Organizational Behavior

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This is a TWO part assignment. Each part has its own set of instructions so please read carefully. Part One (John Mackey, Cofounder and Co-CEO of Whole Market, Believes in "Conscious Capitalism" (pp. 29 & 30) This assignment must be done in APA format. This part of the assignment has five questions to be answered with a minimum word count of 1500 for the overall assignment (without references included). A minimum of four (4) references along with in-text citations is required for this assignment. Please note: The word count for the overall assignment is 1500 words. The required reference count for the overall assignment is 4 references. Also, although this assignment is in APA format; please keep the question and answer line up. For example: Question: XYZ Answer:XYZ Reference: XYZ 1. What role, if any, does McGregor's Theory Y play at Whole Foods? Explain. 2. How does Whole Foods build human and social capital? 3. Where would you locate Whole Foods on Carroll's global corporate social responsibility pyramid in Figure 1-3? Explain. 4. Which of the seven moral principles in Table 1-4 appear to be in force at Whole Foods? Explain. 5. What factors would be an appeal to working at Whole Foods? Part Two Instructions: Write a 100 word response to each of the post. There are two of them. No references needed. 1. Organizational behavior can be defined as the ability to understand and manage an array of individuals at work (Kreitner & Kinicki, 2013). The ability to understand organizational behavior can bring cohesiveness to your business. Supervisors can tailor their environment in a way where employees are happier, more productive, and more efficient at work. Being able to have a more cohesive business will not only make employees happy, but it will have a healthy impact on customers. Additionally, organizational behavior can benefit your personal life, as well. Furthermore, this can have huge impacts on your professional life. All in all, learning the many different aspects of organizational behavior can be a huge investment towards your business and employees. 2. The value of studying organizational behavior is knowing why people do what they do at their job. (Kreitner, Kinicki, 2013) Understanding organizational behavior can help with the understanding of the way a person performs, the outcome of task and projects and be understanding of how the person came to their conclusion. Things like diversity, values, and stereotypes play a factor in organizational behavior. (Kreitner, Kinicki, 2013) An organization's values can impact how the employee sees the company. (Junhui, 2012) With values playing an important role in an employee’s view, this can influence an employee’s performance. Things like Theory X and Theory Y can also affect how an employee views their job. Employees being treated as Theory X, like they are lazy, and they do not like their job, will not receive higher performance, quality and value, like a Theory Y employee who is treated the complete opposite from Theory X. (Kreitner, Kinicki, 2013) To go further, diversity also plays a big role in organizational behavior. When integrating diversity within a team, diversity can positively influence the collectiveness of a team. (Young-Joo, Jung-Hoon, Kyung Sun, 2017) Diversity can be a positive thing, because, although, diversity can mean conflict between individuals, diversity can also offer knowledge and information from a different viewpoint. (Kreitner, Kinicki, 2013) So, the study of organizational behavior can be valuable by revealing the psychology of how and why a person does their job the way they do, and how a company can use this information for a positive outcome. Organizational Behavior H tenth I G G S , S H A N I C Q U A edition Robert Kreitner Angelo Kinicki Both of Arizona State University 3 1 5 3 B U kre29368_fm_i-xxxiv.indd iii 08/12/11 3:12 PM ORGANIZATIONAL BEHAVIOR Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2013, 2010, 2008, 2007, 2004, 2001, 1998, 1994, 1992, 1989 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. H This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2 ISBN 978-0-07-802936-3 MHID 0-07-802936-8 I G G S , Vice president and editor-in-chief: Brent Gordon Editorial director: Paul Ducham Executive editor: Michael Ablassmeir S Executive director of development: Ann Torbert Development editor: Kelly I. Pekelder H Editorial coordinator: Andrea Heirendt A Vice president and director of marketing: Robin J. Zwettler Marketing director: Amee Mosley N Senior marketing manager: Michelle Heaster I Marketing specialist: Elizabeth Steiner Vice president of editing, design, and production: Sesha BolisettyC Senior project manager: Dana M. Pauley Q Senior buyer: Michael R. McCormick Senior designer: Matt Diamond U Senior photo research coordinator: Jeremy Cheshareck Photo researcher: Editorial Image, LLC A Senior media project manager: Bruce Gin Media project manager: Balaji Sundararaman, Hurix Systems Pvt. Ltd. Cover and interior design: Cara Hawthorne, cara david DESIGN 3 Typeface: 10.5/12 Times Roman 1 Compositor: MPS Limited, a Macmillan Company Printer: R. R. Donnelley 5 Library of Congress Cataloging-in-Publication3Data B Kreitner, Robert. Organizational behavior / Robert Kreitner, Angelo Kinicki. -- 10th U ed. p. cm. Includes index. ISBN-13: 978-0-07-802936-3 (alk. paper) ISBN-10: 0-07-802936-8 (alk. paper) 1. Organizational behavior. I. Kinicki, Angelo. II. Title. HD58.7.K766 2013 658.3--dc23 2011043477 www.mhhe.com kre29368_fm_i-xxxiv.indd iv 08/12/11 3:12 PM About the Authors Robert (Bob) Kreitner, PhD, is professor emeritus of management at Arizona State University and a member of ASU’s W P Carey School of Business Faculty Hall of Fame. Prior to joining ASU in 1975, Bob taught at Western Illinois University. He also taught organizational behavior at Thunderbird. Bob has addressed a diverse array of audiences worldwide on management topics. He has authored articles for journals such as Organizational Dynamics, Business Horizons, Educational and Psychological Measurement, Journal of Organizational Behavior Management, and Journal of Business Ethics. He also is coauthor (with Fred Luthans) of the awardwinning book Organizational Behavior Modification and Beyond: H An Operant and Social Learning Approach and coauthor (with Carlene Cassidy) of Management, 12th edition, an introductory I management text. His textbooks collectively have been through editions. G 31 Among Bob and his wife Margaret atop 13,140-foot Boundary Peak his consulting and executive development clients (Nevada’s highest point). G have been American Express, SABRE Computer Services, S Honeywell, Motorola, Amdahl, the Hopi Indian Tribe, State Farm Insurance, Goodyear Aerospace, Doubletree Hotels, Bank One–Arizona, Nazarene School of Large Church Management, Ford Motor Company, US Steel, and Allied-Signal. In 1981–82 he ,served as chairman of the Academy of Management’s Management Education and Development Division. Bob was born in Buffalo, New York. After a four-year enlistment in the US Coast Guard, including service on the icebreaker EASTWIND in Antarctica, Bob attended the University of Nebraska–Omaha on a football scholarship. Bob also holds an MBA from S the University of Nebraska–Omaha and a PhD from the University of Nebraska–Lincoln. While working on his PhD in business at H Nebraska, he spent six months teaching management courses for the university in Micronesia. In 1996, Bob taught two courses in Albania’s first-ever MBA program. He taught a summer leadership A program in Switzerland from 1995 to 1998. Bob and his wife Margaret, a retired Intel Corp manager, live in Phoenix with their two cats Yahoo and Sweetie Pie. They enjoy world travel, lots of N hiking, and fishing in Alaska. I C Angelo Kinicki, DBA, is a professor, author, Q and consultant. He is a professor of management and has held U the Weatherup/Overby Chair in Leadership since 2005. He also is a Dean’s Council of 100 Distinguished Scholar at the W P A Carey School of Business. He joined the faculty in 1982, the year he received his doctorate in business administration from Kent State University. His primary research interests include 3 leadership, organizational culture, organizational change, and 1 multilevel issues associated with predicting organizational effectiveness. Angelo has published more than 90 articles in a 5 variety of academic journals and is coauthor of seven textbooks 3 (25 including revisions) that are used by hundreds of universities around the world. Several of his books have been transB lated into multiple languages. Angelo is an award-winning researcher and teacher. He has U received several awards, including a best research paper award Angelo with Na’vi at the Colorado Wolf and Wildlife center. from the Organizational Behavior (OB) division of the Academy Na’vi is a 40-pound Black Phase Timber Wolf. of Management, the All Time Best Reviewer Award (1996–99) and the Excellent Reviewer Award (1997–98) from the Academy of Management Journal, and six teaching awards from Arizona State University [Outstanding Teaching Award—MBA and Master’s Program, John W Teets Outstanding Graduate Teacher Award (twice), Outstanding Undergraduate Teaching Excellence Award, Outstanding Graduate Teaching Excellence Award, and Outstanding Executive Development Teaching Excellence Award]. v kre29368_fm_i-xxxiv.indd v 08/12/11 3:12 PM vi About the Authors Angelo also has served on the editorial review boards for the Academy of Management Journal, Personnel Psychology, the Journal of Management, and the Journal of Vocational Behavior. Angelo has been an active member of the Academy of Management, including service as a representative at large for the Organizational Behavior division, member of the Best Paper Award committee for both the OB and Human Resources (HR) divisions, chair of the committee to select the best publication in the Academy of Management Journal, and program committee reviewer for the OB and HR divisions. Angelo also is a busy international consultant and is a principal at Kinicki and Associates Inc, a management consulting firm that works with top management teams to create organizational change aimed at increasing organizational effectiveness and profitability. He has worked with many Fortune 500 firms as well as numerous entrepreneurial organizations in diverse industries. His expertise includes facilitating strategic/operational planning sessions, diagnosing the causes of organizational and work-unit problems, conducting organizational culture interventions, implementing performance management systems, designing and implementing performance appraisal systems, developing and administering surveys to assess employee attitudes, and leading management/ executive education programs. He developed a 360-degree leadership feedback instrument called the Performance Management Leadership Survey (PMLS) that is used by companies throughout the United States and Europe. The survey is used to assess an individual’s leadership style and to coach individuals interested in developing their leadership skills. Angelo and his wife Joyce have enjoyed living in the beautiful Arizona H desert for 30 years and are natives of Cleveland, Ohio. They enjoy traveling, golfing, hiking, spending time in the White Mountains, and spoiling Nala, their golden retriever. I G G S , S H A N I C Q U A 3 1 5 3 B U kre29368_fm_i-xxxiv.indd vi 08/12/11 3:12 PM H I With love to myG precious little family, Margaret G and our cats Yahoo and Sweetie Pie. S , —B.K. S With respect and H admiration to Dr William A has reduced the carbon Spears. His work N schools, hospitals, and footprint of many I churches. He also is a role model for educators C and entrepreneurs everywhere. I am proud to Q be his friend. U A —A.K. 3 1 5 3 B U kre29368_fm_i-xxxiv.indd vii 08/12/11 3:12 PM par t one H I G G S , The World of Organizational Behavior 1 Organizational SBehavior: The Quest for PeopleH Centered Organizations and Ethical Conduct 2 Managing Diversity: Releasing Every Employee’s N Potential I 3 Organizational CCulture, Socialization, and Mentoring 4 International OB: U Managing across Cultures A Q A 3 1 5 3 B U kre29368_ch01_001-031.indd 1 08/12/11 6:19 PM chapter 1 H Organizational Behavior: The Quest I for People-CenteredGG Organizations S and Ethical Conduct, S H Learning Objectives A When you finish studying the material in this chapter, N you should be able to: I LO.1 Define the term organizational behavior, and contrast McGregor’s Theory X and C Theory Y assumptions about employees. Q LO.2 Identify the four principles of total quality management (TQM). U A the Net Generation. LO.3 Define the term e-business, and describe LO.4 Contrast human and social capital, and explain why we need to build both. LO.5 Define the term management, and identify 1 at least five of the eleven managerial skills in Wilson’s profile of effective managers. LO.6 LO.7 3 5 Characterize 21st-century managers. 