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Figure 7.14
Death and money can be emotional topics. Sales reps at American Express Company’s (NYSE: AXP) life insurance division had to deal with both these issues when selling life insurance, and they were starting to feel the strain of working with such volatile emotional materials every day. Part of the problem representatives faced seemed like an unavoidable side effect of selling life insurance. Many potential clients were responding fearfully to the sales representatives’ calls. Others turned their fears into anger. They replied to the representatives’ questions suspiciously or treated them as untrustworthy.
The sales force at American Express believed in the value of their work, but over time, customers’ negative emotions began to erode employee morale. Sales of policies slowed. Management insisted that the representatives ignore their customers’ feelings and focus on making sales. The representatives’ more aggressive sales tactics seemed only to increase their clients’ negative emotional responses, which kicked off the cycle of suffering again. It was apparent something had to change.
In an effort to understand the barriers between customers and sales representatives, a team led by Kate Cannon, a former American Express staffer and mental-health administrator, used a technique called emotional resonance to identify employees’ feelings about their work. Looking at the problem from an emotional point of view yielded dramatic insights about clients, sales representatives, and managers alike.
The first step she took was to acknowledge that the clients’ negative emotions were barriers to life insurance sales. Cannon explained, “People reported all kinds of emotional issues—fear, suspicion, powerlessness, and distrust—involved in buying life insurance.” Clients’ negative emotions, in turn, had sparked negative feelings among some American Express life insurance sales representatives, including feelings of incompetence, dread, untruthfulness, shame, and even humiliation. Management’s focus on sales had created an emotional disconnect between the sales reps’ work and their true personalities. Cannon discovered that sales representatives who did not acknowledge their clients’ distress felt dishonest. The emotional gap between their words and their true feelings only increased their distress.
Cannon also found some good news. Sales representatives who looked at their job from the customer’s point of view were flourishing. Their feelings and their words were in harmony. Clients trusted them. The trust between these more openly emotional sales representatives and their clients led to greater sales and job satisfaction. To see if emotional skills training could increase job satisfaction and sales among other members of the team, Cannon instituted a course in emotional awareness for a test group of American Express life insurance sales representatives. The goal of the course was to help employees recognize and manage their feelings. The results of the study proved the value of emotional clarity. Coping skills, as measured on standardized psychological tests, improved for the representatives who took Cannon’s course.
The emotional awareness training program had significant impact on American Express’s bottom line. Over time, as Cannon’s team expanded their emotion-based program, American Express life insurance sales rose by tens of millions of dollars. American Express’s exercise in emotional awareness shows that companies can profit when feelings are recognized and consciously managed. Employees whose work aligns with their true emotions make more believable corporate ambassadors. The positive use of emotion can benefit a company internally as well. According to a Gallup poll of over 2 million employees, the majority of workers rated a caring boss higher than increased salary or benefits. In the words of career expert and columnist Maureen Moriarty, “Good moods are good for business.”
Discussion Questions
1. What are some other jobs that deal with relatively negative or unfavorable emotions daily?
2. In what type of job might American Express’s open emotion policy not be acceptable?
3. What type of personality might be better equipped for dealing with negative emotions at work?
4. What are some ways you deal with negative emotions either at work or at school? Do your methods differ depending on what type of situation you are in? | textbooks/biz/Management/Organizational_Behavior/07%3A_Managing_Stress_and_Emotions/07.7%3A_Getting_Emotional%3A_The_Case_of_American_Express.txt |
Stress is a major concern for individuals and organizations. Exhaustion is the outcome of prolonged stress. Individuals and organizations can take many approaches to lessening the negative health and work outcomes associated with being overstressed. Emotions play a role in organizational life. Understanding these emotions helps individuals to manage them. Emotional labor can be taxing on individuals, while emotional intelligence may help individuals cope with the emotional demands of their jobs.
07.9: Exercises
Ethical Dilemma
You work at a paper supply company that employs 50 people. A coworker, Karen, is not your favorite person to work with. She is often late to work, can be unprofessional with coworkers, and isn’t someone you can routinely count on to go above and beyond her job duties. Last week you even noticed that her breath smelled like alcohol when you spoke to her about some last-minute orders that needed to be filled. But, you don’t like to rock the boat and you don’t like to be disloyal to your coworkers, so you didn’t say anything. However, David Chan just approached you and asked whether you smelled alcohol on Karen’s breath last Thursday. You are surprised and ask him why. David mentions that he heard some gossip and wants to confirm if it is true or not.
What will you do?
1. Should you admit you smelled alcohol on Karen’s breath last week? Why or why not?
2. What are the implications of each course of action?
3. Would you change your answer if, instead of working at a paper supply company, you worked as a nurse?
Individual Exercise
Time Management Quiz
Please answer true or false for each of the statements according to how you currently manage your time.
1. True or false: I sort my mail when it comes in, open it, place it in a folder, and deal with it when I am ready to.
2. True or false: I do what my boss asks me to do immediately.
3. True or false: I don’t take breaks because they waste time.
4. True or false: I answer the phone when it rings regardless of what I am doing.
5. True or false: I check my e-mails as soon as they arrive.
6. True or false: I create a “to do” list at the start of every day.
7. True or false: I do my “heavy thinking” at the end of the day when things have calmed down.
8. True or false: I don’t like to take vacations because making up the work is always too stressful.
9. True or false: Multitasking helps me be more effective at work.
10. True or false: I don’t have to organize my office, since I always know where things are.
Group Exercise
Time Management Analysis
Create List 1:
List 10 activities you did at work (or at school) yesterday.
Create List 2:
List 5 things you think are key to doing your job well (or doing well in school).
Compare Lists:
Now, look at both lists and write down which items from List 1 relate to List 2.
Place each activity from List 1 on the following grid.
Figure 7.15
Group Discussion
Now, as a group, discuss the following questions:
1. What trends in your time management style did you notice?
2. How much of your “work” time is being spent on things that are directly related to doing well in your work or at school?
3. What works well for you in terms of time management?
4. What steps could you take to improve your time management?
5. How could your group help one another with time management? | textbooks/biz/Management/Organizational_Behavior/07%3A_Managing_Stress_and_Emotions/07.8%3A_Conclusion.txt |
No one likes to receive bad news, and few like to give it. In what is heralded as one of the biggest human resources blunders of 2006, one company found a way around the discomfort of firing someone face-to-face. A total of 400 employees at the Fort Worth, Texas, headquarters of RadioShack Corporation (NYSE: RSH) got the ultimate e-mail message early one Tuesday morning. The message simply said, “The work force reduction notification is currently in progress. Unfortunately, your position is one that has been eliminated.” Company officials argued that using electronic notification was faster and allowed more privacy than breaking the news in person, and additionally, those employees who were laid off received generous severance packages. Organizational consultant Ken Siegel disagrees, proclaiming, “The bottom line is this: To almost everyone who observes or reads this, it represents a stupefying new low in the annals of management practice.” It’s unclear what, if any, the long-term effect will be for RadioShack.
It isn’t just RadioShack that finds it challenging to deal with letting employees go. Terminating employees can be a painful job for many managers. The communication that takes place requires careful preparation and substantial levels of skill. BusinessWeek ethics columnist Bruce Weinstein suggests that anyone who is involved with communicating with downsized employees has an ethical responsibility to do it correctly, which includes doing it in person, doing it privately, giving the person your full attention, being honest but sensitive, and not rushing the person. Some organizations outsource the job of letting someone go to “terminators” who handle this difficult task for them. In fact, Up in the Air, the 2009 movie starring George Clooney that was nominated for six Oscars, chronicles changes at a workforce reduction firm and highlights many of these issues.
Downsizing has been referred to using many euphemisms (language that softens the sound of the word) for termination. Here are just a few ways to say you’re about to lose your job without saying you’ve been fired:
• Career alternative enhancement program
• Career-change opportunity
• Dehiring staff
• Derecruiting resources
• Downsizing employment
• Employee reduction activities
• Implementing a skills mix adjustment
• Negative employee retention
• Optimizing outplacement potential
• Rectification of a workforce imbalance
• Redundancy elimination
• Right-sizing employment
• Vocation relocation policy
Regardless of how it’s done or what it’s called, is downsizing effective for organizations? Jeffrey Pfeffer, a faculty member at Stanford and best-selling author, argues no:
“Contrary to popular belief, companies that announce layoffs do not enjoy higher stock prices than peers—either immediately or over time. A study of 141 layoff announcements between 1979 and 1997 found negative stock returns to companies announcing layoffs, with larger and permanent layoffs leading to greater negative effects. An examination of 1,445 downsizing announcements between 1990 and 1998 also reported that downsizing had a negative effect on stock-market returns, and the negative effects were larger the greater the extent of the downsizing. Yet another study comparing 300 layoff announcements in the United States and 73 in Japan found that in both countries, there were negative abnormal shareholder returns following the announcement.”
He further notes that evidence doesn’t support the idea that layoffs increase individual company productivity either: “A study of productivity changes between 1977 and 1987 in more than 140,000 U.S. companies using Census of Manufacturers data found that companies that enjoyed the greatest increases in productivity were just as likely to have added workers as they were to have downsized.”
Discussion Questions
1. What communication barriers did RadioShack likely experience as a result of terminating employees via mass e-mail?
2. What do you think RadioShack’s underlying motivation was in using this form of communication?
3. What suggestions for the future would you give RadioShack when faced with the need to dismiss a large number of employees?
4. How has technology enhanced our ability to communicate effectively? In what ways has it hindered our ability to communicate effectively?
5. What ethical challenges and concerns do you think individuals involved in downsizing have? | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.1%3A_Youve_Got_Mailand_Youre_Fired_The_Case_of_RadioShack.txt |
Learning Objectives
1. Define communication.
2. Understand the communication process.
Communication is vital to organizations—it’s how we coordinate actions and achieve goals. It is defined in Webster’s dictionary as a process by which information is exchanged between individuals through a common system of symbols, signs, or behavior. We know that 50% to 90% of a manager’s time is spent communicating (Schnake et al., 1990), and communication ability is related to a manager’s performance (Penley et al., 1991). In most work environments, a miscommunication is an annoyance—it can interrupt workflow by causing delays and interpersonal strife. But, in some work arenas, like operating rooms and airplane cockpits, communication can be a matter of life and death.
So, just how prevalent is miscommunication in the workplace? You may not be surprised to learn that the relationship between miscommunication and negative outcomes is very strong. Data suggest that deficient interpersonal communication was a causal factor in approximately 70% to 80% of all accidents over the last 20 years.[1]
Poor communication can also lead to lawsuits. For example, you might think that malpractice suits are filed against doctors based on the outcome of their treatments alone. But a 1997 study of malpractice suits found that a primary influence on whether or not a doctor is sued is the doctor’s communication style. While the combination of a bad outcome and patient unhappiness can quickly lead to litigation, a warm, personal communication style leads to greater patient satisfaction. Simply put, satisfied patients are less likely to sue.[2]
In business, poor communication costs money and wastes time. One study found that 14% of each workweek is wasted on poor communication (Armour, 1998). In contrast, effective communication is an asset for organizations and individuals alike. Effective communication skills, for example, are an asset for job seekers. A recent study of recruiters at 85 business schools ranked communication and interpersonal skills as the highest skills they were looking for, with 89% of the recruiters saying they were important (Alsop, 2006). On the flip side, good communication can help a company retain its star employees. Surveys find that when employees think their organizations do a good job of keeping them informed about matters that affect them and when they have access to the information they need to do their jobs, they are more satisfied with their employers.[3] So can good communication increase a company’s market value? The answer seems to be yes. “When you foster ongoing communications internally, you will have more satisfied employees who will be better equipped to effectively communicate with your customers,” says Susan Meisinger, president and CEO of the Society for Human Resource Management. Research finds that organizations that are able to improve their communication integrity also increase their market value by as much as 7% (Meisinger, 2003). We will explore the definition and benefits of effective communication in our next section.
The Communication Process
Communication fulfills three main functions within an organization, including coordination, transmission of information, and sharing emotions and feelings. All these functions are vital to a successful organization. The coordination of effort within an organization helps people work toward the same goals. Transmitting information is a vital part of this process. Sharing emotions and feelings bonds teams and unites people in times of celebration and crisis. Effective communication helps people grasp issues, build rapport with coworkers, and achieve consensus. So, how can we communicate effectively? The first step is to understand the communication process.
We all exchange information with others countless times each day by phone, e-mail, printed word, and of course, in person. Let us take a moment to see how a typical communication works using this as a guide.
A sender, such as a boss, coworker, or customer, originates the message with a thought. For example, the boss’s thought could be: “Get more printer toner cartridges!
The sender encodes the message, translating the idea into words.
The boss may communicate this thought by saying, “Hey you guys, let’s order more printer toner cartridges.”
The medium of this encoded message may be spoken words, written words, or signs.
The receiver is the person who receives the message.
The receiver decodes the message by assigning meaning to the words.
In this example, our receiver, Bill, has a to-do list a mile long. “The boss must know how much work I already have,” the receiver thinks. Bill’s mind translates his boss’s message as, “Could you order some printer toner cartridges, in addition to everything else I asked you to do this week…if you can find the time?”
The meaning that the receiver assigns may not be the meaning that the sender intended, because of factors such as noise. Noise is anything that interferes with or distorts the message being transformed. Noise can be external in the environment (such as distractions) or it can be within the receiver. For example, the receiver may be extremely nervous and unable to pay attention to the message. Noise can even occur within the sender: The sender may be unwilling to take the time to convey an accurate message, or the words that are chosen can be ambiguous and prone to misinterpretation.
Picture the next scene. The place: a staff meeting. The time: a few days later. Bill’s boss believes the message about printer toner has been received.
“Are the printer toner cartridges here yet?” Bill’s boss asks.
“You never said it was a rush job!” Bill protests.
“But!
“But!
Miscommunications like these happen in the workplace every day. We’ve seen that miscommunication does occur in the workplace, but how does a miscommunication happen? It helps to think of the communication process. The series of arrows pointing the way from the sender to the receiver and back again can, and often do, fall short of their target.
Key Takeaways
Communication is vital to organizations. Poor communication is prevalent between senders and receivers. Communication fulfills three functions within organizations, including coordination, the transmission of information, and sharing emotions and feelings. Noise can disrupt or distort communication.
Exercises
1. Where have you seen the communication process break down at work? At school? At home?
2. Explain how miscommunication might be related to an accident at work.
3. Give an example of noise during the communication process.
References
Alsop, R. (2006, September 20). The top business schools: Recruiters’ M.B.A. picks. Wall Street Journal Online. Retrieved September 20, 2006, from http://online.wsj.com/article/SB115860376846766495.html?mod=2_1245_1.
Armour, S. (1998, September 30). Failure to communicate costly for companies. USA Today, p. 1A.
Meisinger, S. (2003, February). Enhancing communications—Ours and yours. HR Magazine. Retrieved July 1, 2008, from www.shrm.org/hrmagazine/archive/0203toc.asp.
Penley, L. E., Alexander, E. R., Jernigan, I. E., & Henwood, C. I. (1991). Communication abilities of managers: The relationship of performance. Journal of Management, 17, 57–76.
Schnake, M. E., Dumler, M. P., Cochran, D. S., & Barnett, T. R. (1990). Effects of differences in subordinate perceptions of superiors’ communication practices. Journal of Business Communication, 27, 37–50.
1. NASA study cited by Baron, R. (n.d.). Barriers to effective communication: Implications for the cockpit. Retrieved July 3, 2008, from AirlineSafety.com: http://www.airlinesafety.com/editorials/BarriersToCommunication.htm.
2. Communications skills cut malpractice risk—study reveals most important reason that patients decide to file malpractice suits is because of poor communication by physicians and not medical errors. (1997, October). USA Today.
3. What are the bottom line results of communicating? (2003, June). Pay for Performance Report. Retrieved July 1, 2008, from http://www.mercerHR.com. | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.2%3A_Understanding_Communication.txt |
Learning Objectives
1. Understand different ways that the communication process can be sidetracked.
2. Understand the role poor listening plays in communication problems.
3. Understand what active listening is.
4. Learn strategies to become a more effective listener.
Barriers to Effective Communication
The biggest single problem in communication is the illusion that it has taken place.
George Bernard Shaw
Filtering
Filtering is the distortion or withholding of information to manage a person’s reactions. Some examples of filtering include a manager’s keeping a division’s negative sales figures from a superior, in this case, the vice president. The old saying, “Don’t shoot the messenger!” illustrates the tendency of receivers to vent their negative response to unwanted messages to the sender. A gatekeeper (the vice president’s assistant, perhaps) who doesn’t pass along a complete message is also filtering. Additionally, the vice president may delete the e-mail announcing the quarter’s sales figures before reading it, blocking the message before it arrives.
As you can see, filtering prevents members of an organization from getting the complete picture of a situation. To maximize your chances of sending and receiving effective communications, it’s helpful to deliver a message in multiple ways and to seek information from multiple sources. In this way, the impact of any one person’s filtering will be diminished.
Since people tend to filter bad news more during upward communication, it is also helpful to remember that those below you in an organization may be wary of sharing bad news. One way to defuse this tendency to filter is to reward employees who clearly convey information upward, regardless of whether the news is good or bad.
Here are some of the criteria that individuals may use when deciding whether to filter a message or pass it on:
1. Past experience: Were previous senders rewarded for passing along news of this kind in the past, or were they criticized?
2. Knowledge and perception of the speaker: Has the receiver’s direct superior made it clear that “no news is good news?”
3. Emotional state, involvement with the topic, and level of attention: Does the sender’s fear of failure or criticism prevent the message from being conveyed? Is the topic within the sender’s realm of expertise, increasing confidence in the ability to decode the message, or is the sender out of a personal comfort zone when it comes to evaluating the message’s significance? Are personal concerns impacting the sender’s ability to judge the message’s value?
Once again, filtering can lead to miscommunications in business. Listeners translate messages into their own words, each creating a unique version of what was said (Alessandra, 1993).
Selective Perception
Small things can command our attention when we’re visiting a new place—a new city or a new company. Over time, however, we begin to make assumptions about the environment based on our past experiences. Selective perception refers to filtering what we see and hear to suit our own needs. This process is often unconscious. We are bombarded with too much stimuli every day to pay equal attention to everything, so we pick and choose according to our own needs. Selective perception is a time-saver, a necessary tool in a complex culture. But it can also lead to mistakes.
Think back to the example conversation between the person asked to order more toner cartridges and his boss earlier in this chapter. Since Bill found the to-do list from his boss to be unreasonably demanding, he assumed the request could wait. (How else could he do everything else on the list?) The boss, assuming that Bill had heard the urgency in her request, assumed that Bill would place the order before returning to previously stated tasks. Both members of this organization were using selective perception to evaluate the communication. Bill’s perception was that the task could wait. The boss’s perception was that a time frame was clear, though unstated. When two selective perceptions collide, a misunderstanding occurs.
Information Overload
Messages reach us in countless ways every day. Some messages are societal—advertisements that we may hear or see in the course of our day. Others are professional—e-mails, memos, and voice mails, as well as conversations with our colleagues. Others are personal—messages from and conversations with our loved ones and friends.
Add these together and it’s easy to see how we may be receiving more information than we can take in. This state of imbalance is known as information overload, which occurs “when the information processing demands on an individual’s time to perform interactions and internal calculations exceed the supply or capacity of time available for such processing” (Schick, Gordon, & Haka, 1990). Others note that information overload is “a symptom of the high-tech age, which is too much information for one human being to absorb in an expanding world of people and technology. It comes from all sources including TV, newspapers, and magazines as well as wanted and unwanted regular mail, e-mail and faxes. It has been exacerbated enormously because of the formidable number of results obtained from Web search engines.”[1] Other research shows that working in such fragmented fashion significantly impacts efficiency, creativity, and mental acuity (Overholt, 2001).
Going back to our example of Bill, let’s say he’s in his office on the phone with a supplier. While he’s talking, he hears the chime of his e-mail alerting him to an important message from his boss. He’s scanning through it quickly while still on the phone when a coworker pokes her head into his office saying Bill’s late for a staff meeting. The supplier on the other end of the phone line has just given him a choice among the products and delivery dates he requested. Bill realizes he missed hearing the first two options, but he doesn’t have time to ask the supplier to repeat them all or to try reconnecting with him at a later time. He chooses the third option—at least he heard that one, he reasons, and it seemed fair. How good was Bill’s decision amidst all the information he was processing at the same time?
Emotional Disconnects
An effective communication requires a sender and a receiver who are open to speaking and listening to one another, despite possible differences in opinion or personality. One or both parties may have to put their emotions aside to achieve the goal of communicating clearly. A receiver who is emotionally upset tends to ignore or distort what the sender is saying. A sender who is emotionally upset may be unable to present ideas or feelings effectively.
Lack of Source Familiarity or Credibility
Have you ever told a joke that fell flat? You and the receiver lacked the common context that could have made it funny. (Or yes, it could have just been a lousy joke.) Sarcasm and irony are subtle and, therefore, they are potentially hurtful commodities in business. It’s best to keep these types of communications out of the workplace, as their benefits are limited, and their potential dangers are great. Lack of familiarity with the sender can lead to misinterpreting humor, especially in less-rich information channels such as e-mail. For example, an e-mail from Jill that ends with, “Men should be boiled in vats of oil,” could be interpreted as antimale if the receiver didn’t know that Jill has a penchant for exaggeration and always jokes to let off steam. Similarly, if the sender lacks credibility or is untrustworthy, the message will not get through. Receivers may be suspicious of the sender’s motivations (Why is she telling me this?). Likewise, if the sender has communicated erroneous information in the past or has created false emergencies, the current message may be filtered.
Workplace Gossip
The informal gossip network known as the grapevine is a lifeline for many employees seeking information about their company (Kurland & Pelled, 2000). Researchers agree that the grapevine is an inevitable part of organizational life. Research finds that 70% of all organizational communication occurs at the grapevine level (Crampton, 1998). Employees trust their peers as a source of information, but the grapevine’s informal structure can be a barrier to effective communication from the managerial point of view. Its grassroots structure gives it greater credibility in the minds of employees than information delivered through official channels, even when that information is false. Some downsides of the office grapevine are that gossip offers politically minded insiders a powerful tool for disseminating communication (and self-promoting miscommunications) within an organization. In addition, the grapevine lacks a specific sender, which can create a sense of distrust among employees: Who is at the root of the gossip network? When the news is volatile, suspicions may arise as to the person or person behind the message. Managers who understand the grapevine’s power can use it to send and receive messages of their own. They can also decrease the grapevine’s power by sending official messages quickly and accurately, should big news arise.
Semantics
Words can mean different things to different people, or they might not mean anything to another person. This is called semantics. For example, companies often have their own acronyms and buzzwords (called business jargon) that are clear to them but impenetrable to outsiders. For example, at IBM, GBS is focusing on BPTS, using expertise acquired from the PwC purchase (which had to be sold to avoid conflicts of interest in light of SOX) to fend off other BPO providers and inroads by the Bangalore tiger. Does this make sense to you? If not, here’s the translation: IBM’s Global Business Services (GBS) division is focusing on offering companies Business Process Transformation Services (BPTS), using the expertise it acquired from purchasing the management consulting and technology services arm of PricewaterhouseCoopers (PwC), which had to sell the division due to the Sarbanes-Oxley Act (SOX; enacted in response to the major accounting scandals such as Enron). The added management expertise puts it above business process outsourcing (BPO) vendors who focus more on automating processes rather than transforming and improving them. Chief among these BPO competitors is Wipro, often called the “Bangalore tiger” because of its geographic origin and aggressive growth. Given the amount of messages we send and receive everyday, it makes sense that humans would try to find a shortcut—a way to communicate things in code. In business, this code is known as jargon. Jargon is the language of specialized terms used by a group or profession. It is common shorthand among experts and if used sensibly can be a quick and efficient way of communicating. Most jargon consists of unfamiliar terms, abstract words, nonexistent words, acronyms, and abbreviations, with an occasional euphemism thrown in for good measure. Every profession, trade, and organization has its own specialized terms (Wright, 2008).
At first glance, jargon sounds like a good thing—a quicker way to send an effective communication similar to the way text message abbreviations can send common messages in a shorter, yet understandable way. But that’s not always how things happen. Jargon can be an obstacle to effective communication, causing listeners to tune out or fostering ill feelings between partners in a conversation. When jargon rules the day, the message can get obscured. A key question to ask yourself before using a phrase of jargon is, “Who is the receiver of my message?” If you are a specialist speaking to another specialist in your area, jargon may be the best way to send a message while forging a professional bond—similar to the way best friends can communicate in code. For example, an IT technician communicating with another IT technician may use jargon as a way of sharing information in a way that reinforces the pair’s shared knowledge. But that same conversation should be held in Standard English, free of jargon, when communicating with staff members outside the IT group.
Online Follow-Up
Eighty buzz words in the business can be found at the following Web site:
http://www.amanet.org/movingahead/editorial2002_2003/nov03_80buzzwords.htm
A discussion of why slang is a problem can be found at the following Web site:
http://sbinfocanada.about.com/od/speakforsuccesscourse/a/speechlesson5.htm
In addition, the OB Toolbox below will help you avoid letting business jargon get in your way at work.
OB Toolbox: Tips for Reducing Miscommunication-by-Jargon
• Know your audience. If they weren’t sitting beside you in law school, medical school, or in that finance or computer class, then assume they don’t know what you are talking about. Speak for the other person and not yourself.
• Decode your acronyms. If you use an acronym in verbal or written communication, explain what it means after you use it for the first time. Your audience will filter your message otherwise, as they wonder, “Now what does ROI stand for?” (It stands for “return on investment,” btw—by the way.)
• Limit your jargon use. Jargon doesn’t necessarily make you sound smart or business savvy. It can create communication barriers and obstacles and hurts your ability to build relationships and close deals.
Gender Differences in Communication
Men and women work together every day, but their different styles of communication can sometimes work against them. Generally speaking, women like to ask questions before starting a project, while men tend to “jump right in.” A male manager who’s unaware of how most women communicate their readiness to work may misperceive a ready employee as not being prepared.
Another difference that has been noticed is that men often speak in sports metaphors, while many women use their home as a starting place for analogies. Women who believe men are “only talking about the game” may be missing out on a chance to participate in a division’s strategy and opportunities for teamwork and “rallying the troops” for success (Krotz).
“It is important to promote the best possible communication between men and women in the workplace,” notes gender policy advisor Dee Norton, who provided the above example. “As we move between the male and female cultures, we sometimes have to change how we behave (speak the language of the other gender) to gain the best results from the situation. Clearly, successful organizations of the future are going to have leaders and team members who understand, respect, and apply the rules of gender culture appropriately” (CDR Dee Norton, 2008).
As we have seen, differences in men’s and women’s communication styles can lead to misunderstandings in the workplace. Being aware of these differences, however, can be the first step in learning to work with them instead of around them. Keep in mind that men tend to focus more on competition, data, and orders in their communications, while women tend to focus more on cooperation, intuition, and requests. Both styles can be effective in the right situations, but understanding the differences is a first step in avoiding misunderstandings.
Differences in Meaning Between the Sender and Receiver
“Mean what you say, and say what you mean.” It’s an easy thing to say. But in business, what do those words mean? Simply put, different words mean different things to different people. Age, education, and cultural background are all factors that influence how a person interprets words. The less we consider our audience, the greater our chances of miscommunication will be. Eliminating jargon is one way of ensuring our words will convey real-world concepts to others. Speaking to our audience, as opposed to speaking about ourselves, is another.
Managers who speak about “long-term goals and profits” to a staff that has received scant raises may find their core message (“You’re doing a great job—and that benefits the folks in charge!”) has infuriated the group they hoped to inspire. Instead, managers who recognize the contributions of their staff and confirm that this work is contributing to company goals in ways “that will benefit the source of our success—our employees as well as executives,” will find that their core message (“You’re doing a great job—we really value your work.”) is received as intended, rather than being misinterpreted.
Biased Language
Words and actions that stereotype others on the basis of personal or group affiliation are examples of bias. Below is a list of words that have the potential to be offensive. The column on the right provides alternative words that can be used instead (Ashcraft & Mumby, 2003; Miller & Swift, 1980; Procter, 2007).
Figure 8.6
Avoid Consider Using
black attorney attorney
businessman business person
chairman chair or chairperson
cleaning lady cleaner or maintenance worker
male nurse nurse
manpower staff or personnel
secretary assistant or associate
Effective communication is clear, factual, and goal-oriented. It is also respectful. Referring to a person by one adjective (a brain, a diabetic) reduces the person to that one characteristic. Language that inflames or stereotypes a person poisons the communication process. Language that insults an individual or group based on age, ethnicity, sexual preference, or political beliefs violates public and private standards of decency, ranging from civil rights to corporate regulations.
The effort to create a neutral set of terms to refer to heritage and preferences has resulted in a debate over the nature of “political correctness.” Proponents of political correctness see it as a way to defuse the volatile nature of words that stereotyped groups and individuals in the past. Critics of political correctness see its vocabulary as stilted and needlessly cautious.
Many companies offer new employees written guides on standards of speech and conduct. These guides, augmented by common sense and courtesy, are solid starting points for effective, respectful workplace communication.
Tips for appropriate workplace speech include, but are not limited to the following:
• Alternating our use of he and she when referring to people in general
• Relying on human resources–generated guidelines
• Remembering that terms that feel respectful or comfortable to us may not be comfortable or respectful to others
Poor Listening
The greatest compliment that was ever paid to me was when one asked me what I thought, and attended to my answer.
Henry David Thoreau
A sender may strive to deliver a message clearly. But the receiver’s ability to listen effectively is equally vital to successful communication. The average worker spends 55% of their workdays listening. Managers listen up to 70% each day. Unfortunately, listening doesn’t lead to understanding in every case.
From a number of different perspectives, listening matters. Former Chrysler CEO Lee Iacocca lamented, “I only wish I could find an institute that teaches people how to listen. After all, a good manager needs to listen at least as much as he needs to talk” (Iacocca & Novak, 1984). Research shows that listening skills were related to promotions (Sypher, Bostrom, & Seibert, 1989).
Listening clearly matters. Listening takes practice, skill, and concentration. Alan Gulick, a Starbucks Corporation spokesperson, believes better listening can improve profits. If every Starbucks employee misheard one \$10 order each day, their errors would cost the company a billion dollars annually. To teach its employees to listen, Starbucks created a code that helps employees taking orders hear the size, flavor, and use of milk or decaffeinated coffee. The person making the drink echoes the order aloud.
How Can You Improve Your Listening Skills?
Cicero said, “Silence is one of the great arts of conversation.” How often have we been in a conversation with someone else when we are not really listening but itching to convey our portion? This behavior is known as “rehearsing.” It suggests the receiver has no intention of considering the sender’s message and is actually preparing to respond to an earlier point instead. Effective communication relies on another kind of listening: active listening.
Active listening can be defined as giving full attention to what other people are saying, taking time to understand the points being made, asking questions as needed, and not interrupting at inappropriate times (O*NET Resource Center). Active listening creates a real-time relationship between the sender and receiver by acknowledging the content and receipt of a message. As we’ve seen in the Starbucks example above, repeating and confirming a message’s content offers a way to confirm that the correct content is flowing between colleagues. The process creates a bond between coworkers while increasing the flow and accuracy of messaging.
How Can We Listen Actively?
Carl Rogers gave five rules for active listening:
1. Listen for message content.
2. Listen for feelings.
3. Respond to feelings.
4. Note all cues.
5. Paraphrase and restate.
The good news is that listening is a skill that can be learned (Brownell, 1990). The first step is to decide that we want to listen. Casting aside distractions, such as by reducing background or internal noise, is critical. The receiver takes in the sender’s message silently, without speaking.
Second, throughout the conversation, show the speaker that you’re listening. You can do this nonverbally by nodding your head and keeping your attention focused on the speaker. You can also do it verbally, by saying things like, “Yes,” “That’s interesting,” or other such verbal cues. As you’re listening, pay attention to the sender’s body language for additional cues about how they’re feeling. Interestingly, silence has a role in active listening. During active listening, we are trying to understand what has been said, and in silence we can consider the implications. We can’t consider information and object to it at the same time. That’s where the power of silence comes into play. Finally, if anything is not clear to you, ask questions. Confirm that you’ve heard the message accurately, by repeating back a crucial piece like, “Great, I’ll see you at 2:00 p.m. in my office.” At the end of the conversation, a thank you from both parties is an optional but highly effective way of acknowledging each other’s teamwork.
Becoming a More Effective Listener
As we’ve seen above, active listening creates a more dynamic relationship between a receiver and a sender. It strengthens personal investment in the information being shared. It also forges healthy working relationships among colleagues by making speakers and listeners equally valued members of the communication process.
Many companies offer public speaking courses for their staff, but what about “public listening”? Here are some more ways you can build your listening skills by becoming a more effective listener and banishing communication freezers from your discussions.
OB Toolbox: 10 Ways to Improve Your Listening Habits
1. Start by stopping. Take a moment to inhale and exhale quietly before you begin to listen. Your job as a listener is to receive information openly and accurately.
2. Don’t worry about what you’ll say when the time comes. Silence can be a beautiful thing.
3. Join the sender’s team. When the sender pauses, summarize what you believe has been said. “What I’m hearing is that we need to focus on marketing as well as sales. Is that correct?” Be attentive to physical as well as verbal communications. “I hear you saying that we should focus on marketing, but the way you’re shaking your head tells me the idea may not really appeal to you—is that right?”
4. Don’t multitask while listening. Listening is a full-time job. It’s tempting to multitask when you and the sender are in different places, but doing that is counterproductive. The human mind can only focus on one thing at a time. Listening with only part of your brain increases the chances that you’ll have questions later, ultimately requiring more of the speaker’s time. (And when the speaker is in the same room, multitasking signals a disinterest that is considered rude.)
5. Try to empathize with the sender’s point of view. You don’t have to agree, but can you find common ground?
6. Confused? Ask questions. There’s nothing wrong with admitting you haven’t understood the sender’s point. You may even help the sender clarify the message.
7. Establish eye contact. Making eye contact with the speaker (if appropriate for the culture) is important.
8. What is the goal of this communication? Ask yourself this question at different points during the communication to keep the information flow on track. Be polite. Differences in opinion can be the starting point of consensus.
9. It’s great to be surprised. Listen with an open mind, not just for what you want to hear.
10. Pay attention to what is not said. Does the sender’s body language seem to contradict the message? If so, clarification may be in order.
Communication Freezers
Communication freezers put an end to effective communication by making the receiver feel judged or defensive. Typical communication stoppers include criticizing, blaming, ordering, judging, or shaming the other person. Some examples of things to avoid saying include the following:
1. Telling the other person what to do:
• “You must…”
• “You cannot…”
2. Threatening with “or else” implied:
• “You had better…”
• “If you don’t…”
3. Making suggestions or telling the other person what they ought to do:
• “You should…”
• “It’s your responsibility to…”
4. Attempting to educate the other person:
• “Let me give you the facts.”
• “Experience tells us that…”
5. Judging the other person negatively:
• “You’re not thinking straight.”
• “You’re wrong.”
6. Giving insincere praise:
• “You have so much potential.”
• “I know you can do better than this.”
7. Psychoanalyzing the other person:
• “You’re jealous.”
• “You have problems with authority.”
8. Making light of the other person’s problems by generalizing:
• “Things will get better.”
• “Behind every cloud is a silver lining.”
9. Asking excessive or inappropriate questions:
• “Why did you do that?”
• “Who has influenced you?”
10. Making light of the problem by kidding:
• “Think about the positive side.”
• “You think you’ve got problems!”
Key Takeaways
Many barriers to effective communication exist. Examples include filtering, selective perception, information overload, emotional disconnects, lack of source credibility, workplace gossip, gender differences, and semantics. The receiver can enhance the probability of effective communication by engaging in active listening.
Exercises
1. Most people are poor listeners. Do you agree or disagree with this statement? Please support your position.
2. Please share an example of how differences in shared meaning have affected you.
3. When you see a memo or e-mail full of typos, poor grammar, or incomplete sentences, how do you react? Does it affect your perception of the sender? Why or why not?
4. Give an example of selective perception.
5. Do you use jargon at work or in your classes? If so, do you think it helps or hampers communication? Why or why not?
References
Alessandra, T. (1993). Communicating at work. New York: Fireside.
Ashcraft, K., & Mumby, D. K. (2003). Reworking gender. Thousand Oaks, CA: Sage.
Brownell, J. (1990). Perceptions of effective listeners: A management study. Journal of Business Communications, 27, 401–415.
CDR Dee Norton. (n.d.). Gender and communication—finding common ground. Retrieved July 2, 2008, from www.uscg.mil/leadership/gender.htm.
Crampton, S. M. (1998). The informal communication network: Factors influencing grapevine activity. Public Personnel Management. Retrieved July 2, 2008, from www.allbusiness.com/management/735210-1.html.
Iacocca, L., & Novak, W. (1984). Iacocca: An autobiography. New York: Bantam Press.
Krotz, J. L. (n.d.). 6 tips for bridging the communication gap. Retrieved from the Microsoft Small Business Center Web site: www.microsoft.com/smallbusine...vs-men-6-tips- for-bridging-the-communication-gap.aspx.
Kurland, N. B., & Pelled, L. H. (2000). Passing the word: Toward a model of gossip and power in the workplace. Academy of Management Review, 25, 428–438.
González, V. M., & Gloria, M. (2004). Constant, constant, multi-tasking craziness. CHI 2004. Retrieved July 2, 2008, from http://www.interruptions.net/literature/Gonzalez-CHI04-p113-gonzalez.pdf.
Miller, C., & Swift, K. (1980). The handbook of nonsexist writing. New York: Lippincott & Crowell.
O*NET Resource Center, the nation’s primary source of occupational information accessed at http://online.onetcenter.org/skills/.
Overholt, A. (2001, February). Intel’s got (too much) mail. Fast Company. Retrieved July 2, 2008, from www.fastcompany.com/online/44/intel.html and http://blogs.intel.com/it/2006/10/information_overload.php.
Procter, M. (2007, September 11). Unbiased language. (n.d.). Retrieved July 2, 2008, from www.utoronto.ca/writing/unbias.html.
Schick, A. G., Gordon, L. A., & Haka, S. (1990). Information overload: A temporal approach. Accounting, Organizations, and Society, 15, 199–220.
Sypher, B. D., Bostrom, R. N., & Seibert, J. H. (1989). Listening, communication abilities, and success at work. Journal of Business Communication, 26, 293–303.
Wright, N. (n.d.). Keep it jargon-free. Retrieved July 2, 2008, from the Plain Language Action and Information Network Web site: http://www.plainlanguage.gov/howto/wordsuggestions/jargonfree.cfm.
1. Retrieved July 1, 2008, from PC Magazine encyclopedia Web site: www.pcmag.com/encyclopedia_te...ation+overload &i=44950,00.asp and reinforced by information in Dawley, D. D., & Anthony, W. P. (2003). User perceptions of e-mail at work. Journal of Business and Technical Communication, 17, 170–200. | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.3%3A_Communication_Barriers.txt |
Learning Objectives
1. Understand different types of communication.
2. Understand how communication channels affect communication.
3. Recognize different communication directions within organizations.
Types of Communication
There are three types of communication, including: verbal communication involving listening to a person to understand the meaning of a message, written communication in which a message is read, and nonverbal communication involving observing a person and inferring meaning. Let’s start with verbal communication, which is the most common form of communication.
Verbal Communication
Verbal communications in business take place over the phone or in person. The medium of the message is oral. Let’s return to our printer cartridge example. This time, the message is being conveyed from the sender (the manager) to the receiver (an employee named Bill) by telephone. We’ve already seen how the manager’s request to Bill (“Buy more printer toner cartridges!”) can go awry. Now let’s look at how the same message can travel successfully from sender to receiver.
Manager (speaking on the phone): “Good morning Bill!”
(By using the employee’s name, the manager is establishing a clear, personal link to the receiver.)
Manager: “Your division’s numbers are looking great.”
(The manager’s recognition of Bill’s role in a winning team further personalizes and emotionalizes the conversation.)
Manager: “Our next step is to order more printer toner cartridges. Would you place an order for 1,000 printer toner cartridges with Jones Computer Supplies? Our budget for this purchase is \$30,000, and the printer toner cartridges need to be here by Wednesday afternoon.”
(The manager breaks down the task into several steps. Each step consists of a specific task, time frame, quantity, or goal.)
Bill: “Sure thing! I’ll call Jones Computer Supplies and order 1,000 more printer toner cartridges, not exceeding a total of \$30,000, to be here by Wednesday afternoon.”
(Bill, a model employee, repeats what he has heard. This is the feedback portion of the communication. Feedback helps him recognize any confusion he may have had hearing the manager’s message. Feedback also helps the manager hear if she has communicated the message correctly.)
Storytelling has been shown to be an effective form of verbal communication that serves an important organizational function by helping to construct common meanings for individuals within the organization. Stories can help clarify key values and also help demonstrate how certain tasks are performed within an organization. Story frequency, strength, and tone are related to higher organizational commitment (McCarthy, 2008). The quality of the stories is related to the ability of entrepreneurs to secure capital for their firms (Martens, Jennings, & Devereaux, 2007).
While the process may be the same, high stakes communications require more planning, reflection, and skill than normal day-to-day interactions at work. Examples of high stakes communication events include asking for a raise or presenting a business plan to a venture capitalist. In addition to these events, there are also many times in our professional lives when we have crucial conversations, which are defined as discussions in which not only are the stakes high, but also the opinions vary and emotions run strong (Patterson et al., 2002). One of the most consistent recommendations from communications experts is to work toward using “and” instead of “but” when communicating under these circumstances. In addition, be aware of your communication style and practice being flexible; it is under stressful situations that communication styles can become the most rigid.
OB Toolbox: 10 Recommendations for Improving the Quality of Your Conversations
1. Be the first to say hello. Use your name in your introduction, in case others have forgotten it.
2. Think before you speak. Our impulse is often to imitate movies by offering fast, witty replies in conversation. In the real world, a careful silence can make us sound more intelligent and prevent mistakes.
3. Be receptive to new ideas. If you disagree with another person’s opinion, saying, “Tell me more,” can be a more useful way of moving forward than saying, “That’s stupid!”
4. Repeat someone’s name to yourself and then aloud, when being introduced. The form of the name you use may vary. First names work with peers. Mr. or Ms. is common when meeting superiors in business.
5. Ask questions. This establishes your interest in another person.
6. Listen as much, if not more, than you speak. This allows you to learn new information.
7. Use eye contact. Eye contact shows that you are engaged. Also, be sure to smile and make sure your body language matches your message.
8. Mirror the other person. Occasionally repeat what they’ve said in your own words. “You mean… ?”
9. Have an exit strategy ready. Ideal conversations are brief, leaving others wanting more.
10. Be prepared. Before beginning a conversation, have three simple facts about yourself and four questions about someone else in mind.
Written Communication
In contrast to verbal communications, which are oral, written business communications are printed messages. Examples of written communications include memos, proposals, e-mails, letters, training manuals, and operating policies. They may be printed on paper or appear on the screen. Written communication is often asynchronous. That is, the sender can write a message that the receiver can read at any time, unlike a conversation that is carried on in real time. A written communication can also be read by many people (such as all employees in a department or all customers). It’s a “one-to-many” communication, as opposed to a one-to-one conversation. There are exceptions, of course: A voice mail is an oral message that is asynchronous. Conference calls and speeches are oral one-to-many communications, and e-mails can have only one recipient or many.
Normally, a verbal communication takes place in real time. Written communication, by contrast, can be constructed over a longer period of time. It also can be collaborative. Multiple people can contribute to the content on one document before that document is sent to the intended audience.
Verbal and written communications have different strengths and weaknesses. In business, the decision to communicate verbally or in written form can be a powerful one. As we’ll see below, each style of communication has particular strengths and pitfalls. When determining whether to communicate verbally or in writing, ask yourself: Do I want to convey facts or feelings? Verbal communications are a better way to convey feelings. Written communications do a better job of conveying facts.
Picture a manager making a speech to a team of 20 employees. The manager is speaking at a normal pace. The employees appear interested. But how much information is being transmitted? Probably not as much as the speaker believes. The fact is that humans listen much faster than they speak. The average public speaker communicates at a speed of about 125 words a minute, and that pace sounds fine to the audience. (In fact, anything faster than that probably would sound unusual. To put that figure in perspective, someone having an excited conversation speaks at about 150 words a minute.) Based on these numbers, we could assume that the audience has more than enough time to take in each word the speaker delivers, which actually creates a problem. The average person in the audience can hear 400 to 500 words a minute (Lee & Hatesohl, 2008). The audience has more than enough time to hear. As a result, their minds may wander.
As you can see, oral communication is the most often used form of communication, but it is also an inherently flawed medium for conveying specific facts. Listeners’ minds wander. It’s nothing personal—in fact, it’s a completely normal psychological occurrence. In business, once we understand this fact, we can make more intelligent communication choices based on the kind of information we want to convey.
Most jobs involve some degree of writing. According to the National Commission on Writing, 67% of salaried employees in large American companies and professional state employees have some kind of writing responsibility. Half of responding companies reported that they take writing into consideration when hiring professional employees, and 91% always take writing into account when hiring (Flink, 2007). Luckily, it is possible to learn to write clearly.
Here are some tips on writing well. Thomas Jefferson summed up the rules of writing well with this idea: “Don’t use two words when one will do.” Put another way, half the words can have twice the impact. One of the oldest myths in business is that writing more will make us sound more important. The opposite is true. Leaders who can communicate simply and clearly project a stronger image than those who write a lot but say nothing.
Putting Jefferson’s Rules Into Action: Five Ways to Communicate More With Fewer Words
1. Picture the receiver in your mind before you begin to write. After all, a written communication is a link between people.
2. Choose simple words. When in doubt, choose the shorter word (“Automobile or car? Car!”)
3. Be polite and clear. Your message will make a strong, clear impact.
4. Make your message brief and direct by trimming redundant words or phrases. “Having thus explored our first option, I would now like to begin to explore the second option that may be open to us.” versus “After considering Option 1, I would like to look at Option 2.”
5. Choose strong, active verbs. “I suggest…” instead of “It would seem to me that we might…”
Remember, concise writing equals effective communication.
Nonverbal Communication
What you say is a vital part of any communication. Surprisingly, what you don’t say can be even more important. Research shows that nonverbal cues can also affect whether or not you get a job offer. Judges examining videotapes of actual applicants were able to assess the social skills of job candidates with the sound turned off. They watched the rate of gesturing, time spent talking, and formality of dress to determine which candidates would be the most socially successful on the job (Gifford, Ng, & Wilkinson, 1985). Research also shows that 55% of in-person communication comes from nonverbal cues such as facial expressions, body stance, and tone of voice. According to one study, only 7% of a receiver’s comprehension of a message is based on the sender’s actual words, 38% is based on paralanguage (the tone, pace, and volume of speech), and 55% is based on nonverbal cues (body language) (Mehrabian, 1981). To be effective communicators, our body language, appearance, and tone must align with the words we’re trying to convey. Research shows that when individuals are lying, they are more likely to blink more frequently, shift their weight, and shrug (Siegman, 1985).
Listen Up and Learn More!
To learn more about facial language from facial recognition expert Patrician McCarthy as she speaks with Senior Editor Suzanne Woolley at Business Week, view the online interview at feedroom.businessweek.com/ind...41fa625f5b0744
A different tone can change the perceived meaning of a message. See the table below for how clearly this can be true. If we only read these words, we would be left to wonder, but during a conversation, the tone conveys a great deal of information.
Don’t Use That Tone With Me!
Changing your tone can dramatically change your meaning.
Table \(1\):
Placement of the emphasis What it means
I did not tell John you were late. Someone else told John you were late.
I did not tell John you were late. This did not happen.
I did not tell John you were late. I may have implied it.
I did not tell John you were late. But maybe I told Sharon and José.
I did not tell John you were late. I was talking about someone else.
I did not tell John you were late. I told him you still are late.
I did not tell John you were late. I told him you were attending another meeting.
Now you can see how changing the tone of voice in a conversation can incite or diffuse a misunderstanding. For another example, imagine that you’re a customer interested in opening a new bank account. At one bank, the bank officer is dressed neatly. She looks you in the eye when she speaks. Her tone is friendly. Her words are easy to understand, yet professional sounding. “Thank you for considering Bank of the East Coast. We appreciate this opportunity and would love to explore ways that we can work together to help your business grow,” she says with a friendly smile. At the second bank, the bank officer’s tie is stained. He looks over your head and down at his desk as he speaks. He shifts in his seat and fidgets with his hands. His words say, “Thank you for considering Bank of the West Coast. We appreciate this opportunity and would love to explore ways that we can work together to help you business grow,” but he mumbles his words, and his voice conveys no enthusiasm or warmth. Which bank would you choose? The speaker’s body language must match his or her words. If a sender’s words and body language don’t match—if a sender smiles while telling a sad tale, for example—the mismatch between verbal and nonverbal cues can cause a receiver to actively dislike the sender.
Following are a few examples of nonverbal cues that can support or detract from a sender’s message.
Body Language
A simple rule of thumb is that simplicity, directness, and warmth conveys sincerity. Sincerity is vital for effective communication. In some cultures, a firm handshake, given with a warm, dry hand, is a great way to establish trust. A weak, clammy handshake might convey a lack of trustworthiness. Gnawing one’s lip conveys uncertainty. A direct smile conveys confidence.
Eye Contact
In business, the style and duration of eye contact varies greatly across cultures. In the United States, looking someone in the eye (for about a second) is considered a sign of trustworthiness.
Facial Expressions
The human face can produce thousands of different expressions. These expressions have been decoded by experts as corresponding to hundreds of different emotional states (Ekman, Friesen, & Hager, 2008). Our faces convey basic information to the outside world. Happiness is associated with an upturned mouth and slightly closed eyes; fear with an open mouth and wide-eyed stare. Shifty eyes and pursed lips convey a lack of trustworthiness. The impact of facial expressions in conversation is instantaneous. Our brains may register them as “a feeling” about someone’s character. For this reason, it is important to consider how we appear in business as well as what we say. The muscles of our faces convey our emotions. We can send a silent message without saying a word. A change in facial expression can change our emotional state. Before an interview, for example, if we focus on feeling confident, our face will convey that confidence to an interviewer. Adopting a smile (even if we’re feeling stressed) can reduce the body’s stress levels.
Posture
The position of our body relative to a chair or other person is another powerful silent messenger that conveys interest, aloofness, professionalism, or lack thereof. Head up, back straight (but not rigid) implies an upright character. In interview situations, experts advise mirroring an interviewer’s tendency to lean in and settle back in a seat. The subtle repetition of the other person’s posture conveys that we are listening and responding.
Touch
The meaning of a simple touch differs between individuals, genders, and cultures. In Mexico, when doing business, men may find themselves being grasped on the arm by another man. To pull away is seen as rude. In Indonesia, to touch anyone on the head or to touch anything with one’s foot is considered highly offensive. In the Far East and some parts of Asia, according to business etiquette writer Nazir Daud, “It is considered impolite for a woman to shake a man’s hand” (Daud, 2008). Americans, as we have noted above, place great value in a firm handshake. But handshaking as a competitive sport (“the bone-crusher”) can come off as needlessly aggressive both at home and abroad.
Space
Anthropologist Edward T. Hall coined the term proxemics to denote the different kinds of distance that occur between people. These distances vary among cultures. The chart below outlines the basic proxemics of everyday life and their associated meaning (Hall, 1966).
