Organizational Behavior: Managing People and Organizations, 12th Edition Class Notes

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Chapter One–An Overview of Organizational BehaviorOverviewManagers strive to make their organizations as effective and successful as possible. To do this they relyon assets such as financial reserves and earnings, technology and equipment, rawmaterials, information,and operating systems and processes. At the center of everything are the employees who work for theorganization. It is usually their talent, effort, skill, and ability that differentiates effective from lesseffective organizations. It is critical, then, that managers understand how the behaviors of their employeesimpact organizational effectiveness. In general, managers work to enhance employee performancebehaviors, commitment and engagement, and citizenship behaviors and to minimize various dysfunctionalbehaviors. A number of environmental, individual, group and team, leadership, and organizationalcharacteristics can make the manager’s work easier or more difficult depending on how well theyunderstand organizational behavior.This model will be more fully developed in Chapter 1 and will serveas a roadmap for your study of organizational behavior throughout this book.Regardless of their size, scope, or location, all organizations have at least one thing in common—they arecomprised of people.It is these people who make decisions about the strategic direction of a firm, it isthey who acquire the resources the firm uses to create new products, and it is they who sell thoseproducts. No matter how effectivea manager might be, all organizational successes—and failures—arethe result of the behaviors of many people. Indeed, no manager can succeed without the assistanceofothers.This book is about those people. It is also about the organization itself and the managers who operate it.Together, the study of organizations and the study of the people who work in them constitute the field oforganizational behavior. Our starting pointin exploring this field begins with a more detailed discussionof itThe primary purpose of this chapter is to introduce the field of organizational behavior. The chapterbegins by defining organizational behavior as the study of human behavior in organizational settings, theinterface between human behavior and the organization, and the organization itself. The four functionsthat make up the manager’s job—planning, organizing, leading, and controlling—are discussed. Then thechapter explores the various skills—technical, interpersonal, conceptual, and diagnostic—managers mustapply in organizations.The chapter then discusses human resource management. The strategic context oforganization behavior is discussed, including maintaining a competitive advantage, sources ofcompetitive advantage and types of business strategies. The next section providessome historical contexton organizational behavior, looking at scientific management, Hawthorne effect and the human relationsmovement.The chapter continuesby defining a system and systems perspective, the situationalperspective, and interactionalism. The chapter continuesby examining the outcomes—individual, groupand team, and organization—that are important for organizational effectiveness, including the scientificmethod and meta-analysis. The chapter concludes with a preview of the remaining text.Learning OutcomesAfterstudying this chapter, students should be able to:1.Define organizational behavior and describe how it impacts both personal and organizationalsuccess.

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2.Identify the basic management functions and essential skills that comprise the managementprocess and relate them to organizational behavior.3.Describe the strategic context of organizational behavior and describe the relationships betweenstrategy and organizational behavior.4.Identify and describe contextual perspectives on organizational behavior.5.Describe the role of organizational behavior in managing for effectiveness and discuss the role ofresearch in organizational behavior.6.Summarize the framework around which this book is organized.Real World Challenge: Managing Growth at GoogleSummary:Google’s popular search engine was created in 1998 with the goal of making the world’sinformation available to everyone. Google’s explosive growth needed to be closely monitored,and that itsemployees needed to continue feeling like an important part of the team.Thefounders wanted to makeGoogle an engaging place to work and set out to design theorganization and its culture in a way thatwould appeal to its current and future employees.Real World Challenge:What advice would you give them about the role of its people in its futuresuccess and how to set up the company to maximize employee innovation, trust, and loyalty?Real World Response:Between 1998 and 2015 Google’s rapid growth presentedtremendous challengesin integrating new employeeswhile motivating them to be innovative, productive,and loyal to the fastgrowing company.The founders’ believedthat people thrive in and are loyal to their jobs whenthey feelfully supported and authentically valued. This understanding led to the development of a cultureanchored by trust, transparency, and inclusion.Google is now known for offering its employees awide variety of perks. Google regularly surveysemployees about their managers, using theinformationto publicly recognize the best ones and givetheworst managers intensive coaching and supportthat helps 75 percent of them improve within threemonths. Google also hires smart, ambitious peoplewho share the company’s goals and vision andmaintainsan open culture in which employees feel comfortablesharing opinions and ideas. Google’sproactive efforts to be anengaging and inspiring place for its employees hasboth helped the companysucceed and made it a stapleon various “most desired employer” lists, includingbeing named the #1 BestPlace to Work honor fromGlassdoor in 2015.Chapter OutlineI.WHAT IS ORGANIZATIONAL BEHAVIOR?A.The Meaning of Organizational BehaviorOrganizational behavior(OB)is the study of human behavior in organizational settings, theinterface between human behavior and the organization, and the organization itself.All three are ultimately necessary for a comprehensive understanding of organizationalbehavior.

