Organizational Behavior and Effective Management

1 Organizational behavior is the study of how people act, think, and feel in organizational settings. The roots of the field go back thousands of years. Since the 1900s, major perspectives on organizational behavior have included scientific management, the human relations approach, and the contingency approach. 2 Adopting a contingency orientation means recognizing that organizational behavior is complex and driven by a variety of factors. Consequently, pat (or "cookbook") answers are elusive. Managers must develop their own answers, at least to an extent. 3 Outstanding managers possess four sets of skills that allow them to effectively navigate the process of managing behavior. That process involves 1) identifying the behavioral challenge; 2) identifying the causes of current behavior; 3) choosing a strategy for attaining behavioral goals; and 4) implementing and adjusting the chosen strategy as needed. 4 The behavioral challenges managers face today are exacerbated by the increasing complexity of the work environment and the fast pace of demographic and technological changes. 5 The work force is becoming increasing diverse. Most of the growth in the workforce is being driven by women and various racial or ethnic minorities. Increasing internationalization is also bringing people from a variety of cultural backgrounds together in the workplace. 6 Being able to manage diversity well is more important than ever because decisions are increasingly made in cross-functional teams and task forces. But most corporations still have a long way to go to create a work environment in which diversity is embraced. 7 Likewise, managers need to understand that people who have traditionally been discriminated against (e.g., gays, people with disabilities) represent valuable pools of employee talent. 8 Business practices, cultural values, and market structures usually vary-sometimes dramatically-from country to country. These factors impact all aspects of behavior management and raise the bar when it comes to managers skills. 9 As workplace demands increase, they may spill over into family life. Exacerbating the issue is the fact that family structures have shifted over the years-toward more dual-career couples and single parents. Managers who can recognize these work-family issues and craft flexible solutions will be rewarded with greater employee loyalty and performance.

Organizing Perceptions and Avoiding Biases

1 Our actions are based on our interpretation of events. So understanding perception plays a key role in effective behavior management. Perceptual skills are multifaceted building blocks that pay a major role in problem solving and decision making. 2 Both external (e.g., size/intensity, figure-ground effect) and internal (e.g., self-disclosure) factors drive the perception process. Awareness of these factors helps us understand how we form judgments about others, and in turn, how we can better manage those judgments. 3 Impression management tactics can be either self-enhancing (e.g., name-dropping) or other-enhancing (e.g., flattery). These tactics are used frequently and can be effective, especially under certain conditions. However, certain tactics (e.g., excuse-making) tend to be problematic. Effective managers learn how to both limit the negative effects of impression management and to use impression management tactics judiciously to advance their goals. 4 Impression management also occurs at the firm level. Few companies will pass up opportunities to polish their images. And image and reputation do seem to matter when it comes to financial performance. 5 Two barriers to accurate perception of others include audience extraction (i.e., the creation of self-fulfilling prophecies) and audience selectivity (i.e., paying attention to only certain bits of information). Effective managers can actually take advantage of self-fulfilling prophecies to improve subordinate performance. Likewise, effective managers understand the types of errors that come with selectivity (e.g., halo effects, stereotyping) and take appropriate steps to minimize their negative effects. 6 When observing others, we ultimately make either internal or external attributions for their behavior based on consistency, consensus, and distinctiveness information. Common errors in this process include the actor-observer effect and self-serving bias. Successful managers know how the attribution process works and how to combat common forms of bias.
Understanding Attitudes and Personality

1 Attitudes have affective, cognitive, and behavioral components. Attitudes are more likely to predict behavior if they are specific, no conflicting situational pressures exist, and the attitude itself is strong and salient. 2 Job satisfaction is an important work attitude. Most Americans report that they are satisfied with their jobs. The causes of job satisfaction are idiosyncraticindividuals vary in the extent to which they view the various components of a job as important or not. Evaluating job satisfaction involves comparing what you have in your job against what you want, weighted by the importance of the various components. Job satisfaction can impact absenteeism, turnover, and performance, though in complex ways. 3