Standing too far away from a colleague (public speaking distance) or too close to a colleague (intimate distance for embracing) can thwart an effective verbal communication in business.
Communication Channels
The channel, or medium, used to communicate a message affects how accurately the message will be received. Channels vary in their “information-richness.” Information-rich channels convey more nonverbal information. Research shows that effective managers tend to use more information-rich communication channels than less effective managers (Allen & Griffeth, 1997′ Yates & Orlikowski, 1992). The figure below illustrates the information richness of different channels.
Figure 8.10
Information Channel Information Richness
Face-to-face conversation High
Videoconferencing High
Telephone conversation High
E-mails Medium
Handheld devices Medium
Blogs Medium
Written letters and memos Medium
Formal written documents Low
Spreadsheets Low
Information channels differ in their richness.
The key to effective communication is to match the communication channel with the goal of the message (Barry & Fulmer, 2004). For example, written media may be a better choice when the sender wants a record of the content, has less urgency for a response, is physically separated from the receiver, and doesn’t require a lot of feedback from the receiver, or when the message is complicated and may take some time to understand.
Oral communication, on the other hand, makes more sense when the sender is conveying a sensitive or emotional message, needs feedback immediately, and does not need a permanent record of the conversation.
Figure 8.11 Guide for When to Use Written versus Verbal Communication
Use Written Communication When: Use Verbal Communication When:
conveying facts conveying emotion and feelings
the message needs to become part of a permanent file the message does not need to be permanent
there is little time urgency there is time urgency
you do not need immediate feedback you need immediate feedback
the ideas are complicated the ideas are simple or can be made simple with explanations
Like face-to-face and telephone conversations, videoconferencing has high information richness, because receivers and senders can see or hear beyond just the words that are used—they can see the sender’s body language or hear the tone of their voice. Handheld devices, blogs, and written letters and memos offer medium-rich channels, because they convey words and pictures or photos. Formal written documents, such as legal documents and budget spreadsheets, convey the least richness, because the format is often rigid and standardized. As a result, the tone of the message is often lost.
The growth of e-mail has been spectacular, but it has also created challenges in managing information and increasing the speed of doing businesses. Over 100 million adults in the United States use e-mail at least once a day (Taylor, 2002). Internet users around the world send an estimated 60 billion e-mails each day, and a large portion of these are spam or scam attempts (60 Billion emails sent daily worldwide, 2006). That makes e-mail the second most popular medium of communication worldwide, second only to voice. Less than 1% of all written human communications even reaches paper these days (Isom, 2008). To combat the overuse of e-mail, companies such as Intel have even instituted “no e-mail Fridays.” During these times, all communication is done via other communication channels. Learning to be more effective in your e-mail communications is an important skill. To learn more, check out the OB Toolbox on business e-mail do’s and don’ts.
OB Toolbox: Business E-mail Do’s and Don’ts
1. DON’T send or forward chain e-mails.
2. DON’T put anything in an e-mail that you don’t want the world to see.
3. DON’T write a message in capital letters—this is the equivalent of SHOUTING.
4. DON’T routinely CC everyone. Reducing inbox clutter is a great way to increase communication.
5. DON’T hit send until you’ve spell-checked your e-mail.
6. DO use a subject line that summarizes your message, adjusting it as the message changes over time.
7. DO make your request in the first line of your e-mail. (And if that’s all you need to say, stop there!)
8. DO end your e-mail with a brief sign-off such as, “Thank you,” followed by your name and contact information.
9. DO think of a work e-mail as a binding communication.
10. DO let others know if you’ve received an e-mail in error.
An important although often ignored rule when communicating emotional information is that e-mail’s lack of richness can be your loss. As we saw in the chart above, e-mail is a medium-rich channel. It can convey facts quickly. But when it comes to emotion, e-mail’s flaws make it a far less desirable choice than oral communication—the 55% of nonverbal cues that make a conversation comprehensible to a listener are missing. Researchers also note that e-mail readers don’t pick up on sarcasm and other tonal aspects of writing as much as the writer believes they will (Kruger, 2005).
The sender may believe that certain emotional signifiers have been included in a message. But, with written words alone, those signifiers are not there. This gap between the form and content of e-mail inspired the rise of emoticons—symbols that offer clues to the emotional side of the words in each message. Generally speaking, however, emoticons are not considered professional in business communication.
You might feel uncomfortable conveying an emotionally laden message verbally, especially when the message contains unwanted news. Sending an e-mail to your staff that there will be no bonuses this year may seem easier than breaking the bad news face-to-face, but that doesn’t mean that e-mail is an effective or appropriate way to break this kind of news. When the message is emotional, the sender should use verbal communication. Indeed, a good rule of thumb is that more emotionally laden messages require more thought in the choice of channel and how they are communicated.
Career Advice
Communication can occur without you even realizing it. Consider the following: Is your e-mail name professional? The typical convention for business e-mail contains some form of your name. While an e-mail name like “LazyGirl” or “DeathMonkey” may be fine for chatting online with your friends, they may send the wrong signal to individuals you e-mail such as professors and prospective employers.
Is your outgoing voice mail greeting professional? If not, change it. Faculty and prospective recruiters will draw certain conclusions if, upon calling you, they get a message that screams, “Party, party, party!”
Do you have a “private” social networking Web site on MySpace.com, Facebook.com, or Xanga.com? If so, consider what it says about you to employers or clients. If it is information you wouldn’t share at work, it probably shouldn’t be there.
Googled yourself lately? If not, you probably should. Potential employers have begun searching the Web as part of background checking, and you should be aware of what’s out there about you.
Direction of Communication Within Organizations
Information can move horizontally, from a sender to a receiver, as we’ve seen. It can also move vertically, down from top management, or up from the front line. Information can also move diagonally between and among levels of an organization, such as a message from a customer service rep to a manager in the manufacturing department or a message from the chief financial officer sent down to all department heads.
There is a chance for these arrows to go awry, of course. As Mihaly Csikszentmihalyi, author of best-selling books such as Flow, has noted, “In large organizations the dilution of information as it passes up and down the hierarchy, and horizontally across departments, can undermine the effort to focus on common goals.”[1]
The organizational status of the sender can impact the receiver’s attentiveness to the message. For example, consider the following: A senior manager sends a memo to a production supervisor. The supervisor, who has a lower status within the organization, is likely to pay close attention to the message. The same information conveyed in the opposite direction, however, might not get the attention it deserves. The message would be filtered by the senior manager’s perception of priorities and urgencies.
Requests are just one kind of communication in business. Other communications, either verbal or written, may seek, give, or exchange information. Research shows that frequent communications with one’s supervisor is related to better job performance ratings and overall organizational performance (Snyder & Morris, 1984; Kacmar et al., 2003). Research also shows that lateral communication done between peers can influence important organizational outcomes such as turnover (Krackhardt & Porter, 1986).
External Communications
External communications deliver specific businesses messages to individuals outside an organization. They may announce changes in staff or strategy, earnings, and more. The goal of an external communication is to create a specific message that the receiver will understand and share with others. Examples of external communications include the following.
Press Releases
Public relations professionals create external communications about a client’s product, services, or practices for specific receivers. These receivers, it is hoped, will share the message with others. In time, as the message is passed along, it should appear to be independent of the sender, creating the illusion of an independently generated consumer trend, public opinion, and so on.
The message of a public relations effort may be b2b (business to business), b2c (business to consumer), or media related. The message can take different forms. Press releases try to convey a newsworthy message, real or manufactured. It may be constructed like a news item, inviting editors or reporters to reprint the message in part or as a whole, with or without acknowledgement of the sender’s identity. Public relations campaigns create messages over time through contests, special events, trade shows, and media interviews in addition to press releases.
Ads
Advertising places external business messages before target receivers through media buys. A media buy is a fee that is paid to a television network, Web site, magazine, and so on by an advertiser to insert an advertisement. The fee is based on the perceived value of the audience who watches, reads, listens to, or frequents the space where the ad will appear.
In recent years, receivers have begun to filter advertiser’s messages. This phenomenon is perceived to be a result of the large amount of ads the average person sees each day and a growing level of consumer wariness of paid messaging. Advertisers, in turn, are trying to create alternative forms of advertising that receivers won’t filter. The advertorial is one example of an external communication that combines the look of an article with the focused message of an ad. Product placements in videos, movies, and games are other ways that advertisers strive to reach receivers with commercial messages.
Web Pages
A Web page’s external communication can combine elements of public relations, advertising, and editorial content, reaching receivers on multiple levels and in multiple ways. Banner ads, blogs, and advertiser-driven “click-through” areas are just a few of the elements that allow a business to deliver a message to a receiver online. The perceived flexibility of online communications can impart a less formal (and therefore, more believable) quality to an external communication. A message relayed in a daily blog post, for example, will reach a receiver differently than if it is delivered in an annual report. The popularity and power of blogs is growing, with 11% of Fortune 500 companies having official blogs (up from 4% in 2005). In fact, blogs have become so important to companies such as Coca-Cola Company, Eastman Kodak Company, and Marriott International Inc. that they have created official positions within their organizations titled “chief blogging officer” (Chief blogging officer, 2008). The “real-time” quality of Web communications may appeal to receivers who might filter out traditional ads and public relations messages because of their “prefab” quality. Despite a “spontaneous” feel, many online pages can be revisited many times in a single day. For this reason, clear and accurate external communications are as vital for online use as they are in traditional media.
Customer Communications
Customer communications can include letters, catalogs, direct mail, e-mails, text messages, and telemarketing messages. Some receivers automatically filter these types of bulk messages. Others will be receptive. The key to a successful external communication to customers is to convey a business message in a personally compelling way—dramatic news, a money-saving coupon, and so forth.
Key Takeaways
Types of communication include verbal, written, and nonverbal. Surprisingly, 55% of face-to-face communication comes from nonverbal cues such as tone or body language. Different communication channels are more or less effective at transmitting different kinds of information. In addition, communication flows in different directions within organizations.
Exercises
1. How aware are you of your own body language? Has your body language ever gotten you in trouble while communicating with someone?
2. In your experience, how is silence used in communication?
3. If the meaning behind verbal communication is only 7% words, what does this imply for written communication?
4. How could you use your knowledge of communication richness to be more effective in your own communications?
5. What are the three biggest advantages and disadvantages you see regarding technology and communications?
References
Allen, D. G., & Griffeth, R. W. (1997). Vertical and lateral information processing; Fulk, J., & Boyd, B. (1991). Emerging theories of communication in organizations. Journal of Management, 17, 407–446.
Barry, B., & Fulmer, I. S. (2004). The medium and the message: The adaptive use of communication media in dyadic influence. Academy of Management Review, 29, 272–292.
Chief blogging officer title catching on with corporations. (2008, May 1). Workforce Management. Retrieved July 2, 2008, from http://www.workforce.com/section/00/article/25/50/77.html.
Daud, N. (n.d.). Business etiquette. Retrieved July 2, 2008, from ezinearticles.com/?Business-Etiquette—Shaking-Hands-around- the-World&id=746227.
Ekman, P., Friesen, W. V., & Hager, J. C. The facial action coding system (FACS). Retrieved July 2, 2008, from face-and-emotion.com/dataface/facs/manual.
Flink, H. (2007, March). Tell it like it is: Essential communication skills for engineers. Industrial Engineer, 39, 44–49.
Gifford, R., Ng, C. F., & Wilkinson, M. (1985). Nonverbal cues in the employment interview: Links between applicant qualities and interviewer judgments. Journal of Applied Psychology, 70, 729–736.
Hall, E. T. (1966). The hidden dimension. New York: Doubleday.
Isom, D. K. (updated October 19, 2005). Electronic discovery: New power, new risks. Retrieved July 2, 2008, from the Utah State Bar Web site: utahbar.org/barjournal2000/ht...er_2003_2.html.
Kacmar, K. M., Witt, L. A., Zivnuska, S., & Gully, S. M. (2003). The interactive effect of leader-member exchange and communication frequency on performance ratings. Journal of Applied Psychology, 88, 764–772.
Krackhardt, D., & Porter, L. W. (1986). The snowball effect: Turnover embedded in communication networks. Journal of Applied Psychology, 71, 50–55.
Kruger, J. (2005). Egocentrism over email: Can we communicate as well as we think? Journal of Personality and Social Psychology, 89, 925–936.
Lee, D., & Hatesohl, D. Listening: Our most used communication skill. Retrieved July 2, 2008, from the University of Missouri Web site: extension.missouri.edu/explore/comm/cm0150.htm.
Martens, M. L., Jennings, J. E., & Devereaux, J. P. (2007). Do the stories they tell get them the money they need? The role of entrepreneurial narratives in resource acquisition. Academy of Management Journal, 50, 1107–1132.
McCarthy, J. F. (2008). Short stories at work: Storytelling as an indicator of organizational commitment. Group & Organization Management, 33, 163–193.
Mehrabian, A. (1981). Silent messages. New York: Wadsworth.
Patterson, K., Grenny, J., McMillan, R., & Switzler, A. (2002). Crucial conversations: Tools for talking when stakes are high. New York: McGraw-Hill.
Siegman, A. W. (1985). Multichannel integrations of nonverbal behavior. Hillsdale, NJ: L. Erlbaum Associates.
Snyder, R. A., & Morris, J. H. (1984). Organizational communication and performance. Journal of Applied Psychology, 69, 461–465.
Taylor, C. (2002, June 10). 12 steps for email addicts. Time.com. Retrieved July 2, 2008, from www.time.com/time/magazine/ar...002621,00.html.
Yates, J., & Orlikowski, W. J. (1992). Genres of organizational communication: A structurational approach to studying communication and media. Academy of Management Review, 17, 299–326.
60 Billion emails sent daily worldwide. (2006, April 26). Retrieved July 2, 2008, from CNET.UK: http://www.cnet.co.uk/misc/print/0,39030763,49265163,00.htm.
1. Quotation listed on Inspirational Business Quotes. Retrieved July 1, 2008, from www.woopidoo.com/business_quo...ort-quotes.htm. | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.4%3A_Different_Types_of_Communication_and_Channels.txt |
Learning Objectives
1. Consider the role of ethics in communication.
2. Consider the role of national culture on communication.
Ethics and Communication
“People aren’t happy when the unexpected happens, but they are even unhappier if they find out you tried to hide it,” says Bruce Patton, a partner at Boston-based Vantage Partners LLC (Michelman, 2004). To speak or not to speak? One of the most challenging areas of effective business communication occurs in moments of crisis management. But in an age of instant information, the burden on business to speak out quickly and clearly in times of crisis has never been greater.
The alternative to a clear message is seen as a communication blocker, in addition to being guilty of the misdeed, disaster, or infraction at hand. The Exxon Valdez disaster is a classic example of ineffective crisis management and communication. When millions of barrels of oil spilled into Prince William Sound, the company’s poor response only added to the damage. Exxon Mobil Corporation executives refused to acknowledge the extent of the problem and declined to comment on the accident for almost a week. Exxon also sent a succession of lower level spokespeople to deal with the media (Holusha, 1989).
Instead, a more effective method of crisis communication is to have the company’s highest ranking official become the spokesperson who communicates the situation. This is the approach that James Burke, the chairman of Johnson & Johnson Services, Inc., took when tampering was discovered with Tylenol bottles. He became the face of the crisis, communicating with the public and explaining what J & J would do. His forthrightness built trust and allayed customer fears.
Ethical, forthright communication applies inside the company as well as externally with the public. “When the truth is missing, people feel demoralized, less confident, and ultimately are less loyal,” write leadership experts Beverly Kaye and Sharon Jordan-Evans. “Research overwhelmingly supports the notion that engaged employees are ‘in the know.’ They want to be trusted with the truth about the business, including its challenges and downturns” (Kaye & Jordan-Evans, 2008).
Cross-Cultural Communication
Culture is a shared set of beliefs and experiences common to people in a specific setting. The setting that creates a culture can be geographic, religious, or professional. As you might guess, the same individual can be a member of many cultures, all of which may play a part in the interpretation of certain words.
The different and often “multicultural” identity of individuals in the same organization can lead to some unexpected and potentially large miscommunications. For example, during the Cold War, Soviet leader Nikita Khruschev told the American delegation at the United Nations, “We will bury you!” His words were interpreted as a threat of nuclear annihilation. However, a more accurate reading of Khruschev’s words would have been, “We will overtake you!” meaning economic superiority. The words, as well as the fear and suspicion that the West had of the Soviet Union at the time, led to the more alarmist and sinister interpretation (Garner, 2007).
Miscommunications can arise between individuals of the same culture as well. Many words in the English language mean different things to different people. Words can be misunderstood if the sender and receiver do not share common experiences. A sender’s words cannot communicate the desired meaning if the receiver has not had some experience with the objects or concepts the words describe (Effective communication, 2004).
It is particularly important to keep this fact in mind when you are communicating with individuals who may not speak English as a first language. For example, when speaking with nonnative English-speaking colleagues, avoid “isn’t it?” questions. This sentence construction does not exist in many other languages and can be confusing for nonnative English speakers. For example, to the question, “You are coming, aren’t you?” they may answer, “Yes” (I am coming) or “No” (I am coming), depending on how they interpret the question (Lifland, 2006).
Cultures also vary in terms of the desired amount of situational context related to interpreting situations. People in very high context cultures put a high value on establishing relationships prior to working with others and tend to take longer to negotiate deals. Examples of high context cultures include China, Korea, and Japan. Conversely, people in low context cultures “get down to business” and tend to negotiate quickly. Examples of low context cultures include Germany, Scandinavia, and the United States (Hall, 1976; Munter, 1993).
Finally, don’t forget the role of nonverbal communication. As we learned in the nonverbal communication section, in the United States, looking someone in the eye when talking is considered a sign of trustworthiness. In China, by contrast, a lack of eye contact conveys respect. A recruiting agency that places English teachers warns prospective teachers that something that works well in one culture can offend in another: “In Western countries, one expects to maintain eye contact when we talk with people. This is a norm we consider basic and essential. This is not the case among the Chinese. On the contrary, because of the more authoritarian nature of the Chinese society, steady eye contact is viewed as inappropriate, especially when subordinates talk with their superiors” (Chinese culture-differences and taboos, 2009).
It’s easy to see how meaning could become confused, depending on how and when these signals are used. When in doubt, experts recommend that you ask someone around you to help you interpret the meaning of different gestures, that you be sensitive, and that you remain observant when dealing with a culture different from your own.
Key Takeaways
Ethical, forthright communication applies inside a company as well as externally with the public. Trying to cover up or ignore problems has been the downfall of many organizational members. There are differences in word meanings and nonverbal communication. For example, in North America, the nonverbal V means victory or peace, but in Australia means something closer to “take this,” which could still fit if your team wins a championship but probably isn’t exactly what was meant.
Exercises
1. How can you assess if you are engaging in ethical communications?
2. What experiences have you had with cross-cultural communications? Please share at least one experience when this has gone well and one when it has not gone well.
3. What advice would you give to someone who will be managing a new division of a company in another culture in terms of communication? | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.5%3A_The_Role_of_Ethics_and_National_Culture.txt |
Because of the economic turmoil that most financial institutions find themselves in today, it might come as a surprise that an individual investment company came in at number 2 on Fortune magazine’s “100 Best Companies to Work For” list in 2010, behind software giant SAS Institute Inc. Edward Jones Investments (a limited partnership company) was originally founded in St. Louis, Missouri, where its headquarters remain today. With more than 10,000 offices across the United States and Canada, they are able to serve nearly 7 million investors. This is the 10th year Edward Jones has made the Best Companies list. In addition, Edward Jones ranked highest with client satisfaction among full-service investment firms, according to an annual survey released by J. D. Power and Associates in 2009. How has Edward Jones maintained this favorable reputation in the eyes of both its employees and its customers?
It begins with the perks offered, including profit sharing and telecommuting. But if you ask the company’s CEO, Tim Kirley, he will likely tell you that it goes beyond the financial incentives, and at the heart of it is the culture of honest communication that he adamantly promotes. Kirley works with senior managers and team members in what makes up an open floor plan and always tries to maintain his approachability. Examples of this include direct communication, letters to staff and video, and Internet-posted talks. In addition, regular meetings are held to celebrate achievements and reinforce the firm’s ethos. Staff surveys are frequently administered and feedback is widely taken into consideration so that the 10,000 employees feel heard and respected.
According to Fortune’s managing editor, Hank Gilman, “The most important considerations for this year’s list were hiring and the ways in which companies are helping their employees weather the recession.” Edward Jones was able to persevere through the trauma of the recent financial crisis with no layoffs and an 8% one-year job growth. While a salary freeze was enacted, profit sharing continued. Kirley insists that the best approach to the recent economic downturn is to remain honest with his employees even when the news he is delivering is not what they want to hear.
Edward Jones was established in 1922 by Edward D. Jones Sr., and long ago, the company recognized the importance of a satisfied workforce and how that has the ability to translate into customer satisfaction and long-term growth. The company’s internal policy of open communication seems to carry over to how advisors value their relationship with individual customers. Investors are most likely to contact their advisor by directly visiting them at a local branch or by picking up the phone and calling them. Edward Jones’s managing partner, Jim Weddle, explains it best himself: “We are able to stay focused on the long-term because we are a partnership and we know who we are and what we do. When you respect the people who work here, you take care of them—not just in the good times, but in the difficult times as well.”
Discussion Questions
1. As an organization, what qualities do you think Edward Jones looks for when hiring new financial advisors?
2. With its success in North America, why do you think Edward Jones has not expanded across the Pacific or Atlantic oceans?
3. How has technology enabled Edward Jones to become more effective at communicating with its employees and customers? Do you think technology can ever hamper effective communication?
4. What types of customer service policies do think Edward Jones has in place?
08.7: Conclusion
In this chapter we have reviewed why effective communication matters to organizations. Communication may break down as a result of many communication barriers that may be attributed to the sender or receiver. Therefore, effective communication requires familiarity with the barriers. Choosing the right channel for communication is also important, because choosing the wrong medium undermines the message. When communication occurs in the cross-cultural context, extra caution is needed, given that different cultures have different norms regarding nonverbal communication, and different words will be interpreted differently across cultures. By being sensitive to the errors outlined in this chapter and adopting active listening skills, you may increase your communication effectiveness. | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.6%3A_Employee_Satisfaction_Translates_to_Success%3A_The_Case_of_Edward_Jones.txt |
Ethical Dilemma
How far would you go to find out who is talking to whom? (Bergstein, 2006; Allison, 2006; Fried, 2006))
In 2006, Hewlett-Packard Development Company LP became embroiled in a controversy over methods used to investigate media leaks from its board. HP Chairperson Patricia Dunn could have simply asked the directors who was the source cited in the story, sought an apology, and gone from there. With some direct face-to-face communication, the story would likely have ended quickly. It did not. “Not only did investigators impersonate board members, employees and journalists to obtain their phone records, but according to multiple reports, they also surveilled an HP director and a reporter for CNet Networks Inc. They sent monitoring spyware in an e-mail to that reporter by concocting a phony tip. They even snooped on the phone records of former CEO and Chairperson Carly Fiorina, who had launched the quest to identify media sources in the first place.” The situation continued to escalate. For example, the New York Times reported that HP consultants even considered planting clerical or custodial workers at CNet and the Wall Street Journal to learn who was leaking information to them. Following this, Patricia Dunn, as well as three executives, left the company. A congressional hearing and several federal investigations later, executives were charged with felonies, and HP paid \$14.5 million to settle civil charges related to the scandal. HP is not the only company to use such methods; recent admissions by the investigation firms involved suggest that the use of ethically questionable investigative tactics by large companies is quite common. “It betrays a type of corporate culture that is so self-obsessed, (that) really considers itself not only above the law, but above, I think, ethical decency, that you have to ask yourself, where did the shame come in?” said Charles King, an analyst with Pund-IT Inc.
Consider this situation from a multiple stakeholder perspective. Imagine you are…
• a CEO faced with leaks regarding your strategic vision. What would you do to determine who was sharing the information? What would be the advantages and disadvantages of these approaches?
• a shareholder with HP stock. What would you want to see done to protect your investment in the company?
• a board member who was spied upon. What would your reaction be to learning that you were investigated?
• an investigator hired by HP. What role do you have to uphold ethical standards?
As several observers have noted, HP spent a lot of time establishing whether or not their activities were technically legal but little time considering whether or not their actions were ethical.
Group Exercise
You Know What I Mean, Right?
Purpose
This exercise illustrates how words we commonly take for granted are not universal in their meaning.
Time
Approximately 20 minutes.
1. Write down the number that comes to mind for each of the following questions. Remember that there are no right or wrong answers—just go with your first response. Do not discuss your answers with anyone in the class until instructed to do so.
• My neighbor just bought an expensive car. How much did it cost? _____
• Several people were in line for the movie. How many people were in line? _____
• The ballot measure was approved overwhelmingly. What percentage of votes did the measure receive? _____
• My boss is an older man. How old is he? _____
• I recently saw an article in the paper. How long ago did I see it? _____
2. Your instructor will summarize the responses from the class.
3. Discuss the following questions (either as a class or in small groups).
• Do you agree that words mean different things to different people?
• How large was the range of responses for each of the questions? Why was this?
• Did this surprise you? Why or why not?
What can you apply from this exercise to make you a better communicator? | textbooks/biz/Management/Organizational_Behavior/08%3A_Communication/08.8%3A_Exercises.txt |
In Durham, North Carolina, Robert Henderson was opening a factory for General Electric Company (NYSE: GE). The goal of the factory was to manufacture the largest commercial jet engine in the world. Henderson’s opportunity was great and so were his challenges. GE hadn’t designed a jet engine from the ground up for over 2 decades. Developing the jet engine project had already cost GE \$1.5 billion. That was a huge sum of money to invest—and an unacceptable sum to lose should things go wrong in the manufacturing stage.
How could one person fulfill such a vital corporate mission? The answer, Henderson decided, was that one person couldn’t fulfill the mission. Even Jack Welch, GE’s CEO at the time, said, “We now know where productivity comes from. It comes from challenged, empowered, excited, rewarded teams of people.”
Empowering factory workers to contribute to GE’s success sounded great in theory. But how to accomplish these goals in real life was a more challenging question. Factory floors, traditionally, are unempowered workplaces where workers are more like cogs in a vast machine than self-determining team members.
In the name of teamwork and profitability, Henderson traveled to other factories looking for places where worker autonomy was high. He implemented his favorite ideas at the factory at Durham. Instead of hiring generic “mechanics,” for example, Henderson hired staffers with FAA (Federal Aviation Administration) mechanic’s licenses. This superior training created a team capable of making vital decisions with minimal oversight, a fact that upped the factory’s output and his workers’ feelings of worth.
Henderson’s “self-managing” factory functioned beautifully. And it looked different, too. Plant manager Jack Fish described Henderson’s radical factory, saying Henderson “didn’t want to see supervisors, he didn’t want to see forklifts running all over the place, he didn’t even want it to look traditional. There’s clutter in most plants, racks of parts and so on. He didn’t want that.”
Henderson also contracted out non-job-related chores, such as bathroom cleaning, that might have been assigned to workers in traditional factories. His insistence that his workers should contribute their highest talents to the team showed how much he valued them. And his team valued their jobs in turn.
Six years later, a Fast Company reporter visiting the plant noted, “GE/Durham team members take such pride in the engines they make that they routinely take brooms in hand to sweep out the beds of the 18-wheelers that transport those engines—just to make sure that no damage occurs in transit.” For his part, Henderson, who remained at GE beyond the project, noted, “I was just constantly amazed by what was accomplished there.”
GE’s bottom line showed the benefits of teamwork, too. From the early 1980s, when Welch became CEO, until 2000, when he retired, GE generated more wealth than any organization in the history of the world.
Discussion Questions
1. Would Robert Henderson’s strategy have worked if GE were manufacturing an entire plane rather than just an engine? What about if they were manufacturing medical equipment?
2. Jack Welch stated that productivity “comes from challenged, empowered, excited, rewarded teams of people.” Do you agree with this statement? What are some other factors of productivity that Welch may have left out?
3. One of the factors that contributed to the success of Henderson’s new factory was the use of FAA-certified mechanics. How could Henderson have accomplished his goal if the industry was suffering a shortage of FAA-certified individuals?
4. As stated at the opening of the GE story, GE had already invested \$1.5 billion in the jet engine project. This implies that GE has a large amount of money at its disposal. Could Henderson have pulled off his revolutionary production facility without the amount of financial capital GE provided? How might his initial planning and development of the factory have differed if he were working for a new, small, start-up organization? | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.1%3A_Teamwork_Takes_to_the_Sky%3A_The_Case_of_General_Electric.txt |
Learning Objectives
1. Understand the difference between informal and formal groups.
2. Learn the stages of group development.
3. Identify examples of the punctuated equilibrium model.
4. Learn how group cohesion affects groups.
5. Learn how social loafing affects groups.
6. Learn how collective efficacy affects groups.
Types of Groups: Formal and Informal
What is a group? A group is a collection of individuals who interact with each other such that one person’s actions have an impact on the others. In organizations, most work is done within groups. How groups function has important implications for organizational productivity. Groups where people get along, feel the desire to contribute to the team, and are capable of coordinating their efforts may have high performance levels, whereas teams characterized by extreme levels of conflict or hostility may demoralize members of the workforce.
In organizations, you may encounter different types of groups. Informal work groups are made up of two or more individuals who are associated with one another in ways not prescribed by the formal organization. For example, a few people in the company who get together to play tennis on the weekend would be considered an informal group. A formal work group is made up of managers, subordinates, or both with close associations among group members that influence the behavior of individuals in the group. We will discuss many different types of formal work groups later on in this chapter.
Forming, Storming, Norming, and Performing
American organizational psychologist Bruce Tuckman presented a robust model in 1965 that is still widely used today. Based on his observations of group behavior in a variety of settings, he proposed a four-stage map of group evolution, also known as the forming-storming-norming-performing model (Tuckman, 1965). Later he enhanced the model by adding a fifth and final stage, the adjourning phase. Interestingly enough, just as an individual moves through developmental stages such as childhood, adolescence, and adulthood, so does a group, although in a much shorter period of time. According to this theory, in order to successfully facilitate a group, the leader needs to move through various leadership styles over time. Generally, this is accomplished by first being more directive, eventually serving as a coach, and later, once the group is able to assume more power and responsibility for itself, shifting to a delegator. While research has not confirmed that this is descriptive of how groups progress, knowing and following these steps can help groups be more effective. For example, groups that do not go through the storming phase early on will often return to this stage toward the end of the group process to address unresolved issues. Another example of the validity of the group development model involves groups that take the time to get to know each other socially in the forming stage. When this occurs, groups tend to handle future challenges better because the individuals have an understanding of each other’s needs.
Forming
In the forming stage, the group comes together for the first time. The members may already know each other or they may be total strangers. In either case, there is a level of formality, some anxiety, and a degree of guardedness as group members are not sure what is going to happen next. “Will I be accepted? What will my role be? Who has the power here?” These are some of the questions participants think about during this stage of group formation. Because of the large amount of uncertainty, members tend to be polite, conflict avoidant, and observant. They are trying to figure out the “rules of the game” without being too vulnerable. At this point, they may also be quite excited and optimistic about the task at hand, perhaps experiencing a level of pride at being chosen to join a particular group. Group members are trying to achieve several goals at this stage, although this may not necessarily be done consciously. First, they are trying to get to know each other. Often this can be accomplished by finding some common ground. Members also begin to explore group boundaries to determine what will be considered acceptable behavior. “Can I interrupt? Can I leave when I feel like it?” This trial phase may also involve testing the appointed leader or seeing if a leader emerges from the group. At this point, group members are also discovering how the group will work in terms of what needs to be done and who will be responsible for each task. This stage is often characterized by abstract discussions about issues to be addressed by the group; those who like to get moving can become impatient with this part of the process. This phase is usually short in duration, perhaps a meeting or two.
Storming
Once group members feel sufficiently safe and included, they tend to enter the storming phase. Participants focus less on keeping their guard up as they shed social facades, becoming more authentic and more argumentative. Group members begin to explore their power and influence, and they often stake out their territory by differentiating themselves from the other group members rather than seeking common ground. Discussions can become heated as participants raise contending points of view and values, or argue over how tasks should be done and who is assigned to them. It is not unusual for group members to become defensive, competitive, or jealous. They may even take sides or begin to form cliques within the group. Questioning and resisting direction from the leader is also quite common. “Why should I have to do this? Who designed this project in the first place? Why do I have to listen to you?” Although little seems to get accomplished at this stage, group members are becoming more authentic as they express their deeper thoughts and feelings. What they are really exploring is “Can I truly be me, have power, and be accepted?” During this chaotic stage, a great deal of creative energy that was previously buried is released and available for use, but it takes skill to move the group from storming to norming. In many cases, the group gets stuck in the storming phase.
OB Toolbox: Avoid Getting Stuck in the Storming Phase!
There are several steps you can take to avoid getting stuck in the storming phase of group development. Try the following if you feel the group process you are involved in is not progressing:
• Normalize conflict. Let members know this is a natural phase in the group-formation process.
• Be inclusive. Continue to make all members feel included and invite all views into the room. Mention how diverse ideas and opinions help foster creativity and innovation.
• Make sure everyone is heard. Facilitate heated discussions and help participants understand each other.
• Support all group members. This is especially important for those who feel more insecure.
• Remain positive. This is a key point to remember about the group’s ability to accomplish its goal.
• Don’t rush the group’s development. Remember that working through the storming stage can take several meetings.
Once group members discover that they can be authentic and that the group is capable of handling differences without dissolving, they are ready to enter the next stage, norming.
Norming
“We survived!” is the common sentiment at the norming stage. Group members often feel elated at this point, and they are much more committed to each other and the group’s goal. Feeling energized by knowing they can handle the “tough stuff,” group members are now ready to get to work. Finding themselves more cohesive and cooperative, participants find it easy to establish their own ground rules (or norms) and define their operating procedures and goals. The group tends to make big decisions, while subgroups or individuals handle the smaller decisions. Hopefully, at this point the group is more open and respectful toward each other, and members ask each other for both help and feedback. They may even begin to form friendships and share more personal information with each other. At this point, the leader should become more of a facilitator by stepping back and letting the group assume more responsibility for its goal. Since the group’s energy is running high, this is an ideal time to host a social or team-building event.
Performing
Galvanized by a sense of shared vision and a feeling of unity, the group is ready to go into high gear. Members are more interdependent, individuality and differences are respected, and group members feel themselves to be part of a greater entity. At the performing stage, participants are not only getting the work done, but they also pay greater attention to how they are doing it. They ask questions like, “Do our operating procedures best support productivity and quality assurance? Do we have suitable means for addressing differences that arise so we can preempt destructive conflicts? Are we relating to and communicating with each other in ways that enhance group dynamics and help us achieve our goals? How can I further develop as a person to become more effective?” By now, the group has matured, becoming more competent, autonomous, and insightful. Group leaders can finally move into coaching roles and help members grow in skill and leadership.
Adjourning
Just as groups form, so do they end. For example, many groups or teams formed in a business context are project oriented and therefore are temporary in nature. Alternatively, a working group may dissolve due to an organizational restructuring. Just as when we graduate from school or leave home for the first time, these endings can be bittersweet, with group members feeling a combination of victory, grief, and insecurity about what is coming next. For those who like routine and bond closely with fellow group members, this transition can be particularly challenging. Group leaders and members alike should be sensitive to handling these endings respectfully and compassionately. An ideal way to close a group is to set aside time to debrief (“How did it all go? What did we learn?”), acknowledge each other, and celebrate a job well done.
The Punctuated-Equilibrium Model
As you may have noted, the five-stage model we have just reviewed is a linear process. According to the model, a group progresses to the performing stage, at which point it finds itself in an ongoing, smooth-sailing situation until the group dissolves. In reality, subsequent researchers, most notably Joy H. Karriker, have found that the life of a group is much more dynamic and cyclical in nature (Karriker, 2005). For example, a group may operate in the performing stage for several months. Then, because of a disruption, such as a competing emerging technology that changes the rules of the game or the introduction of a new CEO, the group may move back into the storming phase before returning to performing. Ideally, any regression in the linear group progression will ultimately result in a higher level of functioning. Proponents of this cyclical model draw from behavioral scientist Connie Gersick’s study of punctuated equilibrium (Gersick, 1991).
The concept of punctuated equilibrium was first proposed in 1972 by paleontologists Niles Eldredge and Stephen Jay Gould, who both believed that evolution occurred in rapid, radical spurts rather than gradually over time. Identifying numerous examples of this pattern in social behavior, Gersick found that the concept applied to organizational change. She proposed that groups remain fairly static, maintaining a certain equilibrium for long periods of time. Change during these periods is incremental, largely due to the resistance to change that arises when systems take root and processes become institutionalized. In this model, revolutionary change occurs in brief, punctuated bursts, generally catalyzed by a crisis or problem that breaks through the systemic inertia and shakes up the deep organizational structures in place. At this point, the organization or group has the opportunity to learn and create new structures that are better aligned with current realities. Whether the group does this is not guaranteed. In sum, in Gersick’s model, groups can repeatedly cycle through the storming and performing stages, with revolutionary change taking place during short transitional windows. For organizations and groups who understand that disruption, conflict, and chaos are inevitable in the life of a social system, these disruptions represent opportunities for innovation and creativity.
Cohesion
Cohesion can be thought of as a kind of social glue. It refers to the degree of camaraderie within the group. Cohesive groups are those in which members are attached to each other and act as one unit. Generally speaking, the more cohesive a group is, the more productive it will be and the more rewarding the experience will be for the group’s members (Beal et al., 2003; Evans & Dion, 1991). Members of cohesive groups tend to have the following characteristics: They have a collective identity; they experience a moral bond and a desire to remain part of the group; they share a sense of purpose, working together on a meaningful task or cause; and they establish a structured pattern of communication.
The fundamental factors affecting group cohesion include the following:
• Similarity. The more similar group members are in terms of age, sex, education, skills, attitudes, values, and beliefs, the more likely the group will bond.
• Stability. The longer a group stays together, the more cohesive it becomes.
• Size. Smaller groups tend to have higher levels of cohesion.
• Support. When group members receive coaching and are encouraged to support their fellow team members, group identity strengthens.
• Satisfaction. Cohesion is correlated with how pleased group members are with each other’s performance, behavior, and conformity to group norms.
As you might imagine, there are many benefits in creating a cohesive group. Members are generally more personally satisfied and feel greater self-confidence and self-esteem when in a group where they feel they belong. For many, membership in such a group can be a buffer against stress, which can improve mental and physical well-being. Because members are invested in the group and its work, they are more likely to regularly attend and actively participate in the group, taking more responsibility for the group’s functioning. In addition, members can draw on the strength of the group to persevere through challenging situations that might otherwise be too hard to tackle alone.
OB Toolbox: Steps to Creating and Maintaining a Cohesive Team
• Align the group with the greater organization. Establish common objectives in which members can get involved.
• Let members have choices in setting their own goals. Include them in decision making at the organizational level.
• Define clear roles. Demonstrate how each person’s contribution furthers the group goal—everyone is responsible for a special piece of the puzzle.
• Situate group members in close proximity to each other. This builds familiarity.
• Give frequent praise. Both individuals and groups benefit from praise. Also encourage them to praise each other. This builds individual self-confidence, reaffirms positive behavior, and creates an overall positive atmosphere.
• Treat all members with dignity and respect. This demonstrates that there are no favorites and everyone is valued.
• Celebrate differences. This highlights each individual’s contribution while also making diversity a norm.
• Establish common rituals. Thursday morning coffee, monthly potlucks—these reaffirm group identity and create shared experiences.
Can a Group Have Too Much Cohesion?
Keep in mind that groups can have too much cohesion. Because members can come to value belonging over all else, an internal pressure to conform may arise, causing some members to modify their behavior to adhere to group norms. Members may become conflict avoidant, focusing more on trying to please each other so as not to be ostracized. In some cases, members might censor themselves to maintain the party line. As such, there is a superficial sense of harmony and less diversity of thought. Having less tolerance for deviants, who threaten the group’s static identity, cohesive groups will often excommunicate members who dare to disagree. Members attempting to make a change may even be criticized or undermined by other members, who perceive this as a threat to the status quo. The painful possibility of being marginalized can keep many members in line with the majority.
The more strongly members identify with the group, the easier it is to see outsiders as inferior, or enemies in extreme cases, which can lead to increased insularity. This form of prejudice can have a downward spiral effect. Not only is the group not getting corrective feedback from within its own confines, it is also closing itself off from input and a cross-fertilization of ideas from the outside. In such an environment, groups can easily adopt extreme ideas that will not be challenged. Denial increases as problems are ignored and failures are blamed on external factors. With limited, often biased, information and no internal or external opposition, groups like these can make disastrous decisions. Groupthink is a group pressure phenomenon that increases the risk of the group making flawed decisions by allowing reductions in mental efficiency, reality testing, and moral judgment. Groupthink is most common in highly cohesive groups (Janis, 1972).
Cohesive groups can go awry in much milder ways. For example, group members can value their social interactions so much that they have fun together but spend little time on accomplishing their assigned task. Or a group’s goal may begin to diverge from the larger organization’s goal and those trying to uphold the organization’s goal may be ostracized (e.g., teasing the class “brain” for doing well in school).
In addition, research shows that cohesion leads to acceptance of group norms (Goodman, Ravlin, & Schminke, 1987). Groups with high task commitment do well, but imagine a group where the norms are to work as little as possible? As you might imagine, these groups get little accomplished and can actually work together against the organization’s goals.
Figure 9.4
Low task commitmentHigh task commitmentLow group cohesionLow performancePerformance ranges depending on a number of factorsHigh group cohesionLow performanceHigh performance
Groups with high cohesion and high task commitment tend to be the most effective.
Social Loafing
Social loafing refers to the tendency of individuals to put in less effort when working in a group context. This phenomenon, also known as the Ringelmann effect, was first noted by French agricultural engineer Max Ringelmann in 1913. In one study, he had people pull on a rope individually and in groups. He found that as the number of people pulling increased, the group’s total pulling force was less than the individual efforts had been when measured alone (Karau & Williams, 1993).
Why do people work less hard when they are working with other people? Observations show that as the size of the group grows, this effect becomes larger as well (Karau & Williams, 1993). The social loafing tendency is less a matter of being lazy and more a matter of perceiving that one will receive neither one’s fair share of rewards if the group is successful nor blame if the group fails. Rationales for this behavior include, “My own effort will have little effect on the outcome,” “Others aren’t pulling their weight, so why should I?” or “I don’t have much to contribute, but no one will notice anyway.” This is a consistent effect across a great number of group tasks and countries (Gabrenya, Latane, & Wang, 1983; Harkins & Petty, 1982; Taylor & Faust, 1952; Ziller, 1957). Research also shows that perceptions of fairness are related to less social loafing (Price, Harrison, & Gavin, 2006). Therefore, teams that are deemed as more fair should also see less social loafing.
OB Toolbox: Tips for Preventing Social Loafing in Your Group
When designing a group project, here are some considerations to keep in mind:
• Carefully choose the number of individuals you need to get the task done. The likelihood of social loafing increases as group size increases (especially if the group consists of 10 or more people), because it is easier for people to feel unneeded or inadequate, and it is easier for them to “hide” in a larger group.
• Clearly define each member’s tasks in front of the entire group. If you assign a task to the entire group, social loafing is more likely. For example, instead of stating, “By Monday, let’s find several articles on the topic of stress,” you can set the goal of “By Monday, each of us will be responsible for finding five articles on the topic of stress.” When individuals have specific goals, they become more accountable for their performance.
• Design and communicate to the entire group a system for evaluating each person’s contribution. You may have a midterm feedback session in which each member gives feedback to every other member. This would increase the sense of accountability individuals have. You may even want to discuss the principle of social loafing in order to discourage it.
• Build a cohesive group. When group members develop strong relational bonds, they are more committed to each other and the success of the group, and they are therefore more likely to pull their own weight.
• Assign tasks that are highly engaging and inherently rewarding. Design challenging, unique, and varied activities that will have a significant impact on the individuals themselves, the organization, or the external environment. For example, one group member may be responsible for crafting a new incentive-pay system through which employees can direct some of their bonus to their favorite nonprofits.
• Make sure individuals feel that they are needed. If the group ignores a member’s contributions because these contributions do not meet the group’s performance standards, members will feel discouraged and are unlikely to contribute in the future. Make sure that everyone feels included and needed by the group.
Collective Efficacy
Collective efficacy refers to a group’s perception of its ability to successfully perform well (Bandura, 1997). Collective efficacy is influenced by a number of factors, including watching others (“that group did it and we’re better than them”), verbal persuasion (“we can do this”), and how a person feels (“this is a good group”). Research shows that a group’s collective efficacy is related to its performance (Gully et al., 2002; Porter, 2005; Tasa, Taggar, & Seijts, 2007). In addition, this relationship is higher when task interdependence (the degree an individual’s task is linked to someone else’s work) is high rather than low.
Key Takeaways
Groups may be either formal or informal. Groups go through developmental stages much like individuals do. The forming-storming-norming-performing-adjourning model is useful in prescribing stages that groups should pay attention to as they develop. The punctuated-equilibrium model of group development argues that groups often move forward during bursts of change after long periods without change. Groups that are similar, stable, small, supportive, and satisfied tend to be more cohesive than groups that are not. Cohesion can help support group performance if the group values task completion. Too much cohesion can also be a concern for groups. Social loafing increases as groups become larger. When collective efficacy is high, groups tend to perform better.
Exercises
1. If you believe the punctuated-equilibrium model is true about groups, how can you use this knowledge to help your own group?
2. Think about the most cohesive group you have ever been in. How did it compare in terms of similarity, stability, size, support, and satisfaction?
3. Why do you think social loafing occurs within groups?
4. What can be done to combat social loafing?
5. Have you seen instances of collective efficacy helping or hurting a team? Please explain your answer. | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.2%3A_Group_Dynamics.txt |
Learning Objectives
1. Understand the difference between groups and teams.
2. Understand the factors leading to the rise in the use of teams.
3. Understand how tasks and roles affect teams.
4. Identify different types of teams.
5. Identify team design considerations.
Effective teams give companies a significant competitive advantage. In a high-functioning team, the sum is truly greater than the parts. Team members not only benefit from each other’s diverse experiences and perspectives but also stimulate each other’s creativity. Plus, for many people, working in a team can be more fun than working alone.
Differences Between Groups and Teams
Organizations consist of groups of people. What exactly is the difference between a group and a team? A group is a collection of individuals. Within an organization, groups might consist of project-related groups such as a product group or division, or they can encompass an entire store or branch of a company. The performance of a group consists of the inputs of the group minus any process losses, such as the quality of a product, ramp-up time to production, or the sales for a given month. Process loss is any aspect of group interaction that inhibits group functioning.
Why do we say group instead of team? A collection of people is not a team, though they may learn to function in that way. A team is a cohesive coalition of people working together to achieve mutual goals. Being on a team does not equate to a total suppression of personal agendas, but it does require a commitment to the vision and involves each individual working toward accomplishing the team’s objective. Teams differ from other types of groups in that members are focused on a joint goal or product, such as a presentation, discussing a topic, writing a report, creating a new design or prototype, or winning a team Olympic medal. Moreover, teams also tend to be defined by their relatively smaller size. For example, according to one definition, “A team is a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they are mutually accountable” (Katzenbach & Smith, 1993).
The purpose of assembling a team is to accomplish larger, more complex goals than what would be possible for an individual working alone or even the simple sum of several individuals’ working independently. Teamwork is also needed in cases in which multiple skills are tapped or where buy-in is required from several individuals. Teams can, but do not always, provide improved performance. Working together to further a team agenda seems to increase mutual cooperation between what are often competing factions. The aim and purpose of a team is to perform, get results, and achieve victory in the workplace. The best managers are those who can gather together a group of individuals and mold them into an effective team.
The key properties of a true team include collaborative action in which, along with a common goal, teams have collaborative tasks. Conversely, in a group, individuals are responsible only for their own area. They also share the rewards of strong team performance with their compensation based on shared outcomes. Compensation of individuals must be based primarily on a shared outcome, not individual performance. Members are also willing to sacrifice for the common good, in which individuals give up scarce resources for the common good instead of competing for those resources. For example, in soccer and basketball teams, the individuals actively help each other, forgo their own chance to score by passing the ball, and win or lose collectively as a team.
The early 1990s saw a dramatic rise in the use of teams within organizations, along with dramatic results such as the Miller Brewing Company increasing productivity 30% in the plants that used self-directed teams compared to those that used the traditional organization. This same method allowed Texas Instruments Inc. in Malaysia to reduce defects from 100 parts per million to 20 parts per million. In addition, Westinghouse Electric Corporation reduced its cycle time from 12 to 2 weeks and Harris Corporation was able to achieve an 18% reduction in costs (Welins, Byham, & Dixon, 1994). The team method has served countless companies over the years through both quantifiable improvements and more subtle individual worker-related benefits.
Companies like Schneider Electric, maker of Square D circuit breakers, switched to self-directed teams and found that overtime on machines such as the punch-press dropped 70%. Productivity increased because the set-up operators themselves were able to manipulate the work in much more effective ways than a supervisor could dictate (Moskal, 1988). In 2001, clothing retailer Chico’s Retailer Services Inc. was looking to grow its business. The company hired Scott Edmonds as president, and 2 years later revenues had almost doubled from \$378 million to \$760 million. By 2006, revenues were \$1.6 billion and Chico’s had 9 years of double-digit same-store sales growth. What did Edmonds do to get these results? He created a horizontal organization with high-performance teams that were empowered with decision-making ability and accountability for results.
The use of teams also began to increase because advances in technology have resulted in more complex systems that require contributions from multiple people across the organization. Overall, team-based organizations have more motivation and involvement, and teams can often accomplish more than individuals (Cannon-Bowers & Salas, 2001). It is no wonder organizations are relying on teams more and more.
It is important to keep in mind that teams are not a cure-all for organizations. To determine whether a team is needed, organizations should consider whether a variety of knowledge, skills, and abilities are needed, whether ideas and feedback are needed from different groups within the organization, how interdependent the tasks are, if wide cooperation is needed to get things done, and whether the organization would benefit from shared goals (Rees, 1997). If the answer to these questions is yes, then a team or teams might make sense. For example, research shows that the more team members perceive that outcomes are interdependent, the better they share information and the better they perform (De Dreu, 2007). Let’s take a closer look at the different team characteristics, types of teams companies use, and how to design effective teams.
Team Tasks
Teams differ in terms of the tasks they are trying to accomplish. Richard Hackman identified three major classes of tasks: production tasks, idea-generation tasks, and problem-solving tasks (Hackman, 1976). Production tasks include actually making something, such as a building, product, or a marketing plan. Idea-generation tasks deal with creative tasks, such as brainstorming a new direction or creating a new process. Problem-solving tasks refer to coming up with plans for actions and making decisions. For example, a team may be charged with coming up with a new marketing slogan, which is an idea-generation task, while another team might be asked to manage an entire line of products, including making decisions about products to produce, managing the production of the product lines, marketing them, and staffing their division. The second team has all three types of tasks to accomplish at different points in time.
