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What is an Organisation?
Collection of people Working together Achieving Goals Individual Organisational

Why an Organisation
Increase specialisation and the division of labour To use large-scale technology (Economies of scale & Economies of scope) To manage the external enviornment To economize on transaction cost To exert power and Control- internally/externally

What Managers do
Managers (or administrators)
Individuals who achieve goals through other people.
Managerial Activities Make decisions Allocate resources Direct activities of others to attain goals



Management Functions
Controlling Leading

Mintzbergs Managerial Roles:

Types of Organisations
Attitudes of Orgs* Defenders Prospectors Analysers Reactors

Humanizing Orgs Growing Org Sick Org Lean and Mean Org Effective Org

* Ian Brooks

Enter Organizational Behavior

The field of OB seeks to replace intuitive explanations with systematic study

What is OB (Cont.)

Ancestors and Foundations of OB

Development came about by organisations any collective effort Pyramids, Trains, even slave labour. Industrial revolution (AD 1763-1871) formalised relations between employees and employers. Non-western contributions were earliest development of organisations but Western perspective made OB as significant and advanced as it is today.

Developments in OB
Hawthrone Studies ( 1924) (people respond to attention) McGregor (Theory X and Theory Y) (1950s), Maslows hierarchy of needs

Theory Y: People do not naturally dislike work, are internally motivated towards objectives they are committed to,, accept responsibility, have capacity to be innovative, people are bright but under most organisational conditions their potential is underutilised.

Theory X:

People do not like work and try to avoid it, prefer to be directed towards organisational goals, so as to avoid responsibility and want security, have little ambition



Disciplines contributing to OB

The science that seeks to measure, explain, and sometimes change the behavior of humans and other animals.


The study of people in relation to their fellow human beings.


Social Psychology
An area within psychology that blends concepts from psychology and sociology and that focuses on the influence of people on one another.


The study of societies to learn about human beings and their activities.


Political Science The study of the behavior of individuals and groups within a political environment.


Why is Organisational Behaviour important?

Effectiveness of organisational Associated factors: IT Globalisation Diversity Ethics
Increased foreign assignments Working with people from different cultures Coping with anticapitalism backlash Overseeing movement of jobs to countries with lowcost labor

What OB aims at:

Improving People Skills Empowering People Stimulating Innovation and Change Coping with Temporariness Working in Networked Organizations Helping Employees Balance Work/Life Conflicts Improving Ethical Behavior

All these steps are expected to result in:

> Improving Quality and Productivity > Responding to the Labor Shortage > Improving Customer Service

Components of OB:
Ob has two set of variables (no constants at all): Dependent Variables and Independent Variables

Application of OB


OT (Organisational Theory)

OB (Organisational Behaviour)


OD (Organisation Development)

HRM (Human Resource Management)




Biographical Characteristics
Biographical Characteristics

Personal characteristicssuch as age, gender, and marital statusthat are objective and easily obtained from personnel records.

Ability, Intellect, and Intelligence

Ability An individuals capacity to perform the various tasks in a job.

Intellectual Ability The capacity to do mental activities.

Multiple Intelligences Intelligence contains four subparts: cognitive, social, emotional, and cultural.

Physical Abilities
Physical Abilities

Strength Factors
1. Dynamic strength 2. Trunk strength 3. Static strength 4. Explosive strength

The capacity to do tasks demanding stamina, dexterity, strength, and similar characteristics.

Flexibility Factors
5. Extent flexibility 6. Dynamic flexibility

Other Factors
7. Body coordination 8. Balance 9. Stamina

The Ability-Job Fit

Any relatively permanent change in behavior that occurs as a result of experience.

HIRE for Attitude, Train for SKILL!

Theories of Learning
Classical Conditioning A type of conditioning in which an individual responds to some stimulus that would not ordinarily produce such a response.

Key Concepts
Classical Conditioning link

Unconditioned stimulus Unconditioned response

Conditioned stimulus
Conditioned response

Operant Conditioning A type of conditioning in which desired voluntary behavior leads to a reward or prevents a punishment.

Key Concepts Reflexive (unlearned) behavior Conditioned (learned) behavior


Social-Learning Theory People can learn through observation and direct experience.