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OB helps explain and predict how people and groups interpret events, react, and behave inorganizations and describes the role of organizational systems, structures, and process inshaping behavior. Figure 1.1 illustrates this view of organizational behavior.B.How Organizational Behavior Impacts Personal SuccessThe core of OB is being effective at work.Since most people reading this book are eitherpresent or futuremanagers we take a managerial perspective of the field.Using yourknowledge of OB can helpyou to succeed faster in any organization or career.The study of organizational behavior can greatly clarify thefactors that affect how managersmanage. Hence, the field attempts to describethe complex human context of organizations andto define the opportunities,problems, challenges, and issues associated with that realm.C.How Organizational Behavior Impacts Organizational SuccessOrganizations as a whole also benefit from OB.By appropriately applying OB knowledge about individuals,groups, and the effect oforganizational structure on worker behavior, theconditions can be created that makeorganizations most effective.OB also helps companies perform well.In addition to financialperformance and job satisfaction, OB also influences absenteeism andturnover.Reducing absenteeism and turnover can be worth millions of dollars to organizationsthrough increased productivity and customer service and decreased staffingcosts.One central value of organizational behavior is that it isolates importantaspects of themanager’s job and offers specific perspectives on the human sideof management: people asorganizations, people as resources, and people aspeople.Case Study: The J.M. Smucker CompanySummary:From its founding in 1897, the J.M. Smucker Company recognizes that acting ethically is akey element of its success. The manufacturer wants to ensure that its fruit spreads, frostings, juices, andbeverages remain American staples, and that its daily operations are guided by honesty, respect, trust,responsibility, and fairness.1.Why would ethics be important to a company like Smucker? How can its focus on ethicsimprove its business performance?Acting ethically is a key element of the company’s success. The benefits to the company includecultivating teamwork and productivity, supporting employee growth, avoiding criminal acts ofomission, and promoting a strong public image. Ethical employee behavior determines short-termorganizational performance and long-term organizational success. If employees do not consistentlybehave ethically, long-term sustainability is unlikely.2. Appearing on “best places to work” lists can increase anemployer’s popularity, even amonglower-qualified applicants. The increased volume of applicants can be costly and time-consuming. What do you feel are the benefits and drawbacks to being on this type of list? Do youfeel that it is generally beneficial tobe publicly recognized as a good employer? Why or why not?

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The benefits include employee pride in working for an organization known for its high ethicalstandards. The drawback includes the additional cost of human resources personnel to screenapplications and interview potential employees. It is beneficial to bepublicly recognized as a goodemployer because it sets the overall ethical tone of the company. Employees understand that unethicalbehavior is not tolerated.3. Does Smucker’s culture appeal to you as a potential employee? Why or why not?The culture is appealing because the company is dedicated to higher ethical ideals that better society asa whole such as environmental and social sustainability. Smucker’spromotes initiatives and programsthat support and enhance the quality of life.II.THE MANAGERIAL CONTEXT OF ORGANIZATIONAL BEHAVIORThe managerial context of OB can be viewed from the perspective of basic management functions,critical management skills, and overall human resource management.A.Basic Management Functions and Organizational BehaviorIn characterizing managerial work,mostexperts find it useful to conceptualize the activitiesperformed by managers as reflecting one or more of four basic functions.1.Planningis theprocess of determining an organization’s desired future position and thebest means of getting there.2.Organizingis the process of designing jobs, grouping jobs into units, and establishingpatterns of authority between jobs and units.3.Leadingis the process of getting the organization’s members to work together toward theorganization’s goals.4.Controllingis the process of monitoring and correcting the actions of the organization andits members to keep them directed toward their goals.B.Critical Management Skills and Organizational BehaviorIn general, most successful managers have a strong combination of technical, interpersonal,conceptual, and diagnostic skills.Technical skillsare the skills necessary to accomplish specific tasks within the organization.Interpersonal skillsare the ability to effectively communicate with, understand, and motivateindividuals and groups.Conceptual skillsare the ability to think in the abstract.Diagnostic skillsare the ability to understand cause-and-effect relationships and to recognizethe optimal solutions to problems.C.Organizational Behavior and Human Resource ManagementHuman resource management (HRM)is the set of organizational activities directed atattracting, developing, and maintaining an effective workforce.