Another key to understanding how tasks are related to teams is to understand their level of task interdependence. Task interdependence refers to the degree that team members are dependent on one another to get information, support, or materials from other team members to be effective. Research shows that self-managing teams are most effective when their tasks are highly interdependent (Langfred, 2005; Liden, Wayne, & Bradway, 1997). There are three types of task interdependence. Pooled interdependence exists when team members may work independently and simply combine their efforts to create the team’s output. For example, when students meet to divide the section of a research paper and one person simply puts all the sections together to create one paper, the team is using the pooled interdependence model. However, they might decide that it makes more sense to start with one person writing the introduction of their research paper, then the second person reads what was written by the first person and, drawing from this section, writes about the findings within the paper. Using the findings section, the third person writes the conclusions. If one person’s output becomes another person’s input, the team would be experiencing sequential interdependence. And finally, if the student team decided that in order to create a top-notch research paper they should work together on each phase of the research paper so that their best ideas would be captured at each stage, they would be undertaking reciprocal interdependence. Another important type of interdependence that is not specific to the task itself is outcome interdependence, in which the rewards that an individual receives depend on the performance of others.
Team Roles
Robert Sutton points out that the success of U.S. Airways Flight 1549 to land with no fatalities when it crashed into the Hudson River in New York City is a good example of an effective work team (Sutton, 2009). For example, reports show that Captain Chesley Sullenberger took over flying from copilot Jeff Skiles, who had handled the takeoff, but had less experience in the Airbus (Caruso, 2009). This is consistent with the research findings that effective teams divide up tasks so the best people are in the best positions.
Studies show that individuals who are more aware of team roles and the behavior required for each role perform better than individuals who do not. This fact remains true for both student project teams as well as work teams, even after accounting for intelligence and personality (Mumford et al., 2008). Early research found that teams tend to have two categories of roles consisting of those related to the tasks at hand and those related to the team’s functioning. For example, teams that focus only on production at all costs may be successful in the short run, but if they pay no attention to how team members feel about working 70 hours a week, they are likely to experience high turnover.
Based on decades of research on teams, 10 key roles have been identified (Bales, 1950; Benne & SHeats, 1948; Belbin, 1993). Team leadership is effective when leaders are able to adapt the roles they are contributing or asking others to contribute to fit what the team needs given its stage and the tasks at hand (Kozlowski et al., 1996; Kozlowski et al., 1996). Ineffective leaders might always engage in the same task role behaviors, when what they really need is to focus on social roles, put disagreements aside, and get back to work. While these behaviors can be effective from time to time, if the team doesn’t modify its role behaviors as things change, they most likely will not be effective.
Task Roles
Five roles make up the task portion of the typology. The contractor role includes behaviors that serve to organize the team’s work, including creating team timelines, production schedules, and task sequencing. The creator role deals more with changes in the team’s task process structure. For example, reframing the team goals and looking at the context of goals would fall under this role. The contributor role is important, because it brings information and expertise to the team. This role is characterized by sharing knowledge and training with those who have less expertise to strengthen the team. Research shows that teams with highly intelligent members and evenly distributed workloads are more effective than those with uneven workloads (Ellis et al., 2003). The completer role is also important, as it transforms ideas into action. Behaviors associated with this role include following up on tasks, such as gathering needed background information or summarizing the team’s ideas into reports. Finally, the critic role includes “devil’s advocate” behaviors that go against the assumptions being made by the team.
Social Roles
Social roles serve to keep the team operating effectively. When the social roles are filled, team members feel more cohesive, and the group is less prone to suffer process losses or biases such as social loafing, groupthink, or a lack of participation from all members. Three roles fall under the umbrella of social roles. The cooperator role includes supporting those with expertise toward the team’s goals. This is a proactive role. The communicator role includes behaviors that are targeted at collaboration, such as practicing good listening skills and appropriately using humor to diffuse tense situations. Having a good communicator helps the team to feel more open to sharing ideas. The calibrator role is an important one that serves to keep the team on track in terms of suggesting any needed changes to the team’s process. This role includes initiating discussions about potential team problems such as power struggles or other tensions. Similarly, this role may involve settling disagreements or pointing out what is working and what is not in terms of team process.
Boundary-Spanning Roles
The final two goals are related to activities outside the team that help to connect the team to the larger organization (Anacona, 1990; Anacona, 1992; Druskat & Wheeler, 2003). Teams that engage in a greater level of boundary-spanning behaviors increase their team effectiveness (Marrone, Tesluk, & Carson, 2007). The consul role includes gathering information from the larger organization and informing those within the organization about team activities, goals, and successes. Often the consul role is filled by team managers or leaders. The coordinator role includes interfacing with others within the organization so that the team’s efforts are in line with other individuals and teams within the organization.
Types of Teams
There are several types of temporary teams. In fact, one-third of all teams in the United States are temporary in nature (Gordon, 1992). An example of a temporary team is a task force that is asked to address a specific issue or problem until it is resolved. Other teams may be temporary or ongoing, such as product development teams. In addition, matrix organizations have cross-functional teams in which individuals from different parts of the organization staff the team, which may be temporary or long-standing in nature.
Virtual teams are teams in which members are not located in the same physical place. They may be in different cities, states, or even different countries. Some virtual teams are formed by necessity, such as to take advantage of lower labor costs in different countries with upwards of 8.4 million individuals working virtually in at least one team (Ahuja & Galvin, 2003). Often, virtual teams are formed to take advantage of distributed expertise or time—the needed experts may be living in different cities. A company that sells products around the world, for example, may need technologists who can solve customer problems at any hour of the day or night. It may be difficult to find the caliber of people needed who would be willing to work at 2:00 a.m. on a Saturday, for example. So companies organize virtual technical support teams. BakBone Software Inc., for example, has a 13-member technical support team. All members have degrees in computer science and are divided among offices in California, Maryland, England, and Tokyo. BakBone believes it has been able to hire stronger candidates by drawing from a diverse talent pool and hiring in different geographic regions rather than being limited to one region or time zone (Alexander, 2000).
Despite potential benefits, virtual teams present special management challenges. Managers often think that they have to see team members working in order to believe that work is being done. Because this kind of oversight is impossible in virtual team situations, it is important to devise evaluation schemes that focus on deliverables. Are team members delivering what they said they would? In self-managed teams, are team members producing the results the team decided to measure itself on?
Another special challenge of virtual teams is building trust. Will team members deliver results just as they would in face-to-face teams? Can members trust each other to do what they said they would do? Companies often invest in bringing a virtual team together at least once so members can get to know each other and build trust (Kirkman et al., 2002). In manager-led virtual teams, managers should be held accountable for their team’s results and evaluated on their ability as a team leader.
Finally, communication is especially important in virtual teams, be it through e-mail, phone calls, conference calls, or project management tools that help organize work. If individuals in a virtual team are not fully engaged and tend to avoid conflict, team performance can suffer (Montoya-Weiss, Massey, & Song, 2001). A wiki is an Internet-based method for many people to collaborate and contribute to a document or discussion. Essentially, the document remains available for team members to access and amend at any time. The most famous example is Wikipedia, which is gaining traction as a way to structure project work globally and get information into the hands of those that need it. Empowered organizations put information into everyone’s hands (Kirkman & Rosen, 2000). Research shows that empowered teams are more effective than those that are not empowered (Mathieu, Gilson, & Ruddy, 2006).
Top management teams are appointed by the chief executive officer (CEO) and, ideally, reflect the skills and areas that the CEO considers vital for the company. There are no formal rules about top management team design or structure. The top team often includes representatives from functional areas, such as finance, human resources, and marketing, or key geographic areas, such as Europe, Asia, and North America. Depending on the company, other areas may be represented, such as legal counsel or the company’s chief technologist. Typical top management team member titles include chief operating officer (COO), chief financial officer (CFO), chief marketing officer (CMO), or chief technology officer (CTO). Because CEOs spend an increasing amount of time outside their companies (e.g., with suppliers, customers, and regulators), the role of the COO has taken on a much higher level of internal operating responsibilities. In most American companies, the CEO also serves as chairman of the board and can have the additional title of president. Companies have top teams to help set the company’s vision and strategic direction. Top teams make decisions on new markets, expansions, acquisitions, or divestitures. The top team is also important for its symbolic role: How the top team behaves dictates the organization’s culture and priorities by allocating resources and by modeling behaviors that will likely be emulated lower down in the organization. Importantly, the top team is most effective when team composition is diverse—functionally and demographically—and when it can truly operate as a team, not just as a group of individual executives (Carpenter, Geletkanycz, & Sanders, 2004).
Chapter 1 “Organizational Behavior” began with the quote that the people make the place, and this holds especially true for members of the top management team. In a study of 15 firms that demonstrated excellence, defined as sustained performance over a 15-year period, leadership researcher Jim Collins noted that those firms attended to people first and strategy second. “They got the right people on the bus, moved the wrong people off the bus, ushered the right people to the right seats—then they figured out where to drive it” (Collins, 2001). The best teams plan for turnover. Succession planning is the process of identifying future members of the top management team. Effective succession planning allows the best top teams to achieve high performance today and create a legacy of high performance for the future.
Team Leadership and Autonomy
Teams also vary in terms of how they are led. Traditional manager-led teams are teams in which the manager serves as the team leader. The manager assigns work to other team members. These types of teams are the most natural to form, with managers having the power to hire and fire team members and being held accountable for the team’s results.
Self-managed teams are a new form of team that rose in popularity with the Total Quality Movement in the 1980s. Unlike manager-led teams, these teams manage themselves and do not report directly to a supervisor. Instead, team members select their own leader, and they may even take turns in the leadership role. Self-managed teams also have the power to select new team members. As a whole, the team shares responsibility for a significant task, such as assembly of an entire car. The task is ongoing rather than a temporary task such as a charity fund drive for a given year.
Organizations began to use self-managed teams as a way to reduce hierarchy by allowing team members to complete tasks and solve problems on their own. The benefits of self-managed teams extend much further. Research has shown that employees in self-managed teams have higher job satisfaction, increased self-esteem, and grow more on the job. The benefits to the organization include increased productivity, increased flexibility, and lower turnover. Self-managed teams can be found at all levels of the organization, and they bring particular benefits to lower level employees by giving them a sense of ownership of their jobs that they may not otherwise have. The increased satisfaction can also reduce absenteeism, because employees do not want to let their team members down.
Typical team goals are improving quality, reducing costs, and meeting deadlines. Teams also have a “stretch” goal—a goal that is difficult to reach but important to the business unit. Many teams also have special project goals. Texas Instruments (TI), a company that makes semiconductors, used self-directed teams to make improvements in work processes (Welins, Byham, & Dixon, 1994). Teams were allowed to set their own goals in conjunction with managers and other teams. TI also added an individual component to the typical team compensation system. This individual component rewarded team members for learning new skills that added to their knowledge. These “knowledge blocks” include topics such as leadership, administration, and problem solving. The team decides what additional skills people might need to help the team meet its objectives. Team members would then take classes and/or otherwise demonstrate their proficiency in that new skill on the job in order to get certification for mastery of the skill. Individuals could then be evaluated based on their contribution to the team and how they are building skills to support the team.
Self-managed teams are empowered teams, which means that they have the responsibility as well as the authority to achieve their goals. Team members have the power to control tasks and processes and to make decisions. Research shows that self-managed teams may be at a higher risk of suffering from negative outcomes due to conflict, so it is important that they are supported with training to help them deal with conflict effectively (Alper, Tjosvold, & Law, 2000; Langfred, 2007). Self-managed teams may still have a leader who helps them coordinate with the larger organization (Morgeson, 2005). For a product team composed of engineering, production, and marketing employees, being empowered means that the team can decide everything about a product’s appearance, production, and cost without having to get permission or sign-off from higher management. As a result, empowered teams can more effectively meet tighter deadlines. At AT&T Inc., for example, the model-4200 phone team cut development time in half while lowering costs and improving quality by using the empowered team approach (Parker, 1994). A special form of self-managed teams are self-directed teams, which also determine who will lead them with no external oversight.
Figure 9.8
Traditionally managed teams Self-managed teams Self-directed team
• Leader resides outside the team
• Potential for low autonomy
• The team manages itself but still has a team leader
• Potential for low, medium, or high autonomy
• The team makes all decisions internally about leadership and how work is done
• Potential for high autonomy
Team leadership is a major determinant of how autonomous a team can be.
Designing Effective Teams
Designing an effective team means making decisions about team composition (who should be on the team), team size (the optimal number of people on the team), and team diversity (should team members be of similar background, such as all engineers, or of different backgrounds). Answering these questions will depend, to a large extent, on the type of task that the team will be performing. Teams can be charged with a variety of tasks, from problem solving to generating creative and innovative ideas to managing the daily operations of a manufacturing plant.
Who Are the Best Individuals for the Team?
A key consideration when forming a team is to ensure that all the team members are qualified for the roles they will fill for the team. This process often entails understanding the knowledge, skills, and abilities (KSAs) of team members as well as the personality traits needed before starting the selection process (Humphrey et al., 2007). When talking to potential team members, be sure to communicate the job requirements and norms of the team. To the degree that this is not possible, such as when already existing groups are utilized, think of ways to train the team members as much as possible to help ensure success. In addition to task knowledge, research has shown that individuals who understand the concepts covered in this chapter and in this book, such as conflict resolution, motivation, planning, and leadership, actually perform better on their jobs. This finding holds for a variety of jobs, including being an officer in the U.S. Air Force, an employee at a pulp mill, or a team member at a box manufacturing plant (Hirschfeld et al., 2006; Stevens & Campion, 1999).
How Large Should My Team Be?
Interestingly, research has shown that regardless of team size, the most active team member speaks 43% of the time. The difference is that the team member who participates the least in a 3-person team is still active 23% of the time versus only 3% in a 10-person team (McGrath, 1984; Solomon, 1960). When deciding team size, a good rule of thumb is a size of two to 20 members. Research shows that groups with more than 20 members have less cooperation (Gratton & Erickson, 2007). The majority of teams have 10 members or less, because the larger the team, the harder it is to coordinate and interact as a team. With fewer individuals, team members are more able to work through differences and agree on a common plan of action. They have a clearer understanding of others’ roles and greater accountability to fulfill their roles (remember social loafing?). Some tasks, however, require larger team sizes because of the need for diverse skills or because of the complexity of the task. In those cases, the best solution is to create subteams in which one member from each subteam is a member of a larger coordinating team. The relationship between team size and performance seems to greatly depend on the level of task interdependence, with some studies finding larger teams outproducing smaller teams and other studies finding just the opposite (Campion, Medsker, & Higgs, 1993; Magjuka & Baldwin, 1991; Vinokur-Kaplan, 1995). The bottom line is that team size should be matched to the goals of the team.
How Diverse Should My Team Be?
Team composition and team diversity often go hand in hand. Teams whose members have complementary skills are often more successful, because members can see each other’s blind spots. One team member’s strengths can compensate for another’s weaknesses (Jackson, Joshi, & Erhardt, 2003; van Knippenberg, De Dreu, & Homan, 2004). For example, consider the challenge that companies face when trying to forecast future sales of a given product. Workers who are educated as forecasters have the analytic skills needed for forecasting, but these workers often lack critical information about customers. Salespeople, in contrast, regularly communicate with customers, which means they’re in the know about upcoming customer decisions. But salespeople often lack the analytic skills, discipline, or desire to enter this knowledge into spreadsheets and software that will help a company forecast future sales. Putting forecasters and salespeople together on a team tasked with determining the most accurate product forecast each quarter makes the best use of each member’s skills and expertise.
Diversity in team composition can help teams come up with more creative and effective solutions. Research shows that teams that believe in the value of diversity performed better than teams that do not (Homan et al., 2007). The more diverse a team is in terms of expertise, gender, age, and background, the more ability the group has to avoid the problems of groupthink (Surowiecki, 2005). For example, different educational levels for team members were related to more creativity in R&D teams and faster time to market for new products (Eisenhardt & Tabrizi, 1995; Shin & Zhou, 2007). Members will be more inclined to make different kinds of mistakes, which means that they’ll be able to catch and correct those mistakes.
Key Takeaway
Groups and teams are not the same thing. Organizations have moved toward the extensive use of teams within organizations. The tasks a team is charged with accomplishing affect how they perform. In general, task interdependence works well for self-managing teams. Team roles consist of task, social, and boundary-spanning roles. Different types of teams include task forces, product development teams, cross-functional teams, and top management teams. Team leadership and autonomy varies, depending on whether the team is traditionally managed, self-managed, or self-directed. Teams are most effective when they comprise members with the right skills for the tasks at hand, are not too large, and contain diversity across team members.
Exercises
1. Think of the last team you were in. Did the task you were asked to do affect the team? Why or why not?
2. Which of the 10 work roles do you normally take in a team? How difficult or easy do you think it would be for you to take on a different role?
3. Have you ever worked in a virtual team? If so, what were the challenges and advantages of working virtually?
4. How large do you think teams should be and why? | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.3%3A_Understanding_Team_Design_Characteristics.txt |
Learning Objectives
1. Understand how to create team norms, roles, and expectations.
2. Identify keys to running effective team meetings.
Team Norms
Norms are shared expectations about how things operate within a group or team. Just as new employees learn to understand and share the assumptions, norms, and values that are part of an organization’s culture, they also must learn the norms of their immediate team. This understanding helps teams be more cohesive and perform better. Norms are a powerful way of ensuring coordination within a team. For example, is it acceptable to be late to meetings? How prepared are you supposed to be at the meetings? Is it acceptable to criticize someone else’s work? These norms are shaped early during the life of a team and affect whether the team is productive, cohesive, and successful.
Square Wheels Exercise and Group Discussion
Sometimes it can be challenging to start a conversation around team ground rules and performance. The following exercise can be used to get individuals talking about what works and what doesn’t work in teams they’ve worked in and how your team can be designed most effectively.
Figure 9.10
What is happening in this picture represents how many organizations seem to operate. On a piece of paper have everyone in your team write on this form and identify as many of the key issues and opportunities for improvement as you can. Following this, have a conversation around what this illustration might mean for your own team.
Team Contracts
Scientific research, as well as experience working with thousands of teams, show that teams that are able to articulate and agree on established ground rules, goals, and roles and develop a team contract around these standards are better equipped to face challenges that may arise within the team (Katzenback & Smith, 1993; Porter & Lilly, 1996). Having a team contract does not necessarily mean that the team will be successful, but it can serve as a road map when the team veers off course. The following questions can help to create a meaningful team contract:
• Team Values and Goals
• What are our shared team values?
• What is our team goal?
• Team Roles and Leadership
• Who does what within this team? (Who takes notes at the meeting? Who sets the agenda? Who assigns tasks? Who runs the meetings?)
• Does the team have a formal leader?
• If so, what are his or her roles?
• Team Decision Making
• How are minor decisions made?
• How are major decisions made?
• Team Communication
• Who do you contact if you cannot make a meeting?
• Who communicates with whom?
• How often will the team meet?
• Team Performance
• What constitutes good team performance?
• What if a team member tries hard but does not seem to be producing quality work?
• How will poor attendance/work quality be dealt with?
Team Meetings
Anyone who has been involved in a team knows it involves team meetings. While few individuals relish the idea of team meetings, they serve an important function in terms of information sharing and decision making. They also serve an important social function and can help to build team cohesion and a task function in terms of coordination. Unfortunately, we’ve all attended meetings that were a waste of time and little happened that couldn’t have been accomplished by reading an e-mail in 5 minutes. To run effective meetings, it helps to think of meetings in terms of three sequential steps (Haynes, 1997).
Before the Meeting
Much of the effectiveness of a meeting is determined before the team gathers. There are three key things you can do to ensure the team members get the most out of their meeting.
Is a meeting needed? Leaders should do a number of things prior to the meeting to help make it effective. The first thing is to be sure a meeting is even needed. If the meeting is primarily informational in nature, ask yourself if it is imperative that the group fully understands the information and if future decisions will be built upon this information. If so, a meeting may be needed. If not, perhaps simply communicating with everyone in a written format will save valuable time. Similarly, decision-making meetings make the most sense when the problem is complex and important, there are questions of fairness to be resolved, and commitment is needed moving forward.
Create and distribute an agenda. An agenda is important in helping to inform those invited about the purpose of the meeting. It also helps organize the flow of the meeting and keep the team on track.
Send a reminder prior to the meeting. Reminding everyone of the purpose, time, and location of the meeting helps everyone prepare themselves. Anyone who has attended a team meeting only to find there is no reason to meet because members haven’t completed their agreed-upon tasks knows that, as a result, team performance or morale can be negatively impacted. Follow up to make sure everyone is prepared. As a team member, inform others immediately if you will not be ready with your tasks so that they can determine whether the meeting should be postponed.
During the Meeting
During the meeting there are several things you can do to make sure the team starts and keeps on track.
Start the meeting on time. Waiting for members who are running late only punishes those who are on time and reinforces the idea that it’s OK to be late. Starting the meeting promptly sends an important signal that you are respectful of everyone’s time.
Follow the meeting agenda. Veering off agenda communicates to members that the agenda is not important. It also makes it difficult for others to keep track of where you are in the meeting.
Figure 9.11
Manage group dynamics for full participation. As you’ve seen in this chapter, a number of group dynamics can limit a team’s functioning. Be on the lookout for full participation and engagement from all team members, as well as any potential problems such as social loafing, group conflict, or groupthink.
Summarize the meeting with action items. Be sure to clarify team member roles moving forward. If individuals’ tasks are not clear, chances are that role confusion will arise later. There should be clear notes from the meeting regarding who is responsible for each action item and the time frames associated with next steps.
End the meeting on time. This is vitality important, as it shows that you respect everyone’s time and are organized. If another meeting is needed to follow up, schedule it later, but don’t let the meeting run over.
After the Meeting
Follow up on action items. During the meeting, participants probably generated several action items. It is likely that you’ll need to follow up on the action items of others.
Key Takeaways
Much like group development, team socialization takes place over the life of the team. The stages move from evaluation to commitment to role transition. Team norms are important for the team process and help to establish who is doing what for the team and how the team will function. Creating a team contract helps with this process. Keys to address in a team contract are team values and goals, team roles and leadership, team decision making, team communication expectations, and how team performance is characterized. Team meetings can help a team coordinate and share information. Effective meetings include preparation, management during the meeting, and follow-up on action items generated in the meeting.
Exercises
1. Have the norms for most of the teams you have belonged to been formal or informal? How do you think that has affected these teams?
2. Have you ever been involved in creating a team contract? Explain how you think that may have influenced how the team functioned.
3. Should the person requesting a meeting always prepare a meeting agenda? Why or why not?
4. Do you think conducting team meetings standing up is a good idea? Why or why not? | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.4%3A_Management_of_Teams.txt |
Learning Objectives
1. Recognize common barriers to effective teams.
2. Learn how to address some of the most common barriers and maintain group effectiveness.
Problems can arise in any team that will hurt the team’s effectiveness. Here are some common problems faced by teams and how to deal with them.
Challenges of Knowing Where to Begin
At the start of a project, team members may be at a loss as to how to begin. Also, they may have reached the end of a task but are unable to move on to the next step or put the task to rest. Floundering often results from a lack of clear goals, so the remedy is to go back to the team’s mission or plan and make sure that it is clear to everyone. Team leaders can help move the team past floundering by asking, “What is holding us up? Do we need more data? Do we need assurances or support? Does anyone feel that we’ve missed something important?”
Dominating Team Members
Some team members may have a dominating personality that encroaches on the participation or air time of others. This overbearing behavior may hurt the team morale or the momentum of the team. A good way to overcome this barrier is to design a team evaluation to include a “balance of participation” in meetings. Knowing that fair and equitable participation by all will affect the team’s performance evaluation will help team members limit domination by one member and encourage participation from all members, even shy or reluctant ones. Team members can say, “We’ve heard from Mary on this issue, so let’s hear from others about their ideas.”
Poor Performance of Team Members
Research shows that teams deal with poor performers in different ways, depending on members’ perceptions of the reasons for poor performance (Jackson & LePine, 2003). In situations in which the poor performer is perceived as lacking in ability, teams are more likely to train the member. When members perceive the individual as simply being low on motivation, they are more likely to try to motivate or reject the poor performer. Keep in mind that justice is an important part of keeping individuals working hard for the team (Colquitt, 2004). Be sure that poor performers are dealt with in a way that is deemed fair by all the team members.
Poorly Managed Team Conflict
Disagreements among team members are normal and should be expected. Healthy teams raise issues and discuss differing points of view, because that will ultimately help the team reach stronger, more well-reasoned decisions. Unfortunately, sometimes disagreements arise owing to personality issues or feuds that predated a team’s formation. Ideally, teams should be designed to avoid bringing adversaries together on the same team. If that is not possible, the next best solution is to have adversaries discuss their issues privately, so the team’s progress is not disrupted. The team leader or other team member can offer to facilitate the discussion. One way to make a discussion between conflicting parties meaningful is to form a behavioral contract between the two parties. That is, if one party agrees to do X, then the other will agree to do Y (Scholtes, 1988).
Key Takeaways
Barriers to effective teams include the challenges of knowing where to begin, dominating team members, the poor performance of team members, and poorly managed team conflict.
Exercises
1. How could some of the things discussed in “Understanding Team Design Characteristics” help to avoid the common barriers to team effectiveness?
2. Have you ever been involved in a team where dominating team members hurt the team’s performance? Share what happened and how the team dealt with this. | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.5%3A_Barriers_to_Effective_Teams.txt |
Learning Objectives
1. Consider the role of ethics and teams.
2. Consider teams around the globe.
Ethics and Teams
The use of teams, especially self-managing teams, has been seen as a way to overcome the negatives of bureaucracy and hierarchical control. Giving teams the authority and responsibility to make their own decisions seems to empower individuals and the team alike by distributing power more equitably. Interestingly, research by James Barker shows that sometimes replacing a hierarchy with self-managing teams can actually increase control over individual workers and constrain members more powerfully than a hierarchical system (Barker, 1993). Studying a small manufacturing company that switched to self-managing teams, Barker interviewed team members and found an unexpected result: Team members felt more closely watched under self-managing teams than under the old system. Ronald, a technical worker, said, “I don’t have to sit there and look for the boss to be around; and if the boss is not around, I can sit there and talk to my neighbor or do what I want. Now the whole team is around me and the whole team is observing what I’m doing.” Ronald said that while his old supervisor might tolerate someone coming in a few minutes late, his team had adopted a “no tolerance” policy on tardiness, and members carefully monitored their own behaviors.
Team pressure can harm a company as well. Consider a sales team whose motto of “sales above all” hurts the ability of the company to gain loyal customers (DiModica, 2008). The sales team feels pressure to lie to customers to make sales. Their misrepresentations and unethical behavior gets them the quick sale but curtails their ability to get future sales from repeat customers.
Teams Around the Globe
People from different cultures often have different beliefs, norms, and ways of viewing the world. These kinds of country-by-country differences have been studied by the GLOBE Project, in which 170 researchers collected and analyzed data on cultural values, practices, and leadership attributes from over 17,000 managers in 62 societal cultures (Javidan et al., 2006). GLOBE identified nine dimensions of culture. One of the identified dimensions is a measure called collectivism. Collectivism focuses on the degree to which the society reinforces collective over individual achievement. Collectivist societies value interpersonal relationships over individual achievement. Societies that rank high on collectivism show more close ties between individuals. The United States and Australia rank low on the collectivism dimension, whereas countries such as Mexico and Taiwan rank high on that dimension. High collectivism manifests itself in close, long-term commitment to the member group. In a collectivist culture, loyalty is paramount and overrides most other societal rules and regulations. The society fosters strong relationships in which everyone takes responsibility for fellow members of their group.
Harrison, McKinnon, Wu, and Chow explored the cultural factors that may influence how well employees adapt to fluid work groups (Harrison et al., 2000). The researchers studied groups in Taiwan and Australia. Taiwan ranks high on collectivism, while Australia ranks low. The results: Australian managers reported that employees adapted more readily to working in different teams, working under different leaders, and taking on leadership of project teams than the middle managers in Taiwan reported. The two samples were matched in terms of the functional background of the managers, size and industries of the firms, and local firms. These additional controls provided greater confidence in attributing the observed differences to cultural values.
In other research, researchers analyzed the evaluation of team member behavior by part-time MBA students in the United States and Mexico (Gomez, Kirkman, & Shapiro, 2000). The United States ranks low on collectivism while Mexico ranks high. They found that collectivism (measured at the individual level) had a positive relationship to the evaluation of a teammate. Furthermore, the evaluation was higher for in-group members among the Mexican respondents than among the U.S. respondents.
Power distance is another culture dimension. People in high power distance countries expect unequal power distribution and greater stratification, whether that stratification is economic, social, or political. An individual in a position of authority in these countries expects (and receives) obedience. Decision making is hierarchical, with limited participation and communication. Countries with a low power distance rating, such as Australia, value cooperative interaction across power levels. Individuals stress equality and opportunity for everyone.
Another study by researchers compared national differences in teamwork metaphors used by employees in six multinational corporations in four countries: the United States, France, Puerto Rico, and the Philippines (Gibson & Zellmer-Bruhn, 2001). They identified five metaphors: military, family, sports, associates, and community. Results showed national variation in the use of the five metaphors. Specifically, countries high in individualism (United States and France) tended to use the sports or associates metaphors, while countries high in power distance (Philippines and Puerto Rico) tended to use the military or family metaphors. Further, power distance and collectivistic values were negatively associated with the use of teamwork metaphors that emphasized clear roles and broad scope. These results suggest that the meaning of teamwork may differ across cultures and, in turn, imply potential differences in team norms and team-member behaviors.
Key Takeaways
Self-managing teams shift the role of control from management to the team itself. This can be highly effective, but if team members put too much pressure on one another, problems can arise. It is also important to make sure teams work toward organizational goals as well as specific team-level goals. Teams around the globe vary in terms of collectivism and power distance. These differences can affect how teams operate in countries around the world.
Exercises
1. Have you ever felt pressure from team members to do something you didn’t want to do? If so, how did you handle it?
2. In what ways do you think culture can affect a team? | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.6%3A_The_Role_of_Ethics_and_National_Culture.txt |
Figure 9.13
Teamwork is important at New Seasons Market Inc. (a privately held company). This is a relatively small chain of upscale grocery stores in the Pacific Northwest that are built on the ideas of local identity, quality products, and employee freedom to meet the needs of customers. Formed in 1999 by a group of people with similar goals, New Seasons Market operates nine grocery stores in various Portland area neighborhoods. Though the look and products of the stores are consistent, each store is predominantly staffed by individuals that live in the local neighborhood, enabling each store to know the needs of its customers and create an internal identity all its own.
One of the ways each store creates that identity is through Green Teams. These teams are typically composed of up to 13 paid employees from various departments. Teams join together to address social and environmental issues of sustainability within each store and its surrounding community. The idea for Green Teams originated from a group of employees in one store that assembled to tackle “green” issues in their store. Corporate managers (who also have their own Green Team) agreed that it was such a good idea that now every store is required to have a Green Team. Each team meets monthly and reports to the company sustainability coordinator. Team leadership structures vary from store to store, with some Green Teams having a single chairperson who serves the team for more than 1 year, while other teams regularly rotate leaders or even elect two cochairs to lead the cause. Teams act as liaisons between their department and the Green Team, help educate staff, and make recommendations to management. Store Green Teams also initiate community service projects and help maintain the waste diversion program.
Through this flexibility, each Green Team has accomplished a variety of projects in their store and local community, including wilderness and wetland cleanup, painting and weeding at a local elementary school, and helping plant gardens for low-income families. One suburban store even developed an intricate car pool program for employees to encourage a reduction in drive-alone car trips. As long as the Green Team’s focus is on their local store and community, they are granted freedom and support from corporate management. Safety and Sustainability Manager Heather Schmidt explains, “If there were too many rules, it could hold back creativity and passion. Having a balance is the key.”
Participation in Green Team initiatives has developed a friendly competition between stores and rewards employees who participate with incentives. For example, every time an employee joins in the staff car pool, his or her name is entered into a monthly drawing for a gift card. These values of support and encouragement are consistent throughout New Seasons company culture, where employees are valued for their personal contributions. As their Web site explains, “To be a truly great company means that we continually evolve to meet the changing needs of our customers, our staff and the world around us.” With these values, New Seasons Market has created “a workplace that truly believes that taking good care of our co-workers, our customers and our environment is what drives the success of our business.”
Discussion Questions
1. In what ways has New Seasons Market followed the steps for creating and maintaining a cohesive team?
2. What types of teams are the Green Teams?
3. How can we tell if the Green Teams are successful or not?
4. What types of problems might the Green Teams encounter?
5. How would you recommend Green Teams resolve potential conflicts?
09.8: Conclusion
Research shows that group formation is a beneficial but highly dynamic process. The life cycle of teams can often closely resemble various stages in individual development. In order to maintain group effectiveness, individuals should be aware of key stages as well as methods to avoid becoming stuck along the way. Good leadership skills combined with knowledge of group development will help any group perform at its peak level. Teams, though similar, are different from groups in both scope and composition. Groups are often small collections of individuals with various skill sets that combine to address a specific issue, whereas teams can be much larger and often consist of people with overlapping abilities working toward a common goal.
Many issues that can plague groups can also hinder the efficacy of a team. Problems such as social loafing or groupthink can be avoided by paying careful attention to team member differences and providing clear definitions for roles, expectancy, measurement, and rewards. Because many tasks in today’s world have become so complex, groups and teams have become an essential component of an organization’s success. The success of the team/group rests within the successful management of its members and making sure all aspects of work are fair for each member.
09.9: Exercises
Ethical Dilemma
Imagine you work at an ad agency and your team is charged with coming up with the name for BeautyBees’s latest perfume. You have been with the company for 6 months. The branding team has been brainstorming for the last 2 hours, filling up pages and pages of the flipchart with innovative, imaginative names. Feeling daunted by how loudly, quickly, and assertively branding team members are shouting out suggestions, you decide to sit this one out, even though you have some ideas. You are uncomfortable shouting over everyone else and you reason that the group would discount your input anyway. Plus, everyone else is generating so many good names that the group is bound to succeed regardless of your input.
What Do You Think?
1. Is your lack of participation ethical? Why or why not?
2. What are the implications of speaking up or not speaking up?
3. Would you change your answer if you’d been with the company for 10 years instead of 6 months? | textbooks/biz/Management/Organizational_Behavior/09%3A_Managing_Groups_and_Teams/09.7%3A_Green_Teams_at_Work%3A_The_Case_of_New_Seasons_Market.txt |
Thumbnail: pixabay.com/photos/people-three-people-office-business-2270641/
10: Conflict and Negotiations
In 1997, a company called PointCast Network Inc. was the hottest start-up in Silicon Valley. Its founder and CEO, Christopher Hassett, was “the most famous guy on the Internet,” said Hassett’s former attorney, Allen Morgan. Hassett was named CNET’s newsmaker of the year—an honor previously bestowed on giants such as Bill Gates of Microsoft and Larry Ellison of Oracle. The “push technology” that PointCast pioneered was making headlines as well as being featured on the cover of Wired as “The Radical Future of the Media beyond the Web.”
All the attention around PointCast motivated one of the world’s largest communications companies—Rupert Murdoch’s News Corporation—to make them an offer of \$450 million. Negotiations were intense and lasted weeks. With media speculation that PointCast—a company with almost no revenue—deserved to be valued at \$750 million, some people say Hassett started believing the hype and, with the support of his board, asked for more money. “People involved in the company thought they’d be the next Netscape. They hung out for more,” Murdoch said. News Corporation instead lowered its initial offer to \$400 million but added incentive clauses that brought the offer close to the original \$450 million if PointCast met its financial projections.
PointCast also rejected that offer, and News Corporation walked away from the bargaining table. The timing couldn’t have been worse for PointCast, as “push” technology became old news thanks to the maturing of alternatives such as Yahoo! By the time PointCast decided to go public in 1998, the company was valued at half of News Corporation’s last offer. Worse, the process of filing an initial public offering (IPO) requires the company to disclose all potential dangers to investors. PointCast’s disclosures—such as news that customers had left because of poor performance—scared off so many investors that PointCast ultimately withdrew its IPO. By that time Hassett had been forced out by the board, but the company never fully recovered. In the end, PointCast was acquired in 1999 by Idealab for \$7 million. In this case, stalled negotiations cost the firm a steep price of \$443 million.
Referring to the missed opportunity, an industry expert said, “It may go down as one of the biggest mistakes in Internet history.” According to Steve Lippin, writing in the Wall Street Journal, “Merger professionals point to these euphemistically called ‘social issues’—ego and corporate pride, that is—as among the most difficult aspects of negotiating multibillion-dollar mergers these days. Although financial issues can be vexing too, these social issues can be deal-breakers.”
In a similar and more recent situation in 2008, Yahoo! CEO Jerry Yang was ousted by the board of directors following failed deals with Microsoft and Google. Yang’s behavior during negotiations indicated that he wasn’t interested in bargaining as much as playing “hard to get.” He “kept saying we should get more money, we should get more money, and [he was] not realizing how precarious their position was,” says high-tech analyst Rob Enderle. In other words, even deals that look great financially can fall apart if participants fail to pay attention to organizational behavior issues such as perception, groupthink, and power and influence.
Discussion Questions
1. Considering the amount of buzz surrounding Hassett’s new technology and the impact previous, similar advancements have made, was Hassett necessarily foolish for not taking a quick offer?
2. Is the PointCast situation a case of pride clouding someone’s judgment or more accurately a representation of the rapidly changing nature of computer-related business? In other words, if Hassett’s advancement had been in an industry that is not known for such rapid changes, would he have been considered foolish if he hadn’t held out for more money?
3. This case focuses on how foolish Hassett was for not accepting Rupert Murdoch’s first or second offer. However, think of the buyout offer from the perspective of Rupert Murdoch. If the buyout had gone through, News Corporation would likely have lost hundreds of millions of dollars on the deal, and the company was effectively spared massive losses by the merger falling through. What could Murdoch have done differently to protect against such risky mergers in the future? | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.1%3A_Negotiation_Failure%3A_The_Case_of_the_PointCast.txt |
Learning Objectives
1. Define conflict.
2. Understand different types of conflict.
3. Address whether conflict is always negative.
Let’s take a closer look at these social issues such as conflict to understand how they can derail companies and individuals alike—and what to do to prevent such consequences from happening to you. In this chapter, you’ll see that managing conflict and engaging in effective negotiation are both key for effective organizational behavior within organizations as well as daily life. Conflicts range from minor annoyances to outright violence. For example, one million workers (18,000 people per week) are assaulted on the job in the United States alone (National Institute for Occupational Safety and Health, 1997). One of the major ways to avoid conflicts escalating to these levels is through understanding the causes of conflict and developing methods for managing potential negative outcomes. Negotiation is one of the most effective ways to decrease conflict and will also be examined in depth in this chapter.
Similar to how conflicts can range from minor to major, negotiations vary in terms of their consequences. A high-stakes negotiation at work might mean the difference between a company’s survival and its demise. On the other end of the spectrum, we deal with minor negotiations on a regular basis, such as negotiating with a coworker about which movie to see. Maybe you make a concession: “OK, we’ll watch what you want but I get to pick where we eat.” Maybe you hold tough: “I don’t want to watch anything except a comedy.” Perhaps you even look for a third option that would mutually satisfy both parties. Regardless of the level, conflict management and negotiation tactics are important skills that can be learned. First, let’s take a deeper look at conflict.
Conflict is a process that involves people disagreeing. Researchers have noted that conflict is like the common cold. Everyone knows what it is, but understanding its causes and how to treat it is much more challenging (Wall & Callister, 1995). As we noted earlier, conflict can range from minor disagreements to workplace violence. In addition, there are three types of conflict that can arise within organizations. Let’s take a look at each of them in turn.
Intrapersonal Conflict
Intrapersonal conflict arises within a person. For example, when you’re uncertain about what is expected or wanted, or you have a sense of being inadequate to perform a task, you are experiencing intrapersonal conflict. Intrapersonal conflict can arise because of differences in roles. A manager may want to oversee a subordinate’s work, believing that such oversight is a necessary part of the job. The subordinate, on the other hand, may consider such extensive oversight to be micromanagement or evidence of a lack of trust. Role conflict, another type of intrapersonal conflict, includes having two different job descriptions that seem mutually exclusive. This type of conflict can arise if you’re the head of one team but also a member of another team. A third type of intrapersonal conflict involves role ambiguity. Perhaps you’ve been given the task of finding a trainer for a company’s business writing training program. You may feel unsure about what kind of person to hire—a well-known but expensive trainer or a local, unknown but low-priced trainer. If you haven’t been given guidelines about what’s expected, you may be wrestling with several options.
Interpersonal Conflict
Interpersonal conflict is among individuals such as coworkers, a manager and an employee, or CEOs and their staff. For example, in 2006 the CEO of Airbus S.A.S., Christian Streiff, resigned because of his conflict with the board of directors over issues such as how to restructure the company (Michaels, Power, & Gauthier-Villars, 2006). This example may reflect a well-known trend among CEOs. According to one estimate, 31.9% of CEOs resigned from their jobs because they had conflict with the board of directors (Whitehouse, 2008). CEOs of competing companies might also have public conflicts. In 1997, Michael Dell was asked what he would do about Apple Computer. “What would I do? I’d shut it down and give the money back to shareholders.” Ten years later, Steve Jobs, the CEO of Apple Inc., indicated he had clearly held a grudge as he shot back at Dell in an e-mail to his employees, stating, “Team, it turned out Michael Dell wasn’t perfect in predicting the future. Based on today’s stock market close, Apple is worth more than Dell” (Haddad, 2001; Markoff, 2006). In part, their long-time disagreements stem from their differences. Interpersonal conflict often arises because of competition, as the Dell/Apple example shows, or because of personality or values differences. For example, one person’s style may be to “go with the gut” on decisions, while another person wants to make decisions based on facts. Those differences will lead to conflict if the individuals reach different conclusions. Many companies suffer because of interpersonal conflicts. Keeping conflicts centered around ideas rather than individual differences is important in avoiding a conflict escalation.
Intergroup Conflict
Intergroup conflict is conflict that takes place among different groups. Types of groups may include different departments or divisions in a company, and employee union and management, or competing companies that supply the same customers. Departments may conflict over budget allocations; unions and management may disagree over work rules; suppliers may conflict with each other on the quality of parts. Merging two groups together can lead to friction between the groups—especially if there are scarce resources to be divided among the group. For example, in what has been called “the most difficult and hard-fought labor issue in an airline merger,” Canadian Air and Air Canada pilots were locked into years of personal and legal conflict when the two airlines’ seniority lists were combined following the merger (Stoykewych, 2003). Seniority is a valuable and scarce resource for pilots, because it helps to determine who flies the newest and biggest planes, who receives the best flight routes, and who is paid the most. In response to the loss of seniority, former Canadian Air pilots picketed at shareholder meetings, threatened to call in sick, and had ongoing conflicts with pilots from Air Canada. The conflicts with pilots continue to this day. The history of past conflicts among organizations and employees makes new deals challenging.
Is Conflict Always Bad?
Most people are uncomfortable with conflict, but is conflict always bad? Conflict can be dysfunctional if it paralyzes an organization, leads to less than optimal performance, or, in the worst case, leads to workplace violence. Surprisingly, a moderate amount of conflict can actually be a healthy (and necessary) part of organizational life (Amason, 1996). To understand how to get to a positive level of conflict, we need to understand its root causes, consequences, and tools to help manage it. The impact of too much or too little conflict can disrupt performance. If conflict is too low, then performance is low. If conflict is too high, then performance also tends to be low. The goal is to hold conflict levels in the middle of this range. While it might seem strange to want a particular level of conflict, a medium level of task-related conflict is often viewed as optimal, because it represents a situation in which a healthy debate of ideas takes place.
Task conflict can be good in certain circumstances, such as in the early stages of decision making, because it stimulates creativity. However, it can interfere with complex tasks in the long run (De Dreu & Weingart, 2003). Personal conflicts, such as personal attacks, are never healthy because they cause stress and distress, which undermines performance. The worst cases of personal conflicts can lead to workplace bullying. At Intel Corporation, all new employees go through a 4-hour training module to learn “constructive confrontation.” The content of the training program includes dealing with others in a positive manner, using facts rather than opinion to persuade others, and focusing on the problem at hand rather than the people involved. “We don’t spend time being defensive or taking things personally. We cut through all of that and get to the issues,” notes a trainer from Intel University (Dahle, 2001). The success of the training remains unclear, but the presence of this program indicates that Intel understands the potentially positive effect of a moderate level of conflict. Research focusing on effective teams across time found that they were characterized by low but increasing levels of process conflict (how do we get things done?), low levels of relationship conflict with a rise toward the end of the project (personal disagreements among team members), and moderate levels of task conflict in the middle of the task time line (Jehn & Mannix, 2001).
Key Takeaways
Conflict can be a problem for individuals and organizations. There are several different types of conflict, including intrapersonal, interpersonal, and intergroup conflict. Moderate conflict can be a healthy and necessary part of organizational life.
Exercises
1. What are the types of conflicts that individuals may have at work? Which type have you experienced the most?
2. What are some primary causes of conflict at work?
3. Explain how miscommunication might be related to a conflict at work. | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.2%3A_Understanding_Conflict.txt |
Learning Objectives
1. Understand different causes of conflict.
2. Understand jobs at risk for conflict.
3. Learn the outcomes of conflict.
There are many potential root causes of conflict at work. We’ll go over six of them here. Remember, anything that leads to a disagreement can be a cause of conflict. Although conflict is common to organizations, some organizations have more than others.
Organizational Structure
Conflict tends to take different forms, depending upon the organizational structure (Jaffe, 2000). For example, if a company uses a matrix
structure as its organizational form, it will have decisional conflict built in, because the structure specifies that each manager report to two bosses. For example, global company ABB Inc. is organized around a matrix structure based on the dimensions of country and industry. This structure can lead to confusion as the company is divided geographically into 1,200 different units and by industry into 50 different units (Taylor, 1991).
Limited Resources
Resources such as money, time, and equipment are often scarce. Competition among people or departments for limited resources is a frequent cause for conflict. For example, cutting-edge laptops and gadgets such as a BlackBerry or iPhone are expensive resources that may be allocated to employees on a need-to-have basis in some companies. When a group of employees have access to such resources while others do not, conflict may arise among employees or between employees and management. While technical employees may feel that these devices are crucial to their productivity, employees with customer contact such as sales representatives may make the point that these devices are important for them to make a good impression to clients. Because important resources are often limited, this is one source of conflict many companies have to live with.
Task Interdependence
Another cause of conflict is task interdependence; that is, when accomplishment of your goal requires reliance on others to perform their tasks. For example, if you’re tasked with creating advertising for your product, you’re dependent on the creative team to design the words and layout, the photographer or videographer to create the visuals, the media buyer to purchase the advertising space, and so on. The completion of your goal (airing or publishing your ad) is dependent on others.
Incompatible Goals
Sometimes conflict arises when two parties think that their goals are mutually exclusive. Within an organization, incompatible goals often arise because of the different ways department managers are compensated. For example, a sales manager’s bonus may be tied to how many sales are made for the company. As a result, the individual might be tempted to offer customers “freebies” such as expedited delivery in order to make the sale. In contrast, a transportation manager’s compensation may be based on how much money the company saves on transit. In this case, the goal might be to eliminate expedited delivery because it adds expense. The two will butt heads until the company resolves the conflict by changing the compensation scheme. For example, if the company assigns the bonus based on profitability of a sale, not just the dollar amount, the cost of the expediting would be subtracted from the value of the sale. It might still make sense to expedite the order if the sale is large enough, in which case both parties would support it. On the other hand, if the expediting negates the value of the sale, neither party would be in favor of the added expense.
Personality Differences
Personality differences among coworkers are common. By understanding some fundamental differences among the way people think and act, we can better understand how others see the world. Knowing that these differences are natural and normal lets us anticipate and mitigate interpersonal conflict—it’s often not about “you” but simply a different way of seeing and behaving. For example, Type A individuals have been found to have more conflicts with their coworkers than Type B individuals (Baron, 1989).
Communication Problems
Sometimes conflict arises simply out of a small, unintentional communication problem, such as lost e-mails or dealing with people who don’t return phone calls. Giving feedback is also a case in which the best intentions can quickly escalate into a conflict situation. When communicating, be sure to focus on behavior and its effects, not on the person. For example, say that Jeff always arrives late to all your meetings. You think he has a bad attitude, but you don’t really know what Jeff’s attitude is. You do know, however, the effect that Jeff’s behavior has on you. You could say, “Jeff, when you come late to the meeting, I feel like my time is wasted.” Jeff can’t argue with that statement, because it is a fact of the impact of his behavior on you. It’s indisputable, because it is your reality. What Jeff can say is that he did not intend such an effect, and then you can have a discussion regarding the behavior.
In another example, the Hershey Company was engaged in talks behind closed doors with Cadbury Schweppes about a possible merger. No information about this deal was shared with Hershey’s major stakeholder, the Hershey Trust. When Robert Vowler, CEO of the Hershey Trust, discovered that talks were underway without anyone consulting the Trust, tensions between the major stakeholders began to rise. As Hershey’s continued to underperform, steps were taken in what is now called the “Sunday night massacre,” in which several board members were forced to resign and Richard Lenny, Hershey’s then current CEO, retired (Jargon, Karnitschnig, & Lublin, 2008). This example shows how a lack of communication can lead to an escalation of conflict. Time will tell what the lasting effects of this conflict will be, but in the short term, effective communication will be the key. Now, let’s turn our attention to the outcomes of conflict.
Outcomes of Conflict
One of the most common outcomes of conflict is that it upsets parties in the short run (Bergman & Volkema, 1989). However, conflict can have both positive and negative outcomes. On the positive side, conflict can result in greater creativity or better decisions. For example, as a result of a disagreement over a policy, a manager may learn from an employee that newer technologies help solve problems in an unanticipated new way.
Positive outcomes include the following:
• Consideration of a broader range of ideas, resulting in a better, stronger idea
• Surfacing of assumptions that may be inaccurate
• Increased participation and creativity
• Clarification of individual views that build learning
On the other hand, conflict can be dysfunctional if it is excessive or involves personal attacks or underhanded tactics.
Examples of negative outcomes include the following:
• Increased stress and anxiety among individuals, which decreases productivity and satisfaction
• Feelings of being defeated and demeaned, which lowers individuals’ morale and may increase turnover
• A climate of mistrust, which hinders the teamwork and cooperation necessary to get work done
Is Your Job at Risk for Workplace Violence?
You may be at increased risk for workplace violence if your job involves the following:
• Dealing With People
• Caring for others either emotionally or physically, such as at a nursing home.
• Interacting with frustrated customers, such as with retail sales.
• Supervising others, such as being a manager.
• Denying requests others make of you, such as with customer service.
• Being in High-Risk Situations
• Dealing with valuables or exchanging money, such as in banking.
• Handling weapons, such as in law enforcement.
• Working with drugs, alcohol, or those under the influence of them, such as bartending.
• Working nights or weekends, such as gas station attendants.
Given these negative outcomes, how can conflict be managed so that it does not become dysfunctional or even dangerous? We’ll explore this in the next section.
Key Takeaways
Conflict has many causes, including organizational structures, limitations on resources, task interdependence, goal incompatibility, personality differences, and communication challenges. Outcomes of well-managed conflict include increased participation and creativity, while negatives of poorly managed conflict include increased stress and anxiety. Jobs that deal with people are at higher risk for conflict.
Exercises
1. What are some primary causes of conflict at work?
2. What are the outcomes of workplace conflict? Which types of job are the most at risk for workplace violence? Why do you think that is?