Organizational commitment is another important attitude that is related to employees willingness to perform organizational citizenship behaviors (things that go beyond normal job duties or descriptions). Commitment can also come in various forms (affective, normative, continuance). 4 In addition to individual attitudes, we also possess attitudes toward other people and groups, and they in turn possess attitudes about us. Like never before, a variety of people must interact in the workplace. When negative attitudes about differences are minimized and diversity is embraced, firms benefit greatly. We study some of those negative attitudes and offer suggestions to minimize them but, more positively, we also review some techniques that create a more accepting and tolerant corporate environment. 5 Stereotypes about different national, racial, ethnic, gender, and age groups are widespread. Physical disabilities and sexual orientation are also the target of stereotypical attitudes. Stereotypes can cause serious performance and morale problems in organizations. Stereotyping is most likely to occur when certain conditions are met. Combating the negative effects of stereotyping involves recognizing the problem, and reducing or eliminating situational causes. 6 Diversity programs are designed to attract and retain a more heterogeneous work force. Good diversity programs work, but many programs fail and/or cause harm. Problems include the heavy use of blame and shame methods and poorly trained consultants. 7 Companies can do a better job with diversity programs by making sure that clear goals and outcomes measures exist. Making diversity part of the corporate philosophy and doing a careful job of selecting trainers and techniques can also help ensure that the program will succeed.
Motivating Employees to do Their Best

1 Motivation involves triggering employee needs in a way that will arouse effort and direct behavior. Content theories of motivation identify the needs that employees might seek. Process theories, on the other hand, explain the process by which behavior is aroused and then directed. All motivation theories are culture-bound to some degree. 2 Maslows hierarchy of needs is a content theory that argues that employees are motivated by five basic needs. These needs are triggered hierarchically; starting with basic physiological needs and working up to growth needs like self-actualization. 3 Herzbergs two-factor theory is another content-oriented approach. It claims that hygiene factors (e.g. pay, working conditions) cause dissatisfaction, whereas motivating factors (e.g., challenge, responsibility) cause satisfaction. Despite its limitations, the theorys proscriptive emphasis is appealing to managers. 4

Equity theory states that motivation is a function of comparison we make with others. Specifically, this involves comparing pairs of input-outcome ratios. If the ratios are in balance, employees are motivated to maintain the status quo. If not employees are motivated to reduce the inequity somehow (e.g., change inputs, outcomes, or comparisons). Fairness concerns cut across many motivation issues facing firms today. 5 Reinforcement theory states that by using consequences, desirable behaviors can be strengthened and undesirable behaviors eliminated. Basically, managers have four options to choose from: positive reinforcement, negative reinforcement, extinction, and/or punishment. Positive reinforcement is generally the most desirable option and a variety of partial reinforcement strategies are available for implementation purposes. 6 Goals can be very useful in stimulating and guiding behavior. However, managers must determine the goal attributes (e.g., clarity, difficulty), the goal-setting process (e.g. assigned, participative), and the type of reward (e.g., intrinsic or extrinsic) that will work best to produce goal commitment and motivated behavior for their subordinates. Stretch goals can be extremely motivating, but they usually require employee participation and supportive managers who are willing to provide the resources and latitude needed. 7 Expectancy theory states that our assessment of expectancy (Does effort lead to performance?), instrumentality (Does performance lead to rewards?), and valence (Are the available rewards considered valuable?) must be high for motivation to be high. If any one of these three decision factors is zero, then motivation will be zero.
Effective Decision-Making

1 Decision making is a complex process, not just an outcome. Its important to look closely at that process to figure out what makes for a good decision. 2 People use a variety of rational and quantitative methods to make decisions, whether good ones or otherwise. Bounded rational approaches, ones that recognize the immense time and resource constraints on managers, are among the most common. 3 Sometimes, people simply dont make good decisions. Several things account for this, including the fact that some decision styles dont match well with the business environment. Among the most important reasons is an over-reliance on heuristic thinking. 4 Heuristics are decision short-cuts that help us speed through the many decisions we have to make daily. While these can be effective, an over-reliance on heuristics can lead a decisionmaker astray. 5 Five general suggestions for improving decision making involve issues such as speed, quality and ethics. A final suggestion you may want to consider is a group decision making alternative. 6

While group decision making offers a number of advantages over individual decisionmaking, it is not problem-free. In fact, a few of these problems can have serious and dramatic effects on organizations. However, a variety of methods are available to overcome these obstacles and enjoy better group decision making.
Designing Motivating Jobs and High Performance Teams

