Solution Manual for Canadian Organizational Behaviour, 10th Edition

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Chapter 1: Introduction to the Field of Organizational Behaviour’s Manual to AccompanyCanadianOrganizationalBehaviour 10/eby Steven L. McShane, Kevin Tasa, and Sandra SteenChapter 1:Introduction to the Field ofOrganizational BehaviourPrepared by:Steven L. McShane (Curtin University andUniversity of Victoria)Kevin Tasa (York University)Sandra L. Steen (University of Regina)Page 1-1SOLUTION MANUAL

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Chapter 1: Introduction to the Field of Organizational BehaviourIntroduction to the Fieldof Organizational BehaviourLEARNING OBJECTIVESAfter reading this chapter, students should be able to:1-1Define organizational behaviour and organizations, and discuss the importance of this field of inquiry.1-2Debate the organizational opportunities and challenges of technological change, globalization, emergingemployment relationships, and workforce diversity.1-3Discuss the anchors on which organizational behaviour knowledge is based.1-4Compare and contrast the four perspectives of organizational effectiveness.CHAPTER GLOSSARYcorporate social responsibility (CSR) — organizationalactivities intended to benefit society and theenvironment beyond the firm’s immediate financialinterests or legal obligationsdeep-level diversity — differences in the psychologicalcharacteristics of employees, including personalities,beliefs, values, and attitudesethics – the study of moral principles or values thatdetermine whether actions are right or wrong andoutcomes are good or badevidence-based management — the practice of makingdecisions and taking actions based on research evidenceglobalization — economic, social, and culturalconnectivity with people in other parts of the worldhigh performance work practices (HPWP) — aperspective that holds that effective organizationsincorporate several workplace practices that leveragethe potential of human capitalhuman capital — the stock of knowledge, skills, andabilities among employees that provide economic valueto the organizationintellectual capital — a company’s stock of knowledge,including human capital, structural capital andrelationship capitallearning orientation — beliefs and norms that supportthe acquisition, sharing, and use of knowledge as well aswork conditions that nurture these learning processesopen systems — a perspective that holds thatorganizations depend on the external environment forresources, affect that environment through their output,and consist of internal subsystems that transform inputsinto outputsorganizational behaviour (OB) — the study of whatpeople think, feel, and do in and around organizationsorganizational effectiveness — a broad conceptrepresented by several perspectives, including theorganization’s fit with the external environment, internalsubsystems configuration for high-performance,emphasis on organizational learning, and ability tosatisfy the needs of key stakeholdersorganizational learning — a perspective that holds thatorganizational effectiveness depends on theorganization’s capacity to acquire, share, use, and storevaluable knowledgePage 1-21

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Chapter 1: Introduction to the Field of Organizational Behaviourorganizations — croups of people who workinterdependently toward some purposerelationship capital — the value derived from anorganization’s relationships with customers, suppliers,and othersstakeholders — individuals, organizations, or otherentities who affect, or are affected by, the organization’sobjectives and actionsstructural capital — knowledge embedded in anorganization’s systems and structures.surface-level diversity — the observable demographic orphysiological differences in people, such as their race,ethnicity, gender, age, and physical disabilitiestelecommuting — an arrangement whereby, supportedby information technology, employees work from homeone or more work days per month rather than commuteto the officevalues — relatively stable, evaluative beliefs that guide aperson’s preferences for outcomes or courses of action ina variety of situationswork-life balance — the degree to which a personminimizes conflict between work and nonworkdemandsCHAPTER SUMMARY BY LEARNING OBJECTIVE1-1 Define organizational behaviour and organizations, and discuss the importance of this field of inquiry.Organizational behaviour is the study of what people think, feel, and do in and around organizations.Organizations are groups of people who work interdependently toward some purpose. OB theories help us to (a)comprehend and predict work events, (b) adopt more accurate personal theories, and (c) influence organizationalevents. OB knowledge is for everyone, not just managers. OB theories and practices are highly beneficial for anorganization’s survival and success.1-2 Debate the organizational opportunities and challenges of technological change, globalization, emergingemployment relationships, and increasing workforce diversity.Technological change has improved efficiency, interactivity, and wellbeing, but it has also been a disruptive force inorganizations. Information technology has altered communication patterns and power dynamics at work, and hashad effects on our nonwork time, attention span, and techno-stress. Globalization, which refers to various forms ofconnectivity with people in other parts of the world, has become more intense than ever before becauseinformation technology and transportation systems. It has brought more complexity and new ways of working tothe workplace, requires additional knowledge and skills. It may be an influence on work intensification, reducedjob security, and lessening work–life balance.An emerging employment relationship trend is the blurring of work and nonwork time, and the associated call formore work–life balance (minimizing conflict between work and nonwork demands). Another employment trend istelecommuting, whereby employees work from home one or more work days per month rather than commute tothe office. Telecommuting potentially benefits employees and employers, but there are also disadvantages and itseffectiveness depends on the employee, job, and organization. An organization's workforce has both surface-leveldiversity (observable demographic and other overt differences in people) and deep-level diversity (differences inpersonalities, beliefs, values, and attitudes). Diversity may improve creativity and decision making, and providebetter awareness and response to diverse communities. However, diversity also poses challenges, such asdysfunctional conflict and slower team development.Page 1-3