3. What outcomes have you observed from conflict? | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.3%3A_Causes_and_Outcomes_of_Conflict.txt |
Learning Objectives
1. Understand different ways to manage conflict.
2. Understand your own communication style.
3. Learn to stimulate conflict if needed.
There are a number of different ways of managing organizational conflict, which are highlighted in this section. Conflict management refers to resolving disagreements effectively.
Change the Structure
When structure is a cause of dysfunctional conflict, structural change can be the solution to resolving the conflict. Consider this situation. Vanessa, the lead engineer in charge of new product development, has submitted her components list to Tom, the procurement officer, for purchasing. Tom, as usual, has rejected two of the key components, refusing the expenditure on the purchase. Vanessa is furious, saying, “Every time I give you a request to buy a new part, you fight me on it. Why can’t you ever trust my judgment and honor my request?”
Tom counters, “You’re always choosing the newest, leading-edge parts—they’re hard to find and expensive to purchase. I’m supposed to keep costs down, and your requests always break my budget.”
“But when you don’t order the parts we need for a new product, you delay the whole project,” Vanessa says.
Sharon, the business unit’s vice president, hits upon a structural solution by stating, “From now on, both of you will be evaluated on the total cost and the overall performance of the product. You need to work together to keep component costs low while minimizing quality issues later on.” If the conflict is at an intergroup level, such as between two departments, a structural solution could be to have those two departments report to the same executive, who could align their previously incompatible goals.
Change the Composition of the Team
If the conflict is between team members, the easiest solution may be to change the composition of the team, separating the personalities that were at odds. In instances in which conflict is attributed to the widely different styles, values, and preferences of a small number of members, replacing some of these members may resolve the problem. If that’s not possible because everyone’s skills are needed on the team and substitutes aren’t available, consider a physical layout solution. Research has shown that when known antagonists are seated directly across from each other, the amount of conflict increases. However, when they are seated side by side, the conflict tends to decrease (Gordon et al., 1990).
Create a Common Opposing Force
Group conflict within an organization can be mitigated by focusing attention on a common enemy such as the competition. For example, two software groups may be vying against each other for marketing dollars, each wanting to maximize advertising money devoted to their product. But, by focusing attention on a competitor company, the groups may decide to work together to enhance the marketing effectiveness for the company as a whole. The “enemy” need not be another company—it could be a concept, such as a recession, that unites previously warring departments to save jobs during a downturn.
Consider Majority Rule
Sometimes a group conflict can be resolved through majority rule. That is, group members take a vote, and the idea with the most votes is the one that gets implemented. The majority rule approach can work if the participants feel that the procedure is fair. It is important to keep in mind that this strategy will become ineffective if used repeatedly with the same members typically winning. Moreover, the approach should be used sparingly. It should follow a healthy discussion of the issues and points of contention, not be a substitute for that discussion.
Problem Solve
Problem solving is a common approach to resolving conflict. In problem-solving mode, the individuals or groups in conflict are asked to focus on the problem, not on each other, and to uncover the root cause of the problem. This approach recognizes the rarity of one side being completely right and the other being completely wrong.
Conflict-Handling Styles
Individuals vary in the way that they handle conflicts. There are five common styles of handling conflicts. These styles can be mapped onto a grid that shows the varying degree of cooperation and assertiveness each style entails. Let us look at each in turn.
Avoidance
The avoiding style is uncooperative and unassertive. People exhibiting this style seek to avoid conflict altogether by denying that it is there. They are prone to postponing any decisions in which a conflict may arise. People using this style may say things such as, “I don’t really care if we work this out,” or “I don’t think there’s any problem. I feel fine about how things are.” Conflict avoidance may be habitual to some people because of personality traits such as the need for affiliation. While conflict avoidance may not be a significant problem if the issue at hand is trivial, it becomes a problem when individuals avoid confronting important issues because of a dislike for conflict or a perceived inability to handle the other party’s reactions.
Accommodation
The accommodating style is cooperative and unassertive. In this style, the person gives in to what the other side wants, even if it means giving up one’s personal goals. People who use this style may fear speaking up for themselves or they may place a higher value on the relationship, believing that disagreeing with an idea might be hurtful to the other person. They will say things such as, “Let’s do it your way” or “If it’s important to you, I can go along with it.” Accommodation may be an effective strategy if the issue at hand is more important to others compared to oneself. However, if a person perpetually uses this style, that individual may start to see that personal interests and well-being are neglected.
Compromise
The compromising style is a middle-ground style, in which individuals have some desire to express their own concerns and get their way but still respect the other person’s goals. The compromiser may say things such as, “Perhaps I ought to reconsider my initial position” or “Maybe we can both agree to give in a little.” In a compromise, each person sacrifices something valuable to them. For example, in 2005 the luxurious Lanesborough Hotel in London advertised incorrect nightly rates for £35, as opposed to £350. When the hotel received a large number of online bookings at this rate, the initial reaction was to insist that customers cancel their reservations and book at the correct rate. The situation was about to lead to a public relations crisis. As a result, they agreed to book the rooms at the advertised price for a maximum of three nights, thereby limiting the damage to the hotel’s bottom line as well as its reputation (Horowitz et al., 2006).
Competition
People exhibiting a competing style want to reach their goal or get their solution adopted regardless of what others say or how they feel. They are more interested in getting the outcome they want as opposed to keeping the other party happy, and they push for the deal they are interested in making. Competition may lead to poor relationships with others if one is always seeking to maximize their own outcomes at the expense of others’ well-being. This approach may be effective if one has strong moral objections to the alternatives or if the alternatives one is opposing are unethical or harmful.
Collaboration
The collaborating style is high on both assertiveness and cooperation. This is a strategy to use for achieving the best outcome from conflict—both sides argue for their position, supporting it with facts and rationale while listening attentively to the other side. The objective is to find a win–win solution to the problem in which both parties get what they want. They’ll challenge points but not each other. They’ll emphasize problem solving and integration of each other’s goals. For example, an employee who wants to complete an MBA program may have a conflict with management when he wants to reduce his work hours. Instead of taking opposing positions in which the employee defends his need to pursue his career goals while the manager emphasizes the company’s need for the employee, both parties may review alternatives to find an integrative solution. In the end, the employee may decide to pursue the degree while taking online classes, and the company may realize that paying for the employee’s tuition is a worthwhile investment. This may be a win–win solution to the problem in which no one gives up what is personally important, and every party gains something from the exchange.
Which Style Is Best?
Like much of organizational behavior, there is no one “right way” to deal with conflict. Much of the time it will depend on the situation. However, the collaborative style has the potential to be highly effective in many different situations.
We do know that most individuals have a dominant style that they tend to use most frequently. Think of your friend who is always looking for a fight or your coworker who always backs down from a disagreement. Successful individuals are able to match their style to the situation. There are times when avoiding a conflict can be a great choice. For example, if a driver cuts you off in traffic, ignoring it and going on with your day is a good alternative to “road rage.” However, if a colleague keeps claiming ownership of your ideas, it may be time for a confrontation. Allowing such intellectual plagiarism to continue could easily be more destructive to your career than confronting the individual. Research also shows that when it comes to dealing with conflict, managers prefer forcing, while their subordinates are more likely to engage in avoiding, accommodating, or compromising (Howat & London, 1980). It is also likely that individuals will respond similarly to the person engaging in conflict. For example, if one person is forcing, others are likely to respond with a forcing tactic as well.
What If You Don’t Have Enough Conflict Over Ideas?
Part of effective conflict management is knowing when proper stimulation is necessary. Many people think that conflict is inherently bad—that it undermines goals or shows that a group or meeting is not running smoothly. In fact, if there is no conflict, it may mean that people are silencing themselves and withholding their opinions. The reality is that within meaningful group discussions there are usually varying opinions about the best course of action. If people are suppressing their opinions, the final result may not be the best solution. During healthy debates, people point out difficulties or weaknesses in a proposed alternative and can work together to solve them. The key to keeping the disagreement healthy is to keep the discussion focused on the task, not the personalities. For example, a comment such as “Jack’s ideas have never worked before. I doubt his current idea will be any better” is not constructive. Instead, a comment such as “This production step uses a degreaser that’s considered a hazardous material. Can we think of an alternative degreaser that’s nontoxic?” is more productive. It challenges the group to improve upon the existing idea.
Traditionally, Hewlett-Packard Development Company LP was known as a “nice” organization. Throughout its history, HP viewed itself as a scientific organization, and their culture valued teamwork and respect. But over time, HP learned that you can be “nice to death.” In fact, in the 1990s, HP found it difficult to partner with other organizations because of their culture differences. During role plays created to help HP managers be more dynamic, the trainers had to modify several role-plays, because participants simply said, “That would never happen at HP,” over the smallest conflict. All this probably played a role in the discomfort many felt with Carly Fiorina’s style as CEO and the merge she orchestrated with Compaq Computer Corporation, which ultimately caused the board of directors to fire Fiorina. On the other hand, no one is calling HP “too nice” anymore.
OB Toolbox: How Can You Stimulate Conflict?
• Encourage people to raise issues and disagree with you or the status quo without fear of reprisal. An issue festering beneath the surface, when brought out into the open, may turn out to be a minor issue that can be easily addressed and resolved.
• Assign a devil’s advocate to stimulate alternative viewpoints. If a business unit is getting stagnant, bring in new people to “shake things up.”
• Create a competition among teams, offering a bonus to the team that comes up with the best solution to a problem. For example, have two product development teams compete on designing a new product. Or, reward the team that has the fewest customer complaints or achieves the highest customer satisfaction rating.
• Build some ambiguity into the process. When individuals are free to come up with their own ideas about how to complete a task, the outcome may be surprising, and it allows for more healthy disagreements along the way.
Key Takeaways
Conflict management techniques include changing organizational structures to avoid built-in conflict, changing team members, creating a common “enemy,” using majority rules, and problem solving. Conflict management styles include accommodating others, avoiding the conflict, collaborating, competing, and compromising. People tend to have a dominant style. At times it makes sense to build in some conflict over ideas if none exists.
Exercises
1. List three ways to decrease a conflict situation. What are some pros and cons of each of these approaches?
2. Do you deal with conflict differently with friends and family than you do at work? If so, why do you think that is?
3. What is your usual conflict-handling style at work? Do you see it as effective or ineffective?
4. Describe a situation in which not having enough conflict can be a problem. | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.4%3A_Conflict_Management.txt |
Learning Objectives
1. Learn the five phases of negotiation.
2. Learn negotiation strategies.
3. Avoid common mistakes in negotiations.
4. Learn about third-party negotiations.
A common way that parties deal with conflict is via negotiation. Negotiation is a process whereby two or more parties work toward an agreement. There are five phases of negotiation, which are described below.
Phase 1: Investigation
The first step in negotiation is the investigation, or information gathering stage. This is a key stage that is often ignored. Surprisingly, the first place to begin is with yourself: What are your goals for the negotiation? What do you want to achieve? What would you concede? What would you absolutely not concede? Leigh Steinberg, the most powerful agent in sports (he was the role model for Tom Cruise’s character in Jerry Maguire), puts it this way: “You need the clearest possible view of your goals. And you need to be brutally honest with yourself about your priorities” (Webber, 1998).
During the negotiation, you’ll inevitably be faced with making choices. It’s best to know what you want, so that in the heat of the moment you’re able to make the best decision. For example, if you’ll be negotiating for a new job, ask yourself, “What do I value most? Is it the salary level? Working with coworkers whom I like? Working at a prestigious company? Working in a certain geographic area? Do I want a company that will groom me for future positions or do I want to change jobs often in pursuit of new challenges?”
Phase 2: Determine Your BATNA
If you don’t know where you’re going, you will probably end up somewhere else.
Lawrence J. Peter
One important part of the investigation and planning phase is to determine your BATNA, which is an acronym that stands for the “best alternative to a negotiated agreement.” Roger Fisher and William Ury coined this phrase in their book Getting to Yes: Negotiating without Giving In.
Thinking through your BATNA is important to helping you decide whether to accept an offer you receive during the negotiation. You need to know what your alternatives are. If you have various alternatives, you can look at the proposed deal more critically. Could you get a better outcome than the proposed deal? Your BATNA will help you reject an unfavorable deal. On the other hand, if the deal is better than another outcome you could get (that is, better than your BATNA), then you should accept it.
Think about it in common sense terms: When you know your opponent is desperate for a deal, you can demand much more. If it looks like they have a lot of other options outside the negotiation, you’ll be more likely to make concessions.
As Fisher and Ury said, “The reason you negotiate is to produce something better than the results you can obtain without negotiating. What are those results? What is that alternative? What is your BATNA—your Best Alternative To a Negotiated Agreement? That is the standard against which any proposed agreement should be measured” (Fisher & Ury, 1981).
The party with the best BATNA has the best negotiating position, so try to improve your BATNA whenever possible by exploring possible alternatives (Pinkley, 1995).
Going back to the example of your new job negotiation, consider your options to the offer you receive. If your pay is lower than what you want, what alternatives do you have? A job with another company? Looking for another job? Going back to school? While you’re thinking about your BATNA, take some time to think about the other party’s BATNA. Do they have an employee who could readily replace you?
Once you’ve gotten a clear understanding of your own goals, investigate the person you’ll be negotiating with. What does that person (or company) want? Put yourself in the other party’s shoes. What alternatives could they have? For example, in the job negotiations, the other side wants a good employee at a fair price. That may lead you to do research on salary levels: What is the pay rate for the position you’re seeking? What is the culture of the company?
Greenpeace’s goals are to safeguard the environment by getting large companies and organizations to adopt more environmentally friendly practices such as using fewer plastic components. Part of the background research Greenpeace engages in involves uncovering facts. For instance, medical device makers are using harmful PVCs as a tubing material because PVCs are inexpensive. But are there alternatives to PVCs that are also cost-effective? Greenpeace’s research found that yes, there are (Layne, 1999). Knowing this lets Greenpeace counter those arguments and puts Greenpeace in a stronger position to achieve its goals.
OB Toolbox: BATNA Best Practices
1. Brainstorm a list of alternatives that you might conceivably take if the negotiation doesn’t lead to a favorable outcome for you.
2. Improve on some of the more promising ideas and convert them into actionable alternatives.
3. Identify the most beneficial alternative to be kept in reserve as a fall-back during the negotiation.
4. Remember that your BATNA may evolve over time, so keep revising it to make sure it is still accurate.
5. Don’t reveal your BATNA to the other party. If your BATNA turns out to be worse than what the other party expected, their offer may go down, as PointCast learned in the opening case.
Phase 3: Presentation
The third phase of negotiation is presentation. In this phase, you assemble the information you’ve gathered in a way that supports your position. In a job hiring or salary negotiation situation, for instance, you can present facts that show what you’ve contributed to the organization in the past (or in a previous position), which in turn demonstrates your value. Perhaps you created a blog that brought attention to your company or got donations or funding for a charity. Perhaps you’re a team player who brings out the best in a group.
Phase 4: Bargaining
During the bargaining phase, each party discusses their goals and seeks to get an agreement. A natural part of this process is making concessions, namely, giving up one thing to get something else in return. Making a concession is not a sign of weakness—parties expect to give up some of their goals. Rather, concessions demonstrate cooperativeness and help move the negotiation toward its conclusion. Making concessions is particularly important in tense union-management disputes, which can get bogged down by old issues. Making a concession shows forward movement and process, and it allays concerns about rigidity or closed-mindedness. What would a typical concession be? Concessions are often in the areas of money, time, resources, responsibilities, or autonomy. When negotiating for the purchase of products, for example, you might agree to pay a higher price in exchange for getting the products sooner. Alternatively, you could ask to pay a lower price in exchange for giving the manufacturer more time or flexibility in when they deliver the product.
One key to the bargaining phase is to ask questions. Don’t simply take a statement such as “we can’t do that” at face value. Rather, try to find out why the party has that constraint. Let’s take a look at an example. Say that you’re a retailer and you want to buy patio furniture from a manufacturer. You want to have the sets in time for spring sales. During the negotiations, your goal is to get the lowest price with the earliest delivery date. The manufacturer, of course, wants to get the highest price with the longest lead time before delivery. As negotiations stall, you evaluate your options to decide what’s more important: a slightly lower price or a slightly longer delivery date? You do a quick calculation. The manufacturer has offered to deliver the products by April 30, but you know that some of your customers make their patio furniture selection early in the spring, and missing those early sales could cost you \$1 million. So, you suggest that you can accept the April 30 delivery date if the manufacturer will agree to drop the price by \$1 million.
“I appreciate the offer,” the manufacturer replies, “but I can’t accommodate such a large price cut.” Instead of leaving it at that, you ask, “I’m surprised that a 2-month delivery would be so costly to you. Tell me more about your manufacturing process so that I can understand why you can’t manufacture the products in that time frame.”
Manufacturing the products in that time frame is not the problem,” the manufacturer replies, “but getting them shipped from Asia is what’s expensive for us.”
When you hear that, a light bulb goes off. You know that your firm has favorable contracts with shipping companies because of the high volume of business the firm gives them. You make the following counteroffer: “Why don’t we agree that my company will arrange and pay for the shipper, and you agree to have the products ready to ship on March 30 for \$10.5 million instead of \$11 million?” The manufacturer accepts the offer—the biggest expense and constraint (the shipping) has been lifted. You, in turn, have saved money as well (Malhotra & Bazerman, 2007).
Phase 5: Closure
Closure is an important part of negotiations. At the close of a negotiation, you and the other party have either come to an agreement on the terms, or one party has decided that the final offer is unacceptable and therefore must be walked away from. Most negotiators assume that if their best offer has been rejected, there’s nothing left to do. You made your best offer and that’s the best you can do. The savviest of negotiators, however, see the rejection as an opportunity to learn. “What would it have taken for us to reach an agreement?”
Recently, a CEO had been in negotiations with a customer. After learning the customer decided to go with the competition, the CEO decided to inquire as to why negotiations had fallen through. With nothing left to lose, the CEO placed a call to the prospect’s vice president and asked why the offer had been rejected, explaining that the answer would help improve future offerings. Surprisingly, the VP explained the deal was given to the competitor because, despite charging more, the competitor offered after-sales service on the product. The CEO was taken by surprise, originally assuming that the VP was most interested in obtaining the lowest price possible. In order accommodate a very low price, various extras such as after-sales service had been cut from the offer. Having learned that the VP was seeking service, not the lowest cost, the CEO said, “Knowing what I know now, I’m confident that I could have beaten the competitor’s bid. Would you accept a revised offer?” The VP agreed, and a week later the CEO had a signed contract (Malhotra & Bazerman, 2007).
Sometimes at the end of negotiations, it’s clear why a deal was not reached. But if you’re confused about why a deal did not happen, consider making a follow-up call. Even though you may not win the deal back in the end, you might learn something that’s useful for future negotiations. What’s more, the other party may be more willing to disclose the information if they don’t think you’re in a “selling” mode.
Should You Negotiate for a Higher Salary?
Yes! According to a survey conducted by CareerBuilder.com, 58% of hiring managers say they leave some negotiating room when extending initial job offers. The survey also found that many of the hiring managers agree to a candidate’s request for a higher salary. “Salary negotiation has become a growing opportunity in the job acquisition process,” says Bill Hawkins, president and CEO of The Hawkins Company, a full-service executive search firm with offices in Los Angeles and Atlanta. “Candidates who fail to make a counteroffer could forfeit significant income.”
Distributive Approach
The distributive view of negotiation is the traditional fixed-pie approach. That is, negotiators see the situation as a pie that they have to divide between them. Each tries to get more of the pie and “win.” For example, managers may compete over shares of a budget. If marketing gets a 10% increase in its budget, another department such as R&D will need to decrease its budget by 10% to offset the marketing increase. Focusing on a fixed pie is a common mistake in negotiation, because this view limits the creative solutions possible.
Integrative Approach
A newer, more creative approach to negotiation is called the integrative approach. In this approach, both parties look for ways to integrate their goals under a larger umbrella. That is, they look for ways to expand the pie, so that each party gets more. This is also called a win–win approach. The first step of the integrative approach is to enter the negotiation from a cooperative rather than an adversarial stance. The second step is all about listening. Listening develops trust as each party learns what the other wants and everyone involved arrives at a mutual understanding. Then, all parties can explore ways to achieve the individual goals. The general idea is, “If we put our heads together, we can find a solution that addresses everybody’s needs.” Unfortunately, integrative outcomes are not the norm. A summary of 32 experiments on negotiations found that although they could have resulted in integrated outcomes, only 20% did so (Thompson & Hrebec, 1996). One key factor related to finding integrated solutions is the experience of the negotiators who were able to reach them (Thompson, 1990).
OB Toolbox: Seven Steps to Negotiating a Higher Salary
• Step 1: Overcome your fear.
• The first step is to overcome your fears. Many people don’t even begin a salary negotiation. We may be afraid of angering the boss or think that because we are doing a good job, we’ll automatically be rewarded. But, just because you’re doing a good job doesn’t mean you’ll automatically get a raise. Why? If you don’t ask for one, the boss may believe you’re satisfied with what you’re getting. So why should he pay you more? Imagine going into a car dealership and being absolutely delighted with a car choice. The sticker price is \$19,000. Would you pay the dealer \$23,000 just because you really like the car? Of course not. You probably wouldn’t even offer \$19,000. If the car was up for auction, however, and another bidder offered \$20,000, you’d likely increase your offer, too.
• That’s what salary negotiation is like. Your boss may be thrilled with you but at the same time is running a business. There’s no reason to pay an employee more if you seem satisfied with your current salary.
• Step 2: Get the facts.
• Before you enter into the negotiation, do some background research. What are other companies paying people in your position? Check sites such as Payscale.com, salary.com, and salaryexpert.com to get a feel for the market. Look at surveys conducted by your professional organization.
• Step 3: Build your case.
• How important are you to the organization? How have you contributed? Perhaps you contributed by increasing sales, winning over angry customers, getting feuding team members to cooperate, and so on. Make a list of your contributions. Be sure to focus on the contributions that your boss values most. Is it getting recognition for the department? Easing workload? If another employer has shown interest in you, mention that as a fact. However, don’t use this as a threat unless you’re prepared to take the other offer. Mentioning interest from another employer gets the boss to think, “If I don’t give this raise, I may lose the employee.” (By the way, if you don’t feel you have a strong case for your raise, perhaps this isn’t the time to ask for one.)
• Step 4: Know what you want.
• Set your target salary goal based on your research and the norms of what your organization will pay. Now ask yourself, if you don’t get this figure, would you quit? If not, are there other alternatives besides a salary increase that you’d consider? For example, would you accept a higher title? More vacation time? Paid training to learn a new skill? Flexible hours?
• Step 5: Begin assertively.
• Start the discussion on a strong but friendly tone. “I think I’m worth more than I’m being paid.” List the ways you’ve contributed to the company.
• Step 6: Don’t make the first offer.
• Let your boss name the figure. You can do this by asking, “How much of a raise could you approve?” However, if the boss insists that you name a figure, ask for the most that you can reasonably expect to get. You want to be reasonable, but you need to allow room to make a concession. Your boss will assume your opening number was high and will offer you less, so asking for the actual figure you want may leave you feeling disappointed.
• If the boss opens with, “The salary range for this position is \$66,000 to 78,000,” ask for the high end. If your goal was higher than that range, challenge the range by explaining how you are an exception and why you deserve more.
• Step 7: Listen more than talk.
• You’ll learn more by listening rather than talking. The more you listen, the better the boss will feel about you—people tend to like and trust people who listen to them.
• If you can’t get a raise now, get your boss to agree to one in a few months if you meet agreed-upon objectives.
Failing to Negotiate/Accepting the First Offer
You may have heard that women typically make less money than men. Researchers have established that about one-third of the gender differences observed in the salaries of men and women can be traced back to differences in starting salaries, with women making less, on average, when they start their jobs (Gerhart, 1990). Some people are taught to feel that negotiation is a conflict situation, and these individuals may tend to avoid negotiations to avoid conflict. Research shows that this negotiation avoidance is especially prevalent among women. For example, one study looked at students from Carnegie-Mellon who were getting their first job after earning a master’s degree. The study found that only 7% of the women negotiated their offer, while men negotiated 57% of the time (CNN, 2003). The result had profound consequences. Researchers calculate that people who routinely negotiate salary increases will earn over \$1 million more by retirement than people who accept an initial offer every time without asking for more (Babcock & Lascheve, 2003). The good news is that it appears that it is possible to increase negotiation efforts and confidence by training people to use effective negotiation skills (Stevens, Bavetta, & Gist, 1993).
Letting Your Ego Get in the Way
Thinking only about yourself is a common mistake, as we saw in the opening case. People from the United States tend to fall into a self-serving bias in which they overinflate their own worth and discount the worth of others. This can be a disadvantage during negotiations. Instead, think about why the other person would want to accept the deal. People aren’t likely to accept a deal that doesn’t offer any benefit to them. Help them meet their own goals while you achieve yours. Integrative outcomes depend on having good listening skills, and if you are thinking only about your own needs, you may miss out on important opportunities. Remember that a good business relationship can only be created and maintained if both parties get a fair deal.
Having Unrealistic Expectations
Susan Podziba, a professor of mediation at Harvard and MIT, plays broker for some of the toughest negotiations around, from public policy to marital disputes. She takes an integrative approach in the negotiations, identifying goals that are large enough to encompass both sides. As she puts it, “We are never going to be able to sit at a table with the goal of creating peace and harmony between fishermen and conservationists. But we can establish goals big enough to include the key interests of each party and resolve the specific impasse we are currently facing. Setting reasonable goals at the outset that address each party’s concerns will decrease the tension in the room, and will improve the chances of reaching an agreement” (Rothenberger, 2008). Those who set unreasonable expectations are more likely to fail.
Getting Overly Emotional
Negotiations, by their very nature, are emotional. The findings regarding the outcomes of expressing anger during negotiations are mixed. Some researchers have found that those who express anger negotiate worse deals than those who do not (Kopelman, Rosette, & Thompson, 2006), and that during online negotiations, those parties who encountered anger were more likely to compete than those who did not (Friedman et al., 2004). In a study of online negotiations, words such as despise, disgusted, furious, and hate were related to a reduced chance of reaching an agreement (Brett et al., 2007). However, this finding may depend on individual personalities. Research has also shown that those with more power may be more effective when displaying anger. The weaker party may perceive the anger as potentially signaling that the deal is falling apart and may concede items to help move things along (Van Kleef & Cote, 2007). This holds for online negotiations as well. In a study of 355 eBay disputes in which mediation was requested by one or both of the parties, similar results were found. Overall, anger hurts the mediation process unless one of the parties was perceived as much more powerful than the other party, in which case anger hastened a deal (Friedman et al., 2004). Another aspect of getting overly emotional is forgetting that facial expressions are universal across cultures, and when your words and facial expressions don’t match, you are less likely to be trusted (Hill, 2007; Holloway, 2007).
Letting Past Negative Outcomes Affect the Present Ones
Research shows that negotiators who had previously experienced ineffective negotiations were more likely to have failed negotiations in the future. Those who were unable to negotiate some type of deal in previous negotiation situations tended to have lower outcomes than those who had successfully negotiated deals in the past (O’Connor, Arnold, & Burris, 2005). The key to remember is that there is a tendency to let the past repeat itself. Being aware of this tendency allows you to overcome it. Be vigilant to examine the issues at hand and not to be overly swayed by past experiences, especially while you are starting out as a negotiator and have limited experiences.
Tips for Negotiation Success
• Focus on agreement first. If you reach an impasse during negotiations, sometimes the best recourse is to agree that you disagree on those topics and then focus only on the ones that you can reach an agreement on. Summarize what you’ve agreed on, so that everyone feels like they’re agreeing, and leave out the points you don’t agree on. Then take up those issues again in a different context, such as over dinner or coffee. Dealing with those issues separately may help the negotiation process.
• Be patient. If you don’t have a deadline by which an agreement needs to be reached, use that flexibility to your advantage. The other party may be forced by circumstances to agree to your terms, so if you can be patient you may be able to get the best deal.
• Whose reality? During negotiations, each side is presenting their case—their version of reality. Whose version of reality will prevail? Leigh Steinberg offers this example from the NFL, when he was negotiating the salary of Warren Moon. Moon was 41 years old. That was a fact. Did that mean he was hanging on by a thread and lucky to be employed in the first place? “Should he be grateful for any money that the team pays him?” Steinberg posed, “Or is he a quarterback who was among the league leaders in completions and attempts last year? Is he a team leader who took a previously moribund group of players, united them, and helped them have the best record that they’ve had in recent years?” All those facts are true, and negotiation brings the relevant facts to the forefront and argues their merit.
• Deadlines. Research shows that negotiators are more likely to strike a deal by making more concessions and thinking more creatively as deadlines loom than at any other time in the negotiation process.
• Be comfortable with silence. After you have made an offer, allow the other party to respond. Many people become uncomfortable with silence and feel they need to say something. Wait and listen instead.
Alternative Dispute Resolution
Alternative Dispute Resolution (ADR) includes mediation, arbitration, and other ways of resolving conflicts with the help of a specially trained, neutral third party without the need for a formal trial or hearing (New York State Unified Court System, 2008). Many companies find this effective in dealing with challenging problems. For example, Eastman Kodak Company added an alternative dispute resolution panel of internal employees to help them handle cases of perceived discrimination and hopefully stop a conflict from escalating (Deutsch, 2004).
Mediation
In mediation, an outside third party (the mediator) enters the situation with the goal of assisting the parties in reaching an agreement. The mediator can facilitate, suggest, and recommend. The mediator works with both parties to reach a solution but does not represent either side. Rather, the mediator’s role is to help the parties share feelings, air and verify facts, exchange perceptions, and work toward agreements. Susan Podziba, a mediation expert, has helped get groups that sometimes have a hard time seeing the other side’s point of view to open up and talk to one another. Her work includes such groups as pro-choice and pro-life advocates, individuals from Israel and Palestine, as well as fishermen and environmentalists. According to the U.S. Equal Employment Opportunity Commission, “Mediation gives the parties the opportunity to discuss the issues raised in the charge, clear up misunderstandings, determine the underlying interests or concerns, find areas of agreement and, ultimately, to incorporate those areas of agreements into resolutions. A mediator does not resolve the charge or impose a decision on the parties. Instead, the mediator helps the parties to agree on a mutually acceptable resolution. The mediation process is strictly confidential” (The U.S. Equal Employment Opportunity Commission, 2007). One of the advantages of mediation is that the mediator helps the parties design their own solutions, including resolving issues that are important to both parties, not just the ones under specific dispute. Interestingly, sometimes mediation solves a conflict even if no resolution is reached. Here’s a quote from Avis Ridley-Thomas, the founder and administrator of the Los Angeles City Attorney’s Dispute Resolution Program, who explains, “Even if there is no agreement reached in mediation, people are happy that they engaged in the process. It often opens up the possibility for resolution in ways that people had not anticipated” (Layne, 1999). An independent survey showed 96% of all respondents and 91% of all charging parties who used mediation would use it again if offered (Layne, 1999).
You Know It’s Time for a Mediator When…
• The parties are unable to find a solution themselves.
• Personal differences are standing in the way of a successful solution.
• The parties have stopped talking with one another.
• Obtaining a quick resolution is important.
Arbitration
In contrast to mediation, in which parties work with the mediator to arrive at a solution, in arbitration the parties submit the dispute to the third-party arbitrator. It is the arbitrator who makes the final decision. The arbitrator is a neutral third party, but the decision made by the arbitrator is final (the decision is called the “award”). Awards are made in writing and are binding to the parties involved in the case (American Arbitration Association, 2007). Arbitration is often used in union-management grievance conflicts.
Arbitration-Mediation
It is common to see mediation followed by arbitration. An alternative technique is to follow the arbitration with mediation. The format of this conflict resolution approach is to have both sides formally make their cases before an arbitrator. The arbitrator then makes a decision and places it in a sealed envelope. Following this, the two parties work through mediation. If they are unable to reach an agreement on their own, the arbitration decisions become binding. Researchers using this technique found that it led to voluntary agreements between the two parties 71% of the time versus 50% for mediation followed by arbitration (Conlon, Moon, & Ng, 2002).
Key Takeaways
Negotiation consists of five phases that include investigation, determining your BATNA, presentation, bargaining, and closure. Different negotiation strategies include the distributive approach (fixed-pie approach) and the integrative approach (expanding-the-pie approach). Research shows that some common mistakes made during negotiations include accepting the first offer made, letting egos get in the way, having unrealistic expectations, getting overly emotional, and letting past negative outcomes affect the present ones. Third-party negotiators are sometimes needed when two sides cannot agree.
Exercises
1. What are the negotiation phases and what goes on during each of them?
2. When negotiating, is establishing a BATNA important? Why or why not?
3. What are the third-party conflict resolution options available? | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.5%3A_Negotiations.txt |
Learning Objectives
1. Consider the role of ethics in negotiation.
2. Consider the role of national culture in negotiation.
Ethics and Negotiations
Are hardball tactics OK to use? Sometimes a course of action is legal but is questionable in terms of ethics. A good rule of thumb is that hardball tactics should not be used because the negotiation is likely not to be the last time you will interact with the other party. Therefore, finding a way to make a deal that works for both sides is preferable. Otherwise, if you have the complete upper hand and use it to “destroy” the other party, it’s likely that at a future date the other party will have the upper hand and will use it to retaliate mercilessly against you. What’s more, your reputation as a negotiator will suffer. As J. Paul Getty said, “My father said: ‘You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.’”[1]
Ethics establish a way of doing what is right, fair, and honest. If your counterpart feels you are being unfair or dishonest, he or she is less likely to make any concessions—or even to negotiate with you in the first place.
Here are some tips for ethical negotiations:
• Be honest.
• Keep your promises.
• Follow the Platinum Rule. The Golden Rule tells us to treat others the way we want to be treated. Author Tony Alessandra goes a step further with the Platinum Rule: “Treat people the way they want to be treated.” Caring about others enough to treat them the way they want to be treated helps build long-term relationships based on ethics and trust (Stark & Flaherty, 2003).
Negotiation Around the Globe
Not understanding cultural differences is another common mistake. Some cultures have a higher or lower threshold for conflict. For example, in countries such as Japan or Korea, the preference is for harmony (called wa in Japan) rather than overt conflict (Lebra, 1976). Americans and Germans have a much higher tolerance for conflict as a way of working through issues. In a study of Japanese, German, and American cultures, it was found that almost half of the preference for different conflict management styles was related to the country in which participants were raised (Tinsley, 1998).
In Japan, much like Pakistan, the tendency is not to trust what is heard from the other party until a strong relationship is formed. Similarly, in China, conversations start out with innocuous topics to set a mood of friendliness (U.S. Commerce Department, 2007). This differs a great deal from American negotiators who tend to like to “get down to business” and heavily weigh first offers as reference points that anchor the process as both sides make demands and later offers.
There are also differences in how individuals from different cultures use information and offers during the negotiation process. Observations show that Japanese negotiators tend to use offers as an information exchange process (Adair, Weingart, & Brett, 2007). Research has found that American negotiators tend to reveal more information than their Japanese counterparts (Adair, Okuma, & Brett, 2001). Japanese negotiators might learn little from a single offer, but patterns of offers over time are interpreted and factored into their negotiations. Since Japan is a high-context culture, information is learned from what is not said as well as from what is said.
Even the way that negotiations are viewed can differ across cultures. For example, the Western cultures tend to think of negotiations as a business activity rather than a social activity, but in other cultures, the first step in negotiations is to develop a trusting relationship. Negotiators in Brazil, for example, seriously damaged relationships when they tried to push negotiations to continue during the Carnival festival. “The local guys took that as a disrespectful action,” said Oscar Lopez, commercial director for Hexaprint, S.A. De C.V. in Mexico. “It took several weeks to restore confidence and move on” (Teague, 2006).
Also keep in mind what agreement means in different cultures. For example, in China, nodding of the head does not mean that the Chinese counterpart is agreeing to what you are proposing, merely that they are listening and following what you are saying. “Culturally, Chinese companies and workers do not like to say no,” says a buyer at a manufacturer based in the United States. Here’s how to overcome the problem. Instead of phrasing a question as, “Can you do this for us?” which would put the Chinese official in an uncomfortable position of saying no (which they likely would not do), rephrase the question as, “How will you do this for us and when will it be done?” (Hannon, 2006)
Key Takeaways
Being honest during negotiations, keeping your promises, and treating others as you would like to be treated all help you negotiate ethically. Not understanding the culture of a person or group of people you are negotiating with can be a major mistake. Try to learn as much as you can about the culture of others involved and be sure to clarify key points along the way. Also, keep in mind that agreement (e.g., nodding one’s head up and down or saying “yes, yes”) may not mean the same thing in all cultures.
Exercises
1. Is the goal of negotiation to maximize your economic outcome at all costs? Why or why not? Is it ethical to do so?
2. What are some similarities and differences in conflict management preference and negotiation practices among different countries around the globe? Have you had any experiences with individuals from other cultures? If so, how did it go? How might it have gone better?
References
Adair, W. L., Okumua, T., & Brett, J. M. (2001). Negotiation behavior when cultures collide: The United States and Japan. Journal of Applied Psychology, 86, 371–385.
Adair, W. L., Weingart, L., & Brett, J. (2007). The timing and function of offers in the U.S. and Japanese negotiations. Journal of Applied Psychology, 92, 1056–1068.
Hannon, D. (2006, May 18). DO’s and DON’Ts of doing business in China. Purchasing, 135(8), 52.
Lebra, T. S. (1976). Japanese patterns of behavior. Honolulu, HI: University Press of Hawaii.
Stark, P. B., & Flaherty, J. (2003). Ethical negotiations: 10 tips to ensure win–win outcomes. Negotiator Magazine. Retrieved November 11, 2008, from http://www.negotiatormagazine.com/sh...icle106&page=1.
Teague, P. E. (2006, August 17). Collaboration trumps negotiations. Purchasing, 135(11), 58.
Tinsley, C. (1998). Models of conflict resolution in Japanese, German, and American cultures. Journal of Applied Psychology, 83, 316–323.
U.S. Commerce Department. (2007). Retrieved November 11, 2008, from http://www.Buyusa.gov.
1. Quote retrieved January 29, 2009, from http://www.saidwhat.co.uk/keywordquotes/money. | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.6%3A_The_Role_of_Ethics_and_National_Culture.txt |
Figure 10.11
You could argue that Bernard Ebbers, of the now defunct WorldCom, was one of the biggest conflict avoiders in corporate history. As CEO, Ebbers avoided internal company conflict at all costs, and he ultimately avoided the reality that WorldCom, once the dominant company in the telecommunications industry, was in serious economic trouble. Notorious for his temper, employees were reluctant to present Ebbers with company information that he didn’t like. A 2002 Economist article describes Ebbers as “parochial, stubborn, preoccupied with penny-pinching.…Mr. Ebbers was a difficult man to work for.” Under Ebbers, WorldCom’s \$9 billion accounting fraud grew in order to avoid facing its worsening economic reality.
WorldCom’s roots stem from a Mississippi telecom company called LDDS where Ebbers was CEO. Growing to over 80,000 employees through multiple acquisitions of other telecom businesses, WorldCom became the overwhelming industry leader. However, many of WorldCom’s executives had worked with Ebbers since his start as CEO 2 decades before. Ebbers, who was regularly seen in cowboy boots and a 10-gallon hat, led his close-knit staff in a “shoot from the hip” style. He was resistant to new technology and famously refused to use e-mail to communicate with his employees. A well-known company mantra was “That’s the way we did it at LDDS.” Ebbers lead WorldCom through over 60 acquisitions over a period of 15 years. He grew annual revenues from \$1 million in 1984 to over \$17 billion in 1998. However, Ebbers had little regard for long-term plans and avoided making larger strategic decisions as his company accumulated increasing debt.
As WorldCom acquired new companies, its accounting procedures, computer systems, and customer service issues became increasingly more complex, and industry experts note that WorldCom struggled to keep up with the growth. Company employees who tried to bring initial problems to Ebbers’s attention were discouraged, and Ebbers made it clear he only wanted to hear good news. This avoidance of problems created a company culture that demanded success at all costs. That ultimately included falsifying financial reports. For example, former employees admitted to registering “rolling revenue” to inflate earnings, recording a single sale multiple times. Another 2002 Economist article reports that this and other dishonest techniques were “endemic in the sales hierarchy of WorldCom.…Increasing reported revenues came above all else.”
Despite efforts to inflate the books, WorldCom’s stock prices dramatically declined, and Ebbers left the company in 2002 after pressure from WorldCom’s board of directors. What came to light after his departure, however, highlighted the significant problems he avoided confronting. Under new CEO John Sidgmore, internal auditor Cynthia Cooper uncovered multiple instances of financial dishonesty and illegal activity overseen by CFO Scott Sullivan, a close confidant of Ebbers. A 2002 Wall Street Journal article reports, “As she pursued the trail of fraud, Ms. Cooper time and again was obstructed by fellow employees, some of whom disapproved of WorldCom’s accounting methods but were unwilling to contradict their bosses or thwart the company’s goals.”
Ultimately Cooper’s investigation revealed the fraud that took place under Sullivan and Ebbers. Sullivan later admitted to having booked \$3.8 billion of costs as capital expenditures and that five quarters’ worth of profits should have been recorded as losses. Ebbers’s refusal to honestly face the harsh economic truth for WorldCom was ultimately highlighted to be a source of WorldCom’s financial problems. In 2005, he was found guilty of fraud, conspiracy, and filing false documentation. WorldCom was purchased for \$7.6 billion and subsequently integrated into Verizon (NYSE: VE) in 2006, and Ebbers began serving a 25-year jail sentence in 2005.
Discussion Questions
1. What potential causes of conflict existed at WorldCom during Bernard Ebbers’ administration?
2. What might have happened if Ebbers had been prone to a different conflict-handling style, such as compromise or collaboration?
3. How did having a small “inner circle” of leadership affect the corporate culture at WorldCom?
4. If you were Cynthia Cooper, how might you have dealt with being ignored? What options did Cooper have to deal with the company conflict?
5. What responsibility did the board of directors have to detect and confront the problems at WorldCom?
10.8: Conclusion
Conflict can run the gamut from minor annoyances to physically violent situations. At the same time, conflict can increase creativity and innovation, or it can bring organizations to a grinding halt. There are many different types of conflict, including interpersonal, intrapersonal, and intergroup. Within organizations, there are many common situations that can spur conflict. Certain organizational structures, such as a matrix structure, can cause any given employee to have multiple bosses and conflicting or overwhelming demands. A scarcity of resources for employees to complete tasks is another common cause of organizational conflict, particularly if groups within the organization compete over those resources. Of course, simple personality clashes can create intrapersonal conflict in any situation. Communication problems are also a very common source of conflict even when no actual problem would exist otherwise. When conflict arises, it can be handled by any number of methods, each with varying degrees of cooperation and competitiveness. Different situations require different conflict handling methods, and no one method is best.
Negotiations occur during many important processes, and possessing astute negation skills can be an incredible tool. A key component to negotiations involves having a BATNA, or “best alternative to a negotiated agreement.” Negotiations typically move through five phases, including investigation, determining your BATNA, presentation, bargaining, and closure. During a negotiation, it is important not to make any number of common mistakes. These mistakes can include accepting the first offer, letting ego get in the way, having unrealistic expectations of the outcome of the negotiation, becoming too emotional during the process, or being weighed down by previous failures and letting the past repeat itself. It is important to keep in mind that many cultures have preferential methods for handling conflict and negotiation. Individuals should understand the cultural background of others to better navigate what could otherwise become a messy situation. | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.7%3A_Avoiding_Conflict_at_WorldCom%3A_The_Case_of_Bernard_Ebbers.txt |
Ethical Dilemma
Imagine that you are part of a bargaining team that has been engaged in negotiations for 6 long months. One night, as you are getting ready to leave and are gathering your things, you notice a piece of green paper on the ground near where Devin, a member of the opposite negotiation team, was sitting just a few minutes earlier. When you pick it up, you realize that it is a list of the ideal outcome for the other team.
At first you are ecstatic—this is the information you need to end these negotiations! Then you begin to recall your organizational behavior course and all those ethical dilemmas that seemed so easy back then. What should you do? Should you use the information for your team? I mean, why not, they were careless enough to leave it behind? On the other hand, would that be ethical?
Thinking back to that OB course, you recall some key questions you should ask yourself during negotiations:
• Would this be honest?
• Would this involve keeping my promises?
• Would I be following the Platinum Rule and be “treating people the way they want to be treated?”
As you are pondering these questions, you also realize that this is a key decision. There are some additional questions you should ask yourself around making ethical decisions if you plan on using this information to help your team:
• Is this decision fair?
• Will I feel better or worse about myself after I make this decision?
• Does this decision break any organizational rules?
• Does this decision break any laws?
• How would I feel if this decision were broadcast on the news?
Just as you think you’ve made your decision, Devin from the opposing team walks back in and asks you if you’ve seen a green piece of paper.
• What would you do?
• What are the ethical dilemmas involved?
• How would you justify your choice?
• What would be the consequences of your choice?
Individual Exercise
A Case of Listening: When Silence Is Golden (Devine, 2002)
Listening can be an effective tool during negotiations. William Devine was representing a client on a land purchase. “The owner and I spent 2 hours on the phone horse-trading contract issues, then turned to the price,” Devine explained. “We were \$100,000 apart.” The owner then said, “The price your client proposes will leave us well short of our projections. That makes it very tough on us.” The line went silent.
“My impulse was to say something in response to the silence, and I started to speak, then stopped. As I hesitated, I sensed that if I said, ‘My client can pay all cash,’ or ‘It’s still a good deal for you,’ then the owner would take my comment as an invitation to joust, we would battle over the hundred grand, and my client would end up having to pay some or all of that sum. The owner had not asked a question or proposed a compromise, so no response was required from me at that moment. I decided to remain silent. After what felt like days but was probably less than 30 seconds, I heard, ‘But I guess it’s good for us [i.e., his company] to just get this deal done, so we’ll do it.’”
Devine saved his client \$100,000 by staying silent.
Questions to Think About
1. What does this case suggest about the role of silence in negotiations?
2. Have you ever had a similar experience when saying nothing paid off?
3. Are there times when silence is a bad idea? Explain your answer.
Group Exercise
Salary Negotiations
Thinking about negotiations is a lot easier than actually engaging in them. In order to give you some practice with the information in this chapter, you will engage in a salary negotiation.
1. To make this more meaningful, the exercise will be based on a job that you are actually interested in. Think of a job you would like to have (either now or in the future). Imagine you have been offered this job. The salary is OK. It is about 15% below the market rate for this type of job, but you really want the job.
2. What will you do?
• Will you negotiate for a higher salary?
• What are the pros and cons of this choice?
3. If you’ve decided to negotiate (and we strongly suggest you do), work through the next six steps in the OB Toolbox “Seven Steps to Negotiating a Higher Salary.” Once you are up to step 5, let your instructor know you are ready to begin the negotiation process. | textbooks/biz/Management/Organizational_Behavior/10%3A_Conflict_and_Negotiations/10.9%3A_Exercises.txt |
Thumbnail: pixabay.com/photos/girl-cros...e-way-2573111/
11: Making Decisions
Google (NASDAQ: GOOG) is one of the best-known and most admired companies around the world, so much so that “googling” is the term many use to refer to searching information on the Web. What started out as a student project by two Stanford University graduates—Larry Page and Sergey Brin—in 1996, Google became the most frequently used Web search engine on the Internet with 1 billion searches per day in 2009, as well as other innovative applications such as Gmail, Google Earth, Google Maps, and Picasa. Google grew from 10 employees working in a garage in Palo Alto to 10,000 employees operating around the world by 2009. What is the formula behind this success?
Google strives to operate based on solid principles that may be traced back to its founders. In a world crowded with search engines, they were probably the first company that put users first. Their mission statement summarizes their commitment to end-user needs: “To organize the world’s information and to make it universally accessible and useful.” While other companies were focused on marketing their sites and increasing advertising revenues, Google stripped the search page of all distractions and presented users with a blank page consisting only of a company logo and a search box. Google resisted pop-up advertising, because the company felt that it was annoying to end-users. They insisted that all their advertisements would be clearly marked as “sponsored links.” This emphasis on improving user experience and always putting it before making more money in the short term seems to have been critical to their success.
Keeping their employees happy is also a value they take to heart. Google created a unique work environment that attracts, motivates, and retains the best players in the field. Google was ranked as the number 1 “Best Place to Work For” by Fortune magazine in 2007 and number 4 in 2010. This is not surprising if one looks closer to how Google treats employees. On their Mountain View, California, campus called the “Googleplex,” employees are treated to free gourmet food options including sushi bars and espresso stations. In fact, many employees complain that once they started working for Google, they tend to gain 10 to 15 pounds! Employees have access to gyms, shower facilities, video games, on-site child care, and doctors. Google provides 4 months of paternal leave with 75% of full pay and offers \$500 for take-out meals for families with a newborn. These perks create a place where employees feel that they are treated well and their needs are taken care of. Moreover, they contribute to the feeling that they are working at a unique and cool place that is different from everywhere else they may have worked.
In addition, Google encourages employee risk taking and innovation. How is this done? When a vice president in charge of the company’s advertising system made a mistake costing the company millions of dollars and apologized for the mistake, she was commended by Larry Page, who congratulated her for making the mistake and noting that he would rather run a company where they are moving quickly and doing too much, as opposed to being too cautious and doing too little. This attitude toward acting fast and accepting the cost of resulting mistakes as a natural consequence of working on the cutting edge may explain why the company is performing much ahead of competitors such as Microsoft and Yahoo! One of the current challenges for Google is to expand to new fields outside of their Web search engine business. To promote new ideas, Google encourages all engineers to spend 20% of their time working on their own ideas.
Google’s culture is reflected in their decision making as well. Decisions at Google are made in teams. Even the company management is in the hands of a triad: Larry Page and Sergey Brin hired Eric Schmidt to act as the CEO of the company, and they are reportedly leading the company by consensus. In other words, this is not a company where decisions are made by the senior person in charge and then implemented top down. It is common for several small teams to attack each problem and for employees to try to influence each other using rational persuasion and data. Gut feeling has little impact on how decisions are made. In some meetings, people reportedly are not allowed to say “I think…” but instead must say “the data suggest….” To facilitate teamwork, employees work in open office environments where private offices are assigned only to a select few. Even Kai-Fu Lee, the famous employee whose defection from Microsoft was the target of a lawsuit, did not get his own office and shared a cubicle with two other employees.
How do they maintain these unique values? In a company emphasizing hiring the smartest people, it is very likely that they will attract big egos that may be difficult to work with. Google realizes that its strength comes from its “small company” values that emphasize risk taking, agility, and cooperation. Therefore, they take their hiring process very seriously. Hiring is extremely competitive and getting to work at Google is not unlike applying to a college. Candidates may be asked to write essays about how they will perform their future jobs. Recently, they targeted potential new employees using billboards featuring brain teasers directing potential candidates to a Web site where they were subjected to more brain teasers. Each candidate may be interviewed by as many as eight people on several occasions. Through this scrutiny, they are trying to select “Googley” employees who will share the company’s values, perform at high levels, and be liked by others within the company.
Will this culture survive in the long run? It may be too early to tell, given that the company was only founded in 1998. The founders emphasized that their initial public offering (IPO) would not change their culture and they would not introduce more rules or change the way things are done in Google to please Wall Street. But can a public corporation really act like a start-up? Can a global giant facing scrutiny on issues including privacy, copyright, and censorship maintain its culture rooted in its days in a Palo Alto garage? Larry Page is quoted as saying, “We have a mantra: don’t be evil, which is to do the best things we know how for our users, for our customers, for everyone. So I think if we were known for that, it would be a wonderful thing.”