1 In this chapter we present several different ways to redesign jobs. These techniques range from changing when the job is done (e.g., compressed work schedules and flextime), to exactly how its done (e.g., job rotation, job enlargement, job enrichment). 2 Job enrichment usually involves the most extensive changes. Fortunately, the job characteristics model can help managers diagnose whether and to what extent jobs need to be enriched. Specifically, the model describes how five core job characteristics (i.e., skill variety, task identity, task significance, autonomy, and feedback) can be leveraged to produce the psychological states in employees (i.e., perceived meaningfulness, responsibility, and knowledge of results) that are critical for high motivation and performance. 3 One way to enrich jobs is to convert to team-based operations. Of course, teams come in a variety of forms. Four types of teams are discussed: 1) advisory teams (which basically provide suggestions for improvement; 2) self-managed teams (which focus on doing dayto-day work); 3) cross-functional teams (which contain a diverse membership and tend to focus on conceptual work that is often temporary in nature); and 4) virtual teams (in which a dispersed membership is linked together by technology). 4 Social loafing can be a serious threat to team effectiveness in a variety of contexts. It refers to the tendency for team members not to put out as much effort in the team as they would if working alone. Studies suggest that social loafing is more prevalent in the U.S. than in other countries, perhaps because of the American embrace of individualism. 5 A solid team-building approach can ensure the ultimate success of whatever teams management decides to implement. Team building basically involves three steps, all of which require planning and sustained commitment: 1) developing and executing a careful selection process for team members; 2) training team members in a variety of skills; and 3) monitoring and rewarding the team to keep it running smoothly. 6 A thumbnail sketch of an ideal team player would include: 1) appropriate technical skills; 2) good listening and communication skills; 3) a willingness to commit to team goals; and 4) an ability to trust other team members and management. 7 Setting up a fair and motivating pay system for teams is a major challenge. Some general suggestions that may help management craft such a system include: 1) involving team members in the development of performance appraisal criteria; 2) taking the time to study and examine of any proposed system before actually launching it; 3) being prepared to evaluate, adjust, and tweak the system constantly after its up and running; and 4) keeping the system as simple as possible to minimize breakdowns and promote clarity.

Leadership That Works

1 Leadership is a set of interpersonal influence processes. These processes are aimed at motivating subordinates, creating a vision for the future, and developing strategies for achieving goals. 2 Effective leadership requires an accurate assessment of subordinates skills as well as situational factors (both internal and external to the company). Leaders need to match their behavior to both the context and the abilities of their subordinates. To do this, leaders need adaptability, flexibility, self-insight, and excellent perception skills. 3 Leader-member exchange theory offers useful advice for managing your boss. Much of that advice involves creating a comfortable working relationship with the leader. 4 Some leadership approaches are limited in that they focus only on a leaders behavior or on a leaders skills and traits. Nevertheless, descriptive research on leader behaviors, traits, and skills has been useful in terms of sketching out the types of activities and characteristics that are oftenbut not alwaysassociated with leader success and failure. 5 Situation-centered leadership approaches try to match leader behavior with situational demands in order to increase effectiveness. Situational leadership, for example, suggests that the leaders style should match subordinates level of maturity. 6 Path-goal theory, LPC contingency theory, and leader substitutes theory also look at subordinate issues, but treat the task environment in a more sophisticated fashion. 7 Charismatic and transformational leadership approaches focus on change. These approaches implicitly suggest that effective leadership requires an integration of leader-, follower-, and situation-centered perspectives. For instance, a crisis situation often makes subordinates more open to charismatic or transformational leaders. 8 While charismatic leaders can help create change, they may also have downside risks. When subordinates become overly dependent or the charismatic leader has narcissistic tendencies, the results can be disastrous. 9 Transformational leadership doesnt necessarily require charisma. However, certain behaviors and steps are critical if the leader is to create and sustain change.
Power and Influence: Exercising Leadership and Practicing Politics

1 Power refers to the leaders potential capacity to influence others. To actually leverage their sources of power, however, leaders rely on influence tactics. To be successful as leaders, managers need to understand how to use their power and influence tactics effectively. 2