3 B Describe Carroll’s global corporate social responsibility pyramid, and discuss the U problem of moral erosion. LO.8 Identify four of the seven general ethical principles, and explain how to improve an organization’s ethical climate. LO.9 Describe the sources of organizational behavior research evidence. kre29368_ch01_001-031.indd 2 08/12/11 6:19 PM Why Is Zappos.com So Good at Zapping the Competition? There’s a good chance you have never heard of TonyH Hsieh (pronounced “Shay”), CEO of Zappos.com. But if you are among the legions of satisfied and loyal custom-I ers of the online retailer of footwear and other goods, youG owe him an enthusiastic high five. Initially as an investor/ G adviser and eventually CEO, Hsieh guided Zappos from a struggling Internet start-up to a merger with Amazon.S com in 2009 for $1.2 billion. Along the way, he helped, Zappos develop a zany corporate culture of close-knit employees obsessed with great 24/7 customer service. “Customer Service Isn’t Just a Department!” trumpets theS firm’s website. When the Amazon deal was announced,H Hsieh told an all-hands meeting of employees that each A of them would receive a free Kindle e-book reader and a retention bonus equal to 40% of their annual salary. MostN importantly, he vowed to maintain the company’s cher-I ished culture. The following excerpt from Hsieh’s new C book, Delivering Happiness: A Path to Profits, Passion, and Purpose, highlights how Zappos.com came to putQ people—customers and employees—first. U I e-mailed the entire company several times and got a lot of suggestions and feedback on which core values were the most important to our employees. I was surprised the process took so long, but we wanted to make sure not to rush through the process because whatever core values we eventually came kre29368_ch01_001-031.indd 3 A 3 1 5 3 B U up with, we wanted to be ones that we could truly embrace. . . . We eventually came up with our final list of ten core values [from an initial list of 37], which we still use today: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Deliver WOW Through Service Embrace and Drive Change Create Fun and a Little Weirdness Be Adventurous, Creative, and Open-Minded Pursue Growth and Learning Build Open and Honest Relationships with Communication Build a Positive Team and Family Spirit Do More with Less Be Passionate and Determined Be Humble. . . . Be Humble is probably the core value that ends up affecting our hiring decisions the most. There are a lot of experienced, smart and talented people we interview that we know can make an immediate impact on our top or bottom line. But a lot of them are also really egotistical, so we end up not hiring them. Our philosophy at Zappos is that we’re willing to make short-term sacrifices (including lost revenue or profits) if we believe that the long-term benefits are worth it. Protecting the company culture and sticking to core values is a long-term benefit.1 08/12/11 6:19 PM 4 Part One The World of Organizational Behavior Tony Hsieh does more than just talk about the importance of his company’s people; he trusts, empowers, and listens to them. No surprise then that Zappos.com ranked number 6 on Fortune’s 2011 “100 Best Companies to Work For” list.2 Hsieh helped create what Stanford University’s Jeffrey Pfeffer calls a “people-centered” organization. Research evidence from companies in both the United States and Germany shows the following seven people-centered practices to be strongly associated with much higher profits and significantly lower employee turnover: 1. Job security (to eliminate fear of layoffs). H2. Careful hiring (emphasizing a good fit with the Zappos’s CEO Tony Hsieh likes to mix hard work and fun at company culture). the online retailer. I 3. Power to the people (via decentralization and G self-managed teams). 4. Generous pay for performance. G 5. Lots of training. S 6. Less emphasis on status (to build a “we” feeling). , 7. Trust building (through the sharing of critical information).3 Importantly, these factors are a package deal, meaning they need to be inS stalled in a coordinated and systematic manner—not in bits and pieces. According to Pfeffer, only H 12% of today’s organizations have the systematic approaches and persistence to qualify as true people-centered organizations, thus A giving them a competitive advantage.4 To us, an 88% shortfall in the quest for people-centered organizations N represents a tragic waste of human and economic potential. Pfeffer recently couched I his call for greater people-centeredness in the “green management” term sustainability: “Just as there is concern for protecting Ca similar level of concern for protecting human renatural resources, there could be sources.”5 There are profound ethical Q implications as well, especially during the recent deep recession with millions of layoffs. At people-centered organizations (see Real World/Real People for an U inspiring example), layoffs are a very last resort, not a knee-jerk first response to badAnews. Both practical experience and research tell us that layoffs hurt everyone, including the “survivors” who keep their jobs. A recent study of 318 companies led to this conclusion: “Three-fourths of 4,172 workers who have kept their jobs say their 3 productivity has dropped since their organizations let people go.”6 Of course, layoffs are sometimes unavoidable. But imagina1 can make layoffs a last resort with tactics such tive people-centered organizations as across-the-board pay cuts and/or 5 reduced hours and voluntary unpaid leaves of absence. Additionally, consider these unique people-centered tactics: 3 B Example. Vermont’s Rhino Foods, which makes the cookie dough for Ben & Jerry’s U ice cream, recently sent 15 factory workers to nearby lip balm manufacturer Autumn Harp for a week to help it handle a holiday rush. The employees were paid by Rhino, which then invoiced its neighbor for the hours worked. President Ted Castle is looking to adopt a similar approach with salaried managers, too. “It’s a lot easier to just do the layoff,” says Castle. “But in the long term, it’s not easier for the business.” Matt Cooper, vice-president of Larkspur (Calif.) recruiting firm Accolo, asked employees to take five days of unpaid leave this quarter but won’t dock paychecks until March. If big deals come through, he’ll lift the pay cut.7 Each of us needs to accept the challenge to do a better job of creating and maintaining people-centered organizations, whatever our role(s) in society—employer/ kre29368_ch01_001-031.indd 4 08/12/11 6:19 PM Chapter One Organizational Behavior 5 real WORLD // real PEOPLE: ethics Lola Gonzalez Laid Herself Off First! Like countless small-business owners, Lola Gonzalez agonizingly resolved to trim her firm’s nine-person staff when the economic recovery began to sputter . . . [in early 2010]. Unlike other entrepreneurs, she picked an unlikely employee to lay off: herself. The owner of Accurate Background Check in Ocala, Fla., says she couldn’t bear to fire employees who have worked there for years. So she stopped paying herself a six-figure salary and got a job for less than half the pay H as a social worker. I “How could you let somebody go that you trusted and that trusted you?” says Gonzalez, 51, who’s still a social G worker. . . . Employees initially froze in fear [during her announcement], then erupted in laughter. Until they realized she was serious. . . . Besides putting in a 40-hour week, . . . Gonzalez gets twice-weekly phone updates on goings-on at her business and still does certain background checks herself without getting paid. What are the broader, long-term benefits of this people-centered practice? SOURCE: Excerpted from P Davidson, “How a Boss Saved Jobs: She Laid Herself Off,” USA Today, November 26, 2010, p 1B. G S , student, entrepreneur, employee, manager, stockholder, teacher, voter, elected official, social/political activist. Toward that end, the mission of this book is to help increase the number of people-centered and ethically managed organizations around the world to improve the general quality of S life.8 The purpose of this first chapter is to define organizational behavior (OB); H examine its contemporary relevance; explore its historical, managerial, and ethical A contexts; and introduce a topical road map for the balance of this book. N Welcome to the World ofIC OB Organizational behavior deals with how people act and react in organizations of Q your life on a regular basis; all kinds. Think of the many organizations that touch organizations that employ, educate, connect, inform, U feed, heal, protect, and entertain you. Cradle to grave, we interface with organizations at every turn. According to Chester I Barnard’s classic definition, anAorganization is “a system of consciously coordinated activities or forces of two or more persons.”9 Organizations are a social invention helping us to achieve things collectively that we could 3 our reach. Consider the not achieve alone. For better or for worse, they extend inspiring example of the World Health Organization 1 (WHO): TO THE POINT Why is it important to study organizational behavior, regardless of one’s organizational level or specialty? 5 Example. In 1967, 10 to 15 million people around the3globe were struck annually by smallpox. That year, the World Health Organization set up its smallpox-eradication B the disease. In 1988, 350,000 unit. In 13 years it was able to declare the world free of people were afflicted by polio when the WHO set U up a similar eradication unit. Since then it has spent $3 billion and received the help of 20 million volunteers from around the world. The result: in 2003 there were only 784 reported cases of polio.10 On the other hand, organizations such as al-Qaeda kill and terrorize, and others such as failed banks and businesses squander our resources. Organizations are organization System of consciously coordinated activities of two or more people. kre29368_ch01_001-031.indd 5 08/12/11 6:19 PM 6 Part One The World of Organizational Behavior the chessboard on which the game of life is played. To know more about organizational behavior—life within organizations—is to know more about the nature, possibilities, and rules of that game. LO.1 Organizational Behavior: An Interdisciplinary Field Organizational behavior, commonly referred to as OB, is an interdisciplinary field dedicated to better understanding and managing people at work. By definition, organizational behavior is both research and application oriented. Three basic levels of analysis in OB are individual, group, and organizational. OB draws upon a diverse array of disciplines, including psychology, management, sociology, organization theory, social psychology, statistics, anthropology, general systems theory, economics, information technology, political science, vocational counseling, human stress management, psychometrics, ergonomics, decision theory, and H ethics.11 This rich heritage has spawned many competing perspectives and theories about human work behavior. IBy 2003, one researcher had identified 73 distinct theories about behavior withinG the field of OB.12 G S Through the years we (and our colleagues) have fielded some frequently asked , questions (FAQs) from our students about our field. Here are the most common Some FAQs about Studying OB ones, along with our answers. If you S thoughtfully study this book, you will learn more about yourself, how to interactHeffectively with others, and how to thrive (not just survive) in organizations. Lots of insights about your own personality, emotions, A needs, and goals are available in Part 2. Relavalues, job satisfaction, perceptions, tive to your interpersonal effectiveness, you will learn about being a team player, N building trust, managing conflict, negotiating, communicating, and influencing I and leading others. We conclude virtually every major topic with practical howto-do-it instructions. The ideaCis to build