Key Concepts
Attentional processes Retention processes Motor reproduction processes Reinforcement processes

Shaping Behavior Systematically reinforcing each successive step that moves an individual closer to the desired response.

Key Concepts
Reinforcement is required to change behavior. Some rewards are more effective than others. The timing of reinforcement affects learning speed and permanence.

Types of Reinforcement
Positive reinforcement Providing a reward for a desired behavior. Negative reinforcement Removing an unpleasant consequence when the desired behavior occurs. Punishment Applying an undesirable condition to eliminate an undesirable behavior. Extinction Withholding reinforcement of a behavior to cause its cessation.

Schedules of Reinforcement
Continuous Reinforcement
A desired behavior is reinforced each time it is demonstrated. Intermittent Reinforcement A desired behavior is reinforced often enough to make the behavior worth repeating but not every time it is demonstrated.

Schedules of Reinforcement
Fixed-Interval Schedule Rewards are spaced at uniform time intervals.

Variable-Interval Schedule Rewards are initiated after a fixed or constant number of responses.


OB MOD Organizational Applications

Well Pay versus Sick Pay Reduces absenteeism by rewarding attendance, not absence. Employee Discipline The use of punishment can be counter-productive. Developing Training Programs OB MOD methods improve training effectiveness. Self-management Reduces the need for external management control.


Components of Attitudes
Are evaluative statements or judgments concerning objects, people, or events.

Cognitive component
The opinion or belief segment of an attitude.

Affective Component
The emotional or feeling segment of an attitude.

Behavioral Component
An intention to behave in a certain way toward someone or something.

The Theory of Cognitive Dissonance

Leon Festinger Any incompatibility between two or more attitudes or between behavior and attitudes.
Desire to reduce dissonance

Importance of elements creating dissonance

Degree of individual influence over elements Rewards involved in dissonance

A-B and B-A Relationship

Recent research indicates that attitudes (A) significantly predict behaviors (B) when moderating variables are taken into account - Importance, specificity, social pressure etc. Self Perception Theory - Attitudes are used after the fact to make sense out of an action that has already occurred. Behavior affect attitude

Changing Attitudes
Barriers to change:
Previous commitment Insufficient information

How to change:
Information availability Fear Factor Resolve discrepancies Influence of friends and peers The Co-opting approach

Job Satisfaction
Measuring Job Satisfaction Single global rating Summation score Factors influencing Job Satisfaction Work itself Pay Promotion Supervisor Work Group Job Conditions Personality

Responses to Job Dissatisfaction

Source: C. Rusbult and D. Lowery, When Bureaucrats Get the Blues, Journal of Applied Social Psychology. 15, no. 1, 1985:83. Reprinted with permission.

E X H I B I T 35

How Employees Can Express Dissatisfaction

Behavior directed toward leaving the organization.

Active and constructive attempts to improve conditions.

Passively waiting for conditions to improve.

Allowing conditions to worsen.

The Effect of Job Satisfaction on Employee Performance

Satisfaction and Productivity Satisfied workers arent necessarily more productive. Worker productivity is higher in organizations with more satisfied workers. Satisfaction and Absenteeism Satisfied employees have fewer avoidable absences. Satisfaction and Turnover Satisfied employees are less likely to quit. Organizations take actions to retain high performers and to weed out lower performers.

Job Satisfaction and OCB

Satisfaction and Organizational Citizenship Behavior (OCB) Satisfied employees who feel fairly treated by and are trusting of the organization are more willing to engage in behaviors that go beyond the normal expectations of their job.

Job Satisfaction and Customer Satisfaction

Satisfied employees increase customer satisfaction because: They are more friendly, upbeat, and responsive. They are less likely to turnover which helps build long-term customer relationships. They are experienced. Dissatisfied customers increase employee job dissatisfaction.


What is Personality?
Personality is the dynamic
within the individual of those psychophysical systems that determine the unique adjustments to his/ her environment


The sum total of ways in which an individual reacts and interacts with others

Personality Traits
Personality Traits
Enduring characteristics that describe an individuals behavior these are exhibited in a large number of situations

Personality Determinants
Heredity Environment Situation

Big Five MODEL


Extroversion Emotional Stability Agreeableness Conscientiousness


Low High

Low High

Low High


Openness to Experience


Myers-Briggs Type Indicator

Sensing Thinking Judging

vs. vs. vs.