Discussion Questions
1. Do you think Google’s decision-making culture will help or hurt Google in the long run?
2. What are the factors responsible for the specific culture that exists in Google?
3. What type of decision-making approach has Google taken? Do you think this will remain the same over time? Why or why not?
4. Do you see any challenges Google may face in the future because of its emphasis on risk taking? | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.1%3A_Decision-Making_Culture%3A_The_Case_of_Google.txt |
Learning Objectives
1. Define decision making.
2. Understand different types of decisions.
Decision making refers to making choices among alternative courses of action—which may also include inaction. While it can be argued that management is decision making, half of the decisions made by managers within organizations ultimately fail (Ireland & Miller, 2004; Nutt, 2002; Nutt, 1999). Therefore, increasing effectiveness in decision making is an important part of maximizing your effectiveness at work. This chapter will help you understand how to make decisions alone or in a group while avoiding common decision-making pitfalls.
Individuals throughout organizations use the information they gather to make a wide range of decisions. These decisions may affect the lives of others and change the course of an organization. For example, the decisions made by executives and consulting firms for Enron ultimately resulted in a \$60 billion loss for investors, thousands of employees without jobs, and the loss of all employee retirement funds. But Sherron Watkins, a former Enron employee and now-famous whistleblower, uncovered the accounting problems and tried to enact change. Similarly, the decision made by firms to trade in mortgage-backed securities is having negative consequences for the entire economy in the United States. All parties involved in such outcomes made a decision, and everyone is now living with the consequences of those decisions.
Types of Decisions
Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake.
Peter Drucker
Despite the far-reaching nature of the decisions in the previous example, not all decisions have major consequences or even require a lot of thought. For example, before you come to class, you make simple and habitual decisions such as what to wear, what to eat, and which route to take as you go to and from home and school. You probably do not spend much time on these mundane decisions. These types of straightforward decisions are termed programmed decisions, or decisions that occur frequently enough that we develop an automated response to them. The automated response we use to make these decisions is called the decision rule. For example, many restaurants face customer complaints as a routine part of doing business. Because complaints are a recurring problem, responding to them may become a programmed decision. The restaurant might enact a policy stating that every time they receive a valid customer complaint, the customer should receive a free dessert, which represents a decision rule.
On the other hand, unique and important decisions require conscious thinking, information gathering, and careful consideration of alternatives. These are called nonprogrammed decisions. For example, in 2005 McDonald’s Corporation became aware of the need to respond to growing customer concerns regarding the unhealthy aspects (high in fat and calories) of the food they sell. This is a nonprogrammed decision, because for several decades, customers of fast-food restaurants were more concerned with the taste and price of the food, rather than its healthiness. In response to this problem, McDonald’s decided to offer healthier alternatives such as the choice to substitute French fries in Happy Meals with apple slices and in 2007 they banned the use of trans fat at their restaurants.
A crisis situation also constitutes a nonprogrammed decision for companies. For example, the leadership of Nutrorim was facing a tough decision. They had recently introduced a new product, ChargeUp with Lipitrene, an improved version of their popular sports drink powder, ChargeUp. At some point, a phone call came from a state health department to inform them of 11 cases of gastrointestinal distress that might be related to their product, which led to a decision to recall ChargeUp. The decision was made without an investigation of the information. While this decision was conservative, it was made without a process that weighed the information. Two weeks later it became clear that the reported health problems were unrelated to Nutrorim’s product. In fact, all the cases were traced back to a contaminated health club juice bar. However, the damage to the brand and to the balance sheets was already done. This unfortunate decision caused Nutrorim to rethink the way decisions were made when under pressure. The company now gathers information to make informed choices even when time is of the essence (Garvin, 2006).
Decisions can be classified into three categories based on the level at which they occur. Strategic decisions set the course of an organization. Tactical decisions are decisions about how things will get done. Finally, operational decisions refer to decisions that employees make each day to make the organization run. For example, think about the restaurant that routinely offers a free dessert when a customer complaint is received. The owner of the restaurant made a strategic decision to have great customer service. The manager of the restaurant implemented the free dessert policy as a way to handle customer complaints, which is a tactical decision. Finally, the servers at the restaurant are making individual decisions each day by evaluating whether each customer complaint received is legitimate and warrants a free dessert.
Figure 11.4 Examples of Decisions Commonly Made Within Organizations
Level of Decision Examples of Decision Who Typically Makes Decisions
Strategic Decisions Should we merge with another company?
Should we pursue a new product line?
Should we downsize our organization?
Top Management Teams, CEOs, and Boards of Directors
Tactical Decisions What should we do to help facilitate employees from the two companies working together?
How should we market the new product line?
Who should be let go when we downsize?
Managers
Operational Decisions How often should I communicate with my new coworkers?
What should I say to customers about our new product?
How will I balance my new work demands?
Employees throughout the organization
In this chapter we are going to discuss different decision-making models designed to understand and evaluate the effectiveness of nonprogrammed decisions. We will cover four decision-making approaches, starting with the rational decision-making model, moving to the bounded rationality decision-making model, the intuitive decision-making model, and ending with the creative decision-making model.
Making Rational Decisions
The rational decision-making model describes a series of steps that decision makers should consider if their goal is to maximize the quality of their outcomes. In other words, if you want to make sure that you make the best choice, going through the formal steps of the rational decision-making model may make sense.
Let’s imagine that your old, clunky car has broken down, and you have enough money saved for a substantial down payment on a new car. It will be the first major purchase of your life, and you want to make the right choice. The first step, therefore, has already been completed—we know that you want to buy a new car. Next, in step 2, you’ll need to decide which factors are important to you. How many passengers do you want to accommodate? How important is fuel economy to you? Is safety a major concern? You only have a certain amount of money saved, and you don’t want to take on too much debt, so price range is an important factor as well. If you know you want to have room for at least five adults, get at least 20 miles per gallon, drive a car with a strong safety rating, not spend more than \$22,000 on the purchase, and like how it looks, you have identified the decision criteria. All the potential options for purchasing your car will be evaluated against these criteria. Before we can move too much further, you need to decide how important each factor is to your decision in step 3. If each is equally important, then there is no need to weigh them, but if you know that price and mpg are key factors, you might weigh them heavily and keep the other criteria with medium importance. Step 4 requires you to generate all alternatives about your options. Then, in step 5, you need to use this information to evaluate each alternative against the criteria you have established. You choose the best alternative (step 6), and then you would go out and buy your new car (step 7).
Of course, the outcome of this decision will influence the next decision made. That is where step 8 comes in. For example, if you purchase a car and have nothing but problems with it, you will be less likely to consider the same make and model when purchasing a car the next time.
While decision makers can get off track during any of these steps, research shows that searching for alternatives in the fourth step can be the most challenging and often leads to failure. In fact, one researcher found that no alternative generation occurred in 85% of the decisions he studied (Nutt, 1994). Conversely, successful managers know what they want at the outset of the decision-making process, set objectives for others to respond to, carry out an unrestricted search for solutions, get key people to participate, and avoid using their power to push their perspective (Nutt, 1998).
The rational decision-making model has important lessons for decision makers. First, when making a decision, you may want to make sure that you establish your decision criteria before you search for alternatives. This would prevent you from liking one option too much and setting your criteria accordingly. For example, let’s say you started browsing cars online before you generated your decision criteria. You may come across a car that you feel reflects your sense of style and you develop an emotional bond with the car. Then, because of your love for the particular car, you may say to yourself that the fuel economy of the car and the innovative braking system are the most important criteria. After purchasing it, you may realize that the car is too small for your friends to ride in the back seat, which was something you should have thought about. Setting criteria before you search for alternatives may prevent you from making such mistakes. Another advantage of the rational model is that it urges decision makers to generate all alternatives instead of only a few. By generating a large number of alternatives that cover a wide range of possibilities, you are unlikely to make a more effective decision that does not require sacrificing one criterion for the sake of another.
Despite all its benefits, you may have noticed that this decision-making model involves a number of unrealistic assumptions as well. It assumes that people completely understand the decision to be made, that they know all their available choices, that they have no perceptual biases, and that they want to make optimal decisions. Nobel Prize winning economist Herbert Simon observed that while the rational decision-making model may be a helpful device in aiding decision makers when working through problems, it doesn’t represent how decisions are frequently made within organizations. In fact, Simon argued that it didn’t even come close.
Think about how you make important decisions in your life. It is likely that you rarely sit down and complete all 8 of the steps in the rational decision-making model. For example, this model proposed that we should search for all possible alternatives before making a decision, but that process is time consuming, and individuals are often under time pressure to make decisions. Moreover, even if we had access to all the information that was available, it could be challenging to compare the pros and cons of each alternative and rank them according to our preferences. Anyone who has recently purchased a new laptop computer or cell phone can attest to the challenge of sorting through the different strengths and limitations of each brand and model and arriving at the solution that best meets particular needs. In fact, the availability of too much information can lead to analysis paralysis, in which more and more time is spent on gathering information and thinking about it, but no decisions actually get made. A senior executive at Hewlett-Packard Development Company LP admits that his company suffered from this spiral of analyzing things for too long to the point where data gathering led to “not making decisions, instead of us making decisions” (Zell, Glassman, & Duron, 2007). Moreover, you may not always be interested in reaching an optimal decision. For example, if you are looking to purchase a house, you may be willing and able to invest a great deal of time and energy to find your dream house, but if you are only looking for an apartment to rent for the academic year, you may be willing to take the first one that meets your criteria of being clean, close to campus, and within your price range.
Making “Good Enough” Decisions
The bounded rationality model of decision making recognizes the limitations of our decision-making processes. According to this model, individuals knowingly limit their options to a manageable set and choose the first acceptable alternative without conducting an exhaustive search for alternatives. An important part of the bounded rationality approach is the tendency to satisfice (a term coined by Herbert Simon from satisfy and suffice), which refers to accepting the first alternative that meets your minimum criteria. For example, many college graduates do not conduct a national or international search for potential job openings. Instead, they focus their search on a limited geographic area, and they tend to accept the first offer in their chosen area, even if it may not be the ideal job situation. Satisficing is similar to rational decision making. The main difference is that rather than choosing the best option and maximizing the potential outcome, the decision maker saves cognitive time and effort by accepting the first alternative that meets the minimum threshold.
Making Intuitive Decisions
The intuitive decision-making model has emerged as an alternative to other decision making processes. This model refers to arriving at decisions without conscious reasoning. A total of 89% of managers surveyed admitted to using intuition to make decisions at least sometimes and 59% said they used intuition often (Burke & Miller, 1999). Managers make decisions under challenging circumstances, including time pressures, constraints, a great deal of uncertainty, changing conditions, and highly visible and high-stakes outcomes. Thus, it makes sense that they would not have the time to use the rational decision-making model. Yet when CEOs, financial analysts, and health care workers are asked about the critical decisions they make, seldom do they attribute success to luck. To an outside observer, it may seem like they are making guesses as to the course of action to take, but it turns out that experts systematically make decisions using a different model than was earlier suspected. Research on life-or-death decisions made by fire chiefs, pilots, and nurses finds that experts do not choose among a list of well thought out alternatives. They don’t decide between two or three options and choose the best one. Instead, they consider only one option at a time. The intuitive decision-making model argues that in a given situation, experts making decisions scan the environment for cues to recognize patterns (Breen, 2000; Klein, 2003; Salas & Klein, 2001). Once a pattern is recognized, they can play a potential course of action through to its outcome based on their prior experience. Thanks to training, experience, and knowledge, these decision makers have an idea of how well a given solution may work. If they run through the mental model and find that the solution will not work, they alter the solution before setting it into action. If it still is not deemed a workable solution, it is discarded as an option, and a new idea is tested until a workable solution is found. Once a viable course of action is identified, the decision maker puts the solution into motion. The key point is that only one choice is considered at a time. Novices are not able to make effective decisions this way, because they do not have enough prior experience to draw upon.
Making Creative Decisions
In addition to the rational decision making, bounded rationality, and intuitive decision-making models, creative decision making is a vital part of being an effective decision maker. Creativity is the generation of new, imaginative ideas. With the flattening of organizations and intense competition among companies, individuals and organizations are driven to be creative in decisions ranging from cutting costs to generating new ways of doing business. Please note that, while creativity is the first step in the innovation process, creativity and innovation are not the same thing. Innovation begins with creative ideas, but it also involves realistic planning and follow-through. Innovations such as 3M’s Clearview Window Tinting grow out of a creative decision-making process about what may or may not work to solve real-world problems.
The five steps to creative decision making are similar to the previous decision-making models in some keys ways. All the models include problem identification, which is the step in which the need for problem solving becomes apparent. If you do not recognize that you have a problem, it is impossible to solve it. Immersion is the step in which the decision maker consciously thinks about the problem and gathers information. A key to success in creative decision making is having or acquiring expertise in the area being studied. Then, incubation occurs. During incubation, the individual sets the problem aside and does not think about it for a while. At this time, the brain is actually working on the problem unconsciously. Then comes illumination, or the insight moment when the solution to the problem becomes apparent to the person, sometimes when it is least expected. This sudden insight is the “eureka” moment, similar to what happened to the ancient Greek inventor Archimedes, who found a solution to the problem he was working on while taking a bath. Finally, the verification and application stage happens when the decision maker consciously verifies the feasibility of the solution and implements the decision.
A NASA scientist describes his decision-making process leading to a creative outcome as follows: He had been trying to figure out a better way to de-ice planes to make the process faster and safer. After recognizing the problem, he immersed himself in the literature to understand all the options, and he worked on the problem for months trying to figure out a solution. It was not until he was sitting outside a McDonald’s restaurant with his grandchildren that it dawned on him. The golden arches of the M of the McDonald’s logo inspired his solution—he would design the de-icer as a series of Ms.[1] This represented the illumination stage. After he tested and verified his creative solution, he was done with that problem, except to reflect on the outcome and process.
How Do You Know If Your Decision-Making Process Is Creative?
Researchers focus on three factors to evaluate the level of creativity in the decision-making process. Fluency refers to the number of ideas a person is able to generate. Flexibility refers to how different the ideas are from one another. If you are able to generate several distinct solutions to a problem, your decision-making process is high on flexibility. Originality refers to how unique a person’s ideas are. You might say that Reed Hastings, founder and CEO of Netflix Inc. is a pretty creative person. His decision-making process shows at least two elements of creativity. We do not know exactly how many ideas he had over the course of his career, but his ideas are fairly different from each other. After teaching math in Africa with the Peace Corps, Hastings was accepted at Stanford, where he earned a master’s degree in computer science. Soon after starting work at a software company, he invented a successful debugging tool, which led to his founding of the computer troubleshooting company Pure Software LLC in 1991. After a merger and the subsequent sale of the resulting company in 1997, Hastings founded Netflix, which revolutionized the DVD rental business with online rentals delivered through the mail with no late fees. In 2007, Hastings was elected to Microsoft’s board of directors. As you can see, his ideas are high in originality and flexibility (Conlin, 2007).
Some experts have proposed that creativity occurs as an interaction among three factors: people’s personality traits (openness to experience, risk taking), their attributes (expertise, imagination, motivation), and the situational context (encouragement from others, time pressure, physical structures) (Amabile, 1988; Amabile et al., 1996; Ford & Gioia, 2000; Tierney, Farmer, & Graen, 1999; Woodman, Sawyer, & Griffin, 1993). For example, research shows that individuals who are open to experience, less conscientious, more self-accepting, and more impulsive tend to be more creative (Feist, 1998).
OB Toolbox: Ideas for Enhancing Organizational Creativity
• Team Composition
• Diversify your team to give them more inputs to build on and more opportunities to create functional conflict while avoiding personal conflict.
• Change group membership to stimulate new ideas and new interaction patterns.
• Leaderless teams can allow teams freedom to create without trying to please anyone up front.
• Team Process
• Engage in brainstorming to generate ideas. Remember to set a high goal for the number of ideas the group should come up with, encourage wild ideas, and take brainwriting breaks.
• Use the nominal group technique (see Tools and Techniques for Making Better Decisions below) in person or electronically to avoid some common group process pitfalls. Consider anonymous feedback as well.
• Use analogies to envision problems and solutions.
• Leadership
• Challenge teams so that they are engaged but not overwhelmed.
• Let people decide how to achieve goals, rather than telling them what goals to achieve.
• Support and celebrate creativity even when it leads to a mistake. Be sure to set up processes to learn from mistakes as well.
• Role model creative behavior.
• Culture
• Institute organizational memory so that individuals do not spend time on routine tasks.
• Build a physical space conducive to creativity that is playful and humorous—this is a place where ideas can thrive.
• Incorporate creative behavior into the performance appraisal process.
There are many techniques available that enhance and improve creativity. Linus Pauling, the Nobel Prize winner who popularized the idea that vitamin C could help strengthen the immune system, said, “The best way to have a good idea is to have a lot of ideas.”[2] One popular method of generating ideas is to use brainstorming. Brainstorming is a group process of generating ideas that follow a set of guidelines, including no criticism of ideas during the brainstorming process, the idea that no suggestion is too crazy, and building on other ideas (piggybacking). Research shows that the quantity of ideas actually leads to better idea quality in the end, so setting high idea quotas, in which the group must reach a set number of ideas before they are done, is recommended to avoid process loss and maximize the effectiveness of brainstorming. Another unique aspect of brainstorming is that since the variety of backgrounds and approaches give the group more to draw upon, the more people are included in the process, the better the decision outcome will be. A variation of brainstorming is wildstorming, in which the group focuses on ideas that are impossible and then imagines what would need to happen to make them possible (Scott, Leritz, & Mumford, 2004).
Figure 11.8
Decision Making Model Use This Model When:
Rational
• Information on alternatives can be gathered and quantified.
• The decision is important.
• You are trying to maximize your outcome.
Bounded Rationality
• The minimum criteria are clear.
• You do not have or you are not willing to invest much time to make the decision.
• You are not trying to maximize your outcome.
Intuitive
• Goals are unclear.
• There is time pressure and analysis paralysis would be costly.
• You have experience with the problem.
Creative
• Solutions to the problem are not clear.
• New solutions need to be generated.
• You have time to immerse yourself in the issues.
Which decision-making model should I use?
Key Takeaways
Decision making is choosing among alternative courses of action, including inaction. There are different types of decisions ranging from automatic, programmed decisions to more intensive nonprogrammed decisions. Structured decision-making processes include rational, bounded rationality, intuitive, and creative decision making. Each of these can be useful, depending on the circumstances and the problem that needs to be solved.
Exercises
1. What do you see as the main difference between a successful and an unsuccessful decision? How much does luck versus skill have to do with it? How much time needs to pass to know if a decision is successful or not?
2. Research has shown that over half of the decisions made within organizations fail. Does this surprise you? Why or why not?
3. Have you used the rational decision-making model to make a decision? What was the context? How well did the model work?
4. Share an example of a decision in which you used satisficing. Were you happy with the outcome? Why or why not? When would you be most likely to engage in satisficing?
5. Do you think intuition is respected as a decision-making style? Do you think it should be? Why or why not?
References
Amabile, T. M. (1988). A model of creativity and innovation in organizations. In B. M. Staw & L. L. Cummings (Eds.), Research in organizational behavior, vol. 10 (pp. 123–167) Greenwich, CT: JAI Press.
Amabile, T. M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). Assessing the work environment for creativity. Academy of Management Journal, 39, 1154–1184.
Breen, B. (2000, August). What’s your intuition? Fast Company, 290.
Burke, L. A., & Miller, M. K. (1999). Taking the mystery out of intuitive decision making. Academy of Management Executive, 13, 91–98.
Conlin, M. (2007, September 14). Netflix: Recruiting and retaining the best talent. Business Week Online. Retrieved March 1, 2008, from http://www.businessweek.com/managing/content/sep2007/ca20070913_564868.htm?campaign_id=rss_null.
Feist, G. J. (1998). A meta-analysis of personality in scientific and artistic creativity. Personality and Social Psychology Review, 2, 290–309.
Ford, C. M., & Gioia, D. A. (2000). Factors influencing creativity in the domain of managerial decision making. Journal of Management, 26, 705–732.
Garvin, D. A. (2006, January). All the wrong moves. Harvard Business Review, 84, 18–23.
Ireland, R. D., & Miller, C. C. (2004). Decision making and firm success. Academy of Management Executive, 18, 8–12.
Klein, G. (2003). Intuition at work. New York: Doubleday.
Nutt, P. C. (1994). Types of organizational decision processes. Administrative Science Quarterly, 29, 414–550.
Nutt, P. C. (1998). Surprising but true: Half the decisions in organizations fail. Academy of Management Executive, 13, 75–90.
Nutt, P. C. (1999). Surprising but true: Half the decisions in organizations fail. Academy of Management Executive, 13, 75–90.
Nutt, P. C. (2002). Why decisions fail. San Francisco: Berrett-Koehler.
Salas, E., & Klein, G. (2001). Linking expertise and naturalistic decision making. Mahwah, NJ: Lawrence Erlbaum Associates.
Scott, G., Leritz, L. E., & Mumford, M. D. (2004). The effectiveness of creativity training: A quantitative review. Creativity Research Journal, 16, 361–388.
Tierney, P., Farmer, S. M., & Graen, G. B. (1999). An examination of leadership and employee creativity: The relevance of traits and relationships. Personnel Psychology, 52, 591–620.
Woodman, R. W., Sawyer, J. E., & Griffin, R. W. (1993). Toward a theory of organizational creativity. Academy of Management Review, 18, 293–321.
Zell, D. M., Glassman, A. M., & Duron, S. A. (2007). Strategic management in turbulent times: The short and glorious history of accelerated decision making at Hewlett-Packard. Organizational Dynamics, 36, 93–104.
1. In person interview conducted by author at Ames Research Center, Mountain View, CA, 1990.
2. Quote retrieved May 1, 2008, from http://www.whatquote.com/quotes/linus-pauling/250801-the-best-way-to-have.htm. | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.2%3A_Understanding_Decision_Making.txt |
Learning Objectives
1. Understand overconfidence bias and how to avoid it.
2. Understand hindsight bias and how to avoid it.
3. Understand anchoring and how to avoid it.
4. Understand framing bias and how to avoid it.
5. Understand escalation of commitment and how to avoid it.
Avoiding Decision-Making Traps
No matter which model you use, it is important to know and avoid the decision-making traps that exist. Daniel Kahnemann (another Nobel Prize winner) and Amos Tversky spent decades studying how people make decisions. They found that individuals are influenced by overconfidence bias, hindsight bias, anchoring bias, framing bias, and escalation of commitment.
Overconfidence bias occurs when individuals overestimate their ability to predict future events. Many people exhibit signs of overconfidence. For example, 82% of the drivers surveyed feel they are in the top 30% of safe drivers, 86% of students at the Harvard Business School say they are better looking than their peers, and doctors consistently overestimate their ability to detect problems (Tilson, 1999). Much like friends that are 100% sure they can pick the winners of this week’s football games despite evidence to the contrary, these individuals are suffering from overconfidence bias. Similarly, in 2008, the French bank Société Générale lost over \$7 billion as a result of the rogue actions of a single trader. Jérôme Kerviel, a junior trader in the bank, had extensive knowledge of the bank’s control mechanisms and used this knowledge to beat the system. Interestingly, he did not make any money from these transactions himself, and his sole motive was to be successful. He secretly started making risky moves while hiding the evidence. He made a lot of profit for the company early on and became overly confident in his abilities to make even more. In his defense, he was merely able to say that he got “carried away” (The rogue rebuttal, 2008). People who purchase lottery tickets as a way to make money are probably suffering from overconfidence bias. It is three times more likely for a person driving 10 miles to buy a lottery ticket to be killed in a car accident than to win the jackpot (Orkin, 1991). Further, research shows that overconfidence leads to less successful negotiations (Neale & Bazerman, 1985). To avoid this bias, take the time to stop and ask yourself if you are being realistic in your judgments.
Hindsight bias is the opposite of overconfidence bias, as it occurs when looking backward in time and mistakes seem obvious after they have already occurred. In other words, after a surprising event occurred, many individuals are likely to think that they already knew the event was going to happen. This bias may occur because they are selectively reconstructing the events. Hindsight bias tends to become a problem when judging someone else’s decisions. For example, let’s say a company driver hears the engine making unusual sounds before starting the morning routine. Being familiar with this car in particular, the driver may conclude that the probability of a serious problem is small and continues to drive the car. During the day, the car malfunctions and stops miles away from the office. It would be easy to criticize the decision to continue to drive the car because in hindsight, the noises heard in the morning would make us believe that the driver should have known something was wrong and taken the car in for service. However, the driver in question may have heard similar sounds before with no consequences, so based on the information available at the time, continuing with the regular routine may have been a reasonable choice. Therefore, it is important for decision makers to remember this bias before passing judgments on other people’s actions.
Anchoring refers to the tendency for individuals to rely too heavily on a single piece of information. Job seekers often fall into this trap by focusing on a desired salary while ignoring other aspects of the job offer such as additional benefits, fit with the job, and working environment. Similarly, but more dramatically, lives were lost in the Great Bear Wilderness Disaster when the coroner, within 5 minutes of arriving at the accident scene, declared all five passengers of a small plane dead, which halted the search effort for potential survivors. The next day two survivors who had been declared dead walked out of the forest. How could a mistake like this have been made? One theory is that decision biases played a large role in this serious error, and anchoring on the fact that the plane had been consumed by flames led the coroner to call off the search for any possible survivors (Becker, 2007).
Framing bias is another concern for decision makers. Framing bias refers to the tendency of decision makers to be influenced by the way that a situation or problem is presented. For example, when making a purchase, customers find it easier to let go of a discount as opposed to accepting a surcharge, even though they both might cost the person the same amount of money. Similarly, customers tend to prefer a statement such as “85% lean beef” as opposed to “15% fat” (Li, Sun & Wang, 2007). It is important to be aware of this tendency, because depending on how a problem is presented to us, we might choose an alternative that is disadvantageous simply because of the way it is framed.
Escalation of commitment occurs when individuals continue on a failing course of action after information reveals it may be a poor path to follow. It is sometimes called the “sunken costs fallacy,” because continuation is often based on the idea that one has already invested in the course of action. For example, imagine a person who purchases a used car, which turns out to need something repaired every few weeks. An effective way of dealing with this situation might be to sell the car without incurring further losses, donate the car, or use it until it falls apart. However, many people would spend hours of their time and hundreds, even thousands of dollars repairing the car in the hopes that they might recover their initial investment. Thus, rather than cutting their losses, they waste time and energy while trying to justify their purchase of the car.
A classic example of escalation of commitment from the corporate world is Motorola Inc.’s Iridium project. In the 1980s, phone coverage around the world was weak. For example, it could take hours of dealing with a chain of telephone operators in several different countries to get a call through from Cleveland to Calcutta. There was a real need within the business community to improve phone access around the world. Motorola envisioned solving this problem using 66 low-orbiting satellites, enabling users to place a direct call to any location around the world. At the time of idea development, the project was technologically advanced, sophisticated, and made financial sense. Motorola spun off Iridium as a separate company in 1991. It took researchers a total of 15 years to develop the product from idea to market release. However, in the 1990s, the landscape for cell phone technology was dramatically different from that in the 1980s, and the widespread cell phone coverage around the world eliminated most of the projected customer base for Iridium. Had they been paying attention to these developments, the decision makers could have abandoned the project at some point in the early 1990s. Instead, they released the Iridium phone to the market in 1998. The phone cost \$3,000, and it was literally the size of a brick. Moreover, it was not possible to use the phone in moving cars or inside buildings. Not surprisingly, the launch was a failure, and Iridium filed for bankruptcy in 1999 (Finkelstein & Sanford, 2000). In the end, the company was purchased for \$25 million by a group of investors (whereas it cost the company \$5 billion to develop its product), scaled down its operations, and modified it for use by the Department of Defense to connect soldiers in remote areas not served by land lines or cell phones.
Why does escalation of commitment occur? There may be many reasons, but two are particularly important. First, decision makers may not want to admit that they were wrong. This may be because of personal pride or being afraid of the consequences of such an admission. Second, decision makers may incorrectly believe that spending more time and energy might somehow help them recover their losses. Effective decision makers avoid escalation of commitment by distinguishing between when persistence may actually pay off versus when it might mean escalation of commitment. To avoid escalation of commitment, you might consider having strict turning back points. For example, you might determine up front that you will not spend more than \$500 trying to repair the car and will sell it when you reach that point. You might also consider assigning separate decision makers for the initial buying and subsequent selling decisions. Periodic evaluations of an initially sound decision to see whether the decision still makes sense is also another way of preventing escalation of commitment. This type of review becomes particularly important in projects such as the Iridium phone, in which the initial decision is not immediately implemented but instead needs to go through a lengthy development process. In such cases, it becomes important to periodically assess the soundness of the initial decision in the face of changing market conditions. Finally, creating an organizational climate in which individuals do not fear admitting that their initial decision no longer makes economic sense would go a long way in preventing escalation of commitment, as it could lower the regret the decision maker may experience (Wong & Kwong, 2007).
So far we have focused on how individuals make decisions and how to avoid decision traps. Next we shift our focus to the group level. There are many similarities as well as many differences between individual and group decision making. There are many factors that influence group dynamics and also affect the group decision-making process. We will discuss some of them in the following section.
Key Takeaways
Understanding decision-making traps can help you avoid and manage them. Overconfidence bias can cause you to ignore obvious information. Hindsight bias can similarly cause a person to incorrectly believe in their ability to predict events. Anchoring and framing biases show the importance of the way problems or alternatives are presented in influencing one’s decision. Escalation of commitment demonstrates how individuals’ desire to be consistent or avoid admitting a mistake can cause them to continue to invest in a decision that is no longer prudent.
Exercises
1. Describe a time when you fell into one of the decision-making traps. How did you come to realize that you had made a poor decision?
2. How can you avoid escalation of commitment?
3. Share an example of anchoring.
4. Which of the traps seems the most dangerous for decision makers and why? | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.3%3A_Faulty_Decision_Making.txt |
Learning Objectives
1. Understand the pros and cons of individual and group decision making.
2. Learn to recognize the signs of groupthink.
3. Recognize different tools and techniques for making better decisions.
When It Comes to Decision Making, Are Two Heads Better Than One?
The answer to this question depends on several factors. Group decision making has the advantage of drawing from the experiences and perspectives of a larger number of individuals. Hence, a group may have the potential to be more creative and lead to more effective decisions. In fact, groups may sometimes achieve results beyond what they could have done as individuals. Groups may also make the task more enjoyable for the members. Finally, when the decision is made by a group rather than a single individual, implementation of the decision will be easier, because group members will be more invested in the decision. If the group is diverse, better decisions may be made, because different group members may have different ideas based on their backgrounds and experiences. Research shows that for top management teams, diverse groups that debate issues make decisions that are more comprehensive and better for the bottom line (Simons, Pelled, & Smith, 1999).
Despite its popularity within organizations, group decision making suffers from a number of disadvantages. We know that groups rarely outperform their best member (Miner, 1984). While groups have the potential to arrive at an effective decision, they often suffer from process losses. For example, groups may suffer from coordination problems. Anyone who has worked with a team of individuals on a project can attest to the difficulty of coordinating members’ work or even coordinating everyone’s presence in a team meeting. Furthermore, groups can suffer from groupthink. Finally, group decision making takes more time compared to individual decision making, because all members need to discuss their thoughts regarding different alternatives.
Thus, whether an individual or a group decision is preferable will depend on the specifics of the situation. For example, if there is an emergency and a decision needs to be made quickly, individual decision making might be preferred. Individual decision making may also be appropriate if the individual in question has all the information needed to make the decision and if implementation problems are not expected. On the other hand, if one person does not have all the information and skills needed to make a decision, if implementing the decision will be difficult without the involvement of those who will be affected by the decision, and if time urgency is more modest, then decision making by a group may be more effective.
Figure 11.11 Advantages and Disadvantages of Different Levels of Decision Making
Individual Decision Making Group Decision Making
Pros Cons Pros Cons
Typically faster than group decision making Fewer ideas Diversity of ideas and can piggyback on others’ ideas Takes longer
Best individual in a group usually outperforms the group Identifying the best individual can be challenging Greater commitment to ideas Group dynamics such as groupthink can occur
Accountability is easier to determine Possible to put off making decisions if left alone to do it Interaction can be fun and serves as a teambuilding task Social loafing–harder to identify responsibility for decisions
Groupthink
Have you ever been in a decision-making group that you felt was heading in the wrong direction but you didn’t speak up and say so? If so, you have already been a victim of groupthink. Groupthink is a tendency to avoid a critical evaluation of ideas the group favors. Iriving Janis, author of a book called Victims of Groupthink, explained that groupthink is characterized by eight symptoms (Janis, 1972):
1. Illusion of invulnerability is shared by most or all of the group members, which creates excessive optimism and encourages them to take extreme risks.
2. Collective rationalizations occur, in which members downplay negative information or warnings that might cause them to reconsider their assumptions.
3. An unquestioned belief in the group’s inherent morality occurs, which may incline members to ignore ethical or moral consequences of their actions.
4. Stereotyped views of outgroups are seen when groups discount rivals’ abilities to make effective responses.
5. Direct pressure is exerted on any members who express strong arguments against any of the group’s stereotypes, illusions, or commitments.
6. Self-censorship occurs when members of the group minimize their own doubts and counterarguments.
7. Illusions of unanimity occur, based on self-censorship and direct pressure on the group. The lack of dissent is viewed as unanimity.
8. The emergence of self-appointed mindguards happens when one or more members protect the group from information that runs counter to the group’s assumptions and course of action.
OB Toolbox: Recommendations for Avoiding Groupthink
• Groups should do the following:
• Discuss the symptoms of groupthink and how to avoid them.
• Assign a rotating devil’s advocate to every meeting.
• Invite experts or qualified colleagues who are not part of the core decision-making group to attend meetings and get reactions from outsiders on a regular basis and share these with the group.
• Encourage a culture of difference where different ideas are valued.
• Debate the ethical implications of the decisions and potential solutions being considered.
• Individuals should do the following:
• Monitor personal behavior for signs of groupthink and modify behavior if needed.
• Check for self-censorship.
• Carefully avoid mindguard behaviors.
• Avoid putting pressure on other group members to conform.
• Remind members of the ground rules for avoiding groupthink if they get off track.
• Group leaders should do the following:
• Break the group into two subgroups from time to time.
• Have more than one group work on the same problem if time and resources allow it. This makes sense for highly critical decisions.
• Remain impartial and refrain from stating preferences at the outset of decisions.
• Set a tone of encouraging critical evaluations throughout deliberations.
• Create an anonymous feedback channel through which all group members can contribute if desired.
Tools and Techniques for Making Better Decisions
Nominal Group Technique (NGT) was developed to help with group decision making by ensuring that all members participate fully. NGT is not a technique to be used routinely at all meetings. Rather, it is used to structure group meetings when members are grappling with problem solving or idea generation. It follows four steps (Delbecq, Van de Ven, & Gustafson, 1975). First, each member of the group begins by independently and silently writing down ideas. Second, the group goes in order around the room to gather all the ideas that were generated. This process continues until all the ideas are shared. Third, a discussion takes place around each idea, and members ask for and give clarification and make evaluative statements. Finally, group members vote for their favorite ideas by using ranking or rating techniques. Following the four-step NGT helps to ensure that all members participate fully, and it avoids group decision-making problems such as groupthink.
Delphi Technique is unique because it is a group process using written responses to a series of questionnaires instead of physically bringing individuals together to make a decision. The first questionnaire asks individuals to respond to a broad question such as stating the problem, outlining objectives, or proposing solutions. Each subsequent questionnaire is built from the information gathered in the previous one. The process ends when the group reaches a consensus. Facilitators can decide whether to keep responses anonymous. This process is often used to generate best practices from experts. For example, Purdue University Professor Michael Campion used this process when he was editor of the research journal Personnel Psychology and wanted to determine the qualities that distinguished a good research article. Using the Delphi technique, he was able to gather responses from hundreds of top researchers from around the world and distill them into a checklist of criteria that he could use to evaluate articles submitted to his journal, all without ever having to leave his office (Campion, 1993).
Majority rule refers to a decision-making rule in which each member of the group is given a single vote and the option receiving the greatest number of votes is selected. This technique has remained popular, perhaps due to its simplicity, speed, ease of use, and representational fairness. Research also supports majority rule as an effective decision-making technique (Hastie & Kameda, 2005). However, those who did not vote in favor of the decision will be less likely to support it.
Consensus is another decision-making rule that groups may use when the goal is to gain support for an idea or plan of action. While consensus tends to require more time, it may make sense when support is needed to enact the plan. The process works by discussing the issues at hand, generating a proposal, calling for consensus, and discussing any concerns. If concerns still exist, the proposal is modified to accommodate them. These steps are repeated until consensus is reached. Thus, this decision-making rule is inclusive, participatory, cooperative, and democratic. Research shows that consensus can lead to better accuracy (Roch, 2007), and it helps members feel greater satisfaction with decisions (Mohammed & Ringseis, 2001). However, groups take longer with this approach, and if consensus cannot be reached, members tend to become frustrated (Peterson, 1999).
OB Toolbox: Perform a Project “Premortem”
Doctors routinely perform postmortems to understand what went wrong with a patient who has died. The idea is for everyone to learn from the unfortunate outcome so that future patients will not meet a similar fate. But what if you could avoid a horrible outcome before it happened by proactively identifying project risks? Research has shown that the simple exercise of imagining what could go wrong with a given decision can increase people’s ability to correctly identify reasons for future successes or failures by 30% (Mitchell, Russo, & Pennington, 1989). A “premortem” is a way to imagine what might go wrong and avoid it before spending a cent or having to change course along the way. Gary Klein, an expert on decision making in fast-paced, uncertain, complex, and critical environments, recommends that decision makers follow a five-step process to increase their chances of success.
1. A planning team comes up with an outline of a plan, such as the launching of a new product.
2. Either the existing group or a unique group is then told to imagine looking into a crystal ball and seeing that the new product failed miserably. They then write down all the reasons they can imagine that might have led to this failure. Each team member shares items from their list until all the potential problems have been identified.
3. The list is reviewed for additional ideas.
4. The issues are sorted into categories in the search for themes.
5. The plan should then be revised to correct the flaws and avoid these potential problems.
This technique allows groups to truly delve into “what if” scenarios. For example, in a premortem session at a Fortune 500 company, an executive imagined that a potential billion-dollar environmental sustainability project might fail because the CEO had retired.
Group Decision Support Systems (GDSS) are interactive computer-based systems that are able to combine communication and decision technologies to help groups make better decisions. Research shows that a GDSS can actually improve the output of groups’ collaborative work through higher information sharing (Lam & Schaubroeck, 2000). Organizations know that having effective knowledge management systems to share information is important, and their spending reflects this reality. Businesses invested \$2.7 billion into new systems in 2002, and projections were for this number to double every 5 years. As the popularity of these systems grows, they risk becoming counterproductive. Humans can only process so many ideas and information at one time. As virtual meetings grow larger, it is reasonable to assume that information overload can occur and good ideas will fall through the cracks, essentially recreating a problem that the GDSS was intended to solve, which is to make sure every idea is heard. Another problem is the system possibly becoming too complicated. If the systems evolve to a point of uncomfortable complexity, it has recreated the problem. Those who understand the interface will control the narrative of the discussion, while those who are less savvy will only be along for the ride (Nunamaker et al., 1991). Lastly, many of these programs fail to take into account the factor of human psychology. These systems could make employees more reluctant to share information because of lack of control, lack of immediate feedback, or the fear of online “flames.”
Decision trees are diagrams in which answers to yes or no questions lead decision makers to address additional questions until they reach the end of the tree. Decision trees are helpful in avoiding errors such as framing bias (Wright & Goodwin, 2002). Decision trees tend to be helpful in guiding the decision maker to a predetermined alternative and ensuring consistency of decision making—that is, every time certain conditions are present, the decision maker will follow one course of action as opposed to others if the decision is made using a decision tree.
Key Takeaways
There are trade-offs between making decisions alone and within a group. Groups have a greater diversity of experiences and ideas than individuals, but they also have potential process losses such as groupthink. Groupthink can be avoided by recognizing the eight symptoms discussed. Finally, there are a variety of tools and techniques available for helping to make more effective decisions in groups, including the nominal group technique, Delphi technique, majority rule, consensus, GDSS, and decision trees.
Exercises
1. Do you prefer to make decisions in a group or alone? What are the main reasons for your preference?
2. Have you been in a group that used the brainstorming technique? Was it an effective tool for coming up with creative ideas? Please share examples.
3. Have you been in a group that experienced groupthink? If so, how did you deal with it?
4. Which of the decision-making tools discussed in this chapter (NGT, Delphi, and so on) have you used? How effective were they? | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.4%3A_Decision_Making_in_Groups.txt |
Learning Objectives
1. Consider the role of ethical behavior on decision making.
2. Consider the role of national culture on decision making.
Ethics and Decision Making
Because many decisions involve an ethical component, one of the most important considerations in management is whether the decisions you are making as an employee or manager are ethical. Here are some basic questions you can ask yourself to assess the ethics of a decision.[1]
• Is this decision fair?
• Will I feel better or worse about myself after I make this decision?
• Does this decision break any organizational rules?
• Does this decision break any laws?
• How would I feel if this decision were broadcast on the news?
The current economic crisis in the United States and many other parts of the world is a perfect example of legal yet unethical decisions resulting in disaster. Many experts agree that one of the driving forces behind the sliding economy was the lending practices of many banks (of which several no longer exist). In March of 2008, a memo from JPMorgan Chase & Co. was leaked to an Oregon newspaper called “Zippy Cheats & Tricks” (Zippy is Chase’s automated, computer-based loan approval system). Although Chase executives firmly stated that the contents of the memo were not company policy, the contents clearly indicate some of the questionable ethics involved with the risky loans now clogging the financial system.
In the memo, several steps were outlined to help a broker push a client’s approval through the system, including, “In the income section of your 1003, make sure you input all income in base income. DO NOT break it down by overtime, commissions or bonus. NO GIFT FUNDS! If your borrower is getting a gift, add it to a bank account along with the rest of the assets. Be sure to remove any mention of gift funds on the rest of your 1003. If you do not get Stated/Stated, try resubmitting with slightly higher income. Inch it up \$500 to see if you can get the findings you want. Do the same for assets” (Manning, 2008).
While it is not possible to determine how widely circulated the memo was, the mentality it captures was clearly present during the lending boom that precipitated the current meltdown. While some actions during this period were distinctly illegal, many people worked well within the law and simply made unethical decisions. Imagine a real estate agent that knows a potential buyer’s income. The buyer wants to purchase a home priced at \$400,000, and the agent knows the individual cannot afford to make payments on a mortgage of that size. Instead of advising the buyer accordingly and losing a large commission, the agent finds a bank willing to lend money to an unqualified borrower, collects the commission for the sale, and moves on to the next client. It is clear how these types of unethical yet legal decisions can have dramatic consequences.
Suppose you are the CEO of a small company that needs to cut operational costs or face bankruptcy. You have decided that you will not be issuing the yearly bonus that employees have come to expect. The first thing you think about after coming to this decision is whether or not it is fair. It seems logical to you that since the alternative would be the failure of the company and everyone’s losing their jobs, not receiving a bonus is preferable to being out of work. Additionally, you will not be collecting a bonus yourself, so that the decision will affect everyone equally. After deciding that the decision seems fair, you try to assess how you will feel about yourself after informing employees that there will not be a bonus this year. Although you do not like the idea of not being able to issue the yearly bonus, you are the CEO, and CEOs often have to make tough decisions. Since your ultimate priority is to save the company from bankruptcy, you decide it is better to withhold bonuses rather than issuing them, knowing the company cannot afford it. Despite the fact that bonuses have been issued every year since the company was founded, there are no organizational policies or laws requiring that employees receive a bonus; it has simply been a company tradition. The last thing you think about is how you would feel if your decision were broadcast on the news. Because of the dire nature of the situation, and because the fate of the business is at stake, you feel confident that this course of action is preferable to laying off loyal employees. As long as the facts of the situation were reported correctly, you feel the public would understand why the decision was made.
Decision Making Around the Globe
Decision-making styles and approaches tend to differ depending on the context, and one important contextual factor to keep in mind is the culture in which decisions are being made. Research on Japanese and Dutch decision makers show that while both cultures are consensus-oriented, Japanese managers tend to seek consensus much more than Dutch managers (Noorderhaven, 2007). Additionally, American managers tend to value quick decision making, while Chinese managers are more reflective and take their time to make important decisions—especially when they involve some sort of potential conflict.
Another example of how decision-making styles may differ across cultures is the style used in Japan called nemawashi. Nemawashi refers to building consensus within a group before a decision is made. Japanese decision makers talk to parties whose support is needed beforehand, explain the subject, address their concerns, and build their support. Using this method clearly takes time and may lead to slower decision making. However, because all parties important to the decision will give their stamp of approval before the decision is made, this technique leads to a quicker implementation of the final decision once it is decided.
Key Takeaways
Asking yourself some key questions can help you determine if a decision you are considering is ethical. A decision being legal does not automatically make it ethical. Unethical decisions can lead to business failures for a variety of reasons. Different cultures have different styles of decision making. In countries with a collectivist orientation, a high value is placed on building consensus. Some national cultures value quick decision making, whereas others believe in taking time to arrive at a decision. Taking national culture into account is important in effective cross-cultural business interactions.
Exercises
1. How can you assess if you are making ethical decisions or not?
2. Have you seen examples of ethical or unethical decisions being made? Describe what you observed.
3. Have you seen examples of national culture affecting decision making?
4. What advice surrounding decision making would you give to someone who will be managing a new division of a company in another culture?
5. What can go wrong when cultural factors are ignored?
References
Manning, J. (2008, March 27). Chase mortgage memo pushes “Cheats & Tricks.” The Oregonian. Retrieved November 1, 2008, from www.oregonlive.com/business/i...ushes_che.html.
Noorderhaven, N. G. (2007). Comprehensiveness versus pragmatism: Consensus at the Japanese-Dutch interface. Journal of Management Studies, 44, 1349–1370.
1. Adapted from ideas contained in Kenneth Blanchard and Norman Vincent Peale (1988). The power of ethical management. New York: William Morrow. | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.5%3A_The_Role_of_Ethics_and_National_Culture.txt |
“If you always do what you always did, you always get what you always got,” says Ingar Skaug—and he should know. Skaug is president and CEO of Wilh. Wilhelmsen ASA (OSE: ABM), a leading global maritime industry company based in Norway with 23,000 employees and 516 offices worldwide. He faced major challenges when he began his job at Wilhelmsen Lines in 1989. The entire top management team of the company had been killed in an airplane crash when returning from a ship dedication ceremony. As you can imagine, employees were mourning the loss of their friends and leadership team. While Skaug knew that changes needed to be made within the organization, he also knew that he had to proceed slowly and carefully in implementing any changes. The biggest challenge he saw was the decision-making style within the company.
Skaug recalls this dilemma as follows:
I found myself in a situation in Wilhelmsen Lines where everyone was coming to my office in the morning and they expected me to take all the decisions. I said to people, “Those are not my decisions. I don’t want to take those decisions. You take those decisions.” So for half a year they were screaming about that I was very afraid of making decisions. So I had a little bit of a struggle with the organization, with the people there at the time. They thought I was a very poor manager because I didn’t dare to make decisions. I had to teach them. I had to force the people to make their own decisions.
His lessons paid off over the years. The company has now invented a cargo ship capable of transporting 10,000 vehicles while running exclusively on renewable energy via the power of the sun, wind, and water. He and others within the company cite the freedom that employees feel to make decisions and mistakes on their way to making discoveries in improved methods as a major factor in their success in revolutionizing the shipping industry one innovation at a time.
Discussion Questions
1. What are some additional challenges Ingar Skaug probably faced while taking over control of Wilh. Wilhelmsen?
2. Skaug says that for the first several months as CEO, he deferred many decisions to other employees. In what types of situations might this have been inappropriate? Would Skaug’s method have worked if he were taking over a hospital or an investment firm?
3. How would you approach a situation like Skaug’s?
4. For Skaug, the decision to defer decisions worked for the company. What are some potential pitfalls this management style could have fallen into? Does the pace of the industry make a difference in what management style is appropriate (e.g., the fast pace of a high-tech company versus the slower pace of an industrial manufacturing company)?
11.7: Conclusion
Decision making is a critical component of business. Some decisions are obvious and can be made quickly, without investing much time and effort in the decision-making process. Others, however, require substantial consideration of the circumstances surrounding the decision, available alternatives, and potential outcomes. Fortunately, there are several methods that can be used when making a difficult decision, depending on various environmental factors. Some decisions are best made by groups. Group decision-making processes also have multiple models to follow, depending on the situation. Even when specific models are followed, groups and individuals can often fall into potential decision-making pitfalls. If too little information is available, decisions might be made based on a feeling. On the other hand, if too much information is presented, people can suffer from analysis paralysis, in which no decision is reached because of the overwhelming number of alternatives.
Ethics and culture both play a part in decision making. From time to time, a decision can be legal but not ethical. These gray areas that surround decision making can further complicate the process, but following basic guidelines can help people ensure that the decisions they make are ethical and fair. Additionally, different cultures can have different styles of decision making. In some countries such as the United States, it may be customary to come to a simple majority when making a decision. Conversely, a country such as Japan will often take the time to reach consensus when making decisions. Being aware of the various methods for making decisions as well as potential problems that may arise can help people become effective decision makers in any situation. | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.6%3A_Empowered_Decision_Making%3A_The_Case_of_Ingar_Skaug.txt |
Ethical Dilemma
Herb’s Concoction (and Martha’s Dilemma): The Case of the Deadly Fertilizer[1]
Martha Wang worked in the Consumer Affairs Department of a company called Herb’s Garden Products. Martha was a relatively new employee and had only worked there 6 months, while most employees at Herb’s had been with the company since its beginning back in 1958. She enjoyed her job and hoped to be promoted at her next performance appraisal. One especially exciting part of working at Herb’s was that they had made a public commitment to protecting the environment. There were regular meetings at work about the choice to brand the organization in this way, sell their products at “green” markets, and capture some of the growing consumer market for natural products. Martha’s values were closely aligned with this mentality, so she really loved her new job at Herb’s Garden Products. How quickly things change.
One day, Martha received a call from a dissatisfied customer who complained that Herb’s Special Fertilizer Mix killed her dog, an expensive and beloved toy poodle. Martha knew that the fertilizer was made mostly of fish byproducts and chicken manure, but she had also heard there was a “secret ingredient” that had only been revealed to long-time employees. The company had advertised the product as “safe enough to eat for breakfast” and “able to work wonders on any plant.” However, Martha had used the product only once herself. Shortly after applying the fertilizer, Martha found several dead birds near the garden where she had spread the most fertilizer. At the time, she convinced herself this was just a coincidence. Listening now to this customer describing the death of her small dog after lying on the soil near the fertilizer, Martha began to wonder if those birds had perished for the same reason. Martha took the customer’s name and number and went immediately to her boss.