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More precisely, HR managersselect new employees, develop rewards and incentives tomotivate andretain employees, and create programs for training and developing employees.III.THE STRATEGIC CONTEXT OF ORGANIZATIONAL BEHAVIORCompetitive advantageis anything that gives a firm an edge over rivals in attracting customers anddefending itself against competition.A.Sources of Competitive AdvantageThere are many sources of competitive advantageincluding having the best-made or cheapestproduct, providing the bestcustomer service, being moreconvenient to buy from, havingshorter productdevelopment times, and having a well-known brand name.Because itis an organization’s people who are responsible for gaining and keepinganycompetitive advantage, effective management is critical to businesssuccess.To have a competitive advantage a companymust ultimately be able to give customers superiorvalue for their money (acombination of quality, service, and acceptable price)—either a betterproductthat is worth a premium price or a good product at a lower price can be asource ofcompetitive advantage.Table 1.1 lists some possible sources ofcompetitive advantage. You should note that anorganization’s talent is thekey to securing each of these.B.Types of Business StrategiesA company may create value based on price, technologicalleadership, customer service, orsome combinationof these and other factors.Business strategyinvolves the issue of how to compete, but alsoencompasses:The strategies of different functional areas in the firm.How changing industry conditions such as deregulation,product market maturity, andchanging customerdemographics will be addressed.How the firm as a whole will address the range of strategicissues and choices it faces.Business strategies arepartially planned, and partiallyreactive to changing circumstances.Companies may also pursue more than one strategyat a particular time.Three primary business strategies are:1.Cost leadership2.Differentiation3.Specialization1.CostLeadership Strategystrives to be the lowest-cost producer for a particular level ofproduct quality.Walmart is a good example of a firm that uses a cost leadership strategy.Operational excellencemaximizes the efficiency of the manufacturing or productdevelopment process to minimize costs. Dell computers, Federal Express, and Walmart aregood examples of companies whose competitive advantage is based on operationalexcellence.

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2.Differentiation Strategydevelops a product or service that has unique characteristicsvalued by customers.Firms can differentiate along various dimensions, including image (Coca-Cola), productdurability (Wrangler clothing), quality (Lexus), safety (Volvo), and usability (AppleComputer).Product innovationis developing new products or services.This strategy is common in technology and pharmaceutical companies. Johnson &Johnson, Nike, and 3M are good examples.3.Specialization Strategyfocuses on a narrow market segment or niche and pursues either adifferentiation or cost leadership strategy within that market segment.This strategy can be successful if it results in either lower costs than competitors servingthe same niche, or an ability to offer customers something other competitors do not, such asChuck E. Cheese, Dunkin’ Donuts, and Starbucks.Customer intimacyis delivering unique and customizable products or services to meetcustomers’ needs and increase customer loyalty.Consulting, retail, and banking organizations often adopt this approach.4.Growth Strategyoccurs when companies expand organically or through acquisitions.Chipotle Mexican Grill is a growth-oriented chain and regularly opens new stores requiringadditional management, employees, and even product distribution staff.C.Connecting Business Strategy to Organizational BehaviorThere are a number of significant linkages that connect business strategy andOB.For instance, a firm that relies on a cost leadership strategy will usually needto keep all of itsexpenses as low as possible. Therefore, this strategy might dictaterelying on low-wageemployees and trying to automate as many jobs as possible.These actions, in turn, clearly relateto employee motivation and the design ofwork.Likewise, a company using a differentiation strategy mightwant to emphasizeexemplarycustomer service. As a result, it needs employees who are motivatedto provide high levels ofservice, leaders who can help develop a customerservice culture, and a reward structure tied tocustomer service.Aspecializationstrategy often requires employees with specializedskills and abilities.Effective managers understandwhat needs to be done to execute a company’s businessstrategy, then theyplan, organize, direct, and control the activities of employees to get it done.Itis important to note that managers do not accomplish organizational objectivesbythemselves—they get work done through others. Flexibly applyingOB principles will help youto do that most effectively.IV.CONTEXTUAL PERSPECTIVES ON ORGANIZATIONAL BEHAVIORA.Where Does Organizational Behavior Come From?