Intuition Feeling Perceiving

INROVERSION Keeps own opinions Tends to seek privacy Concentrates on thoughts Tends to focus on a few subjects, but in some depths Thinks things through AT THE WORKPLACE Prefers to communicate in writing or 1-to-1 Likes advanced warning of issues Doesnt like to be interrupted when deep in thought Stays silent which can be misconstrued as agreement

EXTROVERSION Expresses views Tends to seek social contact Interacts with the environment Tends to dip into a wide variety of subjects Acts things out
AT THE WORKPLACE Prefers to communicate in groups or 1-to-1 Likes to tackle issues as they arise Doesnt like to read when it can be discussed States thoughts which can be misconstrued as a decision


Core Self-Evaluation: Self Esteem Locus of control Machiavellianism Niccolo Machivelli Narcissism Self-monitoring Propensity for risk taking Type A and Type B personality


High Risk-taking Managers Make quicker decisions. Use less information to make decisions. Operate in smaller and more entrepreneurial organizations. Low Risk-taking Managers Are slower to make decisions. Require more information before making decisions. Exist in larger organizations with stable environments. Risk Propensity Aligning managers risk-taking propensity to job requirements should be beneficial to organizations.

Perception and Individual Decision Making

What Is Perception
Perception A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

Factors that Influence Perception

* From book by Robbins

Person Perception: Making Judgments About Others

Attribution Theory

When individuals observe behavior, they attempt to determine whether it is internally or externally caused.
Distinctiveness: Shows different behaviors in different situations. Consensus: Response is the same as others to same situation. Consistency: Responds in the same way over time.

* From book by Robbins

Errors and Biases in Attributions

In general, we tend to blame the person first, not the situation.

Fundamental Attribution Error

Thought: When students get an A on an exam, they often say they studied hard. But when they dont do well, how does the self-serving bias come into play? Whose fault is it usually when an exam is tough?

Self-Serving Bias

Frequently Used Shortcuts in Judging Others

People selectively interpret what they see on the basis of their interests, background, experience, and attitudes.

Selective Perception

Halo Effect Drawing a general impression about an individual on the basis of a single characteristic Contrast Effects Evaluation of a persons characteristics that are affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics

Frequently Used Shortcuts in Judging Others


Attributing ones own characteristics to other people

Stereotyping Judging someone on the basis of ones perception of the group to which that person belongs

The Link Between Perceptions and Individual Decision Making

Problem A perceived discrepancy between the current state of affairs and a desired state Decisions Choices made from among alternatives developed from data perceived as relevant

Perception of the Decision Maker


Decision-making Model
Rational Decision- making Model

Describes how individuals should behave in order to maximize some outcome

Model Assumptions Problem clarity Known options Clear preferences Constant preferences No time or cost constraints Maximum payoff

Steps in the Rational Decisionmaking Model

1. Define the problem.

2. Identify the decision criteria.

3. Allocate weights to the criteria. 4. Develop the alternatives. 5. Evaluate the alternatives. 6. Select the best alternative.

E X H I B I T 53

How Are Decisions Actually Made in Organizations?

Bounded Rationality

Individuals make decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

How Are Decisions Actually Made in Organizations?

How/Why problems are Identified Visibility over importance of problem
Attention-catching, high profile problems Desire to solve problems

Self-interest (if problem concerns decision maker) Alternative Development Satisficing: seeking the first alternative that solves problem Engaging in incremental rather than unique problem solving through successive limited comparison of alternatives to the current alternative in effect

Common Biases and Errors

Overconfidence Bias
Believing too much in our own ability to make good decisions

Anchoring Bias
Using early, first received information as the basis for making subsequent judgments

Confirmation Bias

Common Biases and Errors

Availability Bias Using information that is most readily at hand
Recent Vivid

Representative Bias Mixing apples with oranges Assessing the likelihood of an occurrence by trying to match it with a preexisting category using only the facts that support our decision Winners Curse Highest bidder pays too much Likelihood of winners curse increases with the number of people in auction

