. ______

Totals ______ ______ ______ ______ ______

Your primary conflict-handling style is the category w ith the highest total. Your fallback intention is the category w ith the
second-highest total.

Source: C. K. W. De Dreu, A. Evers, B. Beersma, E. S. Kluw er, and A. Nauta, “ A Theory-Based M easure of Conflict M anagement Strategies in the
Workplace,” Journal of Organizational Behavior 22, no. 6 (September 2001), pp. 645–668. W ith permission.

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Describe a situation in w hich you ignored someone. What impact did it have on that person’s subsequent commu-
nication behaviours?

2. What differences have you observed in the w ays that men and w omen communicate?

3. You and 2 other students carpool to school every day. The driver has recently taken to playing a new radio station
quite loudly. You do not like the music, or the loudness. Using one of the conflict-handling strategies outlined in
Exhibit 6-6, indicate how you might go about resolving this conflict. Identify a number of BATNAs (b est alternative
t o a n egotiated agreement) available to you, and then decide w hether you should continue carpooling.

W O RK I N G W I TH O T H ER S EX ERC I SE

A Nego tiatio n Ro le Play

This role play is designed to help you develop your negotiating skills. The class is to break into pairs. One person w ill play the
role of Terry, the department supervisor. The other person w ill play Dale, Terry’s boss.
The Situation: Terry and Dale w ork for hockey-equipment manufacturer Bauer. Terry supervises a research laboratory.
Dale is the manager of research and development (R & D). Terry and Dale are former skaters w ho have w orked for Bauer for
more than 6 years. Dale has been Terry’s boss for 2 years.
One of Terry’s employees has greatly impressed Terry. This employee is Lisa Roland. Lisa w as hired 11 months ago. She is
24 years old and holds a master’s degree in mechanical engineering. Her entry-level salary w as $52 500 a year. She w as told
 Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 215

O B A T W O RK

by Terry that, in accordance w ith corporation policy, she w ould receive an initial performance evaluation at 6 months and a
comprehensive review after 1 year. Based on her performance record, Lisa w as told she could expect a salary adjustment at
the time of the 1-year evaluation.
Terry’s evaluation of Lisa after 6 months w as very positive. Terry commented on the long hours Lisa w as w orking, her
cooperative spirit, the fact that others in the lab enjoyed w orking w ith her, and her immediate positive impact on the project
to w hich she had been assigned. Now that Lisa’s first anniversary is coming up, Terry has again review ed Lisa’s performance.
Terry thinks Lisa may be the best new person the R & D group has ever hired. After only a year, Terry has ranked Lisa third
highest in a department of 11.
Salaries in the department vary greatly. Terry, for instance, has a basic salary of $93 800, plus eligibility for a bonus that
might add another $7000 to $11 000 a year. The salary range of the 11 department members is $42 500 to $79 000. The
low est salary is a recent hire w ith a bachelor’s degree in physics. The tw o people that Terry has rated above Lisa earn base
salaries of $73 800 and $78 900. They are both 27 years old and have been at Bauer for 3 and 4 years, respectively. The
median salary in Terry’s department is $65 300.
Terry’s Role: You w ant to give Lisa a big raise. While she is young, she has proven to be an excellent addition to the depart-
ment. You don’t w ant to lose her. M ore important, she know s in general w hat other people in the department are earning, and
she thinks she is underpaid. The company typically gives 1-year raises of 5 percent, although 10 percent is not unusual and 20
to 30 percent increases have been approved on occasion. You w ould like to get Lisa as large an increase as Dale w ill approve.
Dale’s Role: All your supervisors typically try to squeeze you for as much money as they can for their people. You under-
stand this because you did the same thing w hen you w ere a supervisor, but your boss w ants to keep a lid on costs. He w ants
you to keep raises for recent hires generally in the range of 5 to 8 percent. In fact, he has sent a memo to all managers and
supervisors stating this objective. How ever, your boss is also very concerned w ith equity and paying people w hat they are
w orth. You feel assured that he w ill support any salary recommendation you make, as long as it can be justified. Your goal,
consistent w ith cost reduction, is to keep salary increases as low as possible.
The Negotiation: Terry has a meeting scheduled w ith Dale to discuss Lisa’s performance review and salary adjustment.
In your role of either Dale or Terry, take a couple of minutes to think through the facts in this exercise and to prepare a strat-
egy. Determine w hat your target and resistance points are and w hat your BATNA is. Then you have up to 15 minutes to con-
duct your negotiation. When your negotiation is complete, the class w ill compare the various strategies used and the
outcomes that resulted.

ETH I C A L D I LEM M A EX ERC I SE

Is It Unethical to Lie and

Deceive During Nego tiatio ns?
It has been said that the w hole notion of negotiation is
built on ethical quicksand: To succeed, you must deceive. Is
this true? Apparently a lot of people think so. For instance,
one study found that 28 percent of negotiators lied about a
common interest issue during negotiations, w hile another
study found that 100 percent of negotiators either failed to
reveal a problem or actively lied about it during negotiations
if they w ere not directly asked about the issue.
Is it possible for someone to maintain high ethical stan-
dards and, at the same time, deal w ith the daily need to
negot iat e w it h bosses, peers, st aff , people f rom ot her
organizations, friends, and even relatives?

coninued
216 Part 3 Int eract ing Eff ect ively
O B A T W O RK
We can probably agree that bald-faced lies during nego-
tiation are w rong. At least most ethicists w ould probably
agree. The universal dilemma surrounds the little lies—the
omissions, evasions, and concealments that are often nec-
essary to best an opponent.
During negotiations, w hen is a lie a lie? Is exaggerating
benefits, dow nplaying negatives, ignoring flaw s, or saying
“ I don’t know ” w hen in reality you do considered lying? Is
declaring that “ this is my final offer and nonnegotiable”
(even w hen you are posturing) a lie? Is pretending to bend
over backw ard t o make meaningf ul concessions lying?
Rather than being unethical practices, the use of these
CA S E I N C I D EN T
Emailing “Lazy” Employees
Imagine receiving the follow ing email from your CEO:
We are getting less than 40 hours of w ork from a large
number of our EM PLOYEES. The parking lot is sparsely
used at 8 a.m.; likew ise at 5 p.m. As managers, you
either do not know w hat your EM PLOYEES are doing
or you do not CARE. In either case, you have a problem
and you w ill fix it or I w ill replace you. :-{{
NEVER in my career have I allow ed a team w hich
w orked for me to think they had a 40-hour job. I have
allow ed YOU to create a culture w hich is permitting
this. NO LONGER. :-|
The note (paraphrased) continues: “ Hell w ill freeze over
before any more employee benefits are given out. I w ill be
w atching the parking lot and expect it to be substantially
full at 7:30 a.m. and 6:30 p.m. on w eekdays and half full on
Saturdays. You have tw o w eeks. Tick, tock. : (”
:-{{ = very angry :-| = dissappointed : ( = frow ing
CBC V I D EO CA SE I N C I D EN T
Buggy Wars
Tw o friends and neighbours arrange to go into business
together and then become bitter rivals: This is the story of
Bob Bell and M ichael Sharpe, w ho once lived just f our
houses apart on Oxford Street in Guelph, Ontario.
“ lies” is considered by many as indicators that a negotiator
is strong, smart, and savvy.
When are evasiveness and deception out of bounds? Is
it naive to be completely honest and bare your soul during
negotiations? Or are the rules of negotiations unique: Is
any t act ic t hat w ill im prove your chance of w inning
acceptable?
Sources: Based on M . E. Schw eitzer, “ Deception in Negotiations,” in
Wharton on M aking Decisions, ed. S. J. Hoch and H. C. Kunreuther
(New York: W iley, 2001), pp. 187–200; and M . Diener, “ Fair Enough,”
Entrepreneur, January 2002, pp. 100–102.
Questions
1 . What impact w ould this message have on you if you
received it?
2. Is email the best w ay to convey such a message?
3. What problems might arise if people outside the
organization saw this email?
4. What suggestions, if any, w ould you make to the
CEO to help improve communication effectiveness?
5. What conflict-handling style is this CEO using? What
might be a more effective style? Why?
Sources: Based on E. Wong, “ Stinging Office E-M ail Lights
‘Firestorm,’” Globe and M ail, April 9, 2001, p. M 1; P. D. Broughton,
“ Boss’s Angry Email Sends Shares Plunging,” Daily Telegraph of
London , April 6, 2001; D. Stafford, “ Shattering the Illusion of
Respect,” Kansas City Star, M arch 29, 2001, p. C1.
Bell and Sharpe thought they had a good idea for a new
business venture—a bicycle trailer—but the good idea turned
into a long, sizzling struggle.

Bell invented the bicycle trailer. Shortly after coming up
w it h t he idea, he began t o design and build t he bicycle
trailer in his garage. Once he shared his idea w ith Sharpe,
both thought they could form a successful partnership by
draw ing upon each other’s expertise. Bell, an engineer by
trade, w ould take on research and development; Sharpe,
a f orm er com put er sof t w are sales m anager and career
manager, w ould focus on marketing. Sharpe put together
t he business plan— but bef ore it w as f inalized, t he deal
fell apart.
The major point of conf lict bet w een Bell and Sharpe
w as royalt ies. Bell w ant ed t o license t he bicycle t railer
design to Sharpe and collect a fee for each bicycle trailer
produced. Sharpe w anted Bell to invest more in the venture
and share the financial risk. How ever, Bell did not see any
grounds for negotiation. Bell considered the bicycle trailer
his idea. He had designed it, he had bought the materials
to build it, and he had put in the time to develop the final
p ro d u ct . W h en b o t h p ar t ies h ired law yer s an d Bell
demanded intellectual property rights, the great Canadian
buggy w ar began.
Bell planned a slow, steady campaign, w orking from the
basement of his home w ith one employee. He started sell-
ing his cargo trailer, the WIKE, at the local farmers’ mar-
ket. His goal w as to sell 20 trailers the first year and 500 in
the coming year. Bell continued his “ go slow, get it right”
campaign, selling locally and fine-tuning his trailer to carry
children. How ever, he eventually decided that making every
bicycle trailer himself w as not a good strategy. By 2002,
Bob Bell just w anted his life back.
M eanw hile, Sharpe had his ow n grand plan. He estab-
lished his new company, Greenw ays, mortgaged his home,
Pro viding Perfo rmance Feedback
One of the most difficult communication challenges for
individuals is providing feedback to others. For instance, in a
study conducted by Watson Wyatt Worldw ide, only 60 per-
cent of Canadian employees said t hey underst ood t he
measures used to evaluate their performance; only 47 per-
cent said that their managers clearly expressed goals and
Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 217
O B A T W O RK
took a bank loan, rented a factory, and hired five employ-
ees. Sharpe began mass production of his version of the
t railer, t he Wonder Wagon, w hich accommodat ed small
children. He project ed sales of 2500 nat ionw ide f or t he
coming year. By the spring of 1994, Sharpe w as selling to
big specialty retailers and Toronto’s largest sporting goods
store. Later, bike shops across the country and tw o national
retailers w ere selling his w agon. He w as even a corporate
sponsor in Vancouver’s Ride for Life.
So how did this end? Bell w on the patent infringement
case against Sharpe. Bell’s company has expanded to six
different versions of the bicycle trailer. It also has a licensed
manufacturer in China, from w hom Bell collects royalties.
Sharpe eventually abandoned the w hole buggy idea, and
sw itched careers to . . . the fitness industry.
Questions
1 . What w ere the sources of conflict betw een Bell and
Sharpe?
2. Which of the five conflict resolution techniques does
each man prefer in handling his conflict? Is there
another conflict resolution approach you w ould rec-
ommend? Why?
3. How w ould you have handled the conflict? How
w ould your personality have affected your approach
to resolving the conflict?
Source: Based on “ Buggy Wars,” CBC Venture, August 18, 2002,
841.
Fr o m Co n ce p t s
t o Sk i l l s
assignments.69 We review some of these communication
difficulties below.
For many managers, few activities are more unpleasant
than providing performance feedback to employees.70 In
fact, unless pressured by organizational policies and con-
trols, managers are likely to ignore this responsibility.71
coninued
218 Part 3 Int eract ing Eff ect ively
O B A T W O RK
W hy t he reluct ance t o give perf ormance f eedback?
There seem to be at least three reasons. First, managers
are of t en uncomf ort able discussing perf ormance w eak-
nesses directly w ith employees. Given that almost every
employee could undoubtedly improve in some areas, man-
agers fear a confrontation w hen presenting negative feed-
back. This discomfort apparently applies even w hen people
give negative feedback to a computer! Bill Gates reports
that M icrosoft conducted a project requiring users to rate
their experience w ith a computer. “ When w e had the com-
puter the users had w orked w ith ask for an evaluation of its
perf ormance, t he responses t ended t o be posit ive. But
w hen w e had a second computer ask the same people to
evaluate their encounters w ith the first machine, the people
w ere significantly more critical. Their reluctance to criticize
the first computer ‘to its face’ suggested that they didn’t
w ant to hurt its feelings, even though they knew it w as
only a machine.” 72
Second, many employees t end t o become def ensive
w hen their w eaknesses are pointed out. Instead of accept-
ing the feedback as constructive and a basis for improving
performance, some employees challenge the evaluation by
criticizing the manager or redirecting blame to someone
else.
Finally, employees tend to have an inflated assessment
of their ow n performance. Statistically speaking, half of all
employees must be below -average performers. But the evi-
dence indicates that the average employee’s estimate of his
or her ow n performance level generally falls around the
75th percentile.73 So even w hen managers are providing
good new s, employees are likely to perceive it as not good
enough!
The solution to the performance feedback problem is
not to ignore it, but to train managers in how to conduct
constructive feedback sessions. An effective review in w hich
the employee perceives the appraisal as fair, the manager as
sincere, and the climate as constructive can result in the
employee leaving the interview in an upbeat mood. The
employee w ill be informed about the performance areas in
w hich he or she needs to improve and feel determined to
correct t he def iciencies. 74 In addit ion, t he perf ormance
review should be designed more as a counselling activity
than a judgmental process. This can best be accomplished
by allow ing the review to evolve out of the employee’s ow n
self-evaluation, but be aw are that some individuals can
over- or underestimate their performance and have a self-
serving bias.
M anagers can use the follow ing tips to give more effec-
tive feedback:75
• Relate feedback to existing performance
goals and clear expectations.
• Give specific feedback tied to observable
behaviour or measurable results.
• Channel feedback tow ard key result areas.
• Give feedback as soon as possible.
• Give positive feedback for improvement,
not just final results.
• Focus feedback on performance, not
personalities.
• Base feedback on accurate and credible
information.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
27. What’s M y Face-to-Face Communication Style?
28. How Good Are M y Listening Skills?
39. What’s M y Preferred Conflict-Handling Style?
40. What’s M y Negotiating Style?
43. How Good Am I at Giving Performance
Feedback?
Practising Skills
Choose a person w ith w hom you’ve w orked as a member
of a t eam, and pract ise giving f eedback t o each ot her.
Person A should begin by ident if ying behaviours t hat
directly helped meet the goals of the project, and then give
f eedback about w hat needs t o be improved. Person B
should summarize the feedback to demonstrate that the
key points have been heard. Persons A and B should then
sw itch roles. How comfortable did you feel in giving feed-
back? In receiving feedback?

Reinforcing Skills
1 . In one of your classes practise giving feedback to
your instructor. Talk w ith your instructor outside
class, indicating w hat you like about the class, and
w hat you think might make the class better. What
w as the instructor’s response?
Chapter 6 Com m unicat ion, Conf lict , and Negot iat ion 219
O B A T W O RK
2. The next time you are w orking w ith someone, and
their performance is really helpful, give them posi-
tive feedback.
3. If you are in a situation w here someone’s perform-
ance is bothering you, instead of getting upset, fig-
ure out a w ay of giving constructive feedback to
that person.
CH A PTER 7

Pow er and Polit ics

How could Jamie Salé and David Pelletier first

lose and later w in the 2002 W inter Olympics
gold medal for figure skating? Pow er and
politics tell much of the story.

1 What is pow er?

2 How does one get pow er?

How does dependency affect

3 pow er?

What tactics can be used to increase

4 pow er?

5 What does it mean to be empow ered?

6 How are pow er and harassment related?

7 Why do people engage in politics?

Are teams alw ays the answ er?
A
ny Canadian, and many Americans,
w at ching t he pairs f igure skat ing
compet it ion in t he 2002 W int er
Olympics seemed sure they had w atched a
gold-medal performance w hen Jamie Salé
and David Pellet ier gave t heir f inal bow. 1
M oments later, how ever, fans looked on in
horror as the gold medal w as aw arded to
Russian skat ers Yelena Berezhnaya and
Anton Sikharulidze. North Americans w ere
shocked: What t hey remembered w as a
flaw ed performance by the Russians, w ith
Sikharulidze shaky on a double axel and
Berezhnaya stiff in some of her landings, and
a perfect performance by the Canadian duo.
Figure skating has long been considered
a political rather than an artistic event, in
w hich the Soviet Union influenced its allies to support organization. Although you might have heard the saying
Russian skaters w hile Western judges tended to side “ Pow er corrupt s, and absolut e pow er corrupt s
w ith US skaters. Thus it w as not surprising that charges absolutely,” pow er is not alw ays bad. Understanding
of politics and abuse of pow er surfaced quickly. how to use pow er and politics effectively makes organi-
A major t heme t hroughout t his chapt er is t hat zational life more manageable, because it can help you
pow er and politics are a natural process in any group or gain the support you need to do your job effectively.

A D EFINITION OF POWER
Power refers to a capacity that A has to influence the behavio ur o f B, so that B acts in 1 What is power?
acco rdance with A’s wishes.2 This definitio n implies that there is a potential fo r po wer if power A capacity that A has to
so meo ne is dependent o n ano ther. But o ne can have po wer and no t impo se it. influence the behaviour of B, so that
Pro bably the mo st impo rtant aspect o f po wer is that it is a functio n o f dependency. B acts in accordance with A’s wishes.
The mo re that B depends o n A, the mo re po wer A has in the relatio nship. Dependence, dependency B’s relationship to
in turn, is based o n the alternatives that B perceives and the impo rtance that B places o n A when A possesses something that
the alternative(s) that A co ntro ls. A perso n can have power over yo u o nly if he o r she co n- B needs.
tro ls so mething yo u desire. If yo u are attending co llege o r university o n funds to tally pro - Jamie Salé and David Pelletier
vided by yo ur parents, yo u pro bably reco gnize the power that yo ur parents ho ld over yo u. Official Website
www.sale-pelletier.com/english/
Yo u are dependent o n them fo r financial suppo rt. But o nce yo u are o ut o f scho o l, have
a jo b, and are making a go o d inco me, yo ur parents’ po wer is reduced significantly. Who
amo ng us, tho ugh, has no t kno wn o r heard o f the rich relative who is able to co ntro l a
large number o f family members merely thro ugh the implicit o r explicit threat o f “writ-
ing them o ut o f the will” ?

O B IS FO R EV ERY O N E

Have you eve r wonde re d Do workplace s e mpowe r Why do some pe ople se e m In what situations doe s
how you might incre ase pe ople ? to e ngage in politics more impre ssion manage me nt
your powe r? than othe rs? work be st?

221
222 Part 3 Int eract ing Eff ect ively

Within larger o rganizatio ns, the info rmatio n techno lo gy ( IT) gro up o ften has co n-
siderable po wer, because everyo ne, right up to the CEO, is dependent o n this gro up
keeping co mputers and netwo rks running. Since few peo ple have the technical expert-
ise to do so , IT perso nnel end up being viewed as irreplaceable. This gives them a lo t o f
po wer within the o rganizatio n.
Po wer sho uld no t be co nsidered a bad thing, ho wever. “Po wer, if used appro priately,
should actually be a positive influence in your organization,” says Professor Patricia Bradshaw
o f the Schulich Scho o l o f Business at Yo rk University. “Having mo re power do esn’t neces-
sarily turn yo u into a Machiavellian mo nster. It can help yo ur team and yo ur o rganizatio n
achieve its goals and increase its potential.” 3 The positive benefits of power (and politics) have
also been explo red by Pro fesso r To m Lawrence o f SFU Business and his co lleagues.4

BASES OF POWER
As the Olympics figure skating controversy sw irled, International Skating Union (ISU) presi-
dent Ottavio Cinquanta tried to contain the uproar by announcing three days after the event
that “ We cannot change the result of the competition.” He w as sending out a signal to the
Americans, w ho had taken to the airw aves to protest the results of the competition, that lob-
bying could not turn judges’ scores around, or change ISU procedures. Forty-eight hours later,
how ever, he changed his mind and announced that the results w ould be changed, and Salé
and Pelletier w ould receive gold medals as w ell. What could have made Cinquanta change his
decision so quickly?

2 How does one get Where do es po wer co me fro m? What is it that gives an individual o r a gro up influence
power? o ver o thers? The answer to these questio ns was develo ped by so cial scientists Jo hn
French and Bertrand Raven, who first presented a five-catego ry classificatio n scheme o f
so urces o r bases o f po wer: co ercive, reward, legitimate, expert, and referent.5 They sub-
sequently added info rmatio n po wer to that schema ( see Exhibit 7-1) .6

Coercive Pow er
coercive pow er Power that is Co ercive power is defined by French and Raven as being dependent o n fear. O ne reacts
based on fear. to this po wer base o ut o f fear o f the negative results that might o ccur if o ne fails to

EXHIBIT 7-1 M easuring Bases of Pow er

Does a person have one or more of the six bases of pow er? These descriptions help identify the person’s pow er base.

Pow er Base Statement

Coercive The person can make things difficult for people, and you w ant to avoid getting him or her angry.

Rew ard The person is able to give special benefits or rew ards to people, and you find it advantageous to trade
favours w ith him or her.

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

Expert The person has the experience and know ledge to earn your respect, and you defer to his or her judgment
in some matters.

Referent You like the person and enjoy doing things for him or her.

Information The person has data or know ledge that you need.

Source: Adapted from G. Yukl and C. M . Falbe, “ Importance of Different Pow er Sources in Dow nw ard and Lateral Relations,” Journal of Applied
Psychology, June 1991, p. 417. W ith permission.
 Chapter 7 Pow er and Polit ics 223

co mply. It rests o n the applicatio n, o r the threat o f the applicatio n, o f physical sanc-
tio ns such as the inflictio n o f pain, the generatio n o f frustratio n thro ugh restrictio n o f
m o vem ent, o r the co ntro lling by fo rce o f basic physio lo gical o r safety needs. When
Jacques Ro gge, president o f the Internatio nal O lympic Co mmittee ( IO C) , threatened to International Olympic
ban judged spo rts fro m the O lympics because o f the skating scandal, he was using a Committee (IOC)
www.olympic.org
fo rm o f co ercio n. He was trying to intimidate the Internatio nal Skating Unio n ( ISU) ,
making them fear that if the co ntro versy was no t ended quickly, figure skaters wo uld no International Skating Union
(ISU)
lo nger co mpete in the O lympics. www.isu.org
O f all the bases o f po wer available, the po wer to hurt o thers is po ssibly the mo st
o ften used, mo st o ften co ndemned, and mo st difficult to co ntro l. The state relies o n
its military and legal reso urces to intimidate natio ns, o r even its o wn citizens; busi-
nesses rely upo n the co ntro l o f eco no mic reso urces to request tax reductio ns; and reli-
gio us institutio ns threaten individuals with dire co nsequences in the afterlife if they
do no t co nduct themselves pro perly in this life. At the perso nal level, individuals use co er-
cive po wer thro ugh a reliance o n physical strength, wo rds, o r the ability to grant o r
withho ld emo tio nal suppo rt fro m o thers. These bases pro vide the individual with the
means to physically harm, bully, humiliate, o r deny lo ve to o thers.7
At the o rganizatio nal level, A has co ercive po wer o ver B if A can dismiss, suspend, o r
demo te B, assuming that B values his o r her jo b. Similarly, if A can assign B wo rk activ-
ities that B finds unpleasant o r treat B in a manner that B finds embarrassing, A po ssesses
co ercive po wer o ver B.

Rew ard Pow er

The o ppo site o f co ercive power is reward power. Peo ple will go alo ng with the wishes o r rew ard pow er Power that
directives of another if doing so produces positive benefits; therefore, one who can distribute achieves compliance based on the
rewards that o thers view as valuable will have po wer o ver tho se o thers. These rewards ability to distribute rewards that oth-
ers view as valuable.
can be anything that ano ther perso n values. In an o rganizatio nal co ntext, we think o f
mo ney, favo urable perfo rmance appraisals, pro mo tio ns, interesting wo rk assignments,
legitimate pow er Power that a
friendly co lleagues, impo rtant info rmatio n, and preferred wo rk shifts o r sales territo ries.8 person receives as a result of his or
As with co ercive power, yo u do no t have to be a manager to be able to exert influence her position in the formal hierarchy
thro ugh rewards. Rewards such as friendliness, acceptance, and praise are available to of an organization.
everyo ne in an o rganizatio n. To the degree that an individual seeks
such rewards, yo ur ability to give o r withho ld them gives yo u po wer
o ver that individual.

Legitimate Pow er
In fo rmal gro ups and o rganizatio ns, pro bably the mo st frequent access
to o ne o r mo re o f the bases o f po wer is thro ugh a perso n’s structural
po sitio n. This is called legitimate power. It represents the po wer a
perso n receives as a result o f his o r her po sitio n in the fo rmal hierar-
chy o f an o rganizatio n.
Po sitio n s o f auth o rity in clud e co ercive an d reward p o wers.
Legitimate po wer, ho wever, is bro ader than the po wer to co erce and
reward. Specifically, it includes acceptance by members o f an o rgani-
zatio n o f the autho rity o f a po sitio n. When scho o l principals, bank
presidents, o r generals speak ( assuming that their directives are viewed
as within the autho rity o f their po sitio ns) , teachers, tellers, and pri-
vates listen and usually co mply. Yo u will no te in Exhibit 7-2 o n page
In India, Naina Lal Kidw ai is a pow erful w oman in the
224that o ne o f the men in the meeting identifies himself as the rule
banking indust ry. She is t he chief execut ive of t he
m aker, which m eans that he has legitim ate po wer. IO C president
Hongkong and Shanghai Banking Corporation (HSBC),
Jacques Ro gge was o ne o f the few individuals who had legitim ate India. Kidw ai’s formal pow er is based on her position at
po wer to try to reso lve to the skating co ntro versy. the bank.
224 Part 3 Int eract ing Eff ect ively
expert pow er Influence based
on special skills or knowledge.
referent power Influence based
on possession by an individual of
desirable resources or personal traits.
Roots Canada
www.roots.com/new_canada/html/
index_canada.shtml
EXHIBIT 7-2
Source: Draw ing by Leo Cullum in The New Yorker. Copyright © 1986 The New Yorker M agazine.
Reprinted by permission.
Expert Pow er
Expert power is influence based o n expertise, special skills, o r kno wledge. Expertise
has beco me o ne o f the mo st po werful so urces o f influence as the wo rld has beco me
mo re techno lo gically o riented. While it is generally ackno wledged that physicians have
expertise and hence expert power—mo st o f us fo llow the advice that o ur do cto rs give us—
yo u sho uld also reco gnize that co mputer specialists, tax acco untants, eco no mists, and
o ther specialists can have power as a result o f their expertise. Yo ung peo ple may find they
have increased po wer in the wo rkplace these days because o f the technical kno wledge
and expertise that their Baby-Bo o mer managers may no t have.
Expert po wer relies o n trust that all relevant info rmatio n is given o ut ho nestly and
co mpletely. O f co urse, since kno wledge is po wer, the mo re that info rmatio n is shared,
the less expert po wer a perso n has. Thus, so me individuals try to pro tect their po wer
by withho lding info rm atio n.9 This tactic can result in po o r-quality perfo rm ance by
tho se who need the info rmatio n.10 The Working W ith O thers Exercise o n page 245–246
gives yo u the o ppo rtunity to explo re the effectiveness o f different bases o f po wer in
changing so meo ne’s behavio ur.
Referent Pow er
Referent power develo ps o ut o f admiratio n o f ano ther and a desire to be like that per-
so n. In a sense, then, it is a lo t like charisma. If yo u admire so meo ne to the po int o f
mo delling yo ur behavio ur and attitudes after him o r her, that perso n po ssesses referent
po wer o ver yo u. So metimes teachers and co aches have referent po wer because o f o ur
admiratio n o f them. Referent po wer explains why celebrities are paid millio ns o f do llars
to endo rse pro ducts in co mmercials. Co mpanies such as To ro nto -based Ro o ts Canada have
 Chapter 7 Pow er and Polit ics 225

EXHIBIT 7-3 Continuum of Responses to Pow er

Resistance Compliance Commitment

Bases of
Leader
Pow er M ost likely employee response

Coercive

Rew ard

Legitimate

Expert

Referent

Source: R. M . Steers and J. S. Black, Organizational Behavior, 5th ed. (New York: HarperCollins, 1994), p. 487. Reprinted
by permission of Pearson Education Inc., Upper Saddle River, New Jersey.

develo ped advertising themes aro und po pular Canadians, such as “bad bo y” O lympic
go ld-medallist and sno wbo arder Ro ss Rebagliati, to co nvince peo ple to buy specific
pro ducts.11 Similarly, Nike has used spo rts celebrities such as fo rmer To ro nto Rapto rs
star centre Vince Carter to pro mo te its pro ducts. In so me ads, stars have provided their own
music, as was the case in Canadian jazz diva Diana Krall’s TV co mmercials fo r Chrysler.

Information Pow er
Info rmatio n power co mes fro m access to and co ntro l o ver info rmatio n. Peo ple in an information pow er Power that
o rganizatio n who have data o r kno wledge that o thers need can m ake tho se o thers comes from access to and control
dependent o n them. Managers, fo r instance, because o f their access to privileged sales, co st, over information.
salary, pro fit, and similar data, can use this info rmatio n to co ntro l and shape subo rdinates’
behavio ur. Similarly, departments that po ssess info rmatio n that is critical to a co mpany’s
perfo rmance in times o f high uncertainty—fo r example, the legal department when a
firm faces a majo r lawsuit o r the human reso urce department during critical labo ur nego -
tiatio ns—will gain increased po wer in their o rganizatio ns until tho se uncertainties are
reso lved. This chapter’s Case Incident— The Power of Bill Fowler at Blackmer/Dover Resources
on page 246–247 shows the power that one man can have in a manufacturing organization.

Evaluating the Bases of Pow er

Generally, peo ple will respo nd in o ne o f three ways when faced with the peo ple who use
the bases o f po wer described abo ve:

• Commitment. The perso n is enthusiastic abo ut the request and sho ws initiative
and persistence in carrying it o ut.
• Compliance. The perso n go es alo ng with the request grudgingly, puts in mini-
mal effo rt, and takes little initiative in carrying o ut the request.
• Resistance. The perso n is o ppo sed to the request and tries to avo id it with such
tactics as refusing, stalling, o r arguing abo ut it.12

A review o f the research o n the effectiveness o f these fo rms o f po wer finds that they
differ in their impact o n a perso n’s perfo rmance.13 Exhibit 7-3 summarizes so me o f this
226 Part 3 Int eract ing Eff ect ively

research. Co ercive power leads to resistance fro m individuals, decreased satisfactio n, and
increased mistrust. Reward power results in co mpliance if the rewards are co nsistent with
what individuals want as rewards, so mething the Ethical Dilemma Exercise o n page 246
shows clearly. Legitimate power also results in co mpliance, but it do es no t generally result
in increased co mmitment. In o ther wo rds, legitimate power do es no t inspire individuals to
act beyo nd the basic level. Expert and referent powers are the mo st likely to lead to co m-
mitment from individuals. Research shows that deadline pressures increase group members’
reliance o n individuals with expert and info rmatio n power.14 Iro nically, the least effective
bases o f po wer fo r impro ving co mmitment—co ercive, reward, and legitimate—are the
o nes mo st o ften used by managers, perhaps because they are the easiest to intro duce.15

D EPEND ENCY: THE KEY TO POWER

As the Olympics figure skating furor unfolded, some claimed that French judge M arie-Reine Le
Gougne w as pressured by the French figure skating federation to vote for the Russians, in
exchange for w hich the Russian judge w ould vote for the French skaters in the Olympic ice
dancing competition. In August 2002, a Russian mobster w as arrested for possible bribery
charges in the case, suggesting that external pressures w ere applied to higher-ups in the skat-
ing organizations, w ho then pressured judges to fix votes. “ Though it doesn’t excuse them
for not judging honestly, it suggests that individuals highly ranked w ithin their federations are
indeed set t ing t he t one f or t heir [t he judges’ ] behaviour,” not ed US dance judge Sharon
Rogers.16 The French judge w as dependent on her superiors to keep her judging job, something
she valued very much. M eanw hile, a dependence on bribes from the Russian mobster made
higher-ups pressure their judges. What factors might lead to one person’s having greater pow er
over another?

3 How does dependency In this sectio n, we sho w ho w an understanding o f dependency is central to furthering
affect power? yo ur understanding o f po wer itself.

The General Depend en cy Po stulate

Let’s begin with a general po stulate: The greater B’s dependency on A, the greater the power
A has over B. When yo u po ssess anything that o thers require but that yo u alo ne co ntro l,
yo u make them dependent upo n yo u and therefo re yo u gain power over them.17 Ano ther
way to frame dependency is to think abo ut a relatio nship in terms o f “who needs who m?”
The perso n who has the mo st need is the o ne mo st dependent o n the relatio nship.18
Dependency is inversely pro po rtio nal to the alternative so urces o f supply. If so mething
is plentiful, po ssessio n o f it will no t increase yo ur po wer. If everyo ne is intelligent, intel-
ligence gives no special advantage. Sim ilarly, in the circles o f the super rich, m o ney
do es no t result in po wer. But if yo u can create a mo no po ly by co ntro lling info rmatio n,
prestige, o r anything that o thers crave, they beco me dependent o n yo u. Alternatively, the
mo re o ptio ns yo u have, the less po wer yo u place in the hands o f o thers. This explains,
fo r example, why mo st o rganizatio ns develo p multiple suppliers rather than give their
business to o nly o ne.

What Creates Depen d en cy?

Dependency is increased when the reso urce yo u co ntro l is impo rtant, scarce, and can-
no t be substituted.19

Impo rtance
If no bo dy wants what yo u have, there is no dependency. To create dependency, the
thing( s) yo u co ntro l must be perceived as impo rtant. In so me o rganizatio ns, peo ple
 Chapter 7 Pow er and Polit ics 227

The locat ion of pow er varies

among organizat ions. At Walt
Disney, enormous pow er is held
by high-t ech scient ist s in t he
research and development group
of Walt Disney Imagineering, a
division formed by Walt Disney in
1952 t o creat e Disneyland. The
company relies on t hese highly
skilled and creat ive st aff ers t o
develop cyberland fantasies such
as virt ual-realit y t heme parks,
w ebsites for kids, and smart TV
sets that learn view ers’ program-
ming preferences and automati-
cally record programs they forget
to w atch.

who co ntro l the budget have a great deal o f impo rtance. In o ther o rganizatio ns, tho se
who po ssess the kno wledge to keep techno lo gy wo rking smo o thly are viewed as impo r-
tant. What is impo rtant is situatio nal. It varies amo ng o rganizatio ns and undo ubtedly
also varies over time within any given o rganizatio n. Individuals o r o rganizatio ns that are
regarded as impo rtant may pressure o thers to engage in unethical behavio ur, ho wever,
as Focus on Ethics suggests.

FO C U S O N E T H I C S

Enron Requests Action from UBS PaineWebber

Did Enron use it s pow er to cause a UBS PaineWebb er employee to b e fired ? In
August 2001, mo nths befo re the Enro n scandal bro ke, executives o f Enro n pressured
UBS PaineWebber (now UBS Financial Services) to discipline o ne o f its bro kers.20 The
bro ker, Chung Wu, had advised Enro n emplo yees to sell their sto ck o ptio ns. Within
ho urs o f the co mplaint, the bro ker was fired.
When the Enro n executive in charge o f the sto ck o ptio n pro gram learned that Wu
had warned emplo yees that the co mpany’s “ financial situatio n is deterio rating,” he
no tified PaineWebber immediately via email. His message stated: “ Please handle
this situatio n. This is extremely disturbing to me.”
PaineWebber went even further than firing Wu, ho wever. It also sent his clients a
repo rt that Enro n was “ likely heading higher than lo wer fro m here o n o ut.”
PaineWebber has since suggested that Wu acted unethically because his em ail
messages to Enro n clients were unautho rized and because he did no t tell them that
PaineWebber’s research analyst rated Enro n a “ stro ng buy.”
One might question PaineWebber’s behaviour, however. When Wu sent the email mes-
sages, the sto ck was wo rth $36. Only a few mo nths later, it was wo rthless. PaineWebber
managed Enro n’s sto ck o ptio n pro gram and handled large perso nal acco unts fo r many
o f Enro n’s executives. It also did investment banking fo r Enro n. Thus, it did no t want to
risk lo sing Enro n’s business by suggesting the sto ck was in tro uble.
228 Part 3 Int eract ing Eff ect ively
Steve Jobs
www.apple.com/pr/bios/jobs.html
4 What tactics can be
used to increase
power?
influence tactics Ways that
individuals translate power bases
into specific actions.
Scarcity
As no ted previo usly, if so mething is plentiful, po ssessio n o f it will no t increase yo ur
po wer. A reso urce must be perceived as scarce to create dependency.
Scarcity can help explain ho w lo w-ranking emplo yees gain po wer if they have impo r-
tant knowledge no t available to high-ranking employees. Po ssessio n o f a scarce reso urce—
in this case, impo rtant kno wledge—makes tho se who do n’t have it dependent o n tho se
who do . Thus, an individual might refuse to sho w o thers ho w to do a jo b, o r might
refuse to share info rmatio n, thereby increasing his o r her impo rtance.
No nsubstitutability
The fewer substitutes fo r a reso urce, the m o re po wer co m es fro m co ntro l o ver that
reso urce. At Apple Co mputer, fo r example, mo st o bservers, as well as the bo ard, believed
that no o ne o ther than Steve Jo bs co uld turn the co mpany aro und when they returned
him to the ro le o f CEO in 1997. In ano ther example, when a unio n go es o n strike and
management is no t permitted to replace the striking emplo yees, the unio n has co nsid-
erable co ntro l o ver the o rganizatio n’s ability to carry o ut its tasks.
Peo ple are o ften able to ask fo r special rewards ( higher pay o r better assignments)
because they have skills that o thers do no t. This chapter’s Point/Counterpoint feature o n
page 243 co nsiders the fairness o f rewarding so me peo ple better than o thers.
INFLUENCE TACTICS
Looking at the 2002 W inter Olympics figure skating controversy, w e can find a number of
instances w here the various people involved in the controversy used influence tactics to get
their w ay. There is some evidence that the French and Russian judges formed a coalition to
ensure that the French ice dancers w ould get a gold medal in a later event. The Russian mob-
ster used bargaining, trading bribes for votes. International Olympic Committee president
Jacques Rogge used assert iveness t o convince Int ernat ional Skat ing Union (ISU) president
Ottavio Cinquanta that in fact there w ould be tw o gold medals. He also threatened the ISU w ith
sanctions, including banning judged sports from the Olympics, if they did not aw ard the sec-
ond medal. So how and w hy do influence tactics w ork?
How do individuals translate their bases of power into specific,
desired actio ns? Research indicates that peo ple use co mmo n
*wonde
Have you eve r
re d how you
tactics to influence o utco mes.21 O ne study identifies the nine
might incre ase your
influence tactics managers and emplo yees use to increase
powe r?
their po wer:22
1. Rational persuasion. Using facts and data to make a lo gi-
cal o r ratio nal presentatio n o f ideas.
2. Inspirational appeals. Appealing to values, ideals, and go als when making a
request.
3. Consultation. Getting o thers invo lved to suppo rt o ne’s o bjectives.
4. Ingratiation. Using flattery, creating go o dwill, and being friendly prio r to mak-
ing a request.
5. Personal appeals. Appealing to loyalty and friendship when asking fo r so mething.
6. Exchange. Offering favo urs o r benefits in exchange fo r suppo rt.
7. Coalition tactics. Getting the suppo rt o f o ther peo ple to provide backing when
making a request.
8. Pressure. Using demands, threats, and reminders to get so meo ne to do so mething.
9. Legitimating tactics. Claiming the autho rity o r right to make a request, o r
sho wing that it suppo rts o rganizatio nal go als o r po licies.
 Chapter 7 Pow er and Polit ics 229

Which influence tactics were used by

M anagement at Flextronics plants
participants in the figure skating co n- in China used legitimating tactics
tro versy? This chapter’s CBC Video Case and rational persuasion in estab-
Incident illustrates ho w the key playes lishing a series of rigid rules and
o f the Liberal Party’s spo nso rship scan- procedures to guard against the
threat of severe acute respiratory
dal used influence tactics to win go v-
syndrome (SARS). Employees
ernment co ntracts. complied w ith the rules—such as
Researchers fo und that there are sig- t w ice-daily hand w ashing af t er
nificant differences in the tactics used eating meals in the company can-
to influence actio ns, depending upo n teen— because they understood
t he mandat es w ere made f or
whether peo ple are interacting with
their ow n safety.
so meo ne abo ve o r belo w them in rank.
While all individuals favo ur ratio nal per-
suasio n, tho se m anaging upward are
even mo re likely to use it ( 77 percent
vs. 52 percent o f tho se managing down- Jean Brault and the
ward) . Tho se managing do wnward are Sponsorship Scandal
next mo st likely to use pressure (22 per-
cent) o r ingratiatio n (15 percent). The o ther favo ured cho ices o f tho se managing upward
were co alitio n tactics ( 15 percent) and pressure ( 15 percent) .23

EMPOWERMENT: GIVING POWER TO EMPLOYEES

Thus far o ur discussio n has implied that—to so me extent, at least—po wer is mo st likely 5 What does it mean to
to rest in the hands o f managers, to be used as part o f their interactio n with emplo yees. be empowered?
Ho wever, in to day’s wo rkplace, there is a mo vement to ward sharing mo re po wer with
emplo yees by putting them in teams and also by making them respo nsible fo r so me
o f the decisio ns regarding their jo bs. With the flattening o f o rganizatio ns, so that there
are fewer m id d le m anagers, em p lo yees also end up with m o re resp o nsib ilities.
O rganizatio nal specialists refer to this increasing respo nsibility as empowerment. We
briefly mentio n in Chapter 8 that o ne o f the current trends in leadership is empo wer-
ing emplo yees. Between 1995 and 2005, nearly 50 000 articles abo ut empo werment
have appeared in the print media in the United States and Canada, with almo st 6000 arti-
cles appearing in Canadian newspapers during that time.24

Definition of Empow erment

The definitio n o f empowerment that we use here refers to the freedo m and the ability o f empow erment The freedom and
emplo yees to make decisio ns and co mmitments.25 Unfo rtunately, neither managers no r the ability of employees to make
researchers can agree o n the definitio n o f empo werment. Ro bert E. Q uinn and Gretchen decisions and commitments.
M. Spreitzer, in their co nsulting wo rk with a Fortune 500 manufacturing co mpany, fo und
that executives were split abo ut 50-50 in their definitio n.26 O ne gro up o f executives
“believed that empo werment was abo ut delegating decisio n making within a set o f clear
bo undaries.” Empo werment wo uld start at the to p, specific go als and tasks wo uld be
assigned, responsibility would be delegated, and people would be held accountable for their
results. The o ther gro up believed that empo werment was “a pro cess o f risk taking and
perso nal gro wth.” This type o f empo werment starts at the bo tto m, with co nsidering the
employees’ needs, showing them what empowered behavio ur lo o ks like, building teams,
enco uraging risk-taking, and demo nstrating trust in emplo yees’ ability to perfo rm.
Much o f the press o n em po werm ent has been po sitive, with bo th executives and
emplo yees applauding the ability o f fro nt-line wo rkers to make and execute impo rtant
decisio ns.27 Ho wever, no t all repo rts are favo urable. O ne management expert no ted
that much o f the talk abo ut empo werment is simply lip service,28 with o rganizatio ns
telling employees that they have decisio n-making respo nsibility, but no t giving them the
230 Part 3 Int eract ing Eff ect ively

autho rity to carry o ut their decisio ns. In

o rder fo r an emplo yee to be fully empo w-
ered, he o r she needs access to the info r-
m atio n req uired to m ake d ecisio n s;
rewards fo r acting in appro priate, respo n-
sible ways; and autho rity to make the nec-
essary decisio ns. Empowerment means that
em plo yees understand ho w their jo bs fit
into the o rganizatio n and that they are able
to make decisio ns regarding jo b actio n in
light o f the o rganizatio n’s purpo se and mis-
sio n. Managers at Mo ntague, PEI-b ased
Durabelt reco gnize that to be empo wered,
em plo yees need to have the appro priate
skills to handle their jo bs. The co m pany
Empow ered employees, w hether they w ork individually or in teams like this one at
sells custo m ized co nveyo r belts used to
Carbon Five, need the tools and training to take responsibility for their w ork. Teams at
harvest so m e vegetab le and fruit cro ps.
Carbon Five have a great deal of freedom to make decisions, w hile their managers act as
advisers and coaches. Emplo yees need to be respo nsive to cus-
to mer co ncerns when manufacturing the
b elts. In o rder to em po wer em plo yees to m anage custo m er relatio ns successfully,
Durabelt created Durascho o l, an o ngo ing training pro gram that pro vides emplo yees
with the skills they need to be mo re effective.29

Empow erment in the Workplace

Joseph L. Rotman School of
M anagement, University of
Toronto
www.rotman.utoronto.ca
The co ncept o f empo werment has caused much cynicism
in m any wo rkp laces. Em p lo yees are to ld that they are
em po wered and yet they do no t feel that they have the
* Do workplace s
e mpowe r pe ople ? autho rity to act, o r they feel that their managers still micro -
manage their perfo rmance. So me managers are reluctant to
em po wer their em plo yees because this m eans sharing o r
even relinquishing their o wn po wer. O ther managers wo rry
that empo wered emplo yees may decide to wo rk o n go als
and jo bs that are no t as clo sely aligned to o rganizatio nal go als. So m e m anagers, o f
co urse, do no t fully understand ho w to go abo ut empo wering their emplo yees.
In so me cases, employees do no t want to be empowered, and having mo re power can
even make them ill. A study carried o ut by Pro fesso r Jia Lin Xie, o f the University o f
To ro nto ’s Jo seph L. Ro tman Scho o l o f Management, and co lleagues fo und that when peo -
ple are put in charge at wo rk but do n’t have the co nfidence to handle their respo nsi-
bilities, they can beco me ill.30 Specifically, peo ple who blame themselves when things
go wro ng are mo re likely to suffer co lds and infectio ns if they have high levels o f co n-
tro l at wo rk. This finding by Pro fesso r Xie and her co lleagues was so m ewhat unex-
pected, as so me have hypo thesized that greater co ntro l at wo rk wo uld lead to less stress.
The study sho wed, instead, that the impact o f empo werment depended o n perso nality
and jo b facto rs. Tho se who had co ntro l, but did no t blame themselves when things
went wro ng, suffered less stress, even if the jo b was demanding. The study’s findings
suggest the impo rtance o f cho o sing carefully which emplo yees to empo wer when do ing
so . These findings are also co nsistent with the Hackman-O ldham jo b characteristics
mo del presented in Chapter 4.31 Empo werment will be po sitive if a perso n has high
gro wth-needs strengths ( see Exhibit 4-13 o n page 134) but tho se with lo w gro wth-
needs strengths may be mo re likely to experience stress when empo wered.
When emplo yees are empo wered, it means that they are expected to act, at least in a
small way, as o wners o f the co mpany, rather than just as emplo yees. O wnership is no t
 Chapter 7 Pow er and Polit ics 231

At Vancouver-based Great Little

Box Company (GLBC), w hich
designs and manufactures corru-
gated containers, employees are
given the freedom to do w hatever
necessary in the financial sense, but in terms o f identifying with the go als and missio n they feel is necessary and appro-
priate to make customers happy. If
o f the o rganizatio n. Fo r emplo yees to be empo wered, ho wever, and have an o wnership
a customer is dissatisfied w ith the
mentality, fo ur co nditio ns need to be met, acco rding to Pro fesso r Dan O ndrack at the product, the employee can say,
Ro tman Scho o l o f Management: “ OK, I’ll bring this product back
and return it for you” w ithout
• There must be a clear definitio n o f the values and missio n o f the co mpany.
having to get prior authorization.
• The co m pany m ust help em plo yees gain the relevant skills.
Great Little Box Company
• Emplo yees need to be suppo rted in their decisio n making and no t criticized (GLBC)
when they try to do so mething extrao rdinary. www.greatlittlebox.com

• Emplo yees need to be reco gnized fo r their effo rts.32

Exhibit 7-4 o utlines what two researchers disco vered in studying the characteristics o f
empo wered emplo yees.

Effects o f Empowerment
Do es empo werment wo rk? Researchers have sho wn that at bo th the individual level33
and the team level,34 empo werment leads to greater pro ductivity. At Winnipeg-based
Melet Plastics, a manufacturer o f plastic co mpo nents, emplo yees can co me in fo r two
extra ho urs each week ( fo r which they are paid o vertime) to wo rk o n pro jects o f their
cho ice that help improve the perfo rmance o f the co mpany. As a result, employees are less

EXHIBIT 7-4 Characteristics of Empow ered People

Robert E. Quinn and Gretchen M . Spreitzer, in their research on the characteristics of empow ered people (through both
in-depth interview s and survey analysis), found four characteristics that most empow ered people have in common:

• Empow ered people have a sense of self-determination (this means that they are free to choose how to do their w ork;
they are not micromanaged).
• Empow ered people have a sense of meaning (they feel that their w ork is important to them; they care about w hat they
are doing).
• Empow ered people have a sense of competence (this means that they are confident about their ability to do their w ork
w ell; they know they can perform).
• Empow ered people have a sense of impact (this means that people believe they can have influence on their w ork unit;
others listen to their ideas).

Source: R. E. Quinn and G. M . Spreitzer, “ The Road to Empow erment: Seven Questions Every Leader Should Consider,” Organizational Dynamics,
Autumn 1997, p. 41.
232 Part 3 Int eract ing Eff ect ively

likely to see Melet “as a place where they simply arrive, park their brains at the do o r
and do what they’re to ld.” 35
Fo ur US researchers investigated whether empo werment wo rks similarly in differ-
ent co untries.36 Their findings showed that employees in India gave their superviso rs low
ratings when empowerment was high, while employees in the United States, Mexico , and
Po land rated their superviso rs favo urably when empo werment was high. In bo th the
United States and Mexico , empo werment had no effect o n satisfactio n with co -wo rkers.
Ho wever, satisfactio n with co -wo rkers was higher when emplo yees were empo wered
in Po land. In India, empo werment led to lo wer satisfactio n with co -wo rkers.
Similar findings in a study co mparing empo werment in the United States, Brazil,
and Argentina indicate that in hierarchical so cieties, em po werm ent m ay need to be
intro duced with care.37 Emplo yees in such so cieties may be mo re used to wo rking in
teams, but they also expect their managers to be the peo ple with all the answers.
O ur discussio n o f empo werment suggests that a number o f pro blems can arise when
o rganizatio ns decide they want to empower employees. First, so me managers do no t want
empo wered emplo yees, because this can take away so me o f their o wn base o f po wer.
Seco nd, so me emplo yees have little o r no interest in being empo wered, and therefo re
resist any attempts to be empo wered. And finally, empo werment is no t so mething that
wo rks well in every wo rkplace thro ugho ut the wo rld.

THE ABUSE OF POWER:

H ARASSMENT IN THE WORKPLACE
6 How are power and Peo ple who engage in harassment in the wo rkplace are typically abusing their power po si-
harassment related? tio ns. The manager-emplo yee relatio nship best characterizes an unequal po wer rela-
tio nship, where po sitio n po wer gives the managers the capacity to reward and co erce.
Managers give emplo yees their assignments, evaluate their perfo rmance, make reco m-
mendatio ns fo r salary adjustments and pro mo tio ns, and even decide whether emplo y-
ees retain their jo b s. These decisio ns give m anagers po wer. Since em plo yees want
favo urable perfo rmance reviews, salary increases, and the like, it is clear that managers
co ntro l the reso urces that m o st em plo yees co nsider im po rtant and scarce. It is also
wo rth no ting that individuals who o ccupy high-status ro les ( such as management po si-
tio ns) so metimes believe that harassing emplo yees is merely an extensio n o f their right
to make demands o n lo wer-status individuals.
Altho ugh co -wo rkers do no t have po sitio n po wer, they can have influence and use it
to harass peers. In fact, altho ugh co -wo rkers appear to engage in so mewhat less severe
fo rms o f harassment than do managers, co -wo rkers are the mo st frequent perpetrato rs
o f harassment, particularly sexual harassment, in o rganizatio ns. Ho w do co -wo rkers
exercise po wer? Mo st o ften they pro vide o r withho ld info rmatio n, co o peratio n, and
suppo rt. Fo r example, the effective perfo rmance o f mo st jo bs requires interactio n and sup-
po rt fro m co -wo rkers. This is especially true these days as wo rk is assigned to teams.
By threatening to withho ld o r delay pro viding info rmatio n that is necessary fo r the suc-
cessful achievement o f yo ur wo rk go als, co -wo rkers can exert po wer o ver yo u.
So me catego ries o f harassment have lo ng been illegal in Canada, including tho se based
on race, religion, and national origin, as well as sexual harassment. Unfortunately, some types
o f harassment that o ccur in the wo rkplace are no t deemed illegal, even if they create pro b-
lems fo r employees and managers. We fo cus here o n two types o f harassment that have
received co nsiderable attentio n in the press: wo rkplace bullying and sexual harassment.

Workplace Bullying
Many o f us are aware, anecdo tally if no t perso nally, o f managers who harass emplo y-
ees, demanding o vertime witho ut pay o r excessive wo rk perfo rmance. Further, so me o f
 Chapter 7 Pow er and Polit ics 233

the recent sto ries o f wo rkplace vio lence have repo rtedly been the result o f an emplo yee’s
feeling intimidated at wo rk. In research co nducted in the private and public secto r in
so uthern Saskatchewan, Céleste Bro theridge, a pro fesso r at the Université du Q uébec à
Mo ntréal, fo und that bullying was rather prevalent in the wo rkplace. Fo rty percent o f
the respo ndents no ted that they had experienced o ne o r mo re fo rms o f bullying weekly
in the past six mo nths. Ten percent experienced bullying at a much greater level: five o r
mo re incidents a week. Bro theridge no tes that bullying has a negative effect o n the wo rk-
place: “Given bullying’s [negative] effects o n employee health, it is reaso n fo r co ncern.” 38
There is no clear definitio n o f wo rkplace bullying, and Marilyn No ble, a Fredericto n-
based adult educato r, remarks that in so me instances there can be a fine line between
m anaging and bullying. Ho wever, No ble, who co -chaired a research team o n wo rk-
place vio lence and abuse at the University o f New Brunswick, no tes that “ when it
beco m es a questio n o f sham ing peo ple, em barrassing peo ple, ho lding them up to
ridicule, just co nstantly being o n their case fo r no apparent reaso n, then [management]
is beco ming unreaso nable.” Mo reo ver, “a bully o ften acts by iso lating an individual.
And they may be a serial bully, who always has a victim o n the go . They may, in fact, have
multiple victims o n the go , but their strategy is to iso late them fro m o ne ano ther.” 39

Sexual Harassment
The issue o f sexual harassment has received increasing attentio n by co rpo ratio ns and the
media because o f the gro wing ranks o f female emplo yees, especially in no ntraditio nal
wo rk enviro nments, and because o f a number o f high-pro file cases. Fo r example, in
March 2006, it was repo rted that all fo ur female firefighters in the Richmo nd, BC, fire
department had taken a leave o f absence, alleging that they had faced repeated sexual
harassment and discriminatio n fro m male firefighters in the department. The city has
since intro duced a co de o f co nduct fo r its firefighters.40 A survey by Yo rk University
fo und that 48 percent o f wo rking wo men in Canada repo rted they had experienced
so m e fo rm o f “ gender harassm ent” in the year befo re they were surveyed.41 Sexual
harassment is also o ccurring amo ng yo ung peo ple. A survey o f 3000 high scho o l students
fro m eight scho o ls in To ro nto , Mo ntreal, and Kingsto n, O ntario , fo und that three-quar-
ters o f them said they had been sexually harassed at least o nce by peers.42
Barbara O rser, a research affiliate with The Co nference Bo ard o f Canada, no tes that
“sexual harassment is mo re likely to o ccur in enviro nments that to lerate bullying, intim-
idatio n, yelling, innuendo and o ther fo rms o f disco urteo us behavio ur.” 43 Recent research
suppo rts this view, finding that within wo rk enviro nments, general incivility, gender
harassment, and sexual harassment tended to o ccur to gether.44 These behavio urs indi-
cate that o ne perso n is trying to use po wer o ver ano ther.
The Supreme Co urt o f Canada defines sexual harassment as unwelco me behavio ur sexual harassment Unwelcome
o f a sexual nature in the wo rkplace that negatively affects the wo rk enviro nment o r leads behaviour of a sexual nature in the
to adverse jo b-related co nsequences fo r the emplo yee.45 Despite the legal framewo rk fo r workplace that negatively affects the
work environment or leads to
defining sexual harassment, there co ntinues to be disagreement as to what specifically
adverse job-related consequences
co nstitutes sexual harassment. Sexual harassment includes unwanted physical to uching, for the employee.
recurring requests fo r dates when it is made clear the perso n is no t interested, and co ercive
Supreme Court of Canada
threats that a perso n will lo se her o r his jo b if she o r he refuses a sexual pro po sitio n. The www.scc-csc.gc.ca
pro blems o f interpreting sexual harassment o ften surface aro und so me o f its mo re subtle
fo rms—unwanted lo o ks o r co mments, o ff-co lo ur jo kes, sexual artifacts such as nude cal-
endars in the wo rkplace, sexual innuendo , o r misinterpretatio ns o f where the line between
“being friendly” ends and “harassment” begins. Case Incident— Damned if You Do; Damned
if You Don’t o n the CD-RO M that acco mpanies this textbo o k illustrates ho w these pro b-
lems can make peo ple feel unco mfo rtable in the wo rkplace. Mo st studies co nfirm that
the co ncept o f power is central to understanding sexual harassment.46 This seems to be true
whether the harassment co mes fro m a manager, a co -wo rker, o r even an emplo yee.
234 Part 3 Int eract ing Eff ect ively

Because o f po wer inequities, sexual harassment by o ne’s manager typically creates

the greatest difficulty fo r the perso n being harassed. If there are no witnesses, it is the
manager’s wo rd against the emplo yee’s wo rd. Are there o thers who m this manager has
harassed, and if so , will they co m e fo rward? Because o f the m anager’s co ntro l o ver
reso urces, many o f tho se who are harassed are afraid o f speaking o ut fo r fear o f retali-
atio n by the manager.
O ne o f the places where there has been a dramatic increase in the number o f sexual
harassment co mplaints is at university campuses acro ss Canada, acco rding to Paddy
Stamp, sexual harassment o fficer at the University o f To ro nto .47 Ho wever, agreement o n
what co nstitutes sexual harassment, and ho w it sho uld be investigated, is no clearer
fo r universities than fo r industry.
While no nco nsensual sex between pro fesso rs and students is rape and subject to
criminal charges, it is harder to evaluate apparently co nsensual relatio nships that o ccur
o utside the classro o m. There is so me argument o ver whether truly co nsensual sex is
ever po ssible between students and pro fesso rs. In an effo rt to undersco re the po wer
discrepancy and po tential fo r abuse o f it by pro fesso rs, in the late 1990s Yale University
decided that there co uld be no sexual relatio ns between students and pro fesso rs. In
2003, the University o f Califo rnia, which includes Berkeley, implemented a po licy that
went further, fo rbidding ro mantic relatio nships between pro fesso rs and their students
as well.48 Mo st universities have been unwilling to take such a stro ng stance. Ho wever,
this issue is certainly o ne o f co ncern, because the power distance between pro fesso rs and
students is co nsiderable.
In co ncluding this discussio n, we wo uld like to po int o ut that sexual harassment is
abo ut po wer. It is abo ut an individual co ntro lling o r threatening ano ther individual. It
is wro ng. Mo reo ver, it is illegal. Yo u can understand ho w sexual harassment surfaces
in o rganizatio ns if yo u analyze it in po wer terms. We sho uld also po int o ut that sexual
harassment is no t so mething do ne o nly by men to wo men. There have been several
cases o f males repo rting sexual harassment by male managers.49 While there have been
no media repo rts o f wo men sexually harassing either men o r wo men in Canada, under
the framewo rk o f the law, it is certainly feasible.