your skills in areas such as self-management, making ethical decisions, avoiding groupthink, listening, coping with Q organizational politics, handling change, and managing stress. Respected OB scholar Edward E Lawler III U created the “virtuous career spiral” in Figure 1–1 to illustrate how OB-related skills A point you toward career success. “It shows that increased skills and performance can lead to better jobs and higher rewards.”13 Why Study OB? If I’m an Accounting (or 3 Other Technical) Major, Why Should I Study OB? Many students in technical fields such as accounting, finance, 1 consider OB to be a “soft” discipline with little computer science, and engineering or no relevance. You may indeed 5 start out in a narrow specialty, but eventually your hard-won success will catch up with you and you will be tapped for some sort of su3 pervisory or leadership position. Your so-called soft people skills will make or break your career at that point. Also,B in today’s team-oriented and globalized workplace, your teamwork, cross-cultural, communication, conflict handling, and negotiation U skills and your powers of persuasion will be needed early and often. Jack Welch, the legendary CEO of General Electric, and Suzy Welch, the former editor of Harvard Business Review, offered this answer to a business school professor’s question about how best to prepare students for today’s global business environment: Example. We’d make the case that the nitty-gritty of managing people should rank higher in the educational hierarchy. In the past two years we’ve visited 35 B-schools around the world and have been repeatedly surprised by how little classroom attention is paid to hiring, motivating, team-building, and firing. Instead, B-schools seem far more invested in teaching brainiac concepts—disruptive technologies, kre29368_ch01_001-031.indd 6 08/12/11 6:19 PM Chapter One figure 1–1 Organizational Behavior 7 OB-Related Skills Are the Ticket to Ride the Virtuous Career Spiral Job s ard w Re Rew ard Motivation and Satisfaction s Pe rfo rm H I G Perf orma G nc e Skills Job S SOURCE: Edward E Lawler III, Treat People Right! How Organizations and , Individuals Can Propel Each Other ance Skills into a Virtual Spiral of Success, Jossey-Bass, 2003, p 21. Reprinted with permission of John Wiley & Sons, Inc. S complexity modeling, and the like. Those may be useful, particularly if you join a consulting firm, but real managers need to know howHto get the most out of people. We hope you have the clout to make sure people management is front and A center at your university. If you do, you’ll launch your students’ careers with a real 14 N head start. I C is an academic designation. Can I Get a Job in OB? Organizational behavior With the exception of teaching/research positions, OB Q is not an everyday job category such as accounting, marketing, information technology, or finance. Students U per se. This reality in no of OB typically do not get jobs in organizational behavior, way demeans OB or lessens its importance in effective Aorganizational management. OB is a horizontal discipline cutting across virtually every job category, business function, and professional specialty. Anyone who plans to make a living in a large 3 organizational behavior. or small, public or private, organization needs to study 1 A Historical Perspective 5of OB 3 helps in studying organiA historical perspective of the study of people at work zational behavior. According to a management history B expert, this is important because: U Example. Historical perspective is the study of a subject in light of its earliest phases and subsequent evolution. Historical perspective differs from history in that the object of historical perspective is to sharpen one’s vision of the present, not the past.15 organizational behavior Interdisciplinary field dedicated to better kre29368_ch01_001-031.indd 7 TO THE POINT What lessons from McGregor and Deming can help managers build human and social capital? understanding and managing people at work. 08/12/11 6:19 PM 8 Part One The World of Organizational Behavior In other words, we can better understand where the field of OB is today and where it appears to be headed by appreciating where it has been and how it is being redirected.16 Let us examine four significant landmarks in the understanding and management of people in the workplace. 1. 2. 3. 4. The human relations movement. The quality movement. The Internet and social media revolution. The age of human and social capital. The Human Relations Movement Go to www.mcgrawhillconnect.com for an interactive exercise to test your knowledge on the history of organizational behavior. A unique combination of factors during the 1930s fostered the human relations H movement. First, following legalization of union–management collective bargaining in the United States in 1935, management began looking for new ways of I handling employees. Second, behavioral scientists conducting on-the-job research G to the “human” factor. Managers who had lost started calling for more attention the battle to keep unions out G of their factories heeded the call for better human relations and improved working conditions. One such study, conducted at Western S plant, was a prime stimulus for the human Electric’s Chicago-area Hawthorne relations movement. Ironically,, many of the Hawthorne findings have turned out to be more myth than fact. The Hawthorne LegacyS Interviews conducted decades later with three subjects of the Hawthorne studies and reanalysis of the original data with H modern statistical techniques do not support initial conclusions about the posiA tive effect of supportive supervision. Specifically, money, fear of unemployment during the Great Depression, managerial discipline, and high-quality raw N materials—not supportive supervision—turned out to be responsible for high output in the relay assembly Itest room experiments.17 Nonetheless, the human relations movement gathered C momentum through the 1950s, as academics and managers alike made stirring claims about the powerful effect that individual Q and group dynamics apparently had on job needs, supportive supervision, performance. U A The Writings of Mayo and Follett Essential to These relay assembly test room employees in the classic Hawthorne Western Electric studies turned in record performance. Why? No one knows for certain, and debate continues today. Supportive supervision was long believed to be the key factor. Whatever the reason, Hawthorne gave the budding human relations movement needed research credibility. kre29368_ch01_001-031.indd 8 the human relations movement were the writings of Elton Mayo 3 and Mary Parker Follett. Australian-born Mayo, who headed the Harvard researchers at Hawthorne, ad1 vised managers to attend to employees’ emotional needs in his 1933 classic The Human Problems of an Industrial Civil5 ization. Follett was a true pioneer, not only as a woman 3 management consultant in the male-dominated industrial world of the 1920s, but also as a writer who saw employees B as complex combinations of attitudes, beliefs, and needs. U Follett was way ahead of her time in telling Mary Parker managers to motivate job performance instead of merely demanding it, a “pull” rather than “push” strategy. She also built a logical bridge between political democracy and a cooperative spirit in the workplace.18 McGregor’s Theory Y In 1960, Douglas McGregor wrote a book entitled The Human Side of Enterprise, which has become an important philosophical base for the modern view of people at work.19 Drawing on his experience as a management consultant, McGregor formulated 08/12/11 6:19 PM Chapter One table 1–1 Organizational Behavior 9 McGregor’s Theory X and Theory Y OUTDATED (THEORY X) ASSUMPTIONS ABOUT PEOPLE AT WORK MODERN (THEORY Y) ASSUMPTIONS ABOUT PEOPLE AT WORK 1. Most people dislike work; they avoid it when they can. 1. Work is a natural activity, like play or rest. 2. Most people must be coerced and threatened with punishment before they will work. People require close direction when they are working. 2. People are capable of selfdirection and self-control if they are committed to objectives. 3. Most people actually prefer to be directed. They tend to avoid responsibility and exhibit little ambition. They are interested only in security. 3. People generally become committed to organizational objectives if they H are rewarded for doing so. 4. 5. I G employee can learn to The typical acceptG and seek responsibility. The typical S member of the general population has imagination, , and creativity. ingenuity, SOURCE: From D McGregor, The Human Side of Enterprise, McGraw-Hill, 1960, Ch 4. Copyright © 2008 The McGraw-Hill Companies. Reprinted with permission. S H A two sharply contrasting sets of assumptions about human nature (see Table 1–1). His Theory X assumptions were pessimistic and negative and, according to McN Gregor’s interpretation, typical of how managers traditionally perceived employI ees. To help managers break with this negative tradition, McGregor formulated his Theory Y, a modern and positive set of assumptions about people. McGregor C believed managers could accomplish more through others by viewing them as selfQ energized, committed, responsible, and creative beings. Unfortunately, according to ongoing research U on employee engagement, McGregor’s Theory Y is still a distant vision in the American workplace: A Example. The August 2009 Gallup Employee Engagement Index reported that 3 49 percent are not engaged, only 33 percent of workers are engaged in their jobs, and 18 percent are actively disengaged. The Gallup 1 Organization defines the categories as follows: Engaged employees work with passion and feel a5profound connection to their company. They drive innovation and move the organization forward. 3 Non-engaged employees have essentially “checked out.” They sleepwalk B through workdays. They put in time but don’t approach their work with energy or U passion. Actively disengaged employees aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what engaged coworkers accomplish. Theory Y McGregor’s modern and positive assumptions about employees being responsible and creative. kre29368_ch01_001-031.indd 9 08/12/11 6:19 PM 10 Part One The World of Organizational Behavior Gallup researchers, who base the Employee Engagement Index on a survey of nearly 42,000 randomly selected adults, estimate that disengaged workers cost US businesses as much as $350 billion a year.20 Employee engagement, and many ways to improve it, are discussed in later chapters. New Assumptions about Human Nature Unfortunately, unsophisticated behavioral research methods caused the human relationists to embrace some naive and misleading conclusions.21 For example, human relationists believed in the axiom, “A satisfied employee is a hardworking employee.” Subsequent research, as discussed later in this book, shows the satisfaction → performance linkage to be more complex than originally thought. H Despite its shortcomings, the human relations movement opened the door to I human nature. Rather than continuing to view more progressive thinking about employees as passive economicG beings, managers began to see them as active social beings and took steps to create more humane work environments. G S The Quality Movement , documentary titled “If Japan Can . . . Why Can’t In 1980, NBC aired a television We?” It was a wake-up call for North American companies to dramatically improve product quality or continue losing market share to Japanese electronics and S automobile companies. A full-fledged movement ensued during the 1980s and H and done about improving the quality of both 1990s. Much was written, said, goods and services.22 A Thanks to the concept of total quality management (TQM) and Six Sigma N and services we purchase today is significantly programs, the quality of the goods better than in years past. Six Sigma was developed in 1986 at Motorola by engiI neer Bill Smith to achieve an astounding 99.9997% quality target by eliminating C licensed to companies such as General Electric defects and cutting waste. It was that became avid users. An estimated 35% of US companies have adopted Six Q Sigma. U A Example. Six Sigma, broadly speaking, expresses a way of thinking about busi- ness problems that encourages precision and predictability. The mantra of Six Sigma “black belts” is DMAIC, 3 for “define, measure, analyze, improve, control.” The “sigma” refers to the Greek