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Chapter 1: Introduction to the Field of Organizational Behaviour1-3 Discuss the anchors on which organizational behaviour knowledge is based.The multidisciplinary anchor states that the field should develop from knowledge in other disciplines (e.g.,psychology, sociology, economics), not just from its own isolated research base. The systematic research anchorstates that OB knowledge should be based on systematic research, consistent with evidence-based management.The contingency anchor states that OB theories generally need to consider that there will be different consequencesin different situations. The multiple levels of analysis anchor states that OB topics may be viewed from theindividual, team, and organization levels of analysis.1-4 Compare and contrast the four perspectives of organizational effectiveness.The open systems perspective views organizations as complex organisms that “live” within an externalenvironment, depend on it for resources, then use organizational subsystems to transform those resources intooutputs, which are returned to the environment. Organizations receive feedback to maintain a good “fit” with thatenvironment. Fit occurs by adapting to the environment, influencing the environment, or moving to a morefavourable environment. Effective transformation processes are efficient, adaptable, and innovative. Theorganizational learning perspective states that organizations are effective when they find ways to acquire, share,use, and store knowledge. Intellectual capital consists of human capital, structural capital, and relationship capital.Knowledge is retained in the organizational memory; companies also selectively unlearn.The high-performance work practices (HPWP) perspective identifies a bundle of systems and structures toleverage workforce potential. The most widely identified HPWPs are employee involvement, job autonomy,developing employee competencies, and performance-/skill-based rewards. HPWPs improve organizationaleffectiveness by building human capital, increasing adaptability, and strengthening employee motivation andattitudes. The stakeholder perspective states that organizations are more effective when they understand, manage,and satisfy stakeholder needs and expectations. Leaders manage the interests of diverse stakeholders by relying ontheir personal and organizational values for guidance. Ethics and corporate social responsibility (CSR) are naturalvariations of values-based organizations. CSR consists of organizational activities intended to benefit society andthe environment beyond the firm’s immediate financial interests or legal obligations.Page 1-4

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Chapter 1: Introduction to the Field of Organizational BehaviourLECTURE OUTLINESlide 1: Introduction to the Field of Organizational BehaviourSlide 2:ShopifyOttawa-based Shopify is a rapidly growing technology success story due to its focus onteamwork, employee motivation, organizational culture, and other effective organizationalbehaviour practices.Slide 3: Organizational Behaviour and OrganizationsOrganizational behaviour (OB)• Studies what people think, feel, and do in and around organizationsOrganizations• Groups of people who work interdependently toward some purpose• Collective entities• Collective sense of purposeSlide 4: Importance of OBOB helps people in all jobs (not just for “management.”)1. Comprehend and predict workplace events• Fulfills need to understand environment, reduces anxiety• Anticipate future events — get along better, goal achievement2. Adopt more accurate personal theories• OB isn’t all common sense.• Some common sense knowledge is inaccurate.• Personal theories need correction or refinement.3. Influence organizational events• Helps us to work successfully with others, perform our jobs better• Employers identify OB knowledge and skills as most important.OB is vital to the organization’s survival and success.• Predicts firm’s performance• Predicts hospital quality• OB concepts are positive screens in investment decisionsPage 1-5