Common Biases and Errors

Escalation of Commitment In spite of new negative information, commitment actually increases

Randomness Error Creating meaning out of random events Hindsight Bias Looking back, once the outcome has occurred, and believing that you accurately predicted the outcome of an event

Intuitive Decision Making An unconscious process created out of distilled experience Conditions Favoring Intuitive Decision Making A high level of uncertainty exists There is little precedent to draw on Variables are less scientifically predictable Facts are limited Facts dont clearly point the way Analytical data are of little use Several plausible alternative solutions exist Time is limited and pressing for the right decision

Organizational Constraints
Performance Evaluation Evaluation criteria influence the choice of actions Reward Systems Decision makers make action choices that are favored by the organization Formal Regulations Organizational rules and policies limit the alternative choices of decision makers System-imposed Time Constraints Organizations require decisions by specific deadlines Historical Precedents

Cultural Differences in Decision Making

Problems selected Time orientation Importance of logic and rationality Belief in the ability of people to solve problems Preference for collective decision making

Ethics in Decision Making

Ethical Decision Criteria Utilitarianism
Seeking the greatest good for the greatest number

Respecting and protecting basic rights of individuals such as whistleblowers

Imposing and enforcing rules fairly and impartially

Ways to Improve Decision Making

1. Analyze the situation and adjust your decision making style to fit the situation. 2. Be aware of biases and try to limit their impact. 3. Combine rational analysis with intuition to increase decisionmaking effectiveness. 4. Dont assume that your specific decision style is appropriate to every situation. 5. Enhance personal creativity by looking for novel solutions or seeing problems in new ways, and using analogies.

6. Focus on goals.
Look for information that disconfirms beliefs. Dont try to create meaning out of random events.

Increase your options.

Discuss with your neighbor what the answer would be if your sister came home and said I just knew that everyone would buy that dress!
Its your little sisters senior Prom night, and she
notices that everyone is wearing the same dress she has on! Which perceptual shortcut may be occurring?

Escalation of commitment Representative bias Availability bias Hindsight bias

Michael has just discovered he is registered for

two classes at the same time and must make a

decision about which one to take this semester. He considers the professor teaching this semester, the time of the class, and the classes his friends are taking. He then considers his options for when he can take each class again, as well as the costs and benefits for taking each this

semester versus later next year. He then makes

his decision. Michael has just engaged in what?

In making his decision, Michael forgot to consider the implications of the color of paint in the room where each class was being offered. Given that room color can influence mood, which can influence performance, why didnt Michael consider it?

Michael engaged in the rational decision making model, and didnt consider the paint color of the rooms because he operates under the confines of bounded rationality.

Can you read this?


What Is Motivation?
Motivation The processes that account for an individuals willingness to exert high levels of effort to reach organizational goals, conditioned by the efforts ability to satisfy some individual need. Effort: a measure of intensity or drive. Direction: toward organizational goals Need: personalized reason to exert effort Motivation works best when individual needs are compatible with organizational goals.

Theories of Motivation
Needs theories Maslows hierarchy of needs
McGregors Theory X and Theory Y

Herzbergs two factor theory

Process theories Expectancy Theory Goal Setting Theory Three-Needs Theory Reinforcement Theory Designing Motivating Jobs Equity Theory

Early Theories of Motivation

Maslows Hierarchy of Needs Theory Needs were categorized as five levels of lower- to higher-order needs. Hierarchy of needs Lower-order (external): physiological, safety Higher-order (internal): social, esteem, selfactualization
Higher Order


Lower Order

Early Theories of Motivation (contd)

McGregors Theory X and Theory Y Theory X Assumes that workers have little ambition, dislike work, avoid responsibility, and require close supervision. Theory Y Assumes that workers can exercise selfdirection, desire responsibility, and like to work.

Herzbergs Motivation-Hygiene Theory Job satisfaction and job dissatisfaction are created by different factors. Hygiene factors: extrinsic (environmental) factors that create job dissatisfaction. Motivators: intrinsic (psychological) factors that create job satisfaction. Attempted to explain why job satisfaction does not result in increased performance. The opposite of satisfaction is not BACK dissatisfaction, but rather no satisfaction.