letter, which in statistics is used to measure how 1 far something deviates from perfection. The “six” comes from the goal to be no more than six standard deviations 5 away from that perfect measure.23 3 The underlying principles B of TQM and Six Sigma are more important than ever given customers’ steadily rising expectations: U Example. Establish a reputation for great value, top quality, or pulling late-night miracles in time for crucial client meetings, and soon enough, the goalposts move. “Greatness” lasts only as long as someone fails to imagine something better. Inevitably, the exceptional becomes the expected. Call it the performance paradox: If you deliver, you only qualify to deliver more. Great companies and their employees have always endured this treadmill of expectations. But these days, the brewing forces of technology, productivity, and transparency have accelerated the cycle to breakneck speed.24 kre29368_ch01_001-031.indd 10 08/12/11 6:19 PM Chapter One Organizational Behavior 11 The quality movement has profound practical implications for managing people today. What Is TQM? Experts on the subject offered this definition of total quality management: Example. TQM means that the organization’s culture is defined by and sup- ports the constant attainment of customer satisfaction through an integrated system of tools, techniques, and training. This involves the continuous improvement of organizational processes, resulting in high-quality products and services.25 H Quality consultant Richard J Schonberger sums I up TQM as “continuous, customer-centered, employee-driven improvement.”26 TQM is necessarily emG be continuously improved ployee driven because product or service quality cannot without the active learning and participation of every G employee. Thus, in successful quality improvement programs, TQM principles are embedded in the organization’s culture. In fact, according to the resultsSof a field experiment, bank customers had higher satisfaction after interacting with , bank employees who had 27 been trained to provide excellent service. The Deming Legacy S Quality is in the corporate DNA today thanks in large H28 Ironically, the mathematipart to the pioneering work of W Edwards Deming. cian credited with Japan’s post–World War II quality A revolution rarely talked in terms of quality. He instead preferred to discuss “good management” during the hard-hitting seminars he delivered right up until hisNdeath at age 93 in 1993.29 Although Deming’s passion was the statistical measurement and reduction of variaI tions in industrial processes, he had much to say about how employees should be C treated. Regarding the human side of quality improvement, Deming called for the following: Q U Formal training in statistical process control techniques and teamwork. Helpful leadership, rather than order giving and A punishment. Elimination of fear so employees will feel free to ask questions. Emphasis on continuous process improvements rather than on numerical 3 quotas. 1 • Teamwork. • Elimination of barriers to good workmanship.530 • • • • 3 One of Deming’s most enduring lessons for managers is his 85–15 rule.31 Specifically, when things go wrong, there is roughly B an 85% chance the system (including management, machinery, and rules) is at fault. Only about 15% of the U time is the individual employee at fault. Unfortunately, as Deming observed, the typical manager spends most of his or her time wrongly blaming and punishing individuals for system failures. Statistical analysis is required to uncover system failures. total quality management An organizational culture dedicated to training, continuous improvement, and customer satisfaction. kre29368_ch01_001-031.indd 11 08/12/11 6:19 PM 12 Part One The World of Organizational Behavior LO.2 Principles of TQM Despite variations in the language and scope of TQM programs, it is possible to identify four common TQM principles: 1. 2. 3. 4. Do it right the first time to eliminate costly rework and product recalls. Listen to and learn from customers and employees. Make continuous improvement an everyday matter. Build teamwork, trust, and mutual respect.32 Deming’s influence is clearly evident in this list. Once again, as with the human relations movement, we see people as the key factor in organizational success. In summary, TQM advocates have made a valuable contribution to the field of OB by providing a practical context for managing people. The case for TQM is strong because, as discovered in two comprehensive studies, it works.33 When people are managed accordingHto TQM principles, more of us are likely to get the employment opportunities and high-quality goods and services we demand. I the TQM principle of continuous improvement Organizations that lose sight of do so at their own peril. When GChrysler’s once-popular PT Cruiser went out of production in 2010, one observer noted, “It’s a car that, initially, people loved. But G the company then tried to squeeze as much profit as it could out of the car, refusing to properly redesign it and S eventually fitting it with cheaper radios and interior 34 materials to save a few pennies.” , As you will see many times in later chapters, this book is anchored to Deming’s philosophy and TQM principles—especially the idea of continuous improvement. S H Back to the Chapter-Opening Case A What TQM principles are embedded N in Zappos.com’s values and culture? I C Q LO.3 The Internet and Social Media Revolution U start-ups were the rage, advocates said the InterIn the early 1990s, when Internet net would change everything. A Then came the tech crash of 2001 and the Internet Go to www.mcgrawhillconnect.com for an interactive exercise to test your knowledge on The Net Generation. promise was ridiculed as pure hype. But after some adolescent growing pains, the now-mobile Internet has in fact changed everything. Raw numbers are impressive: Internet users worldwide3grew from 361 million in 2001 to nearly 2 billion by 2010.35 What was once e-commerce (buying and selling goods and services over the Internet) has evolved 1 into e-business, using the Internet to facilitate every aspect of running a business, 5 including the management of virtual teams.36 Said one industry observer: “Strip away the highfalutin talk, and at bottom, the In3 ternet is a tool that dramatically lowers the cost of communication. That means it can radically alter any industry B or activity that depends heavily on the flow of information.”37 U Another important shift in the Internet—enabled by social media innovations such as Facebook, LinkedIn, and Twitter—is the growing importance of usergenerated content. Passive consumers of mass content (e.g., watching TV and movies and reading print media) have become creators and distributors of individualized content who blog, Facebook, and tweet whatever they like to whomever they like whenever they like.38 This is hugely empowering for the individual consumer, employee, citizen, student, etc. Example. [Social media entrepreneur] Amit Kapur envisions a Web that’s more about him. When he visits a news site, the headlines will be heavy on technology, kre29368_ch01_001-031.indd 12 08/12/11 6:19 PM Chapter One Organizational Behavior 13 real WORLD // real PEOPLE: ethics Is Your Robot Watching Me? In a 2007 issue of Scientific American, [Microsoft cofounder] Bill Gates predicted that the future would bring a “robot in every home.” In the foreseeable future, though, it may be a robot in every cubicle—or at least every third cubicle. Industrial and technological companies across the globe are already hard at work trying to make this a reality. The QB, a “remote presence robot” created by Anybots, based in Mountain View, California, is basically a videoH conferencing system on wheels. The QB, which looks I a little like Wall-E, is controlled remotely through a Web browser and keyboard, allowing managers to virtually visit G satellite branches from the comfort of their offices. The $15,000 QB was unveiled in May, and according to Anybots’ founder, Trevor Blackwell, sales are in the hundreds. “Everyone already has videoconferencing,” says Blackwell. “Yet planes are still full of people traveling for business.” Where should managers draw the line between proper managerial oversight of remote workers and invading their privacy with electronic monitoring technology? SOURCE: Excerpted from E Spitznagel, “The Robot Revolution Is Coming,” Bloomberg Businessweek, January 17–23, 2011, p 70. G S his passion; when we opens Yelp on his iPhone, the restaurant review app will al, ready know about his upcoming trip to San Francisco and recommend restaurants there. “I imagine this future where everywhere you go online or any application you open on your mobile device is in some way personalized to you and your inS terests,” says Kapur, 29.39 H A New technologies such as smart phones, cloud computing, and augmented reality are important change drivers.40 But relativeNto OB, we need to focus on how the evolving Internet has changed the behavior I of those who have grown up with the Internet and take Google, Facebook, YouTube, and tweeting for C Grown Up Digital: How granted. Don Tapscott, author of the intriguing book the Net Generation Is Changing the World, says the Q81 million Americans born between January 1977 and December 1997 have a unique worldview shaped by U the Internet: A Example. These are the eight norms of the Net Generation. They value free- dom—freedom to be who they are, freedom of choice. 3 They want to customize everything, even their jobs. They learn to be skeptical, to scrutinize what they see and read in the media, including the Internet.1They value integrity—being honest, considerate, transparent, and abiding by their 5 commitment. They’re great collaborators, with friends online and at work. They thrive on speed. They love to 3 innovate. B your company, school or . . . [I]f you understand these norms, you can change 41 university, government, or family for the twenty-first Ucentury. (Tapscott’s ideas about the Net Generation are expanded upon in Chapter 14.) In short, organizations and organizational life will never be the same because of the virtual world of the Internet42 (see Real World/Real People). e-business Running the entire business via the Internet and managing virtual teams. kre29368_ch01_001-031.indd 13 08/12/11 6:19 PM 14 Part One The World of Organizational Behavior Managers are challenged to effectively communicate with, supervise, and lead widely dispersed individuals and teams linked via modern telecommunications and Internet technology. The creation and management of virtual teams is covered in detail in Chapter 11 and virtual organizations are explored in Chapter 17. LO.4 The Need to Build Human and Social Capital Knowledge workers, those who add value by using their brains rather than the sweat off their backs, are more important than ever in today’s global economy. What you know and who you know increasingly are the keys to both personal and organizational success (see Figure 1–2). In the United States, the following “perfect storm” of current and emerging trends heightens the importance and urgency of building human capital: H I • Spread of advanced technology to developing countries with rapidly growing middle classes (e.g., China, India, Russia, and Brazil). G • Offshoring of increasingly sophisticated jobs (e.g., product design, architecture, medical diagnosis). G Sand science skills among America’s youth. • Comparatively poor math , by retiring post–World War II baby-boom • Massive brain drain caused generation.43 S H figure 1–2 The Strategic Importance and Dimensions of Human and A Social Capital N Strategic I assumption: CPeople, individually collectively, Qand are the key to U organizational success A Individual human capital 3 • Intelligence/abilities/ knowledge 1 • Visions/dreams/aspirations • Technical and social skills 5 • Confidence/self-esteem 3 • Initiative/entrepreneurship B • Adaptability/flexibility • Readiness to learn U Organizational learning • Creativity (Shared knowledge) • Enthusiasm • Motivation/commitment • Persistence • Ethical standards/courage • Honesty • Emotional maturity kre29368_ch01_001-031.indd 14 Social capital • Shared visions/goals • Shared values • Trust • Mutual respect/goodwill • Friendship/support groups • Mentoring/positive role modeling • Participation/empowerment • Connections/sources • Networks/affiliations • Cooperation/collaboration • Teamwork • Camaraderie • Assertive (rather