POLITICS: POWER IN ACTION

Both International Olympic Committee president Jacques Rogge and International Skating
Union president Ottavio Cinquanta paid a lot of attention to w hat the media had to say about
the figure skating controversy. The event had taken place in the United States, and Americans
made it clear that they w ere dismayed w hen the Canadians lost. As a result, the controversy w as
discussed on a variety of talk show s and new s programs, and in new spapers. This w as a w ay
of keeping the controversy alive, and trying to persuade the Olympics head that the decision
needed to be changed. Rogge arguably w as affected by the pressure, fearing that the negative
publicity surrounding the skating controversy w as harming the rest of the Olympics. Thus,
w hen he decided to aw ard the unprecedented second gold medal, it might have been less
about making the “ right” decision and more about making a political decision to silence dis-
sent. So w hy is politics so prevalent? Is it merely a fact of life?

7 Why do people engage O rganizatio nal behavio ur researchers have learned a lo t in recent years abo ut ho w peo -
in politics? ple gain and use po wer in o rganizatio ns. Part o f using po wer in o rganizatio ns is engag-
ing in o rganizatio nal po litics to influence o thers to help yo u achieve yo ur perso nal
o bjectives. Lo bbying o thers to get them to vo te with yo u o n a particular decisio n is
engaging in o rganizatio nal po litics.
When peo ple get to gether in gro ups, po wer will be exerted. Peo ple want to carve o ut
niches fro m which to exert influence, to earn rewards, and to advance their careers.50
When emplo yees in o rganizatio ns co nvert their po wer into actio n, we describe them as
 Chapter 7 Pow er and Polit ics 235

engaged in po litics. Tho se with go o d po litical skills have the ability to use their bases
o f po wer effectively.51 Belo w we co ver the types o f po litical activity peo ple use to try to
influence o thers as well as impressio n management. Po litical skills are no t co nfined to
adults, o f co urse. When yo ur Vanco uver autho r’s six-year-o ld nephew wanted the latest
Game Bo y kno wing full well his parents did no t appro ve, he waged a careful, deliberate
campaign to wear them do wn, explaining ho w he wo uld use the to y o nly at assigned
times, etc. His po liticking paid o ff: Within six weeks he succeeded in getting the to y.

Definition of Political Behaviour

There has been no sho rtage o f definitio ns fo r o rganizatio nal po litics. One clever definitio n
o f politics co mes fro m To m Jako bek, To ro nto ’s fo rmer budget chief, who said, “ In po l-
itics, yo u may have to go fro m A to C to D to E to F to G and then to B.” 52
Fo r o ur purpo ses, we will define po litical behavio ur in o rganizatio ns as tho se activ- political behaviour Those activi-
ities that are o utside o ne’s fo rmal ro le (i.e., no t part o f o ne’s specific jo b duties), and that ties that influence, or attempt to
influence, o r try to influence, the distributio n o f advantages and disadvantages within influence, the distribution of advan-
tages and disadvantages within the
the o rganizatio n.53
organization.
This definitio n enco mpasses key elements fro m what mo st peo ple mean when they
talk abo ut o rganizatio nal po litics. Po litical behavio ur is outside o ne’s specified jo b require-
ments. The behavio ur attempts to use o ne’s bases of power. Our definitio n also enco mpasses
effo rts to influence the go als, criteria, o r pro cesses used fo r decisio n making when we state
that po litics is co ncerned with “the distributio n o f advantages and disadvantages within
the o rganizatio n.” O ur definitio n is bro ad eno ugh to include such varied po litical behav-
io urs as whistle-blowing, spreading rumo urs, withho lding key info rmatio n fro m decisio n
makers, leaking co nfidential info rmatio n abo ut o rganizatio nal activities to the media,
exchanging favo urs with o thers in the o rganizatio n fo r mutual benefit, and lo bbying o n
behalf o f o r against a particular individual o r decisio n alternative. Exhibit 7-5 o n page 236
pro vides a quick measure to help yo u assess ho w po litical yo ur wo rkplace is.
No w that yo u have learned a bit abo ut po litical behavio ur, yo u may want to assess
yo ur o wn po litical behavio ur in o ur Learning About Yourself Exercise o n page 000.
Po litical behavio ur is no t co nfined to just individual ho pes and go als. Po litics might
also be used to achieve o rganizatio nal go als.54 Fo r instance, if a CEO wants to change
the way em plo yees are paid, say fro m salaries to co m m issio ns, this m ight no t be a
po pular cho ice to the emplo yees. While it might make go o d o rganizatio nal sense to
make this change ( perhaps the CEO believes this will increase pro ductivity) , simply
im po sing the change thro ugh the use o f po wer ( go alo ng with this o r yo u’re fired)
might no t be very po pular. Instead, the CEO may try to pitch the reaso ns fo r the change
to sympathetic managers and emplo yees, trying to get them to understand the neces-
sity fo r the change. Burnaby, BC-based TELUS used a direct appro ach with its emplo y-
ees after fo ur an d a h alf years o f un successful b argain in g with un io n lead ers.
Management became frustrated with the impasse and explained their wage and bene-
fit o ffer directly to emplo yees in the ho pes o f getting the emplo yees to side with man-
agement rather than their unio n leaders. The unio n was o utraged by this behavio ur, and
it to o k several mo re mo nths fo r unio n members and management to finally co mplete
a new co llective agreement in fall 2005.

The Reality of Politics

Why, yo u may wo nder, must po litics exist? Isn’t it po ssible fo r an o rganizatio n to be
po litics-free? It’s possible, but mo st unlikely. O rganizatio ns are made up o f individuals
and gro ups with different values, go als, and interests.55 This sets up the po tential fo r co n-
flict o ver reso urces. The allo catio n o f departmental budgets, space, pro ject respo nsibil-
ities, and bo nuses are the kind o f reso urce issues abo ut which o rganizatio nal members
will disagree.
236 Part 3 Int eract ing Eff ect ively

EXHIBIT 7-5 A Quick M easure of How Political Your Workplace Is

How political is your w orkplace? Answ er the 12 questions using the follow ing scale:

SD = Strongly d isagree
D = Disagree
U = Uncertain
A = Agree
SA = Strongly agree

1. M anagers often use the selection system to hire only people w ho can help them in their future. ______

2. The rules and policies concerning promotion and pay are fair; it’s how managers carry out the policies
that is unfair and self-serving. ______

3. The performance ratings people receive from their managers reflect more of the managers’
“ ow n agenda” than the actual performance of the employee. ______

4. Although a lot of w hat my manager does around here appears to be directed at helping employees,
it’s actually intended to protect my manager. ______

5. There are cliques or “ in-groups” that hinder effectiveness around here. ______

6. M y co-w orkers help themselves, not others. ______

7. I have seen people deliberately distort information requested by others for purposes of personal gain,
either by w ithholding it or by selectively reporting it. ______

8. If co-w orkers offer to lend some assistance, it is because they expect to get something out of it. ______

9. Favouritism rather than merit determines w ho gets ahead around here. ______

10. You can usually get w hat you w ant around here if you know the right person to ask. ______

11. Overall, the rules and policies concerning promotion and pay are specific and w ell-defined. ______

12. Pay and promotion policies are generally communicated clearly in this organization. ______

This questionnaire taps the three salient dimensions that have been found to be related to perceptions of politics: manager
behaviour, co-w orker behaviour, and organizational policies and practices. To calculate your score for items 1 to 10, give
yourself 1 point for Strongly disagree; 2 points for Disagree; and so forth (through 5 points for Strongly agree). For items
11 and 12, reverse the score (that is, 1 point for Strongly agree, etc.). Add up the total: The higher the total score, the
greater the degree of perceived organizational politics.

Source: G. R. Ferris, D. D. Frink, D. P. S. Bhaw uk, J. Zhou, and D. C. Gilmore, “ Reactions of Diverse Groups to Politics in the Workplace,” Journal
of M anagement 22, no. 1 (1996), pp. 32–33.

Reso urces in o rganizatio ns are also limited, which o ften turns po tential co nflict into
real co nflict. If reso urces were abundant, then all the vario us co nstituencies within the
o rganizatio n co uld satisfy their go als. Because they are limited, no t everyo ne’s inter-
ests can be pro vided fo r. Mo reo ver, whether true o r no t, gains by o ne individual o r
gro up are o ften perceived as being at the expense o f o thers within the o rganizatio n.
These fo rces create a co m petitio n am o ng m em b ers fo r the o rganizatio n’s lim ited
reso urces. Peter Go dso e, fo rmer CEO o f To ro nto -based Sco tiabank, demo nstrated an
awareness o f ho w to get the mo st reso urces fo r whatever unit he headed, while enhanc-
ing his o wn career, as this O B in the Workplace sho ws.
 Chapter 7 Pow er and Polit ics 237

O B I N T H E W O RK PL A C E

Godsoe M akes the M ost of Resources to Become

CEO of Scotiabank
How d o you ensure your w ay to the top? Peter Go dso e was determined to beco me
CEO o f Sco tiabank. In his quest fo r this jo b, he learned ho w to “ o utlast and o utwit Scotiabank
o ther ho pefuls.” 56 When he was put in charge o f the bank’s lending in the United www.scotiabank.com
States and Latin America, he made the o peratio n his own by giving it a new name, the
Western Hemisphere Internatio nal Regio nal Office (WHIRO). While heading WHIRO,
he repo rted to Sco tt McDo nald, who was regarded as a po tential successo r to then
CEO Ced Ritchie. In o rder to raise his pro file, Go dso e built “a lo yal fo llo wing by
making WHIRO the ho t sho p,” thus making himself lo o k better than McDo nald.
Go dso e develo ped carto o ns, WHIRO hero awards, a crest, jackets, and a Latin mo tto
that translated: “If yo u do n’t have a hernia, yo u’re no t pulling yo ur weight,” all with
the aim o f strengthening his unit’s culture and making it mo re pro minent within
the bank. After his time at WHIRO, Go dso e demo nstrated a remarkable knack fo r get-
ting himself appo inted the head o f every o rganizatio nal divisio n created. Eventually,
McDo nald ended up leaving the bank, while Go dso e replaced Ritchie ( but no t befo re
he threatened to leave to accept ano ther jo b o ffer) .

Maybe the mo st impo rtant facto r behind po litics within o rganizatio ns is the real-
izatio n that mo st o f the “ facts” that are used to allo cate the limited reso urces are o pen
to interpretatio n. What, fo r instance, is good perfo rmance? What is an adequate impro ve-
ment? What co nstitutes an unsatisfactory jo b? It is in this large and ambiguo us middle
gro und o f o rganizatio nal life— where the facts don’t speak fo r themselves— that po li-
tics flo urish.
Finally, because m o st decisio ns m ust be m ade in a clim ate o f am biguity— where
facts are rarely fully o bjective and thus are o pen to interpretatio n—peo ple within o rgan-
izatio ns will use whatever influence they can to taint the facts to suppo rt their go als
and interests. That, o f co urse, creates the activities we call politicking. Fo r mo re abo ut
ho w o ne engages in po liticking, see From Concepts to Skills o n page 248–249.

President and CEO Aris Kaplanis

of Toronto-based high-tech firm
Teranet (show n here at far right
w it h his senior management
group) discourages negat ive
office politics by his employees.
The company employs the Golden
Rule, “ Do unt o ot hers as you
w ould have others do unto you.”
He tells his employees, “ If you’re
here to play a game, you’re in the
w rong business.”
238 Part 3 Int eract ing Eff ect ively
impression management The
process by which individuals attempt
to control the impression others
form of them.
Therefo re, to answer the earlier questio n o f whether it is po ssible fo r an o rganizatio n
to be po litics-free, we can say “yes”— but o nly if all members o f that o rganizatio n ho ld
the same go als and interests, o rganizatio nal reso urces are no t scarce, and perfo rmance
o utco mes are co mpletely clear and o bjective. Ho wever, that do es no t describe the o rga-
nizatio nal wo rld that mo st o f us live in!
RESEARCH FINDINGS Polit icking
O ur earlier discussio n fo cused o n the favo urable o utco mes fo r individuals who suc-
cessfully engage in po liticking. But fo r mo st peo ple— who have mo dest po litical skills
o r are unwilling to play the po litics gam e— o utco m es tend to be m ainly negative.57
There is, fo r instance, very stro ng evidence indicating that perceptio ns o f o rganizatio nal
po litics are negatively related to jo b satisfactio n.58 The perceptio n o f po litics also tends
to increase jo b anxiety and stress. This seems to be because o f the belief that, by no t
engaging in po litics, a perso n may be lo sing gro und to o thers who are active po litickers,
o r, co nversely, because o f the additio nal pressures individuals feel o f having entered
into and co mpeting in the po litical arena.59 No t surprisingly, when po liticking beco mes
to o much to handle, it can lead employees to quit.60 Finally, there is preliminary evidence
suggesting that po litics leads to self-repo rted declines in em plo yee perfo rm ance.61
Perceived o rganizatio nal po litics appears to have a demo tivating effect o n individuals,
and thus leads to decreased perfo rmance levels.
Types of Political A ctivity
Within o rganizatio ns, we can find a variety o f po litical
activities in which peo ple engage. These include the fo l-
*peWhy do some
ople se e m to
lo wing:62
e ngage in politics • Attacking or blaming others. Used when trying to
more than othe rs? avo id respo nsibility fo r failure.
• Using information. Withho lding o r disto rting info r-
matio n, particularly to hide negative info rmatio n.
• Managing impressions. Bringing po sitive attentio n to o ne’s self o r taking credit
fo r the po sitive acco mplishments o f o thers.
• Building support for ideas. Making sure that o thers will suppo rt o ne’s ideas
befo re they are presented.
• Praising others. Making impo rtant peo ple feel go o d.
• Building coalitions. Jo ining with o ther peo ple to create a po werful gro up.
• Associating with influential people. Building suppo rt netwo rks.
• Creating obligations. Do ing favo urs fo r o thers so they will o we yo u favo urs later.
Individuals will use these po litical activities fo r different purpo ses. So me o f these
activities are mo re likely to be used to defend o ne’s po sitio n ( such as attacking o r blam-
ing o thers) , while o ther activities are meant to enhance o ne’s image ( such as building
suppo rt fo r ideas and managing impressio ns) .
Impression M anagement
The pro cess by which individuals attem pt to co ntro l the im pressio n o thers fo rm o f
them is called impressio n management.63 Being perceived po sitively by o thers sho uld
have benefits fo r peo ple in o rganizatio ns. It might, fo r instance, help them initially to
get the jo bs they want in an o rganizatio n and, o nce hired, to get favo urable evalua-
tio ns, superio r salary increases, and mo re rapid pro mo tio ns. In a po litical co ntext, it
 Chapter 7 Pow er and Polit ics 239

might help bring mo re advantages their way. Fo r instance, during the O lympics figure
skating co ntro versy, Jamie Salé and David Pelletier were seen in many televisio n sho ws
and news co nferences, always giving the impressio n that they were no t lo bbying fo r a go ld
medal after the fact, and presenting an image o f clean-cut, so ft-spo ken individuals. This
led to even mo re sympathy fo r their plight.
Im pressio n m anagem ent do es no t im ply that the im pressio ns peo ple co nvey are
necessarily false ( altho ugh, o f co urse, they so metimes are) .64 So me activities may be
do ne with great sincerity. Fo r instance, yo u may actually believe that ads co ntribute little
to sales in yo ur regio n o r that yo u are the key to the tripling o f yo ur divisio n’s sales.
Ho wever, if the image claimed is false, yo u may be discredited.65 The impressio n man-
ager must be cautio us no t to be perceived as insincere o r manipulative.66

RESEARCH FINDINGS Impression M anagement

Belo w we explo re research findings in two areas: the use o f impressio n management
and the effectiveness o f impressio n management.

Use of Im pression M anagem ent Impressio n management is mo re likely to be

used by high self-mo nito rs than lo w self-mo nito rs.67 Lo w self-mo nito rs tend to present
images o f themselves that are co nsistent with their perso nalities, regardless o f the ben-
eficial o r detrimental effects fo r them. In co ntrast, high self-mo nito rs are skilled at read-
ing situatio ns and m o ulding their appearances and behavio ur to fit each situatio n.
Research by Marc-David Seidel at the Sauder Scho o l o f
Business, University o f British Co lum bia, and his co l- Sauder School of Business,
*doe s impre ssion
In what situations leagues suggests that impressio n management is engaged
in mo re frequently by tho se who spend at least so me time
University of British Columbia
www.sauder.ubc.ca
manage me nt work
teleco mmuting. These emplo yees feel the need to keep
be st?
their superviso rs m o re info rm ed abo ut their activities,
because they are physically absent.68

Ef f ect iveness of Im pression M anagem ent A number o f studies have exam-

ined the effectiveness o f impressio n management techniques in a variety o f wo rk situ-
atio ns. Studies sho w that impressio n management behavio ur is po sitively asso ciated
with jo b-interview success.69 Fo r instance, o ne study fo und that recent university grad-
uates who used mo re self-pro mo tio n tactics go t higher evaluatio ns by interviewers and
mo re fo llo w-up jo b-site visits, even after adjusting fo r grade po int average, gender, and
jo b type.70 O ther studies have fo und that tho se using impressio n management tech-
niques received better perfo rmance evaluatio ns fro m their managers,71 were liked mo re
by their managers,72 and were criticized less.73 Impressio n management effects seem
to wo rk mo re stro ngly when the measures o f perfo rmance are subjective, ho wever, than
when they can be measured mo re o bjectively.74 Fo r instance, tho se using impressio n
m anagem ent techniques were rated m o re highly fo r interperso nal effectiveness, but
they co uld be mo re negatively evaluated o n their business co mpetence.75 O verall, the
findings o f these studies suggest that there is so me advantage to engaging in impres-
sio n m anagem ent as lo ng as the perso n delivers o n the o bjective m easures o f per-
fo rm ance as well. Fo r tho se who intend to beco m e leaders, engaging in im pressio n
management techniques makes it mo re likely that they will be cho sen.76

M aking Office Politics Work

O ne thing to be aware o f is that extreme o ffice po litics can have a negative effect o n
emplo yees. Researchers have fo und that o rganizatio nal po litics is asso ciated with less
o rganizatio nal co mmitment,77 lower jo b satisfactio n,78 and decreased jo b perfo rmance.79
 240 Part 3 Int eract ing Eff ect ively

Fast Company M agazine
www.fastcompany.com
Individuals who experience greater o rganizatio nal po litics are m o re likely to repo rt
higher levels o f jo b anxiety, 8 0 and they are m o re likely to co nsid er leaving the
o rganizatio n.81
Is there an effective way to engage in o ffice po litics that is less likely to be disruptive
o r negative? We discussed different nego tiatio n strategies in Chapter 6, including a win-
lose strategy, which means that if I win, yo u lo se, and a win-win strategy, which means cre-
ating situatio ns where bo th o f us can win. Fast Company, a business magazine, identifies
several rules that may help yo u make yo ur way thro ugh the o ffice po litics maze:82

• Nobody wins unless everybody wins. The mo st successful pro po sals lo o k fo r ways
to ackno wledge, if no t include, the interests o f o thers. This requires building
suppo rt fo r yo ur ideas acro ss the o rganizatio n. “ Real po litical skill isn’t abo ut
campaign tactics,” says Lo u DiNatale, a veteran po litical co nsultant at the
University o f Massachusetts. “ It’s abo ut pulling peo ple to ward yo ur ideas and
then pushing tho se ideas thro ugh to o ther peo ple.” When ideas are packaged
to lo o k as if they are best fo r the o rganizatio n as a who le and will help o thers,
it is harder fo r o thers to co unteract yo ur pro po sal.

• Don’t just ask for opinions— change them. It is helpful to find o ut what peo ple
think and then, if necessary, set o ut to change their o pinio ns so that they can
see what yo u want to do . It is also impo rtant to seek o ut the o pinio ns o f tho se
yo u do n’t kno w well, o r who are less likely to agree with yo u. Gathering
to gether peo ple who always suppo rt yo u is o ften no t eno ugh to build an effec-
tive co alitio n.

• Everyone expects to be paid back. In o rganizatio ns, as in life, we develo p per-

so nal relatio nships with tho se aro und us. It is tho se perso nal relatio nships
that affect much o f the behavio ur in o rganizatio ns. By building go o d relatio n-
ships with co lleagues, suppo rting them in their endeavo urs, and sho wing
appreciatio n fo r what they acco mplish, yo u are building a fo undatio n o f sup-
po rt fo r yo ur o wn ideas.

• Success can create opposition. As part o f the o ffice po litics, success can be viewed
as a win-lose strategy, which we identified abo ve. So me peo ple may feel that
yo ur success co mes at their expense. So , fo r instance, yo ur higher pro file may
mean that a pro ject o f theirs will be received less favo urably. Yo u have to be
prepared to deal with this o ppo sitio n.

SUMMARY AND IMPLICATIONS

1 What is pow er? Po wer refers to a capacity that A has to influence the behavio ur o f
B, so that B acts in acco rdance with A’s wishes.
SNAPSHOT SUM M ARY
2 How d oe s one get pow er? There are six bases o r so urces o f po wer: co ercive,
1 A Definition of Pow er reward, legitimate, expert, referent, and info rmatio n. These fo rms o f po wer differ
2 Bases of Pow er in their ability to impro ve a perso n’s perfo rmance. Coercive power tends to result in
Coercive Power negative perfo rmance respo nses fro m individuals; it decreases satisfactio n, increases
Reward Power mistrust, and creates fear. Reward power may impro ve perfo rmance, but it can also
Legitimate Power lead to unethical behavio ur. Legitimate power do es no t have a negative effect, but do es
Expert Power no t generally stimulate emplo yees to impro ve their attitudes o r perfo rmance, and
Referent Power it do es no t generally result in increased co mmitment. Iro nically, the least effec-
tive bases o f po wer—co ercive, legitimate, and reward—are the o nes mo st likely to
Information Power
be used by managers, perhaps because they are the easiest to implement. By co n-
Evaluating the Bases of
Power trast, effective leaders use expert and/ o r referent power; these fo rms o f po wer are
no t derived fro m the perso n’s po sitio n. Information power co mes fro m access to
 Chapter 7 Pow er and Polit ics 241

and co ntro l o ver info rmatio n and can be used in bo th po sitive ( sharing) and neg-
ative ( withho lding) ways in the o rganizatio n. 3 Dependency: The Key to
Pow er
3 How d oes d epend ency affect pow er? To maximize yo ur po wer, yo u will want to The General Dependency
increase o thers’ dependence o n yo u. Yo u can, fo r instance, increase yo ur po wer in Postulate
relatio n to yo ur emplo yer by develo ping kno wledge o r a skill that he o r she needs What Creates Dependency?
and fo r which there is no ready substitute. Ho wever, yo u will no t be alo ne in try-
4 Influence Tactics
ing to build yo ur bases o f po wer. O thers, particularly emplo yees and peers, will
seek to make yo u dependent o n them. While yo u try to maximize o thers’ depend- 5 Empow erment: Giving
Pow er to Employees
ence o n yo u, yo u will be trying to minimize yo ur dependence o n o thers. O f co urse,
o thers yo u wo rk with will be trying to do the same. The result is a co ntinual strug-
Definition of Empowerment
gle fo r po wer. Empowerment in the
Workplace
4 What tactics can b e used to increase pow er? O ne particular study identified 6 The Abuse of Pow er:
nine tactics, o r strategies, that managers and emplo yees use to increase their po wer: Harassment in the
ratio nal persuasio n, inspiratio nal appeals, co nsultatio n, ingratiatio n, perso nal Workplace
appeals, exchange, co alitio n tactics, pressure, and legitimating tactics.83 Workplace Bullying
5 What d oes it mean to b e empow ered ? Empo werment refers to the freedo m and Sexual Harassment
the ability o f emplo yees to make decisio ns and co mmitments. There is a lo t o f 7 Politics: Pow er in Action
po sitive press o n empo werment. Ho wever, much o f the talk o f empo werment in Definition of Political
o rganizatio ns do es no t result in emplo yees’ being empo wered. So me managers Behaviour
do no t fully understand ho w to go abo ut empo wering their emplo yees, and o thers The Reality of Politics
find it difficult to share their po wer with emplo yees. As well, so me emplo yees have Types of Political Activity
little o r no interest in being empo wered, and empo werment is no t so mething that Impression Management
wo rks well in every culture. Making Office Politics Work

6 How are pow er and harassment related ? Peo ple who engage in harassment in
the wo rkplace are typically abusing their po wer po sitio n. Harassment can co me
in many fo rms, fro m gro ss abuse o f po wer to ward anyo ne o f lo wer rank, to abuse
o f individuals because o f their perso nal characteristics, such as race, religio n,
natio nal o rigin, and gender.

7 Why d o people engage in politics? Peo ple use po litics to influence o thers to
help them achieve their perso nal o bjectives. Whenever peo ple get to gether in
gro ups, power will be exerted. Peo ple also use impressio n management to influence
peo ple. Impressio n management is the pro cess by which individuals attempt to
co ntro l the impressio n o thers fo rm o f them. Tho ugh po litics is a natural o ccur-
rence in o rganizatio ns, when it is carried to an extreme it can damage relatio n-
ships amo ng individuals.
O B A T W O RK
For Review
1 . What is pow er? How do you get it?

2. Contrast the bases of pow er and influence tactics.

3. What are some of the key contingency variables that determine w hich tactic a pow er holder is likely to use?

4. Which of the six bases of pow er lie w ith the individual? Which are derived from the organization?

5. State the general dependency postulate. What does it mean?

6 . What creates dependency? Give an applied example.

7. Identify the range of empow erment that might be available to employees.

8. Define sexual harassment. Who is most likely to harass an employee: a boss, a co-w orker, or a subordinate? Explain.

9. How are pow er and politics related?

1 0. Define political behaviour. Why is politics a fact of life in organizations?

For Critical Thinking

1 . Based on the information presented in this chapter, if you w ere a recent graduate entering a new job, w hat w ould
you do to maximize your pow er and accelerate your career progress?

2. “ Politics isn’t inherently bad. It is merely a w ay to get things accomplished w ithin organizations.” Do you agree or
disagree? Defend your position.

3. You are a sales representative for an international softw are company. After four excellent years, sales in your territory
are off 30 percent this year. Describe three impression management techniques you might use to convince your man-
ager that your sales record is better than one could have expected under the circumstances.

4. “ Sexual harassment should not be tolerated in the w orkplace.” “ Workplace romances are a natural occurrence in
organizations.” Are both of these statements true? Can they be reconciled?

5. Which impression management techniques have you used? What ethical implications, if any, are there in using
impression management?

OB for You
■ There are a variety of w ays to increase your pow er in an organization. As an example, you could acquire more know l-
edge about a situation and then use that information to negotiate a bonus w ith your employer. Even if you don’t get
the bonus, the know ledge may help you in other w ays.

■ To increase your pow er, consider how dependent others are on you. Dependency is affected by your importance, sub-
stitutability, and scarcity options. If you have needed skills that no one else has, you w ill have more pow er.

■ You can develop political skills. Remembering to take time to join in an office birthday celebration for someone is part
of developing the skill of w orking w ith others effectively.

PO I N T
“ Special Deals” fo r “ Special
Emplo yees” Make Sense
In countries such as France, Belgium, and the Netherlands,
terms of employment are largely mandated by law and
hence highly standardized.84 In contrast, in countries such
as Canada, the United States, the United Kingdom, and
New Zealand, managers have considerable leew ay to nego-
t iat e idiosyncrat ic deals w it h employees. In t hese lat t er
countries, managers are increasingly using this latitude to
customize their treatment of “ special” individuals.
Tw o trends help explain the grow th in special deals for
certain employees. First, the demand for know ledge w ork-
ers w ith distinctive competencies in a competitive market
means w orkers have greater pow er to negotiate employ-
ment condit ions suit ed t o t heir t ast es and pref erences.
Second, the decline in unionization and the w eakening of
the job security–based model of organizational careers have
led to less-standardized conditions of employment.
In order to hire, motivate, and keep highly skilled w ork-
ers, managers are negotiating special treatment for certain
employees. Examples of t his special t reat ment include
higher pay than others for doing similar w ork, allow ing an
employee to w ork from home several days a w eek, permit-
ting an employee to leave early to fulfill family obligations,
upgrading t ravel arrangement s, and allow ing cert ain
employees to spend time on personal projects during w ork
time.
W hat do t hese employees have t hat allow t hem t o
make idiosyncratic arrangements? It can be unique creden-
tials, special skills, high status, important contacts, or high
marketability. But it must also include the w illingness of an
employee or prospective employee to speak up and ask for
special treatment. These deals are typically offered as bar-
gaining chips w hen negotiating initial employment terms or
after the employee has been on the job a w hile, built a
trusting relationship w ith his or her manager, and become a
valued performer.
These special deals have advantages for both employees
and managers. They provide greater rew ards for employees
and allow them to tailor their jobs to better meet their per-
sonal needs. They also give individual managers greater lat-
itude in motivating their employees and the flexibility to
adapt to changing circumstances.
Chapter 7 Pow er and Polit ics 243
O B A T W O RK
CO U N TERPO I N T
“ Special Deals” Hurt the
Wo rk Enviro nment
M aking special deals w ith certain employees is bound to
undermine w hat ever t rust t here is in an organizat ion.
Although management may desire flexibility in its relation-
ships w ith employees, maintaining standardized practices is
more likely to provide the appearance of fairness that is
needed t o creat e a climat e of t rust . Cust omizat ion of
employment relationships, under the guise of flexibility,
only increases politics in the w orkplace.
There is no shortage of arguments against special deals
for special employees. Here are just a few :
• Special deals give too much pow er to managers. They
allow managers to negotiate favourable treatment w ith
employees they like, politicizing the w ork environment.
• Special deals are unlikely to be perceived as fair by
those w ho do not receive them. One person’s merit is
another’s favouritism.
• Special deals rew ard the w rong behaviours. They
encourage employees to “ kiss up” to their bosses and
to treat every attempt to get a raise or time off as a
bargaining opportunity.
• Special deals tend to go to aggressive employees,
w hether or not they are contributing the most. Shy,
quiet, and less demanding employees w ho are good
performers are likely to be excluded.
• Special deals are not cost-free. One employee’s gain is
often at another’s expense. So allow ing one employee in
a department to take off tw o hours early every Thursday
afternoon to coach his son’s baseball team often means
others in that department w ill have to take up some of
his w ork. This has the potential to create conflicts. For
instance, evidence indicates that many single and child-
less employees resent the “ family-friendly” benefits—
such as helping to find an employee’s spouse
employment or paid daycare—that many companies
offer to married w orkers and those w ith children.
Our position is that special deals undermine trust and
cooperation at w ork. We have spent three-quarters of a
century building formal human resource systems that ensure
consistent treatment of the w orkforce. These systems are
critical to promoting fairness, cooperation, and efficiency.
Using idiosyncratic deals to supposedly enhance flexibility is
a major step tow ard trashing these systems.
244 Part 3 Int eract ing Eff ect ively

O B A T W O RK

LEA RN I N G A B O U T Y O U RSELF EX ERC I SE

Ho w Po litical Are Yo u?
To determine your political tendencies, please review the follow ing statements. Check the answ er that best represents your
behaviour or belief, even if that particular behaviour or belief is not present all the time.

True False

1 . You should make others feel important through an open appreciation of their
ideas and w ork. ______ ______

2. Because people tend to judge you w hen they first meet you, alw ays try to make
a good first impression. ______ ______

3. Try to let others do most of the talking, be sympathetic to their problems, and
resist telling people that they are totally w rong. ______ ______

4. Praise the good traits of the people you meet, and alw ays give people an opportunity
to save face if they are w rong or make a mistake. ______ ______

5. Spreading false rumours, planting misleading information, and backstabbing are

necessary, if somew hat unpleasant, methods of dealing w ith your enemies. ______ ______

6 . Sometimes it is necessary to make promises that you know you w ill not or cannot keep. ______ ______

7. It is important to get along w ith everybody, even w ith those w ho are generally
recognized as w indbags, abrasive, or constant complainers. ______ ______

8. It is vital to do favours for others so that you can call in these IOUs at times w hen they
w ill do you the most good. ______ ______

9. Be w illing to compromise, particularly on issues that are minor to you but major to others. ______ ______

1 0. On controversial issues, it is important to delay or avoid your involvement if possible. ______ ______

Scoring Key:
According to the author of this instrument, a complete organizational politician w ill answ er “ true” to all 10 questions.
Organizational politicians w ith fundamental ethical standards w ill answ er “ false” to questions 5 and 6, w hich deal w ith
deliberate lies and uncharitable behaviour. Individuals w ho regard manipulation, incomplete disclosure, and self-serving
behaviour as unacceptable w ill answ er “ false” to all or almost all of the questions.

Source: J. F. Byrnes, “ The Political Behavior Inventory.” Reprinted by permission of Dr. Joseph F. Byrnes, Bentley College, Waltham, M assachusetts.

B REA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Describe an incident in w hich you tried to use political behaviour in order to get something you w anted. What
influence tactics did you use?

2. In thinking about the incident described above, w ere your influence tactics effective? Why?

3. Describe an incident in w hich you saw someone engaging in politics. What w as your reaction to observing the
political behaviour? Under w hat circumstances do you think political behaviour is appropriate?
 Chapter 7 Pow er and Polit ics 245

O B A T W O RK

W O RK I N G W I TH O T H ERS EX ERC I SE

Understanding Bases o f Po wer

Step 1 : Your instructor w ill divide the class into groups of about 5 or 6 (making sure there are at least 5 groups). Each
group w ill be assigned 1 of the follow ing bases of pow er: (1) coercive, (2) rew ard, (3) legitimate, (4) expert,
(5) referent, (6) information. Refer to your text for discussion of these terms.

Step 2: Each group is to develop a role play that highlights the use of the pow er assigned. The role play should be
developed using the follow ing scenario:

You are the leader of a group that is trying to develop a w ebsite for a new client. One of your group mem-
bers, w ho w as assigned the task of researching and analyzing the w ebsites of your client’s competition, has
tw ice failed to bring the analysis to scheduled meetings, even though the member knew the assignment
w as due. Consequently, your group is falling behind in getting the w ebsite developed. As leader of the
group, you have decided to speak w ith this team member and to use your specific brand of pow er to
influence the individual’s behaviour.

Step 3: Each group should select 1 person to play the group leader, and another to play the member w ho has not
done the assignment. You have 10 minutes to prepare an influence plan.

Step 4: Each group w ill conduct its role play. In the event of multiple groups’ being assigned the same pow er base, 1
of the groups may be asked to volunteer. While you are w atching the other groups’ role plays, try to put your-
self in the place of the person being influenced, to see w hether that type of influence w ould cause you to
change your behaviour.

Immediately after each role play, w hile the next one is being set up, you should pretend that you w ere the
person being influenced, and then record your reaction using the questionnaire below. To do this, take out a
sheet of paper and tear it into 5 (or 6) pieces. At the top of each piece of paper, w rite the type of influence
that w as used. Then w rite the letters A, B, C, and D in a column, and indicate w hich number on the scale (see
below ) reflects the influence attempt.

Reaction to Influence Questionnaire

For each role play, think of yourself being on the receiving end of the influence attempt described and record your ow n reac-
tion.
Type of pow er used __________________________

A. As a result of the influence attempt, I w ill . . .

d efinitely not comply 1 2 3 4 5 d efinitely comply

B. Any change that does come about w ill be . . .

temporary 1 2 3 4 5 long-lasting

C. M y ow n personal reaction is . . .

resistant 1 2 3 4 5 accepting

D. As a result of this influence attempt, my relationship w ith my group leader w ill probably be . . .

w orse 1 2 3 4 5 b etter

Step 5: For each influence type, 1 member of each group w ill take the pieces of paper from group members and cal-
culate the average group score for each of the 4 questions. For efficiency, this should be done w hile the role
plays are being conducted.
continued
246 Part 3 Int eract ing Eff ect ively

O B A T W O RK

Step 6 : Your instructor w ill collect the summaries from each group, and then lead a discussion based on these results.

Step 7: Discussion.
1 . Which kind of influence is most likely to result immediately in the desired behaviour?
2. Which w ill have the longest-lasting effects?
3. What effect w ill using a particular base of pow er have on the ongoing relationship?
4. Which form of pow er w ill others find most acceptable? Least acceptable? Why?
5. Are there some situations in w hich a particular type of influence strategy might be more effective than others?

Source: This exercise w as inspired by one found in Judith R. Gordon, Organizational Behavior, 2nd ed. (Englew ood Cliffs, NJ: Prentice Hall, 1992),
pp. 499–502.

ETH I C A L D I LEM M A EX ERC I SE

Swapping Perso nal Favo urs?

Jack Grubman w as a pow erful man on Wall Street. As a
star analyst of telecom companies for the Salomon Smith
Barney unit of Citigroup, his recommendations carried a lot
of w eight w ith investors.
For years, Grubman had been negative about the stock
of AT&T. But in November 1999, he upgraded his opinion
on the stock. According to email evidence, it appears that
Grubman’s decision to upgrade AT&T w as not based on the
stock’s fundamentals. There w ere other factors involved.
At the time, his boss at Citigroup, Sanford Weill, w as in
the midst of a pow er struggle w ith co-CEO John Reed to
become t he single head of t he company. M eanw hile,
Salomon w as looking for additional business to increase its
revenues. Getting investment banking business fees from
AT&T w ould be a big plus t ow ard improving revenues.
Salomon’s efforts at getting that AT&T business w ould def-
initely be improved if Grubman w ould upgrade his opinion
on t he st ock. Furt hermore, Weill sought Grubman’s
upgrade to w in favour w ith AT&T CEO M ichael Armstrong,
w ho sat on Citigroup’s board. Weill w anted Armstrong’s
backing in his efforts to oust Reed.
Grubman had his ow n concerns. Although he w as earn-
ing tens of millions a year in his job, he w as a man of mod-
est background. He w as t he son of a cit y employee in
Philadelphia. He w anted the best for his tw in daughters,
w hich included entry to an exclusive New York City nursery
school—a school that a year earlier had reportedly turned
dow n M adonna’s daughter. Weill made a call on Grubman’s
behalf to the school and pledged a $1 million donation
from Citigroup.
At approximately the same time, Weill also asked
Grubman to “ take a fresh look” at his neutral rating on AT&T.
Shortly after being asked to review his rating, Grubman
turned positive, raised his rating, and AT&T aw arded Salomon
an investment-banking job w orth nearly $45 million.
Did Sanford Weill do anything unethical? How about
Jack Grubman? What do you think?
Source: Based on D. Kadlec, “ Did Sandy Play Dirty?” Time Online
Edition, November 25, 2002.

CA SE I N C I D EN T

The Power of Bill Fowler at Blackmer/Dover Resources

Blackmer/Dover Resources’ plant makes heavy-duty pumps
designed to move commodities such as refined oil and choco-
late. The plant has 160 employees.
Historically, management assigned employees to oper-
ate the same machine for months or even years at a time. In
this w ay, each employee became intimately familiar w ith a
narrow task. And employees used their expertise to earn
more money. Until 1997, about half the w orkforce at the
plant earned a premium, on top of their hourly w ages, based
on the number of pumps or pump parts they produced. The
old system gave them a strong incentive to conceal output-
enhancing tricks they had learned, even from co-w orkers.

Today, the plant’s employees receive a straight hourly
w age. To make the plant more flexible, management encour-
ages w orkers to learn a variety of jobs and accept moves to
different parts of the factory floor. M any of the plant’s older
employees, how ever, have not w elcomed the change. One
of those is Bill Fow ler.
Fow ler is 56 years old and has w orked at the Blackmer
plant for 24 years. Fow ler does not like changing jobs and he
does not like telling anyone anything about w hat he does. “ I
don’t w ant to move around,” he says, “ because I love my
routine—it helps me get through the day.”
Fow ler’s job is cutting metal shafts for industrial pumps.
It ’s a precision t ask: A minor error could render a pump
useless. Fow ler is outstanding at w hat he does. He is know n
for the accuracy of his cuts. His bosses also say he can be
hours faster than anyone else in readying his giant cutting
machines to shift from making one type of pump shaft to
another. M anagement w ould love to incorporate Fow ler’s
know -how into the manufacturing process, but he refuses
t o share his secret s even w it h f ellow w orkers. “ If I gave
aw ay my t ricks, management could use [t hem] t o speed
t hings up and keep me at a f lat -out pace all day long,”
says Fow ler.
CBC V I D EO CA SE I N C I D EN T
Jean Brault and the Sponsorship Scandal
The curtain w as pulled back on a Canadian political scandal
as Jean Brault testified at the Gomery inquiry. The sponsor-
ship-kickback scheme toppled a government w eeks after
t he Gomery Commission issued a report t hat out lined a
st ory of greed, polit ics, and m isconduct involving over-
spending, kickbacks, and fraudulent billing by communica-
tions agencies in Quebec.
At the heart of the scandal is advertising executive Jean
Brault, w ho has come a long w ay since he started his adver-
t ising agency, Groupact ion, out of his basem ent in t he
1980s. Groupaction became a multi-million dollar company,
helped along the w ay by generous federal government con-
tracts. Brault is facing fraud charges, and it is from his firm
that the federal government is trying to recover $35 mil-
lion. The floodgates of government sponsorship contracts
opened after the 1995 Quebec referendum, paving the w ay
for a story of misuse of taxpayers’ money and leading to
speculation of w idespread political corruption.
M uch of the deal making took place over lavish lunches
and extravagant dinners. One episode included a dinner
Chapter 7 Pow er and Polit ics 247
O B A T W O RK
Employees like Fow ler w orry w hen they read about com-
panies soliciting employees’ expert advice in the name of mak-
ing their plants more competitive, and then turn around and
move jobs to low er-w age locations abroad. Blackmer’s top
management, how ever, says they have no plans to relocate
jobs or otherw ise hurt w orkers. They merely w ant to pool
employees’ know ledge to make the plant stronger. “ We’ve
realized that to get competitive, we need to start asking these
guys w hat they know,” says Blackmer’s president.
Questions
1 . Explain Bill Fow ler’s behaviour in pow er terms.
2. What, if anything, does this case say about trust and
pow er?
3. What does this case say regarding implementing
know ledge-management systems?
4. What, if anything, can management do to change
Fow ler’s behaviour?
Source: This case is based on T. Aeppel, “ On Factory Floors, Top Workers
Hide Secrets to Success,” Wall Street Journal, July 1, 2002, p. A1.
w ith Brault and his advertising executives the night before
they w ere going to make a pitch for a big federal contract.
The person they w ere going to pitch to, Chuck Guité, w as
also there. Although Brault said at the inquiry the contract
w as not mentioned over dinner, a short time after that meal
together Brault’s company w as aw arded the contract.
In 2001 Brault met w ith Joe M orselli, vice-president of
fundraising for the Liberal Party, w ho requested a Liberal
organizer be placed on Brault ’s company payroll. Brault
refused, and instead offered to pay $5000/month in cash
using a bizarre payment system reminiscent of the under-
w orld.
Brault benefited for several years from the nearly $60 mil-
lion in contracts from the sponsorship program and kept
funnelling money back to the Liberal Party. But stress w as
getting to Brault, and in 2001 he had a falling out w ith Alain
Renaud, a Liberal activist and lobbyist. Brault had been pay-
ing Renaud’s fees and expenses of almost $1 million, and in
ret urn Renaud secured most of Brault ’s sponsorship and
advertising contracts. After the dispute, they parted w ays.
248 Part 3 Int eract ing Eff ect ively

O B A T W O RK

Tony M ignacca, a close associate of Alfonso Galiano, the Questions

f ormer cabinet minist er w ho had been in charge of t he
sponsorship program , began t o pressure Brault t o t ake
Renaud back. M ignacca gave Brault t he impression t hat
Groupaction’s account w ith Via Rail w ould be in jeopardy
if he did not re-hire Renaud.
In 2002, Brault knew a federal advertising contract for the
Department of Justice w as coming up. Because Brault’s firm
w as not ready to bid, he w anted a delay in the closing of the
tender. He met w ith M orselli, proposing $100 000 if the
competition w as delayed. He paid $50 000 in cash, and the
competition w as delayed. He planned to pay the rest in April
2002, but by that time Auditor General Sheila Fraser had
begun her investigation into Brault’s firm. Facing a criminal
trial, Jean Brault, the high-flying advertising man, has been
brought back to earth.
1 . Identify the pow er bases of the individuals involved
in the sponsorship scandal: Jean Brault, Chuck
Guité, Joe M orselli, Alain Renaud, Tony M ignacca,
and Sheila Fraser.
2. What influence tactics did the prominent characters
in the sponsorship saga use to try to pressure people
to act in certain w ays?
3. What factors contributed to the political behaviour
evident in the sponsorship scandal?
Sources: “ Brault Dissected,” The National, April 7, 2005; “ Guité Trial
Begins as Brault Sent to Jail,” Daily Courier (Kelow na), M ay 6, 2006,
p. A8; G. Chiasson, “ Advertising Scandal Fells Canadian
Government,” Advertising Age, December 5, 2005, p. 81; and J.
Intini, “ Ottaw a’s Crusader,” M aclean’s, December 27, 2004, p. 32.

Fr o m Co n ce p t s
t o Sk i l l s

Po liticking
Forget, for a moment, the ethics of politicking and any nega- 3. Gain control of organizational resources. The control
tive impressions you may have of people who engage in orga- of organizational resources that are scarce and impor-
nizational politics.85 If you wanted to be more politically adept tant is a source of pow er. Know ledge and expertise
in your organization, w hat could you do? The follow ing eight are particularly effective resources to control. They
make you more valuable to the organization and
suggestions are likely to improve your political effectiveness.
therefore more likely to gain security, advancement,
1 . Frame arguments in terms of organizational goals. and a receptive audience for your ideas.
Effective politicking requires camouflaging your self-
4. M ake yourself appear indispensable. Because w e
interest. No matter that your objective is self-serving;
are dealing w ith appearances rather than objective
all the arguments you marshal in support of it must
facts, you can enhance your pow er by appearing to
be framed in terms of the benefits that the organiza-
be indispensable. That is, you don’t have to really be
tion w ill gain. People w hose actions appear to bla-
indispensable as long as key people in the organiza-
tantly further their ow n interests at the expense of the
tion believe that you are. If the organization’s prime
organization’s are almost universally denounced, are
decision makers believe there is no ready substitute
likely to lose influence, and often suffer the ultimate
for w hat you are giving the organization, they are
penalty of being expelled from the organization.
likely to go to great lengths to ensure that your
2. Develop the right image. If you know your organiza- desires are satisfied.
tion’s culture, you understand w hat the organiza-
5. Be visible. Because performance evaluation has a
tion w ants and values from its employees—in terms
substantial subjective component, it is important
of dress; associates to cultivate, and those to avoid;
that your manager and those in pow er in the
w hether to appear risk-taking or risk-aversive; the
organization be made aw are of your contribution.
preferred leadership style; the importance placed on
If you are fortunate enough to have a job that
getting along w ell w ith others; and so forth. Then
brings your accomplishments to the attention of
you are equipped to project the appropriate image.
others, it may not be necessary to take direct mea-
Because the assessment of your performance is not
sures to increase your visibility. But your job may
a fully objective process, both style and substance
require you to handle activities that are low in visi-
must be addressed.

bility, or your specific contribution may be indistin-
guishable because you are part of a team endeav-
our. In such cases—w ithout appearing to toot your
ow n horn or create the image of a braggart—you
w ill w ant to call attention to yourself by highlight-
ing your successes in routine reports, having satis-
fied customers relay their appreciation to senior
executives in your organization, being seen at social
functions, being active in your professional associa-
tions, developing pow erful allies w ho speak posi-
tively about your accomplishments, and similar
tactics. Of course, the skilled politician actively and
successfully lobbies to get those projects that w ill
increase his or her visibility.
6 . Develop pow erful allies. It helps to have pow erful
people in your camp. Cultivate contacts w ith poten-
tially influential people above you, at your ow n
level, and in the low er ranks. They can provide you
w ith important information that may not be avail-
able through normal channels. There w ill be times,
too, w hen decisions w ill be made in favour of those
w ith the greatest support. Having pow erful allies
can provide you w ith a coalition of support if and
w hen you need it.
7. Avoid “ tainted” members. In almost every organiza-
tion, there are fringe members w hose status is
questionable. Their performance and/or loyalty is
suspect. Keep your distance from such individuals.
Given the reality that effectiveness has a large sub-
jective component, your ow n effectiveness might be
called into question if you are perceived as too
closely associated w ith tainted members.
8. Support your manager. Your immediate future is in
the hands of your current manager. Since he or she
evaluates your performance, you w ill typically w ant
to do w hatever is necessary to have your manager
on your side. You should make every effort to help
your manager succeed, make her look good, sup-
port her if she is under siege, and spend the time to
find out w hat criteria she w ill be using to assess
your effectiveness. Do not undermine your man-
ager, and do not speak negatively of her to others.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
Chapter 7 Pow er and Polit ics 249
O B A T W O RK
35. How Pow er-Oriented Am I?
36 . What’s M y Preferred Type of Pow er?
37. How Good Am I at Playing Politics?
38. How Well Do I M anage Impressions?
Practising Skills
You used t o be t he st ar market ing manager f or Hilt on
Electronics Corporation. But for the past year, you have
been outpaced again and again by Sean, a new manager in
the design department w ho has been accomplishing every-
thing expected of him and more. M eanw hile, your best
efforts to do your job w ell have been sabotaged and under-
cut by M aria— your and Sean’s manager. For example,
before last year’s international consumer electronics show,
M aria moved $30 000 from your budget to Sean’s. Despite
your best efforts, your marketing team could not complete
all the marketing materials normally developed to show -
case all of your organization’s new products at this impor-
tant industry show. Also, M aria has chipped aw ay at your
staff and budget ever since. Although you have been able
t o meet most of your goals w it h f ew er st aff and less
budget, M aria has continued to slice aw ay resources from
your group. Just last w eek, she eliminated tw o positions in
your team of eight marketing specialists to make room for a
new designer and some extra equipment for Sean. M aria is
clearly taking aw ay your resources w hile giving Sean w hat-
ever he w ants and more. You think it’s time to do some-
thing or soon you w ill not have any team or resources left.
What do you need to do to make sure your division has the
resources to survive and grow ?
Reinforcing Skills
1 . Keep a one-w eek journal of your behaviour describ-
ing incidents w hen you tried to influence others
around you. Assess each incident by asking: Were
you successful at these attempts to influence them?
Why or w hy not? What could you have done differ-
ently?
2. Outline a specific action plan, based on concepts in
this module, that w ould improve your career pro-
gression in the organization in w hich you currently
w ork or an organization in w hich you think you
w ould like to be employed.
250
O B O N TH E ED G E

The
Toxic
Workplace
It’s not unusual to find the follow ing employee behaviours in today’s w ork-
place:

Answ ering the phone w ith a “ yeah,” neglecting to say thank you or
please, using voice mail to screen calls, leaving a half cup of coffee
behind to avoid having to brew the next pot, standing uninvited but
impatiently over the desk of someone engaged in a telephone conversa-
tion, dropping trash on the floor and leaving it for the maintenance crew
to clean up, and talking loudly on the phone about personal matters.1

Some employers or managers fit the follow ing descriptions:

In the months since [the new ow ner of the pharmacy] has been in charge
[he] has made it clear that he is at liberty to fire employees at w ill . . .
change their positions, decrease their bonus percentages, and refuse
time-off and vacation choices. Furthermore, he has established an
authoritarian w ork structure characterized by distrust, cut-backs on many
items deemed essential to w ork comfort, disrespect, rigidity and poor-to-
no-communication.2

He w alked all over people. He made fun of them; he intimidated them.