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Formal study of OB began in the 1890s, following the industrial relationsmovement spawnedby Adam Smith’s introduction of the division oflabor. In the 1890s, Frank and Lillian Gilbrethand Frederick Winslow Tayloridentified the positive effects of precise instructions, goalsetting, and rewardson motivation. Their ideas became known asscientific management,andare often considered the beginning of the formal study of OB.Scientific managementis based on the belief that productivity is maximized whenorganizations are rationalized with precise sets of instructions based on time-and-motionstudies.The four principles of Taylor’s scientificmanagement are:1.Replace rule-of-thumb work methods with methods based on scientificallystudying thetasks using time-and-motion studies.2.Scientifically select, train, and develop all workers rather than leavingthem to passivelytrain themselves.3.Managers provide detailed instructions and supervision to workers toensure that they arefollowing the scientifically developed methods.4.Divide work nearly equally between workers and managers. Managersshould applyscientific management principles to planning the work, andworkersshould actuallyperform the tasks.Although scientific management improved productivity, it also increasedthe monotony ofwork.After World War I, attention shifted to understanding the role of human factorsand psychologyin organizations. This interest was spawned by the discoveryof theHawthorne effectin the1920s and 1930s.TheHawthorne effectoccurs when people improve some aspect of their behavior orperformance simply because they are being assessed.Rather than viewing workers as interchangeable parts inmechanical organizations as thescientific management movement had done,thehuman relations movementviewedorganizations as cooperative systemsand treated workers’ orientations, values, and feelings asimportant parts oforganizational dynamics and performance.B.Organizations as Open SystemsAsystemis an interrelated set of elements that function as a whole. The framework for systemsstudy consists of inputs, transformation, outputs,and feedback.An organizational system receives four kinds of input from its environment: material, human,financial, and informational. These inputs are combined and transformed and then returned tothe environment in the form of products or services, profits or losses, employee behaviors, andadditional information.Finally, the system receives feedback from the environment regarding these outputs.The systems perspective is valuable to managers for a variety of reasons.First, it underscores the importance of anorganization’s environment. The systems perspectivealsohelps managers conceptualize the flow and interaction of various elements oftheorganization itself as they work together to transform inputs into outputs.

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C.Situational Perspectives on Organizational BehaviorAnother useful viewpoint for understanding behavior in organizations comesfrom thesituational perspectivewhich suggest that in most organizations, situations andoutcomes are influenced by other variables.Because of the complexities of human behavior and organizational settings, universalconclusions are impossible.In organizations, most situations and outcomes are contingent; thatis, the precise relationship between any two variables is likely to be situational and dependenton other variables.There are distinct differences between universal and situational perspectives.D.Interactionalism: People and SituationsInteractionalismsuggests that individuals and situations interact continuously to determineindividuals’behavior. This view attempts to explain how people select, interpret, and changevarious situations.V.MANAGING FOR EFFECTIVENESSEssentially,managers and leaders generally try to direct the behaviors of people intheirorganizations in ways that promote organizational effectiveness.A.Enhancing Individual and Team Performance BehaviorsSeveral individual behaviors result from a person’s participation in an organization.One important behavior is productivity. A person’s productivity is a relatively narrow indicatorof his or her efficiency and is measured interms of the products or services created per unit ofinput.Performance, another important individual-level outcome variable, is asomewhat broaderconcept and is made up of all work-related behaviors.Another set of outcomes exists at the group and team level. Some of theseoutcomes parallel theindividual-level outcomes just discussed.Individuals,not groups, have attitudes. But groups or teams can also have unique outcomesthatindividuals do not share.Managersneed to assess both common and unique outcomes when considering theindividualand group levels.B.Enhancing Employee Commitment and EngagementLevels of job satisfaction or dissatisfaction, organizationalcommitment, andemployeeengagement all play an important role inorganizational behavior.Extensive research conducted on job satisfaction hasindicated that personal factors.Contrary towhat many managers believe, however, high levels ofjob satisfaction do not necessarily lead tohigher levels of performance.