Early Theories of Motivation (contd)

Traditional view



Herzberg's view

Hygiene Factors

No satisfaction

No dissatisfaction


Three-Needs Theory
There are three major acquired needs that are major motives in work. Need for achievement (nAch) The drive to excel and succeed Need for power (nPow) The need to influence the behavior of others Need of affiliation (nAff) The desire for interpersonal relationships

Goal-Setting Assumes Theory Commitment to goal

Proposes that setting goals that are accepted, specific, and challenging yet achievable will result in higher performance than having no or easy goals. Benefits of Participation in Goal-Setting Increases the acceptance of goals. Fosters commitment to difficult, public goals. Provides for self-feedback (internal locus of control) that guides behavior and BACK motivates performance (self-efficacy).

Specific Difficult Accepted


Effects on Person Directs attention Energises Encourages persistency New strategies developed


Internal locus of control Medium on Power Distance Low on uncertainty avoidance nArh


Equity Theory
Proposes that employees perceive what they get from a job situation (outcomes) in relation to what they put in (inputs) and then compare their inputs-outcomes ratio with the inputs-outcomes ratios of relevant others. Fairness exists. Under- or Over-rewarded. When inequities occur, employees will attempt to do something to rebalance the ratios (seek justice).

Equity Theory (contd) Employee responses to perceived inequities: 1. Distort own or others ratios. 2. Induce others to change their own inputs or outcomes. 3. Change own inputs (increase or decrease efforts) or outcomes (seek greater rewards). 4. Choose a different comparison (referent) other (person, systems, or self). 5. Quit their job.


Distributive Justice

Procedural Justice

Interactive Justice

Expectancy Theory States that an individual tends to act in a certain way based on the expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. Key to the theory is understanding and managing employee goals and the linkages among and between effort, performance and rewards. Effort: employee abilities and training/development Performance: valid appraisal systems Rewards (goals): understanding employee needs


Expectancy Relationships Expectancy (effort-performance linkage) The perceived probability that an individuals effort will result in a certain level of performance. Instrumentality The perception that a particular level of performance will result in the attaining a desired outcome (reward). Valence The attractiveness/importance of the performance reward (outcome) to the BACK individual.

Individual Effort

Individual Performance

Organisational Rewards

1. Effort-Performance relationship = Expectancy

2. Performance-Rewards relationship = Instrumentality Personal Goals

3. Rewards-Personal goals relationship = Valence

Reinforcement Theory
Assumes that a desired behavior is a function of its consequences, is externally caused, and if reinforced, is likely to be repeated. Positive reinforcement is preferred for its long-term effects on performance Ignoring undesired behavior is better than punishment which may create additional dysfunctional behaviors.

Designing Motivating Jobs

Job Design The way into which tasks can be combined to form complete jobs. Factors influencing job design: Changing organizational environment/structure The organizations technology Employees skill, abilities, and preferences Job enlargement Increasing the scope (number of tasks) in a job. Job enrichment

Job Characteristics Model (JCM) A conceptual framework for designing motivating jobs that create meaningful work experiences that satisfy employees growth needs. Five primary job characteristics: Skill variety: how many skills and talents are needed? Task identity: does the job produced a completed work? Task significance: how important is the job? Autonomy: how independence do the jobholder have? Feedback: do workers know how well they

Suggestions for Using the JCM Combine tasks (job enlargement) to create more meaningful work. Create natural work units to make employees work important and whole. Establish external and internal client relationships to provide feedback. Expand jobs vertically (job enrichment) by giving employees more autonomy. Open feedback channels to let employees know how well they are doing.


Group Two or more interacting and interdependent individuals who come together to achieve specific goals. Formal groups Informal groups > Work groups defined Groups that are by the organizations independently formed to structure that have meet the social needs of designated work their members. assignments and tasks. > Appropriate behaviors are defined by and directed toward organizational goals.

Stages in Group Development

Performing Forming A fully functional group Members join and begin structure allows the group the process of defining the to focus on performing the groups purpose, structure, task at hand. and leadership. Adjourning Storming The group prepares to Intragroup conflict occurs disband and is no longer as individuals resist concerned with high control by the group and levels of performance. disagree over leadership. Norming Close relationships develop as the group becomes cohesive and establishes its norms for acceptable behavior.