Martha’s boss was Herb’s nephew, Mac. Once Martha explained her story about her own experience with the fertilizer and the customer’s claim that it killed her dog, Mac began to smile. “Some people will complain about the littlest things,” Mac said. Martha protested that it was her job as a consumer affairs officer to address the serious concerns of this customer and follow company procedure to ensure the safety of future customers and their pets. Mac laughed and said, “You really believe that something is wrong with our product? We’ve been selling this fertilizer for 35 years. People love it! Now and again someone whines about finding dead animals, but that’s just their imagination. After all, we use all-natural ingredients!” Martha thanked Mac for his help and slowly headed back toward her cubicle. She felt extremely confused and torn about her role at this point. What should she tell the customer when she called her back? Was the fertilizer safe? Should she worry about working in a place with potentially dangerous products? What about quality issues for the company’s products in general? Were Herb’s other products unsafe or of poor quality? What might be the environmental impact of this product as it runs off into lakes and streams? As her head began to spin with the difficulty of the task ahead of her, the phone suddenly rang. It was Herb himself, the owner and founder of the company. “Martha,” the voice on the other line whispered, “Herb’s Special Fertilizer is our best seller! Don’t let us down.”
NOW It Is Your Turn
• What kind of decision does Martha face? What are some of her decision-making challenges?
• What recommendations do you have for a company facing this situation? What should they do to deal with this customer complaint? From the perspective of the management at Herb’s Garden Products, what are some next steps that could be taken?
Individual Exercise
The Nine Dots Problem
Instructions: Using only four straight lines, intersect all the dots without ever lifting up your pen or pencil.
Figure 11.16
Group Exercise
Moon Walk and Talk[2]
Warning: Do not discuss this exercise with other members of your class until instructed to do so.
You are a member of the moon space crew originally scheduled to rendezvous with a mother ship on the lighted surface of the moon. Due to mechanical difficulties, however, your ship was forced to land at a spot some 200 miles (320 km) from the rendezvous point. During reentry and landing, much of the equipment aboard was damaged, and because survival depends on reaching the mother ship, the most critical items available must be chosen for the 200-mile (320 km) trip. Please see the list of the 15 items left intact and undamaged after landing. Your task is to rank the items in terms of their importance for your crew to reach the rendezvous point. Place the number 1 by the most important, 2 by the next most important, and so on, with 15 being the least important.
Table 11.1
Undamaged items My ranking Group ranking NASA ranking My difference Group difference
Box of matches
Food concentrates
50 feet of nylon
Parachute silk
Portable heating unit
Two 45-caliber pistols
One case dehydrated milk
Two 100 lb. tanks oxygen
Stellar map (of moon’s constellations)
Life raft
Magnetic compass
5 gallons of water
Signal flares
First aid kit containing injection needles
Solar powered FM receiver–transmitter
1. Jeanne Enders, Portland State University. Used by permission of the author.
2. NASA educational materials. Retrieved March 2, 2008, from http://www.nasa.gov/audience/foreducators/topnav/materials/listbytype/Survival_Lesson.html. | textbooks/biz/Management/Organizational_Behavior/11%3A_Making_Decisions/11.8%3A_Exercises.txt |
Thumbnail: www.pexels.com/photo/woman-standing-on-the-center-table-with-four-people-on-the-side-1367271/
12: Leading People Within Organizations
She is among the top 100 most influential people according to Time magazine’s 2008 list. She is also number 5 in Forbes’s “Most Influential Women in the World” (2007), number 1 in Fortune’s “50 Most Powerful Women” (2006), and number 22 in Fortune’s “25 Most Powerful People in Business” (2007). The lists go on and on. To those familiar with her work and style, this should come as no surprise: Even before she became the CEO of PepsiCo Inc. (NYSE: PEP) in 2006, she was one of the most powerful executives at PepsiCo and one of the two candidates being groomed for the coveted CEO position. Born in Chennai, India, Nooyi graduated from Yale’s School of Management and worked in companies such as the Boston Consulting Group Inc., Motorola Inc., and ABB Inc. She also led an all-girls rock band in high school, but that is a different story.
What makes her one of the top leaders in the business world today? To start with, she has a clear vision for PepsiCo, which seems to be the right vision for the company at this point in time. Her vision is framed under the term “performance with purpose,” which is based on two key ideas: tackling the obesity epidemic by improving the nutritional status of PepsiCo products and making PepsiCo an environmentally sustainable company. She is an inspirational speaker and rallies people around her vision for the company. She has the track record to show that she means what she says. She was instrumental in PepsiCo’s acquisition of the food conglomerate Quaker Oats Company and the juice maker Tropicana Products Inc., both of which have healthy product lines. She is bent on reducing PepsiCo’s reliance on high-sugar, high-calorie beverages, and she made sure that PepsiCo removed trans fats from all its products before its competitors. On the environmental side, she is striving for a net zero impact on the environment. Among her priorities are plans to reduce the plastic used in beverage bottles and find biodegradable packaging solutions for PepsiCo products. Her vision is long term and could be risky for short-term earnings, but it is also timely and important.
Those who work with her feel challenged by her high-performance standards and expectation of excellence. She is not afraid to give people negative feedback—and with humor, too. She pushes people until they come up with a solution to a problem and does not take “I don’t know” for an answer. For example, she insisted that her team find an alternative to the expensive palm oil and did not stop urging them forward until the alternative arrived: rice bran oil.
Nooyi is well liked and respected because she listens to those around her, even when they disagree with her. Her background cuts across national boundaries, which gives her a true appreciation for diversity, and she expects those around her to bring their values to work. In fact, when she graduated from college, she wore a sari to a job interview at Boston Consulting, where she got the job. She is an unusually collaborative person in the top suite of a Fortune 500 company, and she seeks help and information when she needs it. She has friendships with three ex-CEOs of PepsiCo who serve as her informal advisors, and when she was selected to the top position at PepsiCo, she made sure that her rival for the position got a pay raise and was given influence in the company so she did not lose him. She says that the best advice she received was from her father, who taught her to assume that people have good intentions. Nooyi notes that expecting people to have good intentions helps her prevent misunderstandings and show empathy for them. It seems that she is a role model to other business leaders around the world, and PepsiCo is well positioned to tackle the challenges the future may bring.
Discussion Questions
1. Indra Nooyi is not a typical CEO. How does she differ from your idea of what a typical CEO is like? How do you think your current image of CEOs was created?
2. Indra Nooyi is touted as being “unusually collaborative” for someone in charge of a Fortune 500 company. Why do you think her level of collaboration is so unusual for top executives?
3. Do you think Nooyi’s story represents a transition of American companies to a different type of leader or simply a unique case?
4. Pepsi-Cola dates back to 1898 and officially became PepsiCo after merging with Frito-Lay in 1965. What are some challenges the CEO faces today that were not an issue at that time? What are some aspects that make the position easier in modern times?
5. If you were in Indra Nooyi’s shoes, what direction would you take the company, given the success you have had thus far? What are some challenges that could arise in the near future for PepsiCo?
12.2: Who Is a Leader Trait Approaches to Leadership
52, 899–926. | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.1%3A_Taking_on_the_Pepsi_Challenge%3A_The_Case_of_Indra_Nooyi.txt |
Learning Objectives
1. Explain the behaviors that are associated with leadership.
2. Identify the three alternative decision-making styles leaders use and the conditions under which they are more effective.
3. Discuss the limitations of behavioral approaches to leadership.
Leader Behaviors
When trait researchers became disillusioned in the 1940s, their attention turned to studying leader behaviors. What did effective leaders actually do? Which behaviors made them perceived as leaders? Which behaviors increased their success? To answer these questions, researchers at Ohio State University and the University of Michigan used many different techniques, such as observing leaders in laboratory settings as well as surveying them. This research stream led to the discovery of two broad categories of behaviors: task-oriented behaviors (sometimes called initiating structure) and people-oriented behaviors (also called consideration). Task-oriented leader behaviors involve structuring the roles of subordinates, providing them with instructions, and behaving in ways that will increase the performance of the group. Task-oriented behaviors are directives given to employees to get things done and to ensure that organizational goals are met. People-oriented leader behaviors include showing concern for employee feelings and treating employees with respect. People-oriented leaders genuinely care about the well-being of their employees, and they demonstrate their concern in their actions and decisions. At the time, researchers thought that these two categories of behaviors were the keys to the puzzle of leadership (House & Aditya, 1997). However, research did not support the argument that demonstrating both of these behaviors would necessarily make leaders effective (Nystrom, 1978).
When we look at the overall findings regarding these leader behaviors, it seems that both types of behaviors, in the aggregate, are beneficial to organizations, but for different purposes. For example, when leaders demonstrate people-oriented behaviors, employees tend to be more satisfied and react more positively. However, when leaders are task oriented, productivity tends to be a bit higher (Judge, Piccolo, & Ilies, 2004). Moreover, the situation in which these behaviors are demonstrated seems to matter. In small companies, task-oriented behaviors were found to be more effective than in large companies (Miles & Petty, 1977). There is also some evidence that very high levels of leader task-oriented behaviors may cause burnout with employees (Seltzer & Numerof, 1988).
Leader Decision Making
Another question behavioral researchers focused on involved how leaders actually make decisions and the influence of decision-making styles on leader effectiveness and employee reactions. Three types of decision-making styles were studied. In authoritarian decision making, leaders make the decision alone without necessarily involving employees in the decision-making process. When leaders use democratic decision making, employees participate in the making of the decision. Finally, leaders using laissez-faire decision making leave employees alone to make the decision. The leader provides minimum guidance and involvement in the decision.
As with other lines of research on leadership, research did not identify one decision-making style as the best. It seems that the effectiveness of the style the leader is using depends on the circumstances. A review of the literature shows that when leaders use more democratic or participative decision-making styles, employees tend to be more satisfied; however, the effects on decision quality or employee productivity are weaker. Moreover, instead of expecting to be involved in every single decision, employees seem to care more about the overall participativeness of the organizational climate (Miller & Monge, 1986). Different types of employees may also expect different levels of involvement. In a research organization, scientists viewed democratic leadership most favorably and authoritarian leadership least favorably (Baumgartel, 1957), but employees working in large groups where opportunities for member interaction was limited preferred authoritarian leader decision making (Vroom & Mann, 1960). Finally, the effectiveness of each style seems to depend on who is using it. There are examples of effective leaders using both authoritarian and democratic styles. At Hyundai Motor America, high-level managers use authoritarian decision-making styles, and the company is performing very well (Deutschman, 2004; Welch, Kiley, & Ihlwan, 2008).
The track record of the laissez-faire decision-making style is more problematic. Research shows that this style is negatively related to employee satisfaction with leaders and leader effectiveness (Judge & Piccolo, 2004). Laissez-faire leaders create high levels of ambiguity about job expectations on the part of employees, and employees also engage in higher levels of conflict when leaders are using the laissez-faire style (Skogstad et al., 2007).
Leadership Assumptions about Human Nature
Why do some managers believe that the only way to manage employees is to force and coerce them to work while others adopt a more humane approach? Douglas McGregor, an MIT Sloan School of Management professor, believed that a manager’s actions toward employees were dictated by having one of two basic sets of assumptions about employee attitudes. His two contrasting categories, outlined in his 1960 book, The Human Side of Enterprise, are known as Theory X and Theory Y.
According to McGregor, some managers subscribe to Theory X. The main assumptions of Theory X managers are that employees are lazy, do not enjoy working, and will avoid expending energy on work whenever possible. For a manager, this theory suggests employees need to be forced to work through any number of control mechanisms ranging from threats to actual punishments. Because of the assumptions they make about human nature, Theory X managers end up establishing rigid work environments. Theory X also assumes employees completely lack ambition. As a result, managers must take full responsibility for their subordinates’ actions, as these employees will never take initiative outside of regular job duties to accomplish tasks.
In contrast, Theory Y paints a much more positive view of employees’ attitudes and behaviors. Under Theory Y, employees are not lazy, can enjoy work, and will put effort into furthering organizational goals. Because these managers can assume that employees will act in the best interests of the organization given the chance, Theory Y managers allow employees autonomy and help them become committed to particular goals. They tend to adopt a more supportive role, often focusing on maintaining a work environment in which employees can be innovative and prosperous within their roles.
One way of improving our leadership style would be to become conscious about our theories of human nature, and question the validity of our implicit theories.
Limitations of Behavioral Approaches
Behavioral approaches, similar to trait approaches, fell out of favor because they neglected the environment in which behaviors are demonstrated. The hope of the researchers was that the identified behaviors would predict leadership under all circumstances, but it may be unrealistic to expect that a given set of behaviors would work under all circumstances. What makes a high school principal effective on the job may be very different from what makes a military leader effective, which would be different from behaviors creating success in small or large business enterprises. It turns out that specifying the conditions under which these behaviors are more effective may be a better approach.
Key Takeaways
When researchers failed to identify a set of traits that would distinguish effective from ineffective leaders, research attention turned to the study of leader behaviors. Leaders may demonstrate task-oriented and people-oriented behaviors. Both seem to be related to important outcomes, with task-oriented behaviors more strongly relating to leader effectiveness and people-oriented behaviors leading to employee satisfaction. Leaders can also make decisions using authoritarian, democratic, or laissez-faire styles. While laissez-faire has certain downsides, there is no best style, and the effectiveness of each style seems to vary across situations. Because of the inconsistency of results, researchers realized the importance of the context in which leadership occurs, which paved the way to contingency theories of leadership.
Exercises
1. Give an example of a leader you admire whose behavior is primarily task oriented, and one whose behavior is primarily people oriented.
2. What are the limitations of authoritarian decision making? Under which conditions do you think authoritarian style would be more effective?
3. What are the limitations of democratic decision making? Under which conditions do you think democratic style would be more effective?
4. What are the limitations of laissez-faire decision making? Under which conditions do you think laissez-faire style would be more effective?
5. Examine your own leadership style. Which behaviors are you more likely to demonstrate? Which decision-making style are you more likely to use? | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.3%3A_What_Do_Leaders_Do_Behavioral_Approaches_to_Leadership.txt |
Learning Objectives
1. Learn about the major situational conditions that determine the effectiveness of different leadership styles.
2. Identify the conditions under which highly task-oriented and highly people-oriented leaders can be successful based on Fiedler’s contingency theory.
3. Describe the Path-Goal theory of leadership.
4. Describe a method by which leaders can decide how democratic or authoritarian their decision making should be.
What is the best leadership style? By now, you must have realized that this may not be the right question to ask. Instead, a better question might be: Under which conditions are certain leadership styles more effective? After the disappointing results of trait and behavioral approaches, several scholars developed leadership theories that specifically incorporated the role of the environment. Specifically, researchers started following a contingency approach to leadership—rather than trying to identify traits or behaviors that would be effective under all conditions, the attention moved toward specifying the situations under which different styles would be effective.
Fiedler’s Contingency Theory
The earliest and one of the most influential contingency theories was developed by Frederick Fiedler (Fiedler, 1967). According to the theory, a leader’s style is measured by a scale called Least Preferred Coworker scale (LPC). People who are filling out this survey are asked to think of a person who is their least preferred coworker. Then, they rate this person in terms of how friendly, nice, and cooperative this person is. Imagine someone you did not enjoy working with. Can you describe this person in positive terms? In other words, if you can say that the person you hated working with was still a nice person, you would have a high LPC score. This means that you have a people-oriented personality, and you can separate your liking of a person from your ability to work with that person. On the other hand, if you think that the person you hated working with was also someone you did not like on a personal level, you would have a low LPC score. To you, being unable to work with someone would mean that you also dislike that person. In other words, you are a task-oriented person.
According to Fiedler’s theory, different people can be effective in different situations. The LPC score is akin to a personality trait and is not likely to change. Instead, placing the right people in the right situation or changing the situation to suit an individual is important to increase a leader’s effectiveness. The theory predicts that in “favorable” and “unfavorable” situations, a low LPC leader—one who has feelings of dislike for coworkers who are difficult to work with—would be successful. When situational favorableness is medium, a high LPC leader—one who is able to personally like coworkers who are difficult to work with—is more likely to succeed.
How does Fiedler determine whether a situation is “favorable,” “medium,” or “unfavorable”? There are three conditions creating situational favorableness: leader-subordinate relations, position power, and task structure. If the leader has a good relationship with most people and has high position power, and the task at hand is structured, the situation is very favorable. When the leader has low-quality relations with employees and has low position power, and the task at hand it relatively unstructured, the situation is very unfavorable.
Figure 12.9 Situational Favorableness
Situational favorableness Leader-subordinate relations Position Power Task structure Best Style
Favorable Good High High Low LPC Leader
Good High Low
Good Low High
Medium Good Low Low High LPC Leader
Poor High High
Poor High Low
Poor Low High
Unfavorable Poor Low Low Low LPC leader
Research partially supports the predictions of Fiedler’s contingency theory (Peters, Hartke, & Pohlmann, 1985; Strube & Garcia, 1981; Vecchio, 1983). Specifically, there is more support for the theory’s predictions about when low LPC leadership should be used, but the part about when high LPC leadership would be more effective received less support. Even though the theory was not supported in its entirety, it is a useful framework to think about when task- versus people-oriented leadership may be more effective. Moreover, the theory is important because of its explicit recognition of the importance of the context of leadership.
Situational Leadership
Another contingency approach to leadership is Kenneth Blanchard and Paul Hersey’s Situational Leadership Theory (SLT) which argues that leaders must use different leadership styles depending on their followers’ development level (Hersey, Blanchard, & Johnson, 2007). According to this model, employee readiness (defined as a combination of their competence and commitment levels) is the key factor determining the proper leadership style. This approach has been highly popular with 14 million managers across 42 countries undergoing SLT training and 70% of Fortune 500 companies employing its use.[1]
The model summarizes the level of directive and supportive behaviors that leaders may exhibit. The model argues that to be effective, leaders must use the right style of behaviors at the right time in each employee’s development. It is recognized that followers are key to a leader’s success. Employees who are at the earliest stages of developing are seen as being highly committed but with low competence for the tasks. Thus, leaders should be highly directive and less supportive. As the employee becomes more competent, the leader should engage in more coaching behaviors. Supportive behaviors are recommended once the employee is at moderate to high levels of competence. And finally, delegating is the recommended approach for leaders dealing with employees who are both highly committed and highly competent. While the SLT is popular with managers, relatively easy to understand and use, and has endured for decades, research has been mixed in its support of the basic assumptions of the model (Blank, Green, & Weitzel, 1990; Graeff, 1983; Fernandez & Vecchio, 2002). Therefore, while it can be a useful way to think about matching behaviors to situations, overreliance on this model, at the exclusion of other models, is premature. | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.4%3A_What_Is_the_Role_of_the_Context_Contingency_Approaches_to_Leadership.txt |
Learning Objectives
1. Learn about the difference between transformational and transactional leaders.
2. Find out about the relationship between charismatic leadership and how it relates to leader performance.
3. Learn how to be charismatic.
4. Describe how high-quality leader-subordinate relationships develop.
5. Define servant leadership and evaluate its potential for leadership effectiveness.
6. Define authentic leadership and evaluate its potential for leadership effectiveness.
What are the leadership theories that have the greatest contributions to offer to today’s business environment? In this section, we will review the most recent developments in the field of leadership.
Transformational Leadership
Transformational leadership theory is a recent addition to the literature, but more research has been conducted on this theory than all the contingency theories combined. The theory distinguishes transformational and transactional leaders. Transformational leaders lead employees by aligning employee goals with the leader’s goals. Thus, employees working for transformational leaders start focusing on the company’s well-being rather than on what is best for them as individual employees. On the other hand, transactional leaders ensure that employees demonstrate the right behaviors and provide resources in exchange (Bass, 1985; Burns, 1978).
Transformational leaders have four tools in their possession, which they use to influence employees and create commitment to the company goals (Bass, 1985; Burns, 1978; Bycio, Hackett, & Allen, 1995; Judge & Piccolo, 2004). First, transformational leaders are charismatic. Charisma refers to behaviors leaders demonstrate that create confidence in, commitment to, and admiration for the leader (Shamir, House, & Arthur, 1993). Charismatic individuals have a “magnetic” personality that is appealing to followers. Second, transformational leaders use inspirational motivation, or come up with a vision that is inspiring to others. Third is the use of intellectual stimulation, which means that they challenge organizational norms and status quo, and they encourage employees to think creatively and work harder. Finally, they use individualized consideration, which means that they show personal care and concern for the well-being of their followers. Examples of transformational leaders include Steve Jobs of Apple Inc.; Lee Iaccoca, who transformed Chrysler Motors LLC in the 1980s; and Jack Welch, who was the CEO of General Electric Company for 20 years. Each of these leaders is charismatic and is held responsible for the turnarounds of their companies.
While transformational leaders rely on their charisma, persuasiveness, and personal appeal to change and inspire their companies, transactional leaders use three different methods. Contingent rewards mean rewarding employees for their accomplishments. Active management by exception involves leaving employees to do their jobs without interference, but at the same time proactively predicting potential problems and preventing them from occurring. Passive management by exception is similar in that it involves leaving employees alone, but in this method the manager waits until something goes wrong before coming to the rescue.
Which leadership style do you think is more effective, transformational or transactional? Research shows that transformational leadership is a very powerful influence over leader effectiveness as well as employee satisfaction (Judge & Piccolo, 2004). In fact, transformational leaders increase the intrinsic motivation of their followers, build more effective relationships with employees, increase performance and creativity of their followers, increase team performance, and create higher levels of commitment to organizational change efforts (Herold et al., 2008; Piccolo & Colquitt, 2006; Schaubroeck, Lam, & Cha, 2007; Shin & Zhou, 2003; Wang et al., 2005). However, except for passive management by exception, the transactional leadership styles are also effective, and they also have positive influences over leader performance as well as employee attitudes (Judge & Piccolo, 2004). To maximize their effectiveness, leaders are encouraged to demonstrate both transformational and transactional styles. They should also monitor themselves to avoid demonstrating passive management by exception, or leaving employees to their own devices until problems arise.
Why is transformational leadership effective? The key factor may be trust. Trust is the belief that the leader will show integrity, fairness, and predictability in his or her dealings with others. Research shows that when leaders demonstrate transformational leadership behaviors, followers are more likely to trust the leader. The tendency to trust in transactional leaders is substantially lower. Because transformational leaders express greater levels of concern for people’s well-being and appeal to people’s values, followers are more likely to believe that the leader has a trustworthy character (Dirks & Ferrin, 2002).
Is transformational leadership genetic? Some people assume that charisma is something people are born with. You either have charisma, or you don’t. However, research does not support this idea. We must acknowledge that there is a connection between some personality traits and charisma. Specifically, people who have a neurotic personality tend to demonstrate lower levels of charisma, and people who are extraverted tend to have higher levels of charisma. However, personality explains only around 10% of the variance in charisma (Bono & Judge, 2004). A large body of research has shown that it is possible to train people to increase their charisma and increase their transformational leadership (Barling, Weber, & Kelloway, 1996; Dvir et al., 2002; Frese, Beimel, & Schoenborg, 2003).
Even if charisma can be learned, a more fundamental question remains: Is it really needed? Charisma is only one element of transformational leadership, and leaders can be effective without charisma. In fact, charisma has a dark side. For every charismatic hero such as Lee Iaccoca, Steve Jobs, and Virgin Atlantic Airways Ltd.’s Sir Richard Branson, there are charismatic personalities who harmed their organizations or nations, such as Adoph Hitler of Germany and Jeff Skilling of Enron Corporation. Leadership experts warn that when organizations are in a crisis, a board of directors or hiring manager may turn to heroes who they hope will save the organization, and sometimes hire people who have no particular qualifications other than being perceived as charismatic (Khurana, 2002).
An interesting study shows that when companies have performed well, their CEOs are perceived as charismatic, but CEO charisma has no relation to the future performance of a company (Agle et al., 2006). So, what we view as someone’s charisma may be largely because of their association with a successful company, and the success of a company depends on a large set of factors, including industry effects and historical performance. While it is true that charismatic leaders may sometimes achieve great results, the search for charismatic leaders under all circumstances may be irrational.
OB Toolbox: Be Charismatic!
• Have a vision around which people can gather. When framing requests or addressing others, instead of emphasizing short-term goals, stress the importance of the long-term vision. When giving a message, think about the overarching purpose. What is the ultimate goal? Why should people care? What are you trying to achieve?
• Tie the vision to history. In addition to stressing the ideal future, charismatic leaders also bring up the history and how the shared history ties to the future.
• Watch your body language. Charismatic leaders are energetic and passionate about their ideas. This involves truly believing in your own ideas. When talking to others, be confident, look them in the eye, and express your belief in your ideas.
• Make sure that employees have confidence in themselves. You can achieve this by showing that you believe in them and trust in their abilities. If they have real reason to doubt their abilities, make sure that you address the underlying issue, such as training and mentoring.
• Challenge the status quo. Charismatic leaders solve current problems by radically rethinking the way things are done and suggesting alternatives that are risky, novel, and unconventional.
Leader-Member Exchange (LMX) Theory
Leader-member exchange (LMX) theory proposes that the type of relationship leaders have with their followers (members of the organization) is the key to understanding how leaders influence employees. Leaders form different types of relationships with their employees. In high-quality LMX relationships, the leader forms a trust-based relationship with the member. The leader and member like each other, help each other when needed, and respect each other. In these relationships, the leader and the member are each ready to go above and beyond their job descriptions to promote the other’s ability to succeed. In contrast, in low-quality LMX relationships, the leader and the member have lower levels of trust, liking, and respect toward each other. These relationships do not have to involve actively disliking each other, but the leader and member do not go beyond their formal job descriptions in their exchanges. In other words, the member does his job, the leader provides rewards and punishments, and the relationship does not involve high levels of loyalty or obligation toward each other (Dansereau, Graen, & Haga, 1975; Erdogan & Liden, 2002; Gerstner & Day, 1997; Graen & Uhl-Bien, 1995; Liden & Maslyn, 1998).
If you have work experience, you may have witnessed the different types of relationships managers form with their employees. In fact, many leaders end up developing differentiated relationships with their followers. Within the same work group, they may have in-group members who are close to them, and out-group members who are more distant. If you have ever been in a high LMX relationship with your manager, you may attest to the advantages of the relationship. Research shows that high LMX members are more satisfied with their jobs, more committed to their companies, have higher levels of clarity about what is expected of them, and perform at a higher level (Gerstner & Day, 1997; Hui, Law, & Chen, 1999; Kraimer, Wayne, & Jaworski, 2001; Liden, Wayne, & Sparrowe, 2000; Settoon, Bennett, & Liden, 1996; Tierney, Farmer, & Graen, 1999; Wayne, Shore, & Liden, 1997). Employees’ high levels of performance may not be a surprise, since they receive higher levels of resources and help from their managers as well as more information and guidance. If they have questions, these employees feel more comfortable seeking feedback or information (Chen, Lam, & Zhong, 2007). Because of all the help, support, and guidance they receive, employees who have a good relationship with the manager are in a better position to perform well. Given all they receive, these employees are motivated to reciprocate to the manager, and therefore they demonstrate higher levels of citizenship behaviors such as helping the leader and coworkers (Ilies, Nahrgang, & Morgeson, 2007). Being in a high LMX relationship is also advantageous because a high-quality relationship is a buffer against many stressors, such as being a misfit in a company, having personality traits that do not match job demands, and having unmet expectations (Bauer et al., 2006; Erdogan, Kraimer, & Liden, 2004; Major et al., 1995).The list of the benefits high LMX employees receive is long, and it is not surprising that these employees are less likely to leave their jobs (Ferris, 1985; Graen, Liden, & Hoel, 1982).
The problem, of course, is that not all employees have a high-quality relationship with their leader, and those who are in the leader’s out-group may suffer as a result. But how do you develop a high-quality relationship with your leader? It seems that this depends on many factors. Managers can help develop such a meaningful and trust-based relationship by treating their employees in a fair and dignified manner (Masterson et al., 2002). They can also test to see if the employee is trustworthy by delegating certain tasks when the employee first starts working with the manager (Bauer & Green, 1996). Employees also have an active role in developing the relationship. Employees can put forth effort into developing a good relationship by seeking feedback to improve their performance, being open to learning new things on the job, and engaging in political behaviors such as the use of flattery (Colella & Varma, 2001; Maslyn & Uhl-Bien, 2001; Janssen & Van Yperen, 2004; Wing, Xu & Snape, 2007). Interestingly, high performance does not seem to be enough to develop a high-quality exchange. Instead, interpersonal factors such as the similarity of personalities and a mutual liking and respect are more powerful influences over how the relationship develops (Engle & Lord, 1997; Liden, Wayne, & Stilwell, 1993; Wayne, Shore, & Liden, 1997). Finally, the relationship develops differently in different types of companies, and corporate culture matters in how leaders develop these relationships. In performance-oriented cultures, the relevant factor seems to be how the leader distributes rewards, whereas in people-oriented cultures, the leader treating people with dignity is more important (Erdogan, Liden, & Kraimer, 2006).
Self-Assessment: Rate Your LMX
Answer the following questions using 1 = not at all, 2 = somewhat, 3 = fully agree.
1. _____ I like my supervisor very much as a person.
2. _____ My supervisor is the kind of person one would like to have as a friend.
3. _____ My supervisor is a lot of fun to work with.
4. _____ My supervisor defends my work actions to a superior, even without complete knowledge of the issue in question.
5. _____ My supervisor would come to my defense if I were “attacked” by others.
6. _____ My supervisor would defend me to others in the organization if I made an honest mistake.
7. _____ I do work for my supervisor that goes beyond what is specified in my job description.
8. _____ I am willing to apply extra efforts, beyond those normally required, to further the interests of my work group.
9. _____ I do not mind working my hardest for my supervisor.
10. _____ I am impressed with my supervisor’s knowledge of his or her job.
11. _____ I respect my supervisor’s knowledge of and competence on the job.
12. _____ I admire my supervisor’s professional skills.
Scoring:
Add your score for 1, 2, 3 = _____ . This is your score on the Liking factor of LMX.
A score of 3 to 4 indicates a low LMX in terms of liking. A score of 5 to 6 indicates an average LMX in terms of liking. A score of 7+ indicates a high LMX in terms of liking.
Add your score for 4, 5, 6 = _____ . This is your score on the Loyalty factor of LMX.
A score of 3 to 4 indicates a low LMX in terms of loyalty. A score of 5 to 6 indicates an average LMX in terms of loyalty. A score of 7+ indicates a high LMX in terms of loyalty.
Add your score for 7, 8, 9 = _____ . This is your score on the Contribution factor of LMX.
A score of 3 to 4 indicates a low LMX in terms of contribution. A score of 5 to 6 indicates an average LMX in terms of contribution. A score of 7+ indicates a high LMX in terms of contribution.
Add your score for 10, 11, 12 = _____ . This is your score on the Professional Respect factor of LMX.
A score of 3 to 4 indicates a low LMX in terms of professional respect. A score of 5 to 6 indicates an average LMX in terms of professional respect. A score of 7+ indicates a high LMX in terms of professional respect.
Should you worry if you do not have a high-quality relationship with your manager? One problem in a low-quality exchange is that employees may not have access to the positive work environment available to high LMX members. Secondly, low LMX employees may feel that their situation is unfair. Even when their objective performance does not warrant it, those who have a good relationship with the leader tend to have positive performance appraisals (Duarte, Goodson, & Klich, 1994). Moreover, they are more likely to be given the benefit of the doubt. For example, when high LMX employees succeed, the manager is more likely to think that they succeeded because they put forth a lot of effort and had high abilities, whereas for low LMX members who perform objectively well, the manager is less likely to make the same attribution (Heneman, Greenberger, & Anonyuo, 1989). In other words, the leader may interpret the same situation differently, depending on which employee is involved, and may reward low LMX employees less despite equivalent performance. In short, those with a low-quality relationship with their leader may experience a work environment that may not be supportive or fair.
Despite its negative consequences, we cannot say that all employees want to have a high-quality relationship with their leader. Some employees may genuinely dislike the leader and may not value the rewards in the leader’s possession. If the leader is not well liked in the company and is known as abusive or unethical, being close to such a person may imply guilt by association. For employees who have no interest in advancing their careers in the current company (such as a student employee who is working in retail but has no interest in retail as a career), having a low-quality exchange may afford the opportunity to just do one’s job without having to go above and beyond the job requirements. Finally, not all leaders are equally capable of influencing their employees by having a good relationship with them: It also depends on the power and influence of the leader in the company as a whole and how the leader is treated within the organization. Leaders who are more powerful will have more to share with their employees (Erdogan & Enders, 2007; Sparrowe & Liden, 2005; Tangirala, Green, & Ramanujam, 2007).
What LMX theory implies for leaders is that one way of influencing employees is through the types of relationships leaders form with their subordinates. These relationships develop naturally through the work-related and personal interactions between the manager and the employee. Because they occur naturally, some leaders may not be aware of the power that lies in them. These relationships have an important influence over employee attitudes and behaviors. In the worst case, they have the potential to create an environment characterized by favoritism and unfairness. Therefore, managers are advised to be aware of how they build these relationships: Put forth effort in cultivating these relationships consciously, be open to forming good relationships with people from all backgrounds regardless of characteristics such as sex, race, age, or disability status, and prevent these relationships from leading to an unfair work environment.
OB Toolbox: Ideas for Improving Your Relationship With Your Manager
Having a good relationship with your manager may substantially increase your job satisfaction, improve your ability to communicate with your manager, and help you be successful in your job. Here are some tips to developing a high-quality exchange.
• Create interaction opportunities with your manager. One way of doing this would be seeking feedback from your manager with the intention of improving your performance. Be careful though: If the manager believes that you are seeking feedback for a different purpose, it will not help.
• People are more attracted to those who are similar to them. So find out where your similarities lie. What does your manager like that you also like? Do you have similar working styles? Do you have any mutual experiences? Bringing up your commonalities in conversations may help.
• Utilize impression management tactics, but be tactful. If there are work-related areas in which you can sincerely compliment your manager, do so. For example, if your manager made a decision that you agree with, you may share your support. Most people, including managers, appreciate positive feedback. However, flattering your manager in non-work-related areas (such as appearance) or using flattery in an insincere way (praising an action you do not agree with) will only backfire and cause you to be labeled as a flatterer.
• Be a reliable employee. Managers need people they can trust. By performing at a high level, demonstrating predictable and consistent behavior, and by volunteering for challenging assignments, you can prove your worth.
• Be aware that relationships develop early (as early as the first week of your working together). So be careful how you behave during the interview and your very first days. If you rub your manager the wrong way early on, it will be harder to recover the relationship.
Servant Leadership
The early 21st century has been marked by a series of highly publicized corporate ethics scandals: Between 2000 and 2003 we witnessed the scandals of Enron, WorldCom, Arthur Andersen LLP, Qwest Communications International Inc., and Global Crossing Ltd. As corporate ethics scandals shake investor confidence in corporations and leaders, the importance of ethical leadership and keeping long-term interests of stakeholders in mind is becoming more widely acknowledged.
Servant leadership is a leadership approach that defines the leader’s role as serving the needs of others. According to this approach, the primary mission of the leader is to develop employees and help them reach their goals. Servant leaders put their employees first, understand their personal needs and desires, empower them, and help them develop in their careers. Unlike mainstream management approaches, the overriding objective in servant leadership is not limited to getting employees to contribute to organizational goals. Instead, servant leaders feel an obligation to their employees, customers, and the external community. Employee happiness is seen as an end in itself, and servant leaders sometimes sacrifice their own well-being to help employees succeed. In addition to a clear focus on having a moral compass, servant leaders are also interested in serving the community. In other words, their efforts to help others are not restricted to company insiders, and they are genuinely concerned about the broader community surrounding their organization (Greenleaf, 1977; Liden et al., 2008). According to historian Doris Kearns Goodwin, Abraham Lincoln was a servant leader because of his balance of social conscience, empathy, and generosity (Goodwin, 2005).
Even though servant leadership has some overlap with other leadership approaches such as transformational leadership, its explicit focus on ethics, community development, and self-sacrifice are distinct characteristics of this leadership style. Research shows that servant leadership has a positive impact on employee commitment, employee citizenship behaviors toward the community (such as participating in community volunteering), and job performance (Liden et al., 2008). Leaders who follow the servant leadership approach create a climate of fairness in their departments, which leads to higher levels of interpersonal helping behavior (Ehrhart, 2004).
Servant leadership is a tough transition for many managers who are socialized to put their own needs first, be driven by success, and tell people what to do. In fact, many of today’s corporate leaders are not known for their humility! However, leaders who have adopted this approach attest to its effectiveness. David Wolfskehl, of Action Fast Print in New Jersey, founded his printing company when he was 24 years old. He marks the day he started asking employees what he can do for them as the beginning of his company’s new culture. In the next 2 years, his company increased its productivity by 30% (Buchanan, 2007).
OB Toolbox: Be a Servant Leader
One of the influential leadership paradigms involves leaders putting others first. This could be a hard transition for an achievement-oriented and success-driven manager who rises to high levels. Here are some tips to achieve servant leadership.
• Don’t ask what your employees can do for you. Think of what you can do for them. Your job as a leader is to be of service to them. How can you relieve their stress? Protect them from undue pressure? Pitch in to help them? Think about creative ways of helping ease their lives.
• One of your key priorities should be to help employees reach their goals. This involves getting to know them. Learn about who they are and what their values and priorities are.
• Be humble. You are not supposed to have all the answers and dictate others. One way of achieving this humbleness may be to do volunteer work.
• Be open with your employees. Ask them questions. Give them information so that they understand what is going on in the company.
• Find ways of helping the external community. Giving employees opportunities to be involved in community volunteer projects or even thinking and strategizing about making a positive impact on the greater community would help.
Authentic Leadership
Leaders have to be a lot of things to a lot of people. They operate within different structures, work with different types of people, and they have to be adaptable. At times, it may seem that a leader’s smartest strategy would be to act as a social chameleon, changing his or her style whenever doing so seems advantageous. But this would lose sight of the fact that effective leaders have to stay true to themselves. The authentic leadership approach embraces this value: Its key advice is “be yourself.” Think about it: We all have different backgrounds, different life experiences, and different role models. These trigger events over the course of our lifetime that shape our values, preferences, and priorities. Instead of trying to fit into societal expectations about what a leader should be, act like, or look like, authentic leaders derive their strength from their own past experiences. Thus, one key characteristic of authentic leaders is that they are self aware. They are introspective, understand where they are coming from, and have a thorough understanding of their own values and priorities. Secondly, they are not afraid to act the way they are. In other words, they have high levels of personal integrity. They say what they think. They behave in a way consistent with their values. As a result, they remain true to themselves. Instead of trying to imitate other great leaders, they find their own style in their personality and life experiences (Avolio & Gardner, 2005; Gardner et al., 2005; George, 2007; Ilies, Morgeson, & Nahrgang, 2005; Sparrowe, 2005).
One example of an authentic leader is Howard Schultz, the founder of Starbucks Corporation coffeehouses. As a child, Schultz witnessed the job-related difficulties his father experienced as a result of medical problems. Even though he had no idea he would have his own business one day, the desire to protect people was shaped in those years and became one of his foremost values. When he founded Starbucks, he became an industry pioneer by providing health insurance and retirement coverage to part-time as well as full-time employees (Shamir & Eilam, 2005).
Authentic leadership requires understanding oneself. Therefore, in addition to self reflection, feedback from others is needed to gain a true understanding of one’s behavior and its impact on others. Authentic leadership is viewed as a potentially influential style, because employees are more likely to trust such a leader. Moreover, working for an authentic leader is likely to lead to greater levels of satisfaction, performance, and overall well-being on the part of employees (Walumbwa et al., 2008).
Key Takeaways
Contemporary approaches to leadership include transformational leadership, leader-member exchange, servant leadership, and authentic leadership. The transformational leadership approach highlights the importance of leader charisma, inspirational motivation, intellectual stimulation, and individualized consideration as methods of influence. Its counterpart is the transactional leadership approach, in which the leader focuses on getting employees to achieve organizational goals. According to the leader-member exchange (LMX) approach, the unique, trust-based relationships leaders develop with employees are the key to leadership effectiveness. Recently, leadership scholars started to emphasize the importance of serving others and adopting a customer-oriented view of leadership; another recent focus is on the importance of being true to oneself as a leader. While each leadership approach focuses on a different element of leadership, effective leaders will need to change their style based on the demands of the situation, as well as utilizing their own values and moral compass.
Exercises
1. What are the characteristics of transformational leaders? Are transformational leaders more effective than transactional leaders?
2. What is charisma? What are the advantages and disadvantages of charismatic leadership? Should organizations look for charismatic leaders when selecting managers?
3. What are the differences (if any) between a leader having a high-quality exchange with employees and being friends with employees?
4. What does it mean to be a servant leader? Do you know any leaders whose style resembles servant leaders? What are the advantages of adopting such a leadership style?
5. What does it mean to be an authentic leader? How would such a style be developed? | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.5%3A_Whats_New_Contemporary_Approaches_to_Leadership.txt |
Learning Objectives
1. Consider the role of leadership for ethical behavior.
2. Consider the role of national culture on leadership.
Leadership and Ethics
As some organizations suffer the consequences of ethical crises that put them out of business or damage their reputations, the role of leadership as a driver of ethical behavior is receiving a lot of scholarly attention as well as acknowledgement in the popular press. Ethical decisions are complex and, even to people who are motivated to do the right thing, the moral component of a decision may not be obvious. Therefore, employees often look to role models, influential people, and their managers for guidance in how to behave. Unfortunately, research shows that people tend to follow leaders or other authority figures even when doing so can put others at risk. The famous Milgram experiments support this point. Milgram conducted experiments in which experimental subjects were greeted by someone in a lab coat and asked to administer electric shocks to other people who gave the wrong answer in a learning task. In fact, the shocks were not real and the learners were actors who expressed pain when shocks were administered. Around two-thirds of the experimental subjects went along with the requests and administered the shocks even after they reached what the subjects thought were dangerous levels. In other words, people in positions of authority are influential in driving others to ethical or unethical behaviors (Milgram, 1974; Trevino & Brown, 2004).
It seems that when evaluating whether someone is an effective leader, subordinates pay attention to the level of ethical behaviors the leader demonstrates. In fact, one study indicated that the perception of being ethical explained 10% of the variance in whether an individual was also perceived as a leader. The level of ethical leadership was related to job satisfaction, dedication to the leader, and a willingness to report job-related problems to the leader (Brown, Trevino, & Harrison, 2005; Morgan, 1993).
Leaders influence the level of ethical behaviors demonstrated in a company by setting the tone of the organizational climate. Leaders who have high levels of moral development create a more ethical organizational climate (Schminke, Ambrose, & Neubaum, 2005). By acting as a role model for ethical behavior, rewarding ethical behaviors, publicly punishing unethical behaviors, and setting high expectations for the level of ethics, leaders play a key role in encouraging ethical behaviors in the workplace.
The more contemporary leadership approaches are more explicit in their recognition that ethics is an important part of effective leadership. Servant leadership emphasizes the importance of a large group of stakeholders, including the external community surrounding a business. On the other hand, authentic leaders have a moral compass, they know what is right and what is wrong, and they have the courage to follow their convictions. Research shows that transformational leaders tend to have higher levels of moral reasoning, even though it is not part of the transformational leadership theory (Turner et al., 2002). It seems that ethical behavior is more likely to happen when (a) leaders are ethical themselves, and (b) they create an organizational climate in which employees understand that ethical behaviors are desired, valued, and expected.
Leadership Around the Globe
Is leadership universal? This is a critical question given the amount of international activity in the world. Companies that have branches in different countries often send expatriates to manage the operations. These expatriates are people who have demonstrated leadership skills at home, but will these same skills work in the host country? Unfortunately, this question has not yet been fully answered. All the leadership theories that we describe in this chapter are U.S.-based. Moreover, around 98% of all leadership research has been conducted in the United States and other western nations. Thus, these leadership theories may have underlying cultural assumptions. The United States is an individualistic, performance-oriented culture, and the leadership theories suitable for this culture may not necessarily be suitable to other cultures.
People who are perceived as leaders in one society may have different traits compared to people perceived as leaders in a different culture, because each society has a concept of ideal leader prototypes. When we see certain characteristics in a person, we make the attribution that this person is a leader. For example, someone who is confident, caring, and charismatic may be viewed as a leader because we feel that these characteristics are related to being a leader. These leadership prototypes are societally driven and may have a lot to do with a country’s history and its heroes.
Recently, a large group of researchers from 62 countries came together to form a project group called Global Leadership and Organizational Behavior Effectiveness or GLOBE (House et al., 2004). This group is one of the first to examine leadership differences around the world. Their results are encouraging, because, in addition to identifying differences, they found similarities in leadership styles as well. Specifically, certain leader traits seem to be universal. Around the world, people feel that honesty, decisiveness, being trustworthy, and being fair are related to leadership effectiveness. There is also universal agreement in characteristics viewed as undesirable in leaders: being irritable, egocentric, and a loner (Den Hartog et al., 1999; Javidan et al., 2006). Visionary and charismatic leaders were found to be the most influential leaders around the world, followed by team-oriented and participative leaders. In other words, there seems to be a substantial generalizability in some leadership styles.
Even though certain leader behaviors such as charismatic or supportive leadership appear to be universal, what makes someone charismatic or supportive may vary across nations. For example, when leaders fit the leadership prototype, they tend to be viewed as charismatic, but in Turkey, if they are successful but did not fit the prototype, they were still viewed as charismatic (Ensari & Murphy, 2003). In Western and Latin cultures, people who speak in an emotional and excited manner may be viewed as charismatic. In Asian cultures such as China and Japan, speaking in a monotonous voice may be more impressive because it shows that the leader can control emotions. Similarly, how leaders build relationships or act supportively is culturally determined. In collectivist cultures such as Turkey or Mexico, a manager is expected to show personal interest in employees’ lives. Visiting an employee’s sick mother at the hospital may be a good way of showing concern. Such behavior would be viewed as intrusive or strange in the United States or the Netherlands. Instead, managers may show concern verbally or by lightening the workload of the employee (Brodbeck et al., 2000; Den Hartog et al., 1999).
There were also many leader characteristics that vary across cultures (Dorfman et al., 1997; Gerstner & Day, 1994). Traits such as being autonomous, conflict avoidant, status conscious, and ambitious were culturally dependent. For example, in France, employees do not expect their leaders to demonstrate empathy. Leaders demonstrating self-sacrifice are also viewed negatively, suggesting that servant leadership would be an improper style there. In Middle Eastern cultures such as Egypt, leaders are expected to be superior to lay people. They are supposed to have all the answers, be confident, and authoritarian. In fact, leading like a benevolent autocrat (someone who cares about people but acts alone) may be an appropriate style (Javidan et al., 2006). Even within the same geography, researchers identified substantial cultural differences. For example, in Europe, there were five clusters of cultures. Directness in interpersonal relationships was viewed positively in Nordic cultures such as Finland, but negatively in Near Eastern cultures such as Turkey. Similarly, leaders who are autonomous were viewed positively in Germanic cultures such as Austria, but negatively in Latin European cultures such as Portugal (Brodbeck et al., 2000). Finally, in some cultures, good leaders are paternalistic. These leaders act like a parent to employees, give advice, care for them, and get obedience and loyalty in return (Aycan et al., 2000; Pellegrini & Scandura, 2008).
Given all these differences, effective leaders should develop a sensitivity to cultural differences and adapt their style when they work in different societies or with people from different cultural backgrounds. It seems that flexibility is an important trait for global leaders.
Key Takeaways
People get their cues for ethical behaviors from leaders. Therefore, leadership characteristics and style will influence the level of ethical behaviors employees demonstrate. Being ethical is related to being perceived as a leader, and ethical leaders create a more satisfied workforce. More contemporary approaches such as servant leadership and authentic leadership explicitly recognize the importance of ethics for leadership effectiveness. Some leadership traits seem to be universal. Visionary, team-oriented, and to a lesser extent participative leadership seem to be the preferred styles around the world. However, traits such as how confident leaders should be and whether they should sacrifice themselves for the good of employees and many others are culturally dependent. Even for universal styles such as charismatic and supportive leadership, how leaders achieve charisma and supportiveness seems to be culturally dependent.
Exercises
1. What is the connection between leadership and ethical behaviors?
2. Do you believe that ethical leaders are more successful in organizations?
3. Which of the leadership theories seem to be most applicable to other cultures? Which ones are culturally dependent? | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.6%3A_The_Role_of_Ethics_and_National_Culture.txt |
Figure 12.15
Starbucks Coffee (NASDAQ: SBUX) was born out of a desire for convenience and accessibility to great coffee. In 1971, three friends made that desire a reality and established the first Starbucks coffee house in historic Pike Place Market on Seattle’s waterfront. In 1990, Starbucks drafted its first mission statement, and the number one principle was to “provide a great work environment and treat each other with respect and dignity.” How has the company lived up to that declaration 20 years later?? Starbucks has consistently made Fortune magazine’s “100 Best Companies to Work For” list and in addition is included on a list of the best places to work for LGBT (lesbian, gay, bisexual, and transgender) equality. Working conditions in the service and retail industry are notoriously low paying with long hours, but Starbucks manages to offer benefits for part-time and full-time employees as well as higher-than-average salaries for store managers. Why, one might ask, does Starbucks try so hard to set itself apart?
Leadership development is a core element of the business process at Starbucks, which ensures that the organizational culture of the company is maintained with every CEO successor. Starbucks is forward looking in this respect and strives to attract future business leaders and managers. The idea of planning for one’s own succession can often make people uneasy, but this idea is openly embraced at Starbucks. The company plans far in advance to replace its top-level successors. The importance of leadership is not only ingrained in the upper management team, but Starbucks also ensures that this is an understood value throughout the organization. In 2004, the Coffee Master program was introduced to teach employees about regional coffee flavors. Graduates of the Coffee Master program earn a prestigious black apron and a special insignia on their business cards. In creating this ethos, Starbucks excels at its ability to attract an educated workforce with a high satisfaction level where individuals often move up to become effective leaders within the company.
With the recession of 2009, Starbucks has been forced to rethink its traditional strategy of accelerated growth by closing over 30,000 stores. CEO Howard Schultz has cut his salary to less than \$10,000 a year, down from \$1.2 million. Despite these slowdowns, Starbucks continues to call employees “partners” and offers a dynamic place to work. As a result, the company had more than 150,000 people apply for jobs last year, a sure indication that the company’s ability to cultivate talented leaders is as strong as ever.
Discussion Questions
1. Why does Starbucks Coffee consider internal leadership development such an important part of its core business process?
2. What possible negative repercussions can the aggressive growth strategy that Starbucks exhibits have on its leadership agenda?
3. With the slowdown of business, how can Starbucks ensure that the importance of leadership development does not get overlooked?
4. How does your experience with leadership and management compare with the case of Starbucks?
12.8: Conclusion
In this chapter we have reviewed the most influential leadership theories. Trait approaches identify the characteristics required to be perceived as a leader and to be successful in the role. Intelligence, extraversion, conscientiousness, openness to experience, and integrity seem to be leadership traits. Behavioral approaches identify the types of behaviors leaders demonstrate. Both trait and behavioral approaches suffered from a failure to pay attention to the context in which leadership occurs, which led to the development of contingency approaches. Recently, ethics became an explicit focus of leadership theories such as servant leadership and authentic leadership. It seems that being conscious of one’s style and making sure that leaders demonstrate the behaviors that address employee, organizational, and stakeholder needs are important and require flexibility on the part of leaders. | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.7%3A_Leadership_Development%3A_The_Case_of_Starbucks.txt |
Ethical Dilemma
You are currently a department manager and Jim is your “trusted assistant.” You have very similar working styles, and you went to the same college and worked in the insurance industry for several years. Before working in this company, you both worked at a different company and you have this shared history with him. You can trust him to come to your aid, support you in your decisions, and be loyal to you. Because of your trust in him, you do not supervise his work closely, and you give him a lot of leeway in how he structures his work. He sometimes chooses to work from home, and he has flexibility in his work hours, which is unusual in the department.