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Chapter 1: Introduction to the Field of Organizational BehaviourContemporary Developments Facing OrganizationsSlide 5: Technological ChangeLong history as a disruptive force in organizations (waterwheels, cotton gins, steamengines, microprocessors, etc.)Effects of technological change• Higher productivity, but also usually displaces employees and makes entireoccupations obsolete• Alter relationships and patterns of behaviour with coworkers, clients, etc• Improve health and wellbeingEffects of information technology (email, social media, etc)• Potential benefits — may give employees a stronger voice through directcommunication with executives and broader distribution of their opinions• Potential problems — less work = nonwork separation, longer hours, reducing theirattention spans at work, and increasing techno-stress• Information technology may eventually change the form of organizations —organizations as networks rather than places to workSlide 6: GlobalizationEconomic, social, and cultural connectivity with people in other parts of the world• Actively participate in other countries and cultures• Increased globalization due to improved information technology and transportationsystemsEffects of Globalization on Organizations• Expands markets, lower costs, increases knowledge• Effects on teamwork, diversity, cultural values, leadership, etc.• Increases competitive pressures, work intensification and requires additionalknowledge and skills e.g. global mindsetPage 1-6

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Chapter 1: Introduction to the Field of Organizational BehaviourSlide 7: Emerging Employment RelationshipsEmployment relationship has been altered by technology, globalization, and other factors —longer hours, less work-life separation.Work-life balance• Degree of conflict between work and nonwork demandsRemote work — performing the job away from the employer’s physical workplace• Working at client sites (e.g. repair technicians)• Telecommuting (teleworking) – working at home rather than commuting to the officeSlide 8: Telecommuting Benefits and ProblemsTelecommuting benefits• Better work-life balance — but requires sufficient work space and privacy at home —undermined by increased family responsibilities on telecommuting days• Valued work benefit — factor in lower turnover• Higher productivity — due to lower stress, transferring some commuting time to worktime, ability to work when weather prevents office work• Better for the environment — less pollution, road use• Lower real estate costs for companyTelecommuting disadvantages• Less connection with coworkers, more social isolation in general• Less informal communication that helps career (word-of-mouth information aboutpromotional opportunities)• Lower team cohesion and a weaker organizational cultureBenefits of remote work depend on (contingencies):• Employee characteristics — higher self-motivation, self-organization, need forautonomy, skill with information technology, and fulfill their social needs outside work• Jobs characteristics — tasks don’t use workplace resources, the work is performedindependently from coworkers, task performance is measurable• Organizational characteristics — rewarding employees for performance not officepresence (face time), actions to maintain team cohesion and psychologicalconnectedness with the organization — limit telecommuting days, have specialmeetings/events, video communicationPage 1-7

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Chapter 1: Introduction to the Field of Organizational BehaviourSlide 9: Increasing Workforce DiversitySurface-level diversity• Observable demographic or physiological differences in people (e.g. race, ethnicity,gender, age, physical capabilities)• Increasing surface-level diversity in many countriesDeep-level diversity• Differences in the psychological characteristics of employees (e.g. personalities,beliefs, values, and attitudes)• Example: Differences across age cohorts (e.g. Gen-X, Gen-Y)• Some deep-level diversity is associated with surface-level diversity (e.g. genderdifferences in values, attitudes, personality, etc.)Consequences of diversity – opportunities and challenges• Teams with high informational diversity (different knowledge and skills) — morecreativity, better decisions in complex situations• Easier to recognize and address community needs• Diverse teams usually take longer to perform effectively together• Higher risk of dysfunctional conflict — less information sharing and morale• Surface-level and some deep-level diversities are moral/legal imperativesSlide 10: Organizational Behaviour Anchors (1 of 2)1. Systematic research anchor• OB knowledge should be based on systematic research.• Forming research questions, collecting data, and testing hypothesesEvidence-based management• Making decisions and taking actions on research evidence• Scientific method, not fads and personal beliefs that are untestedWhy decision makers don’t apply evidence-based management• Bombarded with popular press and nonresearched sources• OB knowledge is generic — difficult to see relevance to specific situations• Fads are heavily marketed, so they seem convincing.• Perceptual errors bias decision maker toward popular and personal theories and toignore contrary evidence.Page 1-8