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A person with a high level of commitment is likely to see herself as a truemember of theorganization.In contrast, a person with less organizational commitmentis more likely to seehimself as an outsiderC.Promoting Organizational Citizenship BehaviorsOrganizational citizenshipis the behavior of individuals that makes a positiveoverallcontribution to the organization.The determinant of organizational citizenship behaviors is likely to be acomplexmosaic ofindividual, social, and organizational variables.Although the study of organizationalcitizenship is still inits infancy, preliminary research suggests that it may play a powerful roleinorganizational effectiveness.D.Minimizing Dysfunctional BehaviorsSome work-related behaviors are dysfunctional in nature.Dysfunctional behaviorsare those that detract from, rather than contribute to, organizationalperformance.Two other important individual-level behaviors areabsenteeism and turnover. Absenteeism is ameasure of attendance. Turnoveroccurs when a person leaves the organization.Other forms of dysfunctional behavior may be even more costly for an organization.Theft and sabotage result in direct financial costs for an organization.Sexual and racialharassment also cost an organization, both indirectly anddirectly.So, too, can politicized behavior, intentionally misleading others in the organization,spreadingmalicious rumors, and similar activities.Incivility and rudenesscanresult in conflict and damage to morale and the organization’sculture.Bullying and workplace violence are also growing concernsin many organizations.E.Driving Strategic ExecutionFinally, another set of outcome variables exists at the organizationlevel. These outcomesusually relate to strategicexecution—how well managers and their employees understandandcarry out the actions needed to achieve strategicgoals.As before, some of these outcomes parallel those at theindividual and group levels, but othersare unique.Themanager must look at the full array of outcomes and attempt to balance themin an optimalfashion. The manager’s ability to do this is a major determinantof the organization’s successand how well it implements its business strategy.F.How Do We Know What We Know?Another important part of being an effective manager is understanding thequality of theinformation you use to make decisions. Not all information isaccurate!

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Accordingly, it is important for you to understand the processes thathave been used to establishour knowledge about OB, and why we know whatwe know.1.IntuitionDecades of research have both reinforced some of the things many people intuitivelybelieve and identified common misunderstandings or misperceptions about OB.The authorsencourage you to read this book with an open mind, and to not assumethat youknow all there is to know about a topic before you have studied it.Theirgoal is to help yoube as effective as possible in organizations, and to help youcreate successful organizations.2.The Scientific MethodRather than relying on experience or intuition, or just assuming that ideas arecorrectbecause they seem to make sense, thescientific methodrelies on systematicstudies thatidentify and replicate a result using a variety of methods,samples, and settings. Sir FrancisBacon developed thescientific methodinthe 1600s.The scientific method begins withtheory, which is a collection of verbaland symbolicassertions that specify how and why two or more variables arerelated, and the conditionsunder which they should and should not relate.The second step in the scientific method is the development ofhypotheses,or writtenpredictions specifying expected relationships between certain variables.Hypothesis testing can be done using a variety of research methods andstatistical analyses.For our purposes, assume we collect data on our predictor,orindependent variable, andour criterion, ordependentvariable.Setting a specific, difficult, achievablegoal is the independent variable, and the number ofproducts assembled isour dependent variable.We can then analyze thecorrelation,abbreviated r, between thetwo variables to test ourhypothesis. The correlation reflects the strength ofthe statistical relationship between twovariables.The correlation ranges from −1 to +1, and can be positive or negative. Acorrelation of 0means that there is no statistical relationship.A negative correlation is not necessarilybad.It maysimply mean that to maximize assemblers’ performance,the manager should setlowergoals.In reality, we never seeperfect +1.0 or −1.0 correlationswhen it comes to people’sbehavior—people are just too complicated.A statistical technique calledmeta-analysisis used to combine the results ofmany differentresearch studies done in a variety of organizations and for a varietyof jobs.The goal of meta-analysis is to estimate the true relationship betweenvarious constructsand to determine whether the results can be generalized to allsituations or if therelationship works differently in different situations.3.Global Replication