Now you decided to promote him to be the assistant department manager. However, when you shared this opinion with someone else in the department, you realized that this could be a problem. Apparently, Jim is not liked by his colleagues in the department and is known as an “impression manager.” Others view him as a slacker when you are not around, and the fact that he gets the first pick in schedules and gets the choice assignments causes a lot of frustration on the part of others. They feel that you are playing favorites.
Discussion Questions:
1. What would you do?
2. Would you still promote him?
3. How would you address this unpleasant situation within your department?
Individual Exercise
Ideas for Developing Yourself as an Authentic Leader
Authentic leaders have high levels of self-awareness, and their behavior is driven by their core personal values. This leadership approach recognizes the importance of self-reflection and understanding one’s life history. Answer the following questions while you are alone to gain a better understanding of your own core values and authentic leadership style.
• Understand Your History
• Review your life history. What are the major events in your life? How did these events make you the person you are right now?
• Think about your role models. Who were your role models as you were growing up? What did you learn from your role models?
• Take Stock of Who You Are Now
• Describe your personality. How does your personality affect your life?
• Know your strengths and weaknesses. What are they and how can you continue to improve yourself?
• Reflect on Your Successes and Challenges
• Keep a journal. Research shows that journaling is an effective tool for self-reflection. Write down challenges you face and solutions you used to check your progress.
• Make Integrity a Priority
• Understand your core values. What are your core values? Name three of your most important values.
• Do an ethics check. Are you being consistent with your core values? If not, how can you get back on track?
• Understand the Power of Words
• Words shape reality. Keep in mind that the words you use to describe people and situations matter. For example, how might the daily reality be different if you refer to those you manage as associates or team members rather than employees or subordinates?
In view of your answers to the questions above, what kind of a leader would you be if you truly acted out your values? How would people working with you respond to such a leadership style?
Group Exercise
You are charged with hiring a manager for a fast-food restaurant. The operations within the store are highly standardized, and employees have very specific job descriptions. The person will be in charge of managing around 30 employees. There is a high degree of turnover among employees, so retention will be an important priority. Most employees who work in the restaurant are young with low levels of work experience, and few of them view the restaurant business as a full-time career. The atmosphere in the restaurant has a fast pace. In this company, managers are often promoted from within, and this position is an exception. Therefore, the incoming manager may not expect a warm welcome from employees who were passed over for a promotion, as well as their colleagues. Finally, the position power of the manager will be somewhat limited because employees are unionized. Therefore, the manager will have limited opportunities for distributing pay raises or bonuses.
Discussion Questions
1. Identify the leadership traits and behaviors that are desirable for this position.
2. Design an approach to selecting this person. Which methods of employee selection would you use? Why?
3. Develop interview questions to be used in hiring this manager. Your questions should be aimed at predicting the leadership capabilities of the person in question. | textbooks/biz/Management/Organizational_Behavior/12%3A_Leading_People_Within_Organizations/12.9%3A_Exercises.txt |
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13: Power and Politics
In 2007, Fortune named Steve Jobs the “Most Powerful Person in Business.” In 2009, the magazine named him “CEO of the Decade.” Jobs, CEO of Apple Inc. (NASDAQ: AAPL), has transformed no fewer than five different industries: computers, Hollywood movies, music, retailing, and wireless phones. His Apple II ushered in the personal computer era in 1977, and the graphical interface of the Macintosh in 1984 set the standard that all other PCs emulated. His company Pixar defined the computer-animated feature film. The iPod, iTunes, and iPhone revolutionized how we listen to music, how we pay for and receive all types of digital content, and what we expect of a mobile phone.
How has Jobs done it? Jobs draws on all six types of power: legitimate, expert, reward, information, coercive, and referent. His vision and sheer force of will helped him succeed as a young unknown. But the same determination that helps him succeed has a darker side—an autocracy and drive for perfection that can make him tyrannical. Let’s take each of these in turn.
1. Legitimate power. As CEO of Apple, Jobs enjoys unquestioned legitimate power.
2. Expert power. His success has built a tremendous amount of expert power. Jobs is renowned for being able to think of markets and products for needs that people didn’t even know they had.
3. Reward power. As one of the richest individuals in the United States, Jobs has reward power both within and outside Apple. He also can reward individuals with his time and attention.
4. Information power. Jobs has been able to leverage information in each industry he has transformed.
5. Coercive power. Forcefulness is helpful when tackling large, intractable problems, says Stanford social psychologist Roderick Kramer, who calls Jobs one of the “great intimidators.” Robert Sutton notes that “the degree to which people in Silicon Valley are afraid of Jobs is unbelievable.” Jobs is known to berate people to the point of tears.
6. Referent power. But at the same time, “He inspires astounding effort and creativity from his people.” Employee Andy Herzfeld, the lead designer of the original Mac operating system, says Jobs imbues employees with a “messianic zeal” and can make them feel that they’re working on the greatest product in the world.
Those who work with him say Jobs is very hard to please. However, they also say that this means that Apple employees work hard to win his approval. “He has the ability to pull the best out of people,” says Cordell Ratzlaff, who worked closely with Jobs on OS X for 18 months. “I learned a tremendous amount from him.” Jobs’s ability to persuade and influence has come to be called a “reality distortion field.” As Bud Tribble put it, “In his presence, reality is malleable. He can convince anyone of practically anything.” Hertzfeld describes his style as “a confounding mélange of a charismatic rhetorical style, an indomitable will, and an eagerness to bend any fact to fit the purpose at hand.” The influence works even when you’re aware of it, and it works even on “enemies”: “No other high-tech impresario could walk into the annual sales meeting of one of his fiercest rivals and get a standing ovation,” which is what Jobs got in 2002 from Intel Corporation (the ally of Apple archrival Microsoft in the partnership known as Wintel: Windows + Intel).
Jobs’s power is not infallible—he was ousted from his own company in 1987 by the man he hired to help him run it. But he returned in 1997 and brought the company back from the brink of failure. The only years that Apple was unprofitable were the years during Jobs’s absence. Many are watching to see how Apple and Jobs succeed with the iPad in 2010.
Discussion Questions
1. Steve Jobs has achieved a great deal of success. What are some possible negative consequences of the level of power that he holds?
2. Where does Steve Jobs’s power and influence come from?
3. How might the CEO of Apple create compliance within his organization?
4. Does a member of an organization who has the title of power, such as Steve Jobs, need legitimacy from the members of the organization to realize that power, or is the title enough?
5. Apple is a global company. How might the power structure within Apple change to reflect regional differences? | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.1%3A_Focus_on_Power%3A_The_Case_of_Steve_Jobs.txt |
Learning Objectives
1. Learn the meaning of power.
2. Understand how power can have both positive and negative consequences.
3. Learn about different sources of power.
4. Understand the relationship between dependency and power.
What Is Power?
We’ll look at the aspects and nuances of power in more detail in this chapter, but simply put, power is the ability to influence the behavior of others to get what you want. Gerald Salancik and Jeffery Pfeffer concur, noting, “Power is simply the ability to get things done the way one wants them to be done” (Salancik & Pfeffer, 1989). If you want a larger budget to open a new store in a large city and you get the budget increase, you have used your power to influence the decision.
Power distribution is usually visible within organizations. For example, Salancik and Pfeffer gathered information from a company with 21 department managers and asked 10 of those department heads to rank all the managers according to the influence each person had in the organization. Although ranking 21 managers might seem like a difficult task, all the managers were immediately able to create that list. When Salancik and Pfeffer compared the rankings, they found virtually no disagreement in how the top 5 and bottom 5 managers were ranked. The only slight differences came from individuals ranking themselves higher than their colleagues ranked them. The same findings held true for factories, banks, and universities.
Positive and Negative Consequences of Power
The fact that we can see and succumb to power means that power has both positive and negative consequences. On one hand, powerful CEOs can align an entire organization to move together to achieve goals. Amazing philanthropists such as Paul Farmer, a doctor who brought hospitals, medicine, and doctors to remote Haiti, and Greg Mortenson, a mountaineer who founded the Central Asia Institute and built schools across Pakistan, draw on their own power to organize others toward lofty goals; they have changed the lives of thousands of individuals in countries around the world for the better (Kidder, 2004; Mortenson & Relin, 2006). On the other hand, autocracy can destroy companies and countries alike. The phrase, “Power tends to corrupt, and absolute power corrupts absolutely” was first said by English historian John Emerich Edward Dalberg, who warned that power was inherently evil and its holders were not to be trusted. History shows that power can be intoxicating and can be devastating when abused, as seen in high-profile cases such as those involving Enron Corporation and government leaders such as the impeached Illinois Governor Rod Blagojevich in 2009. One reason that power can be so easily abused is because individuals are often quick to conform. To understand this relationship better, we will examine three famous researchers who studied conformity in a variety of contexts.
Conformity
Conformity refers to people’s tendencies to behave consistently with social norms. Conformity can refer to small things such as how people tend to face forward in an elevator. There’s no rule listed in the elevator saying which way to face, yet it is expected that everyone will face forward. To test this, the next time you’re in an elevator with strangers, simply stand facing the back of the elevator without saying anything. You may notice that those around you become uncomfortable. Conformity can result in engaging in unethical behaviors, because you are led by someone you admire and respect who has power over you. Guards at Abu Ghraib said they were just following orders when they tortured prisoners (CNN.com, 2005). People conform because they want to fit in with and please those around them. There is also a tendency to look to others in ambiguous situations, which can lead to conformity. The response to “Why did you do that?” being “Because everyone else was doing it” sums up this tendency.
So, does conformity occur only in rare or extreme circumstances? Actually, this is not the case. Three classic sets of studies illustrate how important it is to create checks and balances to help individuals resist the tendency to conform or to abuse authority. To illustrate this, we will examine findings from the Milgram, Asch, and Zimbardo studies.
The Milgram Studies
Stanley Milgram, a psychologist at Yale in the 1960s, set out to study conformity to authority. His work tested how far individuals would go in hurting another individual when told to do so by a researcher. A key factor in the Milgram study and others that will be discussed is the use of confederates, or people who seem to be participants but are actually paid by the researchers to take on a certain role. Participants believed that they were engaged in an experiment on learning. The participant (teacher) would ask a series of questions to another “participant” (learner). The teachers were instructed to shock the learners whenever an incorrect answer was given. The learner was not a participant at all but actually a confederate who would pretend to be hurt by the shocks and yell out in pain when the button was pushed. Starting at 15 volts of power, the participants were asked to increase the intensity of the shocks over time. Some expressed concern when the voltage was at 135 volts, but few stopped once they were told by the researcher that they would not personally be held responsible for the outcome of the experiment and that their help was needed to complete the experiment. In the end, all the participants were willing to go up to 300 volts, and a shocking 65% were willing to administer the maximum of 450 volts even as they heard screams of pain from the learner (Milgram, 1974).
The Asch Studies
Another researcher, Solomon Asch, found that individuals could be influenced to say that two lines were the same length when one was clearly shorter than the other. This effect was established using groups of four or more participants who were told they were in experiments of visual perception. However, only one person in the group was actually in the experiment. The rest were confederates, and the researchers had predetermined whether or not they gave accurate answers. Groups were shown a focal line and a choice of three other lines of varying length, with one being the same length as the focal line. Most of the time the confederates would correctly state which choice matched the focal line, but occasionally they would give an obviously wrong answer. For example, looking at the following lines, the confederates might say that choice C matches the length of the focal line. When this happened, the actual research participant would go along with the wrong answer 37% of the time. When asked why they went along with the group, participants said they assumed that the rest of the group, for whatever reason, had more information regarding the correct choice. It only took three other individuals saying the wrong answer for the participant to routinely agree with the group. However, this effect was decreased by 75% if just one of the insiders gave the correct answer, even if the rest of the group gave the incorrect answer. This finding illustrates the power that even a small dissenting minority can have. Additionally, it holds even if the dissenting confederate gives a different incorrect answer. As long as one confederate gave an answer that was different from the majority, participants were more likely to give the correct answer themselves (Asch, 1952b; Asch, 1956). A meta-analysis of 133 studies using Asch’s research design revealed two interesting patterns. First, within the United States, the level of conformity has been decreasing since the 1950s. Second, studies done in collectivistic countries such as Japan showed more conformity than those done in more individualistic countries such as Great Britain (Bond & Smith, 1996).
The Zimbardo Study
Philip Zimbardo, a researcher at Stanford University, conducted a famous experiment in the 1970s (Zimbardo, 2009). While this experiment would probably not make it past the human subjects committee of schools today, at the time, he was authorized to place an ad in the paper that asked for male volunteers to help understand prison management. After excluding any volunteers with psychological or medical problems or with any history of crime or drug abuse, he identified 24 volunteers to participate in his study. Researchers randomly assigned 18 individuals to the role of prisoner or guard. Those assigned the role of “prisoners” were surprised when they were picked up by actual police officers and then transferred to a prison that had been created in the basement of the Stanford psychology building. The guards in the experiment were told to keep order but received no training. Zimbardo was shocked with how quickly the expected roles emerged. Prisoners began to feel depressed and helpless. Guards began to be aggressive and abusive. The original experiment was scheduled to last 2 weeks, but Zimbardo ended it after only 6 days upon seeing how deeply entrenched in their roles everyone, including himself, had become. Next we will examine the relationship between dependency and power.
Dependency
Dependency is directly related to power. The more that a person or unit is dependent on you, the more power you have. The strategic contingencies model provides a good description of how dependency works. According to the model, dependency is power that a person or unit gains from their ability to handle actual or potential problems facing the organization (Saunders, 1990). You know how dependent you are on someone when you answer three key questions that are addressed in the following sections.
Scarcity
In the context of dependency, scarcity refers to the uniqueness of a resource. The more difficult something is to obtain, the more valuable it tends to be. Effective persuaders exploit this reality by making an opportunity or offer seem more attractive because it is limited or exclusive. They might convince you to take on a project because “it’s rare to get a chance to work on a new project like this,” or “You have to sign on today because if you don’t, I have to offer it to someone else.”
Importance
Importance refers to the value of the resource. The key question here is “How important is this?” If the resources or skills you control are vital to the organization, you will gain some power. The more vital the resources that you control are, the more power you will have. For example, if Kecia is the only person who knows how to fill out reimbursement forms, it is important that you are able to work with her, because getting paid back for business trips and expenses is important to most of us.
Substitutability
Finally, substitutability refers to one’s ability to find another option that works as well as the one offered. The question around whether something is substitutable is “How difficult would it be for me to find another way to this?” The harder it is to find a substitute, the more dependent the person becomes and the more power someone else has over them. If you are the only person who knows how to make a piece of equipment work, you will be very powerful in the organization. This is true unless another piece of equipment is brought in to serve the same function. At that point, your power would diminish. Similarly, countries with large supplies of crude oil have traditionally had power to the extent that other countries need oil to function. As the price of oil climbs, alternative energy sources such as wind, solar, and hydropower become more attractive to investors and governments. For example, in response to soaring fuel costs and environmental concerns, in 2009 Japan Airlines successfully tested a blend of aircraft fuel made from a mix of camelina, jatropha, and algae on the engine of a Boeing 747-300 aircraft (Krauss, 2009).
Key Takeaways
Power is the ability to influence the behavior of others to get what you want. It is often visible to others within organizations. Conformity manifests itself in several ways, and research shows that individuals will defer to a group even when they may know that what they are doing is inaccurate or unethical. Having just one person dissent helps to buffer this effect. The more dependent someone is on you, the more power you have over them. Dependency is increased when you possess something that is considered scarce, important, and nonsubstitutable by others.
Exercises
1. What does the phrase “Power corrupts and absolute power corrupts absolutely” refer to? What experiences have you had that confirm or refute this assumption?
2. Thinking about the Milgram and Zimbardo studies, do you think you would behave the same or differently in those situations? Why or why not?
3. What lessons can be learned from the past studies of conformity to help avoid abuses of power in the future?
4. Give an example of someone who you are dependent upon. Think about how scarcity, importance, and substitutability affect this dependency. | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.2%3A_The_Basics_of_Power.txt |
Learning Objectives
1. Identify the five sources of power.
2. Understand influence tactics.
3. Learn about impression management.
4. Examine the impact of the direction of influence attempts.
Bases of Power
Having power and using power are two different things. For example, imagine a manager who has the power to reward or punish employees. When the manager makes a request, he or she will probably be obeyed even though the manager does not actually reward the employee. The fact that the manager has the ability to give rewards and punishments will be enough for employees to follow the request. What are the sources of one’s power over others? Researchers identified six sources of power, which include legitimate, reward, coercive, expert, information, and referent (French & Raven, 1960). You might earn power from one source or all six depending on the situation. Let us take a look at each of these in turn, and continue with Steve Jobs from the opening case as our example.
Legitimate Power
Legitimate power is power that comes from one’s organizational role or position. For example, a boss can assign projects, a policeman can arrest a citizen, and a teacher assigns grades. Others comply with the requests these individuals make because they accept the legitimacy of the position, whether they like or agree with the request or not. Steve Jobs has enjoyed legitimate power as the CEO of Apple. He could set deadlines and employees comply even if they think the deadlines were overly ambitious. Start-up organizations often have founders who use their legitimate power to influence individuals to work long hours week after week in order to help the company survive.
Reward Power
Reward power is the ability to grant a reward, such as an increase in pay, a perk, or an attractive job assignment. Reward power tends to accompany legitimate power and is highest when the reward is scarce. Anyone can wield reward power, however, in the form of public praise or giving someone something in exchange for their compliance. When Steve Jobs ran Apple, he had reward power in the form of raises and promotions. Another example of reward power comes from Bill Gross, founder of Idealab, who has the power to launch new companies or not. He created his company with the idea of launching other new companies as soon as they could develop viable ideas. If members could convince him that their ideas were viable, he gave the company a maximum of \$250,000 in seed money, and gave the management team and employees a 30% stake in the company and the CEO 10% of the company. That way, everyone had a stake in the company. The CEO’s salary was capped at \$75,000 to maintain the sense of equity. When one of the companies, Citysearch, went public, all employees benefited from the \$270 million valuation.
Coercive Power
In contrast, coercive power is the ability to take something away or punish someone for noncompliance. Coercive power often works through fear, and it forces people to do something that ordinarily they would not choose to do. The most extreme example of coercion is government dictators who threaten physical harm for noncompliance. Parents may also use coercion such as grounding their child as punishment for noncompliance. Steve Jobs has been known to use coercion—yelling at employees and threatening to fire them. When John Wiley & Sons Inc. published an unauthorized biography of Jobs, Jobs’s response was to prohibit sales of all books from that publisher in any Apple retail store (Hafner, 2005). In other examples, John D. Rockefeller was ruthless when running Standard Oil Company. He not only undercut his competitors through pricing, but he used his coercive power to get railroads to refuse to transport his competitor’s products. American presidents have been known to use coercion power. President Lyndon Baines Johnson once told a White House staffer, “Just you remember this. There’s only two kinds at the White house. There’s elephants and there’s ants. And I’m the only elephant” (Hughes, Ginnet, & Curphy, 1995).
Expert Power
Expert power comes from knowledge and skill. Steve Jobs has expert power from his ability to know what customers want—even before they can articulate it. Others who have expert power in an organization include long-time employees, such as a steelworker who knows the temperature combinations and length of time to get the best yields. Technology companies are often characterized by expert, rather than legitimate power. Many of these firms utilize a flat or matrix structure in which clear lines of legitimate power become blurred as everyone communicates with everyone else regardless of position.
Information Power
Information power is similar to expert power but differs in its source. Experts tend to have a vast amount of knowledge or skill, whereas information power is distinguished by access to specific information. For example, knowing price information gives a person information power during negotiations. Within organizations, a person’s social network can either isolate them from information power or serve to create it. As we will see later in this chapter, those who are able to span boundaries and serve to connect different parts of the organizations often have a great deal of information power. In the TV show Mad Men, which is set in the 1960s, it is clear that the switchboard operators have a great deal of information power as they place all calls and are able to listen in on all the phone conversations within the advertising firm.
Referent Power
Referent power stems from the personal characteristics of the person such as the degree to which we like, respect, and want to be like them. Referent power is often called charisma—the ability to attract others, win their admiration, and hold them spellbound. Steve Jobs’s influence as described in the opening case is an example of this charisma.
What Is Influence?
Starting at infancy, we all try to get others to do what we want. We learn early what works in getting us to our goals. Instead of crying and throwing a tantrum, we may figure out that smiling and using language causes everyone less stress and brings us the rewards we seek.
By the time you hit the workplace, you have had vast experience with influence techniques. You have probably picked out a few that you use most often. To be effective in a wide number of situations, however, it’s best to expand your repertoire of skills and become competent in several techniques, knowing how and when to use them as well as understanding when they are being used on you. If you watch someone who is good at influencing others, you will most probably observe that person switching tactics depending on the context. The more tactics you have at your disposal, the more likely it is that you will achieve your influence goals.
Al Gore and many others have spent years trying to influence us to think about the changes in the environment and the implications of global warming. They speak, write, network, and lobby to get others to pay attention. But Gore, for example, does not stop there. He also works to persuade us with direct, action-based suggestions such as asking everyone to switch the kind of light bulbs they use, turn off appliances when not in use, drive vehicles with better fuel economy, and even take shorter showers. Ironically, Gore has more influence now as a private citizen regarding these issues than he was able to exert as a congressman, senator, and vice president of the United States.
OB Toolbox: Self-Assessment
Do You Have the Characteristics of Powerful Influencers?
People who are considered to be skilled influencers share the following attributes.
How often do you engage in them? 0 = never, 1= sometimes, 2 = always.
• present information that can be checked for accuracy
• provide a consistent message that does not change from situation to situation
• display authority and enthusiasm (often described as charisma)
• offer something in return for compliance
• act likable
• show empathy through listening
• show you are aware of circumstances, others, and yourself
• plan ahead
If you scored 0–6: You do not engage in much effective influencing behavior. Think of ways to enhance this skill. A great place to start is to recognize the items on the list above and think about ways to enhance them for yourself.
If you scored 7–12: You engage in some influencing behavior. Consider the context of each of these influence attempts to see if you should be using more or less of it depending on your overall goals.
If you scored 13–16: You have a great deal of influence potential. Be careful that you are not manipulating others and that you are using your influence when it is important rather than just to get your own way.
Commonly Used Influence Tactics
Figure 13.7 Influence Tactics Use and Outcomes (Kipnis, Schmidt, & Wilkinson, 1980; Schriescheim & Hinkin, 1990; Yukl & Falbe, 1991).
Frequency of Use Resistance Compliance Commitment
Rational persuasion 54% 47% 30% 23%
Legitimating 13% 44% 56% 0%
Personal appeals 7% 25% 33% 42%
Exchange 7% 25% 33% 42%
Ingratiation 6% 41% 28% 31%
Pressure 6% 56% 41% 3%
Coalitions 3% 53% 44% 3%
Inspirational appeals 2% 0% 10% 90%
Consultation 2% 18% 27% 55%
Researchers have identified distinct influence tactics and discovered that there are few differences between the way bosses, subordinates, and peers use them, which we will discuss at greater depth later on in this chapter. We will focus on nine influence tactics. Responses to influence attempts include resistance, compliance, or commitment. Resistance occurs when the influence target does not wish to comply with the request and either passively or actively repels the influence attempt. Compliance occurs when the target does not necessarily want to obey, but they do. Commitment occurs when the target not only agrees to the request but also actively supports it as well. Within organizations, commitment helps to get things done, because others can help to keep initiatives alive long after compliant changes have been made or resistance has been overcome.
1. Rational persuasion includes using facts, data, and logical arguments to try to convince others that your point of view is the best alternative. This is the most commonly applied influence tactic. One experiment illustrates the power of reason. People were lined up at a copy machine and another person, after joining the line asked, “May I go to the head of the line?” Amazingly, 63% of the people in the line agreed to let the requester jump ahead. When the line jumper makes a slight change in the request by asking, “May I go to the head of the line because I have copies to make?” the number of people who agreed jumped to over 90%. The word because was the only difference. Effective rational persuasion includes the presentation of factual information that is clear and specific, relevant, and timely. Across studies summarized in a meta-analysis, rationality was related to positive work outcomes (Higgins, Judge, & Ferris, 2003).
2. Inspirational appeals seek to tap into our values, emotions, and beliefs to gain support for a request or course of action. When President John F. Kennedy said, “Ask not what your country can do for you, ask what you can do for your country,” he appealed to the higher selves of an entire nation. Effective inspirational appeals are authentic, personal, big-thinking, and enthusiastic.
3. Consultation refers to the influence agent’s asking others for help in directly influencing or planning to influence another person or group. Consultation is most effective in organizations and cultures that value democratic decision making.
4. Ingratiation refers to different forms of making others feel good about themselves. Ingratiation includes any form of flattery done either before or during the influence attempt. Research shows that ingratiation can affect individuals. For example, in a study of résumés, those résumés that were accompanied with a cover letter containing ingratiating information were rated higher than résumés without this information. Other than the cover letter accompanying them, the résumés were identical (Varma, Toh, & Pichler, 2006). Effective ingratiation is honest, infrequent, and well intended.
5. Personal appeal refers to helping another person because you like them and they asked for your help. We enjoy saying yes to people we know and like. A famous psychological experiment showed that in dorms, the most well-liked people were those who lived by the stairwell—they were the most often seen by others who entered and left the hallway. The repeated contact brought a level of familiarity and comfort. Therefore, personal appeals are most effective with people who know and like you.
6. Exchange refers to give-and-take in which someone does something for you, and you do something for them in return. The rule of reciprocation says that “we should try to repay, in kind, what another person has provided us” (Cialdini, 2000). The application of the rule obliges us and makes us indebted to the giver. One experiment illustrates how a small initial gift can open people to a substantially larger request at a later time. One group of subjects was given a bottle of Coke. Later, all subjects were asked to buy raffle tickets. On the average, people who had been given the drink bought twice as many raffle tickets as those who had not been given the unsolicited drinks.
7. Coalition tactics refer to a group of individuals working together toward a common goal to influence others. Common examples of coalitions within organizations are unions that may threaten to strike if their demands are not met. Coalitions also take advantage of peer pressure. The influencer tries to build a case by bringing in the unseen as allies to convince someone to think, feel, or do something. A well-known psychology experiment draws upon this tactic. The experimenters stare at the top of a building in the middle of a busy street. Within moments, people who were walking by in a hurry stop and also look at the top of the building, trying to figure out what the others are looking at. When the experimenters leave, the pattern continues, often for hours. This tactic is also extremely popular among advertisers and businesses that use client lists to promote their goods and services. The fact that a client bought from the company is a silent testimonial.
8. Pressure refers to exerting undue influence on someone to do what you want or else something undesirable will occur. This often includes threats and frequent interactions until the target agrees. Research shows that managers with low referent power tend to use pressure tactics more frequently than those with higher referent power (Yukl, Kim, & Falbe, 1996). Pressure tactics are most effective when used in a crisis situation and when they come from someone who has the other’s best interests in mind, such as getting an employee to an employee assistance program to deal with a substance abuse problem.
9. Legitimating tactics occur when the appeal is based on legitimate or position power. “By the power vested in me…”: This tactic relies upon compliance with rules, laws, and regulations. It is not intended to motivate people but to align them behind a direction. Obedience to authority is filled with both positive and negative images. Position, title, knowledge, experience, and demeanor grant authority, and it is easy to see how it can be abused. If someone hides behind people’s rightful authority to assert themselves, it can seem heavy-handed and without choice. You must come across as an authority figure by the way you act, speak, and look. Think about the number of commercials with doctors, lawyers, and other professionals who look and sound the part, even if they are actors. People want to be convinced that the person is an authority worth heeding. Authority is often used as a last resort. If it does not work, you will not have much else to draw from in your goal to persuade someone.
From the Best-Seller’s List: Making OB Connections
You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.
Dale Carnegie
How to Make Friends and Influence People was written by Dale Carnegie in 1936 and has sold millions of copies worldwide. While this book first appeared over 70 years ago, the recommendations still make a great deal of sense regarding power and influence in modern-day organizations. For example, he recommends that in order to get others to like you, you should remember six things:
1. Become genuinely interested in other people.
2. Smile.
3. Remember that a person’s name is to that person the sweetest and most important sound in any language.
4. Be a good listener. Encourage others to talk about themselves.
5. Talk in terms of the other person’s interests.
6. Make the other person feel important—and do it sincerely.
This book relates to power and politics in a number of important ways. Carnegie specifically deals with enhancing referent power. Referent power grows if others like, respect, and admire you. Referent power is more effective than formal power bases and is positively related to employees’ satisfaction with supervision, organizational commitment, and performance. One of the keys to these recommendations is to engage in them in a genuine manner. This can be the difference between being seen as political versus understanding politics.
Impression Management
Impression management means actively shaping the way you are perceived by others. You can do this through your choice of clothing, the avatars or photos you use to represent yourself online, the descriptions of yourself on a résumé or in an online profile, and so forth. By using impression management strategies, you control information that make others see you in the way you want to be seen. Consider when you are “being yourself” with your friends or with your family—you probably act differently around your best friend than around your mother (Dunn & Forrin, 2005).
On the job, the most effective approach to impression management is to do two things at once—build credibility and maintain authenticity. As Harvard Business School Professor Laura Morgan Roberts puts it, “When you present yourself in a manner that is both true to self and valued and believed by others, impression management can yield a host of favorable outcomes for you, your team, and your organization” (Stark, 2005).
There may be aspects of your “true self” that you choose not to disclose at work, although you would disclose them to your close friends. That kind of impression management may help to achieve group cohesiveness and meet professional expectations. But if you try to win social approval at work by being too different from your true self—contradicting your personal values—you might feel psychological distress.
It’s important to keep in mind that whether you’re actively managing your professional image or not, your coworkers are forming impressions of you. They watch your behavior and draw conclusions about the kind of person you are, whether you’ll keep your word, whether you’ll stay to finish a task, and how you’ll react in a difficult situation.
Since people are forming these theories about you no matter what, you should take charge of managing their impressions of you. To do this, ask yourself how you want to be seen. What qualities or character traits do you want to convey? Perhaps it’s a can-do attitude, an ability to mediate, an ability to make a decision, or an ability to dig into details to thoroughly understand and solve a problem.
Then, ask yourself what the professional expectations are of you and what aspects of your social identity you want to emphasize or minimize in your interactions with others. If you want to be seen as a leader, you might disclose how you organized an event. If you want to be seen as a caring person in whom people can confide, you might disclose that you’re a volunteer on a crisis helpline. You can use a variety of impression management strategies to accomplish the outcomes you want.
Here are the three main categories of strategies and examples of each:
• Nonverbal impression management includes the clothes you choose to wear and your demeanor. An example of a nonverbal signal is body art, including piercings and tattoos. While the number of people in the United States who have body art has risen from 1% in 1976 to 24% in 2006, it can hold you back at work. Vault.com did a survey and found that 58% of the managers they surveyed said they would be less likely to hire someone with visible body art, and over 75% of respondents felt body art was unprofessional. Given these numbers, it should not be surprising that 67% of employees say they conceal body art while they are at work(Society for Industrial and Organizational Psychology Inc., 2008).
• Verbal impression management includes your tone of voice, rate of speech, what you choose to say and how you say it. We know that 38% of the comprehension of verbal communication comes from these cues. Managing how you project yourself in this way can alter the impression that others have of you. For example, if your voice has a high pitch and it is shaky, others may assume that you are nervous or unsure of yourself.
• Behavior impression management includes how you perform on the job and how you interact with others. Complimenting your boss is an example of a behavior that would indicate impression management. Other impression management behaviors include conforming, making excuses, apologizing, promoting your skills, doing favors, and making desirable associations known. Impression management has been shown to be related to higher performance ratings by increasing liking, perceived similarity, and network centrality (Barsness, Diekmann, & Seidel, 2005; Wayne & Liden, 1995).
Research shows that impression management occurs throughout the workplace. It is especially salient when it comes to job interviews and promotional contexts. Research shows that structured interviews suffer from less impression management bias than unstructured interviews, and that longer interviews lead to a lessening of the effects as well (Tsai, Chen, & Chiu, 2005).
Direction of Influence
The type of influence tactic used tends to vary based on the target. For example, you would probably use different influence tactics with your boss than you would with a peer or with employees working under you.
Upward Influence
Upward influence, as its name implies, is the ability to influence your boss and others in positions higher than yours. Upward influence may include appealing to a higher authority or citing the firm’s goals as an overarching reason for others to follow your cause. Upward influence can also take the form of an alliance with a higher status person (or with the perception that there is such an alliance) (Farmer & Maslyn, 1999; Farmer et al., 1997). As complexity grows, the need for this upward influence grows as well—the ability of one person at the top to know enough to make all the decisions becomes less likely. Moreover, even if someone did know enough, the sheer ability to make all the needed decisions fast enough is no longer possible. This limitation means that individuals at all levels of the organization need to be able to make and influence decisions. By helping higher-ups be more effective, employees can gain more power for themselves and their unit as well. On the flip side, allowing yourself to be influenced by those reporting to you may build your credibility and power as a leader who listens. Then, during a time when you do need to take unilateral, decisive action, others will be more likely to give you the benefit of the doubt and follow. Both Asian American and Caucasian American managers report using different tactics with superiors than those used with their subordinates (Xin & Tsui, 1996). Managers reported using coalitions and rationality with managers and assertiveness with subordinates. Other research establishes that subordinates’ use of rationality, assertiveness, and reciprocal exchange was related to more favorable outcomes such as promotions and raises, while self-promotion led to more negative outcomes (Orpen, 1996; Wayne et al., 1997).
Influence takes place even before employees are hired. For example, ingratiation and rationality were used frequently by fire fighters during interviews (McFarland, Ryan, & Kriska, 2002). Extraverts tend to engage in a greater use of self-promotion tactics while interviewing, and research shows that extraverts are more likely to use inspirational appeal and ingratiation as influence tactics (Cable & Judge, 2003; Kristof-Brown, Barrick, & Franke, 2002). Research shows that ingratiation was positively related to perceived fit with the organization and recruiters’ hiring recommendations (Higgins & Judge, 2004).
Downward Influence
Downward influence is the ability to influence employees lower than you. This is best achieved through an inspiring vision. By articulating a clear vision, you help people see the end goal and move toward it. You often don’t need to specify exactly what needs to be done to get there—people will be able to figure it out on their own. An inspiring vision builds buy-in and gets people moving in the same direction. Research conducted within large savings banks shows that managers can learn to be more effective at influence attempts. The experimental group of managers received a feedback report and went through a workshop to help them become more effective in their influence attempts. The control group of managers received no feedback on their prior influence attempts. When subordinates were asked 3 months later to evaluate potential changes in their managers’ behavior, the experimental group had much higher ratings of the appropriate use of influence (Seifer, Yukl, & McDonald, 2003). Research also shows that the better the quality of the relationship between the subordinate and their supervisor, the more positively resistance to influence attempts are seen (Tepper et al., 2006). In other words, bosses who like their employees are less likely to interpret resistance as a problem.
Peer Influence
Peer influence occurs all the time. But, to be effective within organizations, peers need to be willing to influence each other without being destructively competitive (Cohen & Bradford, 2002). There are times to support each other and times to challenge—the end goal is to create better decisions and results for the organization and to hold each other accountable. Executives spend a great deal of their time working to influence other executives to support their initiatives. Research shows that across all functional groups of executives, finance or human resources as an example, rational persuasion is the most frequently used influence tactic (Enns & McFarlin, 2003).
OB Toolbox: Getting Comfortable With Power
Now that you’ve learned a great deal about power and influence within organizations, consider asking yourself how comfortable you are with the three statements below:
• Are you comfortable saying, “I want to be powerful” to yourself? Why or why not?
• Are you comfortable saying, “I want to be powerful” to someone else? Why or why not?
• Are you comfortable having someone say, “You are powerful” to you? Why or why not?
Discomfort with power reduces your power. Experts know that leaders need to feel comfortable with power. Those who feel uncomfortable with power send those signals out unconsciously. If you feel uncomfortable with power, consider putting the statement in a shared positive light by saying, “I want to be powerful so that we can accomplish this goal.”
Key Takeaways
Individuals have six potential sources of power, including legitimate, reward, coercive, expert, information, and referent power. Influence tactics are the way that individuals attempt to influence one another in organizations. Rational persuasion is the most frequently used influence tactic, although it is frequently met with resistance. Inspirational appeals result in commitment 90% of the time, but the tactic is utilized only 2% of the time. The other tactics include legitimizing, personal appeals, exchanges, ingratiation, pressure, forming coalitions, and consultation. Impression management behaviors include conforming, making excuses, apologizing, promoting your skills, doing favors, and making associations with desirable others known. Influence attempts may be upward, downward, or lateral in nature.
Exercises
1. Which of the six bases of power do you usually draw upon? Which do you use the least of at this time?
2. Distinguish between coercive and reward power.
3. Which tactics seem to be the most effective? Explain your answer.
4. Why do you think rational persuasion is the most frequently utilized influence tactic?
5. Give an example of someone you’ve tried to influence lately. Was it an upward, downward, or lateral influence attempt? | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.3%3A_The_Power_to_Influence.txt |
Learning Objectives
1. Understand what organizational politics are.
2. Examine political behavior within organizations.
Organizational Politics
Organizational politics are informal, unofficial, and sometimes behind-the-scenes efforts to sell ideas, influence an organization, increase power, or achieve other targeted objectives (Brandon & Seldman, 2004; Hochwarter, Witt, & Kacmar, 2000). Politics has been around for millennia. Aristotle wrote that politics stems from a diversity of interests, and those competing interests must be resolved in some way. “Rational” decision making alone may not work when interests are fundamentally incongruent, so political behaviors and influence tactics arise.
Today, work in organizations requires skill in handling conflicting agendas and shifting power bases. Effective politics isn’t about winning at all costs but about maintaining relationships while achieving results. Although often portrayed negatively, organizational politics are not inherently bad. Instead, it’s important to be aware of the potentially destructive aspects of organizational politics in order to minimize their negative effect. Of course, individuals within organizations can waste time overly engaging in political behavior. Research reported in HR Magazine found that managers waste 20% of their time managing politics. However, as John Kotter wrote in Power and Influence, “Without political awareness and skill, we face the inevitable prospect of becoming immersed in bureaucratic infighting, parochial politics and destructive power struggles, which greatly retard organizational initiative, innovation, morale, and performance” (Kotter, 1985).
In our discussion about power, we saw that power issues often arise around scarce resources. Organizations typically have limited resources that must be allocated in some way. Individuals and groups within the organization may disagree about how those resources should be allocated, so they may naturally seek to gain those resources for themselves or for their interest groups, which gives rise to organizational politics. Simply put, with organizational politics, individuals ally themselves with like-minded others in an attempt to win the scarce resources. They’ll engage in behavior typically seen in government organizations, such as bargaining, negotiating, alliance building, and resolving conflicting interests.
Politics are a part of organizational life, because organizations are made up of different interests that need to be aligned. In fact, 93% of managers surveyed reported that workplace politics exist in their organization, and 70% felt that in order to be successful, a person has to engage in politics (Gandz & Murray, 1980). In the negative light, saying that someone is “political” generally stirs up images of back-room dealing, manipulation, or hidden agendas for personal gain. A person engaging in these types of political behaviors is said to be engaging in self-serving behavior that is not sanctioned by the organization (Ferris et al., 1996; Valle & Perrewe, 2000; Harris, James, & Boonthanom, 2005; Randall et al., 1999).
Examples of these self-serving behaviors include bypassing the chain of command to get approval for a special project, going through improper channels to obtain special favors, or lobbying high-level managers just before they make a promotion decision. These types of actions undermine fairness in the organization, because not everyone engages in politicking to meet their own objectives. Those who follow proper procedures often feel jealous and resentful because they perceive unfair distributions of the organization’s resources, including rewards and recognition (Parker, Dipboye, & Jackson, 1995).
Researchers have found that if employees think their organization is overly driven by politics, the employees are less committed to the organization (Maslyn & Fedor, 1998; Nye & Wit, 1993), have lower job satisfaction (Ferris et al., 1996; Hochwarter et al., Kacmar et al., 1999), perform worse on the job (Anderson, 1994), have higher levels of job anxiety (Ferris et al., 1996; Kacmar & Ferris, 1989), and have a higher incidence of depressed mood (Byrne et al., 2005).
The negative side of organizational politics is more likely to flare up in times of organizational change or when there are difficult decisions to be made and a scarcity of resources that breeds competition among organizational groups. To minimize overly political behavior, company leaders can provide equal access to information, model collaborative behavior, and demonstrate that political maneuvering will not be rewarded or tolerated. Furthermore, leaders should encourage managers throughout the organization to provide high levels of feedback to employees about their performance. High levels of feedback reduce the perception of organizational politics and improve employee morale and work performance (Rosen, Levy, & Hall, 2006). Remember that politics can be a healthy way to get things done within organizations.
Individual Antecedents
There are a number of potential individual antecedents of political behavior. We will start off by understanding the role that personality has in shaping whether someone will engage in political behavior.
Political skill refers to peoples’ interpersonal style, including their ability to relate well to others, self-monitor, alter their reactions depending upon the situation they are in, and inspire confidence and trust (Ferris et al., 2000). Researchers have found that individuals who are high on political skill are more effective at their jobs or at least in influencing their supervisors’ performance ratings of them (Ferris, Fedor, & King, 1994; Kilduff & Day, 1994). Individuals who are high in internal locus of control believe that they can make a difference in organizational outcomes. They do not leave things to fate. Therefore, we would expect those high in internal locus of control to engage in more political behavior. Research shows that these individuals perceive politics around them to a greater degree (Valle & Perrewe, 2000). Investment in the organization is also related to political behavior. If a person is highly invested in an organization either financially or emotionally, they will be more likely to engage in political behavior because they care deeply about the fate of the organization. Finally, expectations of success also matter. When a person expects that they will be successful in changing an outcome, they are more likely to engage in political behavior. Think about it: If you know there is no chance that you can influence an outcome, why would you spend your valuable time and resources working to effect change? You wouldn’t. Over time you’d learn to live with the outcomes rather than trying to change them (Bandura, 1996).
Organizational Antecedents
Scarcity of resources breeds politics. When resources such as monetary incentives or promotions are limited, people see the organization as more political. Any type of ambiguity can relate to greater organizational politics. For example, role ambiguity allows individuals to negotiate and redefine their roles. This freedom can become a political process. Research shows that when people do not feel clear about their job responsibilities, they perceive the organization as more political (Muhammad, 2007). Ambiguity also exists around performance evaluations and promotions. These human resource practices can lead to greater political behavior, such as impression management, throughout the organization. As you might imagine, democratic decision making leads to more political behavior. Since many people have a say in the process of making decisions, there are more people available to be influenced.
OB Toolbox: Overcoming Ineffective Politics
Author and consultant Patrick Lencioni recommends the following four steps for overcoming ineffective politics due to turf wars. When members of the organization are more concerned about their own area of operations than doing what’s best for the entire organization, in the long run you may have a problem with turf wars. Taking these four steps can help overcome this situation:
1. Create a thematic goal. The goal should be something that everyone in the organization can believe in, such as, for a hospital, giving the best care to all patients. This goal should be a single goal, qualitative, time-bound, and shared.
2. Create a set of defining objectives. This step should include objectives that everyone agrees will help bring the thematic goal to fruition.
3. Create a set of ongoing standard operating objectives. This process should be done within each area so that the best operating standards are developed. These objectives should also be shared across the organization so everyone is aware of them.
4. Create metrics to measure them. Measuring whether the standard operating objectives get done is a vital step in the process. Rather than someone else pointing out what isn’t working, all the people within the department will have the information necessary to come to this conclusion and correct the problem, because ultimately, everyone in the organization cares about achieving the thematic goal.
Key Takeaways
Organizational politics is a natural part of organizational life. Organizations that are driven by unhealthy levels of political behavior suffer from lowered employee organizational commitment, job satisfaction, and performance as well as higher levels of job anxiety and depression. Individual antecedents of political behavior include political skill, internal locus of control, high investment in the organization, and expectations of success. Organizational antecedents include scarcity of resources, role ambiguity, frequent performance evaluations and promotions, and democratic decision making.
Exercises
1. Do you think politics are a positive or negative thing for organizations? Why?
2. Describe an example of a negative outcome due to politics.
3. Describe an example of a positive outcome due to politics.
4. Can you think of additional individual or organizational antecedents of political behavior?
5. What political behaviors have you observed within school groups or your workplace? Were they successful? Why or why not? | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.4%3A_Organizational_Politics.txt |
Learning Objectives
1. Learn what social networks are.
2. Understand social network analysis.
Social Networks
We’ve seen that power comes from many sources. One major source relates to who you know and how much access you have to information within your organization. Social networks are visual maps of relationships between individuals. They are vital parts of organizational life as well as important when you are first looking for a job. For example, if you are interested in being hired by Proctor & Gamble, you might call upon your social network—the network of people you know—to find the people who can help you accomplish this task. You might ask your network if they know anyone at Proctor & Gamble. If you did so, the people you’d call on aren’t just your friends and family—they’re part of your informal network. In fact, research finds that 75% to 95% of all jobs are never formally advertised but are filled through such social networks (Hansen, 2008).
Much of the work that gets done in organizations is done through informal networks as well. Networks serve three important functions. First, they deliver private information. Second, they allow individuals to gain access to diverse skills sets. Third, they can help create power.
Organizations can conduct a social network analysis (SNA), a systematic effort to examine the structure of social relationships in a group. Their purpose is to uncover the informal connections between people. SNA dates back to 1934 when Joseph Moreno introduced the tools of sociometry. More recently, the advent of computers has made SNA possible on large networks. In the past decade, SNA has become widely used across fields.
Conducting SNA
SNA can be conducted either directly or indirectly. The indirect way is to analyze e-mails between people. For example, which employees e-mail each other? How often? Who replies to whom? Another technique is to observe a group in action to see which employees talk to each other and who approaches whom for what. Additional, nonintrusive options are to look at project structures of billable hours such as determining which individuals regularly work together. Direct approaches to SNA involve doing a survey that asks questions directly (Cross et al., 2001). For example, the survey might ask individuals, “Who would you go to for technical information? Who can you rely on to give you the pulse of the company? Who do you trust to keep your best interests in mind?” SNA can reveal who is trusted, important in decision making (that is, to whom do people turn for advice before making an important decision?), and innovative (“With whom are you most likely to discuss a new idea?”). The direct approach is likely to be more targeted, but some people may see it as an unwanted intrusion.
Analyzing Network Ties and Key Network Roles
Once the data is collected, SNA software is used to create the maps for analysis. The maps draw incoming and outgoing arrows between people to show the number of ties coming into a person (contacts that the person receives) and the number of ties outgoing (contacts that the person initiates). There are three key roles in a network. Central connectors are people linked to the greatest number of people. Boundary spanners are people who connect one network to another within the company or even across organizations. Peripheral specialists have special expertise that can be drawn upon even though they often work independently of the group.
Analysis: Strong and Weak Ties
You can recognize the strength of ties between people by counting the frequency of ties. The more interactions people have, the stronger the ties those individuals have with each other. Strong ties often indicate emotional support, not just informational support between people. Ties that are reciprocated tend to be stronger as well. Weak ties are characterized by less frequent interaction and often do not have as much emotional attachment, but they are also easier to maintain, and therefore people can have more of them. Weak ties are particularly useful for innovation, because people who are good friends tend to see the same information, whereas people who are merely acquaintances are likely to be exposed to different information. Thus, a casual encounter may spark that creative idea. Social networks tend to be informal, but by doing an SNA, the company can harness their power to help improve communication throughout the company (such as by making sure people have the information to share) and to help generate and spread innovation (by giving information to the boundary-spanning people who will pass it on beyond their work group). Social networks serve to promote collaboration, improve new product development, and respond to emergencies or unusual circumstances quickly (Cross, Liedtka, & Weiss, 2005).
Social networks connect people with others. Consider networking Web sites such as Facebook or LinkedIn, where being connected with many people makes you more visible. This is becoming more and more salient as 80% of 12- to 17-year-olds use MySpace at least weekly, and over 40,000 MySpace groups are devoted to companies and colleagues (Frauenheim, 2007). In business, the more central you are, the more power you will have. The closer you are to more people, the more powerful you are (Cross, Parker, & Cross, 2004). If you are the person who many people link to and you serve as a node between people, you have brokering power—you can introduce people to each other. People high on this “betweenness” are also in a position to withhold information from one person to the next, which can happen during power plays. You also have a greater number of people to call on when you need something, which makes you less dependent on any one person. The more ties you have that are incoming (toward you), the more trusted you are.
Social network analysis shows who communicates with whom, who knows whom, and where gaps in communication or collaboration may exist. After conducting a network analysis, organizations can take actions to modify people’s roles or responsibilities in ways that improve communication or diffuse innovation throughout the organization more effectively by putting people or departments in touch with each other.
Building Your Own Network
NPDOC – General Lyon plays tennis – CC BY 2.0.
There are several simple steps you can take to help build your own social network. For example, you can go to lunch with someone new. You can also try to do more to encourage, help, and share with others. You can seek information outside your own class or work group. You can spend time with people from work outside work. All these suggestions are effective ways to naturally build your social network.
Key Takeaways
Social networks make up a key part of organizations. A social network analysis (SNA) involves tracing who interacts with whom. Central connectors have a large number of contacts. Boundary spanners connect to several networks of people. Peripheral specialists often work independently. Strong and weak ties can both be helpful for gathering information and building one’s network.
Exercises
1. Have you ever thought about your own social network before? What do you think about it now?
2. Do you think the direct or indirect approach to doing a social network analysis is the most accurate?
3. Do you think it is ethical to play golf or tennis with coworkers to build your social network? Why or why not?
4. How have computers influenced social networking? | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.5%3A_Understanding_Social_Networks.txt |
Learning Objectives
1. Consider the role of ethics and power.
2. Consider the role of national culture on power.
Ethics and Power
Power brings a special need for ethics, because the circumstances of power make it easy for misuse to occur. As we have seen, a company president wields at least three sources of power: legitimate from the position they hold, coercive from the ability to fire employees, and reward such as the ability to give raises and perks. Expert power and referent power often enter the mix as well. Now take the example of setting the CEO’s pay. In a public company, the CEO presumably has to answer to the board of directors and the shareholders. But what if the CEO appoints many of the people on the board? What if the board and the CEO are friends? Consider the case of Richard Grasso, former chairman of the New York Stock Exchange (NYSE), whose compensation was \$140 million plus another \$48 million in retirement benefits. At that time, the average starting salary of a trader on the NYSE was \$90,000, so Grasso was being paid 1,555 times more than a starting employee. The NYSE Board of Directors approved Grasso’s payment package, but many of the board members had been appointed to their positions by Grasso himself. What’s more, the NYSE’s function is to regulate publicly traded companies. As Hartman and Desjardins noted, “The companies being regulated by the NYSE were the very same companies that were paying Grasso” (Hartman & Desjardins, 2008). Grasso ultimately resigned amid public criticism but kept the \$140 million. Other CEOs have not faced the same outcry, even though average CEO pay increased 200% to 400% during the same time period that average worker pay increased only 4.3% (CEO paycharts, 2005). Some CEOs have earned a great deal of respect by limiting what they are paid. For example, Japan Airlines CEO Haruka Nishimatsu earns the equivalent to \$90,000 per year while running the 10th largest airline in the world. In addition, he rides the bus to work and eats in the company cafeteria with everyone else (Petersen, 2009).