He criticized w ork for no reason, and he changed his plans daily.3
O B O N TH E ED G E
What ’s Happening
in Our Workplaces?
W o rkp laces to d ay are receivin g
highly critical reviews, being called
everything fro m “uncivil” to “to xic.”
Lynne Anderso n and Christine
Pearso n, two management pro fesso rs
fro m St. Jo seph’s University and the
University o f No rth Caro lina, respec-
tively, no te that “Histo rians may view
the dawn o f the twenty-first century
as a tim e o f tho ughtless acts and
rudeness: We tailgate, even in the
slo w lane; we dial wro ng num bers
and then slam the receiver o n the
in n o cen t resp o n d en t; we b reak
appo intments with no nchalance.” 4
The wo rkplace has o ften been seen
as o ne o f the places where civility still
ruled, with co -wo rkers treating each
o ther with a mixture o f fo rmality and
friendliness, distance and po liteness.
H o wever, w ith d o w n sizin g, re-
engineering, budget cuts, pressures
fo r increased pro ductivity, auto cratic
wo rk enviro nments, and the use o f
part-time emplo yees, there has been
an increase in “uncivil and aggressive
wo rkplace behavio urs.” 5
What does civility in the workplace
mean? A simple definitio n o f wo rk-
place civility is behavio ur “invo lving
po liteness and regard fo r o thers in the
wo rkplace, within wo rkplace no rms
for respect.” 6 Workplace incivility then
“ invo lves acting with disregard fo r
o thers in the wo rkplace, in vio latio n
o f wo rkplace no rms fo r respect.” 7 O f
co urse, different wo rkplaces will have
different no rms fo r what determines
mutual respect. Fo r instance, in mo st
restaurants, if the staff were rude to
yo u when yo u were there fo r dinner,
yo u wo uld be anno yed, and perhaps
even co m p lain to the m anager.
However, at the Elbow Ro o m Cafe in
do wnto wn Vanco uver, if custo mers
co mplain they are in a hurry, man-
ager Patrick Savo ie might well say, “If
yo u’re in a hurry, yo u sho uld have
go ne to McDo nald’s.” 8 Such a co me-
back is acceptable to the diners at the
Elbo w Ro o m Cafe, because rudeness
is its trademark.
Mo st wo rk enviro nments are no t
expected to be characterized by such
rudeness. Ho wever, this has b een
ch an gin g in recen t years. Ro b ert
Warren, a University o f Manito b a
marketing pro fesso r, no tes that “sim-
ple co urtesy has go ne by the bo ard.” 9
There is do cumented evidence o f
the rise o f vio lence and threats o f vio -
lence at wo rk. 10 Ho wever, several
studies have fo und that there is per-
sistent negative b ehavio ur in the
wo rkplace that is no t o f a vio lent
nature.11 Fo r instance, a survey o f 603
To ro nto nurses fo und that 33 percent
had experienced verbal abuse during
the five previo us days o f wo rk.12
Ano ther study fo und that 78 per-
cent o f emplo yees interviewed think
th at wo rkp lace in civility h as
increased in the past 10 years.13 The
research ers fo un d th at m en are
m o stly to b lam e fo r this change:
“Altho ugh men and wo men are tar-
gets o f disrespect and rudeness in
equal numbers . . . men instigate the
rudeness 70 percent o f the time.” 14
Rude behavio ur is no t co nfined
to m en, ho wever. Pro fesso r André
Ro berge at Laval University suggests
that so me o f the rudeness is genera-
tio nal. He finds that “ yo ung clerks
o ften lack bo th kno wledge and civil-
ity. Em plo yers are having to train
yo ung p eo p le in sim p le m anners
b ecause that is no t b eing do ne at
ho me.” 15 Pro fesso r Warren backs this
up: “ O ne o f the biggest co mplaints
I hear fro m businesses when I go to
talk ab o ut graduates is the lack o f
interperso nal skills.” 16
Workplace Violence
Recently, researchers have suggested
that incivility may be the beginning
o f mo re negative behavio urs in the
251
wo rkplace, including aggressio n and
vio lence.17
Pierre Lebrun cho se a deadly way
to exhibit the anger he had sto red up
fro m his wo rkp lace. 1 8 H e to o k a
hunting rifle to O ttawa-Carleto n–
based O C Transpo and killed fo ur
public transit co -wo rkers o n April 6,
1 9 9 9 , b efo re turning the gun o n
himself. Lebrun felt that he had been
the target o f harassm ent by his co -
wo rkers fo r years because o f his stut-
tering. If this so unds like an unusual
respo nse fo r an irate emplo yee, co n-
sid er th e circum stan ces at O C
Transpo . “ Q uite apart fro m what’s
alleged o r o th erw ise w ith M r.
Leb run’s situatio n, we kno w [O C
Transpo ’s] had a very unhappy wo rk
enviro nm ent fo r a lo ng tim e,” Al
Lo n ey, fo rm er ch air o f O ttawa-
Carleto n’s transit co mmissio n, no ted.
A co nsultant’s repo rt pro duced the
year b efo re the sho o ting fo und a
wo rkplace with “ro ck-bo tto m mo rale
and po o r management.” It was no t
unco m m o n fo r fights to break o ut
in the unit where the fo ur men were
killed.
Wo rkplace vio lence, acco rding to
the Internatio nal Lab o ur O rgani-
zatio n (ILO ), includes
any incident in which a person is
abused, threatened or assaulted in
circumstances relating to [ his or
her] work. These behaviours would
originate from customers or co-
workers at any level of the organi-
zation. This definition would
include all forms of harassment,
bullying, intimidation, physical
threats, assaults, robbery and other
intrusive behaviour. 19
No Canadian statistics o n anger
at wo rk are availab le. 20 Ho wever,
studies sho w that anger pervades the
US wo rkplace. While 25 percent o f
Americans repo rted being “generally
at least so m ewhat angry at wo rk,”
49 percent say that they felt “at least
252
O B O N TH E ED G E
‘a little angry’ at wo rk.” 21 A 2000
Gallup po ll co nducted in the United
States fo und that 25 percent o f the
wo rking ad ults surveyed felt like
screaming o r sho uting because o f jo b
stress, 14 percent had co nsidered hit-
ting a co -wo rker, and 10 p ercent
wo rry ab o ut co lleagues b eco m ing
vio lent. This wo rry is no t unfo unded.
Twenty em p lo yees are m urd ered
each week in the United States.22
Can ad ian wo rkp laces are n o t
m urd er-free, h o wever. In 2 0 01 ,
60 murders o ccurred at wo rk, 10 per-
cent of all murders for the year.23 Most
o f these wo rkplace incidents were
carried o ut by male spo uses and part-
ners of female employees. Surprisingly,
Canada scores higher than the United
States o n wo rkplace vio lence. In a
recent ILO study invo lving 130 000
wo rkers in 32 co untries, Argentina
was ran ked th e m o st vio len t.
Ro mania was seco nd, France third,
an d Can ad a fo urth . Th e Un ited
States placed ninth.24
Sixty-fo ur percent o f unio n repre-
sen tatives w h o were surveyed
recen tly rep o rted an in crease in
wo rkplace aggressio n, based o n their
review o f incident repo rts, grievance
files, and o ther so lid evidence.25 The
ILO, in a separate 1998 study, fo und
that, per capita, the rate o f assault at
wo rk fo r Canadian wo m en is fo ur
times that o f American wo men.26 To
Fa ct Bo x 27
• In 2000, only 49% of w orking Canadians said they w ere committed to
their employers. In 1991, the level of commitment w as 62% .
• M ore Americans report commitment to their employers than Canadians:
55% of Americans vs. 49% of Canadians.
• Of those w ho experience rudeness, 12% quit their jobs in response, 22%
decrease their w ork effort, and 52% lose w ork time w orrying about it.
• Employees over the age of 55 express the highest degree of commitment
to their employers.
understand the serio usness o f this
situatio n, co nsider that o ne quarter
o f No va Sco tia teachers surveyed
repo rted that they faced physical vio -
lence at wo rk during the 2001–2002
scho o l year.28
What Causes
Incivilit y (and Worse)
in t he Workplace?
If emplo yers and emplo yees are act-
ing with less civility to ward each
o ther, what is causing this to happen?
Managers and em plo yees o ften
h ave d ifferen t views o f th e
emplo yee’s ro le in the o rganizatio n.
Jeffrey Pfeffer, a pro fesso r o f o rgani-
zatio nal behavio ur at the Graduate
Sch o o l o f Busin ess at Stan fo rd
University, no tes that many co mpa-
nies do n’t really value their emplo y-
ees: “Mo st managers, if they’re being
ho nest with themselves, will admit
it: When they lo o k at their peo ple,
they see co sts, they see salaries, they
see benefits, they see o verhead. Very
few co mpanies lo o k at their peo ple
and see assets.” 29
Mo st emplo yees, ho wever, like to
think that they are assets to their
o rganizatio ns. The realizatio n that
they are simply co sts and no t valued
m em b ers o f an o rganizatio n can
cause frustratio n fo r emplo yees.
In additio n, “emplo yers’ excessive
demands and to p-down style o f man-
agement are co ntributing to the rise
o f ‘wo rk rage,’” claims Gerry Smith
o f To ro nto -b ased Warren Shep ell
Co nsultants.30 He is the autho r o f the
recently released Work Rage.31 He cites
dem ands co m ing fro m a variety o f
so urces: “overtime, downsizing, rapid
techno lo gical changes, co m p any
restructuring and difficulty balancing
the dem ands o f jo b and ho m e.” 32
Sm ith wo rries ab o ut th e co n se-
quences o f these dem ands: “ If yo u
push peo ple to o hard, set unrealistic
expectatio ns and cut back their ben-
efits, they’re go ing to strike back.” 33
Sm ith’s wo rk suppo rts the find-
ings o f a study that repo rted the mo st
co mmo n cause o f anger is the actio ns
o f superviso rs o r managers.34 O ther
co mmo n causes o f anger identified
by the researchers include lack o f pro -
ductivity by co -wo rkers and o thers;
tight d ead lines; heavy wo rklo ad ;
interactio n with the public; and bad
treatment.
The Psychological
Cont ract
So me researchers have lo o ked at this
frustratio n in terms o f a breakdo wn
o f the psycho lo gical co ntract fo rmed
between emplo yees and emplo yers.
Emplo yers and emplo yees begin to
develo p psycho lo gical co ntracts as
they are first intro duced to each o ther
in the hiring pro cess.35 These co n-
tinue o ver time as the emplo yer and
the em plo yee co m e to understand
each o ther’s expectatio ns abo ut the
amo unts and quality o f wo rk to be
perfo rmed and the types o f rewards
to be given. Fo r instance, when an
em p lo yee is co ntinually asked to
wo rk late and/ o r be available at all
ho urs thro ugh pagers and email, the
emplo yee may assume that do ing so
will result in greater rewards o r faster
p ro m o tio n d o w n th e lin e. Th e

em p lo yer m ay have had no such
intentio n, and may even be thinking
that the emplo yee sho uld be grate-
ful simply to have a jo b. Later, when
the emplo yee do es no t get expected
( tho ugh never pro m ised) rewards,
he o r she is disappo inted.
Sandra Ro b inso n, an o rganiza-
tio nal b ehavio ur p ro fesso r at the
Saud er Scho o l o f Business at the
University o f British Co lumbia, and
her co lleagues have fo und that when
a psycho lo gical co ntract is vio lated
( perceptually o r actually) , the rela-
tio nship between the emplo yee and
the em plo yer is dam aged. This can
result in th e lo ss o f trust. 3 6 Th e
b reakd o w n in trust can cause
emplo yees to be less ready to accept
decisio ns o r o bey rules.37 The ero -
sio n o f trust can also lead em plo y-
ees to take revenge o n the employers.
So they do n’t carry o ut their end o f a
task. O r they refuse to pass o n mes-
sages. They engage in any number o f
subtle and no t-so -subtle behavio urs
that affect the way wo rk gets do ne—
o r prevents wo rk fro m getting do ne.
The Toxic
Organizat ion
Pfeffer suggests that co mpanies have
beco me “to xic places to wo rk.” 38 He
no tes that co mpanies, particularly in
Silico n Valley, ask their employees to
sign co ntracts o n the first day o f wo rk
ind icating the em p lo yee’s und er-
standing that the co m pany has the
right to fire at will and fo r any rea-
so n. So me emplo yers also ask their
em plo yees to cho o se between hav-
ing a life and having a career. Pfeffer
relates a jo ke p eo p le used to tell
abo ut Micro so ft: “ We o ffer flexible
tim e— yo u can wo rk any 18 ho urs
yo u want.” 39 This kind o f attitude
can be to xic to em plo yees, tho ugh
this do es no t imply that Micro so ft is
a to xic emplo yer.
253
What do es it mean to be a to xic beco mes to xic. This is no t dissimilar
o rganizatio n? The late pro fesso r Peter to what the liver o r kidneys do when
Fro st o f th e Saud er Sch o o l o f to xin s b eco m e to o in ten se in a
Business at the University o f British human bo dy.40
Co lum b ia n o tes th at th ere w ill What makes o rganizatio ns to xic?
always be pain in o rganizatio ns, but Like Pfeffer, p ro fesso rs Fro st and
that so metimes it beco mes so intense Ro binso n identify a number o f fac-
o r pro lo nged that co nditio ns within to rs. Do wnsizing and o rganizatio nal
th e o rgan izatio n b egin to b reak change are two main facto rs, partic-
do wn. In o ther wo rds, the situatio n ularly in recent years. So m etim es
D o Yo u Ha v e a To x ic M a na g e r ?
Below are some of the toxic behaviours of managers and the w orkplace cultures
that allow these behaviours to thrive.
M anagerial Toxic Behaviour
• Actor behaviour. These managers act out anger rather than discuss prob-
lems. They slam doors, sulk, and make it clear they are angry, but refuse to
talk about it.
• Fragmentor behaviour. These managers see no connection betw een w hat
they do and the outcome, and take no responsibility for their behaviour.
• M e-first behaviour. These managers make decisions based on their ow n
convenience.
• M ixed-messenger behaviour. These managers present themselves one w ay
but their behaviour doesn’t match w hat they say.
• Wooden-stick behaviour. These managers are extremely rigid and controlling.
• Escape-artist behaviour. These managers don’t deal w ith reality, often
lying, or at the extreme, escaping through drugs or alcohol.
Workplace Culture That Fosters This Behaviour
• M acho culture. People don’t discuss problems. The emphasis is to “ take it
like a man.”
• Specialist culture. Employees w ho are technically gifted or great in their
fields don’t have to consider how their behaviour or w ork affects anyone.
• Elitist culture. Promotions and rew ards are not based on your w ork but on
w ho your buddies are.
• Office-politics culture. Promotions and rew ards are based on flattery and
positioning.
• Change-resistant culture. Upper management struggles to maintain the
status quo regardless of the outcome.
• Workaholic culture. Employees are forced to spend more time at the
office than necessary.
Source: L. M cClure, Risky Business (Binghamton, NY: Haw orth Press, 1996).
254
O B O N TH E ED G E
o rganizatio ns experience unexpected
events—such as the sudden death o f
a key manager, an unwise mo ve by
senio r management, stro ng co mpe-
titio n fro m a start-up co mpany—that
lead to to xicity. O ther o rganizatio ns
are to xic thro ugho ut their system due
to po licies and practices that create
distress. Such facto rs as unreaso n-
able stretch go als o r perfo rmance tar-
gets, o r un relen tin g in tern al
co m p etitio n , can create to xicity.
There are also to xic m anagers who
lead thro ugh insensitivity, vindic-
tiveness, and failure to take respo n-
sibility, o r they are co ntro l freaks o r
are unethical. The inset Do You Have
a Toxic M anager? o n page 253 lists
so m e types o f to xic m anagers and
the wo rkplace culture that fo sters
their behavio ur.
What Are t he Eff ect s of
Incivilit y and Toxicit y in
t he Workplace?
In general, researchers have fo und
that the effects o f wo rkplace anger
are so metimes subtle: a ho stile wo rk
enviro nment and the tendency to do
o nly eno ugh wo rk to get by.41
Tho se who feel chro nic anger in
the wo rkp lace are m o re likely to
repo rt “ feelings o f b etrayal by the
o rganizatio n, decreased feelings o f
Ho w To x in Ha nd le r s A lle v ia t e
Or g a niza t io na l Pa in
• They listen empathically.
• They suggest solutions.
• They w ork behind the scenes to prevent pain.
• They carry the confidences of others.
• They reframe difficult messages.
Source: P. Frost and S. Robinson, “ The Toxic Handler: Organizational Hero—and Casualty,”
Harvard Business Review, July–August 1999, p. 101 (Reprint 99406).
lo yalty, a d ecreased sen se th at
respo ndent values and the o rganiza-
tio n’s values are similar, a decreased
sense that the emplo yer treated the
respo ndent with dignity and respect,
and a decreased sense that employers
h ad fulfilled p ro m ises m ad e to
respo ndents.” 42 So do these feelings
m ake a difference? Apparently so .
Researchers have fo und that tho se
who felt angry with their emplo yers
were less likely to put fo rth their best
effo rts, mo re likely to be co mpetitive
to ward o ther em plo yees, and less
likely to suggest “a quicker and better
way to do their jo b.” 43 All o f these
actio ns tend to decrease the pro duc-
tivity po ssible in the wo rkplace.
It’s no t just tho se who wo rk fo r an
o rganizatio n who are affected by inci-
vility and to xicity. Po o r service, fro m
indifference to rudeness to o utright
ho stility, characterizes many transac-
tio ns in Canadian businesses. “Acro ss
the co untry, better business bureaus,
provincial government consumer-help
agencies and m ed ia o m b ud sm en
repo rt a lengthening litany o f co m-
plaints abo ut co ntracto rs, car dealers,
repair sho ps, moving co mpanies, air-
lines and department sto res.” 44 This
suggests that custo mers and clients
m ay well b e feeling the im pact o f
internal wo rkplace dynamics.
The Toxin Handler
Employees o f to xic o rganizatio ns suf-
fer pain fro m their experiences in
to xic enviro nments. In so me o rgan-
izatio ns, m echanism s, o ften info r-
m al, are set up to d eal w ith th e
results o f to xicity.
Fro st and Ro binso n identified a
special ro le that so m e em plo yees
play in trying to relieve the to xicity
within an o rganizatio n: the to xin
handler. This perso n tries to mitigate
the pain by so ftening the b lo w o f
downsizing, o r change, o r the behav-
io ur o f the to xic leader. Essentially
th e to xin h an d ler h elp s o th ers
aro und him o r her d eal with the
strains o f the o rganizatio n, by co un-
selling, advising, shielding employees
fro m the wrath o f angry m anagers,
reinterpreting the m anagers’ m es-
sages to make them less harsh, etc.
So who takes o n this ro le?
Certainly no o rganizatio n to date has
a line o n its o rganizatio nal chart fo r
“ the to xin handler.” O ften the ro le
emerges as part of an individual’s posi-
tion in an organization, for instance, a
m anager in the hum an reso urce
department. In many cases, however,
handlers are pulled into the ro le “bit
by bit—by their co lleagues, who turn
to them because they are trustwo rthy,
calm, kind and no njudgmental.” 45
Fro st and Ro binso n, in pro filing
these individuals, suggest that to xin
handlers are predispo sed to say yes,
have a high to lerance fo r pain, a sur-
p lus o f em p athy, an d wh en th ey
no tice peo ple in pain they have a
need to make the situatio n right. But
these are no t individuals who thrive
sim p ly o n d ealing with the em o -
tio nal needs o f o thers. Q uo ting o ne
o f the managers in their study, Fro st
and Ro binso n cite the full range o f
activities o f m o st to xin hand lers:
“ These peo ple are usually relentless
in their drive to acco mplish o rgani-
zatio nal targets and rarely lo se fo cus

FA CEOFF
M anners are an over-romant icized
co n cep t . Th e b ig issu e isn ’ t t h at
em ployees need t o be concerned
about their manners. Rather, employ-
ers should be paying better w ages.
o n business issues. Managing emo -
tio nal pain is o ne o f their means.” 46
Th e in set H ow Toxin H andlers
Alleviate O rganizational Pain o n page
254 identifies the m any tasks that
to xin handlers take o n in an o rgani-
zatio n. Fro st and Ro binso n suggest
that these tasks will pro bably need
to be handled fo rever, and they rec-
o m m end that o rganizatio ns take
steps to actively suppo rt peo ple per-
fo rming this ro le.
Research Exercises
1 . Look for data on violence and
anger in the w orkplace in other
countries. How do these data
compare w ith the Canadian and
American data presented here?
What might you conclude about
how violence and anger in the
w orkplace are expressed in differ-
ent cultures?
255
Want to Know M ore?
The Golden Rule, “ Do unto others If you’d like to read more on this topic,
as you w ould have others do unto see Peter Frost, Toxic Emotions at
yo u ,” sh o u ld st ill h ave a ro le Work (Cambridge, M A: Harvard
in t oday’s w orkplace. Being nice Business School Press, 2003); P. Frost
pays off. and S. Robinson, “ The Toxic Handler:
Organizational Hero—and Casualty,”
Harvard Business Review, July–August
2. Identify three Canadian organiza- 1999, pp. 96–106 (Reprint 99406);
tions that are trying to foster bet- and A. M . Webber, “ Danger: Toxic
ter and/or less toxic environments Company,” Fast Company, November
for their employees. What kind of 1998, pp. 152–157. You can find the
effect is this having on the organi- latter article at w w w.fastcompany.com/
zations’ bottom lines? online/19/toxic.html. It contains an
interview w ith Professor Jeffrey Pfeffer,
w ho discusses examples of toxic
Your Perspective organizations.
1 . Is it reasonable to suggest, as
some researchers have, that
young people today have not
learned to be civil to others or
do not place a high priority on
doing so? Do you see this as one
of the causes of incivility in the
w orkplace?
2. What should be done about man-
agers w ho create toxicity in the
w orkplace w hile being rew arded
because they achieve bottom-line
results? Should bottom-line
results justify their behaviour?
P A R T 4 SHA RIN G THE ORGA N IZATION A L VISION

CH A PTER 8

Leadership

A major US city is hit by a deadly hurricane,

and then suffers serious flooding. Does
anyone have the leadership skills needed to
rescue people and provide order?

What is the difference betw een a

1 manager and a leader?

Are there specific traits, behaviours, and

2 situations that affect how one leads?

3 How does a leader lead w ith vision?

4 Can a person be an informal leader?

5 What is self-leadership?

What are some of the contemporary

6 issues in leadership?
M
illions of people around the w orld
w ere glued to their television sets
in September 2005, w atching the
devast at ion of Hurricane Kat rina unf old. 1
W hile t he st orm damaged part s of
M ississippi, Alabama, and Louisiana, it w as
t he damage t o New Orleans t hat got t he
most press coverage. The entire city had to be
evacuated because of severe flooding, caus-
ing thousands of people, mostly poor and
black, to be stranded at the city’s Superdome
and Convention Center.
For many of those w atching people w av-
ing from rooftops begging to be rescued, and
people from the Convention Center and
Superdome begging for food and w ater, the
questions that arose w ere, Who w as in
charge? Why w asn’t help coming faster? There w as In this chapter, w e examine the various studies on
plenty of blame to go around, and the obvious leaders, leadership to determine w hat makes an effective leader.
Louisiana governor Kathleen Blanco, and President We first consider the traits, behaviours, and situations
George W. Bush, and New Orleans M ayor Ray Nagin, that affect one’s ability to lead, and then w e consider
show n here, w ere all singled out for criticism. Subsequent visionary leadership. We then look at how leadership is
investigations of w hat w ent w rong suggested that these being spread throughout the organization, and how you
leaders did not do enough to minimize the damage of the might lead yourself, through self-management. Finally,
storm, starting right from the top w ith President Bush. w e consider contemporary issues in leadership.

ARE MANAGERS AND LEAD ERS THE SAME?

Leadership and management are two terms that are o ften co nfused. What is the differ- 1 What is the difference
ence between them? between a manager
Jo hn Ko tter o f the Harvard Business Scho o l argues that “managers pro mo te stability and a leader?
while leaders press fo r change and o nly o rganizatio ns that embrace bo th sides o f the co n-
tradictio n can survive in turbulent times.” 2 Harvard Business School
Pro fesso r Rabindra Kanungo at McGill University sees a gro wing co nsensus emerg- www.hbs.edu
ing “amo ng management scho lars that the co ncept o f ‘leadership’ must be distinguished
fro m the co ncept o f ‘supervisio n/ management.’” 3 Exhibit 8-1 o n page 258 illustrates
Kanungo ’s distinctio ns between management and leadership. Leaders pro vide visio n
and strategy; managers implement that visio n and strategy, co o rdinate and staff the
o rganizatio n, and handle day-to -day pro blems.

O B IS FO R EV ERY O N E

Have you eve r wonde re d if Is a le ade r always Can anyone be a le ade r? How do you manage
the re was one right way to ne ce ssary? yourse lf?
le ad?
257
258 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 8-1 Distinguishing Leadership from M anagement

M anagement Lead ership

1. Engages in day-to-day caretaker activities: Formulates long-term objectives for reforming the
M aintains and allocates resources system: Plans strategy and tactics

2. Exhibits supervisory behaviour: Acts to make others Exhibits leading behaviour: Acts to bring about change in
maintain standard job behaviour others congruent w ith long-term objectives

3. Administers subsystems w ithin organizations Innovates for the entire organization

4. Asks how and w hen to engage in standard practice Asks w hat and w hy to change standard practice

5. Acts w ithin established culture of the organization Creates vision and meaning for the organization

6. Uses transactional influence: Induces compliance in Uses transformational influence: Induces change in values,
manifest behaviour using rew ards, sanctions, attitudes, and behaviour using personal examples
and formal authority and expertise

7. Relies on control strategies to get things done Uses empow ering strategies to make follow ers internalize
by subordinates values

8. Status quo supporter and stabilizer Status quo challenger and change creator

Source: R. N. Kanungo, “ Leadership in Organizations: Looking Ahead to the 21st Century,” Canadian Psychology 39, no. 1–2 (1998), p. 77.

In o ur discussio n o f leadership, we will fo cus o n two majo r tasks o f tho se who lead
in o rganizatio ns: managing tho se aro und them to get the day-to -day tasks do ne ( lead-
ership as supervisio n) and inspiring o thers to do the extrao rdinary (leadership as visio n).

LEAD ERSHIP AS SUPERVISION

As Hurricane Katrina rushed closer to the New Orleans coastline, people in authority in both
Louisiana and Washington were trying to figure out how best to handle the situation. Some won-
dered w hether hundreds of thousands of people should be evacuated from New Orleans before
the storm hit or w hether everyone could simply ride out the storm. M ichael Brow n, then head
of the Federal Emergency M anagement Agency (FEM A), sent a small emergency response
team to Louisiana to review evacuation plans the w eekend before the levees broke. Frustrated
that M ayor Ray Nagin did not seem to be acting quickly enough to get New Orleans evacuated,
Brow n called President George W. Bush to advise him of the situation. He also asked the pres-
ident to phone the mayor directly to tell him to evacuate the people of New Orleans. The pres-
ident’s response, “ M ike, you w ant me to call the M ayor?” illustrates the different roles of
managers and leaders. The president w as not expecting to micromanage an evacuation plan and
did not really consider it his role. As the “ big picture person,” his job might have been to make
sure that strategies w ere developed for emergency situations, not to develop the strategies or
implement them. Nevertheless, did President Bush do all that w as needed to make sure his
follow ers could carry out their tasks?

2 Are there specific
traits, behaviours, and
situations that affect
how one leads?
In this sectio n we discuss theo ries o f leadership that were develo ped befo re 1980. These
early theo ries fo cused o n the superviso ry nature o f leadership— that is, ho w leaders
managed the day-to -day functio ning o f emplo yees. The three general types o f theo ries
that emerged were ( 1) trait theo ries, which pro po se leaders have a particular set o f traits
that makes them different fro m no nleaders; (2) behavio ural theo ries, which pro po se that
 Chapt er 8 Leadership 259

particular behavio urs make fo r better leaders; and ( 3) co ntingency theo ries, which pro -
po se the situatio n has an effect o n leaders. When yo u think abo ut these theo ries, remem-
ber that altho ugh they have been co nsidered “ theo ries o f leadership,” they rely o n an
o lder understanding o f what “leadership” means, and they do no t co nvey Kanungo ’s dis-
tinctio n between leadership and supervisio n.

Trait Theory: Are Lea d ers Different from Others?

Have yo u ever wo ndered whether there is so m e fundam ental perso nality difference
that makes so me peo ple “ bo rn leaders” ? Trait theo ries o f leadership emerged in the trait theories of leadership
ho pe that if it were po ssible to identify the traits o f leaders, it wo uld be easier to select Theories that propose traits— per-
peo ple to fill leadership ro les. sonality, social, physical, or intellec-
tual— differentiate leaders from
The media have lo ng been believers in trait theo ries. They identify peo ple such as
nonleaders.
Nelso n Mandela, Richard Branso n o f the Virgin Gro up, and Steve Jo bs o f Apple as lead-
ers, and then describe them in terms such as charismatic, enthusiastic, decisive, and coura-
geous. The media are no t alo ne. Exhibit 8-2 o n page 260 sho ws the findings o f a recent
survey o f 200 CEO s, and what they cited as the mo st impo rtant leadership traits.
The search fo r perso nality, so cial, physical, o r intellectual traits that wo uld describe lead-
ers and differentiate them fro m no nleaders go es back to research do ne by psycho lo gists
in the 1930s. Ho wever, until recently, research effo rts at iso lating leadership traits have
reached few co nclusio ns.4 A breakthro ugh, o f so rts, came when researchers began o rgan-
izing traits aro und the Big Five perso nality framewo rk ( see Chapter 2, page 44) .5 They
fo und that mo st o f the do zens o f traits that emerged in vario us
leadership reviews fall under o ne o f the Big Five perso nality traits
( extraversio n, agreeableness, co nscientio usness, emo tio nal stabil-
ity, and o penness to experience) . This appro ach resulted in co n-
sistent and stro ng suppo rt fo r traits as predicto rs o f leadership.
Co mprehensive reviews o f the leadership literature, when o rgan-
ized aro und the Big Five, have fo und that extraversio n is the mo st
impo rtant trait o f effective leaders.6 But results sho w that extra-
versio n is mo re stro ngly related to leader emergence than to leader
effectiveness. This is no t to tally surprising since so ciable and do m-
inant peo ple are mo re likely to assert themselves in gro up situa-
tio ns. Co nscientio usness and o penness to experience also sho wed
stro ng and co nsistent relatio nships to leadership, but no t as stro ng
as extraversio n. The traits o f agreeableness and emo tio nal stabil-
ity do no t appear to o ffer much help in predicting leadership.
Recent studies indicate that emo tio nal intelligence ( EI) is an
additio nal facto r to co nsider in the emergence o f a leader.7 The
wo rk o n EI suggests that leaders need mo re than the basic traits o f
intelligence and jo b-relevant kno wledge.8 It is the po ssessio n o f
the five co mpo nents o f EI—self-awareness, self-management, self-
mo tivatio n, empathy, and so cial skills—that allows an individual to
beco me a star perfo rmer. Witho ut EI, a perso n can have o utstand-
ing training, a highly analytical mind, a lo ng-term visio n, and an
M eg Whitman, president and CEO of eBay, is a leader w ith
endless supply o f terrific ideas, but still no t make a great leader. high emot ional int elligence. Since eBay f ounder Pierre
Based o n the latest findings, we o ffer two co nclusio ns. First, Omidyar chose Whitman to transform his start-up into a
traits can predict leadership. Seco nd, traits do a better jo b at pre- global enterprise, she has emerged as a star performer in a
dicting the emergence o f leaders and the appearance o f leadership job that demands a high degree of social interaction w ith
employees and customers throughout the w orld. Whitman is
than in actually distinguishing between effective and ineffective lead-
9 described as self-confident, trustw orthy, culturally sensitive, a
ers. The fact that an individual exhibits the traits and o thers co n-
high achiever, and expert at building t eams and leading
sider that perso n to be a leader do es no t necessarily mean that the change. Show n here, Whitman interacts w ith customers dur-
leader is successful at getting his o r her gro up to achieve its go als. ing an eBay Live convention.
260 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 8-2 What CEOs Identify as Key Leadership Traits

Quality CEOs Rating It M ost Important (% )

Communication skills 52

Ability to motivate people 47

Honesty 34

Ability to listen 25

Team-building expertise 24

Analytical skills 19

Aggressiveness in business 10

Source: Survey conducted by American Express for the National Quality Institute. Reported in R. Nutt,
“ Survey Finds Leadership Key,” Vancouver Sun, June 1, 2000, p. D6.

What Types o f Traits Sre Preferred in Leaders?

Remember the GLO BE study we discussed in Chapter 3? As part o f that study, researchers
surveyed managers in 62 co untries to find o ut what attributes they liked and disliked in
leaders. The study unco vered 22 leader attributes that were universally liked, 8 that
were universally disliked, and 35 o ver which there was a lo t o f disagreement.10 Exhibit
8-3 identifies so me o f these different attributes.
The results o f this study suggest that

• Universally liked attributes sho uld be used by leaders wo rking in any culture

• Universally disliked attributes sho uld be avo ided by leaders

• Attributes o ver which there is a lo t o f disagreement sho uld be used cautio usly,
based o n specific cultures

EXHIBIT 8-3 Leadership Attributes: A Cross-Cultural View

Lead er Attrib utes Universally Lead er Attrib utes Universally Lead er Attrib utes Over Which
Liked Disliked There Was M ost Disagreement

■ Trustw orthy ■ Noncooperative ■ Subdued

■ Dynamic ■ Irritable ■ Intragroup conflict avoider

■ M otive arouser ■ Egocentric ■ Cunning

■ Decisive ■ Ruthless ■ Sensitive

■ Intelligent ■ Dictatorial ■ Provocateur

■ Dependable ■ Loner/self-centred ■ Self-effacing

■ Plans ahead ■ W illful

■ Excellence oriented

■ Team builder

■ Encouraging

Source: D. N. Den Hartog, R. J. House, P. J. Hanges, S. A. Ruiz-Quintanilla, and P. W. Dorfman, “ Culture Specific and Cross-culturally Generalizable
Implicit Leadership Theories: Are Attributes of Charismatic/Transformational Leadership Universally Endorsed?” Leadership Quarterly 10, no. 2
(Summer 1999), pp. 219–256.
 Chapt er 8 Leadership 261

This chapter’s Point/Counterpoint o n page 285 raises further issues o n the extent to
which leadership is affected by natio nal culture issues. Case Incident— M oving From
Colleague to Supervisor o n page 288 helps yo u think abo ut the difficulties o ne has when
mo ving fro m being a co -wo rker to taking o n leadership respo nsibilities.

Behavioural Theories: Do Lea d ers Behave in

Particular Way s?
Limited success in the study o f traits led researchers to lo o k at the behavio urs that spe-
cific leaders exhibit. They wo ndered if there was so mething unique in the way that effec-
tive leaders behave. They also wo ndered if it was po ssible to train peo ple to be leaders.
The three mo st best-kno wn behavio ural theo ries o f leadership are the O hio State behavioural theories of leader-
University studies that were co nducted starting in the late 1940s, the University o f ship Theories that propose that
Michigan studies co nducted at abo ut the same time, and Blake and Mo uto n’s Leadership specific behaviours differentiate
leaders from nonleaders.
Grid, which reflects the behavio ural definitio ns o f bo th the O hio and Michigan studies.
All three appro aches co nsider two main dimensio ns by which managers can be char-
acterized: attentio n to pro ductio n and attentio n to peo ple.

The Ohio State Studies

In the O hio State studies, these two dimensio ns are kno wn as initiating structure and con-
sideration.11 Initiating structure refers to the extent to which a leader is likely to define initiating structure The extent to
and structure his o r her ro le and the ro les o f employees in o rder to attain go als; it includes which a leader is likely to define and
behavio ur that tries to o rganize wo rk, wo rk relatio nships, and go als. Fo r instance, lead- structure his or her role and the roles
of employees in order to attain goals.
ers using this style may develo p specific o utput go als o r deadlines fo r emplo yees.
Co nsideratio n is defined as the extent to which a leader is likely to have jo b rela- consideration The extent to
tio nships characterized by mutual trust, respect fo r emplo yees’ ideas, and regard fo r which a leader is likely to have job
their feelings. A leader who is high in co nsideratio n sho ws co ncern fo r fo llo wers’ co m- relationships characterized by
mutual trust, respect for employees’
fo rt, well-being, status, and satisfactio n. Fo r instance, leaders using this style may create
ideas, and regard for their feelings.
mo re flexible ho urs, o r flextime, to make it easier fo r employees to manage family issues
during wo rk ho urs.

The Michigan Studies

Researchers at the University o f Michigan, who se wo rk is referred to as “ the Michigan
studies,” also develo ped two dim ensio ns o f leadership behavio ur that they labelled
employee-oriented and production-oriented. 12 Emplo yee-o riented leaders em phasize employee-oriented leader A
interperso nal relatio ns. They take a perso nal interest in the needs o f their subo rdinates leader who emphasizes interper-
and accept individual differences amo ng members. Pro ductio n-o riented leaders , in sonal relations.

co ntrast, tend to emphasize the technical o r task aspects o f the jo b. They are mainly production-oriented leader A
co ncerned with making sure the gro up acco mplishes its tasks, and the gro up members leader who emphasizes the technical
are simply a means to that end. or task aspects of the job.

The Leadership Grid

Blake and Mo uto n develo ped a graphic po rtrayal o f a two -dimensio nal view o f leader-
ship style.13 They pro po sed a Leadership Grid based o n the styles o f “co ncern fo r peo - Leadership Grid A two-dimen-
ple” and “co ncern fo r pro ductio n,” which essentially represent the Ohio State dimensio ns sional grid outlining 81 different
o f co nsideratio n and initiating structure, o r the Michigan dimensio ns o f emplo yee o ri- leadership styles.

entatio n and pro ductio n o rientatio n.

The grid, sho wn in Exhibit 8-4 o n page 262, has 9 po ssible po sitio ns alo ng each axis,
creating 81 different po sitio ns in which the leader’s style may fall, but emphasis has been
placed o n 5: impo verished management ( 1,1) ; autho rity-o bedience management ( 9,1) ;
m iddle-o f-the-ro ad m anagem ent ( 5,5) ; co untry club m anagem ent ( 1,9) ; and team
management ( 9,9) . The grid sho ws the do minating facto rs in a leader’s thinking with
respect to how to get results fro m peo ple, witho ut fo cusing o n what the specific results are.
262 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 8-4 The Leadership Grid

High 9

Country club management Team management

1,9
8 Thought f ul at t ent ion t o t he needs
of people f or sat isf ying rel at ion-
ships leads t o a comf ort able,
f riendly org anizat ion at mosphere
7 and w ork t empo.
Concern for people
9,9
Work accomplishment is f rom
commit t ed people w ho h ave a
ì common st ake” in t he org aniza-
t ion' s purpose.This leads t o
rel at ionships of t rust and respect .

M iddle-of-the-road management
5,5
5 Adequ at e org anizat ion al perf orm an ce is
possi ble t hrough bal an cing t he necessit y
t o get out w ork w it h m aint aining
mor ale of people at a sat isf act ory level.
4

3
Impoverished management Authority-obedience
1,1 9,1
Exert ion of minimum eff ort Eff i cien cy in oper at ions result s
t o get required w ork done is f rom arr anging condit ions of
2
appropri at e t o sust ain w ork in su ch a w ay t h at hum an
org anizat ion mem bership. element s int erf ere t o a minimum
degree.
Low 1

1 2 3 4 5 6 7 8 9
Low High
Concern for production

Source: Reprinted by permission of Harvard Business Review. Based on an exhibit from “ Breakthrough in
Organization Development” by R. R. Blake, J. S. M outon, L. B. Barnes, and L. E. Greiner (November–
December 1964). Copyright © 1964 by the President and Fellow s of Harvard College; all rights reserved.

RESEARCH FINDINGS Behavioural Theories of Leadership

A lengthy review o f the results o f behavio ural studies suppo rts the idea that peo ple-
o riented behavio ur by leaders is related to emplo yee satisfactio n and mo tivatio n, and
leader effectiveness; meanwhile, pro ductio n-o riented behavio ur by leaders is slightly
mo re stro ngly related to perfo rmance by the leader, the gro up, and the o rganizatio n.14
The research also pro vides so me insights into when leaders sho uld be pro ductio n o ri-
ented and when they sho uld be peo ple o riented:15

• When subo rdinates experience a lo t o f pressure because o f deadlines o r

unclear tasks, leaders who are peo ple o riented will increase emplo yee satisfac-
tio n and perfo rmance.

• When the task is interesting o r satisfying, there is less need fo r leaders to be

peo ple o riented.

• When it’s clear ho w to perfo rm the task and what the go als are, leaders who
are peo ple o riented will increase emplo yee satisfactio n, while tho se who are
task o riented will increase dissatisfactio n.
 Chapt er 8 Leadership 263

• When peo ple do n’t kno w what to do o r individuals do n’t have the kno wledge
o r skills to do the jo b, it’s mo re impo rtant fo r leaders to be pro ductio n o ri-
ented than peo ple o riented.

This chapter’s CBC Video Case Incident gives yo u an o ppo rtunity to further explo re the
behavio urs o f leaders and their implicatio ns. How Bad Is Your Boss?

Contingen cy Theorie s: Doe s the Situation M atter?

As research o n leadership develo ped, it became clear that
predicting leadership success was mo re co mplex than sim-
* Have you eve r
wonde re d if the re
ply iso lating a few traits o r preferable behavio urs. Starting
in the 1960s, leadership theo ries began to exam ine the
was one right way to
situatio nal facto rs that affect a leader’s ability to act. This
le ad?
research po inted o ut that no t all leaders can lead in every
situatio n.16 This was clearly illustrated by the failure o f
President Geo rge W. Bush, Lo uisiana go verno r Kathleen Blanco , and New O rleans
Mayo r Ray Nagin to demo nstrate leadership during the Hurricane Katrina crisis. Their
leadership skills might have been better displayed in o ther types o f situatio ns.
Situatio nal, o r co ntingency, theo ries o f leadership try to iso late critical situatio nal situational, or contingency,
facto rs that affect leadership effectiveness. The theo ries co nsider the degree o f structure theories Theories that propose
in the task being perfo rmed, the quality o f leader-member relatio ns, the leader’s po si- that leadership effectiveness
depends on the situation.
tio n po wer, gro up no rm s, info rm atio n availability, em plo yee acceptance o f leader’s
decisio ns, emplo yee maturity, and the clarity o f the emplo yee’s ro le.17
We discuss fo ur situatio nal theo ries below: the Fiedler co ntingency mo del, Hersey and
Blanchard’s situatio nal leadership theo ry, path-go al theo ry, and substitutes fo r leader-
ship. All o f these theo ries fo cus o n the relatio nship o f the leader to fo llo wers, and there
is bro ad suppo rt fo r the idea that this relatio nship is impo rtant.18

Fiedler Co ntingency Mo del

The first co m prehensive co ntingency m o del fo r leadership was develo ped by Fred
Fiedler.19 The Fiedler co ntingency mo del pro po ses that effective gro up perfo rmance Fiedler contingency model A
depends o n the pro per match between the leader’s style and the degree to which the sit- theory that proposes that effective
uatio n gives co ntro l to the leader. group performance depends on the
proper match between the leader’s
Fiedler created the least preferred co-worker ( LPC) questionnaire to determine whether
style and the degree to which the
individuals were m ainly interested in go o d perso nal relatio ns with co -wo rkers, and situation gives control to the leader.
thus relationship-oriented, o r mainly interested in pro ductivity, and thus task-oriented.
Fiedler assumed that an individual’s leadership style is fixed. Therefo re, if a situatio n
requires a task-o riented leader and the perso n in that leadership po sitio n is relatio nship
o riented, either the situatio n has to be mo dified o r the leader must be remo ved and
replaced fo r o ptimum effectiveness to be achieved.
Fiedler identified three co ntingency dimensio ns that to gether define the situatio n a
leader faces:

• Leader-member relations. The degree o f co nfidence, trust, and respect members

have in their leader.

• Task structure. The degree to which the jo b assignments are pro cedurized ( that
is, structured o r unstructured) .

• Position power. The degree o f influence a leader has o ver po wer variables such
as hiring, firing, discipline, pro mo tio ns, and salary increases.
264 Part 4 Sharing t he Organizat ional Vision

Fiedler stated that the better the leader-member relatio ns, the mo re highly structured
the jo b, and the stro nger the po sitio n power, the mo re co ntro l the leader has. He suggested
that task-o riented leaders perfo rm best in situatio ns o f high and lo w co ntro l, while rela-
tio nship-o riented leaders perfo rm best in mo derate co ntro l situatio ns.20 In a high-co n-
tro l situatio n, a leader can “get away” with task o rientatio n, because the relatio nships
are go o d and fo llo wers are easily influenced.21 In a lo w-co ntro l situatio n ( which is
marked by po o r relatio ns, ill-defined task, and lo w influence) , task o rientatio n may be
the o nly thing that makes it po ssible to get so mething do ne. In a mo derate-co ntro l sit-
uatio n, the leader’s relatio nship o rientatio n may smo o th the way to getting things do ne.

Hersey and Blanchard’s Situatio nal Leadership Theo ry

situational leadership theory
(SLT) A theory that proposes that
effective leaders adapt their leader-
ship style according to how willing
and able a follower is to perform
tasks.
Paul Hersey and Ken Blanchard have develo ped a leadership mo del that has gained a
stro ng fo llo wing amo ng management develo pment specialists.22 This mo del— called
situational leadership theory (SLT) —has been included in leadership training pro grams
at mo re than 400 o f the Fortune 500 co mpanies; and mo re than o ne millio n managers a
year fro m a wide variety o f o rganizatio ns are taught its basic elements.23
SLT views the leader-fo llower relatio nship as similar to that o f a parent and child. Just
as a parent needs to give up co ntro l as a child beco mes mo re mature and respo nsible, so
to o sho uld leaders. Hersey and Blanchard identify fo ur specific leader behavio urs—fro m
highly directive to highly laissez-faire. The mo st effective behavio ur depends o n a fo l-
lower’s ability and mo tivatio n. This is illustrated in Exhibit 8-5. SLT says that if a fo llower
is unable and unwilling to do a task, the leader needs to give clear and specific directio ns (in
o ther wo rds, be highly directive). If a fo llower is unable and willing, the leader needs to dis-
play high task o rientatio n to co mpensate fo r the fo llower’s lack o f ability, and high rela-
tio nship o rientatio n to get the fo llower to “buy into ” the leader’s desires (in o ther wo rds,
“sell” the task). If the fo llower is able and unwilling, the leader needs to ado pt a suppo rtive
and participative style. Finally, if the employee is bo th able and willing, the leader do es no t
need to do much (in o ther wo rds, a laissez-faire appro ach will wo rk).

EXHIBIT 8-5 Hersey and Blanchard’s Situational Leadership Theory

Leader Behaviours
(High)

g
t in Se
pa
Relationship behaviour

ci llin
rt i g
Pa
S3 S2

g
a t in Te
ll in
le g g
De
S4 S1

(Low ) Task behaviour (High)

Follow er Readiness

R4 R3 R2 R1
Able and Unable and
Able and Unable and
unw illing/ unw illing/
w illing w illing
apprehensive insecure

High M oderate Low

 Chapt er 8 Leadership 265

Bo th the Fiedler co ntingency mo del and Hersey and Blanchard’s SLT have so me intu-
itive appeal. Blanchard’s wo rk, fo r instance, is widely applied in the wo rkplace. However,
bo th theo ries have received far less empirical suppo rt, and Fiedler’s theo ry has been
fo und mo re difficult to apply in the wo rk situatio n than the next mo del we co nsider,
path-go al theo ry.24

Path-Go al Theo ry
Currently, o ne o f the mo st respected appro aches to leadership is path-go al theo ry. path-goal theory A theory that
Develo ped by University o f To ro nto pro fesso r Martin Evans in the late 1960s, it was says it’s the leader’s job to assist fol-
later expanded o n by Ro bert Ho use ( fo rmerly at the University o f To ro nto , but no w at lowers in attaining their goals and to
provide the necessary direction
the Wharto n Scho o l o f Business at the University o f Pennsylvania) . Path-go al theo ry
and/or support to ensure that their
is a co ntingency mo del o f leadership that extracts key elements fro m the O hio State individual goals are compatible with
leadership research o n initiating structure and co nsideratio n and fro m the expectancy the overall goals.
theo ry o f mo tivatio n.25 Path-Goal Theory
The essence o f the theo ry is that it is the leader’s jo b to assist fo llowers attain their go als http://faculty.css.edu/dswenson/web/
and to provide the necessary directio n and/ o r suppo rt to ensure that their individual go als LEAD/path-goal.html
are co mpatible with the o verall go als o f the gro up o r o rganizatio n. The term path-goal
derives fro m the belief that effective leaders bo th clarify the path to help their fo llo wers
achieve their wo rk go als and make the jo urney alo ng the path easier by reducing ro ad-
blo cks and pitfalls.
Acco rding to this theo ry, leaders sho uld fo llo w three guidelines to be effective:26

• D etermine the outcomes subordinates want. These might include go o d pay, jo b

security, interesting wo rk, and the auto no my to do o ne’s jo b.

• Reward individuals with their desired outcomes when they perfo rm well.

• Let individuals know what they need to do to receive rewards ( that is, the path to
the go al) , remo ve any barriers that wo uld prevent high perfo rmance, and
express co nfidence that individuals have the ability to perfo rm well.

Path-go al theo ry identifies fo ur leadership behavio urs that might be used in differ-
ent situatio ns to mo tivate individuals:

• The directive leader lets fo llo wers kno w what is expected o f them, schedules
wo rk to be do ne, and gives specific guidance as to ho w to acco mplish tasks.
This clo sely parallels the O hio State dimensio n o f initiating structure. This
behavio ur is best used when individuals have difficulty do ing tasks o r the
tasks are ambiguo us. It wo uld no t be very helpful when used with individuals
who are already highly mo tivated, have the skills and abilities to do the task,
and understand the requirements o f the task.

• The supportive leader is friendly and sho ws co ncern fo r the needs o f fo llo wers.
This is essentially syno nymo us with the O hio State dimensio n o f co nsidera-
tio n. This behavio ur is o ften reco mmended when individuals are under stress
o r o therwise sho w that they need to be suppo rted.

• The participative leader co nsults with fo llo wers and uses their suggestio ns
befo re making a decisio n. This behavio ur is mo st appro priate when individu-
als need to buy in to decisio ns.

• The achievement-oriented leader sets challenging go als and expects fo llo wers to
perfo rm at their highest level. This behavio ur wo rks well with individuals who
like challenges and are highly mo tivated. It wo uld be less effective with less
capable individuals o r tho se who are highly stressed fro m o verwo rk.

As Exhibit 8-6 o n page 266, illustrates, path-go al theo ry pro po ses two types o f co n-
tingency variables that affect the leadership behavio ur–o utco m e relatio nship: envi-
266 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 8-6 Path-Goal Theory

CONTINGENCY FACTORS

Environmental

• Task structure
• Formal authority system
• Work group
Leader’s Behaviour Outcomes

• Directive • Performance
• Supportive • Satisfaction
• Participative
• Achievement-oriented Subordinate

• Locus of control
• Experience
• Perceived ability

ro nmental variables that are o utside the co ntro l o f the emplo yee and variables that are
part o f the perso nal characteristics o f the emplo yee. Ho use assumes that leaders are
flexible and can display any o r all o f these behavio urs, depending o n the situatio n.
So me situatio ns may in fact need mo re than o ne style fro m the leader. The theo ry pro -
po ses that emplo yee perfo rmance and satisfactio n are likely to be po sitively influenced
when the leader co mpensates fo r things lacking in either the emplo yee o r the wo rk set-
ting. However, the leader who spends time explaining tasks when tho se tasks are already
clear o r when the em plo yee has the ability and experience to handle them witho ut
interference is likely to be ineffective because the employee will see such directive behav-
io ur as redundant o r even insulting. Research generally suppo rts path-go al theo ry.27
O ne questio n that arises fro m co ntingency theo ries is whether leaders can actually
adjust their behavio ur to vario us situatio ns. As we kno w, individuals differ in their
behavio ural flexibility. So me peo ple sho w co nsiderable ability to adjust their behav-
io ur to external, situatio nal facto rs; they are adaptable. O thers, however, exhibit high lev-
els o f co nsistency regardless o f the situatio n. High self-m o nito rs are usually able to
adjust their leadership styles to suit changing situatio ns better than lo w self-mo nito rs.28
Clearly, if an individual’s leadership style range is very narro w and he o r she canno t o r
will no t adjust (that is, the perso n is a low self-mo nito r), that individual will be successful
o nly in very specific situatio ns suitable to his o r her style. To find o ut mo re abo ut yo ur
style o f leadership, see the Learning About Yourself Exercise o n pages 286.

Substitutes fo r Leadership
The previo us three theo ries argue that leaders are needed, but
that leaders sho uld co nsider the situatio n in determining
the style o f leadership to ado pt. Ho wever, numero us studies
* Is a le ade r always
ne ce ssary? co llectively demo nstrate that, in many situatio ns, leaders’
actio ns are irrelevant. Certain individual, jo b, and o rgani-
zatio nal variables can act as substitutes fo r leadership o r neu-
tralize the leader’s ability to influence his o r her fo llo wers.29
If emplo yees have appro priate experience, training, o r “pro fessio nal” o rientatio n o r if
em plo yees are indifferent to o rganizatio nal rewards, the effect o f leadership can be
 Chapt er 8 Leadership 267

EXHIBIT 8-7 Substitutes and Neutralizers for Leadership

Characteristics of Individual Effect on Leadership
Experience/t raining Subst it ut es f or t ask-orient ed leadership

Prof essionalism Subst it ut es f or relat ionship-orient ed and t ask-orient ed leadership

Indif f erence t o rew ards Neut ralizes relat ionship-orient ed and t ask-orient ed leadership

Characteristics of Job
Highly st ruct ured t ask Subst it ut es f or t ask-orient ed leadership

Provides it s ow n f eedback Subst it ut es f or t ask-orient ed leadership

Int rinsically sat isf ying Subst it ut es f or relat ionship-orient ed leadership

Characteristics of Organization
Explicit f ormal goals Subst it ut es f or t ask-orient ed leadership

Rigid rules and procedures Subst it ut es f or t ask-orient ed leadership

Cohesive w ork groups Subst it ut es f or relat ionship-orient ed and t ask-orient ed leadership

Source: Based on S. Kerr and J. M . Jermier, “ Substitutes for Leadership: Their M eaning and M easurement,”
Organizational Behavior and Human Performance, December 1978, p. 378.

replaced o r neutralized. Experience and training, fo r instance, can replace the need fo r a
leader’s suppo rt o r ability to create structure and reduce task ambiguity. Jo bs that are
inherently unambiguo us and ro utine, pro vide their o wn feed-
back, o r are intrinsically satisfying generally require less hands- EXHIBIT 8-8
o n leadership. O rganizatio nal characteristics such as explicit
fo rmalized go als, rigid rules and pro cedures, and co hesive wo rk
gro ups can replace fo rmal leadership ( see Exhibit 8-7) . Recent
research has suppo rted the impo rtance o f ability and intrinsic
satisfactio n in co nsidering perfo rmance o utco mes.30

Can You Be a Better Follow er?

Thus far we have co ncentrated o n ho w leaders must adapt their
styles to the needs o f their fo llo wers. This undersco res the impo r-
tance o f the fo llo wers’ ro le in the way leadership is exercised.
O nly recently have we begun to reco gnize that in additio n to
having leaders who can lead, successful o rganizatio ns need fo l-
lo wers who can fo llo w.31 In fact, it’s pro bably fair to say that all
o rganizatio ns have far mo re fo llo wers than leaders, so ineffec-
tive fo llo wers m ay be m o re o f a handicap to an o rganizatio n
than ineffective leaders. The Far Side carto o n sho wn in Exhibit 8-
8 gives yo u so me indicatio n o f what can happen when so meo ne
finally realizes that he o r she is “a fo llo wer, to o .”
An und erstand ing o f ho w to b e a fo llo wer is im p o rtant,
because almo st all ro les in an o rganizatio n require o ne to be a fo l-
lo wer in so me settings. O bvio usly lo wer-level emplo yees are fo l-
lo wers to their superviso rs. But the superviso r is a fo llo wer to his Source: THE FAR SIDE copyright 1990 & 1991 Farw orks,
o r her manager, who is a fo llower to the CEO. The CEO in a pub- Inc./Dist. by Universal Press Syndicate. Reprinted w ith
permission. All rights reserved.
lic co rpo ratio n is a fo llower to the bo ard o f directo rs. Even the best
leaders have to be fo llo wers so metimes.
268 Part 4 Sharing t he Organizat ional Vision
3 How does a leader
lead with vision?
transactional leaders Leaders
who guide or motivate their follow-
ers in the direction of established
goals by clarifying role and task
requirements.
What qualities do effective fo llo wers have? O ne writer fo cuses o n fo ur:32
• They manage themselves well. They are able to think fo r themselves. They can
wo rk independently and witho ut clo se supervisio n.
• They are committed to a purpose outside themselves. Effective fo llo wers are co m-
mitted to so mething— a cause, a pro duct, a wo rk team, an o rganizatio n, an
idea— in additio n to the care o f their o wn lives. Mo st peo ple like wo rking
with co lleagues who are emo tio nally, as well as physically, co mmitted to their
wo rk.
• They build their competence and focus their efforts for maximum impact. Effective
fo llo wers master skills that will be useful to their o rganizatio ns, and they ho ld
higher perfo rmance standards than their jo bs o r wo rk gro ups require.
• They are courageous, honest, and credible. Effective fo llo wers establish themselves
as independent, critical thinkers who se kno wledge and judgment can be
trusted. They ho ld high ethical standards, give credit where credit is due, and
are no t afraid to o wn up to their mistakes.
These po ints suggest that there is a relatio nship between leadership and fo llo wer-
ship, and that taking respo nsibility fo r o ne’s o wn behavio ur is beneficial fo r bo th o ne’s
self and the o rganizatio n.
INSPIRATIONAL LEAD ERSHIP
As people around the w orld w atched the aftermath of Hurricane Katrina from the safety of their
homes, many w ondered, Why isn’t anyone sending in food or w ater? The implicit question
people w ere asking w as, Why w asn’t someone just taking charge and doing something rather
than w aiting for others to act? Both New Orleans mayor Ray Nagin and Louisiana governor
Kathleen Blanco w ere quick to criticize President Bush, and the president’s staff just as quickly
tried to explain that it was not the role of the federal government to be the first responder. People
w ho lead w ith vision do not w onder w hy someone else is not acting—rather, they make sure
action is taken. Without pointing any fingers of blame, it is easy to see that in the early days after
the levees broke, none of the official leaders w as prepared to rise to the occasion and lead
w ith vision. What does it take for a person to lead w ith vision? What characteristics does such
a person need?
The leadership theo ries that we have discussed were develo ped at a time when mo st o rgan-
izations were structured in traditional hierarchies where there were classic lines of command.
While this fo rm still do minates in Canada’s “Mo st Respected Co rpo ratio ns,” 33 there are
organizations trying to be innovative, faster moving, and more responsive to employees who
are highly educated and intelligent, and who want mo re say in the wo rkplace. Thus, new
styles o f leadership are evo lving to meet the demands o f these o rganizatio ns. The mo re
recent appro aches to leadership move away fro m the superviso ry tasks o f leaders and fo cus
o n visio n-setting activities. To day, leadership theo ries also try to explain how certain lead-
ers can achieve extraordinary levels of performance from their followers, and they stress sym-
bo lic and emo tio nally appealing leadership behavio urs.34 In what fo llo ws we co nsider
transactio nal leadership, transfo rmatio nal leadership, and charismatic leadership.
From Tran sa ctional to Tran sformational Lea d ership
Mo st o f the leadership theo ries presented thus far in this chapter have co ncerned trans-
actio nal leaders . Such leaders guide o r m o tivate their fo llo wers in the directio n o f
established go als by clarifying ro le and task requirements. In so me styles o f transac-
tio nal leadership, the leader uses rewarding and reco gnizing behavio urs. This appro ach
results in perfo rmance that meets expectatio ns, tho ugh rarely do es o ne see results that
 Chapt er 8 Leadership 269

exceed expectatio ns.35 In o ther styles o f transactio nal leadership, the leader empha-
sizes co rrectio n and po ssible punishment rather than rewards and reco gnitio n. This
style “ results in perfo rmance belo w expectatio ns, and disco urages inno vatio n and ini-
tiative in the wo rkplace.” 36 O f co urse, leaders sho uld no t igno re po o r perfo rmance, but
effective leaders emphasize ho w to achieve expectatio ns rather than dwell o n mistakes.
So me leaders inspire fo llowers to transcend their own self-interests fo r the go o d o f the
o rganizatio n and have a pro fo und and extrao rdinary effect o n their fo llo wers. These
are transfo rmatio nal leaders , such as Matthew Barrett, chairm an o f Barclays PLC, transformational leaders
Britain’s seco nd-largest bank, and fo rmerly CEO o f Bank o f Mo ntreal; Frank Stro nach, Leaders who inspire followers to go
chairm an o f the bo ard o f Auro ra, O ntario -based Magna Internatio nal; and Mo gens beyond their own self-interests for
the good of the organization and
Smed, CEO o f Calgary-based DIRTT ( Do ing It Right This Time) and fo rmer CEO o f
have a profound and extraordinary
SMED Internatio nal. O ther Canadians who have frequently been cited as charismatic effect on their followers.
leaders include René Lévesque, Quebec premier; Lucien Bo uchard, fo rmer Blo c Québéco is
leader; Michaëlle Jean, Go verno r General; Pierre Trudeau, prime minister; and Craig
Kielburger, the Canadian teenager who fo unded Free The Children to pro mo te chil-
dren’s rights and co mbat explo itatio n o f child labo ur. What links these individuals is that
they pay attentio n to the co ncerns and develo pmental needs o f individual fo llo wers.
Transfo rmatio nal leaders change fo llo wers’ awareness o f issues by helping them lo o k at
o ld pro blems in new ways, and they are able to excite, aro use, and inspire fo llo wers to
exert extra effo rt to achieve gro up go als.37
Transfo rmatio nal leadership is so metimes identified separately fro m charismatic charismatic leadership
leadership in the literature, altho ugh McGill’s Kanungo no tes that the two fo rmula- Leadership that critically examines
tio ns do no t differ in that charismatic leaders are also transfo rmatio nal leaders. Relying the status quo with a view to devel-
oping and articulating future strategic
o n his judgm ent, we use the two co ncepts interchangeably. As Kanungo no tes, the
goals or vision for the organization,
charismatic leader “critically examines the status quo with a view to develo ping and and then leading organizational
articulating future strategic go als o r visio n fo r the o rganizatio n and then leading o rga- members to achieve these goals
nizatio nal members to achieve these go als thro ugh empo wering strategies.” 38 While through empowering strategies.
no t all transfo rmatio nal leaders are charismatic in perso nality, bo th transfo rmatio nal and
charismatic leaders wo rk to empo wer their fo llo wers to reach higher go als.
Transactio nal and transfo rmatio nal leadership sho uld no t be viewed as o ppo sing
ap p ro aches to getting things
do ne.39 Transfo rmatio nal lead- Through his charismat ic leader-
ership is built on top of transac- ship, Steve Jobs achieved unw a-
tio nal leadership— it pro duces vering loyalt y and commit ment
from the technical staff he over-
levels o f employee effo rt and per-
saw at Apple Comput er during
fo rmance that go beyo nd what the late 1970s and early 1980s.
wo uld o ccur with a transactio nal How ever, as the company grew,
appro ach alo ne. Exhibit 8-9 o n this style w as less effective, and
page 270o utlines the difference he w as f orced out of Apple in
1985. In 1996, w ith Apple doing
between transactio nal and trans-
poorly, Jobs w as brought back to
fo rm atio nal ( o r charism atic)
lead t he company once again
leaders. Wo uld yo u be able to be w ith his vision and charisma. With
a charismatic leader? We give yo u such innovations as the iPod and
tip s in this chap ter’s From t he iPod shuff le, Jobs’ visionary
Concepts to Skills o n pages 291. leadership cont inues t o make
Apple successful.
While the idea o f charismatic
leadership was develo ped based
o n No rth Am erican o b serva-
tio ns, pro fesso rs Dale Carl o f the
Scho o l o f Business Management
at Ryerso n Un iversity an d
M an so ur Javid an at th e
University o f Calgary also sug-
270 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 8-9 Characteristics of Transactional and Transformational Leaders

Transactional Lead er
Contingent rew ards: Contracts exchange of rew ards for effort, promises rew ards for good performance, recognizes
accomplishments.
M anagement by exception (active): Watches and searches for deviations from rules and standards, takes corrective action.
M anagement by exception (passive): Intervenes only if standards are not met.
Laissez-faire: Abdicates responsibilities, avoids making decisions.

Transformational Lead er
Charisma: Provides vision and sense of mission, instills pride, gains respect and trust.
Inspiration: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple w ays.
Intellectual stimulation: Promotes intelligence, rationality, and careful problem solving.
Individualized consideration: Gives personal attention, treats each employee individually, coaches, advises.

Source: B. M . Bass, “ From Transactional to Transformational Leadership: Learning to Share the Vision,” Organizational Dynamics, W inter 1990, p.
22. Reprinted by permission of the publisher. American M anagement Association, New York. All rights reserved.

gest that charismatic leadership is expressed as relatively similar in a variety o f co untries,

including Canada, Hungary, India, Turkey, Austria, Singapo re, Sweden, and Venezuela.40
This finding indicates that there may be so me universal aspects o f this style o f leadership.

