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Solution Manual for Canadian Organizational Behaviour, 10th Edition

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    Chapter 1: Introduction to the Field of Organizational Behaviour ’s Manual to Accompany Canadian Organizational Behaviour 10 /e by Steven L. McShane, Kevin Tasa, and Sandra Steen Chapter 1: Introduction to the Field of Organizational Behaviour Prepared by: Steven L. McShane (Curtin University and University of Victoria) Kevin Tasa (York University) Sandra L. Steen (University of Regina) Page 1-1 SOLUTION MANUAL

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    Chapter 1: Introduction to the Field of Organizational Behaviour Introduction to the Field of Organizational Behaviour LEARNING OBJECTIVES After reading this chapter, students should be able to: 1-1 Define organizational behaviour and organizations, and discuss the importance of this field of inquiry. 1-2 Debate the organizational opportunities and challenges of technological change, globalization, emerging employment relationships, and workforce diversity. 1-3 Discuss the anchors on which organizational behaviour knowledge is based. 1-4 Compare and contrast the four perspectives of organizational effectiveness. CHAPTER GLOSSARY corporate social responsibility (CSR) — organizational activities intended to benefit society and the environment beyond the firm’s immediate financial interests or legal obligations deep-level diversity — differences in the psychological characteristics of employees, including personalities, beliefs, values, and attitudes ethics – the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad evidence-based management — the practice of making decisions and taking actions based on research evidence globalization — economic, social, and cultural connectivity with people in other parts of the world high performance work practices (HPWP) — a perspective that holds that effective organizations incorporate several workplace practices that leverage the potential of human capital human capital — the stock of knowledge, skills, and abilities among employees that provide economic value to the organization intellectual capital — a company’s stock of knowledge, including human capital, structural capital and relationship capital learning orientation — beliefs and norms that support the acquisition, sharing, and use of knowledge as well as work conditions that nurture these learning processes open systems — a perspective that holds that organizations depend on the external environment for resources, affect that environment through their output, and consist of internal subsystems that transform inputs into outputs organizational behaviour (OB) — the study of what people think, feel, and do in and around organizations organizational effectiveness — a broad concept represented by several perspectives, including the organization’s fit with the external environment, internal subsystems configuration for high-performance, emphasis on organizational learning, and ability to satisfy the needs of key stakeholders organizational learning — a perspective that holds that organizational effectiveness depends on the organization’s capacity to acquire, share, use, and store valuable knowledge Page 1-2 1

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    Chapter 1: Introduction to the Field of Organizational Behaviour organizations — croups of people who work interdependently toward some purpose relationship capital — the value derived from an organization’s relationships with customers, suppliers, and others stakeholders — individuals, organizations, or other entities who affect, or are affected by, the organization’s objectives and actions structural capital — knowledge embedded in an organization’s systems and structures. surface-level diversity — the observable demographic or physiological differences in people, such as their race, ethnicity, gender, age, and physical disabilities telecommuting — an arrangement whereby, supported by information technology, employees work from home one or more work days per month rather than commute to the office values — relatively stable, evaluative beliefs that guide a person’s preferences for outcomes or courses of action in a variety of situations work-life balance — the degree to which a person minimizes conflict between work and nonwork demands CHAPTER SUMMARY BY LEARNING OBJECTIVE 1-1 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 organizational events. OB knowledge is for everyone, not just managers. OB theories and practices are highly beneficial for an organization’s survival and success. 1-2 Debate the organizational opportunities and challenges of technological change, globalization, emerging employment relationships, and increasing workforce diversity. Technological change has improved efficiency, interactivity, and wellbeing, but it has also been a disruptive force in organizations. Information technology has altered communication patterns and power dynamics at work, and has had effects on our nonwork time, attention span, and techno-stress. Globalization, which refers to various forms of connectivity with people in other parts of the world, has become more intense than ever before because information technology and transportation systems. It has brought more complexity and new ways of working to the workplace, requires additional knowledge and skills. It may be an influence on work intensification, reduced job security, and lessening work–life balance. An emerging employment relationship trend is the blurring of work and nonwork time, and the associated call for more work–life balance (minimizing conflict between work and nonwork demands). Another employment trend is telecommuting, whereby employees work from home one or more work days per month rather than commute to the office. Telecommuting potentially benefits employees and employers, but there are also disadvantages and its effectiveness depends on the employee, job, and organization. An organization's workforce has both surface-level diversity (observable demographic and other overt differences in people) and deep-level diversity (differences in personalities, beliefs, values, and attitudes). Diversity may improve creativity and decision making, and provide better awareness and response to diverse communities. However, diversity also poses challenges, such as dysfunctional conflict and slower team development. Page 1-3