Personal power includes sources of potential influence that managers must develop on their own, such as expertise and referent power. Position power includes what the manager can legitimately ask others to do and the control over information that comes with a managers position in the organizational hierarchy. Control over rewards is also part of position power, as is control over punishments and control over the environment (which includes the physical layout, work organization, and work schedules). 3 When leveraging expertise, confidence and good communication skills are very important. To tap referent power, a leader must model appropriate behaviors. Recognize that: 1) the exercise of legitimate authority may tap sensitivities about power and status differences; and 2) the impact of rewards tends to be overestimated by managers. 4 The choice of influence tactics depends on who the target person is (superior, subordinate, or peer), what power sources are available, whether the manager is making an initial influence attempt or trying to follow up, whether there is a likelihood of resistance, and what influence norms are commonly used in the organization. In general, inspirational appeals and consultation are influence tactics that work well. However, their effectiveness depends on the target to some extent. Rational persuasion also works pretty well and is used frequently, especially with superiors. 5 Organizational politics involves the use of power and influence for personal gain. Personalities, stage of organizational development, scarce resources, and ambiguous circumstances are all factors that determine the likelihood of political behavior in a firm. Political behavior becomes problematic if the rights or needs of others are abused or if organizational goals are undercut. 6 Political tactics include scapegoating, manipulating information, as well as a variety of positive and negative image management tactics. The effective management of politics involves confronting destructive behavior, building an open culture, developing clear expectations/procedures, and role modeling appropriate behaviors. On the positive side, managerial careers often involve a political seasoning process that can prove to be a very helpful learning experience - one that is important for success and effectiveness.
Constructively Dealing with Conflict and Stress

1 Conflict is very common in organizations. Contention and disagreement can have both negative and positive effects on organizations and people. 2 Organizational and interpersonal causes of conflict are important to consider because they can be guides for diagnosing when and why conflict can get out of hand and become problematic for the firm. 3 Assuming that conflict does come to a head, and it almost always does at some point, how do people typically deal with that disagreement and dissension? It turns out that five styles are commonly used by managers, with more or less success. Each style has pluses in certain situations; the real trick is finding people that are flexible enough to adapt their styles to fit the situation.

4 Some have said that instead of hoping that a manger has the right style, that more general techniques for reducing conflict should be used. These include creating common goals that unite separate units or departments. On the other hand, there are times when there just isnt enough conflict and managers need to stir up the pot. 5 Regardless, organizations that are constantly dealing with conflict and contention begin to see stress take its toll. In addition to chronic conflict, other causes of stress include the actual jobs people perform, stress-prone personalities, and the work-family interaction. 6 The costs associated with health and performance problems, among others, can be enormous for organizations. So, it is wise to try to manage stress - both at the individual and organizational level.
Communicating and Negotiating Successfully

1 Although good communication is important for both firms and individuals, its general quality is poor. There are several reasons for this, including the selective nature of communication itself and the many errors that can occur in passing on messages to others. 2 As a first step to improving communication, its important to understand that the medium matters. Accordingly, one needs to carefully choose between written, oral, nonverbal, and electronic methods of communication. 3 Communication can flow not only downward, but also upward and laterally in the organization. Plus, there are many informal channels that managers can use to their advantage (e.g., the grapevine). 4 Given all these different options, whats the right medium to use? Nonroutine messages (e.g., mergers, layoffs) are best addressed by rich communication methods such as faceto-face conversations. More common or routine messages are best addressed by leaner methods, such as memos, bulletin boards or newsletters. 5 Interestingly, high-performing managers are able to adapt their communication methods to fit the nature of the message they want to send. 6 Even the best communicators can run into barriers, including both structural and organization barriers (e.g., gender, status) as well as personal obstacles (e.g., poor listening, lying). 7 Firms can improve communication by overcoming communication barriers that exist. Several key characteristics distinguish companies that do an excellent job of communicating including having a management team that makes communication a top priority.
Structuring Companies for Effective Competition

In this chapter, we move beyond the personal (perception, motivation) and interpersonal (power, conflict, communication) issues to organizational issues such as company structure and culture. 2 While structure is important to understand and control, it is also complex. For example, decisions must be made or remade about how to divide up tasks. There are a dizzying array of organizational choices, including product-based, customer-based, and matrix structures, among others. Each type of structure includes both pluses and minuses. 3 Organizations also need to consider how to divide up power and decision-making capability. This includes how tall or flat the hierarchy needs to be, the exact span of control, and the degree of centralization you seek to have. 4 Centralization (or decentralization if you choose) is very complex in and of itself. But decisions about how and when to delegate are an important managerial skill that should be cultivated. 5 An organizational also must decide how formal it wants to be. An extremely formal organization is a bureaucracy. While not all bad, many feel that bureaucracies have largely earned their reputation. Bureaucracy-busting is a common theme among popular management writers. 6 Most types of structures have their place. Important factors such as size, technology, and environmental stability affect the choice of a particular type of structure. 7 The distinction between mechanistic and organic structures provides a useful way to summarize how the many dimensions of organizational structures (centralization, formalization, etc.) might be more or less functional in various environments.
Corporate Culture: Analyzing and Shaping the Firm's Way of Life

