Organizational

Behavior
Securing
Competitive
Advantage
Thomson South-Western
Wagner & Hollenbeck 5e

Introduction
With recent technological advancements
in such areas as information systems,
manufacturing processes, inventory
management, and service delivery, the
current trend of increasing
productivity ,may extend well into the
future
Nonetheless, individual companies
sometimes run into productivity problems
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Ford Motor Company Example

This company currently faces problems as a
result of:
Fierce competition in the automotive

manufacturing industry
Aggressive discounting by domestic manufacturers
Attractive pricing by international competitors

CEO William Clay Bill Ford, Jr. faces the

undaunting tasks of:
Cutting up to $4.5 billion in expenses
Updating aging product lines
Shoring up falling quality

Ford Motor Company Example

What Would You Do If
you were a manager in a company like
Ford Motor Company?
How would you improve employee
productivity in the face of unacceptably
high production costs?
initial assessments indicate that
productivity lapses are due to poor
employee motivation, what would you do
to solve this problem?
4

The Ford Motor Company Case

Indicates
the know-how needed to solve motivational
productivity problems can be found in the
field of organizational behavior
The management of people through the
application of knowledge from the field of
organizational behavior is a primary means
through which competitive advantage can be
created and sustained

Defining Organizational
Behavior
There are three important
Organizational
considerations underlying
behavior is a field of
this definition:
study that endeavors
Organizational behavior
to understand,
focuses on observable behaviors
explain, predict, and
Organizational behavior
change human
involves the analysis of how
people behave both as
behavior as it occurs
individuals and as members of
in the organizational
groups and organizations
context
Organizational behavior
assesses the behavior of groups
and organizations per se

Defining Organizational
Behavior
The field of organizational
behavior traces its roots back to
the late 1940s when researchers
in psychology, sociology, political
science, economics, and other
social sciences joined together in
an effort to develop a
comprehensive body of
organizational research
It is now divided into three
distinct subfields
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Contemporary Issues
The three subfields of organizational
behavior offers valuable information,
insight, and advice to managers facing
the challenge of understanding and
reacting to a broad range of
contemporary management issues
Todays managers find four of these
issues especially important

Contemporary Issues:
Workforce Diversity
Within the societal cultures of the United States and
Canada, subcultural differences once ignored by many
managers now command significant attention and
sensitivity
Historically, the North American workforce has
consisted primarily of white males; however today
white males make up only about 15% of business new
hires in the U.S., whereas women, African American,
Hispanic, and Asian men account for increasingly large
segments of the U.S. workforce
Knowledge about the workplace consequences of these
differences, drawn from the subfield of micro
organizational behavior, can provide managers with
help in this regard

Contemporary Issues: Team

Productivity
Management is becoming less of a process relying on
top-down command and control
For various reasons organizations now use greater
amounts of empowerment
Often empowerment is accomplished by grouping
employees into teams, then giving those teams
responsibility for self-management activities
Guidance from the meso organizational behavior
precepts can help managers establish realistic
expectations about the implementation difficulties
and probable effects of team-based empowerment
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Contemporary Issues:
Organizational Adaptability
In todays business world, emphasis is shifting from
mass production of low-cost, interchangeable
commodities to the production of high-quality goods
and services, made individually or in small batches
and geared to meet the specific demands of small
groups of consumers
Companies are reacting by implementing programs
that require new ways of dividing an organizations
work into jobs and coordinating the efforts of many
employees
Implementations of this sort benefit from insights
derived from macro organizational behavior
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Contemporary Issues: International

Growth and Development
Fewer firms today limit their operations to a
single national or cultural region than was
once the case
Multinationalism or even statelessness has
become the norm
The resulting globalization is changing the
way business is conducted and it promises to
continue to do so at an increasing pace
All three subfields of organizational behavior
have valuable advice to offer managers
confronted with this challenge

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Putting Organizational Behavior

Knowledge to Work
Putting theoretical knowledge from the field
of organizational behavior to practical use
requires that managers develop skills in
using such knowledge to identify and solve
problems in an effective manner
The process of problem solving can be
simplified and made more effective by
breaking it into four stages

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Putting Organizational Behavior

Knowledge to Work: Diagnosis and
Solution
1.

2.

3.

Problem solving begins with

4. Solution is the process of
diagnosis, a procedure in which
identifying ways to resolve
managers gather information
the problem identified
about a troublesome situation
during the diagnosis
and try to summarize it in a
phase
problem statement
Information gathering may
require direct observation of
events in and around an
organization
Summarizing information in a
problem statement requires that
managers use the mix of theories,
experience, and intuition they
have amassed to construct a
statement of what is wrong

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Becoming an Active Problem

Solver
To sharpen your skills as a problem
solver, study each management theory
to develop a basic understanding of the
variables and relationships it describes
You should practice following the
theories applied during problem
definition to their logical conclusions
You should also practice specifying the
actions required to implement and
assess your proposed solution
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How to conduct SWOT

Analysis?

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BCG Growth-Share Matrix

Module 12: Strategic Management in the Asia-Pacific

Annual real rate o f m arket grow th (% )

Portfolio Planning Models: The BCG

Growth-Share Matrix
HIGH

Earnings:

high stable, growing

Cash flow:

neutral

Strategy:

invest for growth

Earnings:

low, unstable, growing

Cash flow:

negative

Strategy:

analyze to determine
whether business can
be grown into a
star, or
will degenerate
into a dog

Earnings:

high stable

Earnings:

Cash flow:

high stable

Cash flow:

neutral or negative

Strategy:

milk

Strategy:

divest

low, unstable

$$$$$$

LOW
HIGH

Relative market share

LOW

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Porters 5 Forces Analysis

SUPPLIERS
4. Bargaining power
of suppliers
3. Threat of
new entrants

POTENTIAL
ENTRANTS

MARKET
COMPETITORS
SUBSTITUTES
2. Rivalry among
existing firms

5. Threat of substitute
products or services

1. Bargaining power
of customers

BUYERS
Source: Porter (1980)

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Financial Analysis

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