Sharing a Visio n
Perhaps o ne o f the key co mpo nents o f charismatic leadership is the ability to articulate
a visio n. A review o f vario us definitio ns finds that a visio n differs fro m o ther fo rms o f
directio n setting in several ways:

A vision has clear and compelling imagery that offers an innovative way to improve,
which recognizes and draws on traditions, and connects to actions that people can take to
realize change. Vision taps people’s emotions and energy. Properly articulated, a vision
creates the enthusiasm that people have for sporting events and other leisure-time activi-
ties, bringing the energy and commitment to the workplace. 41

The key pro perties o f a visio n seem to be inspiratio nal po ssibilities that are value-cen-
tred and realizable, with superio r imagery and articulatio n.42 Visio ns sho uld be able
to create po ssibilities that are inspiratio nal and unique, and o ffer a new o rder that can
pro duce o rganizatio nal distinctio n. A visio n is likely to fail if it do es no t o ffer a view o f
the future that is clearly and demo nstrably better fo r the o rganizatio n and its mem-
bers. Desirable visio ns fit the times and circumstances and reflect the uniqueness o f
the o rganizatio n. Peo ple in the o rganizatio n must also believe that the visio n is attain-
able. It sho uld be perceived as challenging yet do able. Visio ns that have clear articula-
tio n and po werful imagery are mo re easily grasped and accepted. Case Incident— Anne
Mulcahy at Xerox o n the CD-RO M that acco mpanies this textbo o k discusses ho w visio n-
ary leadership helped turn Xero x aro und.

RESEARCH FINDINGS Charismat ic Leadership

A number o f studies demo nstrate the effectiveness o f charismatic and transfo rmatio nal
leadership.43 We co nsider the impact o f this leadership style o n co mpany perfo rmance
and individual perfo rmance.

Com pany Perf orm ance Do visio n and charismatic leadership really make a dif-
ference? Several studies pro vide po sitive evidence that they do :
 Chapt er 8 Leadership 271

• O ne study co ntrasted 18 visio nary co mpanies with 18 co mparable no nvisio n-

ary firms o ver a 65-year perio d.44 The visio nary co mpanies perfo rmed 6 times
better than the co mpariso n gro up, based o n standard financial criteria, and
their sto cks perfo rmed 15 times better than the general market.

• In a study o f 250 executives and managers at a majo r financial services co mpany,

Jane Howell (at the Richard Ivey Scho o l o f Business at the University o f Western
O ntario ) and her co lleagues fo und that “transfo rmatio nal leaders had 34 percent
higher business unit perfo rmance results than o ther types o f leaders.” 45

• An unpublished study by Ro bert Ho use and so me co lleagues o f 63 American

and 49 Canadian co mpanies ( including No rtel Netwo rks, Mo lso n, Gulf
Canada [no w Co no co Phillips], and Manulife Financial) fo und that “ between
15 and 25 percent o f the variatio n in pro fitability amo ng the co mpanies was
acco unted fo r by the leadership qualities o f their CEO.” 46 That is, charismatic
leaders led mo re pro fitable co mpanies in the 1990s. This may explain the
high co mpensatio n packages fo r CEO s that we discussed in Chapter 4.

Individual Perf orm ance An increasing bo dy o f research sho ws that peo ple wo rk-
ing fo r charismatic leaders are mo tivated to exert extra wo rk effo rt and, because they
like their leaders, they express greater satisfactio n.47
To learn mo re abo ut how to be transfo rmatio nal/ charismatic yo urself, see the Working
W ith O thers Exercise o n page 287.
The evidence suppo rting the superio rity o f transfo rm atio nal leadership o ver the
transactio nal variety is o verwhelmingly impressive. Fo r instance, a number o f studies o f
US, Canadian, and German military o fficers fo und, at every level, that transfo rmatio nal
leaders were evaluated as mo re effective than their transactio nal co unterparts.48 Managers
at FedEx who were rated by their fo llowers as exhibiting mo re transfo rmatio nal leadership
were evaluated by their im m ediate superviso rs as higher perfo rm ers and m o re pro -
mo table.49 Nevertheless, transfo rmatio nal leadership sho uld be used with so me cautio n
in no n–No rth American co ntexts, because its effectiveness may be affected by cultural
values co ncerning leadership.50
In summary, the overall evidence indicates that transfo rmatio nal leadership co rrelates
mo re stro ngly than transactio nal leadership with lo wer turno ver rates, higher pro duc-
tivity, and higher em plo yee satisfactio n.51 O ne caveat to this research is a study by
Pro fesso r Tim o thy DeGro o t o f McMaster University and his co lleagues. They fo und
that charismatic leadership had a greater impact o n team perfo rmance than o n indi-
vidual perfo rmance, and they suggest that the po sitive findings o f previo us studies are
the result o f charismatic leaders’ pro viding a better team enviro nment fo r everyo ne,
which then resulted in higher perfo rmance.52

The Downside o f Charismatic Leadership

When o rganizatio ns are in need o f great change, charismatic leaders are o ften able to
inspire their fo llowers to meet the challenges o f change. Be aware that a charismatic leader
may beco me a liability to an o rganizatio n o nce the crisis is o ver and the need fo r dra-
matic change subsides.53 Why? Because then the charismatic leader’s o verwhelming self-
confidence can be a liability. He or she is unable to listen to others, becomes uncomfortable
when challenged by aggressive employees, and begins to ho ld an unjustifiable belief in his
o r her “rightness” o n issues. So me wo uld argue that Jean Chrétien’s behavio ur leading
up to his decisio n to anno unce that he wo uld eventually step down as prime minister, thus
preventing a divisive leadership review in February 2003, wo uld fit this descriptio n.
Many have argued that the recent acco unting scandals and high-pro file bankrupt-
cies facing No rth American co mpanies, including Enro n and Wo rldCo m, po int to so me
272 Part 4 Sharing t he Organizat ional Vision
level 5 leaders Leaders who are
fiercely ambitious and driven, but
their ambition is directed toward their
company rather than themselves.
o f the dangers o f charism atic leadership. Wo rldCo m ’s Bernard Ebbers and Enro n’s
Kenneth Lay “ seem ed alm o st a breed apart, blessed with unique visio nary po wers”
when their co mpanies were increasing sto ck prices at pheno menal rates in the 1990s.54
Harvard Business Scho o l pro fesso r Rakesh Khurana argues that an ino rdinate num-
ber o f to day’s chief executives have been “cho sen fo r their ability to articulate messianic
‘visio ns’ fo r their co mpanies; inspire emplo yees to do whatever it takes to realize these
grand designs; and imbue investo rs with faith in their o wn talents.” 55 These traits, ho w-
ever, might have led to the co rpo rate scandals that unfo lded in recent years. Charismatic
leadership, by its very nature, silences criticism . Thus, em plo yees fo llo w the lead o f
their visio nary CEO s unquestio ningly. Pro fesso r David Leighto n, o f the Richard Ivey
Scho o l o f Business at the University o f Western O ntario , no tes that even the bo ards o f
directo rs and audito rs were reluctant to challenge these CEO s. He also suggests that
Canada’s “mo re balanced culture,” which is less likely to turn CEOs into hero es, may help
pro tect the co untry fro m so me o f the scandals that the United States faced.56
Is Charismatic Leadership Always Necessary?
A recent study o f 29 co mpanies that went fro m go o d to great ( their cumulative sto ck
returns were all at least three times better than the general sto ck market o ver 15 years)
fo und that a key difference in successful charismatic leaders may be the fact that they are
no t ego-driven. 57 Altho ugh the leaders o f these firms were fiercely ambitio us and driven,
their ambitio n was directed to ward their co mpany rather than themselves. They gener-
ated extrao rdinary results, but with little fanfare o r ho o pla. They to o k respo nsibility
fo r mistakes and po o r results but gave credit fo r successes to o ther peo ple. They also
prided themselves o n develo ping stro ng leaders inside the firm who co uld direct the co m-
pany to greater heights after they were go ne. These individuals have been called level 5
leaders because they have fo ur basic leadership qualities— individual capability, team
skills, m anagerial co m petence, and the ability to stim ulate o thers to high perfo rm -
ance— plus a fifth dim ensio n: a parado xical blend o f perso nal hum ility and pro fes-
sio nal will. Level 5 leaders channel their ego needs away fro m themselves and into the
go al o f building a great co mpany. So while level 5 leaders are highly effective, they tend
to be peo ple yo u have never heard o f and who get little no to riety in the business press—
peo ple like O rin Smith at Starbucks, Kristine McDivitt o f Patago nia, Jo hn Whitehead o f
Go ldman Sachs, and Jack Brennan o f Vanguard. This study is impo rtant because it co n-
firms that leaders do no t necessarily need to be charismatic to be effective, especially
where charisma is enmeshed in an o utsized ego .
The current mo o d seems to be fo r CEO s with less visio n, and mo re ethical and co r-
po rate respo nsibility. It seems clear that future research o n charismatic leadership will need
to pro vide greater insight into ho w this style relates to ethical and business behavio ur.
D ISPERSED LEAD ERSHIP: SPREAD ING
LEAD ERSHIP THROUGHOUT THE O RGANIZATION
US Army Lieutenant General Russel Honoré w as perhaps the first leader to inspire calm in New
Orleans, as people struggled to get help and others struggled to help out.58 Clear leadership,
w ith clear statements of w hat people should do, had not come from the obvious leaders in the
situation: President George W. Bush, Governor Kathleen Blanco, and M ayor Ray Nagin. While
these latter w ere elected politicians, chosen by their constituents to lead them, Honoré had no
direct connection to the people he w as about to save. Instead, he w as a no-nonsense military
man. When he arrived on the scene in New Orleans, he did not w ait to find out w hat the
other leaders w anted him to do: He assessed the situation and made decisions about the best
w ay to get things under control.
 Chapt er 8 Leadership 273

One of the major issues facing Honoré w hen he arrived in Louisiana w as how to evacuate
the Superdome, w here more than 20 000 people had gone to the storm. Once there, they
became stranded w hen the New Orleans levees broke. W ith no electricity, and little food and
w ater, M ayor Nagin complained bitterly that no one w as sending the buses needed to get the
people relocated. Honoré’s junior officers did not provide much hope that the job could be
done quickly—they told him it w ould take days. Honoré w as not prepared to w ait that long, and
24 hours after he gave orders he managed to clear the Superdome and put people on buses to
shelters in other states. How is it that people w ho are not officially in charge can also be effec-
tive leaders?

Transfo rmatio nal leadership theo ry fo cuses o n hero ic leaders, leaders in the to p eche- 4 Can a person be an
lo ns o f their o rganizatio ns, and also o n individuals rather than teams. The fo llowing sec- informal leader?
tio ns aim to explain ho w leadership can be spread thro ugho ut an o rganizatio n thro ugh
mento ring and team leadership. Even if yo u are no t a manager o r so meo ne thinking
abo ut leadership in a co rpo rate situatio n, this discussio n o ffers impo rtant insights into how
yo u can take o n a leadership ro le in an o rganizatio n.
Mo reo ver, in to day’s flatter o rganizatio ns, yo u may well be
expected to sho w leadership characteristics, even if yo u are
* Can anyone be
a le ade r?
no t a fo rmal leader. The wo rk o f Lieutenant General Russel
Honoré illustrates this point. Although he was a leader in the
army, he had no fo rmal autho rity to take charge in New
O rleans. That was the jo b o f po liticians. Still, he saw what
needed to be do ne and did it.
As yo u co nsider the ways that ro les can spread to peo ple who are no t managers, be
aware that no t all o rganizatio ns engage in this practice, and even within o rganizatio ns, no t
all managers are happy with sharing their po wer with tho se under them. Gifted leaders
o ften reco gnize that they actually have mo re po wer if they share po wer. That is, sharing
power enables them to build co alitio ns and teams that wo rk to gether fo r the overall go o d
o f the o rganizatio n. There are o ther managers, tho ugh, who fear the lo ss o f any po wer.

M entoring
Many leaders create mento ring relatio nships. A mento r is o ften a senio r emplo yee who mentor A senior employee who
spo nso rs and suppo rts a less-experienced emplo yee ( a pro tégé) . The mento ring ro le sponsors and supports a less-experi-
includes co aching, co unselling, and spo nso rship.59 As a co ach, mento rs help develo p enced employee.

their pro tégés’ skills. As co unsello rs, mento rs pro vide suppo rt and help bo lster pro -
tégés’ self-co nfidence. And as spo nso rs, mento rs actively intervene o n behalf o f their
pro tégés, lo bby to get their pro tégés visible assignments, and po litic to get their pro -
tégés rewards such as pro mo tio ns and salary increases.
Successful mento rs are go o d teachers. They can present ideas clearly, listen well, and
empathize with the pro blems o f their pro tégés. They also share experiences with the
pro tégés, act as ro le mo dels, share co ntacts, and pro vide guidance thro ugh the po litical
maze o f the o rganizatio n. They pro vide advice o n ho w to survive and get ahead in the
o rganizatio n and act as a so unding bo ard fo r ideas that pro tégés may be hesitant to
share with their direct superviso r. Mento rs vo uch fo r a pro tégés, answer fo r them o r in
the highest circles within the o rganizatio n, and makes appro priate intro ductio ns.
So me o rganizatio ns have fo rmal mento ring pro grams, in which mento rs are o ffi-
cially assigned to new o r high-po tential emplo yees. Fo r instance, Mo ntreal-based Bell
Canada intro duced Mento r Match in late 2002 to bring to gether senio r and junio r
employees. The mento rs meet o ne-o n-o ne fo r abo ut an ho ur a mo nth, to build a stro nger
understanding o f leadership and o rganizatio nal kno wledge fo r the yo unger emplo y-
ees.60 Ho wever, in co ntrast to Bell Canada’s fo rmal system, mo st o rganizatio ns rely o n Bell Canada
info rmal mento ring—with senio r managers perso nally selecting emplo yees as pro tégés www.bell.ca
o r junio r emplo yees asking senio r emplo yees to mento r them.
274 Part 4 Sharing t he Organizat ional Vision

The mo st effective mento ring relatio nships exist o utside the immediate bo ss–sub-
o rdinate interface.61 The bo ss–subo rdinate co ntext has an inherent co nflict o f interest
and tensio n, mo stly attributable to managers’ direct evaluatio n o f the perfo rmance o f
subo rdinates, that limits o penness and meaningful co mmunicatio n.
Why wo uld a leader want to be a mento r? There are perso nal benefits to the leader
as well as benefits fo r the o rganizatio n. The mento r–pro tégé relatio nship gives the men-
to r unfiltered access to the attitudes and feelings o f lo wer-ranking emplo yees. Pro tégés
can be an excellent so urce o f info rmatio n o n po tential pro blems; they can pro vide early
warning signals to upper managers because they sho rt-circuit the fo rmal channels. So the
mento r–pro tégé relatio nship is a valuable co mmunicatio n channel that allo ws men-
to rs to learn abo ut pro blem s befo re they beco m e co m m o n kno wledge to o thers in
upper management. In additio n, in terms o f leader self-interest, mento ring can pro -
vide perso nal satisfactio n to senio r executives. It gives them the o ppo rtunity to share with
o thers the kno wledge and experience that they have develo ped o ver many years.
Fro m the o rganizatio n’s standpo int, mento ring pro vides a suppo rt system fo r high-
po tential emplo yees. Where mento rs exist, pro tégés are o ften mo re mo tivated, better
gro unded po litically, and less likely to quit. A recent co m prehensive review o f the
research, fo r instance, fo und that mento ring pro vided substantial benefits to pro tégés.62
Specifically, mento red emplo yees had higher co mpensatio n, a larger number o f pro -
mo tio ns, and were mo re satisfied with their careers than their no nmento red co unterparts.
Are all em plo yees in an o rganizatio n equally likely to participate in a m ento ring
relatio nship? Unfo rtunately the answer is no .63 The evidence indicates that mino rities
and wo men are less likely to be cho sen as pro tégés than are white males and thus they
are less likely to accrue the benefits o f mento rship. Mento rs tend to select pro tégés who
are similar to themselves in criteria such as backgro und, educatio n, gender, race, ethnicity,
and religio n. “Peo ple naturally mo ve to mento r and can mo re easily co mmunicate with
tho se with who m they mo st clo sely identify.” 64
In a twist to the typical m ento ring-do wn idea, Pro cter & Gam b le intro duced a
Mento ring Up pro gram to help senio r managers beco me mo re aware o f what female
managers can co ntribute to the o rganizatio n. In its pro gram, mid-level female man-
agers mento r senio r-level male executives. The pro gram has led to fewer departures o f
female managers and has expo sed wo men to to p decisio n makers.65

Co aching
A number o f o rganizatio ns have intro duced co aching, which is different fro m mento ring.
“Mento ring, at its best, invo lves a lo nger term relatio nship in which there is an emo tio nal
attachment between mento r and pro tégé.” 66 By co ntrast, co aching is o ften mo re task o ri-
ented and sho rt term. Co aching is used by senio r and middle managers in particular,
altho ugh o ther managers use co aching as part o f their leadership style. A go o d co ach

• Emphasizes self-develo pment and self-disco very o f the perso n being co ached

• O ffers the perso n being co ached co nstructive feedback o n ho w to impro ve

• Meets regularly with the perso n being co ached

• Is a go o d listener

• Challenges the perso n being co ached to perfo rm

• Sets realistic standards fo r the perso n being co ached to achieve.67

Provid ing Team Lea d ership

Increasingly leadership is taking place within a team co ntext. As teams grow in po pularity,
the ro le o f the leader in guiding team m em bers takes o n m o re im po rtance.68 Also ,
because o f its mo re co llabo rative nature, the ro le o f team leader differs fro m the tradi-
 Chapt er 8 Leadership 275

tio nal leadership ro le perfo rmed by fro nt-

line superviso rs.
Many leaders are no t equipped to han-
d le th e m o ve to team lead er. As o n e
pro m inent co nsultant no ted, “ Even the
mo st capable managers have tro uble mak-
ing the transitio n b ecause all the co m -
mand-and-co ntro l type things they were
enco uraged to do b efo re are no lo nger
appro priate. There’s no reaso n to have any
skill o r sense o f this.” 69 This sam e co n-
sultant estimated that “ pro bably 15 per-
cent o f managers are natural team leaders;
ano ther 15 percent co uld never lead a
team because it runs co unter to their per-
so nality. [They are unab le to put aside
their do minating style fo r the go o d o f the
team.] Then there’s that huge gro up in the Af t er Hurricane Kat rina devast at ed many areas of t he sout hern Unit ed St at es, t he
middle: team leadership do esn’t co me nat- Vancouver Urban Search and Rescue Team sent a group of 46 men to help w ith evacua-
70 tions. The team is a self-contained unit that can bring all of its ow n supplies to a disaster
urally to them, but they can learn it.”
area, in addition to supplies to help out others. The team members w ere the first rescuers
Effective team leaders need to b uild to get to St. Bernard Parish in New Orleans. They received great praise for their team lead-
co m m itm ent and co nfid ence, rem o ve ership in helping Americans in a time of real need.
o bstacles, create o ppo rtunities, and be part
o f the team.71 They have to learn skills such as the patience to share info rmatio n, the will-
ingness to trust o thers, the ability to give up autho rity, and an understanding o f when
to intervene. New team leaders may try to retain to o much co ntro l at a time when team
members need mo re auto no my, o r they may abando n their teams at times when the
teams need suppo rt and help.72

Ro les o f Team Leaders

A recent study o f 20 o rganizatio ns that reo rganized themselves aro und teams fo und
certain co mmo n respo nsibilities that all leaders had to assume. These included co ach-
ing, facilitating, handling disciplinary pro blems, reviewing team/ individual perfo rmance,
training, and co mmunicating.73 Many o f these respo nsibilities apply to managers in
general. A mo re meaningful way to describe the team leader’s jo b is to fo cus o n two
prio rities: managing the team’s relatio ns with o utsiders and facilitating the team pro cess.74
We have divided these prio rities into fo ur specific ro les that team leaders play:

• Liaisons with outsiders. O utsiders include upper management, o ther internal

teams, custo mers, and suppliers. The leader represents the team to o ther co n-
stituencies, secures needed reso urces, clarifies o thers’ expectatio ns o f the team,
gathers info rmatio n fro m the o utside, and shares this info rmatio n with team
members.

• Troubleshooters. When the team has pro blems and asks fo r assistance, team
leaders sit in o n meetings and try to help reso lve the pro blems. This rarely
relates to technical o r o peratio nal issues because the team members typically
kno w mo re abo ut the tasks being do ne than do es the team leader. The leader
co ntributes by asking penetrating questio ns, by helping the team discuss
pro blems, and by getting needed reso urces fro m external co nstituencies. Fo r
instance, when a team in an aero space firm fo und itself sho rt-handed, its team
leader to o k respo nsibility fo r getting mo re staff. He presented the team’s case
to upper management and go t the appro val thro ugh the co mpany’s human
reso urce department.
276 Part 4 Sharing t he Organizat ional Vision

• Conflict managers. When disagreements surface, team leaders help pro cess the
co nflict. What is the so urce o f the co nflict? Who is invo lved? What are the
issues? What reso lutio n o ptio ns are available? What are the advantages and
disadvantages o f each? By getting team members to address questio ns such as
these, the leader minimizes the disruptive aspects o f intrateam co nflicts.

• Coaches. They clarify expectatio ns and ro les, teach, o ffer suppo rt, cheerlead,
and do whatever else is necessary to help team members impro ve their wo rk
perfo rmance.

LEAD ING O NE’S SELF

When the death toll after Hurricane Katrina w as around 900 in New Orleans and 1100 over-
all, rather than the tens of thousands officials had feared at the start of the catastrophe, most
people breathed a sigh of relief. What kept the toll so low ? Tw o factors w ere largely responsible.
First, people took charge of themselves and their families, doing w hat they could to get them-
selves evacuated before the storm hit. People also did w hat they could to help others evacuate—
making it their ow n responsibility to help their poor, sick, and elderly neighbours move to
safety. That the death toll w as so low illustrates the importance of individuals’ taking leadership
responsibility w hen the situation demands. So, how can individuals practise leadership on a
daily basis even if they do not hold official positions of leadership?

5 What is self-leadership?
Thus far we have discussed the ro le o f leadership as if it were mainly a o ne-way street:
Leadership is so mething so meo ne at the to p do es and, o ne ho pes, tho se at the bo t-
to m— the fo llo wers— fo llo w. Ho wever, there are two pro vo cative issues fo r yo u to co n-
sider when thinking abo ut leadership. The first is the issue o f self-leadership, o r taking
respo nsibility fo r yo ur o wn actio ns. The seco nd is learning ho w to be a leader, even if
o nly in small areas o f yo ur wo rk o r perso nal life.
Exhibit 8-10 o n page 277 gives a lighthearted lo o k at what it means to be a team leader.

Self-Lea d ership (or Self-M anagement)

A gro wing trend in o rganizatio ns is the fo cus o n self-lead-
ership, o r self-m anagem ent.75 With self-leadership, indi-

* How do you
manage yourse lf?
viduals and team s set go als, plan and im plem ent tasks,
evaluate perfo rmance, so lve their o wn pro blems, and mo ti-
vate them selves. Several facto rs call fo r self-leadership:
reduced levels o f supervisio n, m o re o ffices in the ho m e,
m o re teamwo rk, and gro wth in service and pro fessio nal
em plo ym ent where individuals are o ften req uired to m ake decisio ns o n the spo t.
Fo llo wing fro m o ur previo us discussio n o f substitutes fo r leadership, self-management
can also be a substitute o r neutralizer fo r leadership fro m o thers.
Despite the lack o f studies o f self-leadership techniques in o rganizatio nal settings, self-
leadership strategies have been sho wn to be successful in no no rganizatio nal settings.76
Tho se who practise self-leadership lo o k fo r o ppo rtunities to be mo re effective in the
wo rkplace and impro ve their career success. Their behavio ur is self-reinfo rced— that is,
they pro vide their o wn sense o f reward and feedback after carrying o ut their acco m-
plishments. Mo reo ver, self-reinfo rced behavio ur is o ften maintained at a higher rate
than behavio ur that is externally regulated.77
What do es self-leadership lo o k like? Tho ugh “individuals in o rganizatio ns are regu-
larly taught how to lead subo rdinates, gro ups, and even o rganizatio ns, they rarely receive
instructio n o n how to lead themselves.” 78 Few empirical studies o f this kind have been
carried o ut in the wo rkplace,79 but a 1999 study o f 305 managers at a large retailing o rgan-
izatio n in the Midwestern United States identified fo ur behavio urs that can be co nsidered
 Chapt er 8 Leadership 277

EXHIBIT 8-10

Source: DILBERT reprinted by permission of United Features Syndicate, Inc.

self-leadership: planning, access management, catch-up activities, and emotions management.80

The Learning About Yourself Exercise o n page 286 describes these behavio urs in greater detail.
Ho w do leaders create self-leaders? The fo llo wing have been suggested:81

• Model self-leadership. Practise self-o bservatio n, setting challenging perso nal

go als, self-directio n, and self-reinfo rcement. Then display these behavio urs
and enco urage o thers to rehearse and then pro duce them.

• Encourage employees to create self-set goals. Suppo rt emplo yees in develo ping
quantitative, specific go als; having such go als is the mo st impo rtant part o f
self-leadership.

• Encourage the use of self-rewards to strengthen and increase desirable behaviours. By

co ntrast, limit self-punishment o nly to o ccasio ns when the emplo yee has
been disho nest o r destructive.

• Create positive thought patterns. Enco urage emplo yees to use mental imagery
and self-talk to further stimulate self-mo tivatio n.

• Create a climate of self-leadership. Redesign the wo rk to increase the natural

rewards o f a jo b and fo cus o n these naturally rewarding features o f wo rk to
increase mo tivatio n.

• Encourage self-criticism. Enco urage individuals to be critical o f their o wn

perfo rmance.

The underlying assumptio ns o f self-leadership are that peo ple are respo nsible, capa-
ble, and able to exercise initiative witho ut the external co nstraints o f bo sses, rules, o r
regulatio ns. Given the pro per suppo rt, individuals can mo nito r and co ntro l their o wn
behavio ur. Self-leadership is different fro m empo werment in that empo werment creates
the co nditio ns to make decisio ns. Self-leadership is far mo re extensive than empowerment
in what emplo yees acco mplish, because self-leaders also set their o wn go als.

Lea d ing W ithout Authority

We have discussed ho w to be a fo llo wer and ho w to manage yo urself, but what if yo ur
go al is to be a leader, even if yo u do no t have the autho rity ( o r fo rmal appo intment) to
be o ne? Fo r instance, what if yo u wanted to co nvince the dean o f yo ur scho o l to intro -
duce new business co urses that were mo re relevant, o r yo u wanted to co nvince the pres-
ident o f the co m pany where yo u wo rk that she sho uld start thinking ab o ut m o re
278 Part 4 Sharing t he Organizat ional Vision

enviro nmentally friendly strategies in dealing with waste? Ho w do yo u effectively lead

in a student gro up, in which everyo ne is a peer?
Leadership at the grassro o ts level in o rganizatio ns do es happen. Harvard Business
Scho o l pro fesso r Ro sabeth Mo ss Kanter discusses examples o f peo ple who saw so mething
in their wo rkplace that needed changing and to o k the respo nsibility to do so upo n
themselves in her bo o k The Change Masters.82 Employees were mo re likely to take o n extra
respo nsibility when o rganizatio ns permitted initiative at all levels o f the o rganizatio n
rather than making it a to o l o f senio r executives o nly.
Leading witho ut autho rity simply means exhibiting leadership behavio ur even tho ugh
yo u do no t have a fo rmal po sitio n o r title that might enco urage o thers “to o bey.” Neither
Martin Luther King Jr. no r Mahatma Gandhi o perated fro m a po sitio n o f autho rity, yet
each was able to inspire many to fo llow him in the quest fo r so cial justice. The wo rkplace
can be an o ppo rtunity fo r leading witho ut autho rity as well. As Ro nald Heifetz o f
Harvard’s Kennedy Scho o l o f Go vernment no tes, “ leadership means taking respo nsi-
bility fo r hard pro blems beyo nd anyo ne’s expectatio ns.” 83 It also means no t waiting
fo r the co ach’s call.84
What are the benefits o f leading witho ut autho rity? Heifetz has identified three:85

• Latitude for creative deviance. Because o ne do es no t have autho rity and the trap-
pings that go with autho rity, it is easier to raise harder questio ns and lo o k fo r
less traditio nal so lutio ns.

• Issue focus. Leading witho ut autho rity means that o ne can fo cus o n a single
issue, rather than be co ncerned with the great number o f issues that tho se in
autho rity face.

• Front-line information. Leading witho ut autho rity means that o ne is clo ser to
the detailed experiences o f so me o f the stakeho lders, such as co -wo rkers. Thus
mo re info rmatio n is available to this kind o f leader.

No t all o rganizatio ns will suppo rt this type o f leadership, and so me have been known
to actively suppress it. Still o thers will lo o k aside, neither enco uraging no r disco uraging
it. Nevertheless, yo u may want to reflect o n the po ssibility o f engaging in leadership
behavio ur simply because yo u see a need rather than because yo u are required to act.

CONTEMPORARY ISSUES IN LEAD ERSHIP

Louisiana governor Kathleen Blanco found herself under severe criticism w hen the state seemed
to have greater difficulties w ith its emergency evacuation plans compared w ith tw o other
states hit by Hurricane Katrina: M ississippi and Alabama (states led by men).86 M ichael Brow n,
then director of the Federal Emergency M anagement Agency (FEM A), even described Blanco’s
response to the disaster as “ confused” compared w ith the governors of the tw o other states.
In the early days after the levees broke, Blanco expressed some frustration that aides to
President George W. Bush did not seem to respond to her pleas for help in a timely manner.
FEM A director Brow n asked her: “ What do you need? Help me help you.” Blanco’s commu-
nications director, Robert M ann, said Blanco could not believe that FEM A could not anticipate
some of the state’s needs. “ It w as like w alking into an emergency room bleeding profusely
and being expected to instruct the doctors how to treat you,” he said. Could gender differences
in leadership styles and communication have played any role in how the reactions to Hurricane
Katrina played out?

6 What are some of the Is there a mo ral dimensio n to leadership? Do men and wo men rely o n different lead-
contemporary issues in ership styles, and if so , is o ne style inherently superio r to the o ther? What are the chal-
leadership? lenges o f o nline leadership? In this sectio n, we briefly address these co ntem po rary
issues in leadership.
 Chapt er 8 Leadership 279

Is There a M oral Dimen sion to Lea d ership?

The to pic o f leadership and ethics has received surprisingly little attentio n. O nly very
recently have ethicists and leadership researchers begun to co nsider the ethical impli-
catio ns in leadership.87 Why no w? O ne reaso n may be the gro wing general interest in
ethics thro ugho ut the field o f business. Ano ther reaso n may be the disco very by pro b-
ing bio graphers that so m e o f o ur past leaders suffered fro m ethical sho rtco m ings.
Regardless, no co ntempo rary discussio n o f leadership is co mplete witho ut addressing
its ethical dimensio n.
Ethics relates to leadership in a number o f ways. Transfo rmatio nal leaders, fo r instance,
have been described by o ne autho rity as enco uraging m o ral virtue when they try to
change the attitudes and behavio urs o f fo llo wers.88 Charisma, to o , has an ethical co m-
po nent. Unethical leaders are mo re likely to use their charisma to enhance po wer o ver
fo llo wers, directed to ward self-serving ends. We prefer to believe that ethical leaders
use their charisma in a so cially co nstructive way to serve o thers.89 Co nsider, to o , the
issue o f abuse o f power by leaders—fo r example, when they give themselves large salaries
and bo nuses while also trying to cut co sts by laying o ff lo ng-time emplo yees.
Leadership effectiveness needs to address the means that a leader uses in trying to
achieve go als, as well as the co ntent o f tho se go als. Fo r instance, at Enro n, employees were
driven by the to p executives to keep Enro n sto ck prices up, at whatever co st. “The driver
was this unbelievable desire to keep po rtraying Enro n as so mething very different and
keep the track reco rd go ing and go ing,” said Fo rrest Ho glund, who ran Enro n’s o il and
gas explo ratio n until 1999.90 To achieve these go als, executives inflated revenues and hid
debts. CEO and chair Kenneth Lay thus led his subo rdinates to achieve sto ck price go als
no matter ho w this was acco mplished. Anyo ne who questio ned what the co mpany was
do ing was igno red o r dismissed.
Ethical leadership must also address the co ntent o f a leader’s go als. Are the changes
that the leader seeks fo r the o rganizatio n mo rally acceptable? Is a business leader effec-
tive if he o r she builds an o rganizatio n’s success by selling pro ducts that damage the
health o f their users, such as to bacco executives have do ne. Is a military leader success-
ful when winning a war that sho uld no t have been fo ught in the first place?
Pro fesso r James Clawso n o f the Darden Graduate Scho o l o f Business, University o f
Virginia, suggests that there are fo ur co rnersto nes to a “mo ral fo undatio n o f leadership”:91

• Truth telling. Leaders who tell the truth as they see it allo w fo r a mutual, fair
exchange to o ccur.

• Promise keeping. Leaders need to be careful abo ut the co mmitments they make,
and then careful to keep tho se co mmitments.

• Fairness. Leaders who are equitable ensure that fo llo wers get their fair share fo r
their co ntributio ns to the o rganizatio n.

• Respect for the individual. Leaders who tell the truth, keep pro mises, and are fair
sho w respect fo r fo llo wers. Respect means treating peo ple with dignity.

Mo ral leadership co mes fro m within the individual, and in general means treating
peo ple well, and with respect. This chapter’s Ethical D ilemma Exercise o n page 287–288
raises so me pro vo cative issues abo ut whether we sho uld co nsider just the ends to ward
which a leader strives, o r the means as well.

G en d er: Do M en an d Women Lea d Differently?

An extensive review o f the literature suggests two co nclusio ns.92 First, the similarities
between male and female leaders tend to o utweigh the differences. Seco nd, what dif-
ferences there are seem to be that wo men fall back o n a mo re demo cratic leadership style
while men feel mo re co mfo rtable with a directive style.
280 Part 4 Sharing t he Organizat ional Vision

George Cooke, CEO of Toronto-

based Dominion of Canada
General Insurance, believes in
promoting w omen to senior posi-
tions. He is notew orthy for this:
Dominion is w ell above t he
national average in the percent-
age of w omen w ho have made it
t o t he execut ive ranks of
Canada’s top companies.

The similarities amo ng men and wo men leaders sho uld no t be co mpletely surprising.
Almo st all the studies lo o king at this issue have treated managerial po sitio ns as syn-
o nymo us with leadership ro les. Bo th male and female managers have characteristics
that set them apart fro m the general po pulatio n. Just as peo ple who cho o se careers in law
enfo rcement o r civil engineering have a lo t in co mmo n, so do individuals who cho o se
managerial careers. Peo ple with traits asso ciated with leadership—such as intelligence, co n-
fidence, and so ciability—are mo re likely to be perceived as leaders and enco uraged to pur-
sue careers where they can exert leadership. This is true regardless o f gender. Similarly,
o rganizatio ns tend to recruit and pro mo te peo ple who pro ject leadership attributes into
leadership po sitio ns. The result is that, regardless o f gender, tho se who achieve fo rmal lead-
ership po sitio ns in o rganizatio ns tend to be mo re alike than different.
Despite the previo us co nclusio n, studies indicate so me differences in the inherent lead-
ership styles o f wo men and men. A recent Co nference Bo ard o f Canada study fo und
that “ wo men are particularly stro ng in managing interperso nal relatio nships and their
appro ach is mo re co nsensual.” 93 O ther studies have sho wn that wo men tend to ado pt
a style o f shared leadership. They enco urage participatio n, share power and info rmatio n,
and try to enhance fo llo wers’ self-wo rth. They prefer to lead thro ugh inclusio n and rely
o n their charisma, expertise, co ntacts, and interperso nal skills to influence o thers. Men,
o n the o ther hand, are mo re likely to use a directive co mmand-and-co ntro l style. They
rely o n the fo rmal autho rity o f their po sitio n fo r their influence base.
Given that men have histo rically held the great majo rity o f leadership po sitio ns in
o rganizatio ns, it is tempting to assume that the differences no ted between men and
wo men wo uld auto matically wo rk to favo ur men. They do no t. In to day’s o rganiza-
tio ns, flexibility, teamwo rk, trust, and info rm atio n sharing are replacing rigid struc-
tures, co mpetitive individualism, co ntro l, and secrecy. The best leaders listen, mo tivate,
and pro vide suppo rt to their peo ple. Many wo men seem to do tho se things better than
men. As a specific example, the expanded use o f cro ss-functio nal teams in o rganiza-
tio ns means that effective leaders must beco me skilled nego tiato rs. The leadership styles
wo men typically use can make them better at nego tiating, as they are less likely than men
to fo cus o n wins, lo sses, and co mpetitio n. They tend to treat nego tiatio ns in the co ntext
 Chapt er 8 Leadership 281

EXHIBIT 8-11 Where Female M anagers Do Better: A Scorecard

None of t he f ive st udies set out t o f ind gender diff erences. They st umbled on t hem w hile
compiling and analyzing perf ormance evaluat ions.

Skill (Each check mark denot es w hich group M EN WOM EN

scored higher on t he respect ive st udies.)
M otivating others
Fostering communication *
Producing high quality w ork
Strategic planning *
Listening to others
Analyzing issues *
* In one st udy, w omen’s and men’s scores in t hese cat egories w ere st at ist ically even.
Dat a: Hagberg Consult ing Group, M anagement Research Group, Law rence A. Pf aff , Personnel Decisions
Int ernat ional Inc., Advanced Teamw are Inc.

Source: R. Sharpe, “ As Leaders, Women Rule,” BusinessWeek, November 20, 2000, p. 75. Reprinted by
permission of Business Week.

o f a co ntinuing relatio nship— trying hard to make the

o ther party a winner in his o r her o wn and o thers’ eyes.
Altho ugh it’s interesting to see ho w m en’s and
wo men’s leadership styles differ, a mo re impo rtant ques-
tio n is whether they differ in effectiveness. Altho ugh
so m e researchers have sho wn that m en and wo m en
tend to be equally effective as leaders,94 an increasing
number o f studies have sho wn that wo men executives,
when rated by their peers, emplo yees, and bo sses, sco re
higher than their male co unterparts in a wide variety
o f measures, including getting extra effo rt fro m subo r-
dinates and overall effectiveness in leading. Subo rdinates
also repo rt mo re satisfactio n with the leadership given
by wo men.95 See Exhibit 8-11 fo r a sco recard o n where
female managers do better, based o n a summary o f five
studies. Why these differences? One po ssible explanatio n
is that in to day’s o rganizatio ns, flexibility, teamwo rk
and partnering, trust, and info rmatio n sharing are rap-
idly replacing rigid structures, co mpetitive individualism,
co ntro l, and secrecy. In these types o f wo rkplaces, effec-
tive managers must use mo re so cial and interperso nal Emmie Wong Leung, founder and CEO of International Paper Industries
(IPI) of North Vancouver, w hich collects, processes, and sells w aste paper
behavio urs. They m ust listen, m o tivate, and pro vide
to offshore buyers, has been exporting to the United States, Hong Kong,
suppo rt to their peo ple. They must inspire and influ- Japan, China, the Philippines, India, and Indonesia for more than 20
ence rather than co ntro l. Wo m en seem to do tho se years. She says: “ I think an old-boys’ netw ork operates all over the w orld,
things better than men.96 but you can get them to accept you.”

W hat Are the Challenges of Online Lea d ership?

O rganizatio ns are facing m o re teleco m m uting by em plo yees, m o re co ntracting o ut,
mo re mergers, and increasing glo balizatio n. Students o ften take co urses o nline. It is
beco ming mo re co mmo n, then, that the perso n do ing the leading is no t necessarily in
the same building, let alo ne the same o rganizatio n o r co untry, as the perso n being led.
 282 Part 4 Sharing t he Organizat ional Vision

Ho w do yo u lead peo ple who are physically separated fro m yo u and fo r who m inter-
actio ns are basically reduced to written digital co mmunicatio ns? This is a questio n that,
to date, has received minimal attentio n fro m o rganizatio nal behavio ur researchers.97
Leadership research has been directed almo st exclusively to face-to -face and verbal sit-
uatio ns. But we canno t igno re the reality that to day’s m anagers and em plo yees are
increasingly linked by netwo rks rather than by geo graphical pro ximity. O bvio us exam-
ples include co -wo rkers who regularly use email to co mmunicate with each o ther, man-
agers who o versee virtual pro jects o r teams, and students who take co urses o nline.
If leadership is impo rtant fo r inspiring and mo tivating dispersed emplo yees, we need
to o ffer so me guidance o n how leadership might functio n in this co ntext. Keep in mind,
ho wever, that there is limited research o n this to pic. So o ur intentio n here is no t to
pro vide yo u with definitive guidelines fo r leading o nline. Rather, it’s to intro duce yo u to
an increasingly impo rtant issue and to get yo u to think abo ut ho w leadership changes
when relatio nships are defined by netwo rk interactio ns.
In face-to -face co mmunicatio ns, harsh words can be so ftened by no nverbal actio n. A
smile and co mfo rting gestures, fo r instance, can lessen the blow behind stro ng wo rds like
disappointed, unsatisfactory, inadequate, o r below expectations. That no nverbal co mpo nent
do es no t exist with o nline interactio ns. The structure o f wo rds in a digital co mmunica-
tio n has the po wer to mo tivate o r demo tivate the receiver.
Leaders need to be sure the tone o f their email co rrectly reflects the emo tio ns they want
to send. Is the message fo rmal o r info rmal? Do es it match the verbal style o f the sender?
Do es it co nvey the appro priate level o f impo rtance o r urgency? The fact that many peo -
ple’s writing styles are very different fro m their interperso nal styles is certainly a po ten-
tial pro blem.
Jane Howell at the Richard Ivey Scho o l o f Business, University o f Western Ontario , and
o ne o f her fo rmer students, Kate Hall-Merenda, have co nsidered the issues o f leading
fro m a distance.98 They no te that physical distance can create many po tential pro b-
lems, with emplo yees feeling iso lated, fo rgo tten, and perhaps no t cared abo ut. It may
result in lo wered pro ductivity. Their study o f 109 business leaders and 371 fo llo wers in
a large financial institutio n fo und that physical distance m akes it m o re difficult fo r
managers and emplo yees to develo p high-quality relatio nships.
Ho well and Hall-Merenda suggest that so me o f the same characteristics o f transfo r-
matio nal leaders are appro priate fo r lo ng-distance managing. In particular, they empha-
size the need to articulate a co mpelling visio n to emplo yees and to co mmunicate that
visio n in an inspiring way. Enco uraging emplo yees to think abo ut ways to strive to ward
that visio n is ano ther impo rtant task o f the leader. Their research also indicates that
co mmunicatio n do es no t have to be do ne face to face as lo ng as the visio n is co mmu-
nicated clearly in so me fashio n.
This discussio n leads us to the tentative co nclusio n that, fo r an increasing number o f
managers, go o d interperso nal skills may include the ability to co mmunicate suppo rt and
leadership thro ugh written wo rds o n a co mputer screen and to read emo tio ns in o thers’
messages. In this “new wo rld” o f co mmunicatio ns, writing skills are likely to beco me an
extensio n o f interperso nal skills.

SUMMARY AND IMPLICATIONS

1 What is the d ifference b etw een a manager and a lead er? Managers pro mo te
SNAPSHOT SUM M ARY stability, while leaders press fo r change. Leaders pro vide visio n and strategy; man-
agers implement that visio n and strategy, co o rdinate and staff the o rganizatio n,
1 Are M anagers and
and handle day-to -day pro blems.
Leaders the Same?
2 Are there specific trait s, b ehaviours, and situations that affect how one leads?
Early leadership theo ries were co ncerned with supervisio n and so ught to find o ut
 Chapt er 8 Leadership 283

if there were ways to identify leaders. Trait theo ries examined whether any traits were
universal amo ng leaders. While there are so me co mmo n traits, leaders are mo re dif- 2 Leadership as
Supervision
ferent than the same in terms o f traits. Emo tio nal intelligence is o ne o f the few
Trait Theory: Are Leaders
traits that has been fo und to be extremely impo rtant fo r leadership success. O ther
Different from Others?
research has tried to disco ver whether so me behavio urs create better leaders than
Behavioural Theories: Do
o thers. The findings were mixed, suggesting that leaders need to be bo th task o ri- Leaders Behave in Particular
ented and peo ple o riented. The mixed findings led researchers to co ntingency the- Ways?
o ries that co nsider the effect o f the situatio ns in which leadership is applied. This Contingency Theories: Does
research tells us that leaders need to adjust their behavio urs, depending o n the the Situation Matter?
situatio n and the needs o f emplo yees. Co ntingency theo ries were an impo rtant Can You Be a Better
co ntributio n to the study o f leadership. Follower?
3 Inspirational Leadership
3 How d oes a lead er lead w ith vision? The mo re recent appro aches to leader-
ship mo ve away fro m the superviso ry tasks o f leaders and fo cus o n visio n-setting
From Transactional to
Transformational Leadership
activities. These theo ries try to explain ho w certain leaders can achieve extrao rdi-
nary perfo rmance levels fro m their fo llo wers, and they stress symbo lic and emo - 4 Dispersed Leadership:
Spreading Leadership
tio nally appealing leadership behavio urs. These leaders, kno wn as charismatic o r
Throughout the
transformational leaders, inspire fo llo wers to go beyo nd their o wn self-interests fo r Organization
the go o d o f the o rganizatio n.
Mentoring
4 Can a person b e an informal lead er? There are several appro aches to being a Providing Team Leadership
leader even if o ne do es no t ho ld a fo rm al po sitio n o f leadership. Mento ring is 5 Leading One’s Self
o ne way to be an info rmal leader. Mento rs spo nso r and suppo rt less-experienced Self-Leadership (or Self-
emplo yees, co aching and co unselling them abo ut their jo bs. A perso n can also act Management)
as an info rmal leader o n a team. Leading Without Authority
5 What is self-lead ership? With self-leadership, individuals and teams set go als, 6 Contemporary Issues in
plan and implement tasks, evaluate perfo rmance, so lve their o wn pro blems, and Leadership
mo tivate themselves. The superviso r plays a much-reduced ro le. Self-leadership Is There a Moral Dimension
can also include leadership at the grassro o ts level in an o rganizatio n, where o ne do es
to Leadership?
no t have actual autho rity. Leading witho ut autho rity simply means exhibiting lead- Gender: Do Men and
Women Lead Differently?
ership behavio ur even tho ugh yo u do no t have a fo rmal po sitio n o r title that might
What Are the Challenges of
enco urage o thers “ to o bey.”
Online Leadership?
6 What are some of the contemporary issues in lead ership? O ne o f the majo r
issues in leadership to day is whether there is a mo ral dimensio n to leadership.
Mo ral leadership co mes fro m within the individual, and, in general, means treat-
ing peo ple well and with respect. Ano ther ho t issue in leadership is the questio n o f
whether men and wo men use different leadership styles, and, if that is the case,
whether o ne style is inherently superio r to the o ther. The literature suggests two co n-
clusio ns. First, the similarities between men and wo men tend to o utweigh the dif-
ferences. Seco nd, what differences there are seem to relate to wo men’s falling back
o n a mo re demo cratic leadership style and men’s feeling mo re co mfo rtable with a
directive style. Yet ano ther interesting issue in leadership is pro viding leadership
o nline. Leadership demands are different when o ne do es no t have the o ppo rtunity
fo r face-to -face interactio n. Fo r an increasing number o f leaders, go o d interper-
so nal skills may include the ability to co mmunicate suppo rt and leadership thro ugh
written wo rds o n a co mputer screen and to read emo tio ns in o thers’ messages.
O B A T W O RK
For Review
1 . Trace the development of leadership research.

2. Describe the strengths and w eaknesses of trait theories of leadership.

3. What is the Leadership Grid? Contrast its approach to leadership w ith the approaches of the Ohio State and
M ichigan studies.

4. What are the contingency variables in path-goal theory?

5. When might leaders be irrelevant?

6 . What characteristics define an effective follow er?

7. What are the differences betw een transactional and transformational leaders?

8. Describe the strengths and w eaknesses of a charismatic leader.

9. What is moral leadership?

1 0. Why do you think effective female and male managers often exhibit similar traits and behaviours?

For Critical Thinking

1 . Reconcile path-goal theory and substitutes for leadership.

2. What kind of activities could a full-time college or university student pursue that might lead to the perception that he
or she is a charismatic leader? In pursuing those activities, w hat might the student do to enhance this perception?

3. Based on the low representation of w omen in upper management, to w hat extent do you think that organizations
should actively promote w omen into the senior ranks of management?

4. Is there an ethical problem if leaders focus more on looking like leaders than actually being leaders? Discuss.

5. “ Leaders make a real difference in an organization’s performance.” Build an argument in support of this statement.
Then build an argument against this statement.

OB for You
■ It is easy to imagine that theories of leadership are more important to those w ho are leaders or w ho plan in the near
future to become leaders. How ever, leadership opportunities occur throughout an organization. You have no doubt
seen student leaders w ho did not necessarily have any formal authority be extremely successful.

■ Leaders are not born. They learn how to lead by paying attention to situations and w hat needs to be done.

■ There is no one best w ay to lead. It is important to consider the situation and the needs of the people w ho w ill be led.

■ Sometimes no leader is needed—the individuals in the group simply w ork w ell enough together that each takes turns
at leadership w ithout appointing a formal leader.

PO I N T
Leadership Is Culturally
Bo und
Leaders must adapt their styles to different national cul-
tures. What w orks in China is not likely to w ork in Canada
or France.99 Can you imagine, for instance, executives at a
large department store chain in Canada, such as The Bay,
being effective by humiliating their employees? But that
approach w orks at the Asia Department Store in central
China.100 Executives there blatantly brag about practising
“ heartless” management, requiring new employees to
undergo tw o to four w eeks of military-type training in
order to increase their obedience, and conducting the
store’s in-house training sessions in a public place w here
employees can openly suffer embarrassment from their
mistakes.
National culture affects leadership style by w ay of the
follow er. Leaders cannot choose their styles at w ill. They
are constrained by the cultural conditions that their fol-
low ers have come to expect. For instance, Korean leaders
are expected to be paternalistic tow ard employees; Arab
leaders w ho show kindness or generosity w ithout being
asked to do so are seen by other Arabs as w eak; and
Japanese leaders are expected to be humble and speak
infrequently.101
Consist ent w it h t he cont ingency approach, leaders
need to adjust their styles to the unique cultural aspects of
a country. For example, a manipulative or autocratic style
is compatible w ith high pow er distance, and w e find high
pow er distance scores in Russia and Spain, and Arab, Far
Eastern, and most Latin countries. Pow er distance rank-
ings should also be good indicators of employee w illing-
ness to accept participative leadership. Participation is
likely to be most effective in low pow er distance cultures
as exist in Norw ay, Finland, Denmark, and Sw eden.
Chapt er 8 Leadership 285
O B A T W O RK
CO U N TERPO I N T
Leadership Transcends
Culture
The GLOBE research program, w hich w e introduced in
Chapter 3, has gathered data on approximately 18 000
middle managers in 825 organizations, covering 62 coun-
tries. It is the most comprehensive cross-cultural study of
leadership ever undertaken. So its findings should not be
quickly dismissed. It is illuminating that one of the results
coming f rom t he GLOBE st udy is t hat t here are some
universal aspects to leadership. Specifically, a number of
t he element s making up t ransf ormat ional leadership
appear to be associated w ith effective leadership regard-
less of w hat country the leader is in.102 This conclusion is
very important because it flies in the face of the contin-
gency view that leadership style needs to adapt to cultural
differences.
What elements of transformational leadership appear
universal? Vision, foresight, providing encouragement,
trustw orthiness, dynamism, positiveness, and proactive-
ness. The results led tw o members of the GLOBE team to
conclude that “ effective business leaders in any country
are expected by their subordinates to provide a pow erful
and proactive vision to guide the company into the future,
strong motivational skills to stimulate all employees to ful-
fill the vision, and excellent planning skills to assist in
implementing the vision.” 103
W hat might explain t he universal appeal of t hese
transformational leader attributes? It has been suggested
that pressures tow ard common technologies and man-
agement practices, as a result of global competition and
multinational influences, may make some aspects of lead-
ership universally accepted. If this is true, w e may be able
to select and train leaders in a universal style and thus
significantly raise the quality of leadership w orldw ide.
286 Part 4 Sharing t he Organizat ional Vision

O B A T W O RK

LEA RN I N G A BO U T Y O U RSELF EX ERC I SE

Are Yo u a Self-Manager?
To determine your self-management initiative, rate each of the follow ing items, from 1 (“ Never Do This” ) to 7 (“ Alw ays
Do This” ).

Never Do This Alw ays Do This

Planning
1. I plan out my day before beginning to w ork. 1 2 3 4 5 6 7

2. I try to schedule my w ork in advance. 1 2 3 4 5 6 7

3. I plan my career carefully. 1 2 3 4 5 6 7

4. I come to w ork early to plan my day. 1 2 3 4 5 6 7

5. I use lists and agendas to structure my w orkday. 1 2 3 4 5 6 7

6. I set specific job goals on a regular basis. 1 2 3 4 5 6 7

7. I set daily goals for myself. 1 2 3 4 5 6 7

8. I try to manage my time. 1 2 3 4 5 6 7

Access M anagement
1. I control the access subordinates have to me in order to get
my w ork done. 1 2 3 4 5 6 7

2. I use a special place at w ork w here I can w ork uninterrupted. 1 2 3 4 5 6 7

3. I hold my telephone calls w hen I need to get things done. 1 2 3 4 5 6 7

Cat ch-up Activities

1. I come in early or stay late at w ork to prevent distractions from
interfering w ith my w ork. 1 2 3 4 5 6 7

2. I take my w ork home w ith me to make sure it gets done. 1 2 3 4 5 6 7

3. I come in on my days off to catch up on my w ork. 1 2 3 4 5 6 7

Emotions M anagement
1. I have learned to manage my aggressiveness w ith my subordinates. 1 2 3 4 5 6 7

2. M y facial expression and conversational tone are important in

dealing w ith subordinates. 1 2 3 4 5 6 7

3. It’s important for me to maintain a “ professional” manager-

subordinate relationship. 1 2 3 4 5 6 7

4. I try to keep my emotions under control. 1 2 3 4 5 6 7

Scoring Key:
Higher scores mean a higher degree of self-management. For the overall scale, scores of 100 or higher represent high scores.
For each area, the follow ing represent high scores: planning, scores of 48 or higher; access management, scores of 18 or
higher; catch-up activities, scores of 18 or higher; and emotions management, scores of 24 or higher.

Source: M . Castaneda, T. A. Kolenko, and R. J. Aldag, “ Self-M anagement Perceptions and Practices: A Structural Equations Analysis,” Journal of
Organizational Behavior 20, 1999. Table 4, pp. 114–115. Copyright © John W iley & Sons, Inc. Reproduced w ith permission.
 Chapt er 8 Leadership 287

O B A T W O RK

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Identify an example of someone you think of as a good leader (currently or in the past). What traits did he or she
have? How did these traits differ from someone you identify as a bad leader?

2. Identify a situation in w hich you w ere in a leadership position (in a group, in the w orkplace, w ithin your family,
etc.). To w hat extent w ere you able to use a contingency approach to leadership? What made that easier or more
difficult for you?

3. When you have w orked in student groups, how frequently have leaders emerged in the group? What difficulties
occur w hen leaders are leading peers? Are there w ays to overcome these difficulties?

W O RK I N G W I TH O T H ERS EX ERC I SE

Being Charismatic
From Concepts to Skills on pages 290–291 suggests indicates how to become charismatic. In this exercise, you w ill use that
information to practise projecting charisma.

a. The class should break into pairs.

b . Student A’s task is to “ lead” Student B through a new -student orientation to your college or university. The orienta-
tion should last about 10 to 15 minutes. Assume Student B is new to your college or university and is unfamiliar
w ith the campus. Student A should try to project himself or herself as charismatic.

c. Roles now reverse and Student B’s task is to “ lead” Student A in a 10- to 15-minute program on how to study
more effectively for college or university exams. Take a few minutes to think about w hat has w orked w ell for you,
and assume that Student A is a new student interested in improving his or her study habits. This time, Student B
should try to project himself or herself as charismatic.

d . When both role plays are complete, each pair should assess how w ell it did in projecting charisma and how it might
improve.

Source: This exercise is based on J. M . How ell and P. J. Frost, “ A Laboratory Study of Charismatic Leadership,” Organizational Behavior and
Human Decision Processes, April 1989, pp. 243–269.

ETH I C A L D I LEM M A EX ERC I SE

Do the Ends Justify the Means?

The pow er that comes from being a leader can be used for • Bill Clinton w as view ed as a charismatic US president.
evil as w ell as for good. When you assume the benefits of Yet he lied w hen necessary and “ managed” the truth.
leadership, you also assume et hical burdens. But many
• Former Prime M inister Jean Chrétien successfully led
highly successful leaders have relied on questionable tactics
Canada through 10 years of economic change. Those
to achieve their ends. These include manipulation, verbal
close to him w ere committed and loyal follow ers. Yet
at t acks, physical int imidat ion, lying, f ear, and cont rol.
concerns w ere raised recently that he might have been
Consider a few examples:

continued
288 Part 4 Sharing t he Organizat ional Vision

O B A T W O RK

w illing to quietly spend millions of dollars in sponsor- Should leaders be judged solely on their end achieve-
ship money to manage the Quebec situation. ments? Or do the means they choose also reflect on their
leadership qualities? Are employees, shareholders, and soci-
• Jack Welch, former head of General Electric (GE), pro-
et y t oo quick t o excuse leaders w ho use quest ionable
vided the leadership that made GE the most valuable
means if they are successful in achieving their goals? Is it
company in America. He also ruthlessly preached firing
impossible for leaders to be ethical and successful?
the low est-performing 10 percent of the company’s
employees every year.

• Former IBM chair Lou Gerstner oversaw the reemer- Source: Based on C. E. Johnson, M eeting the Ethical Challenges in
Leadership (Thousand Oaks, CA: Sage, 2001), pp. 4–5.
gence of IBM as a pow erhouse in the computer indus-
try. He w as not, how ever, easy to w ork for. He believed
in never relaxing or in letting others enjoy life.

CA SE I N C I D EN T

Moving from Colleague to Supervisor

Cheryl Kahn, Rob Carstons, and Linda M cGee have some-
t hing in com m on. They all w ere prom ot ed w it hin t heir
organizat ions int o management posit ions. As w ell, each
found the transition a challenge.
Kahn w as promoted to director of catering for the Glazier
Group of restaurants. With the promotion, she realized that
things w ould never be the same again. No longer w ould
she be able to participate in w ater-cooler gossip or shrug off
an employee’s chronic lateness. She says she found her new
role daunting. “ At first I w as like a bulldozer knocking every-
one over, and that w as not w ell received. I w as saying, ‘It’s
my w ay or the highw ay.’ And w as forgetting that my friends
w ere also in transition.” She admits that this style alienated
just about everyone w ith w hom she w orked.
Carstons, a technical manager at IBM , talks about the
uncertainty he felt after being promoted to a manager from
a junior programmer. “ It w as a little bit challenging to be
suddenly giving directives to peers, w hen just the day before
you w ere one of them. You try to be careful not to offend
anyone. It ’s st range w alking int o a room and t he w hole
conversat ion changes. People don’t w ant t o be as open
w ith you w hen you become the boss.”
M cGee is now president of M edex Insurance Services.
She started as a customer service representative w ith the
company, then leapfrogged over colleagues in a series of
prom ot ions. Her f ast rise creat ed problem s. Colleagues
“ w ould say, ‘Oh, here comes the big cheese now.’ God only
know s w hat they talked about behind my back.”
Questions
1 . A lot of new managers err in selecting the right lead-
ership style w hen they move into management. Why
do you think this happens?
2. If new managers don’t know w hat leadership style to
use, w hat does this say about leadership and leader-
ship training?
3. Which leadership theories, if any, could help new
leaders deal w ith this transition?
4. Do you think it’s easier or harder to be promoted
internally into a formal leadership position than to
come into it as an outsider? Explain.
Source: Based on D. Koeppel, “ A Tough Transition: Friend to
Supervisor,” New York Times, M arch 16, 2003, p. BU-12.
 Chapt er 8 Leadership 289

O B A T W O RK

CBC V I D EO CA SE I N C I D EN T

How Bad Is Your Boss?