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Assuming that everyone in the world shares the same values,norms, and expectations aboutwork is incorrect. National boundaries no longerlimit many organizations, and many U.S.companies employ people fromaround the world.GlobalIssues Feature: Managing Across CulturesSummary:Effective management requires flexibility and an appreciation that expectations and valuesdiffer. The U.S. workforce is expected to become more diverse. The more comfortable students are intailoring motivation and leadership efforts to the people they lead, the more effective they will be asmanagers.Although good pay and interesting work appear to be universally motivating,people fromdifferent cultures have different traditions, are motivated by different things, and communicate indifferent ways.Motivating employees in a multinational organization is challenging, particularly ifmanagers adopt a “one-size-fits-all” strategy. Cultural differences also influence the effectiveness ofdifferent leadership behaviors.Managers supervising employees from different cultures must recognizethese differences and adapt their behaviors and relationships accordingly.VI.THE FRAMWORK OF THE BOOKFigure 1.7 presents the framework around which our book isorganized.Summary and ApplicationOrganizational behavior is the study of human behavior in organizationalsettings, the interface betweenhuman behavior and the organization, andthe organization itself. The study of OB is important becauseorganizationshave a powerful influence on our lives and it directly relates to managementinorganizations.A manager’s job can be characterized in terms of four functions. Thesebasic managerial functions areplanning, organizing, leading, and controlling.Planning is the process of determining the organizations’desiredfuture position and deciding how best to get there. Organizing is the processof designing jobs,grouping jobs into manageable units, and establishingpatterns of authority among jobs and groups ofjobs. Leading is theprocess of motivating members of the organization to work together towardtheorganization’s goals. Controlling is the process of monitoring and correctingthe actions of theorganization and its people to keep them headedtoward their goals.Why is it that some people rise in organizations despite being onlyaverage accountants, marketers,researchers, and so on? Often the answeris that those people know how to interact effectively with otherpeople.Effective interaction with people is critical for advancement in organizations,and often foreffective job performance. Being able to understandwhat people think and feel, knowing how to persuadeand motivate others,and knowing how to resolve conflicts and forge cooperation are among themostimportant skills of successful leaders.This book can help you betterunderstand yourself, understandorganizations,understand the role of organizational behavior in your personal careersuccess, andimprove your OB skills.DISCUSSION QUESTIONS1.What do you think are the most important things a manager does? Is how a manager does thesethings also important? Why or why not?The ability to understand what people think and feel, knowing how to persuade and motivate others,and knowing how to resolve conflicts and forge cooperation are among the most important skills ofsuccessful managers. How a manager does these things is important because “people skills” are often