than aggressive) communication • Functional (rather than dysfunctional) conflict • Win–win negotiations • Philanthropy/volunteering 08/12/11 6:19 PM Chapter One Organizational Behavior 15 What Is Human Capital? (Hint: Think BIG) A team of human resource management authors offered this perspective: “We’re living in a time when a new economic paradigm—characterized by speed, innovation, short cycle times, quality, and customer satisfaction—is highlighting the importance of intangible assets, such as brand recognition, knowledge, innovation, and particularly human capital.”44 Human capital is the productive potential of an individual’s knowledge and actions. Potential is the operative word in this intentionally broad definition. When you are hungry, money in your pocket is good because it has the potential to buy a meal. Likewise, a present or future employee with the right combination of knowledge, skills, and motivation to excel represents human capital with the potential to give the organization a competitive advantage. In a 2010 poll of 449 human resource professionals, “Obtaining human H capital and optimizing human capital investments” was identified as the number-one challenge for companies over theInext 10 years.45 Intel, a high-tech computer-chip manufacturer, is proactive in this G area because its future depends on innovative engineering. It takes Thanks to Intel’s deep commitment to G engineers. education and building human capital, these years of math and science studies to make world-class select students got a pat on the back from Not wanting to leave the future supply of engineers S to chance, Intel President Obama. annually spends $100 million funding education initiatives at all , to study levels worldwide.46 The company encourages youngsters math and science and sponsors rigorous science competitions with scholarships up to $100,000 for the winners.47 Will all of the students end up working for Intel? S No. That’s not the point. The point is much bigger—namely, to build the world’s human capital. H A What Is Social Capital? Our focus now shifts Nfrom the individual to social units (e.g., friends, family, company, group or club, nation). Think relationships. I strong relationships, goodSocial capital is productive potential resulting from 48 will, trust, and cooperative effort. Again, the word C potential is key. According to experts on the subject: “It’s true: the social capital that used to be a given in Qsocial capital we can build organizations is now rare and endangered. But the will allow us to capitalize on the volatile, virtual possibilities of today’s business U environment.”49 Relationships do matter. In a general survey, 77% of the women A boss” extremely important. and 63% of the men rated “Good relationship with Other factors—including good equipment, resources, easy commute, and flexible hours—received lower ratings.50 Moreover, research indicates the favorable im3 pacts positive social interactions can have on cardiovascular health and the im51 1 mune system. 5 Building Human and Social Capital Various dimensions of human 3 and social capital are listed in Figure 1–2. They are a preview of what lies ahead in Blearning in Chapter 17. Forthis book, including our discussion of organizational mal organizational learning and knowledge management U programs, as discussed in Chapter 12, need social capital to leverage individual human capital for the greater good. It is a straightforward formula for success. Growth depends on the timely sharing of valuable knowledge. After all, what good are bright employees who do not network, teach, and inspire? human capital The productive potential of one’s knowledge and actions. kre29368_ch01_001-031.indd 15 social capital The productive potential of strong, trusting, and cooperative relationships. 08/12/11 6:19 PM 16 Part One The World of Organizational Behavior Back to the Chapter-Opening Case How does Zappos.com build human and social capital? LO.5 TO THE POINT Which of Wilson’s managerial skills are most important for 21stcentury managers? The Managerial Context: Getting Things Done with and through Others H managers touch our lives in many ways. Schools, Like the organizations they run, hospitals, government agencies,I and large and small businesses all require systematic management. Formally defined, management is the process of working with G and through others to achieve organizational objectives, efficiently and ethically, in the face of constant change. For G students of OB, the central feature of this definition is working with and through others. Managers play a constantly evolving role. S no longer the I’ve-got-everything-under-control Today’s successful managers are order givers of yesteryear. Rather, , they need to creatively envision and actively sell bold new directions in an ethical and people-friendly manner. Effective managers are team players empowered by the willing and active support of others who S are driven by conflicting self-interests. Each of us has a huge stake in how well managers carry out their evolving role. A recent review of 30 years of business H literature led to this conclusion about what good management involves: “Find a A experience and a mass of information can interclear purpose. Be aware that past fere with wise decisions. Maintain N a bias toward action. Be open to change. Seek feedback.”52 A good managerial role model is Walmart’s CEO Mike Duke. His predecessor Lee Scott recently Ihad this to say in a Fortune magazine interview: C Example. “Mike is not only aQ good leader but a really good manager. There’s so much said today about leadership. U But I don’t think in business you can forget the fact that you don’t just have to lead, you have to manage.” . . . A than I am,” says Scott. “I think it’s his ability to “Yeah, he’s a better manager deal with data, his ability to set a schedule and follow that schedule, and to get all of the things done that he needs to get done. Mike is disciplined, and I think that 3 causes him to be able to accomplish a great deal—how he manages his time, how he manages his people, and the1effectiveness of the time he spends with people.”53 5 Quality of management can 3 make a big difference for employees and customers, alike. Let us take a closer look atB the skills managers need to perform and the future direction of management. U What Do Managers Do? A Skills Profile Observational studies by Henry Mintzberg and others have found the typical manager’s day to be a fragmented collection of brief episodes.54 Interruptions are commonplace, while large blocks of time for planning and reflective thinking are not. In one particular study, four top-level managers spent 63% of their time on activities lasting less than nine minutes each. Only 5% of the managers’ time was devoted to activities lasting more than an hour.55 But what specific skills do effective managers perform during their hectic and fragmented workdays? Many attempts have been made over the years to paint a realistic picture of what managers do. Diverse and confusing lists of managerial functions and roles kre29368_ch01_001-031.indd 16 08/12/11 6:19 PM Chapter One table 1–2 Organizational Behavior 17 Skills Exhibited by an Effective Manager 1. Clarifies goals and objectives for everyone involved. 2. Encourages participation, upward communication, and suggestions. 3. Plans and organizes for an orderly work flow. 4. Has technical and administrative expertise to answer organization-related questions. 5. Facilitates work through team building, training, coaching, and support. 6. Provides feedback honestly and constructively. H 7. Keeps things moving by relying on schedules, deadlines, and helpful reminders. I G Applies reasonable pressure for goal accomplishment. Empowers and delegates key duties to others G while maintaining goal clarity and commitment. S Recognizes good performance with rewards and , positive reinforcement. 8. Controls details without being overbearing. 9. 10. 11. S H A have been suggested. Fortunately, a stream of research N over the past 20 years by Clark Wilson and others has I given us a practical and statistically validated profile C of managerial skills56 (see Table 1–2). Wilson’s managerial skills profile focuses on 11 observable categoQ ries of managerial behavior. This is very much in tune U with today’s emphasis on managerial competency. Wilson’s unique skills-assessment technique goes beA SOURCES: Adapted from material in F Shipper, “A Study of the Psychometric Properties of the Managerial Skill Scales of the Survey of Management Practices,”Educational and Psychological Measurement, June 1995, pp 468–79; and C L Wilson, How and Why Effective Managers Balance Their Skills: Technical, Teambuilding, Drive (Columbia, MD: Rockatech Multimedia Publishing, 2003). yond the usual self-report approach with its natural bias. In addition to surveying a given manager about his or her 11 skills, the Wilson approach also asks 3 those who report directly to the manager to answer 1 questions about their boss’s skills. According to Wilson and his colleagues, the result is an assessment of 5 skill mastery, not simply skill awareness.57 The logic According to Lee Scott, Mike Duke’s predecessor as CEO 3 behind Wilson’s approach is both simple and compelof Walmart, Duke is both a good leader and a good manager ling. Who better to assess a manager’s skills than the B because of his discipline, ability to handle lots of data, people people who experience those behaviors on a day-to- skills, and focus on getting timely results. U day basis—those who report directly to the manager? The Wilson managerial skills research yields four useful lessons: 1. Dealing effectively with people is what management is all about. The 11 skills in Table 1–2 constitute a goal creation/commitment/feedback/reward/ accomplishment cycle with human interaction at every turn. management Process of working with and through others to achieve organizational objectives, efficiently and ethically, amid constant change. kre29368_ch01_001-031.indd 17 08/12/11 6:19 PM 18 Part One The World of Organizational Behavior 2. Managers with high skills mastery tend to have better subunit performance and employee morale than managers with low skills mastery.58 3. Effective female and male managers do not have significantly different skill profiles,59 contrary to claims in the popular business press in recent years.60 4. At all career stages, derailed managers (those who failed to achieve their potential) tended to be the ones who overestimated their skill mastery (rated themselves higher than their employees did).61 This prompted the following conclusion from the researcher: “[W]hen selecting individuals for promotion to managerial positions, those who are arrogant, aloof, insensitive, and defensive should be avoided.”62 LO.6 21st-Century Managers Today’s workplace is indeed Hundergoing immense and permanent changes.63 Organizations have been “reengineered” for greater speed, efficiency, and flexI ibility. Teams are pushing aside the individual as the primary building block of G organizations.64 Command-and-control management is giving way to participaG tive management and empowerment. Ego-centered leaders are being replaced by customer-centered leaders. Employees increasingly are being viewed as internal S customers. A 2008 summit of 35 executives and management scholars prompted , a call for a reinvention of management. Lead researcher Gary Hamel framed the challenge this way: S Example. [Historically,] the problems were efficiency and scale, and the solution H was bureaucracy, with its hierarchical structure, cascading goals, precise role defiAprocedures. nitions, and elaborate rules and Managers today face a newNset of problems, products of a volatile and unforgiving environment. Some of the most critical: How in an age of rapid change do you create organizations that Iare as adaptable and resilient as they are focused and efficient? How in a world where C the winds of creative destruction blow at gale force can a company innovate quickly and boldly enough to stay relevant and Q profitable? How in a creative economy where entrepreneurial genius is the secret to success do you inspire employees to bring the gifts of initiative, imagination, and U passion to work every day? How . . . do you encourage executives to fulfill their A responsibilities to all stakeholders?65 3 All this creates a mandate for more flexible, innovative, and responsive organi1 in the 21st century (see