Group Structure
ROLE The set of expected behavior patterns attributed to someone who occupies a given position in a social unit that assist the group in task accomplishment or maintaining group member satisfaction. Role conflict: experiencing differing role expectations Role ambiguity: uncertainty about role expectations

Acceptable standards or expectations that are shared by the groups members. Common types of norms: Effort and performance Output levels, absenteeism, promptness, socializing Dress Loyalty Various classifications: Performance norms, Appearance norms, social arrangement norms, allocation of resources norms.

Deviant Workplace Behavior

Antisocial actions by organizational members that intentionally violate established norms and result in negative consequences for the organization, its members, or both.

Leaving early Intentionally working slowly Wasting resources


Sabotage Lying about hours worked Stealing from the organization

Showing favoritism Gossiping and spreading rumors Blaming coworkers Sexual harassment Verbal abuse Stealing from coworkers


Personal Aggression

Group Structure
Status - A socially defined position or rank given to groups or group members by others.

Size Social Loafing, Size does matter

Composition Group demography, Cohorts

Cohesiveness - Degree to which group members are attracted to each other and are motivated to stay in the group.

Socially defined position or rank given to groups or members of groups by others

Status Status Status Status

and Norms and Group interaction inequality and Culture


Individuals conform in order to be accepted by groups. Group pressures can have an effect on an individual members judgment and attitudes. The effect of conformity is not as strong as it once was, although still a powerful force.

Group think:
The extensive pressure of others in a strongly cohesive or threatened group that causes individual members to change their opinions to conform to that of the group.

Brainstorming: Presenting ideas without any criticism or opinion being given till the end

Nominal Grouping: Structured Brainstorming. People actually group together only twice.

Electronic meetings: Virtual teams

Delphi Method: Experts discuss the topic at hand. Not face-to-face and may not know the others on the discussion. No one knows whos idea it was.


Generate Synergy through

Interacts to share

coordinated effort Shared Leadership Individual and mutual accountability Collective work products Collective performance (problem solving meetings) Assess work products

information and help individual perform. Strong leader Individual accountability Individual work product Share information (efficient meetings) Assess indirectly like through financial performance of overall business.

Problem-Solving Teams Groups of 5 to 12 employees from the same department who meet for a few hours each week to discuss ways of improving quality, efficiency, and the work environment.
Self-Managed Work Teams Groups of 10 to 15 people who take on the responsibilities of their former supervisors. Cross-Functional Teams Employees from about the same hierarchical level, but from different work areas, who come together to accomplish a task task force, committee

Virtual Teams Teams that use computer technology to tie together physically dispersed members in order to achieve a common goal.

The absence of paraverbal and nonverbal cues A limited social context The ability to overcome time and space constraints

TYPE OF GROUP Effectiveness Criteria Interacting Brainstorming Nominal Electronic

Number and quality of ideas Low

Social pressure Money costs Speed Task orientation Potential for interpersonal conflict Commitment to solution Development of group cohesiveness High High High High Low Moderate Low

Low Low Moderate High Low High

Low High

High High

Moderate Low Moderate Moderate

Moderate Low Moderate Low

Not applicable Moderate Moderate


The Challenges Overcoming individual resistance to team membership. Countering the influence of individualistic cultures. Introducing teams in an organization that has historically valued individual achievement. Shaping Team Players Selecting employees who can fulfill their team roles. Training employees to become team players. Reworking the reward system to encourage cooperative efforts while continuing to recognize individual contributions.

Team Effectiveness and Quality Management Requires That Teams:

Are small enough to be efficient and effective. Are properly trained in required skills. Allocated enough time to work on problems. Are given authority to resolve problems and take corrective action. Have a designated champion to call on when needed.



Conflict Defined Is a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about.

Incompatibility of goals Differences over interpretations of facts Disagreements based on behavioral expectations

Traditional Human

View of Conflict

Relations View of Conflict View of Conflict


Functional Conflict Conflict that supports the goals of the group and improves its performance.

Dysfunctional Conflict Conflict that hinders group performance.

Task Conflict Conflicts over content and goals of the work. Relationship Conflict Conflict based on interpersonal relationships. Process Conflict Conflict over how work gets done.