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what make the difference between an average and an excellent performer in almost any job.2.Some people have suggested that understanding human behavior at work is the single mostimportant requirement for managerial success. Do you agree or disagree with this statement?Why?To some degree, students’ responses maydepend on their major field of study, especially if it is notmanagement. However, students should recognize that the behavior of people in organizations affectseveryone’s lives in numerous ways every day. The extent to which we are able to get things done atwork or to register for classes every semester reflects the behavior of people in organizations. Afterall, people are the organization, people are resources that organizations use, and, most importantly,people are individuals interacting in increasingly complex ways.3.The chapter identifies four basic managerial functions. Based on your ownexperiences andobservations, provide an example of each function.Answers will vary. Students may be more aware of the control function than any other in the jobsthey have held!4.Why will learning about OB help you to get a better job and a better career, and be a bettermanager?OB provides a foundation for the effective management of people in organizations. Becauseit explains how organizations work from individualmotivation to team dynamics toorganizational structure, knowing about OB is essential to being effectiveat allorganizationallevels.Also, learning aboutyourself and constantly developing your skillsareimportant to succeeding in any career.5.Some people believe that individuals working in an organization have basic human rights tosatisfaction with their work and to the opportunity to grow and develop. How would youdefend this position? How would you argue against it?In defense of this position, it may be argued that organizations have a responsibility to society toprovide an environment that enables individuals to grow and develop. In other words, becauseindividuals expend extensive time and energy in organizations,it is the individual’s right to work in asafe, clean, and satisfying environment. From the opposing viewpoint, it may be argued thatorganizations are required only to reward employees financially for the time and effort they spend onthe job. Further, because employees are not “forced” to work for a particular organization, they havethe freedom to leave the organization if they are not satisfied. In addition, because employees are paidfor their services, organizations are not required to address otheremployee concerns.6.Think of something that you believe leads to employee productivity based on intuition that maynot prove to be true if tested systematically. Now apply the scientific method and describe howyou might test your theory.Paying for increased production seems intuitively to lead to increased productivity. In fact, workerswho produced more than their peers were considered “rate busters” and shunned by their coworkers.Theory: Workers are motivated by money.Hypothesis: paying a worker more money increasedoutput. The independent variable is the money, and the dependent variable is the worker’sproductivity. For the data phase,a group of workers is offered additional pay to increase outputduring a one-hour work period. Data analysis shows that the correlation between the two variables is

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negative. This means that paying more money does not increase output. Peer pressure not to work toohard was a stronger motivator than additional pay.GROUP EXERCISE–Managing a Successful RestaurantLearning Objective:Applying concepts learned in this chapter such as employee engagement,organizational citizenship, dysfunctional behaviors and managing for effectiveness.Task:Form groups of 3–5 students.Imagine that you are all managers in a local restaurant. There are many restaurants intown,making it a competitive business.You recognize that providing high quality,friendly service andhaving actively engaged employees is going to make thedifference between your restaurant’ssuccess and failure.Your management team decides to first address organizational citizenship andemployeeengagement as drivers of high quality customer service.First,think independently about whatyour restaurant can do to enhance the engagement andcitizenship behaviors ofyour employees. Then share your ideas with the group and identify yourtop threesuggestions for the restaurant. Be ready to share your ideas with the class.Your management team next decides that it will be important to minimizedysfunctionalemployee behaviors if the restaurant is to succeed. First,think independently about what yourrestaurant can do to minimize the occurrence of these destructivebehaviors. Then share yourideas with the group and identify your topthree suggestions for the restaurant. Be ready to sharethem with the class.VIDEO EXERCISESManaging at Camp Bow WowSummary:Sue Ryan left the corporate world to open her own business,Camp Bow Wow,to enjoy—andpass on—the better managerial practices that she’d encountered in her career. Her strategy for managingher business is to mentor and develop other managers to help her.1.How does Sue Ryan perform the three basic managerial roles—interpersonal, informational,and decision making—in her role at Camp Bow Wow?In the interpersonal category, Sue assumes the leader role and encourages workers to increaseproductivity. In the informational category, Sue assumes the disseminator role by outlining customerservice policies to employees. In the decision-making category, Sue assumes the role of resourceallocator as she allocates budget requests.2.How do Candace Stathis and Sue Ryan apply the four critical managerial skills—technical,interpersonal, conceptual, and diagnostic—in their roles at the company? Which of these skillsdo you think is most important skill for a manager at Camp Bow Wow and why?