Table 1–3). zations and a new kind of manager 5 3 Back to the Chapter-Opening Case B What evidence of a 21st-centuryUorganization, based on Table 1–3, can you find in the Zappos.com case? The Contingency Approach to Management Scholars have wrestled for many years with the problem of how best to apply the diverse and growing collection of management tools and techniques. Their answer is the contingency approach. The contingency approach calls for using management techniques in a situationally appropriate manner, instead of trying to rely on “one best way” or “one size fits all.” kre29368_ch01_001-031.indd 18 08/12/11 6:19 PM Chapter One table 1–3 Organizational Behavior 19 Evolution of the 21st-Century Manager PAST MANAGERS FUTURE MANAGERS Primary role Order giver, privileged elite, manipulator, controller Facilitator, team member, teacher, advocate, sponsor, coach Learning and knowledge Periodic learning, narrow specialist Continuous life-long learning, generalist with multiple specialties Compensation criteria Time, effort, rank Skills, results Cultural orientation Monocultural, monolingual Primary source of influence Formal authority View of people Potential problem Primary communication pattern Vertical Decision-making style Limited input for individual decisions Ethical considerations Nature of interpersonal relationships Handling of power and key information Approach to change H Multicultural, multilingual I Knowledge (technical and G interpersonal) G Primary resource; human S capital , Multidirectional Broad-based input for joint S decisions H Forethought Afterthought A Competitive (win–lose) Cooperative (win–win) N I Share and broaden access Hoard and restrict access C for greater transparency Resist Q Facilitate U A The contingency approach encourages managers to view organizational behavior within a situational context. According to this modern perspective, evolving situations, not hard-and-fast rules, determine when3 and where various management techniques are appropriate. Harvard’s Clayton Christensen put it this way: 1 “Many of the widely accepted principles of good management are only situation66 ally appropriate.” For example, as discussed in Chapter 5 16, contingency researchers have determined that there is no single best style of leadership. Organizational 3 behavior specialists embrace the contingency approach because it helps them reB circumstances inside and alistically interrelate individuals, groups, and evolving outside the organization. Moreover, the contingency Uapproach sends a clear message to managers in today’s global economy: Carefully read the situation and then be flexible enough to adapt (see Real World/Real People on page 20). contingency approach Using management tools and techniques in a situationally appropriate manner; avoiding the one-best-way mentality. kre29368_ch01_001-031.indd 19 08/12/11 6:19 PM 20 Part One The World of Organizational Behavior real WORLD // real PEOPLE Will Happy Employees Mean Happy Customers for American Express? [L]ast year when [American Express] gave its global customer service division a makeover, it decided to focus on making life better for its 26,000 call-center employees. The theory: Happier employees mean happier customers. “We’ve learned the importance of the attitude of the employee,” says Jim Bush, EVP of world service. AmEx started by asking customer service employees what they wanted to see—and then delivered better pay, flexible schedules, and more career development. It also switched from a directive to keep calls short and transaction-oriented to engaging customers in longer conversations. Collectively, the moves have boosted service margins by 10%. “Great service starts with the people who deliver it,” says [CEO Ken] Chenault. “We want American Express to be the company people recommend to their friends.” Based on Table 1–3, what evidence of 21st-century management can you find here? TO THE POINT How can an understanding of Carroll’s social responsibility pyramid and the seven moral principles lead to more ethical conduct in the workplace? SOURCE: Excerpted from C Tkaczyk, “American Express,” Fortune, August 16, 2010, p 14. H I G G S , American Express CEO Kenneth I Chenault. S H The Ethics Challenge A Thanks to highly publicized criminal acts of now-jailed executives from the likes N of Enron, Tyco, and WorldCom,67 corporate officers in the United States became subject to high accountability Istandards and harsh penalties under the SarbanesOxley Act of 2002.68 Sadly, instead of improving, business ethics continued to hit C new lows, as symbolized by Ponzi schemer Bernard Madoff’s 150-year prison senQ record $550 million fine to settle fraud charges tence in 2009 and Goldman Sachs’s and elected officials (who have their own criminal in 2010.69 The general public U hall of shame) continue to call for greater attention to ethical conduct.70 A in the effort to stem this tide of unethical conClearly, everyone needs to join duct. There are a variety of individual and organizational factors that contribute to unethical behavior. OB is an excellent vantage point for better understanding and improving workplace 3 ethics. If OB can provide insights about managing human work behavior, then it can 1 teach us something about avoiding misbehavior. Ethics involves the study of moral issues and choices. It is concerned with right versus wrong, good versus bad,5and the many shades of gray in supposedly blackand-white issues. Moral implications spring from virtually every decision, both on 3 and off the job. Managers are challenged to have more imagination and the courB the world a better place. age to do the right thing to make To enhance our understanding U of ethics within an OB context, we will discuss (1) a corporate social responsibility model, (2) the general erosion of morality, (3) seven moral principles for managers, (4) how to improve an organization’s ethical climate, and (5) a personal call to action. LO.7 A Model of Global Corporate Social Responsibility and Ethics Corporate social responsibility (CSR) is defined as “the notion that corporations have an obligation to constituent groups in society other than stockholders and beyond that prescribed by law or union contract.”71 CSR challenges businesses to go above and beyond just making a profit to serve the interests and needs of kre29368_ch01_001-031.indd 20 08/12/11 6:19 PM Chapter One figure 1–3 Organizational Behavior 21 Carroll’s Global Corporate Social Responsibility Pyramid Be a good global corporate citizen Be ethical Obey the law Be profitable Do what is desired by global stakeholders Philanthropic Responsibility Ethical Responsibility Do what is expected by global stakeholders H I G Legal G Responsibility S , Do what is required by global stakeholders Economic S Responsibility Do what is required by global capitalism H A SOURCE: A B Carroll, Academy of Management Executive: The Thinking Manager’s Source. Copyright © 2004 by The Academy of N via Copyright Clearance Center. Management. Reproduced by permission of The Academy of Management I C customers, suppliers, and “stakeholders,” including past and present employees, Go to countries and communities where facilities are located. Q 72 A good deal of contro- www.mcgrawhillconnect.com versy surrounds the drive for greater CSR because classical economic theory says for a video case on Patagonia U businesses are responsible for producing goods and services to make profits, not and their philosophy solving the world’s social, political, and environmental A ills.73 What is your opinion? concerning corporate social University of Georgia business ethics scholar Archie B Carroll views CSR in broad terms. So broad, in fact, that he created a model of CSR/business ethics 3 in mind (see Figure 1–3). with the global economy and multinational corporations This model is very timely because it effectively triangulates three major trends: (1) 1 economic globalization, (2) expanding CSR expectations, and (3) the call for im5 from the bottom up, advises proved business ethics. Carroll’s global CSR pyramid, organizations in the global economy to 3 responsibility. • Make a profit consistent with expectations forB international businesses. • Obey the law of host countries as well as international law. U • Be ethical in its practices, taking host-country and global standards into consideration. • Be a good corporate citizen, especially as defined by the host country’s expectations.74 ethics Study of moral issues and choices. kre29368_ch01_001-031.indd 21 corporate social responsibility Corporations are expected to go above and beyond following the law and making a profit. 08/12/11 6:19 PM 22 Part One The World of Organizational Behavior In keeping with the pyramid idea, Carroll emphasizes that each level needs to be solid if the structure is to stand. A pick-and-choose approach to CSR is inappropriate. The top level of the pyramid, according to Carroll, reflects “global society’s expectations that business will engage in social activities that are not mandated by law nor generally expected of business in an ethical sense.”75 The spirit of Carroll’s global corporate social responsibility pyramid is evident in Nike’s ongoing quest to shake its sweatshop image: Example. Progress has been slow in coming to Nike’s global supply chain, which employs nearly 800,000 workers in 52 countries. Still, Nike . . . has made strides since it embraced corporate responsibility. What started as a massive PR shield has evolved into a broader mandate for the way it makes and sells products. Nike has been particularly inventive at weaving environmental awareness into its deH sign process, rating each sneaker according to a sustainability index. On labor, the company admits that its initialIefforts—setting a code of conduct and monitoring compliance—haven’t ended abuses across the hundreds of factories that produce G its goods. But the lessons from the 1990s—to own up to problems, then find comG the world’s biggest shoemaker . . . with labor panywide solutions—are helping issues. “I’m proud of what we’ve S accomplished, but we’re still not where we need to be,” says Nike’s current CEO, Mark Parker.76 , Our OB in Action Case Study on Whole Foods at the end of this chapter is a good CSR example. With this globalS CSR perspective in mind, we now narrow the focus to individual moral behavior. H A N Back to the Chapter-Opening Case I Where does Zappos.com belong Con Carroll’s Corporate Social Responsibility Pyramid in Figure 1–3? Explain. Q U A Go to www.mcgrawhillconnect.com for an interactive comprehension case exercise to learn about ethics. An Erosion of Morality? David Callahan, in his book 3 The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead, paints this disturbing picture of modern society: 1 5 Example. [T]he character of Americans has changed. Those values associated with the market hold sway in3their most caricatured form: individualism and self-reliance have morphed into B selfishness and self-absorption; competitiveness has become social Darwinism; desire for the good life has turned into materialU ism; aspiration has become envy. There is a growing gap between the life that many Americans want and the life they can afford—a problem that bedevils even those who would seem to have everything. Other values in our culture have been sidelined; belief in community, social responsibility, compassion for the less able or less fortunate.77 Bolstering this negative view is a 2010 survey in which 72% of Americans polled said corruption had increased in the United States during the past three years.78 Does this portrayal of a “cheating culture” have merit and, if so, to what extent? Let us examine the OB research evidence for relevant insights. kre29368_ch01_001-031.indd 22 08/12/11 6:19 PM Chapter One Organizational Behavior 23 Taking Local Norms and Conduct into Consideration National culture, as discussed in Chapter 4, affects how people think and act about everything, including ethical issues. This reality was supported in a multination study (including the United States, Great Britain, France, Germany, Spain, Switzerland, India, China, and Australia) of management ethics. Managers from each country were asked to judge the ethicality of 12 questionable behaviors, including such things as giving and accepting gifts, passing blame, sharing confidential information, and concealing errors. Results revealed significant differences across the 10 nations in the study. That is, managers in