Antecedent conditions Communication; Structure; Personal Variables Cognition and Personalisation Perceived / felt conflict
Conflict-handling intentions Competing; collaborating; compromising; avoiding; accommodating Overt Conflict partys behaviour; others reaction Outcomes Increased / decreased group performance


Compromising Collaborating






A process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them.

BARGAINING STRATEGIES Distributive Bargaining - Negotiation that seeks to divide up a fixed amount of resources; a win-lose situation. Integrative Bargaining - Negotiation that seeks one or more settlements that can create a win-win solution.


Preparing and Planning

Definition of ground rules

Clarification and justification

Closure and implementation

Bargaining and problem solving


The Role of Personality Traits in Negotiation Traits do not appear to have a significantly direct effect on the outcomes of either bargaining or negotiating processes. Gender Differences in Negotiations Women negotiate no differently from men, although men apparently negotiate slightly better outcomes. Men and women with similar power bases use the same negotiating styles. Womens attitudes toward negotiation and their success as negotiators are less favorable than mens.

Conflict-Handling Intention: Competition When quick, decisive action is vital (in emergencies); on important issues. Where unpopular actions need implementing (in cost cutting, enforcing unpopular rules, discipline). On issues vital to the organizations welfare. When you know youre right. Against people who take advantage of noncompetitive behavior.

Conflict-Handling Intention: Collaboration To find an integrative solution when both sets of concerns are too important to be compromised. When your objective is to learn. To merge insights from people with different perspectives. To gain commitment by incorporating concerns into a consensus. To work through feelings that have interfered with a relationship.

Conflict-Handling Intention: Avoidance When an issue is trivial, or more important issues are pressing. When you perceive no chance of satisfying your concerns. When potential disruption outweighs the benefits of resolution. To let people cool down and regain perspective. When gathering information supersedes immediate decision. When others can resolve the conflict effectively When issues seem tangential or symptomatic of other issues.

Conflict-Handling Intention: Accommodation When you find youre wrong and to allow a better position to be heard. To learn, and to show your reasonableness. When issues are more important to others than to yourself and to satisfy others and maintain cooperation. To build social credits for later issues. To minimize loss when outmatched and losing. When harmony and stability are especially important. To allow employees to develop by learning from mistakes.

Conflict-Handling Intention: Compromise When goals are important but not worth the effort of potential disruption of more assertive approaches. When opponents with equal power are committed to mutually exclusive goals. To achieve temporary settlements to complex issues. To arrive at expedient solutions under time pressure. As a backup when collaboration or competition is unsuccessful.



This is the story about four people named Everybody, Somebody, Anybody, and Nobody: There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that, because it was Everybody's job. Everybody thought that Anybody could do it, but Nobody realised that Everybody wouldn't do it. It ended up that Everybody blamed Somebody, when Nobody did what Anybody could of done.

Work Stress and Its Management

Stress A dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important.

Work Stress and Its Management

Forces that prevent individuals from doing what they desire. Demands The loss of something desired.

Potential Sources of Stress

Environmental Factors
Economic uncertainties of the business cycle
Political uncertainties of political systems

Technological uncertainties of technical innovations

Terrorism in threats to physical safety and security

Potential Sources of Stress

Organizational Factors

Task demands related to the job

Role demands of functioning in an organization Interpersonal demands created by other employees Organizational structure (rules and regulations) Organizational leadership (managerial style) Organizations life stage (growth, stability, or decline)

Potential Sources of Stress

Individual Factors

Family and personal relationships

Economic problems from exceeding earning capacity Personality problems arising for basic disposition

Individual Differences
Perceptual variations of how reality will affect the individuals future. Greater job experience moderates stress effects. Social support buffers job stress. Internal locus of control lowers perceived job stress. Strong feelings of self-efficacy reduce reactions to job stress.

Managing Stress
Individual Approaches
Implementing time management Increasing physical exercise Relaxation training Expanding social support network

Managing Stress
Organizational Approaches Improved personnel selection and job placement Training Use of realistic goal setting Redesigning of jobs Increased employee involvement Improved organizational communication Offering employee sabbaticals Establishment of corporate wellness programs


What Is Organizational Structure?

Organizational Structure

How job tasks are formally divided, grouped, and coordinated.