No matter w here you w ork, you cannot escape the boss. has helped develop. A unit w ill sink if the boss does not
He or she can be demanding, can be out of touch, and can build up great people.
stress you out. Can you train a boss to be better? Robert Lemieux is the
Shaun Belding, a consultant and author, developed a director of sales at the Delta Chelsea in Toronto. He has
quiz about the seven deadly sins of being a boss. Answ er yes goals of reaching vice-president or president of the hotel,
or no to the follow ing questions to find out how bad your and know s he has to be a great boss to achieve that success.
boss really is: So, Lemieux is going to Boss Boot Camp. His drill sergeant,
Lindsay Sukornyk, runs a coaching company on how to be
Yes No
a better manager. She meets w ith Lemieux’s employees to
1 . Has your boss ever embarrassed you hear about his leadership style.
in front of co-w orkers? ____ ____ Employees see Lemieux as extremely professional, self-
2. Does your boss have a tough time contained, caring, and very intuitive in his leadership style.
making decisions? ____ ____ On the other hand, he sometimes appears standoffish and

3. Is your boss a poor communicator? ____ ____ too busy to speak w ith employees. He also has a tendency
t o over-promise and under-deliver because of t ime con-
4. Does your boss hog the limelight
st raint s and compet ing demands. Lemieux should t ry t o
w hen things go w ell but look to
relinquish control, Sukornyk suggests.
blame others w hen things go w rong? ____ ____
Can Lemieux change his w ays? He has ow ned up to his
5. Does your boss argue about everything? ____ ____ w eaknesses and promises to do less talking and more lis-
6 . Is your boss unclear about w hat he or t ening. Lem ieux f eels t he f irst t eam m eet ing w it h t he
she expects of you? ____ ____ new agenda w as very pow erf ul. It allow ed employees t o
communicate how he could be a more effective leader—
7. Does your boss pile on the w ork? ____ ____
and t hey are commit t ed t o keeping him on t ask.
If you answ ered yes to one or tw o questions, you have a
stressful boss the odd time. If you answ ered yes to three to Questions
six questions, you have a bad boss and need to take action.
1 . Would you identify Jack Welsh as a charismatic
If you confront the boss, make sure you can substantiate
leader? Explain.
your claims. If you answ ered yes to all seven questions, you
have the boss from hell and should leave the w orkplace. 2. Is Robert Lemieux a manager or a leader? Explain.
Jack Welsh, named the toughest boss ever, built General
3. If you w ere speaking in front of a room of top execu-
Electric (GE) into a $400 billion pow erhouse. He likens the
tives, w hat advice w ould you offer about w hy being
boss’s role to that of a gardener: “ But some of the garden
a bad boss does not make good business sense?
has w eeds, and you have to cut those w eeds out.” He cut
100 000 of those w eeds out of GE in massive layoffs in the
Sources: “ How Bad Is Your Boss?” CBC Venture, January 17, 2006,
1980s, and every year he pruned by cutting out the bot-
14763; S. M acNaull, “ Coping W ith an Employee Crunch,” Daily
tom 10 percent of his w orkforce. His approach has been Courier (Kelow na), January 21, 2006, p. B1; and G. Low e, “ Trust Is
controversial, but Welsh makes no apologies. He adds that Tops,” Canadian Business, April 10/23, 2006, pp. 85–86.
a boss is only as good as the number of employees he or she
290 Part 4 Sharing t he Organizat ional Vision
O B A T W O RK
Fr o m Co n ce p t s
t o Sk i l l s
Practising to Be Charismatic
In order to be charismatic in your leadership style, you need
to engage in the follow ing behaviours:104
1 . Project a pow erful, confident, and dynamic pres-
ence. This has both verbal and nonverbal compo-
nents. Use a captivating and engaging tone of
voice. Convey confidence. Talk directly to people,
maintain direct eye contact, and hold your body
posture in a w ay that says you are sure of yourself.
Speak clearly, avoid stammering, and avoid sprin-
kling your sentences w ith noncontent phrases such
as “ ahhh” and “ you know.”
2. Articulate an overarching goal. You need to share a
vision for the future, develop an unconventional
w ay of achieving the vision, and have the ability to
communicate the vision to others.
The vision is a clear statement of w here you
w ant to go and how you are going to get there.
You need to persuade others that the achievement
of this vision is in their self-interest.
You need to look for fresh and radically different
approaches to problems. The road to achieving your
vision should be seen as novel but also appropriate
to the context.
Charismatic individuals not only have a vision;
they are also able to get others to buy into it. The
real pow er of M artin Luther King Jr. w as not that he
had a dream but that he could articulate it in terms
that made it accessible to millions.
3. Communicate high performance expectations and
confidence in others’ ability to meet these expecta-
tions. You need to demonstrate your confidence in
people by stating ambitious goals for them individu-
ally and as a group. You then convey absolute belief
that they w ill achieve their expectations.
4. Be sensitive to the needs of follow ers. Charismatic
leaders get to know their follow ers individually. You
need to understand their individual needs and
develop intensely personal relationships w ith each.
This is done by encouraging them to express their
points of view, being approachable, genuinely lis-
tening to and caring about their concerns, and ask-
ing questions so that follow ers can learn w hat is
really important to them.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
25. How Good Am I at Personal Planning?
29. What’s M y Leadership Style?
30. How Charismatic Am I?
32. Do Others See M e as Trustw orthy?
Practising Skills
You recently graduated from college w ith your degree in
business administration. You have spent the past tw o sum-
mers w orking at London M utual Insurance (LM I), filling in as
an intern on a number of different jobs w hile employees
took their vacations. You have received and accepted an
offer to join LM I full time as supervisor of the policy-renew al
department.
LM I is a large insurance company. In the headquarters
office alone, w here you w ill be w orking, there are more
than 1500 employees. The company believes strongly in
the personal development of its employees. This translates
into a philosophy, emanating from the top executive offices,
of trust and respect for all LM I employees. The company is
also regularly at the top of most lists of “ best companies to
w ork for,” largely because of its progressive w ork/life pro-
grams and strong commitment to minimizing layoffs.
In your new job, you w ill direct the activities of 18 policy-
renew al clerks. Their jobs require lit t le t raining and are
highly rout ine. A clerk’s responsibilit y is t o ensure t hat
renew al notices are sent on current policies, to tabulate any
changes in premiums, to advise the sales division if a policy
is to be cancelled as a result of nonresponse to renew al
not ices, and t o answ er quest ions and solve problems
related to renew als.
The people in your w ork group range in age from 19 to
62, w ith a median age of 25. For the most part, they are

high school graduates w ith little previous w orking experi-
ence. They earn betw een $1850 and $2400 a month. You
w ill be replacing a long-time LM I employee, Jan Allison. Jan
is retiring after 37 years w ith LM I, the past 14 spent as a pol-
icy-renew al supervisor. Because you spent a few w eeks in
Jan’s group last summer, you are familiar w ith Jan’s style
and are acquainted w ith most of the department members.
But people don’t know you very w ell and are suspicious of
the fact that you are fresh out of university and have little
experience in the department. And the reality is that you got
this job because management w anted someone w ith a post-
secondary degree to oversee the department. Your most
vocal critic is Lillian Lantz. Lillian is w ell into her 50s, has
been a policy-renew al clerk for over 12 years, and—as the
person w ho has w orked the longest in the department—
carries a lot of w eight w ith group members. It w ill be very
hard to lead this department w ithout Lillian’s support.
Using your know ledge of leadership concepts, w hich
leadership style w ould you choose and w hy?
Chapt er 8 Leadership 291
O B A T W O RK
Reinforcing Skills
1 . Think of a group or team to w hich you currently
belong or of w hich you have been a part. What
type of leadership style did the leader of this group
appear to exhibit? Give some specific examples of
the types of leadership behaviours he or she used.
Evaluate the leadership style. Was it appropriate for
the group? Why or w hy not? What w ould you have
done differently? Why?
2. Observe tw o sports teams (either college or profes-
sional—one that you consider successful and the
other unsuccessful). What leadership styles appear
to be used in these teams? Give some specific
examples of the types of leadership behaviours you
observe. How w ould you evaluate the leadership
style? Was it appropriate for the team? Why or w hy
not? To w hat degree do you think leadership style
influenced the team’s outcomes?
CH A PTER 9

Decision M aking ,
Creat ivit y , and
Et hics
Nike’s decision to manufacture shoes overseas
has prompted critics to claim that it exploits
w orkers in poor countries. Did Nike make a
rational decision, and is the decision socially
responsible?

1 Is there a right w ay to make decisions?

2 How do people actually make decisions?

3 What factors affect group decision making?

Should the leader make the decision or

4 encourage the group to participate?

5 How can w e get more creative decisions?

What is ethics and how can it be used for better

6 decision making?

7 What is corporate social responsibility?

N
ike’s first “ Corporate
Responsibility Report,”
published in October
2001, confessed that making
Nike’s runners is “ tedious, hard
and doesn’t offer a w onderful
future.” 1 Readers may have been
startled to learn that employees
in overseas factories making Nike
products w ere being harassed by
supervisors. Employees w ere also
asked to w ork far more overtime
than rules permitted. Finally, the
company admitted to know ing far too little about day-to- panies face every day. Nike had also decided to move its
day life in the factories, because it w as not monitoring the manufacturing to low -w age countries, an action that
situation closely enough. has brought the company much criticism. So can organ-
These admissions might have seemed shocking to izations learn to make better decisions?
anyone w ho had not expected Nike to acknow ledge In this chapter, w e describe how decisions in organ-
w hat critics have been saying for years: Nike benefits izations are made. Decision making affects people at all
from unfair labour practices in foreign-ow ned plants to levels of the organization, and is done by both individu-
w hich it subcontracts w ork. The company has since been als and groups. Thus, w e consider the special character-
trying to improve conditions at its overseas operations. istics of individual and group decision making. We also
Nike’s decision to publish a corporate responsibility look at how creativity, ethics, and social responsibility
report is just one example of the many decisions com- are linked to decision making.

H OW SHOULD D ECISIONS BE MAD E?

After completing its first corporate responsibility report, Nike increased training for both man-
agers and employees at its overseas operations.2 M anagers w ere told that treating employ-
ees properly w ill lead to “ improved productivity, reduced labour turnover and less sick leave.”
Nike thus evaluated its problem and came up w ith w ays to resolve it, in order to reduce criti-
cism of its labour practices. How do individuals and companies make decisions?

A decisio n is the cho ice made fro m two o r mo re alternatives. Decisio n making o ccurs 1 Is there a right way to
as a reactio n to a pro blem o r an o ppo rtunity. A problem is a discrepancy between so me make decisions?
current state o f affairs and so me desired state, requiring co nsideratio n o f alternative Nike Canada
www.nike.com/canada/

O B IS FO R EV ERY O N E

Do pe ople re ally conside r Is it okay to use intuition Why is it that we Why are some pe ople more
eve ry alte rnative whe n whe n making de cisions? sometime s make bad cre ative than othe rs?
making a de cision? de cisions?

Why do some pe ople make

more ethical de cisions than
othe rs?
293
294 Part 4 Sharing t he Organizat ional Vision

decision The choice made from
two or more alternatives.
problem A discrepancy between
some current state of affairs and
some desired state.
opportunity An occasion that
gives rise to thoughts about new
ways of proceeding.
co urses o f actio n.3 An o ppo rtunity o ccurs when so mething unplanned happens, giv-
ing rise to tho ughts abo ut new ways o f pro ceeding.
Whenever any o f us make a decisio n, we have a pro cess that we go thro ugh to help
us arrive at that decisio n. So me o f us take a very ratio nal appro ach, with specific steps
by which we analyze parts o f the decisio n, o thers rely o n intuitio n, and so me just decide
to put two o r mo re alternatives into a hat and pull o ne o ut.
Kno wing ho w to make decisio ns is an impo rtant part o f everyday life. Belo w we co n-
sider vario us decisio n-making mo dels that apply to bo th individual and gro up cho ices.
( Later in the chapter, we discuss special aspects o f gro up decisio n making.) We start
with the rational model, which describes decisio n making in the ideal wo rld, a situatio n
that rarely exists. We then lo o k at alternatives to the ratio nal mo del and ho w decisio ns
actually get made.

The Rational De cision-M aking Pro ce ss

rational Refers to choices that The ratio nal decisio n maker makes co nsistent, high-quality cho ices within specified
are consistent and value-maximizing co nstraints.4 These cho ices are m ade fo llo wing a six-step ratio nal decisio n-making
within specified constraints.
mo del .5

The Ratio nal Mo del

rational decision-making modelThe six steps in the ratio nal decisio n-making mo del are listed in Exhibit 9-1.
A six-step decision-making model First, the decisio n m aker m ust define the problem. If yo u calculate yo ur m o nthly
that describes how individuals
expenses and find yo u are spending $50 mo re than yo ur mo nthly earnings, yo u have
should behave in order to maximize
defined a pro blem . Many po o r decisio ns can be traced to the decisio n m aker o ver-
some outcome.
lo o king a pro blem o r defining the wro ng pro blem.
O nce a decisio n maker has defined the pro blem, he o r she needs to identify the criteria
that will be impo rtant in so lving the pro blem. In this step, the decisio n maker determines
what is relevant in making the decisio n. This step brings the decisio n maker’s interests,
values, and perso nal preferences into the pro cess. Identifying criteria is im po rtant
because peo ple can have different ideas abo ut what is rele-
vant. Also keep in mind that any facto rs no t identified in this
EXHIBIT 9-1 Steps in the Rational step are co nsidered irrelevant to the decisio n maker.
Decision-M aking M odel To understand the types o f criteria that might be used
to make a decisio n, co nsider the many spo nso rship requests
the To ro nto -based Canadian Imperial Bank o f Co mmerce
1.
Define the
( CIBC) receives each year. In m aking a decisio n ab o ut
problem whether o r no t to suppo rt a request, the bank co nsiders the
fo llo wing criteria:6
6. 2.
Select the
• Strategic fit with CIBC’s o verall go als and o bjectives
Identify the
best alternative criteria • Ability to achieve yo uth custo mer–segment market-
ing o bjectives
• Tangible and intangible benefits o f the pro po sal,
M aking a Decision
such as go o dwill, reputatio n, and co st/ po tential
revenue
5. 3. • O rganizatio nal impact
Evaluate the Allocate w eights
alternatives to the criteria • Business risks ( if any)

If the spo nso rship request do es no t meet these criteria, it

4.
Develop is no t funded.
alternatives The criteria identified are rarely all equal in impo rtance.
So the third step req uires the decisio n m aker to allocate
weights to the criteria in o rder to give them the co rrect pri-
o rity in the decisio n.
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 295

The fo urth step requires the decisio n maker to develop alternatives that co uld succeed
in reso lving the pro blem. No attempt is made in this step to appraise these alterna-
tives, o nly to list them.
O nce the alternatives are listed, the decisio n maker must evaluate the alternatives. The
strengths and weaknesses o f each alternative beco me evident as they are co mpared with
the criteria and weights established in the seco nd and third steps.
The final step in this mo del requires the decisio n maker to select the best alternative.
This is do ne by evaluating each alternative against the weighted criteria and selecting the
alternative with the highest to tal sco re.

Assumptio ns o f the Mo del

The ratio nal decisio n-making mo del we just described co ntains a number o f assump-
tio ns.7 Let’s briefly o utline tho se assumptio ns.

• Problem clarity. The pro blem is clear and unambiguo us. The decisio n maker is
assumed to have co mplete info rmatio n regarding the decisio n situatio n.

• Known options. It is assumed the decisio n maker can identify all the relevant
criteria and list all the wo rkable alternatives. The decisio n maker is also aware
o f all po ssible implicatio ns o f each alternative.

• Clear preferences. Ratio nality assumes that the criteria and alternatives can be
ranked and weighted to reflect their impo rtance.

• Constant preferences. It is assumed that the specific decisio n criteria are co n-

stant and that the weights assigned to them are stable o ver time.

• No time or cost constraints. The decisio n maker can o btain full info rmatio n
abo ut criteria and alternatives because it is assumed that there are no time o r
co st co nstraints.

• Maximum payoff. The decisio n maker will cho o se the alternative that yields the
highest perceived value.

H OW D O IND IVID UALS ACTUALLY

MAKE D ECISIONS?
Chaichana Homsombat, a 21-year-old employee at Pan Asia Footw ear Public Company in
Thailand, the w orld’s third-largest Nike subcontractor factory, explains his job: “ Each of us has
to w ork constantly. The faster w e meet the assigned quota, the earlier w e can go home.” 8
Homsombat’s quota is to pack 1296 pairs of runners into boxes each w orkday.
The deputy managing director of the plant, Boonraw d Indamanee, says the quotas improve
productivity. A human rights inspector at the plant w onders w hether employees are really get-
ting a fair day’s pay under the quota system. The management does not w ant trade unions in
the plant, but the inspector fears that “ Workers don’t know their rights. They simply accept
w hatever is given to them.” Thus w hen asked if the company gives benefits to employees,
one responded: “ The uniform. We get three of them w hen w e join the company and tw o
more each year.” If employees are not aware of their rights, or do not have full information about
them, or have few alternatives, are they really able to make an informed decision about how
to behave?

The situatio n at the Nike plant in Thailand raises so me questio ns: Do decisio n makers 2 How do people
actually fo llo w the ratio nal mo del? Do they carefully assess pro blems, identify all rele- actually make
vant criteria, use their creativity to identify all wo rkable alternatives, and painstakingly decisions?
evaluate every alternative to find an o ptimizing cho ice?
296 Part 4 Sharing t he Organizat ional Vision
bounded rationality Limitations
on a person’s ability to interpret,
process, and act on information.
When decisio n makers are faced with a simple pro blem and few alternative co urses
o f actio n, and when the co st o f searching o ut and evaluating alternatives is lo w, the
ratio nal mo del pro vides a fairly accurate descriptio n o f the decisio n pro cess.9 Ho wever,
such situatio ns are the exceptio n. Mo st decisio ns in the real wo rld do no t fo llo w the
ratio nal mo del. Fo r instance, peo ple are usually co ntent to find an acceptable o r rea-
so nable so lutio n to their pro blem rather than an o ptimizing o ne. As such, decisio n
makers generally make limited use o f their creativity. Cho ices tend to be co nfined to the
pro blem sympto m and to the current alternative. As o ne expert in decisio n making has
co ncluded: “Mo st significant decisio ns are made by judgment, rather than by a defined
prescriptive mo del.” 10
In the fo llo wing sectio ns, we identify areas where the reality o f decisio n making co n-
flicts with the ratio nal mo del.11 No ne o f these ways o f making decisio ns sho uld be co n-
sidered irrational; they are simply departures fro m the ratio nal mo del that o ccur when
info rmatio n is unavailable o r to o co stly to co llect.
Pro b lem Id entification
Mo st o f the decisio ns that get made reflect o nly the pro blems that decisio n makers see.
Pro blems do no t arrive with flashing neo n lights to identify themselves. O ne perso n’s
problem may even be ano ther perso n’s acceptable status quo. So ho w do decisio n makers
identify and select pro blems?
Pro blems that are visible tend to have a higher pro bability o f being selected than
o nes that are impo rtant.12 Why? We can o ffer at least two reaso ns. First, it’s easier to
reco gnize visible pro blems. They are mo re likely to catch a decisio n maker’s attentio n.
This explains why po liticians are mo re likely to talk abo ut the “crime pro blem” than the
“illiteracy pro blem.” Seco nd, remember that we are co ncerned with decisio n making in
o rganizatio ns. Decisio n makers want to appear co mpetent and “ o n to p o f pro blems.”
This mo tivates them to fo cus attentio n o n pro blems that are visible to o thers.
Do no t igno re the decisio n maker’s self-interest. If a decisio n maker faces a co nflict
between selecting a pro blem that is impo rtant to the o rganizatio n and o ne that is impo r-
tant to the decisio n maker, self-interest tends to win o ut.13 This also ties in with the
issue o f visibility. It is usually in a decisio n maker’s best interest to attack high-pro file
pro blems. It co nveys to o thers that things are under co ntro l. Mo reo ver, when the deci-
sio n maker’s perfo rmance is later reviewed, the evaluato r is mo re likely to give a high rat-
ing to so meo ne who has been aggressively attacking visible pro blems than to so meo ne
who se actio ns have been less o bvio us.
Boun d e d Rationality in Con sid ering Alternatives
When yo u co nsidered which co llege o r university to attend,
did yo u lo o k at every po ssible alternative? Did yo u carefully
* Do pe ople re ally
conside r e ve ry
identify all the criteria that were im po rtant to yo ur deci-
sio n? Did yo u evaluate each alternative against the criteria in
alte rnative whe n o rder to find the scho o l that is best fo r yo u? The answer to
making a de cision? these questio ns is pro bably “no .” But do n’t feel bad, because
few peo ple selected their educatio nal institutio n this way.
It is difficult fo r individuals to identify and co nsider every po ssible alternative avail-
able to them . Realistically speaking, peo ple are lim ited by their ability to interpret,
pro cess, and act o n info rmatio n. This is called bo unded ratio nality.14
Because o f bo unded ratio nality, individuals are no t able to disco ver and co nsider
every alternative fo r a decisio n. Instead, they identify a limited list o f the mo st o bvi-
o us cho ices. In m o st cases, these will include fam iliar criteria and previo usly tested
so lutio ns. Rather than carefully reviewing and evaluating each alternative in great detail,
individuals will settle o n an alternative that is “ go o d eno ugh” — o ne that m eets an
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 297

acceptable level o f perfo rmance. The first alternative that meets the “go o d eno ugh” cri-
terio n ends the search. So decisio n makers cho o se a final so lutio n that satisfices rather satisfice To provide a solution
than o ptimizes; that is, they seek a so lutio n that is bo th satisfacto ry and sufficient. In prac- that is both satisfactory and suffi-
tice this might mean that rather than interviewing 10 jo b candidates fo r a po sitio n, a man- cient.

ager interviews o ne at a time until o ne that is “go o d eno ugh” is interviewed—that is, the
first jo b candidate enco untered who meets the minimum criteria fo r the jo b. The fed-
eral go vernment has pro po sed this rule fo r its o wn hiring, as O B in the Workplace sho ws.

O B I N T H E W O RK PL A C E

Ottaw a M ay Stop Hiring “ Best Qualified”

Is hiring the “b est-qualified ” person too much w ork? Executives and middle man-
agers wo rking in the federal go vernment think so .15 They argue that “ being quali-
fied and co mpetent fo r a particular jo b sho uld be eno ugh” even tho ugh the perso n
may no t be the best po ssible candidate.
Public servants asked fo r the rules o n hiring to be lo o sened so that they co uld
actually start hiring and filling po sitio ns rather than spending so much time finding
the “ best-qualified” perso n. They find tho se searches excruciating and exhausting.
When managers fo llo w the federal guidelines fo r hiring, it can take six mo nths o r
mo re to fill a po sitio n.
Steve Hindle, president o f the Pro fessio nal Institute o f the Public Service o f Canada,
explains why hiring so meo ne who is qualified is pro bably go o d eno ugh: “ If peo ple
are ho nest, what they want is so meo ne who is qualified, but the idea o f finding the
best? Do we have the time, to o ls and mo ney needed to find the very best? Yo u want
so meo ne co mpetent and go o d and if they’re the best, that’s great.”
Ho wever, no t everyo ne agrees that changing the rules fo r hiring is a go o d idea.
The public secto r unio ns wo rry that favo uritism may beco me mo re co mmo n. But
they do agree that the current system has to o much red tape.

Intuition
Irene Kho o has just co mmitted her co rpo ratio n to spend-
ing mo re than $40 millio n to build a new plant in New
* Is it okay to use
intuition whe n
Westminster, BC, to manufacture electro nic co mpo nents fo r
satellite co mmunicatio n equipment. As the vice-president
making de cisions? o f o peratio ns fo r her firm, Kho o reviewed a co mprehensive
analysis o f five po ssible plant lo catio ns develo ped by a
site-lo catio n co nsulting firm she had hired. This repo rt
ranked the New Westminster lo catio n third amo ng the five alternatives. After carefully
reading the repo rt and its co nclusio ns, Kho o decided against the co nsultant’s reco m-
mendatio n. When asked to explain her decisio n, Kho o said, “I lo o ked the repo rt over very
carefully. Despite its reco m m endatio n, I felt that the num bers didn’t tell the who le
sto ry. Intuitively, I just sensed that New Westminster wo uld pro ve to be the best bet
o ver the lo ng run.”
Intuitive decisio n making, like that used by Irene Kho o , has recently co me o ut o f
the clo set and gained so me respectability. Experts no lo nger auto matically assume that
using intuitio n to make decisio ns is irratio nal o r ineffective.16 There is gro wing reco g-
nitio n that ratio nal analysis has been o veremphasized and that, in certain instances,
relying o n intuitio n can impro ve decisio n making.
What do we mean by intuitive decisio n making? There are a number o f ways to co n-
ceptualize intuitio n.17 Fo r instance, so me co nsider it a fo rm o f extrasenso ry power o r sixth
298 Part 4 Sharing t he Organizat ional Vision
intuitive decision making A
subconscious process created out of
a person’s many experiences.
heuristics Judgment shortcuts in
decision making.
sense, and so m e believe it is a perso nality trait that a lim ited num ber o f peo ple are
bo rn with. Fo r o ur purpo ses, we define intuitive decisio n making as a subco nscio us
pro cess created o ut o f distilled experience. It do es no t necessarily o perate independ-
ently o f ratio nal analysis; rather, the two co mplement each o ther. Tho se who use intu-
itio n effectively o ften rely o n their experiences to help guide and assess their intuitio ns.
That is why many managers are able to rely o n intuitio n.
A study o f 60 experienced pro fessio nals ho lding high-level po sitio ns in majo r US
o rganizatio ns fo und that many o f them used intuitio n to help them make wo rkplace
decisio ns.18 Twelve percent said they always used it, while 47 percent said they o ften used
intuitio n. O nly 10 percent said they rarely o r seldo m used intuitio n. Mo re than 90 per-
cent o f managers said they were likely to use a mix o f intuitio n and data analysis when
making decisio ns.
When asked the types o f decisio ns fo r which they mo st o ften used intuitio n, 40 per-
cent repo rted that they used it to make peo ple-related decisio ns such as hiring, perfo r-
m ance appraisal, harassm ent co m plaints, and safety issues. The m anagers said they
also used intuitio n fo r quick o r unexpected decisio ns so they co uld avo id delays. They
also were mo re likely to rely o n intuitio n in novel situatio ns that had a lo t o f uncertainty.
The results fro m this study suggest that intuitive decisio ns are best applied when
time is sho rt, when po licies, rules, and guidelines do no t give clear-cut advice, when
there is a great deal o f uncertainty, and when detailed numerical analysis needs a check
and balance.
Intuitio n can be wro ng, so it is impo rtant to develo p o ne’s intuitio n. Often, go o d intu-
itio n is really the result o f reco gnizing the pattern in a situatio n and drawing upo n pre-
vio usly learned info rmatio n asso ciated with that pattern to arrive quickly at a decisio n.
The result is that the intuitive decisio n maker can decide rapidly with what appears to
be very limited info rmatio n. Decisio n making can be impro ved by analyzing o ne’s deci-
sio ns after the fact, to develo p a better understanding o f when go o d and bad decisio ns
have been made.
So what do es all o f this tell us? Based o n o ur discussio n abo ve, yo u sho uld co nsider
the fo llo wing when making decisio ns:
• Make sure that yo u define the pro blem as best yo u can.
• Be clear o n the facto rs that yo u will use to make yo ur decisio n.
• Be sure to co llect eno ugh alternatives so that yo u can clearly differentiate
amo ng them.
Ju d gment Short cut s
In examining the ways that peo ple make decisio ns, two eminent psycho lo gists, Daniel
Kahneman (the 2002 winner o f the No bel Prize in eco no mic sciences) and Amo s Tversky
disco vered that individuals o ften rely o n heuristics , o r judgment sho rtcuts, to simplify
the decisio n pro cess, rather than go ing thro ugh all o f the
steps o f the ratio nal decisio n-making mo del.19 Peo ple tend
* So why is it that
we sometimes make
to rely to o heavily o n experience, im pulses, gut feelings,
and co nvenient “ rules o f thum b” when they m ake deci-
bad decisions?
sio ns. In m any instances, these sho rtcuts are help ful.
Ho wever, in o thers, they may lead to po o r decisio ns.
A gro wing bo dy o f research tells us that decisio n mak-
ers allo w systematic biases and erro rs to creep into their judgments.20 These co me o ut
o f attempts to sho rtcut the decisio n pro cess. In what fo llows, we discuss so me o f the mo st
co mmo n judgment sho rtcuts to alert yo u to mistakes that are o ften made when making
decisio ns.
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 299

EXHIBIT 9-2 Examples of Decision Biases

Scenario 1 : Answ er part A b efore read ing part B.

A: Threatened by a superior enemy force, the general faces a dilemma. His intelligence officers say his soldiers w ill be
caught in an ambush in w hich 600 of them w ill die unless he leads them to safety by one of tw o available routes. If he
takes the first route, 200 soldiers w ill be saved. If he takes the second, there’s a one-third chance that 600 soldiers w ill be
saved and a tw o-thirds chance that none w ill be saved. Which route should he take?

B: The general again has to choose betw een tw o escape routes. But this time his aides tell him that if he takes the first,
400 soldiers w ill die. If he takes the second, there’s a one-third chance that no soldiers w ill die, and a tw o-thirds chance
that 600 soldiers w ill die. Which route should he take?

Scenario 2:

Linda is 31, single, outspoken, and very bright. She majored in philosophy in university. As a student, she w as deeply con-
cerned w ith discrimination and other social issues and participated in antinuclear demonstrations. Which statement is
more likely?:
a. Linda is a bank teller.
b . Linda is a bank teller and active in the feminist movement.

Source: K. M cKean, “ Decisions, Decisions,” Discover, June 1985, pp. 22–31.

Framing
Kahneman and Tversky disco vered that even when peo ple are trying to be co ldly lo gi-
cal, they give radically different answers to the same questio n if it is po sed in different
ways.21 Fo r instance, co nsider cho ices A and B in Scenario 1 in Exhibit 9-2. Mo st peo ple
co me to an o ppo site co nclusio n fo r A and B, even tho ugh the pro blems are identical. The framing Error in judgment that
arises from the selective use of per-
o nly difference is that the first states the pro blem in terms o f lives saved, while the sec-
spective (that is, the way that a set
o nd states it in terms o f lives lo st.
of ideas, facts, or information is pre-
This judgment erro r is called framing , and it refers to ho w the selective use o f per- sented) that alters the way we view
spective alters the way we might view a situatio n in fo rmulating a decisio n. a situation in formulating a decision.

Statistical Regressio n to the Mean

So metimes peo ple make judgments while igno ring statistical regression to the mean , statistical regression to the
the statistical o bservatio n that a very go o d perfo rmance is o ften fo llo wed by a lesser mean The statistical observation
perfo rmance, while a lesser perfo rmance is o ften fo llo wed by a very go o d perfo rmance; that an above-average performance
is often followed by a lesser per-
the result is average perfo rmance o ver time. This heuristic may be o f particular interest
formance, while a below-average
to tho se trying to decide whether rewards o r punishments wo rk better with emplo y- performance is more likely followed
ees, co lleagues, children, and even friends. Altho ugh many studies indicate that rewards by a better performance; the result is
are a mo re effective teaching to o l than punishment, Kahneman was o nce faced with a average performance over time.
student who begged to differ o n this po int. “I’ve o ften praised peo ple warmly fo r beau-
tifully executed mano euvres, and the next time they almo st always do wo rse. And I’ve
screamed at peo ple fo r badly executed mano euvres, and by and large the next time they
impro ve.” Regressio n to the mean helps us understand that each perso n has an average
perfo rmance level, so the highs and the lo ws balance o ut. Perfo rmance impro vements
happen o ver the lo ng term. Thus, in this example, it wo uld be helpful to realize that
screaming is less likely to result in lo ng-term impro vements in behavio ur and also tends
to damage the relatio nship between peo ple.

Availability Heuristic
availability heuristic The
The availability heuristic is the tendency fo r peo ple to base their judgments o n info r-
tendency for people to base their
matio n that is readily available to them rather than co mplete data. Events that evo ke emo - judgments on information that is
tio ns, that are particularly vivid, o r that have o ccurred mo re recently tend to be mo re readily available to them rather than
available in o ur memo ries. As a result, we tend to o verestimate unlikely events such as complete data.
300 Part 4 Sharing t he Organizat ional Vision
representative heuristic The
tendency for people to assess the like-
lihood of an occurrence by trying to
match it with a pre-existing category.
National Hockey League (NHL)
www.nhl.com
ignoring the base rate Error in
judgment that arises from ignoring
the statistical likelihood that an
event might happen.
I. H. Asper School of Business,
University of M anitoba
http://umanitoba.ca/management/
indexGo.html
escalation of commitment
An increased commitment to a
previous decision despite negative
information.
an airplane crash, co mpared with mo re likely events such as car crashes. The availabil-
ity heuristic can also explain why managers, when do ing annual perfo rmance appraisals,
tend to give mo re weight to recent behavio urs o f an emplo yee than to tho se behav-
io urs o f six o r nine mo nths ago .
Representative Heuristic
Many yo ungsters in Canada dream o f playing ho ckey in the Natio nal Ho ckey League
(NHL) when they grow up. In reality, they have a better chance o f beco ming medical do c-
to rs than they do o f playing in the NHL, but these kids are suffering fro m a represen-
tative heuristic. They tend to assess the likeliho o d o f an o ccurrence by trying to match
it with a pre-existing catego ry.22 They heard abo ut so meo ne fro m their neighbo urho o d
who went to the NHL 25 years ago , and imagine that anyo ne fro m their neighbo ur-
ho o d can do the sam e. In the wo rkplace, individuals use this heuristic to m ake any
num ber o f decisio ns. Fo r instance, if three graduates fro m the sam e university were
hired and turned o ut to be po o r perfo rmers, a manager might predict that a current
jo b applicant fro m the same university wo uld no t be a go o d emplo yee. The manager is
assuming that the small sample o f graduates previo usly emplo yed represents all grad-
uates fro m that university. Scenario 2 in Exhibit 9-2 o n page 299gives ano ther example
o f representativeness. In that case, Linda is assumed to be a bank teller and a feminist,
given her co ncerns abo ut so cial issues, even tho ugh the pro bability o f bo th situatio ns’
being true is much less than the pro bability that she is just a bank teller.
Igno ring the Base Rate
Yet ano ther judgment erro r that peo ple make is ignoring the base rate , which is igno r-
ing the statistical likeliho o d that an event might happen. Fo r instance, if yo u were plan-
ning to beco me an entrepreneur and were asked whether yo ur business wo uld succeed,
yo u wo uld almo st undo ubtedly respo nd with a reso unding “yes.” Individuals believe they
will beat the o dds, even when, in the case o f fo unding a business, the failure rate is
clo se to 90 percent. Igno ring the base rate is no t due to inexperience o f the decisio n
m aker. Pro fesso rs Glen Whyte o f the Jo sep h L. Ro tm an Scho o l o f Managem ent
( University o f To ro nto ) and Christina Sue-Chan o f the I. H. Asper Scho o l o f Business
( University o f Manito ba) fo und that even experienced human reso urce managers igno re
the base rate when asked in an experiment to make hiring decisio ns.23 They suggest
the im po rtance o f rem inding peo ple o f what the base rate is befo re asking them to
make decisio ns.
Peo ple who igno re the base rate tend to do so because they take an inside view o f a
pro blem, simply assessing the facts o f their situatio n as they know them and creating pro -
jectio ns based o n that. By co ntrast, peo ple who take an outside view deliberately igno re
the specific facts o f their situatio n and instead co nsider the statistics fo r similar situatio ns;
this appro ach helps them better predict the likeliho o d o f success o f their situatio n.24
Escalatio n o f Co mmitment
So me decisio n makers escalate co mmitment to a failing co urse o f actio n.25 Escalatio n
o f co mmitment is an increased co mmitment to a previo us decisio n despite negative
info rmatio n. Fo r example, a friend has been dating a man fo r abo ut fo ur years. Altho ugh
she admits that things are no t go ing to o well in the relatio nship, she is determined to
marry the man. When asked to explain this seemingly no nratio nal cho ice o f actio n,
she respo nds: “ I have a lo t invested in the relatio nship.”
Individuals escalate co mmitment to a failing co urse o f actio n when they view them-
selves as respo nsible fo r the failure. That is, they “ thro w go o d m o ney after bad” to
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 301

demo nstrate that their initial decisio n was no t wro ng and to avo id having to admit
they made a mistake.
Many o rganizatio ns have suffered large lo sses because a manager was determined
to pro ve his o r her o riginal decisio n was right by co ntinuing to co mmit reso urces to
what was a lo st cause fro m the beginning.

Overco nfidence Bias

It’s been said that “ no pro blem in judgment and decisio n making is mo re prevalent
and mo re po tentially catastro phic than o verco nfidence.” 26
When we are given factual questio ns and asked to judge the pro bability that o ur answers
are co rrect, we tend to be far to o o ptimistic. This is known as the overconfidence bias . Fo r overconfidence bias
instance, studies have fo und that when peo ple say they are 65 to 70 percent co nfident that Overestimating the accuracy of our
they are right, they were actually correct only about 50 percent of the time.27 And when they predictions.

say they are 100 percent sure, they tended to be 70 to 85 percent co rrect.28
Fro m an o rganizatio nal standpo int, o ne o f the mo re interesting findings related to
o verco nfidence is that tho se individuals who se intellectual and interperso nal abilities
are weakest are mo st likely to o verestimate their perfo rmance and ability.29 So as man-
agers and emplo yees beco me mo re kno wledgeable abo ut an issue, they are less likely to
display o verco nfidence.30 O verco nfidence is mo st likely to o ccur when individuals are
co nsidering issues o r pro blems that are o utside their area o f expertise.

Ancho ring Bias

The ancho ring bias is a tendency to fixate o n initial info rmatio n as a starting po int. anchoring bias A tendency to
O nce set, we then fail to adequately adjust fo r subsequent info rmatio n.31 The ancho r- fixate on initial information as a
starting point.
ing bias o ccurs because o ur minds appear to give a dispro po rtio nate amo unt o f empha-
sis to the first info rmatio n they receive. So initial impressio ns, ideas, prices, and estimates
carry undue weight relative to info rmatio n received later.32
Pro fessio nal peo ple such as advertising writers, m anagers,
po liticians, real estate agents, and lawyers widely rely o n O B I N A CTI ON
ancho ring— they create first im pressio ns to persuade peo ple
Reducing Biases and Errors in
to act in particular ways. Fo r instance, in a m o ck jury trial,
o ne set o f juro rs was asked by the plaintiff’s atto rney to make Decision M aking
an award in the range o f $15 millio n to $50 millio n. Ano ther ➔ Focus on goals. Clear goals make decision mak-
set o f juro rs was asked to m ake an award in the range o f $50 ing easier and help you eliminate options that are
millio n to $150 millio n. Co nsistent with the ancho ring bias, inconsistent with your interests.
the median awards were the first numbers heard by the juro rs: ➔ Look for information that disconfirms your
$15 millio n in the first co nditio n and $50 millio n in the sec- beliefs. When we deliberately consider various
o nd co nditio n.33 ways we could be wrong, we challenge our tenden-
cies to think we are smarter than we actually are.
When making decisio ns, yo u sho uld co nsider whether yo u are ➔ Don’t create meaning out of random events. Ask
falling into any o f the judgment and bias traps described above. yourself if patterns can be meaningfully explained
In particular, understanding the base rates and making sure that or whether they are mere coincidence. Don’t
yo u co llect info rmatio n beyo nd that which is immediately avail- attempt to create meaning out of coincidence.
able to yo u will provide yo u with mo re alternatives fro m which ➔ Increase your options. The more alternatives you
to frame a decisio n. It is also useful to co nsider whether yo u are can generate, and the more diverse those alterna-
sticking with a decisio n simply because yo u have invested time tives, the greater your chance of finding an out-
in that particular alternative, even tho ugh it may no t be wise to standing one.
co ntinue. O B in Action— Reducing Biases and Errors in Decision
Source: S. P. Robbins, Decide & Conquer: M aking Winning
M aking pro vides yo u with so m e ideas fo r im pro ving yo ur Decisions and Taking Control of Your Life (Upper Saddle
decisio n making. To learn mo re abo ut yo ur decisio n-making River, NJ: Financial Times/Prentice Hall, 2004), pp. 164–168.
style, see the Learning About Yourself Exercise o n pages 325–326.
302 Part 4 Sharing t he Organizat ional Vision

GROUP D ECISION MAKING

While a variety o f decisio ns in bo th life and o rganizatio ns are made at the individual
3 What factors affect
group decision level, the belief— characterized by juries— that two heads are better than o ne has lo ng
making? been accepted as a basic co m po nent o f No rth Am erica’s and m any o ther co untries’
legal system s. This belief has expanded to the po int that, to day, m any decisio ns in
o rganizatio ns are made by gro ups, teams, o r co mmittees. In this sectio n, we will review
gro up decisio n making and co mpare it with individual decisio n making.

Group s v s. the In d ivid ual

Decisio n-m aking gro ups m ay be widely used in o rganizatio ns, but do es that m ean
gro up decisio ns are preferable to tho se made by an individual alo ne? The answer to
this questio n depends o n a number o f facto rs we co nsider belo w.34 See Exhibit 9-3 fo r
a summary o f o ur majo r po ints.

Strengths o f Gro up Decisio n Making

Gro ups generate more complete information and knowledge. By co mbining the reso urces o f
several individuals, gro ups bring m o re input into the decisio n pro cess. Gro ups can
bring an increased diversity of views to the decisio n pro cess, and, thus, the o ppo rtunity to
co nsider m o re appro aches and alternatives. In term s o f decisio n o utco m es, the evi-
dence indicates that a gro up will almo st always o utperfo rm even the best individual. So
gro ups generate higher quality decisions. 35 Gro up decisio ns also tend to be mo re accurate.
If creativity is impo rtant, gro ups tend to be mo re creative in their decisio ns than indi-
viduals.36 Gro ups also lead to increased acceptance of a solution. Many decisio ns fail after
the final cho ice is made because peo ple do no t accept them. Gro up members who par-
ticipated in making a decisio n are likely to enthusiastically suppo rt the decisio n and
enco urage o thers to accept it.

Weaknesses o f Gro up Decisio n Making

Despite the advantages no ted, gro up decisio ns invo lve certain drawbacks. First, they
are time-consuming. Gro ups typically take mo re time to reach a so lutio n than an individual
wo uld. Thus, gro up decisio ns are no t always efficient. Seco nd, there are conformity pres-
sures in gro ups. The desire o f gro up members to be accepted and co nsidered an asset to
the gro up can result in quashing any o vert disagreement. Third, gro up discussio n can be
dominated by one or a few members. If this do minant co alitio n is co mpo sed o f lo w- and
medium-ability members, the gro up’s o verall effectiveness will diminish. Finally, gro up
decisio ns suffer fro m ambiguous responsibility. In an individual decisio n, it is clear who
is acco untable fo r the final o utco me. In a gro up decisio n, the respo nsibility o f any sin-
gle member is watered do wn.

EXHIBIT 9-3 Group vs. Individual Decision M aking

Criteria of Effectiveness Groups Ind ivid uals

M ore complet e inf ormat iion ✔

Diversit y of view s ✔
Decision qualit y ✔
Accuracy ✔
Creat ivit y ✔
Degree of accept ance ✔
Speed ✔
Eff iciency ✔
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 303

M olly M ak w as chosen president

of a national information technol-
ogy solut ions provider, Calgary-
based Onw ard Computer Systems,
by other partners in the firm after
she show ed that she had the
vision and determination to lead
the company to greater grow th
and profits. She says that consen-
sus is not alw ays possible, espe-
cially w hen it is important to get
things accomplished under tight
time constraints.

Groupthink an d Group shift

Two by-pro ducts o f gro up decisio n making have received a co nsiderable amo unt o f
attentio n by o rganizatio nal behavio ur ( O B) researchers: gro upthink and gro upshift. As
we will sho w, these two pheno mena have the po tential to affect the gro up’s ability to
appraise alternatives o bjectively and arrive at quality so lutio ns.

Gro upthink
Have yo u ever felt like speaking up in a meeting, classro o m, o r info rmal gro up, but
decided against it? O ne reaso n might have been shyness. O n the o ther hand, yo u might
have been a victim o f gro upthink , a pheno meno n in which gro up pressures fo r co n- groupthink A phenomenon in
fo rmity prevent the gro up fro m critically appraising unusual, mino rity, o r unpo pular which group pressures for conform-
views. It describes a deterio ratio n in an individual’s mental efficiency, reality testing, ity prevent the group from critically
appraising unusual, minority, or
and mo ral judgment as a result o f gro up pressures.37
unpopular views.
We have all seen the sympto ms o f the gro upthink pheno meno n:38

• Illusion of invulnerability. Gro up members beco me o verco nfident amo ng them-

selves, allo wing them to take extrao rdinary risks.

• Assumption of morality. Gro up members believe highly in the mo ral rightness

o f the gro up’s o bjectives and do no t feel the need to debate the ethics o f their
actio ns.

• Rationalization. Gro up members ratio nalize any resistance to the assumptio ns

they have made. No matter ho w stro ngly the evidence may co ntradict their basic
assumptio ns, members behave so as to reinfo rce tho se assumptio ns co ntinually.

• Stereotyping outgroups. Peo ple o utside the gro up who criticize decisio ns and
actio ns are viewed as “enemies” who do n’t kno w what they are talking abo ut.

• Minimized doubts. Gro up members who have do ubts o r ho ld differing po ints

o f view seek to avo id deviating fro m what appears to be gro up co nsensus by
keeping silent abo ut misgivings and even minimizing to themselves the
impo rtance o f their do ubts.
304 Part 4 Sharing t he Organizat ional Vision

• Illusion of unanimity. If so meo ne do es no t speak, it’s assumed that he o r she is

in full agreement. In o ther wo rds, abstentio n beco mes viewed as a yes vo te.

• Mindguards. O ne o r mo re members o f the team beco me self-appo inted

guardians to make sure that negative o r inco nsistent info rmatio n do es no t
reach team members.

• Peer pressure. Gro up members apply direct pressure o n tho se who mo mentar-
ily express do ubts abo ut any o f the gro up’s shared views o r who questio n the
alternative favo ured by the majo rity.

The Bre-X Saga As the Bre-X scandal was unfo lding in early 1997, many peo ple who po ssibly sho uld
http://www.canoe.ca/MoneyBreX have kno wn better refused to accept the initial evidence that there might no t be any
Saga/home.html
go ld at the Busang, Indo nesia, mine. Because investo rs and the co mpanies invo lved
had co nvinced themselves that they were sitting o n the go ld find o f the twentieth cen-
tury, they were reluctant to challenge their beliefs when the first evidence o f tampered
co re sam ples was pro duced. Mo re recently, fo recasters seem ed to be suffering fro m
gro upthink as they pro no unced the eco no my in recessio n, as this O B in the Street shows.

O B I N T H E ST REET

Recession: Are We There Yet?

How many e conomic fore ca sters d oe s it take to change the e conomy? In early
2002, eco no mic fo recasters were abso lutely asto nished by all the go o d news they
heard o n the eco no mic fro nt in Canada and the United States. They were surprised
that the eco no mies o f bo th co untries had gro wn in the fo urth quarter and by the
jo b gro wth in Canada during January and February. They were even surprised that
Canada’s manufacturers and expo rters had had a great January. They were surprised
because they had been predicting either a recessio n at wo rst, o r a recessio n with jo b-
less reco very at best.
Fo recasters started painting a glo o my picture after September 11, 2001, anticipat-
ing that the US natio nal crisis wo uld have a lo ng-lasting impact o n the wo rld eco n-
o my. Even as evidence failed to suppo rt this glo o my picture, fo recasters struggled to
find evidence that they were right.
Gro upthink may well explain the fo recasters’ lingering negative predictio ns. The fo re-
casters were fro m the financial industry, which was harder hit than mo st industries,
except fo r the techno lo gy secto r. Wall Street eco no mists also lived next do o r to the
Wo rld Trade Center, so this had a greater impact. Rather than search mo re widely fo r
evidence, they lo o ked mo re lo cally, at the eco no my right aro und Wall Street.
Sto ck prices and co rpo rate pro fits fell significantly during much o f 2001, and this
is what they fo cused o n. Meanwhile, ho using prices and co nsumer spending co n-
tinued to rise. The analysts figured this was a tem po rary upturn befo re the large
do wnturn they were predicting. They also failed to no tice that perso nal inco me co n-
tinued to rise thro ugho ut the year.
In sho rt, fo recasters were calling fo r a recessio n. They co nvinced each o ther it was
co ming. “[Tho se] who didn’t buy the line and suggested that maybe this was o nly a
very sharp slo wdo wn, invited ridicule.” 39

The fo recasters were suffering fro m so m e o f the sym pto m s o f gro upthink. They
ratio nalized resistance, suggesting it was everyo ne else who did no t understand the eco -
no mic numbers. They applied peer pressure to each o ther, ridiculing tho se who sug-
gested that a recessio n might no t o ccur. This might have led so me analysts to minimize
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 305

their do ubts and keep silent. All o f these behavio urs led fo recasters to appear unanimo us
in their views o n the co ming recessio n.
With gro upthink, individuals who ho ld a po sitio n that differs fro m that o f the do m-
inant majo rity are under pressure to suppress, withho ld, o r mo dify their true feelings and
beliefs. As members o f a gro up, we find it mo re pleasant to be in agreement—to be a po s-
itive part o f the gro up— than to be a disruptive fo rce, even if disruptio n is necessary to
impro ve the effectiveness o f the gro up’s decisio ns.
Do es gro upthink attack all gro ups? No . It seems to o ccur mo st o ften where there is
a clear gro up identity, where members ho ld a po sitive image o f their gro up, which they
want to pro tect, and where the gro up perceives a co llective threat to this po sitive image.40
So gro upthink is less a way to suppress dissenters than a means fo r a gro up to pro tect
its po sitive image.
What can managers do to minimize gro upthink?41

• Encourage group leaders to play an impartial role. Leaders sho uld actively seek
input fro m all members and avo id expressing their o wn o pinio ns, especially
in the early stages o f deliberatio n.

• Appoint one group member to play the role of devil’s advocate. This member’s ro le
is to o vertly challenge the majo rity po sitio n and o ffer divergent perspectives.

• Stimulate active discussion of diverse alternatives to enco urage dissenting views

and mo re o bjective evaluatio ns.

While co nsiderable anecdo tal evidence indicates the negative implicatio ns o f gro up-
think in o rganizatio nal settings, no t much actual empirical wo rk has been co nducted in
o rganizatio ns in this area.42 In fact, researchers o f gro upthink have been criticized fo r sug-
gesting that its effect is unifo rmly negative43 and fo r overestimating the link between the
decisio n-making pro cess and its o utco me.44 A 1999 study o f gro upthink using 30 teams
fro m five large co rpo ratio ns suggests that elements o f gro upthink may affect decisio n
making differently. Fo r instance, the illusio n o f invulnerability, belief in inherent gro up
mo rality, and the illusio n o f unanimity were po sitively asso ciated with team perfo rm-
ance.45 The mo st recent research suggests that we sho uld be aware o f gro upthink co n-
ditio ns that lead to po o r decisio ns, while realizing that no t all gro upthink sympto ms
harm decisio n making.

Gro upshift
Evidence suggests that there are differences between the decisio ns gro ups make and
the decisio ns that might be made by individual members within the gro up.46 In so me
cases, gro up decisio ns are m o re co nservative than individual decisio ns. Mo re o ften,
gro up decisio ns are riskier than individual decisio ns.47 In either case, participants have
engaged in gro upshift , a pheno m eno n in which the initial po sitio ns o f individual groupshift A phenomenon in
gro up members beco me exaggerated because o f the interactio ns o f the gro up. which the initial positions of individ-
ual group members become exag-
What appears to happen in gro ups is that the discussio n leads to a significant shift in
gerated because of the interactions
the po sitio ns o f m em bers to ward a m o re extrem e po sitio n to ward the directio n in of the group.
which they were already leaning befo re the discussio n. So co nservative types beco me
mo re cautio us and mo re aggressive types assume mo re risk. The gro up discussio n tends
to exaggerate the initial po sitio n o f the gro up.
Gro upshift can be viewed as a special case o f gro upthink. The gro up’s decisio n reflects
the do m inant decisio n-m aking no rm that develo ps during the gro up’s discussio n.
Whether the shift in the gro up’s decisio n is to ward greater cautio n o r mo re risk depends
o n the do minant pre-discussio n no rm.
The greater shift to ward risk has generated several explanatio ns fo r the pheno me-
no n.48 It has been argued, fo r instance, that the discussio n creates familiarity amo ng the
306 Part 4 Sharing t he Organizat ional Vision
interacting groups Typical
groups, where members interact
with each other face to face.
brainstorming An idea-genera-
tion process that specifically encour-
ages any and all alternatives while
withholding any criticism of those
alternatives.
Jerilyn Wright & Associates
www.jwadesign.com
Executive Decision Centre,
Queen’s University
http://business.queensu.ca/qedc/
members. As they beco me mo re co mfo rtable with each o ther, they also beco me bo lder
and mo re daring. Ano ther argument is that o ur so ciety values risk, that we admire indi-
viduals who are willing to take risks, and that gro up discussio n mo tivates members to
sho w that they are at least as willing as their peers to take risks. The m o st plausible
explanatio n o f the shift toward risk, however, seems to be that the gro up diffuses respo n-
sibility. Gro up decisio ns free any single member fro m acco untability fo r the gro up’s
final cho ice. Greater risk can be taken because even if the decisio n fails, no o ne mem-
ber can be held who lly respo nsible.
How sho uld yo u use the findings o n gro upshift? Yo u sho uld reco gnize that gro up deci-
sio ns exaggerate the initial po sitio n o f the individual members, that the shift has been
sho wn mo re o ften to be to ward greater risk, and that whether a gro up will shift to ward
greater risk o r cautio n is a functio n o f the members’ pre-discussio n inclinatio ns.
Group De cision-M aking Te chnique s
Gro ups can use a variety o f techniques to stimulate decisio n making. We o utline fo ur o f
them belo w.
Interacting Gro ups
The mo st co mmo n fo rm o f gro up decisio n making takes place in interacting gro ups .
In these gro ups, m em bers m eet face to face and rely o n bo th verbal and no nverbal
interactio n to co mmunicate with each o ther. All kinds o f gro ups use this technique fre-
quently, fro m gro ups o rganized to develo p a class pro ject, to a wo rk team, to a senio r
management team. But as o ur discussio n o f gro upthink demo nstrates, interacting gro ups
o ften censo r themselves and pressure individual members to ward co nfo rmity o f o pin-
io n. Brainstorming, the nominal group technique, and electronic meetings have been pro -
po sed as ways to reduce many o f the pro blems inherent in the traditio nal interacting
gro up.
Brainsto rming
Brainsto rming is meant to o verco me pressures fo r co nfo rmity within the interacting
gro up that prevent the develo pment o f creative alternatives.49 It achieves this by using
an idea-generatio n pro cess that specifically enco urages any and all alternatives while
withho lding any criticism o f tho se alternatives.
Yo u have no do ubt engaged in brainsto rming when yo u have tried to co me up with
ideas fo r ho w to present a pro ject fo r class. In a typical brainsto rming sessio n, a half-
do zen to a do zen peo ple sit aro und a table. The gro up leader, o r even ano ther team
member, states the pro blem in a clear manner so that all participants understand it.
Members then “freewheel” as many alternatives as they can in a given perio d o f time. No
criticism is allo wed, and all the alternatives are reco rded fo r later discussio n and analy-
sis. With o ne idea stimulating o thers and judgments o f even the mo st bizarre suggestio ns
withheld until later, gro up members are enco uraged to “ think the unusual.”
A mo re recent variant o f brainsto rming is electro nic brainsto rming, which is do ne by
peo ple interacting o n co mputers to generate ideas. Fo r example, Calgary-based Jerilyn
Wright & Asso ciates uses electro nic brainsto rming to help clients design their wo rk-
spaces thro ugh so ftware that has been adapted fo r o ffice-space design.50
The Executive Decisio n Centre at Q ueen’s University was “ o ne o f the first electro nic
[decisio n-making] facilities in No rth America and the first to be made accessible to the
public.” 51 Pro fesso r Brent Gallupe, the fo unding directo r and ano ther facilitato r at the
centre have co nducted mo re than 600 decisio n-making sessio ns with a variety o f No rth
American o rganizatio ns, including Glaxo SmithKline, Bo mbardier, DuPo nt, Imperial
O il, the Department o f Natio nal Defence and Canadian Fo rces, the Canadian Security
Intelligence Service, and the United Way. The strength o f the Q ueen’s system is that
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 307

participants simultaneo usly interact via co mputer terminals, all respo nses are ano nymo us,
and the speed allo ws fo r generating numero us ideas in a sho rt time. Whitby, O ntario -
based McGraw-Hill Ryerso n has beco me a regular user since finding that o ne o f its divi-
sio ns experienced a surge in sales after visiting the Q ueen’s centre. “They came up with
a better, mo re so undly develo ped strategy, with mo re co mmitment o n the part o f the peo -
ple. Peo ple feel very co mmitted to the o utco mes o f the pro cess because they do n’t feel
like they’ve been stro ng-armed into the o utco mes. They’ve had a vo ice in it,” says Jo hn
Dill, fo rmer president and CEO o f McGraw-Hill Ryerso n.
However, brainstorming is not always the right strategy to use. For example, president and
CEO Terry Graham o f Scarbo ro ugh, Ontario -based Image Pro cessing Systems (now part o f
Pho to n Dynamics), which wo n Canada’s 1997 Expo rt Award, saw brainsto rming backfire
when do ing business in China. He says that meetings with Chinese business peo ple “are
definitely no t fo r brainsto rming. We learned this lesso n the hard way. Our team tho ught we
co uld show o ur creativity by placing fresh alternatives in fro nt o f an impo rtant manager. It
was two years befo re the co mpany wo uld talk to us again.” 52 Brainsto rming, we sho uld also
no te, is merely a pro cess fo r generating ideas. The fo llowing two techniques go further by
o ffering metho ds o f actually arriving at a preferred so lutio n.53

No minal Gro up Technique

The no minal gro up technique restricts discussio n o r interperso nal co mmunicatio n nominal group technique A
during the decisio n-making pro cess; thus the term nominal ( which means “ in name group decision-making method in
o nly” ) . Gro up members are all physically present, as in a traditio nal co mmittee meet- which individual members meet face
to face to pool their judgments in a
ing, but members o perate independently. Specifically, a pro blem is presented and then
systematic but independent fashion.
the fo llo wing steps take place:

• Members meet as a gro up, but befo re any discussio n takes place each member
independently writes do wn his o r her ideas abo ut the pro blem.

• After this silent perio d, each member presents o ne idea to the gro up. Gro up
members take turns presenting a single idea until all ideas have been presented
and reco rded. No discussio n takes place until all ideas have been reco rded.

• The gro up then discusses the ideas fo r clarity and evaluates them.