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    Chapter 1: Introduction to the Field of Organizational Behaviour 1-3 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 anchor states 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 consequences in different situations. The multiple levels of analysis anchor states that OB topics may be viewed from the individual, 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 external environment, depend on it for resources, then use organizational subsystems to transform those resources into outputs, which are returned to the environment. Organizations receive feedback to maintain a good “fit” with that environment. Fit occurs by adapting to the environment, influencing the environment, or moving to a more favourable environment. Effective transformation processes are efficient, adaptable, and innovative. The organizational 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 to leverage workforce potential. The most widely identified HPWPs are employee involvement, job autonomy, developing employee competencies, and performance-/skill-based rewards. HPWPs improve organizational effectiveness by building human capital, increasing adaptability, and strengthening employee motivation and attitudes. 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 on their personal and organizational values for guidance. Ethics and corporate social responsibility (CSR) are natural variations of values-based organizations. CSR consists of organizational activities intended to benefit society and the 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 Behaviour LECTURE OUTLINE Slide 1: Introduction to the Field of Organizational Behaviour Slide 2 : Shopify Ottawa-based Shopify is a rapidly growing technology success story due to its focus on teamwork, employee motivation, organizational culture, and other effective organizational behaviour practices. Slide 3: Organizational Behaviour and Organizations Organizational behaviour (OB) • Studies what people think, feel, and do in and around organizations Organizations • Groups of people who work interdependently toward some purpose • Collective entities • Collective sense of purpose Slide 4: Importance of OB OB 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 achievement 2. 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 decisions Page 1-5

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    Chapter 1: Introduction to the Field of Organizational Behaviour Contemporary Developments Facing Organizations Slide 5: Technological Change Long history as a disruptive force in organizations (waterwheels, cotton gins, steam engines, microprocessors, etc.) Effects of technological change • Higher productivity, but also usually displaces employees and makes entire occupations obsolete • Alter relationships and patterns of behaviour with coworkers, clients, etc • Improve health and wellbeing Effects of information technology (email, social media, etc) • Potential benefits — may give employees a stronger voice through direct communication with executives and broader distribution of their opinions • Potential problems — less work = nonwork separation, longer hours, reducing their attention spans at work, and increasing techno-stress • Information technology may eventually change the form of organizations — organizations as networks rather than places to work Slide 6: Globalization Economic, 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 transportation systems Effects 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 additional knowledge and skills e.g. global mindset Page 1-6

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    Chapter 1: Introduction to the Field of Organizational Behaviour Slide 7: Emerging Employment Relationships Employment 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 demands Remote 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 office Slide 8: Telecommuting Benefits and Problems Telecommuting 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 work time, ability to work when weather prevents office work • Better for the environment — less pollution, road use • Lower real estate costs for company Telecommuting disadvantages • Less connection with coworkers, more social isolation in general • Less informal communication that helps career (word-of-mouth information about promotional opportunities) • Lower team cohesion and a weaker organizational culture Benefits of remote work depend on (contingencies): • Employee characteristics — higher self-motivation, self-organization, need for autonomy, skill with information technology, and fulfill their social needs outside work • Jobs characteristics — tasks don’t use workplace resources, the work is performed independently from coworkers, task performance is measurable • Organizational characteristics — rewarding employees for performance not office presence (face time), actions to maintain team cohesion and psychological connectedness with the organization — limit telecommuting days, have special meetings/events, video communication Page 1-7

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    Chapter 1: Introduction to the Field of Organizational Behaviour Slide 9: Increasing Workforce Diversity Surface-level diversity • Observable demographic or physiological differences in people (e.g. race, ethnicity, gender, age, physical capabilities) • Increasing surface-level diversity in many countries Deep-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. gender differences in values, attitudes, personality, etc.) Consequences of diversity – opportunities and challenges • Teams with high informational diversity (different knowledge and skills) — more creativity, 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 imperatives Slide 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 hypotheses Evidence-based management • Making decisions and taking actions on research evidence • Scientific method, not fads and personal beliefs that are untested Why 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 to ignore contrary evidence. Page 1-8

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    Chapter 1: Introduction to the Field of Organizational Behaviour 2. 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 single solution is best all the time. • Need to understand and diagnose the situation and select the strategy most appropriate under those conditions 4. 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 how organizations interact with their environment • OB topics usually relevant at all three levels of analysis Slide 12: Organizational E ff ectiveness Organizational 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 its stated objectives • Problem 1: Setting easy goals might produce lower outcomes than competitors or potential. • 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/adaptable transformation processes • Organizational learning: effectively acquire, share, use, store knowledge Page 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 and adaptive internal subsystems • Stakeholder: satisfy the needs of key stakeholders with values, ethics, and social responsibility Organizational effectiveness integrates all four perspectives Slide 13: Open Systems Perspective (1 of 2) Organizations are complex systems that “live” within (and depend upon) the external environment Effective organizations • Maintain a close “fit” with those changing conditions • Transform inputs to outputs efficiently and flexibly Open systems perspective is the foundation on which the other three effectiveness perspectives are built Slide 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. laws Internal subsystems – transform outputs into inputs • E.g. departments, teams, informal groups, information systems, and technological processes • Transformation processes are effective through: efficiency, adaptability, innovativeness • Coordination — critical for effective transformation in complex systems Organization–Environment Fit To maintain a good “fit” with the environment, effective organizations 1. Adapt to the environment — adaptive firms have a “dynamic capability” 2. Influence the environment — marketing, lobbying, exclusive agreements 3. Move to a more favourable environment Internal Subsystems Effectiveness – defines effectiveness on how well the organization transforms inputs to outputs • Organizational efficiency (productivity) • Coordination is vital in the relationship among internal subsystems Page 1-10