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Chapter 1: Introduction to the Field of Organizational Behaviour2. Multidisciplinary anchor• Many OB concepts adopted from other disciplines➡e.g. psychology (individual, interpersonal behaviour); sociology (team dynamics,power); communications; marketing; information systems, etc.• OB develops its own theories, but also scans other fields.Slide 11: Organizational Behaviour Anchors (2 of 2)3. Contingency anchor• A particular action may have different consequences in different situations – no singlesolution is best all the time.• Need to understand and diagnose the situation and select the strategy mostappropriate under those conditions4. Multiple levels of analysis anchor• Individual – includes characteristics and behaviours as well as thought processes e.g.motivation, perception, and values• Team (including interpersonal) – looks at the way people interact e.g. team dynamics,decisions, power• Organizational – how people structure their working relationships and howorganizations interact with their environment• OB topics usually relevant at all three levels of analysisSlide 12: Organizational EffectivenessOrganizational effectiveness is considered the ultimate dependent variable in OB• OB theories ultimately try to improve the organization’s effectiveness.Goal attainment: Discredit view of effectiveness — how well organization achieves itsstated objectives• Problem 1: Setting easy goals might produce lower outcomes than competitors orpotential.• Problem 2: Goals might aim the organization in the wrong direction.Organizational effectiveness best described as a composite of four perspectives• Open systems: (a) good fit with external environment and (b) efficient/adaptabletransformation processes• Organizational learning: effectively acquire, share, use, store knowledgePage 1-9

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Chapter 1: Introduction to the Field of Organizational Behaviour• High-performance work practices: develop human capital for more efficient andadaptive internal subsystems• Stakeholder: satisfy the needs of key stakeholders with values, ethics, and socialresponsibilityOrganizational effectiveness integrates all four perspectivesSlide 13: Open Systems Perspective (1 of 2)Organizations are complex systems that “live” within (and depend upon) the externalenvironmentEffective organizations• Maintain a close “fit” with those changing conditions• Transform inputs to outputs efficiently and flexiblyOpen systems perspective is the foundation on which the other three effectivenessperspectives are builtSlide 14: Open Systems Perspective (2 of 2, with model)External environment – organizations depend on the external environment for resources(e.g. raw materials, job applicants, financial resources, etc.)• Affect the environment through their outputs• Place demands on how the organization should operate e.g. lawsInternal subsystems – transform outputs into inputs• E.g. departments, teams, informal groups, information systems, and technologicalprocesses• Transformation processes are effective through: efficiency, adaptability, innovativeness• Coordination — critical for effective transformation in complex systemsOrganization–Environment FitTo maintain a good “fit” with the environment, effective organizations1. Adapt to the environment — adaptive firms have a “dynamic capability”2. Influence the environment — marketing, lobbying, exclusive agreements3. Move to a more favourable environmentInternal Subsystems Effectiveness – defines effectiveness on how well the organizationtransforms inputs to outputs• Organizational efficiency (productivity)• Coordination is vital in the relationship among internal subsystemsPage 1-10

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Chapter 1: Introduction to the Field of Organizational BehaviourSlide 15: Organizational Learning PerspectiveAn organization’s effectiveness depends on capacity to acquire, share, use, and storevaluable knowledgeNeed to consider both stock and flow of knowledge• Stock of knowledge: intellectual capital• Flow of knowledge: processes of acquiring, sharing, using, and storing knowledgeSlide 16: Intellectual CapitalHuman capital• Knowledge, skills, and abilities that employees carry around in their heads• Company’s competitive advantage because:➡Employees are essential for the organization’s survival and success➡Employee talents are difficult to find or copy➡Employee talents are difficult to replace them with technologyStructural capital• Knowledge captured and retained in an organization’s systems and structures, e.g.documentation, finished productsRelationship capital• Value from organization’s relationships with customers, suppliers, others who provideadded mutual value for the organizationSlide 17: Organizational Learning Processes1. Acquiring KnowledgeBringing knowledge in from the external environment as well as through discoveryOccurs through:• Individual learning from external environment — training from external sources,observing and reporting environmental change• Environmental scanning — actively monitoring consumer trends• Hire skilled staff and buy complementary businesses (grafting)• Experimentation — new ideas through discoveryPage 1-11