• Each gro up member silently and independently ranks the ideas. The idea with
the highest o verall ranking determines the final decisio n.

The steps o f the no minal gro up technique are illustrated in Exhibit 9-4. The chief
advantage o f this technique is that it permits the gro up to meet fo rmally but do es no t
restrict independent thinking as the interacting gro up do es.
A number o f studies suggest that brainsto rming by no minal gro ups is mo re effec-
tive than brainsto rming by interacting gro ups. Ho wever, recent research suggests that
no minal gro ups generate mo re ideas and mo re o riginal ideas, but no t necessarily mo re
quality ideas.54

EXHIBIT 9-4 Nominal Group Technique

Individual Activity G roup Activity Individual Activity

Individuals silently Individuals take turns Individuals silently rank

Team members receive
w rite dow n describing solutions (or vote on) each
description of problem.
possible solutions. to each other. solution presented.
G roup then discusses
and evaluates ideas.
308 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 9-5 Evaluating Group Effectiveness

Type of Group
Effectiveness Criteria Interacting Brainstorming Nominal Electronic

Number of ideas Low M oderate High High

Quality of ideas Low M oderate High High

Social pressure High Low M oderate Low

M oney costs Low Low Low High

Speed M oderate M oderate M oderate High

Task orientation Low High High High

Potential for interpersonal conflict High Low M oderate Low

Feelings of accomplishment High to low High High High

Commitment to solution High Not applicable M oderate M oderate

Development of group cohesiveness High High M oderate Low

Source: Based on J. K. M urnighan, “ Group Decision M aking: What Strategies Should You Use?” Academy of M anagement Review, February
1981, p. 61.

Electro nic Meetings

electronic meeting A meeting
in which members interact on com-
puters, allowing for anonymity of
comments and aggregation of votes.
The mo st recent appro ach to gro up decisio n making blends the no minal gro up technique
with so phisticated co mputer techno lo gy.55 It’s called the co mputer-assisted gro up, o r
electro nic meeting . O nce the techno lo gy is in place, the co ncept is simple. As many as
50 peo ple sit aro und a ho rsesho e-shaped table, which is empty except fo r a series o f
co mputer terminals. Issues are presented to the participants, and they type their respo nses
o nto their co m puter m o nito rs. Individual co m m ents, as well as to tal vo tes, are dis-
played o n a pro jectio n screen in the ro o m.
The majo r advantages o f the electro nic meeting are ano nymity, ho nesty, and speed.
Participants can ano nymo usly type any messages they want, and they flash o n the screen
fo r all to see at the push o f butto ns o n participants’ keybo ards. This type o f meeting
also allo ws peo ple to be brutally ho nest witho ut penalty. In additio n, it is fast because
chit-chat is eliminated, discussio ns do no t digress, and many participants can “talk” at
o nce witho ut stepping o n o ne ano ther’s to es. The future o f gro up meetings undo ubtedly
will include extensive use o f this techno lo gy.

Each o f these fo ur gro up-decisio n techniques has its o wn strengths and weaknesses.
The cho ice o f o ne technique o ver ano ther will depend o n what criteria yo u want to
em phasize and the co st-benefit trade-o ff. Fo r instance, as Exhibit 9-5 indicates, the
interacting gro up is effective fo r building gro up co hesiveness, brainsto rm ing keeps
so cial pressures to a minimum, the no minal gro up technique is an inexpensive means
fo r generating a large number o f ideas, and electro nic meetings pro cess ideas quickly.

THE INFLUENCE OF THE LEAD ER ON GROUP

4 Should the leader
make the decision or
encourage the group
to participate?
D ECISION MAKING
Yo u are the head o f yo ur own business o r the manager o f yo ur divisio n at wo rk, and yo u
are trying to decide whether yo u sho uld make a decisio n by yo urself o r invo lve the mem-
bers o f yo ur team. Is there anything that can info rm yo u abo ut whether it is better fo r the
leader to make a decisio n alo ne o r get everyo ne invo lved in the decisio n-making pro cess?
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 309

The leader-participatio n mo del presents the vario us actio ns a leader might take leader-participation model A
with respect to the decisio n-making pro cesses o f the gro up he o r she leads.56 The mo del leadership theory that provides a set
pro vides a sequential set o f rules that sho uld be fo llo wed to determine the fo rm and of rules to determine the form and
amount of participative decision
amo unt o f participatio n desired by the manager o r gro up leader in decisio n making, as
making in different situations.
dictated by the situatio n. It is a co mplex decisio n tree inco rpo rating eight co ntingency
variables that identify which o f five leadership styles to use when making decisio ns.
The five leadership styles the mo del pro po ses leaders can use in a given situatio n are
Auto cratic I (AI), Auto cratic II (AII), Co nsultative I (CI), Co nsultative II (CII), and Gro up
II ( GII) . Thus the gro up leader o r manager has the fo llo wing alternatives fro m which to
cho o se when deciding ho w invo lved to be with decisio ns that affect a wo rk gro up:

AI: Yo u so lve the pro blem o r make a decisio n yo urself using whatever facts yo u
have at hand.

AII: Yo u o btain the necessary info rmatio n fro m emplo yees and then decide o n
the so lutio n to the pro blem yo urself. Yo u may o r may no t tell them abo ut
the nature o f the situatio n yo u face. Yo u seek o nly relevant facts fro m them,
no t their advice o r co unsel.

CI: Yo u share the pro blem with relevant emplo yees o ne-o n-o ne, getting their
ideas and suggestio ns. Ho wever, the final decisio n is yo urs alo ne.

CII: Yo u share the pro blem with yo ur emplo yees as a gro up, co llectively o btain-
ing their ideas and suggestio ns. Then yo u make the decisio n, which may o r
may no t reflect yo ur emplo yees’ influence.

GII: Yo u share the pro blem with yo ur emplo yees as a gro up. Yo ur go al is to help
the gro up co ncur o n a decisio n. Yo ur ideas are no t given any greater weight
than tho se o f o thers.

The o riginal leader-participatio n mo del has been revised to include 12 co ntingency

variables, 8 pro blem types, and 5 leadership styles, and is to o co mplex to describe in
detail in a basic O B textbo o k. There is a co mputer pro gram that cuts thro ugh the co m-
plexity o f the new mo del. The majo r decisio n facto rs include the quality o f the deci-
sio n req uired, the degree o f co m m itm ent needed fro m participants, and the tim e
available to make the decisio n.
Research testing o f the o riginal leader-participatio n mo del was very enco uraging.57
We have every reaso n to believe that the revised mo del provides an excellent guide to help
managers cho o se the mo st appro priate leadership style in different situatio ns.

CREATIVITY IN O RGANIZATIONAL
D ECISION MAKING
“Canada is no t a very creative culture,” acco rding to a Natio nal Research Co uncil repo rt 5 How can we get more
written by Pro fesso r David Bentley o f the English Departm ent at the University o f creative decisions?
Western O ntario .58 The repo rt suggests that co ncrete steps need to be taken to pro mo te
a culture o f inno vatio n, and impro ve the creativity o f individuals. The repo rt gives a
number o f suggestio ns fo r impro ving creativity, including using metapho rs, empathetic
thinking, and imagining to help see things in new ways.
Bentley’s call fo r impro ving creativity is co nsistent with a survey sho wing that 58
percent o f large public co mpanies and entrepreneurs reco gnize a link between creative
thinking within the o rganizatio n and having a co mpetitive edge.59 “It [creative thinking]
will no t necessarily spell the difference between success and failure. But it is o ne o f
tho se tangential issues that can add a few cents per share pro fit,” no ted the head o f an
O ntario agripro ducts co mpany, who was no t identified by the survey. Mo reover, research
310 Part 4 Sharing t he Organizat ional Vision

creativity The process of creating
novel products, ideas, or procedures
that are potentially relevant or useful
to an organization.
sho ws that the o rganizatio nal benefits o f individual creativity include “ higher-quality
pro ducts, mo re effective decisio n making, better gro up perfo rmance, and mo re innovative
so lutio ns to o rganizatio nal pro blems.” 60 A variety o f definitio ns exist fo r the co ncept o f
creativity, with so me viewing it as a characteristic o f a perso n while o thers view it as a
pro cess.61 Mo st co ntempo rary researchers and theo rists use a definitio n that addresses
either the pro duct o r the o utco me o f the pro duct develo pment pro cess.62 In o ur next dis-
cussio n, we co nsider creativity as the pro cess o f creating pro ducts, ideas, o r pro cedures
that are no vel o r o riginal and are po tentially relevant o r useful to an o rganizatio n.63

Fa ctors That Affe ct In d ivid ual Creativity

Peo ple differ in their inherent creativity. Albert Einstein, Marie
Curie, Tho m as Ediso n, Pab lo Picasso , and Wo lfgang Am adeus
* Why are some
people more creative
Mo zart were individuals o f exceptio nal creativity. In mo re recent
tim es, Canadian artist Em ily Carr, legendary Canadian co ncert
than others?
pianist Glenn Go uld, basketball star Michael Jo rdan, and Canadian
autho r Margaret Atwo o d have been no ted fo r the creative co ntri-
butio ns they have m ade to their fields. No t surprisingly, excep-
tio nal creativity is scarce. Fo r example, a study o f lifetime creativity o f 461 men and
Edw ard De Bono wo m en fo und that less than 1 percent were exceptio nally creative.64 But 10 percent
www.edwdebono.com were highly creative and abo ut 60 percent were so mewhat creative. These results suggest
that mo st o f us have creative po tential, if we can learn
to unleash it.
A large bo dy o f literature has examined the perso nal
attributes asso ciated with creative achievement.65 In gen-
eral, “ these studies have demo nstrated that a stable set
o f co re perso nal characteristics, including bro ad interests,
attractio n to co mplexity, intuitio n, aesthetic sensitivity,
to leratio n o f ambiguity, and self-co nfidence, relate po si-
tively and co nsistently to measures o f creative perfo rmance
acro ss a variety o f do m ains.” 66 While perso nality and
co gnitive skills are linked to creativity,67 the task itself
plays an im po rtant ro le. Individuals are m o re creative
when they are mo tivated by intrinsic interest, challenge,
task satisfactio n, and self-set go als.68 Tho se who are extrin-
sically mo tivated are mo re likely to lo o k fo r the mo st effi-
cient so lutio n to a pro blem in o rder to receive the desired
rewards. Tho se who are intrinsically mo tivated may take
mo re time explo ring issues and situatio ns, which gives
them the o ppo rtunity to see things in a different light.69
The setting also makes a difference, and tho se settings
that pro vide o ppo rtunities, absence o f co nstraints,70 and
rewards71 enco urage creativity.
There is so me evidence that the brain is set up to think
linearly, rather than laterally, and yet lateral thinking is
needed fo r creative thinking. Edward De Bo no , a leading
autho rity o n creative and co nceptual thinking fo r o ver
25 years, has written a number o f bo o ks o n this to pic,
including Six Thinking Hats and The Mechanism of Mind.72
Creat ivit y and t he bot t om line can go hand in hand. In f act , at He has identified vario us to o ls fo r helping o ne use mo re
Vancouver-based Big House Communications, creativity rules. Big House lateral thinking. De Bo no ’s “six thinking hats” co ncept is
develops communications, including w ebsites, for other companies. It is
a simple yet po werful to o l that is intended to change the
know n for giving clients several alternatives: traditional, w acky, and
fun. The company must be doing something right. It is 10 years old,
way peo ple think. He suggests that inno vative and cre-
w hich makes it really old for this type of business. ative pro blem-so lving can develo p fro m wo rking thro ugh
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 311

decisio ns using each o f the framewo rks represented by the individual hats. The hats are
metapho rs fo r different kinds o f thinking.73

• The white hat represents impartial thinking, fo cusing strictly o n the facts.

• The red hat represents expressio n o f feelings, passio ns, intuitio ns, emo tio ns.

• The black hat stands fo r a critical, deliberate, evaluating o utlo o k.

• The yellow hat represents an o ptimistic, upbeat, po sitive o utlo o k.

• The green hat represents creativity, inspiratio n, imaginatio n, and the free flo w
o f new co ncepts.

• The blue hat represents co ntro l, an overall “managerial” perspective o f the pro cess.

Each hat has its o wn place in the decisio n-making pro cess. De Bo no suggests that
we use all six in o rder to fully develo p o ur capacity to think mo re creatively. Gro ups
co uld do the same by assigning each perso n to the ro le o f o ne o f the hats. Fo r mo re
suggestio ns o n so lving pro blems creatively, see From Concepts to Skills o n page 329–330.

Organizational Fa ctors That Affe ct Creativity

In two decades o f research analyzing the link between the wo rk enviro nment and cre-
ativity, six o rganizatio nal facto rs have been fo und to affect creativity:74

• Challenge. When peo ple are matched up with the right assignments, their
expertise and skills can be bro ught to the task o f creative thinking. Individuals
sho uld be stretched, but no t o verwhelmed.

• Freedom. To be creative, o nce a perso n is given a pro ject, he o r she needs the
freedo m to determine the pro cess. In o ther wo rds, let the perso n decide ho w
to tackle the pro blem. This heightens intrinsic mo tivatio n.

• Resources. Time and mo ney are the two main reso urces that affect creativity.
Thus, managers need to allo t these reso urces carefully.

Videogame maker Electronic Arts

(EA) created an on-site labyrinth
to help employees unleash their
creative potential. EA encourages
video and computer game devel-
opers to w ander the maze w hen
their creativity levels are running
low. W hile w alking t he maze,
they can think about their chal-
lenges in divergent w ays f or
designing innovative products.
312 Part 4 Sharing t he Organizat ional Vision
6 What is ethics, and
how can it be used for
better decision
making?
ethics The study of moral values
or principles that guide our behav-
iour and inform us whether actions
are right or wrong.
utilitarianism A decision focused
on outcomes or consequences that
emphasizes the greatest good for
the greatest number.
• W ork-group features. In Chapter 5, o ur discussio n o f gro up co mpo sitio n and
diversity co ncluded that diverse gro ups were likely to co me up with mo re cre-
ative so lutio ns. In additio n to ensuring a diverse gro up o f peo ple, team mem-
bers need to share excitement abo ut the go al, must be willing to suppo rt each
o ther thro ugh difficult perio ds, and must reco gnize o ne ano ther’s unique
kno wledge and perspectives.
• Supervisory encouragement. To sustain passio n, mo st peo ple need to feel that
what they are do ing matters to o thers. Managers can reward, co llabo rate, and
co mmunicate to nurture the creativity o f individuals and teams.
• O rganizational support. Creativity-suppo rting o rganizatio ns reward creativity,
and also make sure that there is info rmatio n sharing and co llabo ratio n. They
make sure that negative po litical pro blems do no t get o ut o f co ntro l.
Five o rganizatio nal facto rs have been fo und that can blo ck yo ur creativity at wo rk:
• Expected evaluation. Fo cusing o n ho w yo ur wo rk is go ing to be evaluated.
• Surveillance. Being watched while yo u are wo rking.
• External motivators. Fo cusing o n external, tangible rewards.
• Competition. Facing win-lo se situatio ns with peers.
• Constrained choice. Being given limits o n ho w yo u can do yo ur wo rk.75
WHAT ABOUT ETHICS IN D ECISION MAKING?
At the Pan Asia Footw ear Public Company in Thailand, managers set quotas in order to keep
productivity high.76 The difficulty, as one inspector points out, is “ Shoes w ith complex details
sometimes can’t be finished in eight hours. This means that staff might w ork 10 hours for an
eight -hour w age.” The company does not pay overt ime w hen t his happens, because t he
employee has not met the quota on time. Employees are not paid by the hour. They simply
receive a flat fee for a day’s w ork. How can w e determine w hether this is an ethical practice by
the company?
No co ntempo rary discussio n o f decisio n making wo uld be co mplete witho ut the inclu-
sio n o f ethics, because ethical co nsideratio ns sho uld be an impo rtant criterio n in o rga-
nizatio nal decisio n making. Ethics is the study o f mo ral values o r principles that guide
o ur behavio ur and info rm us whether actio ns are right o r wro ng. Ethical principles
help us “ do the right thing.” In this final sectio n, we present three ways to frame deci-
sio ns ethically and examine the facto rs that shape an individual’s ethical decisio n-mak-
ing behavio ur. We also examine o rganizatio nal respo nses to the demand fo r ethical
behavio ur, as well as co nsideratio n o f ethical decisio ns when do ing business in o ther cul-
tures. To learn m o re abo ut yo ur ethical decisio n-m aking appro ach, see the Ethical
Dilemma Exercise o n pages 327. To co nsider the extent to which ethical decisio n making
blurs the lines between wo rk and perso nal life, see Case Incident— Bankers’ Excess Gets
Them Fired o n the CD-RO M that acco mpanies this textbo o k.
Four Ethical De cision Criteria
An individual can use fo ur different criteria in making ethical cho ices.77 The first is the
utilitarian criterio n, in which decisio ns are made so lely o n the basis o f their o utco mes o r
co nsequences. The go al o f utilitarianism is to pro vide the greatest go o d fo r the greatest
number. This view tends to do minate business decisio n making. It is co nsistent with
go als such as efficiency, pro ductivity, and high pro fits. By maximizing pro fits, fo r instance,
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 313

a business executive can argue that he o r she is securing the greatest go o d fo r the great-
est number—as he o r she hands o ut dismissal no tices to 15 percent o f the emplo yees.
BMO Nesbitt Burns igno red unethical behavio ur by an emplo yee because the co m- BM O Nesbitt Burns
pany sto o d to gain fro m the behavio ur, as Focus on Ethics sho ws. www.bmonesbittburns.com

FO C U S O N E T H I C S

M aking Profits at the Expense of Clients

Can profit s really d rive unethical d ecisions? In spring 2001, BMO Nesbitt Burns in
Winnipeg agreed to pay the highest fine in Manito ba securities histo ry ( $100 000
plus $60 000 to ward investigatio n co sts) after being investigated by the Manito ba
Securities Co mmissio n, the Investment Dealers Asso ciatio n ( IDA) , and the Canadian
Banking O m budsm an fo r igno ring unethical behavio ur by o ne o f its investm ent
bro kers o ver several years.78
These investigatio ns stemmed fro m co ntinuing co mplaints abo ut bro ker Rando lph
McDuff’s behavio ur, fo r which the co mpany to o k little actio n. McDuff was first inves-
tigated by BMO Nesbitt Burns in March 1999 fo r trading in clients’ acco unts witho ut
their perm issio n. McD uff adm itted he had m ade unautho rized trades in client
acco unts; a co mpliance o fficer no ted that “McDuff did no t seem to understand that
a client must be co ntacted prio r to a trade being executed.” The head o f co mpliance
at Nesbitt Burns’ head o ffice in To ro nto reco mmended that McDuff be fired.
Ho wever, McDuff was no t fired. Instead he was fined $2000 and warned that “any
further o ccurrences may result in terminatio n o f emplo yment.” This was no t the first
incident o f unethical behavio ur by McDuff. An internal do cument dated January
28, 1999, no ted, “We have experienced a large increase in the amo unt o f settlements
[anticipated and settled]” regarding McDuff.
Nevertheless, To m Waitt, senio r vice-president o f BMO Nesbitt Burns’ Prairie divi-
sio n and McDuff’s superviso r in Manito ba, urged the head o ffice to avo id taking
drastic actio n, and to supervise McDuff instead. A memo McDuff wro te to his super-
viso r in September 1999 may explain why the Winnipeg o ffice was so interested in
igno ring his behavio ur: “ I kno w there is this great big clo ud o ver my head and that
head o ffice wants me o ut o f here. Do es head o ffice fo rget abo ut my co ntributio ns to
this firm over the years? In additio n to providing fo r mo re than 15% o f the o ffice rev-
enue co nsistently o ver the past five years, I have b een an advo cate o f Nesb itt
Burns . . . Ro o kies and marketers are still amazed at my wo rk ethic. So me have said that
it inspires them to wo rk harder.”

Decisio n makers, particularly in fo r-pro fit o rganizatio ns, tend to feel safe and co m-
fo rtable when they use utilitarianism. Many questio nable actio ns can be justified when
framed as being in the “best interests” o f the o rganizatio n and sto ckho lders. But many
critics o f business decisio n makers argue that this perspective sho uld change because it
can result in igno ring the rights o f so me individuals, particularly tho se with mino rity rep-
resentatio n in the o rganizatio ns.79
A seco nd ethical criterio n is rights. This criterio n calls o n individuals to make decisio ns
co nsistent with fundamental liberties and privileges as set fo rth in do cuments such as
the Canadian Charter o f Rights and Freedo ms. An emphasis o n rights in decisio n mak- Canadian Charter of Rights and
ing means respecting and pro tecting the basic rights o f individuals, such as the rights to Freedoms
www.canadianheritage.gc.ca/progs/
privacy, free speech, and due pro cess. Fo r instance, this criterio n wo uld be used to pro - pdp-hrp/canada/freedom_e.cfm
tect whistle-blowers when they repo rt unethical o r illegal practices by their o rganizatio ns
to the media o r to go vernment agencies o n the gro unds o f their right to free speech.
314 Part 4 Sharing t he Organizat ional Vision

Stew art Leibl, president of Perth’s,

a W innipeg dry-cleaning chain, is
a founding sponsor of the Koats
for Kids program. The company’s
outlets are a drop-off point for no-
longer-needed children’s coats,
w hich Perth’s cleans free of charge
before distributing them to chil-
dren w ho have no w inter coats.
Leibl is going beyond utilitarian
criteria w hen he says, “ We all
have a responsibility to contribute
to the society that w e live in.” He
is also looking at social justice.

A third ethical criterio n is justice. This criterio n requires individuals to impo se and
enfo rce rules fairly and impartially so there is an equitable distributio n o f benefits and
co sts. Unio n members typically favo ur this criterio n. It justifies paying peo ple the same
wage fo r a given jo b, regardless o f perfo rmance differences, and it uses senio rity as the
primary determinatio n in making layo ff decisio ns. A fo cus o n justice pro tects the inter-
ests o f the underrepresented and less po werful, but it can enco urage a sense o f entitle-
ment that reduces risk-taking, inno vatio n, and pro ductivity.
A fo urth ethical criterio n is care. The ethics o f care can be stated as fo llo ws: “ The
mo rally co rrect actio n is the o ne that expresses care in pro tecting the special relatio nships
that individuals have with each o ther.” 80 Care as an ethical criterio n came o ut o f fem-
inist literature81 to address the idea that the male-do minated view o f ethics was to o
imperso nal and igno red the relatio nships amo ng individuals.82 The care criterio n sug-
gests that individuals sho uld be aware o f the needs, desires, and well-being o f tho se to
who m they are clo sely co nnected. Recent research do es no t suggest that men and wo men
differ in their use o f justice vs. care in making decisio ns.83 Ho wever, this criterio n do es
remind us o f the difficulty o f being impartial in all decisio ns.

Factors That Influence Ethical Decision-M aking Behaviour

* Why do some
pe ople make more
ethical de cisions
than othe rs?
sizes three facto rs: stage o f mo ral develo pment, lo cus o f co ntro l, and the o rganizatio nal
enviro nment.
What acco unts fo r unethical behavio ur in o rganizatio ns? Is
it immo ral individuals o r wo rk enviro nments that pro mo te
unethical activity? The answer is both! The evidence indi-
cates that ethical o r unethical actio ns are largely a functio n
o f bo th the individual’s characteristics and the enviro nment
in which he o r she wo rks.84 The mo del in Exhibit 9-6 illus-
trates facto rs affecting ethical decisio n making and empha-

Stages o f Mo ral Develo pment

stages of moral development
The developmental stages that
explain a person’s capacity to judge
what is morally right.
Stages o f mo ral develo pment assess a perso n’s capacity to judge what is m o rally
right.85 Research suggests that there are three levels o f mo ral develo pment, and each
level has two stages.86 The higher o ne’s mo ral develo pment, the less dependent he o r she
is o n o utside influences and thus the mo re he o r she will be predispo sed to behave
ethically. The first level is the preco nventio nal level, the seco nd is the co nventio nal
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 315

EXHIBIT 9-6 Factors Affecting Ethical Decision-M aking Behaviour

Stage of moral
development

Locus of Ethical
control decision-making
behaviour

Organizational
environment

level, and the highest level is the principled level. These levels and their stages are
described in Exhibit 9-7.
The research indicates that peo ple pro ceed thro ugh the stages o ne step at a time,
tho ugh they do no t necessarily reach the highest stage.87 Mo st adults are at a mid-level
o f mo ral develo pment— they are stro ngly influenced by peers and will fo llo w an o rga-
nizatio n’s rules and pro cedures. Tho se individuals who have pro gressed to the higher
stages place increased value o n the rights o f o thers, regardless o f the majo rity’s o pinio n,
and are likely to challenge o rganizatio nal practices they perso nally believe are wro ng.
Tho se at the higher stages are mo st likely to make ethical decisio ns using the criteria o f
rights, justice, and care, which we discuss earlier.

Lo cus o f Co ntro l
Research indicates that peo ple with an external locus of control ( that is, they believe their
lives are co ntro lled by o utside fo rces, such as luck o r chance) are less likely to take

EXHIBIT 9-7 Stages of M oral Development

Principled

6. Follow ing self - chosen et hi cal

prin ciples even if t hey viol at e
t he l aw.
5. Valuing right s of ot hers and
upholding absolut e values
Convent ional and right s reg ardless of t he
m ajorit yís opinion.
4. M aint aining convent ion al
order by f ulf illing
o blig at ions t o w hi ch
you h ave agreed.
3. Living up t o w h at is
Preconvent ional expect ed by people close
t o you.
2. Follow ing rules only
w hen doing so is in your
immedi at e int erest .
1. St i cking t o rules t o avoid
physi cal punishment .

Source: Based on L. Kohlberg, “ M oral Stages and M oralization: The Cognitive-Developmental Approach,” in M oral
Development and Behaviour: Theory, Research, and Social Issues, ed. T. Lickona (New York: Holt, Rinehart and
W inston, 1976), pp. 34–35.
316 Part 4 Sharing t he Organizat ional Vision
w histle-blow ers Individuals who
report unethical practices by their
employers to outsiders.
Corporate Espionage in the
Canadian Airline Industry
respo nsibility fo r the co nsequences o f their behavio ur and are mo re likely to rely o n exter-
nal influences to determine their behavio ur. Tho se with an internal lo cus o f co ntro l
( they believe they are respo nsible fo r their destinies) , o n the o ther hand, are mo re likely
to rely o n their o wn internal standards o f right and wro ng to guide their behavio ur.
Organizatio nal Enviro nment
The organizational environment refers to an employee’s perceptio n o f o rganizatio nal expec-
tatio ns. Do es the o rganizatio nal culture enco urage and suppo rt ethical behavio ur by
rewarding it o r disco urage unethical behavio ur by punishing it? Characteristics o f an o rga-
nizatio nal enviro nment that are likely to fo ster high ethical decisio n making include writ-
ten co des o f ethics; high mo ral behavio ur by senio r management; realistic perfo rmance
expectations; performance appraisals that evaluate means as well as ends; visible recognition
and pro mo tio ns fo r individuals who display high mo ral behavio ur; and visible punish-
ment fo r tho se who act unethically. An o rganizatio n that has po licies to pro tect whistle-
blo wers — individuals who repo rt unethical practices to the press o r go vernm ent
agencies—also makes it po ssible fo r peo ple to speak o ut if they o bserve questio nable activ-
ities. Unfo rtunately, many peo ple who speak o ut against irregularities end up being pun-
ished for doing so, which is why strong company policies are necessary. WestJet, for example,
as discussed in this chapter’s CBC Video Case Incident, intro duced a whistle-blowing po licy
after being taken to co urt by Air Canada and Jetsgo fo r questio nable co nduct.
In sum m ary, peo ple who lack a stro ng m o ral sense are m uch less likely to m ake
unethical decisio ns if they are co nstrained by an o rganizatio nal enviro nment that frowns
o n such behavio urs. Co nversely, righteo us individuals can be co rrupted by an o rgani-
zatio nal enviro nment that permits o r enco urages unethical practices. In the next sectio n,
we co nsider ho w to fo rmulate an ethical decisio n.
M aking Ethical De cision s
While there are no clear-cut ways to differentiate ethical fro m unethical decisio n mak-
ing, there are so me questio ns yo u sho uld co nsider.
Exhibit 9-8 illustrates a decisio n tree to guide ethical decisio ns. This tree is built o n three
o f the ethical decisio n criteria—utilitarianism, rights, and justice—presented earlier. The
first questio n yo u need to answer addresses self-interest vs. o rganizatio nal go als.
The second question concerns the rights of other parties. If the decision violates the rights
o f so meo ne else ( his o r her right to privacy, fo r instance) , then the decisio n is unethical.
The final questio n that needs to be addressed relates to whether the decisio n co nfo rms
to standards o f equity and justice. The department head who raises the perfo rmance
evaluatio n o f a favo ured employee and lowers the evaluatio n o f a disfavo ured employee—
and then uses these evaluatio ns to justify giving the fo rmer a big raise and no thing to the
latter— has treated the disfavo ured emplo yee unfairly.
Unfo rtunately, the answers to the questio ns in Exhibit 9-8 are o ften argued in ways
to make unethical decisio ns seem ethical. Powerful peo ple, fo r example, can beco me very
adept at explaining self-serving behavio urs in terms o f the o rganizatio n’s best interests.
Similarly, they can persuasively argue that unfair actio ns are really fair and just. O ur
po int is that immo ral peo ple can justify almo st any behavio ur. Tho se who are po wer-
ful, articulate, and persuasive are the mo st likely to be able to get away with unethical
actio ns successfully. When faced with an ethical dilemma, try to answer the questio ns
in Exhibit 9-8 truthfully.
Organizational Respon se to Deman ds for
Ethical Behaviour
During the 1990s, an explo sio n in the demand fo r mo re ethics o ccurred in Canada and
the United States. A seco nd explo sio n o ccurred in 2002, after the Enro n, Wo rldCo m, and
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 317

EXHIBIT 9-8 Is a Decision Ethical?

Unet hical
Et hical
Question 3 s
Ye
s Ye

Question 1 Is t he decision
f air and equit able?
Is t he decision
Question 2 s No
mot ivat ed by Ye
self -serving No Does t he decision
int erest s? respect t he
Unet hical
right s of t he
individuals No
aff ect ed?

Unet hical

Source: Based on G. F. Cavanagh, D. J. M oberg, and M . Valasquez, “ The Ethics of Organizational Politics,” Academy of M anagement Journal,
June 1981, pp. 363–374.

o ther acco unting scandals. In Canada, mo re than 120 ethics specialists now o ffer services
as in-ho use mo ral arbitrato rs, mediato rs, watchdo gs, and listening po sts. So me wo rk
at Canada’s largest co rpo ratio ns, including the CIBC, Canada Po st, Magna Internatio nal, Canada Post
Ro yal Bank o f Canada, and McDo nald’s Canada. These co rpo rate ethics o fficers hear www.canadapost.ca
abo ut issues such as co lleagues making pho ne calls o n co mpany time, managers yelling M cDonald’s Canada
at their emplo yees, pro duct researchers being asked to fake data to meet a deadline, o r www.mcdonalds.ca
a co mpany wanting to terminate a co ntract because the co sts are higher than antici-
pated. Ethics pro fesso r Wayne No rman o f the Université de Mo ntréal believes that ethics
o fficers are a po sitive trend, no ting, “all so rts o f studies sho w the co mpanies that take
ethics serio usly tend to be mo re successful.” 88
Many co rpo ratio ns are also develo ping co des o f ethics. Fo r example, abo ut 60 per-
cent o f Canada’s 650 largest co rpo ratio ns have so me so rt o f ethics co de.89 Having a co r-
po rate ethics po licy is no t eno ugh; emplo yees must be instructed in ho w to fo llo w the
po licy. Yet o nly abo ut 39 percent o f Canadian firms pro vided
training in ethical decisio n making in 2000, altho ugh this was
up fro m 21 percent in 1997. While no co mparable Canadian O B I N A CTI ON
data are available, a survey o f emplo yees in US businesses with
ethics co des fo und that 75 percent o f tho se surveyed had
Developing a M eaningful Code
o bserved ethical o r legal vio latio ns in the previo us 12 mo nths, of Ethics
including deceptive sales practices, unsafe wo rking co nditio ns, ➔ Clearly state basic principles and expectations.
sexual harassm ent, co nflicts o f interest, and enviro nm ental ➔ Realistically focus on potential ethical dilem-
vio latio ns. 90 Co m panies with co des o f ethics m ay no t do mas that employees face.
eno ugh mo nito ring. Fo r instance, David Nitkin, president o f ➔ Distribute the code to all employees.
To ro nto -based EthicScan Canada, an ethics co nsultancy, no tes
➔ Train individuals so that they understand the
that “ o nly abo ut 15% o f [larger Canadian co rpo ratio ns with
code.
co des o f ethics] have designated an ethics o fficer o r o mbuds-
➔ Enforce penalties for violating of the code.
man” o r provide an ethics ho tline, and that less than 10 percent
o ffer whistle-blo wer pro tectio n.91 O B in Action— D eveloping a Source: Based on W. E. Stead, D. L. Worrell, and J. G.
Meaningful Code of Ethics sho ws ho w to implement co des o f Stead, “ An Integrative M odel for Understanding and
ethics in o rganizatio ns. M anaging Ethical Behavior in Business Organizations,”
Journal of Business Ethics 9, no. 3 (M arch 1990), pp.
O nly 14 percent o f co mpanies evaluate their ethics-related 233–242.
perfo rmance, suggesting that mo st are no t fo cused o n impro v-
318 Part 4 Sharing t he Organizat ional Vision

ing ethics in the wo rkplace.92 However, a small gro up o f co mpanies is even starting a new
trend in mo nito ring ethical practices, hiring an ethical audito r, much like they wo uld hire
a financial audito r. The ethical audito r is hired to “do uble-check an o rganizatio n’s per-
ceptio n o f its o wn m o rals.” 93 Vanco uver City Savings Credit Unio n ( Vancity) , Bell
Canada, Tetra Pak, British Teleco m, the University o f To ro nto , and The Bo dy Sho p have
all bro ught in ethical audito rs.
Ano ther way to enco urage ethical behavio ur is to create mechanisms that enco ur-
BBDO Canada age emplo yees to speak up when they see wro ngdo ing. To ro nto -based BBDO Canada
www.bbdo.ca
enco urages “cando ur m o m ents.” Em plo yees are em po wered “ to call each o ther o n
behavio ur that go es against co mpany values, even junio r emplo yees who want to be
candid with managers,” says the ad agency’s president and CEO, Gerry Frascio ne.94

W hat A b out National Culture?

We have already sho wn that there are differences between Canada and the United States
in the legal treatment o f ethics vio latio ns and the creatio n o f an ethical co rpo rate cul-
ture. Ho wever, it is impo rtant to no te that what is co nsidered unethical in o ne co untry
may no t be viewed similarly in ano ther co untry. The reaso n is that there are no glo bal
ethical standards. Co ntrasts between Asia and the West pro vide an illustratio n.95 In
Japan, peo ple do ing business to gether o ften exchange gifts, even expensive o nes. This is
part o f Japanese traditio n. When No rth Am erican and Euro pean co m panies started
do ing business in Japan, mo st No rth American executives were no t aware o f the Japanese
traditio n o f exchanging gifts and wo ndered whether this was a fo rm o f bribery. Mo st have
co me to accept this traditio n no w and have even set different limits o n gift giving in
Japan fro m o ther co untries.96
In ano ther instance illustrating the differences between Asia and No rth America, a
manager o f a large US co mpany that o perates in China caught an emplo yee stealing.
Fo llo wing co mpany po licy, she fired the emplo yee and turned him o ver to the lo cal
autho rities fo r his act. Later she discovered, much to her ho rro r, that the fo rmer employee
had been executed fo r the theft.97 These examples indicate that standards fo r ethical
United Parcel Service (UPS) behavio ur and the co nsequences o f particular acts are no t universally similar. The fact
Canada
www.ups.com/canada/ that standards fo r ethical behavio ur and the co nsequences o f particular acts are no t
engindex.html universal presents a variety o f pro blems fo r tho se do ing business in o ther co untries.

United Parcel Service (UPS)

Canada, based in Fredericton,
New Brunsw ick, w ants to make
sure that its employees approach
ethical dilemmas w ith the confi-
dence to make the right decisions.
Therefore, the company conducts
an ethics training program for all
of its employees, from senior
managers to service providers.
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 319

Co mpanies o perating branches in fo reign co untries are faced with to ugh decisio ns
abo ut how to co nduct business under ethical standards that differ fro m tho se in Canada.
Fo r instance, Canadian co mpanies must decide whether they want to o perate in co un-
tries such as China, Burm a, and Nigeria, which abuse hum an rights. Altho ugh the
Canadian go vernment permits investing in these co untries, it also enco urages co mpa-
nies to act ethically.
While ethical standards may seem ambiguo us in the West, criteria defining right and
wro ng are actually much clearer in the West than in Asia. Jo hn McWilliams, senio r vice-
president, general co unsel, and secretary fo r Calgary-based Nexen, no tes that requests Nexen
fo r bribes are no t necessarily direct: “Usually, they do n’t say, ‘Give me X tho usands o f do l- www.nexeninc.com
lars and yo u’ve go t the deal.’ It’s a lo t mo re subtle than that.” 98 Michael Davies, vice-
president and general co unsel fo r Mississauga-based General Electric Canada, o ffers an General Electric Canada
example: “A payment [is] made to an administrative o fficial to do the jo b that he’s sup- www.ge.com/ca
po sed to do . In o ther wo rds, yo u pay a fello w o ver the co unter $10 when yo u’re in the
airpo rt in Saudi Arabia to get o n the flight yo u’re suppo sed to get o n, because, o therwise,
he’s go ing to keep yo u there fo r two days.”
Bribing fo reign public o fficials is widespread. The US go vernm ent repo rted that
between 1994 and 2001, bribery was unco vered in mo re than 400 co mpetitio ns fo r
internatio nal co ntracts.99 The need fo r glo bal o rganizatio ns to establish ethical prin-
ciples fo r decisio n makers in all co untries may be critical if high standards are to be
upheld and if co nsistent practices are to be achieved.

CORPORATE SOCIAL RESPONSIBILITY

In 1999 Nike gave a $7.7 million (US) grant to the International Youth Foundation (IYF) to estab-
lish an organization called the Global Alliance for Workers and Communities.10- Global Alliance,
founded to improve w orking conditions in overseas factories, has been critical of Nike, pub-
lishing a report in 2001 on abuses in Indonesian factories making Nike products. “ Verbal abuse
w as the most marked, w ith 30 percent of the w orkers having personally experienced and 56 per-
cent having observed the problem. An average of 7 percent of w orkers reported receiving
unw elcome sexual comments and 3 percent reported being physically abused,” the report said.
Nike admitted that it w as unaw are of these problems w hen the 2001 report w as published.
The company has since increased training for both managers and employees at its overseas
facilities to avoid some of the abuses in the factories, and a 2003 report noted significant
progress.101 M aria Eitel, the company’s vice-president for corporate responsibility, says: “ The fac-
tory managers are telling us that as they increase their w ork around social responsibility, they
are seeing improvements.” To w hat extent should companies be held socially responsible?

Co rpo rate so cial respo nsibility is defined as an o rganizatio n’s respo nsibility to co n- 7 What is corporate
sider the impact o f its decisio ns o n so ciety. Thus, o rganizatio ns may try to better so ci- social responsibility?
ety, thro ugh such things as charitab le co ntrib utio ns o r pro viding b etter wages to corporate social responsibility
emplo yees wo rking in o ffsho re facto ries. O rganizatio ns may engage in these practices An organization’s responsibility to
because they feel pressured by so ciety to do so , o r they may seek ways to impro ve so ci- consider the impact of its decisions
ety because they feel it is the right thing to do . on society.

Eighty percent o f Canadians feel that O ttawa sho uld establish standards fo r co rpo -
rate so cial respo nsibility and require co rpo ratio ns to repo rt o n ho w they are meeting
guidelines, acco rding to a recent survey.102 Many Canadian co mpanies are feeling the pres-
sure to demo nstrate so cial respo nsibility as well. The Enviro nics Gro up recently fo und
that 49 percent o f the 25 000 co nsumers interviewed wo rldwide made pro duct deci-
sio ns o n the basis o f co mpanies’ so cial respo nsibility.103 This exceeded the 40 percent
who made decisio ns based o n brand quality and reputatio n. Mo reo ver, 23 percent said
they had punished a co mpany in the previo us year fo r no t meeting what they tho ught
were its so cial o bligatio ns.
320 Part 4 Sharing t he Organizat ional Vision

No t everyo ne agrees with the po sitio n o f o rganizatio ns assuming so cial respo nsi-
bility. Fo r example, eco no mist Milto n Friedman remarked in Capitalism and Freedom
that “ few trends co uld so tho ro ughly undermine the very fo undatio ns o f o ur free so ci-
ety as the acceptance by co rpo rate o fficials o f a so cial respo nsibility o ther than to make
as much mo ney fo r their sto ckho lders as po ssible.” 104
Jo el Bakan, pro fesso r o f law at the University o f British Co lum bia, autho r o f The
Corporation, 105 and co -directo r o f the do cumentary o f the same name, is mo re critical o f
o rganizatio ns than Friedm an, tho ugh he finds that current laws suppo rt co rpo rate
behavio ur that so me might find tro ubling. Bakan suggests that to day’s co rpo ratio ns
have many o f the same characteristics as a psycho pathic perso nality ( self-interested,
lacking empathy, manipulative, and reckless in their disregard o f o thers) . Bakan no tes
that even tho ugh co mpanies have a tendency to act psycho pathically, this is no t why they
are fixated o n pro fits. Rather, the o nly legal respo nsibility co rpo ratio ns have is to max-
imize o rganizatio nal pro fits fo r sto ckho lders. He suggests mo re laws and mo re restraints
need to be put in place if co rpo ratio ns are to behave with mo re so cial respo nsibility, as
current laws direct co rpo ratio ns to be respo nsible to their shareho lders and make little
mentio n o f respo nsibility to ward o ther stakeho lders.
Interestingly eno ugh, a recent study sho ws that MBA students change their views
abo ut so cial respo nsibility during the co urse o f their pro gram .106 Students fro m 13
internatio nal business scho o ls, including the Richard Ivey Scho o l o f Business at the
University o f Western O ntario and the Schulich Scho o l o f Business at Yo rk University,
were asked at the beginning and the end o f their MBA pro grams abo ut their attitudes
to ward co rpo rate so cial respo nsibility. At the start o f their pro gram, 40 percent repo rted
that o ne o f the primary respo nsibilities o f a co mpany is to pro duce useful, high qual-
ity go o ds and services. By the time the students graduated, o nly 30 percent o f them
tho ught this was a valuable co rpo rate go al. Instead, 75 percent o f the students sug-
gested that a co mpany’s primary respo nsibility was to maximize shareho lder value.
So me Canadian co mpanies do practise so cial respo nsibility, however. Bo th Vanco uver-
based Vancity and Bo lto n, O ntario -based Husky Injectio n Mo lding Systems have “taken
co mprehensive steps to include custo mer, emplo yee, co mmunity and enviro nmental
Vancity co ncerns in bo th lo ng-term planning and day-to -day decisio n m aking.” 107 Vancity’s
www.vancity.com electro nic banking arm, Citizens Bank, has an “Ethical Po licy,” which states, fo r instance,
Husky Injection M olding that the bank is against excessive enviro nmental harm and will no t do business with co m-
Systems p anies that either vio late the fund am ental rights o f child ren o r are invo lved in
www.husky.ca
weapo ns.108 This chapter’s Case Incident— Syncrude Wants to Be a Good Neighbour o n
page 328 describes a so cially respo nsible appro ach to running a business lo cated near
an Abo riginal co mmunity. Fo r mo re o n the debate abo ut so cial respo nsibility vs. co n-
centrating o n the bo tto m line, see this chapter’s Point/Counterpoint o n page 324.

SUMMARY AND IMPLICATIONS

1 Is there a right w ay to make d ecisions? The ratio nal decisio n-making mo del
SNAPSHOT SUM M ARY
describes the six steps individuals take to make decisio ns: ( 1) Define the pro b-
lem, ( 2) identify the criteria, ( 3) allo cate weights to the criteria, ( 4) develo p alter-
1 How Should Decisions
Be M ade? natives, ( 5) evaluate the alternatives, and ( 6) select the best alternative. This is an
The Rational Decision- ideal mo del, and no t every decisio n tho ro ughly fo llo ws these steps.
Making Process
2 How d o people actually make d ecisions? Mo st decisio ns in the real wo rld do
no t fo llo w the ratio nal mo del. Fo r instance, peo ple are usually co ntent to find an
acceptable o r reaso nable so lutio n to their pro blem rather than an o ptimizing o ne.
Thus decisio n makers may rely o n bo unded ratio nality, satisficing, intuitio n, and
judgment sho rtcuts in making decisio ns.
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 321

3 What factors affect group d ecision making? Gro ups generate mo re co mplete
info rmatio n and kno wledge, they o ffer increased diversity o f views, they generate 2 How Do Individuals
Actually M ake
higher quality decisio ns, and they lead to increased acceptance o f a so lutio n.
Decisions?
Ho wever, gro up decisio ns are time-co nsuming. They also lead to co nfo rmity pres-
Problem Identification
sures, and the gro up discussio n can be do m inated by o ne o r a few m em bers.
Bounded Rationality in
Finally, gro up decisio ns suffer fro m ambiguo us respo nsibility, and the respo nsibility Considering Alternatives
o f any single member is watered do wn. Intuition
4 Should the lead er make the d ecision or encourage the group to participate? Judgment Shortcuts
The revised leader-participatio n mo del uses a decisio n tree to determine whether 3 Group Decision M aking
a leader sho uld make a decisio n alo ne o r inco rpo rate so me level o f gro up partic- Groups vs. the Individual
ipatio n. The majo r facto rs co nsidered in the mo del include the quality o f the deci- Groupthink and Groupshift
sio n required, the degree o f co mmitment needed fro m participants, and the time Group Decision-Making
available to make the decisio n. Techniques
5 How can w e get more creative d ecisions? While there is so me evidence that indi- 4 The Influence of the
viduals vary in their ability to be creative, we also kno w that individuals are mo re Leader on Group
creative when they are mo tivated by intrinsic interest, challenge, task satisfactio n, and Decision M aking
self-set go als. Five o rganizatio nal facto rs have been fo und that can blo ck creativity 5 Creativity in
at wo rk: ( 1) expected evaluation—fo cusing o n ho w wo rk is go ing to be evaluated; Organizational Decision
( 2) surveillance—being watched while wo rking; ( 3) external motivators—emphasiz- M aking
ing external, tangible rewards; (4) competition—facing win-lo se situatio ns with peers; Factors That Affect
Individual Creativity
and ( 5) constrained choice—being given limits o n ho w to do the wo rk.
Organizational Factors That
6 What is ethics and how can it b e used for b etter d ecision making? Ethics is the Affect Creativity
study o f mo ral values o r principles that guide o ur behavio ur and info rm us whether 6 What About Ethics in
actio ns are right o r wro ng. Ethical principles help us “do the right thing.” An indi- Decision M aking?
vidual can use four different criteria in making ethical choices. The first is the utilitarian Four Ethical Decision
criterio n, in which decisio ns are made so lely o n the basis o f their o utco mes o r co n- Criteria
sequences. The seco nd is rights; this ethical criterio n fo cuses o n respecting and pro - Factors That Influence
tecting the basic rights o f individuals. The third is justice; this ethical criterio n requires Ethical Decision-Making
Behaviour
individuals to impo se and enfo rce rules fairly and impartially so there is an equitable
Making Ethical Decisions
distributio n o f benefits and co sts. The fo urth is care; this ethical criterio n suggests
that we sho uld be aware o f the needs, desires, and well-being o f tho se to who m we
Organizational Response to
Demands for Ethical
are clo sely co nnected. There are advantages and disadvantages to each o f these criteria. Behaviour
7 What is corporate social responsib ility? Co rpo rate so cial respo nsibility is defined as What About National
an o rganizatio n’s respo nsibility to co nsider the impact o f its decisio ns o n so ciety. Thus,
Culture?
o rganizatio ns may try to better so ciety, thro ugh such things as charitable co ntributio ns 7 Corporate Social
o r providing better wages to employees wo rking in o ffsho re facto ries. O rganizatio ns Responsibility
may engage in these practices because they feel pressured by society to do so, or they may
seek ways to improve so ciety because they feel it is the right thing to do .
O B A T W O RK
For Review
1 . What is the rational decision-making model? Under w hat conditions is it applicable?

2. Describe organizational factors that might constrain decision makers.

3. What role does intuition play in effective decision making?

4. What is groupthink? What is its effect on decision-making quality?

5. What is groupshift? What is its effect on decision-making quality?

6 . Identify five organizational factors that block creativity at w ork.

7. Describe the four criteria that individuals can use in making ethical decisions.

8. Are unethical decisions more a function of the individual decision maker or the decision maker’s w ork environment?
Explain.

9. What is corporate social responsibility, and w hy do companies engage in it?

For Critical Thinking

1 . “ For the most part, individual decision making in organizations is an irrational process.” Do you agree or disagree?
Discuss.

2. What factors do you think differentiate good decision makers from poor ones? Relate your answ er to the six-step
rational decision-making model.

3. Have you ever increased your commitment to a failed course of action? If so, analyze the follow -up decision to
increase your commitment and explain w hy you behaved as you did.

4. If group decisions consistently achieve better-quality outcomes than those achieved by individuals, how did the
phrase “ a camel is a horse designed by a committee” become so popular and ingrained in our culture?

OB for You
■ In some decision situations, you might consider follow ing the rational decision-making model. This w ill ensure that you
examine a w ider variety of options before committing to a particular decision.

■ Analyze decision situations and be aw are of your biases. We all bring biases to the decisions w e make. Combine
rational analysis w ith intuition. As you gain experience, you should feel increasingly confident in using your intuition
w ith your rational analysis.

■ Use creativity-stimulation techniques. You can improve your overall decision-making effectiveness by searching for
innovative solutions to problems. This can be as basic as telling yourself to think creatively and to look specifically for
unique alternatives.

■ When making decisions, you should consider their ethical implications. A quick w ay to do this is to ask yourself: Would
I be embarrassed if this action w ere printed on the front page of the local new spaper?
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 323

O B A T W O RK

PO I N T CO U N TERPO I N T

O rganizatio ns Sho uld Just Enviro nmental

Stick to the Bo tto m Line Respo nsibility Is Part o f the
The major goals of organizations are and should be effi- Bo tto m Line
ciency, productivity, and high profits. By maximizing prof-
Going green makes good economic sense. The studies
its, businesses ensure that they w ill survive and thus make
reported in the Point argument tend to overstate the cost
it possible to provide employment. Doing so is in the best
of environmental regulations.112 They do not consider the
interests of the organization, employees, and stockhold-
benefits to society of those regulations.
ers. M oreover, it is up to individuals to show that they are
A closer look at a few companies that have devoted
concerned about the environment through their invest-
efforts to being more environmentally friendly w ill illus-
ment and purchasing activities, not for corporations to
trate the benefits of this approach. When the Quaker Oats
lead the w ay.
Company of Canada started w orking tow ard a “ greener”
Let’s examine some of the reasons w hy it is not eco-
w ork environment, its plant in Peterborough, Ontario,
nomically feasible to place all of the burden of protecting
saved more than $1 million in three years through various
the environment on the shoulders of big business.
environmental initiatives.113 As another example, Toronto-
Studies show that environmental regulations are too
based Inco spent $600 million to change the w ay it pro-
costly. The Conference Board of Canada has suggested
duces nickel at its Sudbury, Ontario, operations in order to
that environmental regulations cost Canadian companies
be less devastating to the local environment. Its smelting
$580 million to $600 million a year.109 The Fraser Institute
process is one of the most energy efficient and environ-
in Vancouver reported that all regulations, including those
mentally friendly in the w orld. Inco continues to w ork to
designed t o prot ect t he environment , cost Canadian
rest ore t he appearance of Sudbury. Trees have grow n
industry $103 billion a year.110 Environmental regulations
back, t he w ildlif e has ret urned, and t he air is clean.
can also be harmful to jobs. In British Columbia, the Forest
Sudbury has even been listed as one of the 10 most desir-
Practices Code is said to have added $1 billion a year to
able places to live in Canada. While Inco invested a lot of
harvesting costs and resulted in a number of job cuts.
money to change its production process, Doug Hamilton,
While businesses are concerned w ith the high cost that
controller at Inco’s Ontario division in Sudbury, has said,
results from environmental regulations, the general public
“ Our Sulphur Dioxide Abatement Program w as an aw e-
is not completely supportive of protecting the environ-
some undertaking. Not only did this investment allow us
ment either, particularly if it w ill inconvenience them.111
to capture 90 percent of the sulphur in the ore w e mine,
Companies w ould be better off sticking to the bottom
but the new processes save the company $90 million a
line, and governments should stay aw ay from imposing
year in production costs. That strikes me as a pretty smart
costly environmental regulations on business. Stringent
invest ment .” 114 London, Ont ario-based 3M Canada
environmental standards cause trade distortions, and gov-
started a Pollution Prevention Pays (3P) program more
ernments rarely consider the cost of complying w ith regu-
than 20 years ago.115 The program emphasizes stopping
lations. Companies should be allow ed to take their lead
pollution at the source to avoid the expense and effort of
from shareholders and customers. If these constituencies
cleaning it up or treating it after the fact. The recycling
w ant businesses to pay for environmental protection, they
program at 3M Canada’s tape plant in Perth, Ontario,
w ill indicate this by investing in firms that do so. Until
reduced its w aste by 96 percent and saved the company
they do, the cost of environmental legislation is simply
about $650 000 annually. The capital cost for the pro-
too high.
gram w as only $30 000.
The examples of Quaker Oats, Inco, and 3M show that
companies t hat are environment ally f riendly have an
advantage over their competitors. If organizations control
their pollution costs better than their competitors, they
w ill use t heir resources more eff icient ly and t heref ore
increase profitability.
324 Part 4 Sharing t he Organizat ional Vision

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE

Decisio n-Making Style Q uestio nnaire

Circle the response that comes closest to the w ay you usually feel or act. There are no right or w rong responses to any of
these items.

1 . I am more careful about

a. people’s feelings b . their rights

2. I usually get along better w ith

a. imaginative people b . realistic people

3. It is a higher compliment to be called

a. a person of real feeling b . a consistently reasonable person

4. In doing something w ith other people, it appeals more to me

a. to do it in the accepted w ay b . to invent a w ay of my ow n

5. I get more annoyed at

a. fancy theories b . people w ho do not like theories

6 . It is higher praise to call someone

a. a person of vision b . a person of common sense

7. I more often let

a. my heart rule my head b . my head rule my heart

8. I think it is a w orse fault

a. to show too much w armth b . to be unsympathetic

9. If I w ere a teacher, I w ould rather teach

a. courses involving theory b . factual courses

Which w ord in the follow ing pairs appeals to you more? Circle a or b .

1 0. a. Compassion b . Foresight
11 . a. Justice b . M ercy
1 2. a. Production b . Design
1 3. a. Gentle b . Firm
1 4. a. Uncritical b . Critical
1 5. a. Literal b . Figurative
16 . a. Imaginative b . M atter-of-fact

Scoring Key:
M ark each of your responses on the follow ing scales. Then use the point value column to arrive at your score. For example,
if you answ ered a to the first question, you w ould check 1a in the Feeling column. This response receives zero points w hen
you add up the point value column. Instructions for classifying your scores are indicated follow ing the scales.
 Chapt er 9 Decision M aking, Creat ivit y, and Et hics 325

O B A T W O RK

Point Point Point Point

Sensation Value Intuition Value Thinking Value Feeling Value

2b ________ 1 2a _________ 2 1b _________ 1 1a _________ 0

4a ________ 1 4b _________ 1 3b _________ 2 3a _________ 1

5a ________ 1 5b _________ 1 7b _________ 1 7a _________ 1

6b ________ 1 6a _________ 0 8a _________ 0 8b _________ 1

9b ________ 2 9a _________ 2 10b _________ 2 10a _________ 1

12a ________ 1 12b _________ 0 11a _________ 2 11b _________ 1

15a ________ 1 15b _________ 1 13b _________ 1 13a _________ 1

16b ________ 2 16a _________ 0 14b _________ 0 14a _________ 1

_____ _____ _____ _____

M aximum
Point Value (10) (7) (9) (7)

Circle Intuition if your Intuition score is equal to or greater than your Sensation score. Circle Sensation if your Sensation
score is greater than your Intuition score. Circle Feeling if your Feeling score is greater than your Thinking score. Circle
Thinking if your Thinking score is greater than your Feeling score.
A high score on Intuition indicates you see the w orld in holistic terms. You tend to be creative. A high score on Sensation
indicates that you are realistic and see the w orld in terms of facts. A high score on Feeling means you make decisions based
on gut feeling. A high score on Thinking indicates a highly logical and analytical approach to decision making.

Source: Based on a personality scale developed by D. Hellriegel, J. Slocum, and R. W. Woodman, Organizational Behavior, 3rd ed. (St. Paul, M N:
West Publishing, 1983), pp. 127–141, and reproduced in J. M . Ivancevich and M . T. M atteson, Organizational Behavior and M anagement, 2nd ed.
(Homew ood, IL: BPI/Irw in, 1990), pp. 538–539.

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Apply the rational decision-making model to deciding w here your group might eat dinner this evening. How closely
w ere you able to follow the rational model in making this decision?

2. The company that makes your favourite snack product has been accused of being w eak in its social responsibility
efforts. What impact w ill this have on your purchase of any more products from that company?

3. You have seen a classmate cheat on an exam or an assignment. Do you do something about this or ignore it?

W O RK I N G W I TH O T H ER S EX ERC I SE

The Lifebo at Exercise

1 . Your ship has crashed. Luckily your group has found a lifeboat. How ever there are 10 people w ho are currently sur-
rounding your lifeboat and asking to join you. Unfortunately, your lifeboat has room for only 3 additional people
beyond those in your group. (If you have 6 people in your group, your boat can fit 9, etc.)

continued
326 Part 4 Sharing t he Organizat ional Vision

O B A T W O RK

2. Here is w hat you know about the 10 people surrounding your lifeboat:

An elderly couple A doctor

A new lyw ed couple A naval officer

A 7-year-old child A man in his 30s

A minister A w ounded w oman

3. As a group, decide w hat to do w ith the 10 people. How w ould you arrive at your decision? What ethical criteria
w ould you use to make your decision?

Source: Unknow n.

ETH I C A L D I LEM M A EX ERC I SE

Five Ethical Decisio ns: What Wo uld Yo u Do ?