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    Chapter 1: Introduction to the Field of Organizational Behaviour Slide 15: Organizational Learning Perspective An organization’s effectiveness depends on capacity to acquire, share, use, and store valuable knowledge Need to consider both stock and flow of knowledge • Stock of knowledge: intellectual capital • Flow of knowledge: processes of acquiring, sharing, using, and storing knowledge Slide 16: Intellectual Capital Human 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 technology Structural capital • Knowledge captured and retained in an organization’s systems and structures, e.g. documentation, finished products Relationship capital • Value from organization’s relationships with customers, suppliers, others who provide added mutual value for the organization Slide 17: Organizational Learning Processes 1. Acquiring Knowledge Bringing knowledge in from the external environment as well as through discovery Occurs 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 discovery Page 1-11

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    Chapter 1: Introduction to the Field of Organizational Behaviour 2. Sharing Knowledge Distributing knowledge to others across the organization Occurs through: • Structured and informal communication • Various forms of in-house learning • Intranets 3. Using Knowledge Applying knowledge in ways that add value Knowledge 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 memory The storage and preservation of intellectual capital Retain intellectual capital by: • Keeping knowledgeable employees • Systematically transferring knowledge to other employees • Transferring human capital to structural capital Organizational unlearning – successful companies also unlearn by • Changing routines and patterns of behaviour • Removing knowledge that no longer adds value Slide 18: High-Performance Work Practices (HPWPs) Effective organizations incorporate several workplace practices that enhance human capital Four HPWPs recognized in most studies: 1. Employee involvement 2. Job autonomy ➡ Involvement and autonomy strengthen employee motivation, improve decision making, organizational responsiveness, and commitment to change – together often take the form of self-directed teams Page 1-12

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    Chapter 1: Introduction to the Field of Organizational Behaviour 3. Competence development ➡ Recruit and select people with relevant skills, knowledge, values and other personal characteristics ➡ Invest in employee training and development 4. Performance/skill-based rewards ➡ Link performance and skill development to financial and nonfinancial rewards valued by employees Note: These individually improve human capital, but best when bundled together HPWPs improve organizational effectiveness by: • Developing employee skills and knowledge (human capital), which directly improve individual behaviour and performance • Adapting better to rapidly changing environments — employees are better at performing diverse tasks in unfamiliar situations • Strengthening employee motivation and positive attitudes toward the employer through reciprocity of employer’s investment in employees HPWP limitations • Provides an incomplete picture of organizational effectiveness • Gaps are mostly filled by the stakeholder perspective Slide 19: Corporate Social Responsibility at MTN At MTN Group, Africa’s largest mobile (cell) phone company, employees help the community and environment through the company’s award-winning “21 Days of Y’ello Care” program. For example, MTN employees recently installed solar panels with batteries to generate off-grid electricity for lighting at rural schools. Page 1-13

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    Chapter 1: Introduction to the Field of Organizational Behaviour Slide 20: Stakeholder Perspective Stakeholders: any entity who affects or is affected by the organization’s objectives and actions e.g. employees, shareholders, suppliers, unions, government, etc. Organizations are more effective when they understand, manage, and satisfy stakeholder needs and expectations Personalizes the open-systems perspective • Identifies specific people and social entities in the environment • Stakeholder relations are dynamic i.e. can be negotiated, managed Challenges with understanding, managing, and satisfying stakeholder interests • Stakeholders have conflicting interests • Firms have limited resources to satisfy all stakeholders Stakeholder 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 CEO Slide 21: Stakeholders: Values and Ethics Personal values influence how corporate boards and CEOs allocate organizational resources Values • Relatively stable, evaluative beliefs that guide our preferences for outcomes or courses of action in various situations • Shared values – similar values held by groups of people Ethics • Study of moral principles/values, determine whether actions are right/wrong and outcomes 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 Behaviour Slide 22: Stakeholders and CSR Stakeholder perspective includes corporate social responsibility (CSR) • Benefit society and the environment beyond the firm’s immediate financial interests or legal obligations • Organization’s contract with society—serve stakeholders beyond shareholders and customers Triple-bottom-line philosophy • Economic – survive and be profitable • Society – maintain or improve conditions • Environment – become “greener” Slide 23: Integrative Model of OB Individual inputs and processes influence individual outcomes which have a direct effect on the organization’s effectiveness Team inputs influence team processes which then affect team performance and other outcomes Team processes and outcomes affect individual processes and outcomes Organizational inputs and processes have macro-level influence on both teams and individuals Page 1-15

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