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Chapter 1: Introduction to the Field of Organizational Behaviour2. Sharing KnowledgeDistributing knowledge to others across the organizationOccurs through:• Structured and informal communication• Various forms of in-house learning• Intranets3. Using KnowledgeApplying knowledge in ways that add valueKnowledge use increase when• Employees have a mental map of where knowledge is located• Employees have sufficient prerequisite knowledge• Employees have sufficient autonomy to try out new knowledge• Work norms support organizational learning (learning orientation culture)4. Storing Knowledge — organizational memoryThe storage and preservation of intellectual capitalRetain intellectual capital by:• Keeping knowledgeable employees• Systematically transferring knowledge to other employees• Transferring human capital to structural capitalOrganizational unlearning – successful companies also unlearn by• Changing routines and patterns of behaviour• Removing knowledge that no longer adds valueSlide 18: High-Performance Work Practices (HPWPs)Effective organizations incorporate several workplace practices that enhance human capitalFour HPWPs recognized in most studies:1. Employee involvement2. Job autonomy➡Involvement and autonomy strengthen employee motivation, improve decision making,organizational responsiveness, and commitment to change – together often take the formof self-directed teamsPage 1-12

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Chapter 1: Introduction to the Field of Organizational Behaviour3. Competence development➡Recruit and select people with relevant skills, knowledge, values and other personalcharacteristics➡Invest in employee training and development4. Performance/skill-based rewards➡Link performance and skill development to financial and nonfinancial rewards valued byemployeesNote: These individually improve human capital, but best when bundled togetherHPWPs improve organizational effectiveness by:• Developing employee skills and knowledge (human capital), which directly improveindividual behaviour and performance• Adapting better to rapidly changing environments — employees are better atperforming diverse tasks in unfamiliar situations• Strengthening employee motivation and positive attitudes toward the employerthrough reciprocity of employer’s investment in employeesHPWP limitations• Provides an incomplete picture of organizational effectiveness• Gaps are mostly filled by the stakeholder perspectiveSlide 19: Corporate Social Responsibility at MTNAt MTN Group, Africa’s largest mobile (cell) phone company, employees help thecommunity and environment through the company’s award-winning “21 Days of Y’elloCare” program. For example, MTN employees recently installed solar panels with batteriesto generate off-grid electricity for lighting at rural schools.Page 1-13

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Chapter 1: Introduction to the Field of Organizational BehaviourSlide 20: Stakeholder PerspectiveStakeholders: any entity who affects or is affected by the organization’s objectives andactions e.g. employees, shareholders, suppliers, unions, government, etc.Organizations are more effective when they understand, manage, and satisfy stakeholderneeds and expectationsPersonalizes the open-systems perspective• Identifies specific people and social entities in the environment• Stakeholder relations are dynamic i.e. can be negotiated, managedChallenges with understanding, managing, and satisfying stakeholder interests• Stakeholders have conflicting interests• Firms have limited resources to satisfy all stakeholdersStakeholder priorities depend on:• Stakeholder’s power and urgency for action• Stakeholder’s legitimate claim to organizational resources• How executives perceive the organization’s environment• Organization’s culture• Personal values of the corporate board and CEOSlide 21: Stakeholders: Values and EthicsPersonal values influence how corporate boards and CEOs allocate organizational resourcesValues• Relatively stable, evaluative beliefs that guide our preferences for outcomes or coursesof action in various situations• Shared values – similar values held by groups of peopleEthics• Study of moral principles/values, determine whether actions are right/wrong andoutcomes are good or bad• Rely on ethical values to determine “the right thing to do”Page 1-14

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Chapter 1: Introduction to the Field of Organizational BehaviourSlide 22: Stakeholders and CSRStakeholder perspective includes corporate social responsibility (CSR)• Benefit society and the environment beyond the firm’s immediate financial interests orlegal obligations• Organization’s contract with society—serve stakeholders beyond shareholders andcustomersTriple-bottom-line philosophy• Economic – survive and be profitable• Society – maintain or improve conditions• Environment – become “greener”Slide 23: Integrative Model of OBIndividual inputs and processes influence individual outcomes which have a direct effect onthe organization’s effectivenessTeam inputs influence team processes which then affect team performance and otheroutcomesTeam processes and outcomes affect individual processes and outcomesOrganizational inputs and processes have macro-level influence on both teams andindividualsPage 1-15

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