Assume you are a middle manager in a company w it h
about 1000 employees. How w ould you respond to each of
the follow ing situations?
1 . You are negotiating a contract w ith a potentially
very large customer w hose representative has
hinted that you could almost certainly be assured of
getting his business if you gave him and his w ife an
all-expenses-paid cruise to the Caribbean. You
know the representative’s employer w ould not
approve of such a “ payoff,” but you have the dis-
cretion to authorize such an expenditure. What
w ould you do?
2. You have the opportunity to steal $100 000 from
your company w ith absolute certainty that you
w ould not be detected or caught. Would you do it?
3. Your company policy on reimbursement for meals
w hile travelling on company business is that you w ill
be repaid for your out-of-pocket costs, w hich are
not to exceed $50 a day. You do not need receipts
for these expenses—the company w ill take your
w ord. When travelling, you tend to eat at fast-food
places and rarely spend more than $15 a day. M ost
of your colleagues submit reimbursement requests
in the range of $45 to $50 a day regardless of w hat
their actual expenses are. How much w ould you
request for your meal reimbursements?
4. You w ant to get feedback from people w ho are
using one of your competitor’s products. You
believe you w ill get much more honest responses
from these people if you disguise the identity of
your company. Your boss suggests you contact pos-
sible participants by using the fictitious name of the
Consumer M arketing Research Corporation. What
w ould you do?
5. You have discovered that one of your closest friends
at w ork has stolen a large sum of money from the
company. Would you do nothing? Go directly to an
executive to report the incident before talking about it
w ith the offender? Confront the individual before tak-
ing action? M ake contact w ith the individual w ith the
goal of persuading that person to return the money?
6 . You are in the process of hiring a new assistant, and
your number-one client in terms of dollar value in
sales has suggested that his sister-in-law w ould be
ideal for the job. You have interview ed her, but
believe that another candidate you interview ed is
better qualified. You are concerned that if you don’t
hire the client’s sister-in-law, how ever, you may lose
some or all of your client’s business.
Source: Several of these scenarios are based on D. R. Altany, “ Torn
Betw een Halo and Horns,” IndustryWeek, M arch 15, 1993, pp. 15–20.

CA S E I N C I D EN T
Syncrude Wants to Be a Good Neighbour
Fort M cM urray, Alberta-based Syncrude is “ the largest non-
governmental employer of Aboriginal people in Canada.”
The company, the largest producer of light sw eet crude oil
from oil sand, is strongly committed to w orking w ith the
Aboriginal communit y. According t o Syncrude’s w ebsit e,
“ Commitment to the Aboriginal people of our region is not
only motivated by our responsibility as a good corporate cit-
izen, but by our desire to be a good neighbour.”
In order to make sure that members of the Aboriginal
community are employable, Syncrude provides them w ith
skill training before they are even considered for hiring. This
makes it possible for Aboriginal people to compete for jobs
in t h e o il san d s in d u st ry o n an eq u al f o o t in g w it h
nonAboriginal people. Nora Flet t , Syncrude’s Aboriginal
development program coordinator, explains that companies
cannot just hire Aboriginal people directly w ithout training,
“ because you don’t just take someone from a small com-
munit y, put t hem in a big corporat ion environment and
expect that people w ill survive there, because that’s quite a
bit of a culture shock.”
In addition to being sensitive to the employment needs of
the Aboriginal community, Syncrude is committed to being
a good neighbour in the community. The company gives
CBC V I D EO CA SE I N C I D EN T
Corporate Espionage in the Canadian Airline Industry
Sneaky moves, claims of corporate espionage, and shred-
ded documents. This is not a fictitious spy thriller, but a true
story of rivalry in the Canadian airline business. The com-
panies involved are Air Canada, it s arch enemy West Jet
Airlines, and rival Jetsgo. All w ere locked in a ruthless bat-
tle for passengers.
The story began w hen one of the founders of WestJet,
M ark Hill, gained access to Air Canada’s protected w ebsite
through a passw ord from a former Air Canada employee. In
the w ebsite, Hill found information on Air Canada’s routes
and the number of passengers on planes.
This kind of corporate snooping happens a lot more than
people think, especially in high-tech firms, very competitive
industries, and industries that are at the cutting edge of
Chapt er 9 Decision M aking, Creat ivit y, and Et hics 327
O B A T W O RK
preference to local suppliers to help the local population
benefit economically from Syncrude’s presence. Syncrude
supports literacy programs for schools. As w ell, employment
co u n sello rs o f f er ad vice ab o u t t h e co m p an y, h elp in g
Aboriginal families learn about the company and w hat is
expected of its employees.
Q uestions
1 . What benefits do you think Syncrude might derive
from being a good neighbour in Fort M cM urray?
2. Should the company engage in practices that help
the Aboriginal community, even if it means that the
return to shareholders is not as large?
3. How does social responsibility explain w hat Syncrude
does?
Sources: A. Kellogg, “ Punch the Query ‘Canada’s Best M ajor
Corporate Citizen’ into Google on Your Computer and It’s Likely the
Image of Eric New ell W ill Pop Up,” Calgary Herald, November 30,
2003, p. C2; C. Petten, “ Syncrude, Cameco Strike Gold W ith PAR,”
Windspeaker, M arch 2002, pp. B7–B8; http://w w w.syncrude.com/
community/aboriginal.html; and http://w w w.syncrude.com/business/
business_04.html#4b.
development. “ Information is pow er,” Hill says. “ One of
the reasons w e w ere so successful is that w e knew more
about this business than the other discount airlines that
w ere trying to get going around this time,” he adds.
Air Canada might never have known that Hill had accessed
its protected w ebsite, except a w histle-blow er from WestJet
tipped Air Canada off. By the time he w as revealed, Hill had
accessed the w ebsite 243 000 times in less than a year.
In another tw ist in this tale, Air Canada sent private inves-
tigators to Hill’s home in Victoria, BC, to do a little digging
of their ow n. The investigators dumped all the shredded
paper in Hill’s garbage into their pickup truck, w hich caught
a neighbour’s attention. The neighbour informed the police
and Hill. A few w eeks later, the private investigators w ere
328 Part 4 Sharing t he Organizat ional Vision
O B A T W O RK
back for more garbage, but this time Hill w as ready for them,
w ith a camera. His pictures show ed up on the front page of
one of Canada’s national new spapers, proof of Air Canada’s
“ dumpster digging.”
After Air Canada pieced together the retrieved shredded
docum ent s, it launched a $220-m illion law suit against
WestJet, accusing it of a malicious attempt to take aw ay busi-
ness and schedule competing flights. WestJet responded w ith
a countersuit, accusing Air Canada of trespassing and steal-
ing private property. M ichel Leblanc, president of the dis-
count airline Jetsgo, claimed some of his company’s private
documents w ere also found in Hill’s garbage. Jetsgo filed a
law suit against WestJet for $50 million.
West Jet President Clive Beddoe event ually apologized
t o his em ployees and shareholders about t he sit uat ion.
Beddoe said, “ I have t o t ake responsibilit y f or t his event
as I should have know n w hat M ark Hill w as doing. Neither
I n o r t h e b o ard co n d o n e t h i s so r t o f act i vi t y. . . .
Furt hermore, w e have int roduced a new corporat e w his-
t le-blow ing policy . . . w e have no int ent ion of let t ing a
situation like this happen again.” Hill subsequently resigned
from the company.
Fr o m Co n ce p t s
t o Sk i l l s
So lving Pro blems Creatively
You can be more effective at solving problems creatively if
you use the follow ing 10 suggestions:117
1 . Think of yourself as creative. Research show s that if
you think you can’t be creative, you w on’t be.
Believing in your ability to be creative is the first step
to becoming more creative.
2. Pay attention to your intuition. Every individual has
a subconscious mind that w orks w ell. Sometimes
answ ers w ill come to you w hen you least expect
them. Listen to that “ inner voice.” In fact, most cre-
ative people w ill keep notepads near their beds and
w rite dow n ideas w hen the thoughts come to them.
3. M ove aw ay from your comfort zone. Every individ-
ual has a comfort zone in w hich certainty exists. But
creativity and the know n often do not mix. To be
creative, you need to move aw ay from the status
quo and focus your mind on something new.
By the end of M ay 2006, WestJet and Air Canada had
settled their dispute, w ith WestJet paying $5.5 million for Air
Canada’s investigation and legal fees, and $10 million to chil-
dren’s charities. Jetsgo filed for bankruptcy in M arch 2005.
Q uestions
1 . Using the four ethical decision-making criteria (utilitar-
ianism, rights, justice, and care), assess the ethics of
WestJet Airlines’ and Air Canada’s actions.
2. What w ere the factors influencing ethical or unethical
decision-making behaviour of the main characters in
this airline saga?
3. What could WestJet do to prevent this type of ruth-
less, corporate espionage behaviour in the future?
Sources: “ Corporate Espionage—Under the Radar,” CBC Venture,
October 31, 2004, VA2085A, 925; M . M cClearn, E. Pooley, and J.
Gray, “ Spy vs. Spy,” Canadian Business, January 31–February 13,
2005), pp. 32–45; and “ Air Canada, WestJet Settle Spying Law suit,”
CBC New s, M ay 30, 2006, http://w w w.cbc.ca/story/business/national/
2006/05/29/w estjet-aircansettle.html (accessed June 9, 2006).
4. Determine w hat you w ant to do. This includes such
things as taking time to understand a problem before
beginning to try to resolve it, getting all the facts in
mind, and trying to identify the most important facts.
5. Think outside the box. Use analogies w henever pos-
sible (e.g., could you approach your problem like a
fish out of w ater and look at w hat the fish does to
cope? Or can you use the things you have to do to
find your w ay w hen it’s foggy to help you solve your
problem?). Use different problem-solving strategies,
such as verbal, visual, mathematical, or theatrical.
Look at your problem from a different perspective
or ask yourself w hat someone else, like your grand-
mother, might do if faced w ith the same situation.
6 . Look for w ays to do things better. This may involve
trying consciously to be original, not w orrying about
looking foolish, keeping an open mind, being alert
to odd or puzzling facts, thinking of unconventional
continued

w ays to use objects and the environment, discard-
ing usual or habitual w ays of doing things, and
striving for objectivity by being as critical of your
ow n ideas as you w ould be of someone else’s.
7. Find several right answ ers. Being creative means
continuing to look for other solutions even w hen
you think you have solved the problem. A better,
more creative solution just might be found.
8. Believe in finding a w orkable solution. Like believ-
ing in yourself, you also need to believe in your
ideas. If you don’t think you can find a solution,
you probably w on’t.
9. Brainstorm w ith others. Creativity is not an isolated
activity. Bouncing ideas off of others creates a syn-
ergistic effect.
1 0. Turn creative ideas into action. Coming up w ith
creative ideas is only part of the process. Once the
ideas are generated, they must be implemented.
Keeping great ideas in your mind, or on papers
that no one w ill read, does little to expand your
creative abilities.
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
5. How Creative Am I?
20. What’s M y Decision-M aking Style?
22. How Do M y Ethics Rate?
Practising Skills
Every time the phone rings, your stomach clenches and
your palms start to sw eat. And it’s no w onder! As sales
Chapt er 9 Decision M aking, Creat ivit y, and Et hics 329
O B A T W O RK
manager for Brinkers, a machine tool parts manufacturer,
you are besieged by calls from customers w ho are upset
about late deliveries. Your boss, Carter Hererra, acts as
both production manager and scheduler. Every time your
sales representatives negotiate a sale, it’s up to Carter to
det erm ine w het her product ion can act ually m eet t he
delivery date the customer specifies. Carter invariably says,
“ No problem .” The good t hing about t his is t hat you
make a lot of initial sales. The bad new s is that production
hardly ever meets the shipment dates that Carter author-
izes. He doesn’t seem to be all that concerned about the
af t erm at h of lat e deliveries. He says, “ Our cust om ers
know they’re getting outstanding quality at a great price.
Just let them try to match that anyw here. It can’t be done.
So even if they have to w ait a couple of extra days or
w eeks, t hey’ re st ill get t ing t he best deal t hey can.”
Somehow the customers do not see it that w ay, and they
let you know about their unhappiness. Then it’s up to you
to try to smoothe over the relationship. You know this
problem has to be taken care of, but w hat possible solu-
tions are there? After all, how are you going to keep from
making your manager angry or making t he cust omers
angry? Use your know ledge of creative problem solving to
come up w ith solutions.
Reinforcing Skills
1 . Take 20 minutes to list as many medical or health-
care-related jobs as you can that begin w ith the let-
ter r (for instance, radiologist, registered nurse). If
you run out of listings before time is up, it’s OK to
quit early. But try to be as creative as you can.
2. List on a piece of paper some common terms that
apply to both w ater and finance. How many w ere
you able to come up w ith?
CH A PTER 10

Organizat ional
Cult ure and Change
How does a for-profit Crow n corporation w ith
a $7-million deficit get back in the black?
Changing its culture is part of the answ er.

What is the purpose of organizational

1 culture?

How do you create and maintain

2 organizational culture?

What kind of organizational culture

3 might suit you?

Can organizational culture have a

4 dow nside?

5 How do organizations manage change?

6 Why do people and organizations resist

change?
W
when David Dingw all w as appointed president
and CEO of the Ottawa-based Royal Canadian
M int in M arch 2003, the mint w as a for-profit
Crow n corporation that had a $7-million deficit.1 He
described the culture that led to this deficit: “ There w as
no discipline. There w as no focus. There w as no account-
ability and there w as no transparency.” He also noted
that there w as no urgency in w anting to help customers.
Dingw all noted that business processes “ w ere
essentially broken or non-existent. We had a very unprof-
itable jew ellery line business; I’m talking about high-end
jew ellery that you or I w ould not buy for our spouses
because w e’d have to mortgage our house. In our for-
eign circulation coin w e w ere floundering.” Dingw all
observed that the organization’s culture needed to be Ontario Superior Court judge, reported that as head of
changed if it w as to become a profitable business. the M int Dingw all “ had performed his job w ell.” What
Although Dingw all resigned amidst controversy in did Dingw all do to change the culture of the M int?
September 2005, he w as later cleared of w rongdoing. In this chapter, w e show that every organization has
M ost reports review ing his performance agreed that he a culture. We examine how that culture reveals itself
had significantly turned around the fortunes of the M int. and the impact it has on the attitudes and behaviours of
Auditor General Sheila Fraser, in her 2005 performance members of t hat organizat ion. An underst anding of
review of the M int, gave “ good marks to management w hat makes up an organization’s culture and how cul-
for introducing a ‘lean enterprise’ initiative to control ture is created, sustained, and learned enhances our
costs.” After completing a government-requested inves- ability to explain and predict the behaviour of people at
tigation in spring 2006 of the circumstances surrounding w ork. We also look at different approaches organiza-
Dingw all’s severance pay, George Adams, a ret ired tions take to managing change.

WHAT IS O RGANIZATIONAL CULTURE?

When Henry Mintzberg, pro fesso r at McGill University and o ne o f the wo rld’s leading 1 What is the purpose of
management experts, was asked to co mpare o rganizatio nal structure and co rpo rate cul- organizational culture?
ture, he said, “Culture is the so ul o f the o rganizatio n— the beliefs and values, and ho w
they are manifested. I think o f the structure as the skeleto n, and as the flesh and blo o d. Royal Canadian M int
And culture is the so ul that ho lds the thing to gether and gives it life fo rce.” 2 www.mint.ca
Mintzberg’s metapho r pro vides a clear image o f ho w to think abo ut culture. Culture Henry M intzberg
pro vides stability to an o rganizatio n and gives emplo yees a clear understanding o f “the www.henrymintzberg.com

O B IS FO R EV ERY O N E

What doe s organizational Is culture the same as What kind of Are the re positive
culture do? rule s? organizational culture approache s to change ?
would work be st for you?

How do you re spond to What make s organizations

change ? re sist change ?
331
332 Part 4 Sharing t he Organizat ional Vision

way things are do ne aro und here.” Culture sets the to ne fo r ho w o rganizatio ns o perate
and ho w individuals within the o rganizatio n interact. Think o f the different impres-
sio ns yo u have when a receptio nist tells yo u that “Ms. Dettweiler” will be available in a
mo ment, while at ano ther o rganizatio n yo u are to ld that “ Emma” will be with yo u as
so o n as she gets o ff the pho ne. It’s clear that in o ne o rganizatio n the rules are mo re
fo rmal than in the o ther.
As we discuss o rganizatio nal culture, yo u may want to remember that o rganizatio ns
differ co nsiderably in the cultures they ado pt. Co nsider the different cultures o f Calgary-
WestJet Airlines based WestJet Airlines and Mo ntreal-based Air Canada. WestJet is viewed as having a
www.westjet.com “yo ung, spunky, can-do enviro nment, where custo mers will have mo re fun.” 3 Air Canada,
Air Canada by co ntrast, is co nsidered less helpful and friendly. O ne analyst even suggested that Air
www.aircanada.com Canada staff “tend to make their custo mers feel stressed” by their co nfro ntatio nal behav-
io ur.4 O ur discussio n o f culture sho uld help yo u understand ho w these differences
acro ss o rganizatio ns o ccur.
Culture pro vides stability to an o rganizatio n and gives em plo yees a clear under-
standing o f “the way things are do ne aro und here.” It sets the to ne fo r how o rganizatio ns
o perate and ho w individuals within the o rganizatio n interact. Thus, it has an impact o n
the emplo yees who wo rk fo r the firm.
As yo u start to think abo ut different o rganizatio ns where yo u might wo rk, yo u will want
to co nsider their cultures. An o rganizatio n that expects employees to wo rk 15 ho urs a day
may no t be o ne in which yo u wo uld like to wo rk. An understanding o f culture might help
yo u disco ver the firm’s expectatio ns befo re yo u accept a jo b, o r it might help yo u under-
stand why yo u like ( o r do n’t like) the co llege o r university yo u attend.
Belo w, we pro po se a specific definitio n and review several issues that revo lve aro und
this definitio n. From Concepts to Skills o n pages 365–366 tells yo u ho w to read an o rga-
nizatio n’s culture. Yo u m ay want to co m plete the Learning About Yourself Exercise o n
page 361, which assesses whether yo u wo uld be mo re co mfo rtable in a fo rmal, rule-
o riented culture o r a mo re info rmal, flexible culture.

Definition of Organizational Culture

organizational culture The pat-
tern of shared values, beliefs, and
assumptions considered appropriate
for thinking and acting within an
organization.
Organizatio nal culture is the pattern o f shared values, beliefs, and assumptio ns co n-
sidered to be the appro priate way to think and act within an o rganizatio n. The key fea-
tures o f culture are as fo llo ws:
• Culture is shared by the members o f the o rganizatio n.

• Culture helps members o f the o rganizatio n so lve and understand the things
that the o rganizatio n enco unters, bo th internally and externally.

• Because the assumptio ns, beliefs, and expectatio ns that make up culture have
wo rked o ver time, members o f the o rganizatio n believe they are valid.
Therefo re, they are taught to peo ple who jo in the o rganizatio n.

• These assumptio ns, beliefs, and expectatio ns stro ngly influence ho w peo ple
perceive, think, feel, and behave within the o rganizatio n.5

No t every gro up develo ps a culture, altho ugh any gro up that has existed fo r a while
and has shared learnings will likely have a culture. Gro ups that experience high turno ver
( so that learnings are no t passed do wn to new members very effectively) and gro ups
that have no t experienced any challenging events may no t develo p cultures.

Levels of Culture
Because o rganizatio nal culture has m ultiple levels,6 the m etapho r o f an iceberg has
o ften been used to describe it.7 Ho wever, a simmering vo lcano may better represent
the layers o f culture: beliefs, values, assumptio ns bubble belo w the surface, pro ducing
 Chapter 1 0 Organizat ional Cult ure and Change 333

EXHIBIT 10-1 Layers of Culture

o bservable aspects o f culture at the surface. Exhibit 10-1 reminds us that culture is very
visible at the level o f artifacts . These are what yo u see, hear, and feel when yo u enco unter artifacts Aspects of an organiza-
an o rganizatio n’s culture. Yo u may no tice, fo r instance, that employees in two o ffices have tion’s culture that you see, hear, and
feel.
very different dress po licies, o r o ne o ffice displays great wo rks o f art while ano ther po sts
co mpany mo tto s o n the wall.
Exhibit 10-1 also sho ws us that beliefs, values, and assumptio ns, unlike artifacts, are
no t always readily o bservable. Instead, we rely o n the visible artifacts ( material sym- beliefs The understandings of how
bo ls, special language used, rituals carried o ut, and sto ries to ld to o thers) to help us objects and ideas relate to each
unco ver the o rganizatio n’s beliefs, values, and assum ptio ns. Beliefs are the under- other.
standings o f ho w o bjects and ideas relate to each o ther. Values are the stable, lo ng-last- values The stable, long-lasting
ing beliefs abo ut what is impo rtant. Fo r instance, Winnipeg-based Palliser Furniture, a beliefs about what is important.

M ontreal-based PEAK Financial

Group send employees to “ The
Academy,” an intensive three-day
orientation for all new hires.
Afterw ard, all employees join
together in a w elcome ceremony,
w here new employees are asked
to give a tw o-minute speech
telling w ho they are and w hy they
chose to w ork at PEAK. PEAK’s
programs make sure that employ-
ees feel part of the culture from
day one and feel comfortable
interacting one another. Here w e
see Robert Frances (right), presi-
dent and CEO, w elcoming a new
employee during a staff meeting.
334 Part 4 Sharing t he Organizat ional Vision

assumptions The taken-for-
granted notions of how something
should be.
manufacturer o f wo o den and upho lstered furniture, pro mo tes the fo llo wing co rpo rate
values: “demo nstrating integrity in all relatio nships, pro mo ting the dignity and value o f
each o ther, and striving fo r excellence.” 8 Assumptions are the taken-fo r-granted no tio ns
o f ho w so mething sho uld be. When basic assumptio ns are held by the entire gro up,
members will have difficulty co nceiving o f ano ther way o f do ing things. Fo r instance, in
Canada, so me students ho ld a basic assumptio n that universities sho uld no t co nsider
co sts when setting tuitio n but that they sho uld keep tuitio n low fo r greater access by stu-
dents. Beliefs, values, and assumptio ns, if we can unco ver them, help us understand
why o rganizatio ns do the things that we o bserve.

Characteristics of Culture
Research suggests that seven primary characteristics capture the essence o f an o rgani-
zatio n’s culture:9

• Innovation and risk-taking. The degree to which emplo yees are enco uraged to
be inno vative and take risks.
• Attention to detail. The degree to which emplo yees are expected to wo rk with
precisio n, analysis, and attentio n to detail.
• O utcome orientation. The degree to which management fo cuses o n results, o r
o utco mes, rather than o n the techniques and pro cesses used to achieve these
o utco mes.
• People orientation. The degree to which management decisio ns take into co n-
sideratio n the effect o f o utco mes o n peo ple within the o rganizatio n.
• Team orientation. The degree to which wo rk activities are o rganized aro und
teams rather than individuals.
• Aggressiveness. The degree to which peo ple are aggressive and co mpetitive
rather than easygo ing and suppo rtive.
• Stability. The degree to which o rganizatio nal activities emphasize maintaining
the status quo in co ntrast to gro wth.

Each o f these characteristics exists o n a co ntinuum fro m lo w to high. Fo r instance, the

Ro yal Canadian Mint, discussed in this chapter’s vignette, is high o n inno vatio n and
risk-taking, and high o n peo ple o rientatio n and team o rientatio n. But the Mint is lo w
o n stability, as its go al is to be able to mo ve quickly when o ppo rtunities arise.
When individuals consider their organizations according to these seven characteristics, they
get a co mpo site picture o f the o rganizatio ns’ culture. This picture beco mes the basis fo r feel-
ings o f shared understanding that members have abo ut the o rganizatio n, how things are
do ne in it, and the way members are suppo sed to behave. Exhibit 10-2 o n page 335 demo n-
strates how these characteristics can be mixed to create highly diverse o rganizatio ns.

Culture’s Functions
Culture perfo rms a number o f functio ns within an o rganizatio n:

• It has a bo undary-defining ro le because it creates distinctio n between o ne

o rganizatio n and o thers.

• It co nveys a sense o f identity to o rganizatio n members.

• It helps create co mmitment to so mething larger than
*organizational
What doe s
an individual’s self-interest.

culture do? • It enhances stability; it is the so cial glue that helps

ho ld the o rganizatio n to gether by pro viding appro pri-
ate standards fo r what emplo yees sho uld say and do .
 Chapter 1 0 Organizat ional Cult ure and Change 335

EXHIBIT 10-2 Contrasting Organizational Cultures

Organization A Organization B

• M an agers must f ully do cument • M an agement en cour ages and

all decisions.
• Creat ive decisions, ch ange, and risks
are not en cour aged.
• Ext ensive rules and regul at ions exist
f or all employees.
• Produ ct ivit y is valued over employee
mor ale.
• Employees are en cour aged t o st ay
w it hin t heir ow n dep art ment s.
• Individu al eff ort is en cour aged.
rew ards risk-t aking and ch ange.
• Employees are en cour aged t o
ìr un w it h ” ideas, and f ailures are
t reat ed as “learning experien ces. ”
• Employees h ave f ew rules and
regul at ions t o f ollow.
• Produ ct ivit y is bal an ced w it h t reat ing
it s people right .
• Team mem bers are en cour aged t o int er act
w it h people at all levels and f un ct ions.
• M any rew ards are t eam- based.

• It serves as a co ntro l mechanism that guides and shapes the attitudes and
behavio ur o f emplo yees, and helps them make sense o f the o rganizatio n.

This last functio n is o f particular interest to us.10 As the fo llo wing quo tatio n makes
clear, culture defines the rules o f the game:

Culture by definition is elusive, intangible, implicit, and taken for granted. But every
organization develops a core set of assumptions, understandings, and implicit rules that
govern day-to-day behaviour in the workplace. Until newcomers learn the rules, they are
not accepted as full-fledged members of the organization. Transgressions of the rules on
the part of high-level executives or front-line employees result in universal disapproval and
powerful penalties. Conformity to the rules becomes the primary basis for reward and
upward mobility. 11

The ro le o f culture in influencing emplo yee behavio ur appears to be increasingly

impo rtant in to day’s wo rkplace.12 As o rganizatio ns widen spans o f co ntro l, flatten struc-
tures, intro duce teams, reduce fo rmalizatio n, and empo wer emplo yees, the shared mean-
ing pro vided by a stro ng culture ensures that everyo ne is po inted in the same directio n.
Geo ffrey Relph, IBM Canada’s marketing directo r o f pro fessio nal services, co mpared
the culture o f his previo us co mpany ( GE Appliances in Lo uisville, Kentucky) with that
o f IBM: “The prio rities in GE are: ‘Make the financial co mmitments. Make the financial
co mmitments. Make the financial co mmitments.’ At IBM, the co mpany’s attentio n is IBM Canada
divided amo ng custo mer satisfactio n, employee mo rale, and po sitive financial results.” 13 www.ibm.com/ca/en/
These two cultures give emplo yees and managers different messages abo ut where they
sho uld direct their attentio n. Recent research suggests, mo reo ver, that emplo yees are
mo re likely to behave appro priately when there are clear no rms abo ut behavio ur, rather
than general guidelines, such as “ be ho nest.” 14
Culture can also influence peo ple’s ethical behavio ur. When lo wer-level emplo yees
see their managers padding expense repo rts, this sends a signal that the firm to lerates such
disho nest behavio ur. Firm s that em phasize individual sales reco rds m ay enco urage
unhealthy co mpetitio n amo ng sales staff, including “misplacing” pho ne messages and
no t being helpful to so meo ne else’s client. To ro nto -based GMP Securities, o n the o ther GM P Securities
hand, emphasizes the impo rtance o f a teamwo rk culture, so that individuals are no t www.gmpsecurities.com
co mpeting against o ne ano ther and engaging in questio nable activities. Fo unding part-
ner Brad Griffiths no tes that “ the co rpo rate culture is to make an enviro nment where
everybo dy feels they’re invo lved. We want to be successful, but no t at the expense o f
the individual.” 15 Fo r further discussio n o f the effect o f culture o n ethical behavio ur, see
this chapter’s Ethical Dilemma Exercise o n pages 362–363.
336 Part 4 Sharing t he Organizat ional Vision
dominant culture A system of
shared meaning that expresses the
core values shared by a majority of
the organization’s members.
subcultures Minicultures within
an organization, typically defined by
department designations and geo-
graphical separation.
core values The primary, or domi-
nant, values that are accepted
throughout the organization.
Do Organizations Have Uniform Cultures?
O rganizatio nal culture represents a co mmo n perceptio n held by the o rganizatio n’s mem-
bers. This was made explicit when we defined culture as a system o f shared meaning. We
sho uld expect, therefo re, that individuals with different backgro unds o r at different lev-
els in the o rganizatio n will tend to describe the o rganizatio n’s culture in similar terms.16
Ho wever, the fact that o rganizatio nal culture has co mmo n pro perties do es no t mean
that there canno t be subcultures within it. Mo st large o rganizatio ns have a do minant cul-
ture and numero us sets o f subcultures.17
A do minant culture expresses the co re values that are shared by a majo rity o f the
o rganizatio n’s members. When we talk abo ut an organization’s culture, we are referring
to its do minant culture. It is this macro view o f culture that gives an o rganizatio n its dis-
tinct perso nality.18 Subcultures tend to develo p in large o rganizatio ns to reflect co mmo n
pro blems, situatio ns, o r experiences that members face. These subcultures are likely to
be defined by department designatio ns and geo graphical separatio n.
An o rganizatio n’s purchasing department, fo r example, can have a subculture that is
unique to the members o f that department. It will include the core values —the primary,
o r do minant, values in the o rganizatio n—plus additio nal values unique to members o f
the purchasing department. Similarly, an o ffice o r unit o f the o rganizatio n that is phys-
ically separated fro m the o rganizatio n’s main o peratio ns may take o n a different per-
so nality. Again, the co re values are basically retained but mo dified to reflect the distinct
situatio n o f the separated unit.
If o rganizatio ns had no do minant culture and were co mpo sed o nly o f numero us
subcultures, the value o f o rganizatio nal culture as an independent variable wo uld be sig-
nificantly lessened. This is because there wo uld be no unifo rm interpretatio n o f what rep-
resented appro priate and inappro priate behavio ur. It is the “ shared meaning” aspect
o f culture that makes it such a po tent device fo r guiding and shaping behavio ur. That is
what allows us to say that Micro so ft’s culture values aggressiveness and risk-taking,19 and
then to use that info rmatio n to better understand the behavio ur o f Micro so ft execu-
tives and emplo yees. But we canno t igno re the reality that as well as a do minant culture,
m any o rganizatio ns have subcultures that can influence the behavio ur o f m em bers.
So me stro ng subcultures can even make it difficult fo r managers to intro duce o rgani-
zatio nal change. This so metimes happens in unio nized enviro nments, and can o ccur in
no nunio nized enviro nments as well. To learn mo re abo ut ho w to identify the culture o f
an o rganizatio n, see From Concepts to Skills o n pages 365–366.
CREATING AND SUSTAINING AN
O RGANIZATION ’S CULTURE
To address the problems of the culture he faced w hen he started at the Royal Canadian M int,
president and CEO David Dingw all needed to make a number of changes.20 He introduced a
lean enterprise model and a new management team, including a new chief financial officer as
w ell as a new vice-president of sales and marketing. He made $15 million in cuts, including get-
ting rid of the jew ellery business, reducing inventory by 50 percent and low ering travel and
advertising expenses. He also reduced the time it took to get a product to market from more
than 460 days to just 150, w ith the aim of becoming even faster in the future. To show that he
w as intent on creating a new culture, Dingw all involved employees in the changes. He encour-
aged them to help figure out how to create better w ork processes. Employees helped map
out the steps for change and then implemented them. Dingw all complimented the employees
on the job they did. “ We had inventory savings. We had time savings. We w ere able to redirect
some of our labour to other projects.”
 Chapter 1 0 Organizat ional Cult ure and Change 337

Dingw all recognized the importance of acknow ledging good performance from employees.
He w anted employees to meet customer demands quickly and efficiently. He suggested that the
old culture at the M int w as partially responsible for not encouraging new ideas and initiatives
by employees. “ One of the big things I found at the M int w as a real reluctance to celebrate,”
he said.
Dingw all gave each of his vice-presidents a budget for celebrating achievements. “ I am
sure there w as some celebration in the past, but now if you don’t have celebrations in your oper-
ations I w ant to know w hy. That is the difference.” In w hat other w ays might Dingw all have cre-
ated a high-performance culture at the M int?

An organization’s culture does not pop out of thin air. Once established, it rarely fades away. 2 How do you create and
Exhibit 10-3 summarizes ho w an o rganizatio n’s culture is established and sustained. The maintain organizational
o riginal culture derives fro m the fo under’s philo so phy. This in turn stro ngly influences the culture?
criteria used in hiring. The actio ns o f the current to p management set the general climate
o f what is acceptable behavio ur and what is no t. How employees are to be so cialized will
depend bo th o n the degree o f success an o rganizatio n achieves in matching new employ-
ees’ values to its o wn in the selectio n pro cess and o n to p management’s preference fo r
so cializatio n metho ds. We describe each part o f this pro cess belo w.

How a Culture Begins

An o rganizatio n’s current custo ms, traditio ns, and gen-
eral way o f do ing things largely o we to what it has do ne
befo re and ho w successful tho se previo us endeavo urs
* Is culture the same
as rules?
have been. This leads us to the ultimate so urce o f an o rga-
nizatio n’s culture: its fo unders.21
The fo unders traditio nally have a majo r impact o n that
o rganizatio n’s early culture. They have a visio n o f what
the o rganizatio n sho uld be. They are no t co nstrained by previo us custo ms o r ideo lo gies.
Because new o rganizatio ns are typically small, it is po ssible fo r the fo unders to impo se
their visio n o n all o rganizatio nal members.
A culture can be created in three ways.22 First, fo unders hire and keep o nly emplo yees
who think and feel the way they do . Seco nd, they indo ctrinate and so cialize these employ-
ees to their way o f thinking and feeling. Finally, the fo unders’ behavio ur acts as a ro le
mo del, enco uraging employees to identify with the fo unders and internalize tho se beliefs,
values, and assumptio ns. When the o rganizatio n succeeds, the fo unders’ visio n is seen as
a primary determinant o f that success. At that po int, the fo unders’ entire perso nality
beco mes embedded in the culture o f the o rganizatio n.
Fo r example, Micro so ft’s culture is largely a reflectio n o f its co -fo under, chair, and
chief so ftware architect ( and fo rmer CEO ) , Bill Gates. Gates is perso nally aggressive, Bill Gates, M icrosoft
co mpetitive, and highly disciplined. Tho se are the same characteristics o ften used to www.microsoft.com/billgates/
default.asp
describe the so ftware giant he fo unded. O ther co ntempo rary examples o f fo unders who

EXHIBIT 10-3 How Organizational Cultures Form

Top
Philosophy management
of Selection Organization's
organization's criteria culture
founders
Socialization
338 Part 4 Sharing t he Organizat ional Vision

IKEA f ounder Ingvar Kamprad

grew up in a poor farming area in
Sw eden w here people w orked
hard and lived frugally. He com-
bined t he lessons he learned
grow ing up w it h his vision of
helping people live a better life at
home by off ering t hem aff ord-
able, f unct ional, and w ell-
designed furniture. He named his
company IKEA by combining his
init ials plus t he f irst let t ers of
Elmt aryd and Agunnaryd, t he
farm and village w here he grew
up. The success of IKEA in
expanding t o more t han 220
stores in 35 countries stems from
Kamprad’s vision.

Ted Rogers, Rogers have had an immeasurable impact o n their o rganizatio ns’ cultures are Ted Ro gers o f
Communications To ro nto -based Ro gers Co m m unicatio ns, Frank Stro nach o f Auro ra, O ntario -based
www.rogers.com/english/
aboutrogers/historyofrogers/ Magna Internatio nal, Anita Ro ddick o f The Bo dy Sho p, and Richard Branso n o f the
index.html Virgin Gro up.

Keeping a Culture Alive

O nce a culture is in place, hum an reso urce practices within the o rganizatio n act to
maintain it by giving emplo yees a set o f similar experiences.23 Fo r example, the selec-
tio n pro cess, perfo rmance evaluatio n criteria, training and career develo pment activi-
ties, and pro m o tio n pro cedures ensure that new em plo yees fit in with the culture,
rewarding tho se who suppo rt it and penalizing ( even expelling) tho se who challenge
it. Three fo rces play a particularly impo rtant part in sustaining a culture: selection prac-
tices, the actio ns o f top management, and socialization metho ds. Let’s take a clo ser lo o k
at each.

Selectio n
The explicit go al o f the selectio n pro cess is to identify and hire individuals who have the
kno wledge, skills, and abilities to perfo rm the jo bs within the o rganizatio n success-
fully. Typically, mo re than o ne candidate will meet any given jo b’s requirements. The final
decisio n as to who is hired is significantly influenced by the decisio n maker’s judgment
o f ho w well each candidate will fit into the o rganizatio n. This attem pt to ensure a
pro per match, either deliberately o r inadvertently, results in the hiring o f peo ple who have
values co nsistent with tho se o f the o rganizatio n, o r at least a go o d po rtio n o f tho se
values.24
At the same time, the selectio n pro cess pro vides info rmatio n abo ut the o rganiza-
tio n to applicants. If they perceive a co nflict between their values and tho se o f the
o rganizatio n, they can remo ve themselves fro m the applicant po o l. Selectio n, there-
fo re, beco mes a two -way street, allo wing the emplo yer o r applicant to lo o k elsewhere if
there appears to be a mismatch. In this way, the selectio n pro cess sustains an o rgani-
zatio n’s culture by selecting o ut tho se individuals who might attack o r undermine its co re
values. OB in the Workplace shows how o ne co mpany’s use o f multiple interviews ensures
that applicants are right fo r the jo b.
 Chapter 1 0 Organizat ional Cult ure and Change 339

At Pret A M anger, a British sand-

w ich shop chain, job applicants
spend a t rial day w orking at a
shop, after w hich the shop’s team
of employees decide w hether the
applicant s w ould make good
additions to the staff.

O B I N T H E W O RK PL A C E

Surviving Procter & Gamble’s Intensive Screening Process

How d oes a company make sure an applicant is right for the job ? Applicants fo r
entry-level po sitio ns in brand management at ho useho ld pro ducts maker Pro cter &
Gamble ( P&G) mo ve thro ugh an exhaustive applicatio n and screening pro cess. Their
interviewers are part o f an elite gro up who have been selected and trained exten-
sively via lectures, video tapes, films, practice interviews, and ro le plays to identify
applicants who will successfully fit in at P&G. Applicants are interviewed in depth fo r
such qualities as their ability to “turn o ut high vo lumes o f excellent wo rk,” “identify
and understand pro blems,” and “reach tho ro ughly substantiated and well-reaso ned
co nclusio ns that lead to actio n.” P&G values ratio nality and seeks applicants who
demo nstrate that quality. University and co llege applicants have two interviews and
write a general-kno wledge test o n campus befo re being flo wn back to head o ffice
fo r three mo re o ne-o n-o ne interviews and a gro up interview at lunch. Each enco unter
seeks co rro bo rating evidence o f the traits that the firm believes co rrelate highly with
“ what co unts” fo r success at P&G.25

To p Management
The actio ns o f to p management also have a majo r impact o n the o rganizatio n’s cul-
ture.26 Thro ugh what they say and ho w they behave, senio r executives establish no rms
that filter do wn thro ugh the o rganizatio n. These no rms establish whether risk-taking is
desirable; ho w much freedo m managers sho uld give their emplo yees; what is appro -
priate dress; what actio ns will pay o ff in term s o f pay raises, pro m o tio ns, and o ther
rewards; and the like.
As we no ted earlier, managers at the Ro yal Canadian Mint didn’t seem to value cel-
ebrating emplo yees’ po sitive actio ns befo re David Dingwall to o k o ver. The manager o f
Sherato n Suites Calgary Eau Claire discovered how impo rtant changing the culture o f the
o rganizatio n was to impro ve its perfo rmance, as O B in the Workplace sho ws.
340 Part 4 Sharing t he Organizat ional Vision
Sheraton Suites Calgary
Eau Claire
www.sheratonsuites.com
socialization The process that
adapts new employees to an organi-
zation’s culture.
Sanyo Canada
www.sanyocanada.com
O B I N T H E W O RK PL A C E
Employees Have Feelings Too
Can a culture change help w ith turnover prob lems? Sherato n Suites Calgary Eau
Claire had turno ver pro blems almo st fro m the time it o pened.27 Tho ugh the ho tel
ranked third o ut o f 210 Sherato ns acro ss Canada in a 1999 custo m er satisfactio n
survey, its key emplo yees kept leaving.
General m anager Randy Zupanski wanted to im pro ve em plo yee m o rale and he
hired a co nsulting gro up to unco ver pro blems in the wo rkplace thro ugh a series o f
sem inars. The co nsultants unco vered interesting co ncerns. The ho tel m anagem ent
had fo cused o n team pro cess, enco uraging and rewarding team behavio ur. Ho wever,
the team culture was having a negative effect o n m any em plo yees. They did no t
feel that they were being reco gnized and rewarded fo r what they were do ing as
individuals.
Zupanski and his managers intro duced changes to the ho tel’s culture. They made
the reco gnitio n pro gram mo re perso nal, rewarding such things as attendance, per-
fo rmance, and extra wo rk. So me emplo yees received an extra day o ff with pay fo r
their hard wo rk.
The result, said the ho tel’s human reso urce manager, was an incredible change
in atmo sphere. Individual emplo yees felt less stressed and mo re rewarded, which
led to overall perfo rmance improvements by everyo ne. Custo mer satisfactio n improved
so much that the Eau Claire Sherato n received the Highest O verall Guest Satisfactio n
award amo ng 230 Sherato ns in No rth America in 2001, 2002, 2003, and 2004; it
was also named #1 Sherato n Wo rldwide Ho tel o f the Year in 2005. Zupanski no ted
that wo rking to gether to change the ho tel’s culture bro ught “us to gether and bro ught
trust and understanding into the team atmo sphere.”
The example o f Sherato n Suites Calgary Eau Claire shows that being aware o f how cul-
ture affects individual perfo rmance can help managers identify specific practices that lead
to po o r mo rale. Ho wever, we wo uld no t want to leave yo u with the impressio n that
changing culture is easy. In fact, it is a difficult pro cess. Fo r a specific example o f the
difficulties o f culture change, see Case Incident— EnCana’s New Culture Presents Challenges
o n the CD-RO M that acco mpanies this textbo o k. We discuss the pro cess o f changing cul-
ture later in this chapter.
So cializatio n
No matter ho w effectively the o rganizatio n recruits and selects new emplo yees, they
are no t fully trained in the o rganizatio n’s culture when they start their jo bs. Because
they are unfam iliar with the o rganizatio n’s culture, new em plo yees m ay disturb the
beliefs and custo m s that are in place. The o rganizatio n will, therefo re, want to help
new emplo yees adapt to its culture. This adaptatio n pro cess is called so cializatio n .28
New emplo yees at the Japanese electro nics co mpany Sanyo are so cialized thro ugh a
particularly lo ng training pro gram. At their intensive five-mo nth co urse, trainees eat
and sleep to gether in co mpany-subsidized do rms and are required to vacatio n to gether
at co mpany-o wned reso rts. They learn the Sanyo way o f do ing everything—fro m ho w to
speak to managers to pro per gro o ming and dress.29 The co mpany co nsiders this pro gram
essential fo r transfo rming yo ung emplo yees, fresh o ut o f scho o l, into dedicated kaisha
senshi, o r co rpo rate warrio rs.
 Chapter 1 0 Organizat ional Cult ure and Change 341

As we discuss so cializatio n, keep in m ind

EXHIBIT 10-4
that the new em plo yee’s entry into the o rgani-
zatio n is the m o st critical stage. This is when
the o rganizatio n seeks to m o uld the o utsider
into an em plo yee “ in go o d standing.” Tho se
em plo yees who fail to learn the essential ro le
behavio urs risk being labelled “no nco nfo rmists”
o r “ reb els,” which o ften leads to their b eing
fired. The o rganizatio n co ntinues to so cialize
every em plo yee, tho ugh m aybe no t as explic-
itly, thro ugho ut his o r her career in the o rgani-
zatio n. This further co ntrib utes to sustaining
the culture. ( So m etim es, ho wever, em plo yees
are no t fully so cialized. Fo r instance, yo u will
no te in Exhibit 10-4 that the carto o n em plo y-
ees had learned they were suppo sed to wear
c h ec kerb o ard c ap s to wo rk, b u t c learly Source: Draw ing by M ick Stevens in The New Yorker, October 3, 1994.
didn’t kno w why.) Copyright © 1994 by The New Yorker M agazine, Inc. Reprinted by permission.

MATCHING PEOPLE WITH

O RGANIZATIONAL CULTURES
There is no w a substantive bo dy o f evidence to demo nstrate that o rganizatio ns try to 3 What kind of
select new members who fit well with the o rganizatio ns’ cultures.30 Mo st jo b candi- organizational culture
dates similarly try to find o rganizatio ns where their values and perso nality will fit in. might suit you?
Research by Go ffee and Jo nes pro vides so me interesting insights o n different o rga-
nizatio nal cultures and guidance fo r pro spective emplo yees.31 They have identified fo ur
distinct cultural types. Let’s take a lo o k at their cultural framewo rk and ho w yo u can
use it to select an emplo yer where yo u will best fit.
Go ffee and Jo nes argue that two dimensio ns underlie o rganizatio nal culture. The
first is sociability. This is a measure o f friendliness. High so ciability means peo ple do
kind things fo r o ne ano ther witho ut expecting so mething in return and they relate to each
o ther in a friendly, caring way. In terms o f the characteristics o f o rganizatio nal culture
presented at the beginning o f this chapter, so ciability is co nsistent with a high peo ple
o rientatio n, high team o rientatio n, and fo cuses o n pro cesses rather than o utco mes.
The seco nd dimensio n is solidarity. It co nsiders the strength o f the gro up’s task o ri-
entatio n. High so lidarity means peo ple can o verlo o k perso nal biases and rally behind
co mmo n interests and co mmo n go als. Again, referring back to o ur earlier discussio n o f
the characteristics o f culture, so lidarity is co nsistent with high attentio n to detail and high
aggressiveness. Exhibit 10-5 o n page 342 illustrates a matrix with these two dimensio ns
rated as either high o r lo w. They create fo ur distinct cultural types:

• Networked culture ( high on sociability, low on solidarity) .

*organizational
What kind of O rganizatio ns with this type o f culture view mem-
bers as family and friends. Peo ple kno w and like
culture would work each o ther. Peo ple willingly give assistance to o thers
be st for you? and o penly share info rmatio n. The majo r do wnside
to this culture is that the fo cus o n friendships can
lead to a to lerance fo r po o r perfo rmance and cre-
atio n o f po litical cliques.
342 Part 4 Sharing t he Organizat ional Vision

EXHIBIT 10–5 Four-Culture Typology

High Net w orked Communal

So cia b ility
Low Fragment ed M ercenary

Low High

Soli d arity

Source: Adapted from R. Goffee and G. Jones, The Character of a Corporation: How Your Company’s
Culture Can M ake or Break Your Business (New York: HarperBusiness, 1998), p. 21.

Heineken Canada
www.heineken.com/canada
Unilever and Heineken are examples o f co mpanies with netwo rked cultures. Heineken,
fo r example, has mo re than 60 000 emplo yees but retains the feeling o f friendship and
fam ily m o re typical in sm all firm s. The co m pany’s highly so cial culture pro duces a
stro ng sense o f belo nging and o ften a passio nate identificatio n with its pro duct. Family
businesses can o ften have this type o f culture, altho ugh no t all family businesses wo uld
have a netwo rked culture.

• Mercenary culture ( low on sociability, high on solidarity) . O rganizatio ns with this

type o f culture are fiercely go al-fo cused. Peo ple are intense and determined to
meet go als. They have a zest fo r getting things do ne quickly and a po werful
sense o f purpo se. A mercenary culture is no t just abo ut winning; it is abo ut
destro ying the enemy. This fo cus o n go als and o bjectivity leads to a minimal
degree o f po liticking. The majo r do wnside to this culture is that it can lead to
an almo st inhumane treatment o f peo ple who are perceived as lo w perfo rmers.

M ars Incorporated Enro n, Mars, Campbell Co mpany o f Canada, and Ko matsu Canada ( the Japanese
www.mars.com heavy-equipment manufacturer) have classic mercenary cultures. At Virginia-based candy
manufacturer Mars, fo r instance, meetings are co ncerned almo st to tally with wo rk issues.
There is little to lerance fo r so cializing o r small talk.

• Fragmented culture ( low on sociability, low on solidarity) . O rganizatio ns with this

type o f culture are made up o f individualists. Co mmitment is first and fo re-
mo st to individual members and their jo b tasks. There is little o r no identifi-
catio n with the o rganizatio n. In a fragmented culture, emplo yees are judged
so lely o n their pro ductivity and the quality o f their wo rk. The majo r do wnside
to this culture is that it can lead to excessive critiquing o f o thers and an
absence o f co llegiality and co o peratio n. So me large acco unting and law firms
have this type o f culture.

Mo st to p-tier universities and so me large acco unting and law firms take o n the pro p-
erties o f fragmented cultures. Pro fesso rs at majo r universities, fo r instance, are judged o n
their research and scho larship. Senio r pro fesso rs with big reputatio ns do no t need to be
friendly to their peers o r attend so cial functio ns to retain their status. Sim ilarly, law
partners who bring in new clients and win cases need to expend little energy getting
to kno w co -wo rkers o r being visible in the o ffice.

• Communal culture ( high on sociability, high on solidarity) . O rganizatio ns with

this type o f culture value bo th friendship and perfo rmance. Peo ple have a feel-
ing o f belo nging, but there is still a ruthless fo cus o n go al achievement.
Hew lett-Packard Canada
www.hp.com/country/ca/en/
Leaders o f these cultures tend to be inspiratio nal and charismatic, with a clear
welcome.html visio n o f the o rganizatio ns’ future. The majo r do wnside to this culture is that
 Chapter 1 0 Organizat ional Cult ure and Change 343

it o ften co nsumes emplo yees’ lives. Its charismatic

leaders frequently expect to create disciples rather
than fo llo wers, resulting in a wo rk climate that is
almo st “cult-like.” Apple under Steve Jo bs, particularly
in its early years, is an example o f a co mmunal cul-
ture, as are Hewlett-Packard Canada, Jo hnso n &
Jo hnso n Canada, and co nsulting firm Bain &
Co mpany. HP histo rically has been large and very
go al-fo cused. Yet it is also a co mpany kno wn fo r its
stro ng family feel. The “ HP Way” is a set o f values the
co mpany has develo ped that go vern ho w peo ple
sho uld behave and interact with each o ther. The HP
Way’s value o f trust and co mmunity enco urages lo y-
alty to the co mpany. The co mpany returns that lo yalty
to emplo yees as lo ng as they perfo rm well. Many
start-ups exhibit a co mmunal culture. During the
height o f the do t-co m era, 20-so mething emplo yees
tho ught no thing o f wo rking aro und the clo ck, even
sleeping and eating at their wo rkplaces.
Ho w im p o rtant is the culture-p erso n fit? In a stud y o f
acco unting firms, new emplo yees who se perso nalities meshed
with the co mpany were 20 percent less likely to leave their jo bs
in the first three years than tho se who did no t fit as well.32 O B
in Action— Finding Your Culture pro vides a checklist to help yo u
find the culture in which yo u might be mo st co mfo rtable.
O B I N A CTI ON
Finding Your Culture
How do you know which culture is a good fit for you?
✔ You are cut out for a netw orked culture if
you possess good social skills and empathy; you
like to forge close, work-related friendships; you
thrive in a relaxed and convivial atmosphere;
and you are not obsessed with efficiency and
task performance.
✔ You are well matched to a mercenary culture
if you are goal-oriented, thrive on competition,
like clearly structured work tasks, enjoy risk-tak-
ing, and are able to deal openly with conflict.
✔ You are likely to fit in well in a fragmented
culture if you are independent, have a low
need to be part of a group atmosphere, are ana-
lytical rather than intuitive, and have a strong
sense of self that is not easily undermined by
criticism.
✔ You might fit in with a communal culture if
you have a strong need to identify with some-
thing bigger than yourself, enjoy working in
teams, and are willing to put the organization
above family and personal life.

THE LIABILITIES OF O RGANIZATIONAL CULTURE

When David Dingw all took over as president and CEO of the Royal Canadian M int, he faced a
large deficit and inefficient business processes.33 Dingw all recognized the need to streamline
the M int’s activities, but also knew that he might face great resistance by employees. The cul-
ture of the organization before he arrived w as generally accepted by the employees.
Dingw all knew that part of w hat he had to do to change the culture w as to get the employ-
ees onside w ith the changes. “ I gave a commitment to all of our employees that nobody, but
nobody, w ould lose their job as a result of the lean enterprise. And some of them didn’t believe
that, but w hen they saw that w e w ere w alking the w alk, that w e w eren’t laying people off as
a result of lean enterprise (practices), then it became more believable. We started to see the exhil-
aration from employees in terms of improving our processes,” he says.
At the end of 2004, just 20 months after Dingw all started, the M int w as set to have an
unprecedented good year. The Winnipeg plant doubled its staff during 2004, allow ing it to oper-
ate day and night. Revenue w as $330 million, considerably higher than the M int’s $250-million
revenue in 2003. Net income for 2004 was $13 million, wiping out the deficit Dingwall faced when
he started. How does culture affect an employee’s w illingness to contribute to the organization?

We have treated o rganizatio nal culture in a no njudgmental manner thus far. We have no t 4 Can organizational
said that it is go o d o r bad, o nly that it exists. Many o f its functio ns, as o utlined, are culture have a
valuable fo r bo th the o rganizatio n and the emplo yee. Culture enhances o rganizatio nal downside?
co mmitment and increases the co nsistency o f emplo yee behavio ur. These are clearly
benefits to an o rganizatio n. Fro m an emplo yee’s standpo int, culture is valuable because
it reduces ambiguity. It tells emplo yees ho w things are do ne and what is impo rtant.
However, we sho uld no t igno re the po tentially dysfunctio nal aspects o f culture, especially
o f a stro ng culture, o n an o rganizatio n’s effectiveness. Focus on Ethics discusses ho w
Enro n’s pressure-co o ker culture led to the co mpany’s ultimate co llapse.
344 Part 4 Sharing t he Organizat ional Vision

FO C U S O N E T H I C S

Pressure-Cooker Culture Leads to Enron’s Demise

Would employees know ingly d o w rong for their employer? “At Enro n, lo sers fell by
the wayside but victo rs stayed in the game,” wro te two Washington Post repo rters.34 The
“winner-take-all” culture demanded that emplo yees do whatever they co uld to make
Enro n’s sto ck price co ntinually rise. Executives thus to o k risks with investments and
acco unting pro cedures, inflating revenues and hiding debts. Tho se who co uld no t ( o r
wo uld no t) play this game were fo rced o ut. As the co mpany’s annual repo rt stated,
“ We insist o n results.”
“The driver was this unbelievable desire to keep po rtraying Enro n as so mething very,
very different and keep the track reco rd go ing and go ing,” said Fo rrest Ho glund, a fo r-
mer senio r manager.
Enro n’s culture set up an in-crowd and an o ut-crowd, and employees knew whether
they were “ in” o r “ o ut.” Everyo ne wanted to be liked in the o rganizatio n, acco rding
to Sally Iso n, ano ther emplo yee. “ Yo u do everything yo u can do to keep that.”
Emplo yees were even willing to blatantly ackno wledge they were do ing wro ng
amo ng themselves, acco rding to Margaret Ceco ni, a fo rmer Enro n Energy Services
( EES) manager, who was o nly briefly emplo yed by Enro n. After she was laid o ff, she
wro te a memo to Kenneth Lay, fo rmer chair o f Enro n, and pho ned federal regulato rs
twice. In her memo to Lay she said, “EES has knowingly misrepresented EES’ earnings,”
and, she added, “ This is co mmo n kno wledge amo ng all the EES emplo yees, and is
actually jo ked abo ut . . . [Enro n] must investigate all these go ings-o n.”

Enro n’s culture led its emplo yees to engage in vario us unethical acco unting practices.
Co nsistent with what happened at Enro n, recent research suggests that cultures that
stro ngly emphasize co mpetitio n can lead to negative o rganizatio nal co nsequences.35
We n o w co n sid er culture’s im p act o n ch an ge, d iversity, an d m ergers an d
acquisitio ns.

Culture as a Barrier to Change

Culture is a liability when the shared values do not agree with those that will further the orga-
nizatio n’s effectiveness. Employees are less likely to have shared values when the o rgani-
zatio n’s enviro nment is dynamic. When the enviro nment is undergo ing rapid change, the
o rganizatio n’s entrenched culture may no lo nger be appro priate. Co nsistency o f behavio ur
is an asset to an o rganizatio n when it faces a stable enviro nment. However, it may burden
the o rganizatio n and make it difficult to respo nd to changes in the enviro nment. Fo r many
o rganizatio ns with stro ng cultures, practices that led to previo us successes can lead to failure
when tho se practices no lo nger match up well with enviro nmental needs.36 When employ-
ees at the Royal Canadian Mint failed to act rapidly to create a co mmemo rative co in fo r
Canadian go lfer Mike Weir, then president and CEO David Dingwall felt this undersco red
the Mint’s reluctance to respond to a competitive environment. Consistent with this, research
shows that overly friendly cultures may prevent managers fro m making impo rtant strategic
decisio ns fo r fear o f harming relatio nships.37 This chapter’s Point/Counterpoint o n page 360
further explo res the questio n o f whether a culture can change.

Culture as a Barrier to Diversity

Hiring new emplo yees who , because o f race, gender, disability, o r o ther differences, are
no t like the majo rity o f the o rganizatio n’s members creates a parado x.38 Management
 Chapter 1 0 Organizat ional Cult ure and Change 345

wants the new emplo yees to accept the o rganizatio n’s co re cultural values. O therwise,
these emplo yees are unlikely to fit in o r be accepted. But at the same time, manage-
ment wants to o penly acknowledge and demo nstrate suppo rt fo r the differences that these
emplo yees bring to the wo rkplace.
Stro ng cultures put co nsiderable pressure o n emplo yees to co nfo rm. They limit the
range o f values and styles that are acceptable. It is no co incidence that emplo yees at
Disney theme parks appear to be almo st universally attractive, clean, and who leso me
lo o king, with bright smiles. That’s the image the Walt Disney Co mpany seeks. It selects The Walt Disney Company
employees who will maintain that image. Once the theme-park employees are o n the jo b, http://disney.go.com
a stro ng culture— suppo rted by fo rmal rules and regulatio ns— ensures that they will
act in a relatively unifo rm and predictable way.
A stro ng culture that igno res prejudice can even undermine fo rmal co rpo rate diver-
sity po licies. A widely publicized example is the Texaco case in the United States, which 1996 Texaco Discrimination
senio r managers made disparaging remarks abo ut mino rities and, as a result o f legal Case
www.courttv.com/archive/legaldocs/
actio n o n behalf o f 1400 employees, paid a settlement o f $246 millio n.39 O rganizatio ns business/texaco/
seek o ut and hire diverse individuals because o f the new strengths they bring to the
wo rkplace. Yet these diverse behavio urs and strengths are likely to diminish in stro ng cul-
tures as peo ple try to fit in. Stro ng cultures, therefo re, can be liabilities when they effec-
tively eliminate the unique strengths that peo ple o f different backgro unds bring to the
o rganizatio n. Mo reo ver, stro ng cultures can also be liabilities when they suppo rt insti-
tutio nal bias o r beco me insensitive to peo ple who are different.