Work Specialisation Departmentalisation Formalisation

Span of Control
Chain of Control

Centralisation & Decentralisation

Key Design Questions and Answers for Designing the Proper Organization Structure
The Key Question 1. To what degree are articles subdivided into separate jobs? 2. On what basis will jobs be grouped together? 3. To whom do individuals and groups report? 4. How many individuals can a manager efficiently and effectively direct? 5. Where does decision-making authority lie? 6. To what degree will there be rules and regulations to direct employees and managers? The Answer Is Provided By Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization

Work Specialization
The degree to which tasks in the organization are subdivided into separate jobs.

Division of labor: Makes efficient use of employee skills Increases employee skills through repetition Less between-job downtime increases productivity Specialized training is more efficient. Allows use of specialized equipment.

The basis by which jobs are grouped together. Grouping Activities By: Function Product Geography Process Customer -

Chain of Command
The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Two aspects of Chain of Command are: Authority: Inherent rights in a position Unity of Command: clear single person reporting

Span of Control
The number of subordinates a manager can efficiently and effectively direct. Concept: Wider spans of management increase organizational efficiency. Narrow Span Drawbacks: Expense of additional layers of management. Increased complexity of vertical communication. Encouragement of overly tight supervision and discouragement of employee autonomy.

Centralisation and Decentralisation

The degree to which decision making is concentrated at a single point in the organization. The degree to which decision making is spread throughout the organization.

The degree to which jobs within the organization are standardized.

Common Organization Designs

Simple Structure A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. Bureaucracy A structure of highly operating routine tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Matrix Structure A structure that creates dual lines of authority and combines functional and product departmentalization.

The Bureaucracy
Strengths Functional economies of scale Minimum duplication of personnel and equipment Enhanced communication Centralized decision making Weaknesses Subunit conflicts with organizational goals Obsessive concern with rules and regulations Lack of employee discretion to deal with problems

Matrix Structure (College of Business Administration)




New Design Options

Team Structure Virtual Organization The use of teams as the A small, core organization that outsources central device to coordinate its major business functions. work activities. Highly centralized with little or no Characteristics: departmentalization. Breaks down departmental barriers. Concepts: Decentralizes decision Advantage: Provides maximum making to the team level. flexibility while concentrating on what Requires employees to be the organization does best. generalists as well as Disadvantage: Reduced control over specialists. key parts of the business. Creates a flexible bureaucracy. Boundaryless Organization An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams.

Organization Structure: Its Determinants and Outcomes

Mechanistic Model

A structure characterized by extensive departmentalization, high formalization, a limited information network, and centralization.

Organic Model A structure that is flat, uses cross-hierarchical and crossfunctional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making.

Mechanistic Versus Organic Models

Innovation Strategy A strategy that emphasizes the introduction of major new products and services. Cost-minimization Strategy A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting.

Imitation Strategy A strategy that seeks to move into new products or new markets only after their viability has already been proven.

Strategy-Structure Relationship
Strategy Structural Option


Organic: A loose structure; low specialization, low formalization, decentralized

Mechanistic: Tight control; extensive work specialization, high formalization, high centralization Mechanistic and organic: Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings

Cost minimization


How the size of an organization affects its structure. As an organization grows larger, it becomes more mechanistic.

How an organization transfers its inputs into outputs.

Institutions or forces outside the organization that potentially affect the organizations performance.

The Three Dimensional Model of the Environment

Volatility Capacity


E X H I B I T 1510

Is Bureaucracy Dead?
Characteristics of Bureaucracies Specialization Formalization Departmentalization Centralization Narrow spans of control Adherence to a chain of command. Why Bureaucracy Survives Large size prevails. Environmental turbulence can be largely managed. Standardization achieved through hiring people who have undergone extensive educational training. Technology maintains control.

Organizational Designs and Employee Behavior

Research Findings: Work specialization contributes to higher employee productivity, but it reduces job satisfaction. The benefits of specialization have decreased rapidly as employees seek more intrinsically rewarding jobs. The effect of span of control on employee performance is contingent upon individual differences and abilities, task structures, and other organizational factors. Participative decision making in decentralized organizations is positively related to job satisfaction.