some countries approved of practices that were frowned upon in other countries.79 Consequently, care needs to be taken when extrapolating Callahan’s characterization of American morality to other cultures. Each culture requires its own ethical analysis, taking local norms into consideration. H Ethical Lapses in the Workplace A nationwide survey of 581 human I resource professionals revealed that 62% of the respondents occasionally observed behavior occurs at all organiunethical behavior at their companies.80 Unethical G zational levels, although recent research indicates G that senior executives tend to have significantly more positive perceptions of ethics in their organizations than S employees regularly do lower-level employees.81 Perhaps that is because lower-level witness common ethical lapses such as lying about, being sick, fudging a report, Go to www.mcgrawhillconnect.com for a self-assessment to determine your ethical decision-making skills. bullying and sexual harassment, personal use of company equipment, and stealing company property or funds. Executives are not immune to being victims of unethical conduct, however. For example, a survey of jobSapplicants for executive positions indicated that 64% had been misinformed about the financial condition of H negatively affected by this potential employers, and 58% of these individuals were misinformation.82 It is very likely that some of those A affected individuals moved their families and left their friends only to discover the promise of a great job in N a financially stable organization was a lie. Job applicants, for their part, also have I checks by ADP Screening ethical lapses. An analysis of 2.6 million background and Selection Services, revealed that “44% of applicants C lied about their work histories, 41% lied about their education, and 23% falsified credentials or licenses.”83 Experts estimate that US companies lost about Q $994 billion to fraud in 2008, much of it at the hands of insiders.84 On a global scale, U the World Bank says, “bribery has become a $1 trillion industry.”85 A Intense Pressure for Results Starts Early Lower-level managers generally want to “look good” for their bosses. 3 In support of this conclusion, many studies have found a tendency among middle- and lower-level managers to act unethically in the face of1 perceived pressure for results. Further, this tendency is particularly pronounced when in5 dividuals are significantly rewarded for accomplishing their goals.86 By 3 fostering a pressure-cooker atmosphere for results, managers can unwittingly set the stage for unethical shortcuts by employees who seek to B please the boss, protect their jobs, and be loyal to the company.87 U Unfortunately, the seeds of this problem are planted early in life. A survey of 787 youngsters ages 13 to 18 found “that 44% of teens feel they’re under strong pressure to succeed in school, no matter the cost. Of those, 81% believe the pressure will be the same or worse in the workplace.”88 Sixty-nine percent of the students admitted to lying in the past year (with 27% confessing they even lied on the survey!).89 Anonymous surveys by the Josephson Institute of Ethics of 43,321 students ages 15 to 18 from private and public high schools across the United States found 60% admittedly had cheated on a test in 2010 “and 34% did so twice or more. Students at non-religious private schools cited the lowest percentage (33%), while 56% at religious schools said they cheated.”90 kre29368_ch01_001-031.indd 23 Some believe intense pressure for results by BP managers ultimately was responsible for the 11 deaths and environmental disaster when Transocean’s Deepwater Horizon drilling rig exploded and sank into the Gulf of Mexico in 2010. 08/12/11 6:19 PM 24 table 1–4 Part One The World of Organizational Behavior The Magnificent Seven: General Moral Principles for Managers 1. Dignity of human life: The lives of people are to be respected. Human beings, by the fact of their existence, have value and dignity. We may not act in ways that directly intend to harm or kill an innocent person. Human beings have a right to live; we have an obligation to respect that right to life. Human life is to be preserved and treated as sacred. 2. Autonomy: All persons are intrinsically valuable and have the right to self-determination. We should act in ways that demonstrate each person’s worth, dignity, and right to free choice. We have a right to act in ways that assert our own worth and legitimate needs. We should not use others as mere “things” or only as means to an end. Each person has an equal right to basic human liberty, compatible with a similar liberty for others. 3. Honesty: The truth should be told to those who have a right to know it. Honesty is also known as integrity, truth telling, and honor. One should speak and act so asH to reflect the reality of the situation. Speaking and acting should mirror the way things really are. There are Itimes when others have the right to hear the truth from us; there are times when they do not. G 4. Loyalty: Promises, contracts, and commitments should be honored. Loyalty includes fidelity, promise G in quality of work, reliability, commitment, keeping, keeping the public trust, good citizenship, excellence and honoring just laws, rules, and policies. S 5. Fairness: People should be treated justly. One has the right , to be treated fairly, impartially, and equitably. One has the obligation to treat others fairly and justly. All have the right to the necessities of life—especially those in deep need and the helpless. Justice includes equal, impartial, unbiased treatment. Fairness tolerates diversity and accepts differences in people and their ideas. S 6. Humaneness: There are two parts: (a) Our actions oughtHto accomplish good, and (b) we should avoid doing evil. We should do good to others and to ourselves. We should have concern for the well-being of A others; usually, we show this concern in the form of compassion, giving, kindness, serving, and caring. N good for the greatest number” of people. 7. The common good: Actions should accomplish the “greatest One should act and speak in ways that benefit the welfare of the largest number of people, while trying to I protect the rights of individuals. C Q U In summary, Callahan’s earlier characterization of America’s cheating culture is an appropriate wake-upA call. The challenge to improve is immense because SOURCE: From Kent Hodgson, A Rock and a Hard Place: How to Make Ethical Business Decisions When the Choices Are Tough © 1992. Reprinted with permission of the author. unethical behavior is pervasive. LO.8 3 1 Management consultant and writer Kent Hodgson has helpfully taken manag5 by identifying seven general moral principles ers a step closer to ethical decisions (see Table 1–4). Hodgson calls3them “the magnificent seven” to emphasize their timeless and worldwide relevance. Notions of both justice and care are clearly B which are detailed and, hence, more practical. evident in the magnificent seven, Importantly, according to Hodgson, there are no absolute ethical answers for U General Moral Principles decision makers. The goal for managers should be to rely on moral principles so their decisions are principled, appropriate, and defensible.91 (See Real World/ Real People.) How to Improve the Organization’s Ethical Climate Improving workplace ethics is not just a nice thing to do; it also can have a positive impact on the bottom line. Studies in the United States and the United Kingdom demonstrated that corporate commitment to ethics can be profitable. Evidence kre29368_ch01_001-031.indd 24 08/12/11 6:19 PM Chapter One Organizational Behavior 25 real WORLD // real PEOPLE: ethics Do Billionaire Businesspeople Have an Obligation to “Give Back” to Society? Bill Gates and Warren Buffett announced . . . [in 2010] that 40 of America’s richest people have agreed to sign a “Giving Pledge” to donate at least half their wealth to charity. With a collective net worth said to total $230 billion, that promise translates to at least $115 billion. . . . Successful entrepreneurs-turned-philanthropists typiH cally say they feel a responsibility to “give back” to society. But “giving back” implies they have taken something. I What, exactly, have they taken? Yes, they have amassed G great sums of wealth. But that wealth is the reward they have earned for investing their time and talent in creating products and services that others value. They haven’t taken from society, but rather enriched us in ways that were previously unimaginable. What do you think about the issue of giving back? Explain the ethics and general moral principles of your position. SOURCE: Excerpted from K O Dennis, “Gates and Buffett Take the Pledge,” The Wall Street Journal, August 20, 2010, p A15. G S , suggested that profitability is enhanced by a reputation for honesty and corporate citizenship.92 Ethics also can impact the quality of people who apply to work in an organization. An online survey of 1,020 individuals S indicated that 83% rated a company’s record of business ethics as “very important” when deciding to accept a job offer. Only 2% rated it as “unimportant.”93 H A team of management researchers recommended A the following actions for improving on-the-job ethics.94 N • Behave ethically yourself. Managers are potent role models whose habits I and actual behavior send clear signals about the importance of ethical C conduct. Ethical behavior is a top-to-bottom proposition and executives are challenged “to simultaneously maximize the so-called triple bottom line, or Q ‘People, Planet, Profit.’”95 U are generally lax when • Screen potential employees. Surprisingly, employers it comes to checking references, credentials, transcripts, and other informaA tion on applicant résumés. More diligent action in this area can screen out those given to fraud and misrepresentation. Integrity testing is fairly valid 3 but is no panacea.96 • Develop a meaningful code of ethics. Codes of 1 ethics can have a positive impact if they satisfy these four criteria: 5 1. They are distributed to every employee. 3 2. They are firmly supported by top management. B 3. They refer to specific practices and ethical dilemmas likely to be encountered by target employees (e.g., salespersonsU paying kickbacks, purchasing agents receiving payoffs, laboratory scientists doctoring data, or accountants “cooking the books”). 4. They are evenly enforced with rewards for compliance and strict penalties for noncompliance.97 • Provide ethics training. Employees can be trained to identify and deal with ethical issues during orientation and through seminar, video, and Internet training sessions.98 • Reinforce ethical behavior. Behavior that is reinforced tends to be repeated, whereas behavior that is not reinforced tends to disappear. Ethical conduct too often is ignored or even punished while unethical behavior is rewarded. kre29368_ch01_001-031.indd 25 Go to www.mcgrawhillconnect.com for an interactive exercise to test your knowledge on the model of global corporate social responsibility. 08/12/11 6:19 PM 26 Part One The World of Organizational Behavior • Create positions, units, and other structural mechanisms to deal with ethics. Ethics needs to be an everyday affair, not a one-time announcement of a new ethical code that gets filed away and forgotten. A growing number of large companies in the United States have chief ethics officers who report directly to the CEO, thus making ethical conduct and accountability priority issues. • Create a climate in which whistle-blowing becomes unnecessary. Whistleblowing occurs when an employee reports a perceived unethical and/or illegal activity to a third party such as government agencies, news media, or public-interest groups. Enron’s Sherron Watkins was a highly publicized whistle-blower.99 Organizations can reduce the need for whistle-blowing by encouraging free and open expression of dissenting viewpoints and giving employees a voice through fair grievance procedures and/or anonymous ethics hot lines. H I A Personal Call to G Action Go to www.mcgrawhillconnect.com for an interactive exercise to test your knowledge on improving the ethical climate in your organization. TO THE POINT Which of the five research methodologies is likely to provide the best insights about OB? In the final analysis, ethics comes down to individual perception and motivation. G structure, training, and rewards all can point Organizational climate, role models, employees in the right direction. S But individuals first must be morally attentive, meaning they faithfully consider the ethical implications of their actions and , circumstances.100 Second, they must want to do the right thing and have the courage to act. Bill George, the respected former S CEO of Medtronic, the maker of life-saving devices such as heart pacemakers, gave us this call to action: “Each of us needs H boundaries are and, if asked to violate (them), to determine . . . where our ethical 101 refuse. . . . If this means refusing A a direct order, we must be prepared to resign.” Rising to this challenge requires strong personal values (more about values in Chapter 6) and the courage to N adhere to them during adversity. I C Learning aboutQ OB: Research U and a Road Map A We have a lot of ground to cover. To make the OB is a broad and growing field. trip as instructive and efficient as possible, we use a theory→research→practice strategy. For virtually all major topics in this book, we begin by presenting the 3 (often with graphical models showing how key underlying theoretical framework variables are related) and defining 1 key terms. Next, we tap the latest research findings for valuable insights. Finally, we round out the discussion with illustrative 5 practical examples and, when applicable, how-to-do-it advice. 