1 Corporate culture refers to a firms way of life. Ideally, culture communicates clear messages about how we do things around here regardless of whether here is HewlettPackard, the Marine Corps, or the Green Bay Packers. 2 Another way to think of culture is as the companys personality. Just as with people, the corporate personality is easier to describe when it is strong and distinct. Accordingly, we examine firms with strong cultures, providing specific examples along the way. We also detail what such a culture could do for your firm as well as some drawbacks that could be expected. 3 Diagnosing a culture is among the most difficult managerial skills to develop. Fortunately there has been a good deal of analysis of some of the more common leverage points that firms use to establish their way of life. We discuss several of these, including stories, symbols, and language. We also provide a practical checklist for reading your own corporate culture at the ground level. 4

Many companies arent content to passively sit back and let stories and symbols indirectly influence their way of life. Instead, many go beyond this by actively putting mechanisms in place to ensure that employees know the culture. Hiring methods, training approach, and reward systems are just a few of the things that help to clarify and perpetuate a culture. 5 Since the development of a corporate culture unfolds over time, it can be useful to look at how existing cultures got there in the first place. We look at several of the ways in which this happens, including the founder or CEOs vision or personality and the environment in which the company does business. 6 Sometimes a companys culture needs to be changed. Perhaps the business environment has under gone rapid change, or the existing culture need to be strengthened. Regardless, you have a problem on your hands. All of the mechanisms put into place to establish and perpetuate a culture can also act to resist any change. Still, we present some common warning signs of a need to change, followed by some suggested processes for implementing change in corporate cultures.
Behavioral Challenges in International Management

1 In international business, much growth has been seen among smaller or medium-size firms. This trend and others suggest that a working knowledge of international business practices and cultures is beneficial. 2 Since many firms are going international, it is useful to understand how that process unfolds. As it turns out, there are common phases a company might go through in extending its business across borders. 3 Businesses in every stage of international development can profit from an understanding of their partners and customers perspective. Almost certainly this includes an awareness of the legal, political, and cultural environment in which a firm does business. 4 Three important legal systems include civil law, common law, and Islamic law. Each system poses constraints on business relative to the others. 5 Political systems are probably more complex, but the concept of risk underlies each system. It is important to understand the impact that political risk can have on global firms and the various methods available for classifying, quantifying, and managing that risk for your business. 6 Cultural differences present a major challenge to international managers. Unfortunately, these differences are less well known and are accorded little respect by the typical U.S. company; American managers have a relatively poor reputation for understanding and appreciating cultural differences. 7 A worldwide effort exists to categorize various cultures on a few common, underlying work-related value dimensions. The position of the U.S. on these dimensions is often in contrast to the positions of other countries in which Americans might do business. In fact,

some very traditional and rarely questioned American management techniques might not work - and sometimes even backfire - in other cultures. 8 Given the growth of international business, Americans need to be aware of issues involved in managing in a foreign environment, as well as issues surrounding expatriation. Typically, little concern is given to the expatriate and, hence, little cross-cultural training is provided. Fortunately, there are some ways to overcome the high failure rate of American expatriate managers.
Creating and Implementing Organizational Change

1 This chapter tackles what many think is the most difficult problem in all of organizational behavior - recognizing the need for and implementing organizational change. 2 Assuming that change is necessary, either because of some unplanned event or because of some willful interest in changing direction, what exactly should be changed? Four types of change that vary in scope include- strategic, technological, structural, and people-type change. Each has some well-known effects and problems, and change in one area often affects one or more of the other areas. 3 Once a decision is made about what type of change to target, implementation issues loom large. Taking the company pulse for its readiness to change is often a useful start. 4 Even if theres a readiness for change, few change efforts go perfectly. Many actually encounter some form of resistance. While there are several ways to overcome resistance points, accurately diagnosing a particular situation is required for the effective use of those methods. 5 Sometimes help is needed to provide a sober and accurate assessment of the organization. Thats when a change agent can be of use. While it is common to employ consultants to help with the diagnosis, there are also some dangers in the knee-jerk use of experts to lead an organizational change. 6 Whether change is led from inside the organization or with the help of outside consultants, there are a variety of organizational development (OD) techniques that can be used. These techniques focus on the people-side of organizational change. 7 Finally, it is important to systematically evaluate the effect of change efforts, although this is something that is (surprisingly) done much less frequently than it should be.