Culture as a Barrier to M ergers and A cquisitions

Histo rically, the key facto rs that management lo o ked at in making merger o r acquisitio n
decisio ns were related to financial advantages o r pro duct synergy. In recent years, cultural
co mpatibility has beco me the primary co ncern.40 While a favo urable financial state-
ment o r pro duct line may be the initial attractio n o f an acquisitio n candidate, whether
the acquisitio n actually wo rks seems to have mo re to do with ho w well the two o rgan-
izatio ns’ cultures match up.
A number of mergers fail within the first several years, and the primary cause is often con-
flicting o rganizatio nal cultures.41 Even if mergers do no t fail, the impact o n emplo yees
can be devastating. Fo r instance, employees fro m Andersen Canada merged with To ro nto -
based Delo itte & To uche LLP Canada in June 2002, after they were basically fo rced o ut o f
work with little notice as the Enron scandal unfolded. Colin Taylor, CEO and managing part-
ner o f Delo itte in Canada, no ted that “given the circumstances, yo u have a lo t o f employ- Deloitte
ees wo rried, anxio us, traumatized even. They are in sho ck that a pro fessio nal service firm www.deloitte.com
o f this size wo uld have this happen to them so quickly.” 42 Andersen’s employees were no t
in a very go o d bargaining po sitio n when accepted into Delo itte. Unlike mergers where
the two merging o rganizatio ns fight o ver the name o f the new co mpany, and who gets
what titles, Andersen’s employees were co ncerned abo ut having any jo bs at all. This may
affect how co mfo rtable Andersen employees feel with the Delo itte culture as time passes.

Strategies fo r Merging Cultures

O rganizatio ns can use several strategies when co nsidering ho w to merge the cultures o f
two o rganizatio ns:43

• Assimilation. The entire new o rganizatio n is determined to take o n the culture

o f o ne o f the merging o rganizatio ns. This strategy wo rks best when o ne o f the
o rganizatio ns has a relatively weak culture. Ho wever, if a culture is simply
impo sed o n an o rganizatio n, it rarely wo rks.

• Separation. The o rganizatio ns remain separate, and keep their individual cul-
tures. This strategy wo rks best when the o rganizatio ns have little o verlap in
the industries in which they o perate.
346 Part 4 Sharing t he Organizat ional Vision
5 How do organizations
manage change?
change agents People who act as
catalysts and assume the responsibil-
ity for managing change.
Corporate Cuture M eets
G.A.P. Adventures
• Integration. A new culture is fo rmed by merging parts o f each o f the o rganiza-
tio ns. This strategy wo rks best when aspects o f each o rganizatio n’s culture
need to be impro ved.
While an integratio n strategy m ay take a lo t o f wo rk, it can pay o ff, as O B in the
Workplace sho ws.
O B I N T H E W O RK PL A C E
Agrium Creates Its Ow n Culture Through Blending
Can an organization successfully merge many companies together? Calgary-based
Agrium, a fertilizer pro ducer with pro ductio n plants in Canada, the United States, and
Argentina, grew aggressively during the 1990s thro ugh a series o f mergers and acqui-
sitio ns, which included co m panies such as Western Farm Services and Nu-West
Industries.44 Agrium grew o ut o f the fertilizer divisio n o f Vanco uver-based Co minco
( no w Teck Co minco ) , and then abso rbed fertilizer divisio ns and spin-o ff co mpa-
nies fro m the mining and o il-and-gas industries, including Esso , Sherritt, and Uno cal.
Since Agrium is the result o f multiple mergers o f co mpanies, emplo yees created a
rule that if anyo ne mentio ns a fo rmer emplo yer, he o r she must co ntribute mo ney to
a fund. The fund is used fo r a “ team-building event,” in which emplo yees go o ut
to gether fo r lunch o r dinner.
CEO Michael Wilso n’s explanatio n o f the co mpany’s appro ach to merging cul-
tures suggests that Agrium has used an integratio n strategy. “ We take the best o f the
mining culture, which is very pro active, decisive, willing to act, willing to take appro -
priate risks . . . We blend it with the o il-and-gas culture [which is] very tho ro ugh in its
analysis, in do tting o f the i’s and cro ssing o f the t’s, in making sure everyo ne’s march-
ing at the same pace.” Wilso n adds the culture o f Do w Chemicals to the mix, where
he wo rked fo r 18 years and learned “ ho w to build co llabo ratio n acro ss very stro ng
business units, ho w to get results when yo u do n’t have full acco untability.”
Agrium has perfo rmed well in recent years, and Wilso n sees this as a measure o f
a successful o rganizatio nal culture. However, he believes that success is mo re than just
earnings: “ I have a saying, ‘Yo u have to be happy, healthy, and wise,’ in that o rder.”
Wilso n go es o n to say, “There’s no thing nicer than when yo u’re at a co nventio n with
all yo ur co mpetitio n. And yo u lo o k o ver yo ur team, it’s the bo tto m o f the cycle, busi-
ness is to ugh, and they’re smiling. And yo u lo o k o ver to the co mpetitio n and they’re
all depressed because business is to ugh. And that’s o ne measure right there: Is yo ur
team happy?”
APPROACHES TO MANAGING CHANGE
O ur discussio n o f o rganizatio nal culture as well as the issues that arise when o rgani-
zatio ns merge leads to a fundamental questio n fo r all o rganizatio ns: Ho w can change
be managed? Belo w we co nsider several appro aches to managing change: Lewin’s clas-
sic three-step mo del o f the change pro cess, Ko tter’s eight-step plan fo r implementing
change, actio n research, and appreciative inquiry. We sho uld also no te that recent
research emphasizes the need in change pro cesses to manage the “hard stuff” as well as
the “ so ft,” o r peo ple, issues in o rder to be successful.45
Who is respo nsible fo r managing change in an o rganizatio n? The answer is change
agents .46 Change agents can be managers o r no nmanagers, emplo yees o f the o rgani-
zatio n, o r o utside co nsultants. This chapter’s CBC Video Case Incident examines ho w a
co mpany intro duced and managed change.
 Chapter 1 0 Organizat ional Cult ure and Change 347

EXHIBIT 10-6 Lew in’s Three-Step Change M odel

Unfreezing M oving Refreezing

Lew in’s Three-Step M od el

Assuming that an o rganizatio n has unco vered a need fo r change, ho w do es it engage in
the change pro cess? Kurt Lewin argued that successful change in o rganizatio ns sho uld
fo llo w three steps, which are illustrated in Exhibit 10-6: unfreezing the status quo , unfreezing Change efforts to
moving to a new state, and refreezing the new change to make it permanent. The value 47 overcome the pressures of both indi-
o f this mo del can be seen in the fo llo wing example, where the management o f a large vidual resistance and group con-
formity.
co mpany decided to reo rganize its marketing functio n in Western Canada.
The o il co mpany had three regio nal o ffices in the West, lo cated in Winnipeg, Calgary, moving Efforts to get employees
and Vanco uver. The decisio n was made to co nso lidate the marketing divisio ns o f the three involved in the change process.

regio nal o ffices into a single regio nal o ffice to be lo cated in Calgary. The reo rganiza- refreezing Stabilizing a change
tio n meant transferring mo re than 150 emplo yees, eliminating so me duplicate mana- intervention by balancing driving
gerial po sitio ns, and instituting a new hierarchy o f co mmand. As yo u might guess, such and restraining forces.

a huge mo ve was difficult to keep secret. The rumo urs preceded the anno uncement by
several mo nths. The decisio n itself was made unilaterally. It came fro m the executive
o ffices in To ro nto . Tho se peo ple affected had no say whatso ever in the cho ice. Fo r any-
o ne in Vanco uver o r Winnipeg who m ight have disliked the decisio n and its co nse-
quences— the pro blems invo lved in transferring to ano ther city, pulling yo ungsters o ut
o f scho o l, making new friends, having new co -wo rkers, undergo ing the reassignment o f
respo nsibilities— the o nly reco urse was to quit. The status quo was abo ut to change.
The status quo can be co nsidered an equilibrium state. To mo ve fro m this equilib-
rium — to o verco m e the pressures o f bo th individual resistance and gro up co nfo rm -
ity— unfreezing is necessary. Exhibit 10-7 sho ws that unfreezing can o ccur in o ne o f
three ways. The driving forces , which direct behavio ur away fro m the status quo , can be driving forces Forces that direct
increased. The restraining forces, which hinder movement fro m the existing equilibrium, behaviour away from the status quo.
can be decreased. A third alternative is to combine the first two approaches. restraining forces Forces that
The o il co mpany’s management expected emplo yee resistance to the co nso lidatio n hinder movement away from the
and o utlined its alternatives. Management co uld use po sitive incentives to enco urage status quo.
emplo yees to accept the change. Fo r instance, the co mpany co uld o ffer pay increases
to tho se who accept the transfer. It co uld also o ffer to pay all m o ving expenses.
Managem ent m ight o ffer lo w-co st m o rtgage funds to allo w em plo yees to buy new
ho mes in Calgary. O f co urse, management might also co nsider
unfreezing acceptance o f the status quo by removing restraining
EXHIBIT 10-7 Unfreezing the Status Quo
fo rces. Em plo yees co uld b e co unselled individually. Each
em plo yee’s co ncerns and apprehensio ns co uld be heard and
Desired
specifically clarified. Assuming that mo st o f the fears are unjus- st at e
tified, the co unsello r co uld assure the emplo yees that there was Rest r aining
f or ces
no thing to fear and then dem o nstrate, thro ugh tangible evi-
dence, that restraining fo rces are unwarranted. If resistance is
St at us
extremely high, management may have to reso rt to bo th reduc-
quo
ing resistance and increasing the attractiveness o f the alternative
so the unfreezing can succeed.
Driving
O nce the co nso lidatio n change has been implemented, if it f or ces
is to be successful, the new situatio n must be refro zen so that it
can be sustained over time. Unless this last step is taken, there is Time
a very high chance that the change will be sho rt-lived and that
348 Part 4 Sharing t he Organizat ional Vision

emplo yees will try to revert to the previo us state o f equilibrium. The o bjective o f refreez-
ing, then, is to stabilize the new situatio n by balancing the driving and restraining fo rces.
How co uld the o il co mpany’s management refreeze its co nso lidatio n change? It co uld
systematically replace tempo rary fo rces with permanent o nes. Fo r instance, management
might impo se a new bo nus system tied to the specific changes desired. The fo rmal rules
and regulatio ns governing behavio ur o f tho se affected by the change co uld also be revised
to reinfo rce the new situatio n. O ver time, o f co urse, the wo rk gro up’s o wn no rms will
evo lve to sustain the new equilibrium. But until that po int is reached, management will
have to rely o n mo re fo rmal mechanisms. The Working W ith O thers Exercise o n page 360
gives yo u the o ppo rtunity to identify driving and restraining fo rces fo r ano ther co mpany
experiencing pro blems with change and to make so me reco mmendatio ns fo r change.
A key feature o f Lewin’s three-step mo del is its co nceptio n o f change as an episo dic
activity, with a beginning, a middle, and an end. Ho wever, the structure o f to day’s wo rk-
places requires change to take place as an o ngo ing, if no t chao tic, pro cess. Certainly
the adjustment that co mpanies have made to the realities o f e-co mmerce indicates a
mo re chao tic change, rather than a co ntro lled and planned change.

Kotter’s Eight-Step Plan for Implementing Change

Jo hn Ko tter, pro fesso r o f leadership at Harvard Business Scho o l, built o n Lewin’s three-
step mo del to create a mo re detailed appro ach fo r implementing change.48
Ko tter began by listing co mmo n failures that o ccur when managers try to initiate
change. These include the inability to create a sense o f urgency abo ut the need fo r
change; failure to create a co alitio n fo r managing the change pro cess; the absence o f a
visio n fo r change and to effectively co mmunicate that visio n; no t removing o bstacles that
co uld impede the achievement o f the visio n; failure to pro vide sho rt-term and achiev-
able go als; the tendency to declare victo ry to o so o n; and no t ancho ring the changes in
the o rganizatio n’s culture.
Ko tter then established eight sequential steps to o verco me these pro blems. These
steps are listed in Exhibit 10-8.
No tice ho w Exhibit 10-8 builds o n Lewin’s mo del. Ko tter’s first fo ur steps essentially
represent the “ unfreezing” stage. Steps 5 thro ugh 7 represent “ mo ving.” The final step
wo rks o n “ refreezing.” Ko tter’s co ntributio n lies in pro viding m anagers and change
agents with a mo re detailed guide fo r implementing change successfully.

EXHIBIT 10-8 Kotter’s Eight-Step Plan for Implementing Change

1. Establish a sense of urgency by creating a compelling reason for w hy change is needed.

2. Form a coalition w ith enough pow er to lead the change.

3. Create a new vision to direct the change and strategies for achieving the vision.

4. Communicate the vision throughout the organization.

5. Empow er others to act on the vision by removing barriers to change and encouraging risk-taking and creative
problem solving.

6. Plan for, create, and rew ard short-term “ w ins” that move the organization tow ard the new vision.

7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs.

8. Reinforce the changes by demonstrating the relationship betw een new behaviours and organizational success.

Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996).
 Chapter 1 0 Organizat ional Cult ure and Change 349

A ction Research
Action research refers to a change pro cess based o n the systematic co llectio n o f data and action research A change
then selectio n o f a change actio n based o n what the analyzed data indicate.49 The process based on the systematic
collection of data and then selection
impo rtance o f this appro ach is that it provides a scientific metho d fo r managing planned
of a change action based on what
change.
the analyzed data indicate.
The pro cess o f actio n research, carried o ut by a change agent, co nsists o f five steps:

1. Diagnosis. The change agent gathers info rmatio n abo ut pro blems, co ncerns,
and needed changes fro m members o f the o rganizatio n by asking questio ns,
reviewing reco rds, and listening to the co ncerns o f emplo yees.

2. Analysis. The change agent o rganizes the info rmatio n gathered into primary
co ncerns, pro blem areas, and po ssible actio ns.

3. Feedback. The change agent shares with emplo yees what has been fo und dur-
ing diagno sis and analysis. The emplo yees, with the help o f the change agent,
develo p actio n plans fo r bringing abo ut any needed change.

4. Action. The emplo yees and the change agent carry o ut the specific actio ns to
co rrect the pro blems that have been identified.

5. Evaluation. The change agent evaluates the actio n plan’s effectiveness, using
the data gathered initially as a benchmark.

Actio n research pro vides at least two specific benefits fo r an o rganizatio n. First, it is
pro blem -fo cused. The change agent o bjectively lo o ks fo r pro blem s and the type o f
pro blem determines the type o f change actio n. While this may seem intuitively o bvio us,
a lo t o f change activities are no t do ne this way. Rather, they are so lutio n-centred. The
change agent has a favo urite so lutio n— fo r example, implementing flextime, teams, o r
a pro cess re-engineering pro gram—and then seeks o ut pro blems that his o r her so lutio n
fits. Seco nd, because actio n research so heavily invo lves emplo yees in the pro cess, resist-
ance to change is reduced. In fact, o nce em plo yees have actively participated in the
feedback stage, the change pro cess typically takes o n a m o m entum o f its o wn. The
emplo yees and gro ups that have been invo lved beco me an internal so urce o f sustained
pressure to bring abo ut the change.

Appreciative Inquiry
Mo st o rganizatio nal change appro aches start fro m a neg-
ative perspective: The o rganizatio n has pro blems that need
* Are the re positive
approache s to
so lutio ns. Appreciative inquiry accentuates the po si-
tive. 50 Rather than lo o king fo r p ro b lem s to fix, this
appreciative inquiry An approach
to change that seeks to identify the
change ? appro ach seeks to identify the unique qualities and special unique qualities and special strengths
of an organization, which can then be
strengths o f an o rganizatio n, which can then be built o n
built on to improve performance.
to impro ve perfo rmance. That is, it fo cuses o n an o rgani-
zatio n’s successes rather than o n its pro blems.
Advo cates o f appreciative inquiry argue that pro blem-so lving appro aches always ask
peo ple to lo o k backward at yesterday’s failures, to fo cus o n sho rtco m ings, and they
rarely result in new visio ns. Instead o f creating a clim ate fo r po sitive change, actio n
research and o rganizatio nal develo pm ent ( O D) techniques such as survey feedback
and pro cess co nsultatio n end up placing blame and generating defensiveness. Pro po nents
o f appreciative inquiry claim it makes mo re sense to refine and enhance what the o rgan-
izatio n is already do ing well. This allo ws the o rganizatio n to change by playing to its
strengths and co mpetitive advantages.
350 Part 4 Sharing t he Organizat ional Vision

The appreciative inquiry pro cess essentially co nsists o f fo ur steps, o r “Fo ur D ’s,” o ften
played o ut in a large-gro up meeting o ver a two - o r three-day time perio d, and o verseen
by a trained change agent:

• Discovery. The idea is to find o ut what peo ple think are the strengths o f the
o rganizatio n. Fo r instance, emplo yees are asked to reco unt times they felt the
o rganizatio n wo rked best o r when they specifically felt mo st satisfied with
their jo bs.

• Dreaming. The info rmatio n fro m the disco very phase is used to speculate o n
po ssible futures fo r the o rganizatio n. Fo r instance, peo ple are asked to envi-
sio n the o rganizatio n in five years and to describe what is different.

• Design. Based o n the dream articulatio n, participants fo cus o n finding a co m-

mo n visio n o f ho w the o rganizatio n will lo o k and agree o n its unique qualities.

• Destiny. In this final step, participants discuss ho w the o rganizatio n is go ing to

fulfill its dream. This typically includes the writing o f actio n plans and the
develo pment o f implementatio n strategies.

Appreciative inquiry has pro ven an effective change strategy in o rganizatio ns such as
To ro nto -based O rchestras Canada, Ajax, O ntario -based No kia Canada, Burnaby, BC-
based TELUS, Calgary-based EnCana, and To ro nto -based CBC.
The use o f appreciative inquiry in o rganizatio ns is relatively recent, and it has no t yet
b een determ ined when it is m o st appro priately used fo r o rganizatio nal change. 51
Ho wever, it do es give us the o ppo rtunity o f viewing change fro m a much mo re po sitive
perspective.

6 Why do people and
organizations resist
change?
RESISTANCE TO CHANGE
One o f the mo st well-do cumented findings fro m studies o f individual and o rganizatio nal
behavio ur is that o rganizatio ns and their members resist change. In a sense, this is po s-
itive. It pro vides a degree o f stability and predictability to behavio ur. If there were no
resistance, o rganizatio nal behavio ur wo uld take o n characteristics o f chao tic rando m-
ness. Resistance to change can also be a so urce o f functio nal co nflict. Fo r exam ple,
resistance to a reo rganizatio n plan o r a change in a pro duct line can stimulate a healthy
debate o ver the merits o f the idea and result in a better decisio n. Ho wever, there is a def-
inite do wnside to resistance to change: It hinders adaptatio n and pro gress.
Resistance to change do es no t necessarily surface in standard ways. Resistance can be
overt, implicit, immediate, o r deferred. It is easiest fo r management to deal with resistance
when it is overt and immediate. Fo r instance, a change is pro po sed, and employees respo nd
immediately by vo icing co mplaints, engaging in wo rk slo wdo wns, threatening to go o n
strike, o r the like. The greater challenge is managing resistance that is implicit o r deferred.
Implicit resistance effo rts are mo re subtle— lo ss o f lo yalty to the o rganizatio n, lo ss o f
mo tivatio n to wo rk, increased erro rs o r mistakes, increased absenteeism due to “sick-
ness”—and hence mo re difficult to reco gnize. Similarly, deferred actio ns clo ud the link
between the so urce o f resistance and the reactio n to it. A change m ay pro duce what
appears to be o nly a minimal reactio n at the time it is initiated, but then resistance surfaces
weeks, mo nths, o r even years later. O r a single change that in and o f itself might have
little impact beco mes the straw that breaks the camel’s back. Reactio ns to change can
build up and then explo de in so me respo nse that seems to tally o ut o f pro po rtio n to the
change actio n it fo llows. The resistance, o f co urse, has merely been deferred and sto ckpiled.
What surfaces is a respo nse to the accumulatio n o f previo us changes.
Let’s lo o k at the so urces o f resistance. Fo r analytical purpo ses, we have catego rized them
as individual and o rganizatio nal so urces. In the real wo rld, the so urces o ften overlap.
 Chapter 1 0 Organizat ional Cult ure and Change 351

Ind ivid ual Resistance

Individual so urces o f resistance to change reside in basic
human characteristics such as perceptio ns, perso nalities,
and needs. This chapter’s Case Incident— GreyStar Art &
*re spond
How do you
to change ? Greetings Makes Technological Changes o n page 361 lo o ks
at an individual who resists change in the wo rkplace.
Exhibit 10-9 summarizes five reaso ns why individuals may
resist change:

• Habit. To co pe with life’s co mplexities, we rely o n habits o r pro grammed

respo nses. But when co nfro nted with change, this tendency to respo nd in o ur
accusto med ways beco mes a so urce o f resistance.
• Security. Peo ple with a high need fo r security are likely to resist change because
it threatens their feelings o f safety.
• Economic factors. Changes in jo b tasks o r established wo rk ro utines can aro use
eco no mic fears if peo ple are co ncerned that they will no t be able to perfo rm
the new tasks o r ro utines to their previo us standards, especially when pay is
clo sely tied to pro ductivity.
• Fear of the unknown. Change substitutes ambiguity and uncertainty fo r the known.
This is also referred to as the “status quo bias,” in which individuals assume that
their current state is better than whatever the changed state might be.52
• Selective information processing. Individuals are guilty o f selectively pro cessing
info rmatio n in o rder to keep their perceptio ns intact. They hear what they want
to hear, and they igno re info rmatio n that challenges the wo rld they have created.

Cynicism
In additio n to simple resistance to change, employees o ften feel cynical abo ut the change
pro cess, particularly if they have been thro ugh several ro unds o f change, and no thing
appears ( to them) to have changed. Three researchers fro m O hio State University iden-
tified so urces o f cynicism in the change pro cess o f a large unio nized manufacturing
plant.53 The majo r elements co ntributing to the cynicism were as fo llo ws:

• Feeling uninfo rmed abo ut what was happening

• Lack o f co mmunicatio n and respect fro m o ne’s manager

EXHIBIT 10-9 Sources of Individual Resistance to Change

Selective
information Habit
processing

Individual
Fear of Resistance
the unknow n Security

Economic
factors
352 Part 4 Sharing t he Organizat ional Vision

• Lack o f co mmunicatio n and respect fro m o ne’s unio n representative

• Lack o f o ppo rtunity fo r meaningful participatio n in decisio n making

The researchers also fo und that employees with negative perso nalities were mo re likely
to be cynical abo ut change. While o rganizatio ns might no t be able to change an indi-
vidual’s perso nality, they certainly have the ability to provide greater co mmunicatio n and
respect, as well as o ppo rtunities to take part in decisio n making. The researchers fo und that
cynicism abo ut change led to such o utco mes as lower co mmitment, less satisfactio n, and
reduced mo tivatio n to wo rk hard. Exhibit 10-10 illustrates why so me emplo yees, partic-
ularly Dilbert, may have reaso n to feel cynical abo ut o rganizatio nal change.

Organizational Resistance
O rganizatio ns, by their very nature, are co nservative.54 They
actively resist change. Yo u do no t have to lo o k far to see evi-
* What make s
organizations re sist
dence o f this pheno meno n. Go vernment agencies want to
co ntinue do ing what they have been do ing fo r years, whether
change ? the need fo r their service changes o r rem ains the sam e.
O rganized religio ns are deeply entrenched in their histo ry.
Attem pts to change church do ctrine require great persist-
ence and patience. Educatio nal institutio ns, which exist to o pen minds and challenge
established ways o f thinking, are themselves extremely resistant to change. Mo st scho o l
systems are using essentially the same teaching techno lo gies to day that they were 50
years ago . Similarly, mo st business firms appear highly resistant to change. Half o f the
309 human reso urce executives o f Canadian firms who to o k part in a 1998 survey rated
their co m panyies’ ability to m anage change as “ fair.” 55 O ne-third o f them said that
their ability to manage change was their weakest skill, and o nly 25 percent o f the co m-
panies made a stro ng effo rt to train leaders in the change pro cess. When o rganizatio ns
refuse to change with the times, they can fail, as was the case with Eato n’s, which never
really adjusted to the arrival o f Wal-Mart. When Eato n’s was fo unded in 1869 by Irish
immigrant Timo thy Eato n, it was regarded as a “new wave” department sto re. Eato n’s co n-
tinued to set that pace fo r many years, but by the early 1980s, the sto re was co nsidered
do wdy rather than fashio nable.56
Six majo r so urces o f o rganizatio nal resistance to change ( sho wn in Exhibit 10-11 o n
page 353) have been identified:57

• Structural inertia. O rganizatio ns have built-in mechanisms—such as their selec-

tio n pro cesses and fo rmal regulatio ns—to pro duce stability. When an o rganiza-

EXHIBIT 10-10

Source: Dilbert, by Scott Adams. August 3, 1996. DILBERT reprinted by permission of United Feature
Syndicate, Inc.
 Chapter 1 0 Organizat ional Cult ure and Change 353

tio n is co nfro nted with change, this structural inertia

acts as a co unterbalance to sustain stability.

• Limited focus of change. O rganizatio ns are made up o f

a number o f interdependent subsystems. O ne canno t
be changed witho ut affecting the o thers. So limited
changes in subsystems tend to be nullified by the
larger system.

• Group inertia. Even if individuals want to change their

behavio ur, gro up no rms may act as a co nstraint.

• Threat to expertise. Changes in o rganizatio nal patterns

may threaten the expertise o f specialized gro ups.

• Threat to established power relationships. Any redistrib-

utio n o f decisio n-making autho rity can threaten
lo ng-established po wer relatio nships within the
o rganizatio n.

• Threat to established resource allocations. Gro ups in the

o rganizatio n that co ntro l sizable reso urces o ften see
change as a threat. They tend to be co ntent with the
way things are.

Overcoming Resistance to Change

Michael Adam s, president o f Enviro nics Research Gro up in
To ro nto , has no ted that Canadians have beco me mo re resistant Though most people and organizat ions resist change, at
58
to change in recent years. Between 1983 and the mid-1990s, Advant ech AM T, locat ed in M ont real, Quebec, change is t he
norm. François Binette, chief finance officer, says that “ M anaging
Canadians repo rted that they “felt co nfident in their ability to
change forms an intrinsic part of our corporate DNA and it is this
co pe with change.” This trend has reversed in recent years. Half environment that has allow ed us to consistently develop unique
o f Canadians aged 15 to 33 no w “feel left behind and o ver- and innovative products.”
whelmed by the pace o f life and the prevalence o f techno l-
o gy.” Th o se w h o feel left b eh in d ten d to b e th o se w h o are n o t co llege- o r
university-educated, highly skilled, o r adaptive.
It pro bably canno t be emphasized eno ugh that in o rder to break do wn resistance
to change, it is essential to co m m unicate a sense o f urgency in the need fo r change.
Do ing so pro vides a framewo rk fo r peo ple to understand why the change is o ccurring.

EXHIBIT 10-11 Sources of Organizational Resistance to Change

Threat to established Structural

resource allocations inertia

Threat to established Organizational Limited focus

pow er relationships Resistance of change

Threat to Group
expertise inertia
354 Part 4 Sharing t he Organizat ional Vision

Also , it is impo rtant to co mmunicate and celebrate early successes to keep the mo men-
tum go ing, as change is a lengthy pro cess. Ko tter and Schlesinger have identified six
tactics o rganizatio ns use to deal with resistance to change:59

• Education and communication. Resistance can be reduced thro ugh co mmunicat-

ing with emplo yees to help them see the lo gic o f a change. Co mmunicatio n
can be achieved thro ugh o ne-o n-o ne discussio ns, memo s, gro up presenta-
tio ns, o r repo rts.

• Participation and involvement. It is difficult fo r individuals to resist a change

decisio n in which they have participated. Befo re making a change, tho se
o ppo sed can be bro ught into the decisio n pro cess. Assuming that the partici-
pants have the expertise to make a meaningful co ntributio n, their invo lve-
ment can reduce resistance, o btain co mmitment, and increase the quality o f
the change decisio n.

• Facilitation and support. O rganizatio ns undergo ing change can o ffer a range o f
suppo rtive effo rts to reduce resistance such as emplo yee co unselling and ther-
apy, new-skills training, o r a sho rt paid leave o f absence.

• Negotiation and agreement. Ano ther way fo r o rganizatio ns to deal with po tential
resistance to change is to exchange so mething o f value fo r less resistance. Fo r
instance, if the resistance is centred in a few po werful individuals, a specific
reward package can be nego tiated that will meet their individual needs.

• Manipulation and co-optation. Manipulatio n refers to co vert influence attempts.

Twisting and disto rting facts to make them appear mo re attractive, withho lding
undesirable info rmatio n, and creating false rumo urs to get emplo yees to accept
a change are all examples o f manipulatio n. Co -o ptatio n, o n the o ther hand, is
a fo rm o f bo th manipulatio n and participatio n. It seeks to “buy o ff” the leaders
o f a resistance gro up by giving them a key ro le in the change decisio n.

• Explicit and implicit coercion. Co ercio n is the applicatio n o f direct threats o r

fo rce upo n the resisters. If the co rpo rate management is determined to clo se a
manufacturing plant sho uld emplo yees no t acquiesce to a pay cut, then co er-
cio n wo uld be the label attached to its change tactic. O ther examples o f co er-
cio n are threats o f transfer, lo ss o f pro mo tio ns, negative perfo rmance
evaluatio ns, and po o r letters o f reco mmendatio n.

Exhibit 10-12 o n page 355describes when each o f these appro aches is best used, and
the advantages and drawbacks o f each.

The Politics of Change

No discussio n o f resistance to change wo uld be co mplete witho ut a brief mentio n o f the
po litics o f change. Because change invariably threatens the status quo , it inherently
implies po litical activity.60
Po litics suggests that the demand fo r change is mo re likely to co me fro m emplo yees
who are new to the o rganizatio n ( and have less invested in the status quo ) o r man-
agers who are slightly removed fro m the main power structure. Tho se managers who have
spent their entire careers with a single o rganizatio n and eventually achieve a senio r
po sitio n in the hierarchy are o ften m ajo r im pedim ents to change. Change itself is a
very real threat to their status and po sitio n. Yet they may be expected to implement
changes to demo nstrate that they are no t merely caretakers.
By trying to bring abo ut change, senio r managers can symbo lically co nvey to vario us
co nstituencies— sto ckho lders, suppliers, emplo yees, custo mers— that they are o n to p
o f pro blems and adapting to a dynamic enviro nment. O f co urse, as yo u might guess,
 Chapter 1 0 Organizat ional Cult ure and Change 355

EXHIBIT 10-12 Strategies for Overcoming Resistance to Change

Commonly Used
Approach in Situations Ad vantages Draw b acks

Education + communication
Participation + involvement
Where there is a lack of
information or inaccurate
information and analysis.
Where the initiators do not
have all the information
they need to design the
change, and w here others
have considerable pow er
to resist.
Once persuaded, people w ill Can be very time-consuming
often help w ith the imple- if lots of people are involved.
mentation of the change.
People w ho participate w ill Can be very time-consuming
be committed to implement- if participatants design an
ing change, and any relevant inappropriate change.
information they have w ill be
integrated into the change
plan.

Facilitation + support
Negotiation + agreement
Where people are resisting
because of adjustment
problems.
Where someone or some
group w ill clearly lose out in
a change, and w here that
group has considerable
pow er to resist.
No other approach w orks as
w ell w ith adjustment
problems.
Sometimes it is a relatively
easy w ay to avoid major
resistance.
Can be time-consuming,
expensive, and still fail.
Can be too expensive in
many cases if it alerts others
to negotiate for compliance.

M anipulation + co-optation
Explicit + implicit coercion
Where other tactics w ill not
w ork, or are too expensive.
Where speed is essential, and
the change initiators possess
considerable pow er.
It can be a relatively quick Can lead to future problems
and inexpensive solution to if people feel manipulated.
resistance problems.
It is speedy and can overcome Can be risky if it leaves
any kind of people angry w ith the
resistance. initiators.

Source: M ethods for dealing w ith resistance to change, J. P. Kotter and L. A. Schlesinger, “ Choosing Strategies for Change,” Harvard Business
Review, M arch–April 1979, p. 111, Exhibit 1. Reprinted w ith permission.

when fo rced to intro duce change, these lo ng-tim e po wer ho lders tend to intro duce
changes that do no t fundam entally challenge the status quo . Radical change is to o
threatening. This, incidentally, explains why bo ards o f directo rs that reco gnize the need
fo r the rapid intro ductio n o f fundamental, radical change in their o rganizatio ns o ften
turn to o utside candidates fo r new leadership.61
Yo u may remember that we discussed po litics in Chapter 7 and gave so me suggestio ns
o n ho w to mo re effectively enco urage peo ple to go alo ng with yo ur ideas. That chapter
also indicated ho w individuals acquire po wer, which pro vides further insight into the
ability o f so me individuals to resist change.

SUMMARY AND IMPLICATIONS

1 What is the purpose of organizational culture? Organizatio nal culture is the pattern
o f shared values, beliefs, and assumptio ns co nsidered the appro priate way to think
and act within an o rganizatio n. Culture provides stability to an o rganizatio n and gives SNAPSHOT SUM M ARY
employees a clear understanding o f “the way things are do ne aro und here.”
1 What Is Organizational
2 How d o you create and maintain organizational culture? The o riginal culture Culture?
o f an o rganizatio n is derived fro m the fo under’s philo so phy. That philo so phy then
Definition of Organizational
influences what types o f emplo yees are hired. The culture o f the o rganizatio n is Culture
then reinfo rced by to p management, who signal what is acceptable behavio ur and Levels of Culture
what is no t.
356 Part 4 Sharing t he Organizat ional Vision
Characteristics of Culture
Culture’s Functions
Do Organizations Have
Uniform Cultures?
2 Creating and Sustaining
an Organization’s
Culture
How a Culture Begins
Keeping a Culture Alive
3 M atching People With
Organizational Cultures
4 The Liabilities of
Organizational Culture
Culture as a Barrier to
Change
Culture as a Barrier to
Diversity
Culture as a Barrier to
Mergers and Acquisitions
5 Approaches to
M anaging Change
Lewin’s Three-Step Model
Kotter’s Eight-Step Plan for
Implementing Change
Action Research
Appreciative Inquiry
6 Resistance to Change
Individual Resistance
Organizational Resistance
Overcoming Resistance to
Change
The Politics of Change
3 What kind of organizational culture might suit you? There is no o ne right o rga-
nizatio nal culture because individuals vary in the type o f cultures with which they
are co mfo rtable. O rganizatio nal cultures can be analyzed in terms o f their mem-
bers’ friendliness ( sociability) and the degree to which their members are task o ri-
ented ( solidarity) . These dimensio ns co mbine to create fo ur distinct cultural types:
networked, mercenary, fragmented, and communal.
4 Can organizational culture have a d ow nsid e? Many o f culture’s functio ns are
valuable fo r bo th the o rganizatio n and the emplo yee. Culture enhances o rgani-
zatio nal co mmitment and increases the co nsistency o f employee behavio ur. Culture
also reduces ambiguity fo r emplo yees by telling them what is impo rtant and ho w
things are do ne. Ho wever, a stro ng culture can have a negative effect, such as
Enro n’s pressure-co o ker culture, which led to the co m pany’s ultim ate co llapse.
Culture can act as a barrier to change, it can make it difficult to create an inclu-
sive enviro nment, and it can hinder the success o f mergers and acquisitio ns.
5 How d o organizations manage change? Kurt Lewin argued that successful change
in o rganizatio ns sho uld fo llow three steps: unfreezing the status quo , moving to a new
state, and refreezing the new change to make it permanent. Jo hn Ko tter built o n
Lewin’s three-step mo del to create a mo re detailed eight-step plan fo r implementing
change. Ano ther appro ach to managing change is actio n research. Action research
refers to a change pro cess based o n the system atic co llectio n o f data and then
selectio n o f a change actio n based o n what the analyzed data indicate. So me o rgan-
izatio ns use appreciative inquiry to manage change. Appreciative inquiry seeks to
identify the unique qualities and special strengths o f an o rganizatio n, which can
then be built o n to impro ve perfo rmance.
6 W hy d o people an d organization s re sist change? Individuals resist change
because o f basic hum an characteristics such as perceptio ns, perso nalities, and
needs. O rganizatio ns resist change because they are co nservative, and because
change is difficult. The status quo is o ften preferred by tho se who feel they have the
mo st to lo se if change go es ahead.
 O B A T W O RK
For Review
1 . How can an outsider assess an organization’s culture?

2. What defines an organization’s subcultures?

3. Can an employee survive in an organization if he or she rejects its core values? Explain.

4. What benefits can socialization provide for the organization? For the new employee?

5. Describe four cultural types and the characteristics of employees w ho fit best w ith each.

6 . How can culture be a liability to an organization?

7. How does Lew in’s three-step model of change deal w ith resistance to change?

8. How does Kotter’s eight-step plan for implementing change deal w ith resistance to change?

9. What are the factors that lead individuals to resist change?

1 0. What are the factors that lead organizations to resist change?

For Critical Thinking

1 . How are an individual’s personality and an organization’s culture similar? How are they different?

2. Is socialization brainw ashing? Explain.

3. Can you identify a set of characteristics that describes your college’s or university’s culture? Compare them w ith sev-
eral of your peers’ lists. How closely do they agree?

4. “ Resistance to change is an irrational response.” Do you agree or disagree? Explain.

OB for You
■ Carefully consider the culture of any organization at w hich you are thinking of being employed. You w ill feel more
comfortable in cultures that share your values and expectations.

■ When you w ork in groups on student projects, the groups create mini-cultures of their ow n. Be aw are of the values
and norms that are being supported early on in the group’s life, as these w ill greatly influence the group’s culture.

■ Be aw are that change is a fact of life. If you need to change something in yourself, be aw are of the importance of cre-
ating new systems to replace the old. Saying you w ant to be healthier, w ithout specifying that you intend to go to the
gym three times a w eek, or eat five servings of fruits and vegetables a day, means that change likely w ill not occur. It’s
important to specify goals and behaviours as part of that change.
358 Part 4 Sharing t he Organizat ional Vision
O B A T W O RK
PO I N T
O rganizatio nal Culture
Do esn’t Change
An organization’s culture develops over many years and is
root ed in deeply held values t o w hich employees are
strongly committed. In addition, there are a number of
forces continually operating to maintain a given culture.
These w ould include w ritten statements about the organi-
zat ion’s mission and philosophy, t he design of physical
spaces and buildings, the dominant leadership style, hiring
criteria, past promotion practices, entrenched rituals, popu-
lar stories about key people and events, the organization’s
historical performance evaluation criteria; and the organi-
zation’s formal structure.
Selection and promotion policies are particularly impor-
tant devices that w ork against cultural change. Employees
chose the organization because they perceived their values
as a “ good f it ” w it h t hose of t he organizat ion. They
become comfortable w ith that fit and w ill strongly resist
efforts to disturb the equilibrium.
Those in control in organizations w ill also select senior
managers w ho w ill continue the current culture. Even
attempts to change a culture by going outside the organi-
zation to hire a new chief executive are unlikely to be effec-
tive. The evidence indicates that the culture is more likely to
change the executive than the other w ay around. Why? It’s
too entrenched, and change becomes a potential threat to
member self-interest. In fact, a more pragmatic view of the
relationship betw een an organization’s culture and its chief
executive w ould be to note that the practice of filling senior-
level management positions from the ranks of current man-
agerial employees ensures that those w ho run the
organization have been fully indoctrinated in the organiza-
tion’s culture. Promoting from w ithin provides stability and
lessens uncertainty. When a company’s board of directors
selects as a new chief executive officer an individual w ho has
spent 30 years in the company, it virtually guarantees that
the culture w ill continue unchanged.
Our argument, how ever, should not be view ed as saying
that culture can never be changed. In the unusual case
w hen an organization confronts a survival-threatening cri-
sis—a crisis that is universally acknow ledged as a true life-
or-death situation—members of the organization w ill be
responsive to efforts at cultural change. How ever, anything
less than a crisis is unlikely to be effective in bringing about
cultural change.
CO U N TERPO I N T
Ho w to Change an
O rganizatio n’s Culture
Changing an organization’s culture is extremely difficult,
but cultures can be changed. The evidence suggests that
cultural change is most likely to occur w hen most or all of
the follow ing conditions exist:
• A dramatic crisis. This is the shock that undermines the
status quo and calls into question the relevance of the
current culture. Examples of these crises might be a
surprising financial setback, the loss of a major cus-
tomer, or a dramatic technological breakthrough by a
competitor. The Columbia space-shuttle disaster w as a
dramatic crisis for NASA. A $7-million deficit w as a
dramatic crisis for the Royal Canadian M int.
• Turnover in leadership. New top leadership, w hich can
provide an alternative set of key values, may be per-
ceived as more capable of responding to the crisis. This
w ould definitely be the organization’s chief executive,
but also might need to include all senior management
positions. The recent rush to hire outside CEOs after the
Enron and WorldCom scandals illustrates attempts to
create more ethical climates through the introduction of
new leadership. At NASA, some of the top leadership
w as moved to other positions after the Columbia disas-
ter. A new CEO at the Royal Canadian M int, w ho w as
determined to turn around a deficit situation, brought
about many changes to that organization.
• Young and small organization. The younger the organ-
ization is, the less entrenched its culture w ill be.
Similarly, it’s easier for management to communicate
its new values w hen the organization is small. This
point helps explain the difficulty that multibillion-dollar
corporations have in changing their cultures.
• Weak culture. The more w idely held a culture is and the
higher the agreement among members on its values, the
more difficult it w ill be to change. A strong culture has
been one of the problems facing NASA. Conversely, w eak
cultures are more open to change than strong ones.
Efforts directed at changing organizational culture do
not usually yield immediate or dramatic results. For, in the
final analysis, cultural change is a lengthy process—mea-
sured in years, not months. But w e can ask the question
“ Can culture be changed?” and the answ er is “ Yes! ”
 Chapter 1 0 Organizat ional Cult ure and Change 359

O B A T W O RK

LEA RN I N G A BO U T Y O U R S ELF EX ERC I SE

What Kind o f O rganizatio nal Culture Fits Yo u Best?

For each of the follow ing statements, circle the level of agreement or disagreement that you personally feel:

SA = Strongly agree
A = Agree
U = Uncertain
D = Disagree
SD = Strongly d isagree

1 . I like being part of a team and having my performance assessed in terms of my

contribution to the team. SA A U D SD

2. No person’s needs should be compromised in order for a department to achieve its goals. SA A U D SD

3. I like the thrill and excitement of taking risks. SA A U D SD

4. If a person’s job performance is inadequate, it’s irrelevant how much effort he or she made. SA A U D SD

5. I like things to be stable and predictable. SA A U D SD

6 . I prefer managers w ho provide detailed and rational explanations for their decisions. SA A U D SD

7. I like to w ork w here there isn’t a great deal of pressure and w here people are
essentially easygoing. SA A U D SD

Scoring Key:
For it ems 1, 2, 3, 4, and 7, score as f ollow s: St rongly Agree = ⫹2, Agree = ⫹1, Uncert ain ⫽ 0, Disagree ⫽ ⫺1,
Strongly Disagree ⫽ ⫺2.

For items 5 and 6, reverse the score (Strongly Agree ⫽ ⫺2, and so on).

Add up your total. Your score w ill fall somew here betw een ⫹14 and ⫺14.

What does your score mean? The low er your score, the more comfortable you w ill be in a formal, mechanistic, rule-oriented,
and structured culture. This is often associated w ith large corporations and government agencies. Positive scores indicate a
preference for informal, humanistic, flexible, and innovative cultures, w hich are more likely to be found in research units,
advertising firms, high-tech companies, and small businesses.

BREA K O U T G RO U P EX ERC I SES

Form small groups to discuss the follow ing topics, as assigned by your instructor:

1 . Identify artifacts of culture in your current or previous w orkplace. From these artifacts, w ould you conclude that the
organization has a strong or w eak culture?

2. Have you or someone you know w orked somew here w here the culture w as strong? What w as your reaction to that
strong culture? Did you like that environment, or w ould you prefer to w ork w here there is a w eaker culture? Why?

3. Reflect on either the culture of one of your classes or the culture of the organization w here you w ork, and identify
characteristics of that culture that could be changed. How might these changes be made?
360 Part 4 Sharing t he Organizat ional Vision

O B A T W O RK

W O RK I N G W I TH O T H ER S EX ERC I SE

The Beaco n Aircraft Co mpany

Ob jectives probably again tow ard a matrix structure. Faced w ith these
complaints and demands from project managers, the vice-
1 . To illustrate how forces for change and stability
president is pondering anot her reorganizat ion. He has
must be managed in organizational change pro-
requested an outside consultant to help him in the reor-
grams.
ganization plan.
2. To illustrate the effects of alternative change tech-
niques on the relative strength of forces for change
and forces for stability.
The Proced ure
1 . Divide yourselves into groups of 5 to 7 and take the

The Situation role of consultants.

The marketing division of the Beacon Aircraft Company has
undergone t w o reorganizat ions in t he past t w o years.
Initially, its structure changed from a functional one, in
w hich employees w ere organized w ithin departments, to a
matrix form, in w hich employees from several different
functions reported both to their ow n manager and to a
project manager. But the matrix structure did not satisfy
some functional managers. They complained that the struc-
ture confused the authority and responsibility relationships.
In reaction to these complaints, the marketing manager
revised Beacon’s structure back to the functional form. This
new structure had a marketing group and several project
groups. The project groups w ere managed by project man-
agers w ith a few general staff members, but no functional
specialists, such as people from marketing, w ere assigned
to these groups.
Af t er t he change, some problems began t o surf ace.
Project managers complained that they could not obtain
adequate assistance from functional staff members. It not
only took more time to obtain necessary assistance, but it
also created problems in establishing stable relationships
w it h f unct ional st aff members. Since t hese problems
aff ect ed t heir services t o cust omers, project managers
demanded a change in t he organizat ional st ruct ure—
2. Each group identifies the driving and restraining
forces found in the firm. List these forces.
The Driving Forces The Restraining Forces
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
3. Each group develops a set of strategies for increas-
ing the driving forces and another set for reducing
the restraining forces.
4. Each group prepares a list of changes it w ants to
introduce.
5. The class reassembles and hears each group’s
recommendations.
Source: Adapted from K. H. Chung and L. C. M egginson,
Organizational Behavior, Copyright © 1981 by K. H. Chung and L. C.
M egginson. Reprinted by permission of HarperCollins Publishers, Inc.

ETH I C A L D I LEM M A EX ERC I SE

Cultural Characteristics and Unethical Behavio ur

An organization’s culture socializes people. It subtly con- at General Electric (GE), Westinghouse, and other manu-
veys to members that certain actions are acceptable, even facturers of heavy electrical equipment illegally conspired to
though they may be illegal. For instance, w hen executives set prices in t he early 1960s, t he def endant s invariably

testified that they came new to their jobs, found price-fix-
ing as an established w ay of life, and simply entered into it
as they did into other aspects of their jobs. One GE man-
ager noted that every one of his bosses had directed him to
meet w ith the competition: “ It had become so common
and gone on for so many years that I think w e lost sight of
the fact that it w as illegal.”
The strength of an organization’s culture has an influ-
ence on the ethical behaviour of its managers. A strong
culture w ill exert more influence on managers than a w eak
one. If the culture is strong and supports high ethical stan-
dards, it should have a very pow erful positive influence on a
manager’s ethical behaviour. How ever, in a w eak culture,
managers are more likely to rely on subculture norms to
guide their behaviour. Work groups and departmental stan-
CA S E I N C I D EN T
GreyStar Art & Greetings Makes Technological Changes
Tammy Reinhold didn’t believe the rumours. Now that the
rumours w ere confirmed, she w as in denial. “ I can’t believe
it,” she said. “ I’ve w orked as a greeting-card artist here for
over 15 years. I love w hat I do. Now they tell me that I’m
going to have to do all my w ork on a computer.”
Tammy w as not alone in her fear. The company’s other
tw o artists, M ike Tomaski and M aggie Lyall, w ere just as
concerned. Each had graduated from art school near the
top of his or her class. They came to w ork for GreyStar Art
& Greetings right out of school—M ike in 1985, Tammy in
1991, and M aggie in 1997. They chose the company, w hich
had been around for more than 50 years, because of its rep-
ut at ion as a good place t o w ork. The company also had
never had a layoff.
GreyStar Art & Greetings is a small maker of greeting
cards and specialty w rapping paper. It has modest resources
and modest ambitions. M anagement has alw ays pursued
progress slow ly. Art ist s do much of t heir w ork by hand.
Today, how ever, the company installed three high-pow ered
M ac computers equipped with the latest graphics and photo-
manipulation softw are, including Photoshop, Quark, and
Illustrator.
Court land Grey, t he company’s ow ner, called Tammy,
M ike, and M aggie into his office this morning. He told them
about t he changes t hat w ere going t o be m ade. Grey
Chapter 1 0 Organizat ional Cult ure and Change 361
O B A T W O RK
dards w ill more st rongly inf luence et hical behaviour in
organizations that have w eak overall cultures.
It is also generally acknow ledged that the characteristics
of a culture affect ethical behaviour. Assuming this is true,
w hat w ould a culture look like that w ould shape high ethi-
cal st andards? W hat could t op management do t o
strengthen that culture? Do you think it’s possible for a
manager w ith high ethical standards to uphold those stan-
dards in an organizational culture that tolerates, or even
encourages, unethical practices?
Source: P. C. Yeager, “ Analyzing Corporate Offenses: Progress and
Prospects,” in Business Ethics: Research Issues and Empirical Studies,
ed. W. C. Frederick and L. E. Preston (Greenw ich, CT: JAI Press, 1990),
p. 174.
acknow ledged that the three w ere going to have a lot to
learn to be able to do all their w ork on computers. But he
stressed that the changes w ould dramatically speed up the
art-production and photo-layout processes and eventually
result in significant cost savings. He offered to send the three
to a one-w eek course specifically designed to train artists in
the new technology and softw are. He also said he expected
all of the company’s art and photo operations to be com-
pletely digitalized w ithin three months.
Tammy is not stupid. She has been follow ing the trends
in graphic art. M ore and more w ork is being done on com-
puters. She just thought, as did M ike and M aggie, that she
might escape having t o learn t hese programs. Af t er all,
GreyStar Art & Greetings is not Hallmark. But Tammy w as
w rong. Technology is coming to GreyStar Art & Greetings
and there isn’t much she can do about it. Other than com-
plain or look for another job!
Questions
1 . Explain Tammy’s resistance.
2. Evaluate the w ay Courtland Grey handled this
change.
3. What, if anything, w ould you have done differently if
you had been Grey?
362 Part 4 Sharing t he Organizat ional Vision
O B A T W O RK
CBC V I D EO CA SE I N C I D EN T
Corporate Culture Meets G.A.P Adventures
Bruce Poon Tip, ow ner of G.A.P Advent ures, is one of
Canada’s most successful entrepreneurs. G.A.P Adventures
is a travel company that offers eco-friendly tours w ith a dif-
ference—adventure and adrenaline.
Poon Tip has managed to take G.A.P Adventures from a
business w it h 2 em ployees t o one w it h m ore t han 70
employees and over $12 million in annual sales—in 10 years.
Since the company’s beginnings, Poon Tip has run G.A.P
Adventures as more of a family business than a corpora-
tion. He considers himself better at building than maintain-
ing businesses and w ants to move on to new challenges in
expanding and diversifying G.A.P Adventures’ operations.
Poon Tip believes it’s time to take G.A.P Adventures to a
new corporate level.
It’s the 1990s. G.A.P Adventures’ staff is at the annual
spring retreat in Ontario’s cottage country. To the surprise of
all, Poon Tip announces a new division and the develop-
ment of a t ravel TV show, and int roduces a new “ hired
gun.” Poon Tip has hired Dave Bow en, an aggressive mar-
keting director w ith a corporate background, from one of
G.A.P Adventures’ biggest competitors. He w ants Bow en
to shake up the company, w hich he is concerned is not put-
ting enough emphasis on the customer.
Bow en’s challenge is to bring corporate discipline to the
company w ithout losing employee enthusiasm. Bow en uses
his New York savvy and southern charm to transform G.A.P
Adventures’ corporate culture. The inefficient, handw ritten
reservation system is organized and converted to a high-tech
reservation system, and reservation policies are formalized.
The company’s annual brochure w ill include more large,
glossy pict ures, more excit ing t it les, and only brief t our
descriptions. Bow en insists that it’s important to gain the
interest of the customer first w ith the positive aspects of the
tour, and then give the details (such as long bus rides) later.
How has G.A.P Adventures fared since the change to a
corporate culture? Although some G.A.P employees have
left the company, others have adjusted to a w ork environ-
ment that is more serious, more controlled, and less relaxed
and open. G.A.P Adventures’ 1999 sales w ere $12.9 mil-
lion, up from just $500,000 five years earlier. The events of
September 11 made 2001 a financially challenging year for
many travel companies, yet it w as a profitable year for G.A.P
Adventures.
This year’s annual spring retreat is a bit different—the staff
is staying in the executive suites of the upscale Blue M ountain
resort in Ontario. Poon Tip announces another surprise: The
company w ill be split into tw o divisions: the G.A.P division
and the Real Tours division. The G.A.P division w ill market
the company’s ow n brand: G.A.P tours. The new Real Tours
division w ill m arket ot her cont ract ed-out t ours. G.A.P
Adventures has also partnered w ith Signature Vacations to
market G.A.P tours. The reservation system is also changing,
w it h a new IT company support ing it . W here w ill G.A.P
Adventures’ journey in the w orld of corporate culture take
it next?
Questions
1 . What benefits can come from bringing an “ out-
sider,” such as Dave Bow en, into a grow ing company
like G.A.P Adventures? In your opinion, w as Bow en a
good fit for G.A.P, or should someone more suited to
the company’s existing organizational culture have
been brought in?
2. Did G.A.P Adventures have a strong or w eak culture
before Bow en w as hired? Justify your answ er.
3. The impact of Bow en’s changes around the w ork-
place quickly caused tw o key employees to quit
G.A.P Adventures. Why do you think these employ-
ees w ere so resistant to the new changes to G.A.P’s
culture?
Sources: Based on “ Corporate Culture M eets G.A.P Adventures,”
CBC Venture, June 23, 2002, 833; G.A.P Adventures: World W ide
Adventure Travel and Eco Tour w ebsite, http://w w w.gap.ca (accessed
January 13, 2006); http://w w w.profitguide.com/magazine/article.jsp?
content=261 (accessed January 13, 2006).

Ho w to “ Read” an O rganizatio n’s Culture
The ability to read and assess an organization’s culture can
be a valuable skill.62 If you are looking for a job, you w ill
w ant to choose an employer w hose culture is compatible
w ith your values and in w hich you w ill feel comfortable. If
you can accurately assess a prospective employer’s culture
before you make your decision, you may be able to save
yourself a lot of grief and reduce the likelihood of making a
poor choice. Similarly, you w ill undoubtedly have business
transactions w ith numerous organizations during your pro-
fessional career. You w ill be trying to sell a product or ser-
vice, negotiate a contract, arrange a joint venture, or you
may merely be seeking out w hich individual in an organiza-
tion controls certain decisions. The ability to assess another
organization’s culture can be a definite plus in successfully
completing these pursuits.
For the sake of simplicity, w e w ill approach the problem
of reading an organization’s culture from that of a job appli-
cant. We w ill assume you are interview ing for a job. Here is
a list of things you can do to help learn about a potential
employer’s culture:
• Observe the physical surroundings. Pay attention to
signs, pictures, style of dress, length of hair, degree of
openness betw een offices, and office furnishings and
arrangements.
• With w hom are you meeting? Just the person w ho
w ould be your immediate manager? Or potential col-
leagues, managers from other departments, or senior
executives? Afterw ards, based on w hat they revealed,
to w hat degree do people other than the immediate
manager have input into hiring decisions?
• How w ould you characterize the style of the people
you met? Formal? Casual? Serious? Jovial?
• Does the organization have formal rules and regula-
tions printed in a human resource policy manual? If so,
how detailed are these policies?
• Ask questions of the people you meet. The most valid
and reliable information tends to come from asking the
same questions of many people (to see how closely
their responses align) and by talking w ith boundary
spanners. Boundary spanners are employees w hose
Chapter 1 0 Organizat ional Cult ure and Change 363
O B A T W O RK
Fr o m Co n ce p t s
t o Sk i l l s
w ork links them to the external environment. This
includes jobs such as human resource interview er,
salesperson, purchasing agent, labour negotiator, pub-
lic relations specialist, and company law yer.
Questions that w ill give you insights into organizational
processes and practices might include the follow ing:
• What is the background of the founders?
• What is the background of current senior managers?
What are their functional specializations? Were they
promoted from w ithin or hired from outside?
• How does the organization integrate new employees?
Is there an orientation program? Training? If so, could
you describe these features?
• How does your manager define his or her job success?
(Amount of profit? Serving customers? M eeting dead-
lines? Acquiring budget increases?)
• How w ould you define fairness in terms of rew ard
allocations?
• Can you identify some people here w ho are on the
“ fast track” ? What do you think has put them on the
fast track?
• Can you identify someone w ho seems to be considered
a deviant in the organization? How has the organiza-
tion responded to this person?
• Can you describe a decision that someone made here
that w as w ell received?
• Can you describe a decision that did not w ork out
w ell? What w ere the consequences for the decision
maker?
• Could you describe a crisis or critical event that has
occurred recently in the organization? How did top
management respond? What w as learned from this
experience?
Assessing Skills
Af t er you’ve read t his chapt er, t ake t he f ollow ing Self -
Assessments on your enclosed CD-ROM :
364 Part 4 Sharing t he Organizat ional Vision
O B A T W O RK
4. How Well Do I Handle Ambiguity?
49. How Well Do I Respond to Turbulent Change?
50. How Stressful Is M y Life?
51 . Am I Burned Out?
Practising Skills
You are the nursing supervisor at a community hospital
employing both emergency-room and floor nurses. Each of
these teams of nurses tends to w ork almost exclusively w ith
others doing the same job. In your professional reading,
you have come across the concept of cross-training nursing
teams and giving them more varied responsibilities, w hich
in turn has been show n to both improve patient care and
low er costs. You call the tw o team leaders, Sue and Scott,
into your office to explain that you w ant the nursing teams
to move to this approach. To your surprise, they are both
opposed to the idea. Sue says she and the other emer-
gency-room nurses feel they are needed in the ER, w here
they fill the most vital role in the hospital. They w ork special
hours w hen needed, do w hatever tasks are required, and
often w ork in difficult and stressful circumstances. They
think the floor nurses have relatively easy jobs for the pay
they receive. Scott, the leader of the floor nurse team, tells
you that his group believes the ER nurses lack the special
training and extra experience that the floor nurses bring to
the hospital. The floor nurses claim they have the heaviest
responsibilities and do the most exacting w ork. Because
they have ongoing contact w ith patients and families, they
believe t hey should not be called aw ay f rom vit al f loor
duties to help the ER nurses complete their tasks. Now that
you are faced w ith this resistance, how can you most effec-
tively introduce the cross-training model?
Reinforcing Skills
1 . Choose tw o courses that you are taking this term,
ideally in different faculties, and describe the culture
of the classroom in each. What are the similarities
and differences? What values about learning might
you infer from your observations of culture?
2. Compare the atmosphere or feeling you get from
various organizations. Because of the number and
w ide variety that you w ill find, it w ill probably be
easiest for you to do this exercise using restaurants,
retail stores, or banks. Based on the atmosphere
that you observe, w hat type of organizational cul-
ture do you think these organizations might have? If
you can, interview three employees at each organi-
zation for their descriptions of their organization’s
culture.
3. Think about changes (major and minor) that you
have dealt w ith over the past year. Perhaps these
changes involved other people and perhaps they
w ere personal. Did you resist the change? Did oth-
ers resist the change? How did you overcome your
resistance or the resistance of others to the change?
4. Interview a manager at three different organizations
about a change he or she has introduced. What w as
the manager’s experience in bringing in the change?
How did the manager manage resistance to the
change?