3 LO.9 Five Sources of OB B Research Insights OB gains its credibility as an U academic discipline by being research driven. Scientific rigor pushes aside speculation, prejudice, and untested assumptions about workplace behavior. We systematically cite “hard” evidence from five different categories. Worthwhile evidence was obtained by drawing on the following priority of research methodologies: • Meta-analyses. A meta-analysis is a statistical pooling technique that permits behavioral scientists to draw general conclusions about certain variables from many different studies.102 It typically encompasses a vast number of subjects, often reaching the thousands. Meta-analyses are instructive because they focus on general patterns of research evidence, not fragmented bits and pieces or isolated studies.103 kre29368_ch01_001-031.indd 26 08/12/11 6:19 PM Chapter One Organizational Behavior • Field studies. In OB, a field study probes individual or group processes in an organizational setting. Because field studies involve real-life situations, their results often have immediate and practical relevance for managers. • Laboratory studies. In a laboratory study, variables are manipulated and measured in contrived situations. College students are commonly used as subjects. The highly controlled nature of laboratory studies enhances research precision. But generalizing the results to organizational management requires caution. • Sample surveys. In a sample survey, samples of people from specified populations respond to questionnaires. The researchers then draw conclusions about the relevant population. Generalizability of the results depends on the quality of the sampling and questioning techniques. H of a single individual, • Case studies. A case study is an in-depth analysis group, or organization, Because of their limited I scope, case studies yield realistic but not very generalizable results. 27 Go to www.mcgrawhillconnect.com for an interactive exercise to test your knowledge on the sources of organizational behavior research. G G A Topical Model for Understanding S and Managing OB , Figure 1–4 is a topical road map for our journey through this book. Our destination is organizational effectiveness through continuous improvement. Four different criteria for determining whether or not an Sorganization is effective are discussed in Chapter 17. The study of OB can be a wandering and pointless trip Han effective and efficient orif we overlook the need to translate OB lessons into ganized endeavor. A At the far left side of our topical road map are managers and team leaders, N those who are responsible for accomplishing organizational results with and through others. The three circles at the center of Iour road map correspond to Parts 2, 3, and 4 of this text. Logically, the flow of topical coverage in this book C to group processes, to or(following introductory Part 1) goes from individuals, ganizational processes. Around the core of our topical Q road map in Figure 1–4 is the organization. Accordingly, we end our journey with organization-related material in Part 4. Organizational structure andUdesign are covered there in Chapter 17 to establish and develop the organizational context of organizaA tional behavior. Rounding out our organizational context is a discussion of organizational change in Chapter 18. Chapters 3 and 4 provide a cultural con3 text for OB. The dotted line represents a permeable boundary between the organization 1 and its environment. Energy and influence flow both ways across this permeable 5 highly interactive and inboundary. Truly, no organization is an island in today’s terdependent world. Relative to the external environment, international cultures 3 B U whistle-blowing Reporting unethical/illegal acts to outside third parties. morally attentive Faithfully considering the ethical implications of one’s actions. meta-analysis Pools the results of many studies through statistical procedure. kre29368_ch01_001-031.indd 27 field study Examination of variables in real-life settings. laboratory study Manipulation and measurement of variables in contrived situations. case study In-depth study of a single person, group, or organization. sample survey Questionnaire responses from a sample of people. 08/12/11 6:19 PM 28 Part One figure 1–4 The World of Organizational Behavior A Topical Model for What Lies Ahead External Environment (Cultural Context) Organization (Structure, Change) ructure, Culture, Change Understanding and managing individual behavior Managers and team leaders responsible for achieving organizational results with and through others H I Understanding G and managing group and social G processes S , Organizational effectiveness through continuous improvement Understanding and managing S organizational processes and H problems A N I are explored in Chapter 4. Organization–environment contingencies are examined C in Chapter 17. Chapter 2 examines the OBQ implications of significant demographic and social trends. These discussions provide U a realistic context for studying and managing people at work. A Bon voyage! Enjoy your trip through the challenging, interesting, and often surprising world of OB. Summary of Key Concepts 1. Define the term organizational behavior, and contrast McGregor’s Theory X and Theory Y assumptions about employees. Organizational behavior (OB) is an interdisciplinary field dedicated to better understanding and managing people at work. It is both research and application oriented. Theory X employees, according to traditional thinking, dislike work, require close supervision, and are primarily interested in security. According to the modern Theory Y view, employees are capable of self-direction, of seeking responsibility, and of being creative. 2. Identify the four principles of total quality management (TQM). (a) Do it right the first time to eliminate costly rework. (b) Listen to and learn from customers and employees. (c) Make continuous improvement an everyday matter. (d ) Build teamwork, trust, and mutual respect. kre29368_ch01_001-031.indd 28 3 1 5 3.3Define the term e-business, and describe the Net GenBeration. E-business involves using the Internet to more effectively and efficiently manage every aspect of a busiUness, including virtual teams. Tapscott describes the Net Generation—the 81 million Americans born between the start of 1977 and the end of 1997 who grew up with the Internet—in terms of eight norms: (a) value freedom, (b) customize everything, (c) be skeptical, (d ) value integrity, (e) abide by commitments, ( f ) be a great collaborator, (g) thrive on speed, (h) love to innovate. 4. Contrast human and social capital, and explain why we need to build both. The first involves individual characteristics; the second involves social relationships. Human capital is the productive potential of an individual’s knowledge and actions. Dimensions include such things as intelligence, 08/12/11 6:19 PM Chapter One visions, skills, self-esteem, creativity, motivation, ethics, and emotional maturity. Social capital is productive potential resulting from strong relationships, goodwill, trust, and cooperative effort. Dimensions include such things as shared visions and goals, trust, mutual respect, friendships, empowerment, teamwork, win–win negotiations, and volunteering. Social capital is necessary to tap individual human capital for the good of the organization through knowledge sharing and networking. Organizational Behavior 29 bottom to top, the four levels of corporate responsibility in Carroll’s pyramid are: economic (make a profit); legal (obey the law); ethical (be ethical in its practices); and philanthropic (be a good corporate citizen). Progress needs to be made on all levels. Callahan’s claim that America has developed a “cheating culture” is supported by unethical conduct at all organizational levels. An unintended but serious consequence of excessive pressure for results, beginning in school and carrying over to the workplace, is expedient unethical behavior. Moral erosion is evident in high school and workplace surveys about misconduct. 5. Define the term management, and identify at least five of the eleven managerial skills in Wilson’s profile of effective 8. Identify four of the seven general ethical principles, and managers. Management is the process of working with explain how to improve an organization’s ethical climate. and through others to achieve organizational objectives in The “magnificent seven” moral principles are (a) dignity an efficient and ethical manner. According to the Wilson of human life, (b) autonomy, (c) honesty,...
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Explanation & Answer

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Running Head: ORGANIZATIONAL BEHAVIOR

Organizational behavior
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ORGANIZATIONAL BEHAVIOR

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Part One

Question One: What role, if any, does McGregor's Theory Y play at Whole Foods? Explain.
Answer
At Whole Foods, employees operate with the aim of meeting the demands of the
customers in the market. In this case, each of the workers has an understanding of the
expectations of the management and how to address the needs of the customers in the market.
The enterprise operates like a community where the staff members are focused towards the
achievement of set goals and objectives (Kreitner & Kinicki, 2013). However, this does not
mean that they do not go out of their way to perform extra duties for the firm. McGregor's theory
Y applies to the organization where the workers do not have to be pushed to perform their duties.
However, since each of them is determined to offer quality, they remain focused towards the
achievement of the goals in their jobs. The management of the organization only focuses on
hiring the right people for the job.
When employees get hired, they join hands and work together as a team determined to
meet the needs of the buyers in the market. Every person enjoys their jobs a reason why they are
always happy. The employees do not have to work under supervision since they are self-driven
and always focus on the different ways through which they can contribute to the growth and
development of the organization (Kreitner & Kinicki, 2013). On the other hand, the workers are
determined to meet the requirements of the management a reason why they make proper
utilization of their skills. Through the variety of activities, employees make their decisions which
align with overall organizational decisions. The theory Y thus is illustrated in the way in which
the staff members of the organization work together towards a common goal.

ORGANIZATIONAL BEHAVIOR

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Reference

Kreitner, R., & Kinicki, A. (2013). Organizational Behavior. Boston: McGraw-Hill/Irwin.

Question Two: How does Whole Foods build human and social capital?
Answer
The firm also provides the employees with an opportunity to utilize their skills so that
they deliver quality through their duties and roles. The employees, ther...


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