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Ryan and Stahis need technical skills associated with operations such as handling the dogs. They needinterpersonal skills for the customer service function and conceptual skills to see “the big picture” ofCamp Bow Wow Boulder. Diagnostic skills help themrecognize the optimal solutions to problems.The video shows that Sue excels in leadership skills while Candace excels in the interpersonal skillsrequired for good customer care. The most important skill is interpersonal to effectively andefficiently deal with the dog owners.3.How do Ryan and Stathis balance the three levels of business outcomes—individual, group andteam, and organizational? How would each manager rank the importance of the threeoutcomes? Why are their rankings likely to be the same or different?Sue Ryan would rank organizational outcomes first because she is a manager who realizes the effectof good customer service on business performance. She would rank group and team outcomes nextbecause productivity depends on having her employees care for the dogs effectively. She would rankindividual outcomes last because she is not caring for the dogs herself, rather managing the care.Candace Stathis would rank group and team outcomes first because she interacts with otheremployees to assure quality care for the dogs. She would rank individual outcomes next becausehandles customers who are “are way harder to train” than dogs. She would rank organizationaloutcomes last because she is a middle manager, not a top manager.Now What?Imagine being a new manager at Happy Time Toys, a company that designs and manufactures noveltytoys. While attending a group meeting with your boss and two coworkers, your boss asks for ways ofbetter using the organization’s talent to create a competitive advantage.What do yousay or do?Go to thischapter’s “Now What?” video, watch the challenge video, and choose the best response. Be sure to alsoview the outcomes of the two responses you didn’t choose.OB Concepts Applied:themanagerial functions of planning, organizing, directing, and controlling; therole of OB in managing effectively.Discussion Questions1.Which aspects of management and organizational behavior discussed in this chapter areillustrated in these videos? Explain your answer.Organizational behavior explains how people interpret events and behave in organizations anddescribes how organizations shape behavior. OB explains how organizations work. OB can improve afirm’s performance by positively influencing bottom line results.Happy Time Toys correctly assumed that people work best when they’re rewarded properly.However, the “Employee of the Month” program did not motivate everyone to work harder (incorrectresponse #2) because different employees are motivated by different rewards, especially in aculturally diverse workforce. In the video, one employee put the Employee of the Month certificate inthe recycle bin, and one group said that they’d feel more appreciated with a day off or a raise.OB explains that workers are more motivated when they believe their organization is open,concerned, and willing to listen.As the Human relations movement showed, humane, employee-centered management recognizes employees’ needs.

Organizational Behavior: Managing People and Organizations, 12th Edition Class Notes - Page 16 preview image

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Organizational culture isa system of shared values, norms, and assumptions that guide members’attitudes and behaviorsin an organization. To create a strong culture, leaders clearly communicatethe firm’s expectations to employees. When Happy Time Toysfocused on a strong culture thatsupported creativity and set clear performance goals linked to the company’s business strategy,company performance improved dramatically. Creativity in toy development, high quality, andcompetitive prices re-energized the company (correct response).The video also illustrated the managerial functions of planning, organizing, directing and controllingas Happy Time Toys aligned its talent strategy with its business strategy.2.How could a company’s talent strategy undermine its ability to create a competitive advantage?A competitive advantage offers quality, service, and an acceptable price, and an organization’s talentis the key to securing each of these. The effective management of people is key to the creation of acompetitive advantage because productivity comes from challenged, empowered, excited, rewardedpeople.When Happy Time Toystied its talent strategy a low-cost business strategy (incorrect response #1),its ability to create a competitive advantage was undermined. Why? The philosophy of reducingwages and headcount to save money and keep prices low resulted in increased customer complaints,high turnover, higher absenteeism, reduced production levels, lack of employeeengagement and jobsatisfaction. These elements make a companylesscompetitive in the marketplace.3.How else might you answer the question of how Happy Time Toys can create a competitiveadvantage through its talent?Another approach for Happy Time Toys could be a specialization strategy which focuses on a narrowmarket segment or niche. The company could develop a competitive advantage based on customerintimacy─ delivering unique and customized products and increasing customer loyalty. Creatingcustomer loyalty requires employees to combine knowledge about their customers with a quickresponse to a customer’s need. Talent is the most critical element in building a customer-orientedcompany. Hiring active learners withgood customer relations skills and emotional resilience underpressure complements a customer intimacy competitive advantage.

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