Video Connection: Haruka Nishimatsu
If you are interested in learning more about CEO Haruka Nishimatsu, view this CBS News video segment, available at the following Web site:
www.cbsnews.com/video/watch/?id=4761187n
Power Around the Globe
Power also has a cultural dimension. In some countries, power is centralized in the hands of a few. This type of distribution makes up high power distance countries. Within organizations in these countries, the structure is hierarchical, and compensation is based on your position in the hierarchy (Javidan et al., 2006). People in high power distance countries expect unequal distribution of power, such as large differences in pay and status. People in positions of authority in these countries expect (and receive) obedience. In Brazil, for example, there are formal relationships between the leader and followers, and it’s clear who has the most power in any given work environment. Important decisions, including decisions on hiring and raises, are made by the person in charge, and decisions are often based on loyalty rather than on formal review mechanisms. Japan is also a higher power distant country and has unequal power and wealth among its citizens. But, people do not perceive this inequity as inherently wrong; rather, they accept it as their cultural heritage. Other examples of high power distance countries include the Arab nations, the Philippines, Venezuela, and Spain.
Countries with a low power distance rating, such as Australia, the Netherlands, and Sweden, value cooperative interaction across power levels. They emphasize equality and opportunity for everyone. For example, Australians want their leaders to be achievement-oriented, visionary, and inspirational, but they don’t want their leaders to stand out too much. Leaders need to be seen as “one of us” (Ashkanasy, 1998). Organizational structures in low power distance countries are flatter with higher worker involvement. Status is based on achievement rather than class distinction or birth. People in power cannot arbitrarily hire their relatives or reward those loyal to them. There are formal review mechanisms in place to give everyone a fair chance at pay raises, and the difference in pay between high-level and lower level jobs is smaller.
These differences in perceptions of power become especially important in international ventures in which people of different countries work together. For example, in a joint venture between an American and a Mexican company, American managers were continually frustrated with what they perceived to be slow decision making by Mexican managers. Even the e-mails sent to the Mexican subsidiary were taking a long time to be answered. Mexico ranks higher on the power distance dimension than the United States—company structures are more hierarchical, and decisions are made only by top managers; therefore, lower level managers in Mexico could not make decisions on behalf of their bosses. In the case of e-mails, employees were consulting with their managers before answering each e-mail, taking a long time to answer them.
In addition to differing perceptions of power, how people influence each other seems to be determined by culture. Cross-cultural research shows that the more task-oriented influence tactics, such as rational persuasion, are seen as more effective in the United States than in China, and that Chinese managers rated tactics involving relationships such as coalitions as more effective than did the American managers (Fu & Yukl, 2000; Yukl, Fu, & McDonald, 2003).
Key Takeaways
Power can be easily abused. This is especially the case of CEOs who are rewarded by a board of directors that is often staffed by trusted friends and colleagues of the CEO. It is not hard to imagine that this might become a conflict of interest. Countries differ in terms of power distance. Some countries such as Brazil see a formal relationship between leaders and followers based on a rigid hierarchy.
Exercises
1. What could be done to make sure that CEOs are paid fairly for their work rather than as a favor from their friends?
2. What is some advice about power that you would give to a colleague who was leaving to China to set up a new business? | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.6%3A_The_Role_of_Ethics_and_National_Culture.txt |
Figure 13.14
Networking has the potential to open doors and create possibilities for jobs and partnerships. Networking establishes connections between individuals and access to information that one might not normally have access to. Reaching out to strangers can be an intimidating and nerve-racking experience. In business, the more central you are, the more power you have. Creating connections and ties to other people affords you the opportunity for power and the ability to more closely control your future, so while at times networking might feel awkward and uncomfortable, it is a necessary and important part of establishing and maintaining a career.
Online social networking sites play an important role in this networking process for individuals both professionally and personally. With 1,200 employees in 2010, Facebook has 350 million users around the world, and LinkedIn has over 60 million members in over 200 countries. A new member joins LinkedIn every second, and about half of the members are outside the United States. These online sites have created new opportunities for networking and allow individuals to branch out beyond their normal world of industry, school, and business. The key is to avoid costly missteps as employers have begun to search online for information about prospective and current employees. In 2009, 8% of companies reported that they had fired an employee for misuse of social media.
Many of these online sites have become a tool for business. For example, LinkedIn targets working professionals and provides them a way to maintain lists of business connections and to use those connections to gain introduction to people using mutual contacts. Unlike other social networking sites, LinkedIn is almost entirely used by professionals. The power of social networking flows in both directions. Employers can screen applicants through their online accounts and recruiters more than ever are using these sites to view background information, individual skill sets, and employment history, which can be cross-referenced with submitted applications. Job seekers can review the profiles of those at top management firms and search for mutual contacts. LinkedIn also provides statistics about firms, which can be useful information for individuals looking at potential employers.
Networking is about building your brand and managing relationships. Using social networks as a vehicle to market one’s self and make professional connections is becoming increasingly common, as well as using loose ties or connections through others to open doors and land jobs. In an increasingly high-tech and digital world, it is important to be aware and conscience of the digital footprint that we create. But with careful cultivation these online networks can present many opportunities.
Discussion Questions
1. How is online networking different from or similar to in-person networking? Please describe your experience with both.
2. What are the downfalls and benefits of social networking?
3. In what ways are indirect ties as powerful and important as direct ties?
4. To what extent have you built your own brand? Is this something that you have ever considered before?
13.8: Conclusion
Power and politics in organizations are common. In most cases, each concept is necessary and executed with skill and precision. Unfortunately, power can lead to conformity from those around us, and this occurring conformity can breed corruption. The amount of power you have has strong ties to how much others depend on you. If you are deemed a valuable resource within an organization, then you are able to wield that dependability to make demands and get others to do what you want. Besides having an innate or acquired control over particular resources, there are several social aspects of power to draw on.
Methods for obtaining more power in an organization can often lead to political behaviors. As one person seeks to influence another to support an idea, politics begins to play out. Though necessary in some instances, many people that follow the rules see the politics of an organization as resulting in an unfair distribution of resources. Still others, despite understanding the politics of a given organization, see it as an unnecessary time consumer.
Politics, influence, and power can often reside within your social network. When an individual is core to a social structure, they will often have some degree of control over others. Social networks can also help you acquire jobs, make beneficial connections, and generally make like easier. It is often a good idea to analyze your social network and determine if it needs to be strengthened or tailored. | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.7%3A_Getting_Connected%3A_The_Case_of_Social_Networking.txt |
Ethical Dilemma
It is two days before your performance appraisal. Your performance this quarter has been less than desirable. You came close to reaching your sales targets, but you did not meet them, and you are hoping to still get the merit pay raise to be determined as a result of your performance appraisal. You do not really like your manager, but you are hoping to advance in this company, and being on your manager’s good side may be a good idea both for your current performance appraisal and for your future in this company.
• You are now at a meeting with your manager and a group of employees. Your manager is giving financial information to all employees about different markets. Yet, some of this information is inaccurate, which could lead to wrong pricing decisions and loss of money by the company. If you correct him, though, he would most likely get upset with you because he does not like being corrected. Would you correct him? How and when?
• Today is also the day on which your manager’s boss is collecting information about your manager’s leadership style, so that they can give him a 360-degree appraisal. They assure you that your comments about your manager will remain confidential, but the nature of your thoughts is such that he probably would guess you are the person who made those comments. Specifically, you think that your manager takes offense easily, has a bad temper, and could be more effective in time management. Would you share your thoughts with your manager’s manager?
• You are now at the coffee shop and grabbing a cup of coffee and some pastries. You notice that they have almond coffee cake, which is your manager’s favorite. Would you pick some up for your manager?
Individual Exercise
Map Your Social Network (Carpenter & Sanders, 2007; Wasserman & Faust, 1994; Watt, 2003)
• Step 1: Think of a specific objective you have at work or school that involves other people. Once you have thought of an objective, jot it down.
• Step 2: Use Figure 13.15 to list 5 to 15 people at your school or in your professional network who you have regular contact with and who are relevant to the objective you identified.
• Step 3: Rate how tightly connected you are with the people in your network by placing a check in the corresponding column (barely connected, loosely connected, somewhat connected, or tightly connected) on the right-hand side of their name.
• Step 4: Circle the name of anyone who has introduced you to 4 or more new people since you have known them.
• Step 5: In Figure 13.16, place a check mark in the intersecting box of people that know each other. For example, if person 1 knows person 2, put a check mark under the 2 at the top of the table. Continue to do this throughout the grid (grayed boxes should be left blank).
• Step 6: Analyze your network using the guidelines on the following calculations.
• Step 7: Consider ways to strengthen your network.
Figure 13.15
Figure 13.16
Let’s see how your social network adds up:
Calculating Network Size
The number of people you listed in your own network for this situation
N = _____
Calculating Network Density
It is important to understand what the maximum density of your network is. This refers to how dense it would be if everyone in your network knew each other.
(N * (N − 1)/2 = M) or ( _____ * ( _____ − 1)/2 = M)
M = _____
Total number of checkmarks in Figure 13.16, which represents number of relationships among people in your network.
C = _____
Density of your network (will range between 0 and 1)
C / M = D
_____/_____= D
D = _____
Network Size
N = number of people in your network. The more people in your network, the greater the amount of information and possibly access to greater resources you have. We stopped at 15 people but many individuals have more people in their network than 15.
Network Strength
The strength of your network is also important. You can talk about this in terms of percentages of your relationships. What percentage are very tightly connected? Close? Somewhat connected? Or barely connected?
• ___% Tightly Connected
• ___% Somewhat Connected
• ___% Loosely Connected
• ___% Barely Connected
For most people, it would be hard to manage a huge network where all the ties are very close, just by virtue of the amount of time and energy it takes to satisfy the conditions for closeness.
Identifying Central Connectors
Count how many names you circled in step 4. Each of these individuals plays a special role in your network as they are central connectors who serve to expand your network by introducing you to new people. If you are also a central connector, this can be a benefit to assessing information as long as you are able to keep the network from distracting you from your work.
Network Density
Network density is important. When a person’s network density is 1.0 that indicates that everyone in the network knows everyone else. Whether this is good or bad depends on a few things. For example, if everyone in your network has additional networks they belong to as well, you would be playing a central role in their networks and you would be a boundary spanner. But, if they also have high network density, the odds are that no new information is getting introduced into your group. You are basically a closed loop in which the same people interact with one another, and it is challenging to assess changes in the environment or to be innovative.
Social networks change over time depending on your tenure in an industry or company. The longer you have been in a given industry, the more likely it is that you will see your network size begin to shrink and become more dense.
Consider factors relating to power and influence and how you might go about strengthening and increasing the size of your network.
What are the pros and cons of doing so?
Group Exercise
In a group, analyze the following individuals in terms of their potential power bases. The first step is to discuss which types of power a person with the job listed on the left-hand column could have. If you can think of an example of them having a type of power, write the example in that column.
Table 13.1
Legitimate power Reward power Coercive power Information power Referent power
Flight attendant
Computer programmer
Executive assistant
Manager
Mailroom person
Customer service representative
CEO | textbooks/biz/Management/Organizational_Behavior/13%3A_Power_and_Politics/13.9%3A_Exercises.txt |
Toyota Motor Corporation (TYO: 7203) has often been referred to as the gold standard of the automotive industry. In the first quarter of 2007, Toyota (NYSE: TM) overtook General Motors Corporation in sales for the first time as the top automotive manufacturer in the world. Toyota reached success in part because of its exceptional reputation for quality and customer care. Despite the global recession and the tough economic times that American auto companies such as General Motors and Chrysler faced in 2009, Toyota enjoyed profits of \$16.7 billion and sales growth of 6% that year. However, late 2009 and early 2010 witnessed Toyota’s recall of 8 million vehicles due to unintended acceleration. How could this happen to a company known for quality and structured to solve problems as soon as they arise? To examine this further, one has to understand about the Toyota Production System (TPS).
TPS is built on the principles of “just-in-time” production. In other words, raw materials and supplies are delivered to the assembly line exactly at the time they are to be used. This system has little room for slack resources, emphasizes the importance of efficiency on the part of employees, and minimizes wasted resources. TPS gives power to the employees on the front lines. Assembly line workers are empowered to pull a cord and stop the manufacturing line when they see a problem.
However, during the 1990s, Toyota began to experience rapid growth and expansion. With this success, the organization became more defensive and protective of information. Expansion strained resources across the organization and slowed response time. Toyota’s CEO, Akio Toyoda, the grandson of its founder, has conceded, “Quite frankly, I fear the pace at which we have grown may have been too quick.”
Vehicle recalls are not new to Toyota; after defects were found in the company’s Lexus model in 1989, Toyota created teams to solve the issues quickly, and in some cases the company went to customers’ homes to collect the cars. The question on many people’s minds is, how could a company whose success was built on its reputation for quality have had such failures? What is all the more puzzling is that brake problems in vehicles became apparent in 2009, but only after being confronted by United States transportation secretary Ray LaHood did Toyota begin issuing recalls in the United States. And during the early months of the crisis, Toyota’s top leaders were all but missing from public sight.
The organizational structure of Toyota may give us some insight into the handling of this crisis and ideas for the most effective way for Toyota to move forward. A conflict such as this has the ability to paralyze productivity but if dealt with constructively and effectively, can present opportunities for learning and improvement. Companies such as Toyota that have a rigid corporate culture and a hierarchy of seniority are at risk of reacting to external threats slowly. It is not uncommon that individuals feel reluctant to pass bad news up the chain within a family company such as Toyota. Toyota’s board of directors is composed of 29 Japanese men, all of whom are Toyota insiders. As a result of its centralized power structure, authority is not generally delegated within the company; all U.S. executives are assigned a Japanese boss to mentor them, and no Toyota executive in the United States is authorized to issue a recall. Most information flow is one-way, back to Japan where decisions are made.
Will Toyota turn its recall into an opportunity for increased participation for its international manufacturers? Will decentralization and increased transparency occur? Only time will tell.
Discussion Questions
1. Do you think Toyota’s organizational structure and norms are explicitly formalized in rules, or do the norms seem to be more inherent in the culture of the organization?
2. What are the pros and cons of Toyota’s structure?
3. What elements of business would you suggest remain the same and what elements might need revising?
4. What are the most important elements of Toyota’s organizational structure? | textbooks/biz/Management/Organizational_Behavior/14%3A_Organizational_Structure_and_Change/14.1%3A_Organizational_Structure%3A_The_Case_of_Toyota.txt |
Learning Objectives
1. Explain the role of formalization, centralization, levels in the hierarchy, and departmentalization for employee attitudes and behaviors.
2. Describe how the elements of organizational structure can be combined to create mechanistic and organic structures.
3. Understand the advantages and disadvantages of mechanistic and organic structures for organizations.
4. Explain what a matrix structure is, and the challenges of working in a structure such as this.
5. Define boundaryless organizations.
6. Define learning organizations and list the steps organizations can take to become learning organizations.
Building Blocks of Structure
What exactly do we mean by organizational structure? In other words, which elements of a company’s structure make a difference in how we behave and how work is coordinated? We will review four aspects of structure that have been frequently studied in the literature. We view these four elements as the building blocks, or elements, making up a company’s structure. Then we will examine how these building blocks come together to form two different configurations of structures.
Centralization
Centralization is the degree to which decision making authority is concentrated at higher levels in an organization. In centralized companies, many important decisions are made at higher levels of the hierarchy, whereas in decentralized companies, decisions are made and problems are solved at lower levels by employees who are closer to the problem in question.
As an employee, where would you feel more comfortable and productive? If your answer is “decentralized,” you are not alone. Decentralized companies give more authority to lower level employees, resulting in a sense of empowerment. Decisions are often faster, and employees believe that decentralized companies provide greater levels of procedural fairness to employees. Job candidates are more likely to be attracted to decentralized organizations. Because centralized organizations assign decision making responsibility to higher level managers, there are greater demands on the mental and physical capabilities of CEOs and other high-level managers. Despite many perceived disadvantages, centralization may lead to more efficient operations, particularly if the company is operating in a stable environment (Ambrose & Cropanzano, 2000; Miller, Droge, & Toulouse, 1988; Oldham & Hackman, 1981; Pierce & Delbecq, 1977; Schminke, Ambrose, & Cropanzano, 2000; Turban & Keon, 1993; Wally & Baum, 1994).
Many companies find that the centralization of operations leads to inefficiencies in decision making. For example, in the 1980s, Caterpillar Inc. suffered the consequences of centralized decision making. At the time, all pricing decisions were made in the corporate headquarters in Peoria, Illinois. This meant that when a sales representative working in Africa wanted to give a discount on a product, they needed to check with headquarters. Headquarters did not always have accurate or timely information about the subsidiary markets to make an effective decision. The dramatic reorganization of the company sought to avoid problems such as these (Nelson & Pasternack, 2005). At the other end of the spectrum, organizations can suffer from extreme decentralization. For example, some analysts believe that the Federal Bureau of Investigation (FBI) experiences some problems because all its structure and systems are based on the assumption that crime needs to be caught after it happens. Over time, this assumption led to a situation in which, instead of following an overarching strategy, each unit is completely decentralized, and field agents determine how investigations should be pursued. It has been argued that due to the change in the nature of crimes, the FBI’s need to gather accurate intelligence before a crime is committed requires more centralized decision making and strategy development (Brazil, 2007).
Hitting the right balance between decentralization and centralization is a challenge for many organizations. At the Home Depot Inc., the retail giant with over 2,000 stores across the United States, Canada, Mexico, and China, one of the major changes their former CEO Robert Nardelli did was to centralize most of its operations. Before the transition, Home Depot store managers made a number of decisions autonomously and each store had an entrepreneurial culture. Nardelli’s changes initially saved the company a lot of money. For example, for a company of that size, centralizing purchasing operations led to big cost savings, because the company could negotiate significant discounts from suppliers. At the same time, many analysts think that the centralization went too far, leading to the loss of the service-oriented culture at the stores (Charan, 2006; Marquez, 2007).
Formalization
Formalization is the extent to which policies, procedures, job descriptions, and rules are written and explicitly articulated. In other words, formalized structures are those in which there are many written rules and regulations. These structures control employee behavior using written rules, and employees have little autonomy to make decisions on a case-by-case basis. Formalization makes employee behavior more predictable. Whenever a problem at work arises, employees know to turn to a handbook or a procedure guideline. Therefore, employees respond to problems in a similar way across the organization, which leads to consistency of behavior.
While formalization reduces ambiguity and provides direction to employees, it is not without disadvantages. A high degree of formalization may actually lead to reduced innovativeness, because employees are used to behaving in a certain manner. In fact, strategic decision making in such organizations often occurs only when there is a crisis. A formalized structure is associated with reduced motivation and job satisfaction as well as a slower pace of decision making (Fredrickson, 1986; Oldham & Hackman, 1981; Pierce & Delbecq, 1977; Wally & Baum, 1994). The service industry is particularly susceptible to problems associated with high levels of formalization. Sometimes employees who are listening to a customer’s problems may need to take action, but the answer may not be specified in any procedural guidelines or rulebook. For example, while a handful of airlines such as Southwest Airlines Company do a good job of empowering their employees to handle complaints, in many airlines lower level employees have limited power to resolve a customer problem and are constrained by stringent rules that outline a limited number of acceptable responses.
Hierarchical Levels
Another important element of a company’s structure is the number of levels it has in the hierarchy. Keeping the size of the organization constant, tall structures have several layers of management between frontline employees and the top level, while flat structures consist of few layers. A closely related concept is span of control, or the number of employees reporting to a single manager. In tall structures, span of control tends to be smaller, resulting in greater opportunities for managers to supervise and monitor employee activities. In contrast, flat structures involve a wider span of control. In such a structure, managers will be relatively unable to provide close supervision, leading to greater levels of freedom of action for each employee. Research indicates that flat organizations provide greater need satisfaction for employees, and greater levels of self-actualization (Ghiselli & Johnson, 1970; Porter & Siegel, 2006). Companies such as the IKEA Group, the Swedish furniture manufacturer and retailer, are successfully using flat structures to build an employee mentality of job involvement and ownership. At the same time, there may be some challenges associated with flat structures. In flat structures, employees will not have many opportunities to receive supervision and guidance from the manager, making it necessary for employees to be self-reliant. In fact, research shows that when managers supervise a large number of employees, which is more likely to happen in flat structures, employees experience greater levels of role ambiguity (Chonko, 1982). This may be a disadvantage for employees who need closer guidance from their managers. Moreover, in a flat structure, advancement opportunities will be more limited, because there are fewer management layers. Finally, while employees report that flat structures are better at satisfying their higher order needs such as self-actualization, they also report that tall structures are better at satisfying security needs of employees (Porter & Lawler, 1964). Because tall structures are typical of large and well-established companies, it is possible that when working in such organizations, employees feel a greater sense of job security.
Departmentalization
Organizational structures differ in terms of departmentalization. Organizations using functional structures group jobs based on similarity in functions. Such structures may have departments such as marketing, manufacturing, finance, accounting, human resources, and information technology. In these structures, each person serves a specialized role and handles large volumes of transactions. For example, a marketing employee working in a functional structure may serve as an event planner, planning promotional events for all the products of the company. In organizations using divisional structures, departments represent the unique products, services, customers, or geographic locations the company is serving. In other words, each unique product or service the company is producing will have its own department. Within each department, functions such as marketing, manufacturing, and other roles are replicated. In these structures, employees act like generalists as opposed to specialists. Instead of performing specialized tasks, employees will be in charge of performing many different tasks in the service of the product. For example, a marketing employee working in this structure may be in charge of planning promotions, coordinating relations with advertising agencies, and planning and conducting marketing research.
In reality, many structures are a hybrid of functional and divisional forms. For example, if the company has multiple product lines, departmentalizing by product may increase innovativeness and reduce response times. Each of these departments may have dedicated marketing, manufacturing, and customer service employees serving the specific product, yet the company may also find that centralizing some operations and retaining the functional structure makes sense and is more cost effective for roles such as human resources management and information technology. The same organization may also create geographic departments, if it is serving different countries.
Functional structures tend to be effective when an organization does not have a large number of products and services requiring special attention. When a company has a diverse product line, each product will have unique demands, deeming traditional structures less useful for promptly addressing customer demands and anticipating market changes. Functional structures are also more effective in stable environments that are slower to change. In contrast, organizations using product departments are more agile and can perform better in turbulent environments. The type of employee who will succeed under each structure is also different. Research shows that when employees work in product departments in turbulent environments, because activities are diverse and complex, their performance depends on their general mental abilities (Hollenbeck et al., 2002).
Two Configurations: Mechanistic and Organic Structures
The different elements making up organizational structures in the form of formalization, centralization, number of levels in the hierarchy, and departmentalization often coexist. As a result, we can talk about two configurations of organizational structures, depending on how these elements are arranged.
Mechanistic structures are similar to bureaucracies, as they are highly formalized and centralized. Communication tends to follow formal channels, and employees are given specific job descriptions delineating their roles and responsibilities. Mechanistic organizations are often rigid and resist change, making them unsuitable for being innovative and taking quick action. These forms have the downside of inhibiting entrepreneurial action and discouraging the use of individual initiative on the part of employees. Not only do mechanistic structures have disadvantages for innovativeness, they also limit individual autonomy and self-determination, which will likely lead to lower levels of intrinsic motivation on the job (Burns & Stalker, 1961; Covin & Slevin, 1988; Schollhammer, 1982; Sherman & Smith, 1984; Slevin & Covin, 1990). Despite these downsides, mechanistic structures have advantages when the environment is more stable. The main advantage of a mechanistic structure is its efficiency. Therefore, in organizations that are trying to maximize efficiency and minimize costs, mechanistic structures provide advantages. For example, McDonald’s Corporation has a famously bureaucratic structure in which employee jobs are highly formalized, with clear lines of communication and very specific job descriptions. This structure is an advantage for them, because it allows McDonald’s to produce a uniform product around the world at minimum cost. Moreover, mechanistic structures tend to be advantageous for new ventures. New businesses often suffer from a lack of structure, role ambiguity, and uncertainty. The presence of a mechanistic structure has been shown to be related to firm performance in new ventures (Sine, Mitsuhashi, & Kirsch, 2006).
Organic structures are flexible, decentralized structures with low levels of formalization. Communication lines are more fluid and flexible. Employee job descriptions are broader, and employees are asked to perform duties based on the specific needs of the organization at the time as well as their own expertise levels. Organic structures tend to be related to higher levels of job satisfaction on the part of employees. These structures are conducive to entrepreneurial behavior and innovativeness (Burns & Stalker, 1961; Covin & Slevin, 1988). An example of a company that has an organic structure is 3M. The company is strongly committed to decentralization. At 3M, there are close to 100 profit centers, with each division feeling like a small company. Each division manager acts autonomously and is accountable for his or her actions. As operations within each division get too big and a product created by a division becomes profitable, the operation is spun off to create a separate business unit. This is done to protect the agility of the company and the small-company atmosphere (Adair, 2007).
Matrix Organizations
Matrix organizations cross a traditional functional structure with a product structure. Specifically, employees reporting to department managers are also pooled together to form project or product teams. As a result, each person reports to a department manager as well as a project or product manager. In this structure, product managers have control and say over product-related matters. Matrix structures are created in response to uncertainty and dynamism of the environment and the need to give particular attention to specific products or projects. Instead of completely switching from a product-based structure, a company may utilize a matrix structure to balance the benefits of product-based and traditional functional structures.
Using the matrix structure as opposed to product departments may increase communication and cooperation among departments, because project managers will need to coordinate their actions with department managers. In fact, research shows that matrix structure increases the frequency of informal and formal communication within the organization (Joyce, 1986). Matrix structures also have the benefit of providing quick responses to technical problems and customer demands. The existence of a project manager keeps the focus on the product or service that is being provided.
Despite these potential benefits, matrix structures are not without costs. In a matrix, each employee reports to at least two or more managers. In other words, the matrix organization violates the unity of command principle that is often prevalent in traditional organizations. In organizations with unity of command, each person reports to a single manager. As a result, communication flows through predictable lines and coordination is easier. Because matrix organizations do not follow unity of command, this is a situation ripe with conflict. Because multiple managers are in charge of guiding the behaviors of each employee, there may be power struggles or turf wars among managers. The managers are more interdependent compared to a traditional or product-based structure, and they will need to spend more effort coordinating their work. From the employee’s perspective, there is potential for interpersonal conflict with team members as well as with leaders. The presence of multiple leaders may create role conflict. The necessity to work with a team consisting of employees with different functional backgrounds increases the potential for task conflict at work (Ford & Randolph, 1992). Solving these problems will require a great deal of patience and proactivity on the part of the employee.
The matrix structure is used in many information technology companies engaged in software development. See the example of a matrix structure for an IT company presented in the following figure. Nike Inc. is another company that utilizes the matrix organization successfully. New product introduction is a task shared by regional managers and product managers. While product managers are in charge of deciding how to launch a product, regional managers are allowed to make modifications based on the region (Anand & Daft, 2007).
OB Toolbox: Managed by a Crowd
Due to the widespread use of matrix structures and similar organizational forms, you may find that you are reporting to multiple bosses as opposed to just one. Here is what you can do to make this situation work more smoothly for everyone involved:
• Do not assume that having multiple bosses is necessarily a bad thing! Yes, there are more opportunities for role overload and role conflict, but there are also more chances of learning from several senior people. This may turn out to be a great learning experience.
• Make sure that all your managers are familiar with your overall work load. One challenge of having multiple bosses is that you may end up with too much work, because they may place expectations on you without checking with each other. For example, you may post your “to do” list on a Web board or on a whiteboard in your office for them to keep track of.
• Make conflicts known to managers. Another challenge is the potential for role conflict. If the managers are not coordinating with each other, they may place contradictory expectations on you. Also, keep good records of all e-mails and CC all relevant managers in conversations that are pertinent to them.
• Do not be afraid to request a meeting with all your managers, and potentially with their own managers if you reach an impasse. This structure places serious communication and coordination challenges on all those involved, and having meetings may clear the air.
• Make an effort to establish an effective relation with each manager. When you have multiple bosses, you will need to manage good relations with each of them.
• You need to understand the styles of each manager and vary your style with each. Some may appreciate frequent updates on all you are doing, while others may judge you based solely on ultimate results. Make an effort to understand their styles and do not assume that something that works with one will work with the other.
• Be cognizant of the relationships among those managers as well. Never complain about one to the other. Also, be aware that if two managers truly dislike each other, being too friendly with one in the presence of the other may affect your relations with the other.
Boundaryless Organizations
Boundaryless organization is a term coined by Jack Welch of General Electric Company and refers to an organization that eliminates traditional barriers between departments, as well as barriers between the organization and the external environment. Many different types of boundaryless organizations exist. One form is the modular organization where all the nonessential functions are outsourced. The idea behind this format is to retain only the value-generating and strategic functions in-house, while the rest of the operations are outsourced to many suppliers. An example of a company doing this is Toyota. By managing relationships with hundreds of suppliers, Toyota achieves efficiency and quality in its operations. Strategic alliances constitute another form of boundaryless design. Here, similar to a joint venture, two or more companies find an area of collaboration and combine their efforts to create a partnership that is beneficial for both parties. In this form, the traditional boundaries between two competitors may be broken. As an example, Starbucks Corporation formed a highly successful partnership with PepsiCo Inc. to market its Frappuchino cold drinks. Starbucks has immediate brand name recognition in this cold coffee drink, but its desire to capture shelf space in supermarkets required marketing savvy and experience that Starbucks did not possess at the time. By partnering with PepsiCo, Starbucks gained an important head start in the marketing and distribution of this product. Finally, boundaryless organizations may involve eliminating the barriers separating employees, such as traditional management layers or walls between different departments. Structures such as self-managing teams create an environment where employees coordinate their efforts and change their own roles to suit the demands of the situation, as opposed to insisting that something is “not my job” (Dess et al., 1995; Rosenbloom, 2003).
Learning Organizations
A learning organization is one where acquiring knowledge and changing behavior as a result of the newly gained knowledge are part of an organization’s design. In these structures, experimenting, learning new things, and reflecting on new knowledge are the norms. At the same time, there are many procedures and systems in place that facilitate learning at the organizational level.
In learning organizations, experimentation and testing potentially better operational methods are encouraged. This is true not only in response to environmental threats, but also as a way of identifying future opportunities. 3M is one company that institutionalized experimenting with new ideas in the form of allowing each engineer to spend one day a week working on a personal project. At IBM Corporation, this is achieved by taking highly successful business managers and putting them in charge of emerging business opportunities (EBOs). IBM is a company that has no difficulty coming up with new ideas, as evidenced by the number of patents it holds. Yet commercializing these ideas has been a problem in the past, owing to an emphasis on short-term results. To change this situation, the company began experimenting with the idea of EBOs. By setting up a structure in which failure is tolerated and risk taking is encouraged, the company took a big step toward becoming a learning organization (Deutschman, 2005).
Learning organizations are also good at learning from experience, be it their own or a competitors’. In order to learn from past mistakes, companies conduct a thorough analysis of them. Some companies choose to conduct formal retrospective meetings to analyze the challenges encountered and areas for improvement. In order to learn from others, these companies vigorously study competitors, market leaders in different industries, clients, and customers. By benchmarking against industry best practices, they constantly look for ways of improving their own operations. Learning organizations are also good at studying customer habits to generate ideas. For example, Xerox Corporation uses anthropologists to understand and gain insights into how customers are actually using their office products (Garvin, 1993). By using these techniques, learning organizations facilitate innovativeness and make it easier to achieve organizational change.
Key Takeaways
The degree to which a company is centralized and formalized, the number of levels in the company hierarchy, and the type of departmentalization the company uses are key elements of a company’s structure. These elements of structure affect the degree to which the company is effective and innovative as well as employee attitudes and behaviors at work. These elements come together to create mechanistic and organic structures. Rigid and bureaucratic, mechanistic structures help companies achieve efficiency, while organic structures, which are decentralized and flexible, aid companies in achieving innovativeness. The changing environment of organizations creates the need for newer forms of organizing. Matrix structures are a cross between functional and product-based divisional structures. They facilitate information flow and reduce response time to customers but have challenges, because each employee reports to multiple managers. Boundaryless organizations blur the boundaries between departments or the boundaries between the focal organization and others in the environment. These organizations may take the form of a modular organization, strategic alliance, or self-managing teams. Learning organizations institutionalize experimentation and benchmarking.
Exercises
1. What are the advantages and disadvantages of decentralization?
2. All else being equal, would you prefer to work in a tall or flat organization? Why?
3. What are the advantages of departmentalization by product?
4. Have you ever reported to more than one manager? What were the challenges of such a situation?
5. What do you think are the advantages and disadvantages of being employed by a boundaryless organization?
6. What can organizations do to institutionalize organizational learning? What practices and policies would aid in knowledge acquisition and retention? | textbooks/biz/Management/Organizational_Behavior/14%3A_Organizational_Structure_and_Change/14.2%3A_Organizational_Structure.txt |
Learning Objectives
1. Identify the external forces creating change on the part of organizations.
2. Understand how organizations respond to changes in the external environment.
3. Understand why people resist change.
Why Do Organizations Change?
Organizational change is the movement of an organization from one state of affairs to another. Organizational change can take many forms. It may involve a change in a company’s structure, strategy, policies, procedures, technology, or culture. The change may be planned years in advance or may be forced upon an organization because of a shift in the environment. Organizational change can be radical and alter the way an organization operates, or it may be incremental and slowly change the way things are done. In any case, regardless of the type, change involves letting go of the old ways in which work is done and adjusting to the new ways. Therefore, fundamentally, it is a process that involves effective people management.
Workforce Demographics
Organizational change is often a response to changes in the environment. For example, both the United States Department of Labor and Organization for Economic Co-operation and Development (OECD) estimate that the age of the workforce is on the rise (Lerman & Schmidt, 2006). What does this mean for companies? Organizations may realize that as the workforce gets older the types of benefits they prefer may change. Work arrangements such as flexible work hours and job sharing may become more popular as employees remain in the workforce even after retirement. As the workforce rapidly ages, it also becomes possible that employees who are unhappy with their current work situation will choose to retire, resulting in a sudden loss of valuable knowledge and expertise on the part of organizations. Therefore, organizations will have to devise strategies to retain these employees and plan for their retirement. Finally, a critical issue is finding ways of dealing with age-related stereotypes, which act as barriers in the retention of these employees.
Technology
Sometimes change is motivated by rapid developments in technology. Moore’s law (a prediction by Gordon Moore, cofounder of Intel Corporation) dictates that the overall complexity of computer circuits will double every 18 months with no increase in cost (Moore’s Law, 2008). Such change is motivating corporations to rapidly change their technology. Sometimes technology produces such profound developments that companies struggle to adapt. A recent example is from the music industry. When CDs were first introduced in the 1980s, they were substantially more appealing than the traditional LPs. Record companies were easily able to double the prices, even though producing CDs cost a fraction of what it cost to produce LPs. For decades, record producing companies benefited from this status quo. Yet when peer-to-peer file sharing through software such as Napster and Kazaa threatened the core of their business, companies in the music industry found themselves completely unprepared for such disruptive technological changes. Their first response was to sue the users of file-sharing software, sometimes even underage kids. They also kept looking for a technology that would make it impossible to copy a CD or DVD, which has yet to emerge. Until Apple Inc.’s iTunes came up with a new way to sell music online, it was doubtful that consumers would ever be willing to pay for music that was otherwise available for free (albeit illegally so). Only time will tell if the industry will be able to adapt itself to the changes forced upon it (Lasica, 2005).
Globalization
Globalization is another threat and opportunity for organizations, depending on their ability to adapt to it. Organizations are finding that it is often cheaper to produce goods and deliver services in some countries compared to others. This led many companies to utilize manufacturing facilities overseas, with China as a popular destination. For a while, knowledge work was thought to be safe from outsourcing, but now we are also seeing many service operations moved to places with cheaper wages. For example, many companies have outsourced software development to India, with Indian companies such as Wipro Ltd. and Infosys Technologies Ltd. emerging as global giants. Given these changes, understanding how to manage a global workforce is a necessity. Many companies realize that outsourcing forces them to operate in an institutional environment that is radically different from what they are used to at home. Dealing with employee stress resulting from jobs being moved overseas, retraining the workforce, and learning to compete with a global workforce on a global scale are changes companies are trying to come to grips with.
Market Conditions
Changes in the market conditions may also create changes as companies struggle to adjust. For example, as of this writing, the airline industry in the United States is undergoing serious changes. Demand for air travel was affected after the September 11 terrorist attacks. Also, the widespread use of the Internet to book plane travels made it possible to compare airline prices much more efficiently and easily, encouraging airlines to compete primarily based on cost. This strategy seems to have backfired when coupled with the dramatic increases in the cost of fuel. As a result, airlines are cutting back on amenities that were taken for granted for decades, such as the price of a ticket including meals, beverages, and checking luggage. Some airlines, such as Delta Air Lines Inc. and Northwest Airlines Inc., have merged to deal with this climate, and talks involving other mergers in this industry continue.
How does a change in the environment create change within an organization? Note that environmental change does not automatically change how business is done. Whether or not the organization changes in response to environmental challenges and threats depends on the decision makers’ reactions to what is happening in the environment.
Organizational Growth
It is natural for once small start-up companies to grow if they are successful. An example of this growth is the evolution of the Widmer Brothers Brewing Company, which started as two brothers brewing beer in their garage to become the 11th largest brewery in the United States. This growth happened over time as the popularity of their key product—Hefeweizen—grew in popularity; the company had to expand to meet demand, growing from the 2 founders to 400 employees in 2008 after Widmer Brothers merged with Redhook Ale Brewery to become Craft Brewers Alliance Inc. The newly formed company has five main departments, including Operations, Sales, Marketing, Finance, and Retail, who report to the CEO. Anheuser-Busch Companies Inc. continues to have a minority stake in both beer companies. So, while 50% of all new small businesses fail in their first year (Get ready, 2008), those that succeed often evolve into large, complex organizations over time.
Poor Performance
Change is more likely to happen if the company is performing poorly and if there is a perceived threat from the environment. In fact, poorly performing companies often find it easier to change compared to successful companies. Why? High performance actually leads to overconfidence and inertia. As a result, successful companies often keep doing what made them a success in the first place. When it comes to the relationship between company performance and organizational change, the saying “nothing fails like success” may be fitting. For example, Polaroid Corporation was the number one producer of instant films and cameras in 1994. The company filed for bankruptcy in less than a decade, unable to adapt to the rapid advances in the 1-hour photo development and digital photography technologies. Successful companies that manage to change have special practices in place to keep the organization open to changes. As a case in point, Nokia finds that it is important to periodically change the perspective of key decision makers. For this purpose, they rotate heads of businesses to different posts to give them a fresh perspective. In addition to the success of a business, change in a company’s upper level management is a motivator for change at the organization level. Research shows that long-tenured CEOs are unlikely to change their formula for success. Instead, new CEOs and new top management teams create change in a company’s culture and structure (Barnett & Carroll, 1995; Boeker, 1997; Deutschman, 2005).
Resistance to Change
Changing an organization is often essential for a company to remain competitive. Failure to change may influence the ability of a company to survive. Yet, employees do not always welcome changes in methods. According to a 2007 survey conducted by the Society for Human Resource Management (SHRM), resistance to change is one of the top two reasons why change efforts fail. In fact, reactions to organizational change may range from resistance to compliance to being an enthusiastic supporter of the change, with the latter being the exception rather than the norm (Change management, 2007; Huy, 1999).
Active resistance is the most negative reaction to a proposed change attempt. Those who engage in active resistance may sabotage the change effort and be outspoken objectors to the new procedures. In contrast, passive resistance involves being disturbed by changes without necessarily voicing these opinions. Instead, passive resisters may quietly dislike the change, feel stressed and unhappy, and even look for an alternative job without necessarily bringing their point to the attention of decision makers. Compliance, on the other hand, involves going along with proposed changes with little enthusiasm. Finally, those who show enthusiastic support are defenders of the new way and actually encourage others around them to give support to the change effort as well.
Any change attempt will have to overcome the resistance on the part of people to be successful. Otherwise, the result will be loss of time and energy as well as an inability on the part of the organization to adapt to the changes in the environment and make its operations more efficient. Resistance to change also has negative consequences for the people in question. Research shows that when people negatively react to organizational change, they experience negative emotions, use sick time more often, and are more likely to voluntarily leave the company (Fugate, Kinicki, & Prussia, 2008).
The following is a dramatic example of how resistance to change may prevent improving the status quo. Have you ever wondered why the letters on keyboards are laid out the way they are? The QWERTY keyboard, named after the first six letters in the top row, was actually engineered to slow us down. The first prototypes of the typewriter keyboard would jam if the keys right next to each other were hit at the same time. Therefore, it was important for manufacturers to slow typers down. They achieved this by putting the most commonly used letters to the left-hand side, and scattering the most frequently used letters all over the keyboard. Later, the issue of letters being stuck was resolved. In fact, an alternative to the QWERTY named the Dvorak keyboard provides a much more efficient design and allows individuals to double traditional typing speeds. Yet the shift never occurred. The reasons? Large numbers of people resisted the change. Teachers and typists resisted, because they would lose their specialized knowledge. Manufacturers resisted because of costs inherent in making the switch and the initial inefficiencies in the learning curve (Diamond, 2005). In short, the best idea does not necessarily win, and changing people requires understanding why they resist.
Disrupted Habits
People often resist change for the simple reason that change disrupts our habits. Do you think about how you are driving when you drive? Most of the time probably not, because driving generally becomes an automated activity after a while. You may sometimes even realize that you have reached your destination without noticing the roads you used or having consciously thought about any of your body movements. Now imagine you drive for a living, and even though you are used to driving an automatic car, you are now forced to use a stick shift. You can most likely figure out how to drive a stick, but it will take time, and until you figure it out, you cannot drive on auto pilot. You will have to reconfigure your body movements and practice shifting until you become good at it. You may find that for this simple reason, people sometimes are surprisingly outspoken when confronted with simple changes such as updating to a newer version of a particular software or a change in their voice mail system.
Personality
Some people are more resistant to change than others. Research shows that people who have a positive self-concept are better at coping with change, probably because those who have high self-esteem may feel that whatever the changes are, they are likely to adjust to it well and be successful in the new system. People with a more positive self-concept and those who are more optimistic may also view change as an opportunity to shine as opposed to a threat that is overwhelming. Finally, risk tolerance is another predictor of how resistant someone will be to stress. For people who are risk avoidant, the possibility of a change in technology or structure may be more threatening (Judge et al., 1999; Wanberg & Banas, 2000).
Feelings of Uncertainty
Change inevitably brings feelings of uncertainty. You have just heard that your company is merging with another. What would be your reaction? Such change is often turbulent, and it is often unclear what is going to happen to each individual. Some positions may be eliminated. Some people may see a change in their job duties. Things can get better—or they may get worse. The feeling that the future is unclear is enough to create stress for people, because it leads to a sense of lost control (Ashford, Lee, & Bobko, 1989; Fugate, Kinicki, & Prussia, 2008).
Fear of Failure
People also resist change when they feel that their performance may be affected under the new system. People who are experts in their jobs may be less than welcoming of the changes, because they may be unsure whether their success would last under the new system. Studies show that people who feel that they can perform well under the new system are more likely to be committed to the proposed change, while those who have lower confidence in their ability to perform after changes are less committed (Herold, Fedor, & Caldwell, 2007).
Personal Impact of Change
It would be too simplistic to argue that people resist all change, regardless of its form. In fact, people tend to be more welcoming of change that is favorable to them on a personal level (such as giving them more power over others, or change that improves quality of life such as bigger and nicer offices). Research also shows that commitment to change is highest when proposed changes affect the work unit with a low impact on how individual jobs are performed (Fedor, Caldwell, & Herold, 2006).
Prevalence of Change
Any change effort should be considered within the context of all the other changes that are introduced in a company. Does the company have a history of making short-lived changes? If the company structure went from functional to product-based to geographic to matrix within the past 5 years, and the top management is in the process of going back to a functional structure again, a certain level of resistance is to be expected because people are likely to be fatigued as a result of the constant changes. Moreover, the lack of a history of successful changes may cause people to feel skeptical toward the newly planned changes. Therefore, considering the history of changes in the company is important to understanding why people resist. Also, how big is the planned change? If the company is considering a simple switch to a new computer program, such as introducing Microsoft Access for database management, the change may not be as extensive or stressful compared to a switch to an enterprise resource planning (ERP) system such as SAP or PeopleSoft, which require a significant time commitment and can fundamentally affect how business is conducted (Labianca, Gray, & Brass, 2000; Rafferty & Griffin, 2006).
Perceived Loss of Power
One other reason why people may resist change is that change may affect their power and influence in the organization. Imagine that your company moved to a more team-based structure, turning supervisors into team leaders. In the old structure, supervisors were in charge of hiring and firing all those reporting to them. Under the new system, this power is given to the team itself. Instead of monitoring the progress the team is making toward goals, the job of a team leader is to provide support and mentoring to the team in general and ensure that the team has access to all resources to be effective. Given the loss in prestige and status in the new structure, some supervisors may resist the proposed changes even if it is better for the organization to operate around teams.
In summary, there are many reasons individuals resist change, which may prevent an organization from making important changes.
Is All Resistance Bad?
Resistance to change may be a positive force in some instances. In fact, resistance to change is a valuable feedback tool that should not be ignored. Why are people resisting the proposed changes? Do they feel that the new system will not work? If so, why not? By listening to people and incorporating their suggestions into the change effort, it is possible to make a more effective change. Some of a company’s most committed employees may be the most vocal opponents of a change effort. They may fear that the organization they feel such a strong attachment to is being threatened by the planned change effort and the change will ultimately hurt the company. In contrast, people who have less loyalty to the organization may comply with the proposed changes simply because they do not care enough about the fate of the company to oppose the changes. As a result, when dealing with those who resist change, it is important to avoid blaming them for a lack of loyalty (Ford, Ford, & D’Amelio, 2008).
OB Toolbox: Life After Being Downsized
Organizational change sometimes means reducing the number of people working in the company to make operations more efficient. Sometime in your career, you may find that you go through this painful, sometimes traumatic experience. What do you do to recover in the aftermath of a downsizing?
• Be calm. This is easier said than done, but it happens to the best of us. Remember that it was not your fault. Many companies lay off employees during downsizing despite their stellar performance, so do not take it personally.
• Do not get angry. When you hear the news, make sure that you do not express your disappointment in a way that would burn your bridges. In fact, many companies rehire workers they lay off or bring them in as external consultants. Do not say or do something in anger that closes all doors. Remember, during downsizing companies are often forced to let go of employees they want to keep.
• Know your rights. Are you getting a severance package afterward? Are you going to have continued access to some benefits? Does the company provide assistance to those who are laid off? Find out what is being offered. You may also want to ask for a letter of recommendation from your former boss to help with your job hunt.
• Think about your ideal job situation. Are you in the right field? Do you have all the skills and education you need to work in the right field? Some people will look at a layoff as a time to settle for any job that comes along, but this may not be an effective long-term strategy. Instead, imagine your ideal situation and find out what you can do to get there.
• Get help. There are many organizations and career coaches offering career support, advice, and networking opportunities. Surround yourself with positive people who are supportive. Getting assistance may help you make yourself more marketable or simply provide you with necessary emotional support.
• Polish your resume and job hunting skills. You may benefit from someone else proofreading your resume and practicing interviews with you.
• Do not give up! You found a job once, you will find it again. Stay positive, be patient, and do not lose hope.
Planning and Executing Change Effectively
How do you plan, organize, and execute change effectively? One of the most useful frameworks in this area is Kurt Lewin’s three-stage model of planned change (Lewin, 1951). The assumption is that change will encounter resistance. Therefore, executing change without prior preparation is likely to lead to failure. Instead, organizations should start with unfreezing, or making sure that organizational members are ready for and receptive to change. This is followed by change, or executing the planned changes. Finally, refreezing involves ensuring that change becomes permanent and the new habits, rules, or procedures become the norm. John Kotter, a Harvard University professor, wrote a book in 1996 titled Leading Change in which he discussed eight steps to changing an organization (Kotter, 1996). In the next section, we integrate the two models with more recent work in the area to present a roadmap to how organizations may want to approach change.
Unfreezing Prior to Change
Many change efforts fail because people are insufficiently prepared for change. When employees are not prepared, they are more likely to resist the change effort and less likely to effectively function under the new system. What can organizations do prior to change to prepare employees? There are a number of things that are important at this stage.
Create a Vision for Change
In successful change efforts, the leader has an overall vision for the change (Herold et al., 2008). When this vision is exciting and paints a picture of a future that employees would be proud to be a part of, people are likely to be more committed to change. For example, Toyota is a master of kaizen, or continuous improvement. They also follow the philosophy of kakushin, or revolutionary change, as needed. Regardless of the nature of the particular change, there is an overall vision for the company that justifies and explains why change is necessary “to build the dream car of the future” (Stewart & Raman, 2007).
Communicating a Plan for Change
Do people know what the change entails, or are they hearing about the planned changes through the grapevine or office gossip? When employees know what is going to happen, and when and why, they may conquer their discomfort with change. Research shows that those who have more complete information about upcoming changes are more committed to a change effort (Wanberg & Banas, 2000).
Ensuring that top management communicates with employees about the upcoming changes also has symbolic value (Armenakis, Harris, & Mossholder, 1993). In any organization, many changes are done on a daily basis, with some taking root and some disappearing after a short while. When top management and the company CEO discuss the importance of the changes in meetings, employees are provided with a reason to trust that this change is a strategic initiative. For example, while changing the employee performance appraisal system, the CEO of Kimberly-Clark Corporation made sure to mention the new system in all meetings with employees, indicating that the change was supported by the CEO.
Develop a Sense of Urgency
People are more likely to accept change if they feel that there is a need for it. If employees feel their company is doing well, the perceived need for change will be smaller. Those who plan the change will need to make the case that there is an external or internal threat to the organization’s competitiveness, reputation, or sometimes even its survival, and failure to act will have dire consequences. For example, Lou Gerstner, the former CEO of IBM, executed a successful transformation of the company. In his biography Elephants Can Dance, he highlights how he achieved cooperation as follows: “Our greatest ally in shaking loose the past was IBM’s eminent collapse. Rather than go with the usual impulse to put on a happy face, I decided to keep the crisis front and center. I didn’t want to lose the sense of urgency” (Gerstner, 2002; Kotter, 1996).
Building a Coalition
In order to convince people that change is needed, the change leader does not necessarily have to convince every person individually. In fact, people’s opinions toward change are affected by opinion leaders, or those people who have a strong influence over the behaviors and attitudes of others (Burkhardt, 1994; Kotter, 1995). Instead of trying to get everyone on board at the same time, it may be more useful to convince and prepare the opinion leaders. Once these individuals agree that change is needed and will be useful, they will become helpful allies in ensuring that the rest of the organization is ready for change (Armenakis, Harris, & Mossholder, 1993). For example, Paul Pressler, after becoming the CEO of Gap Inc. in 2002, initiated a culture change effort in the hope of creating a sense of identity among the company’s many brands such as Banana Republic, Old Navy, and Gap. For this purpose, management segmented the employees into groups instead of trying to reach out to all employees at the same time. Gap Inc. started by training the 2,000 senior managers in Leadership Summits, who in turn were instrumental in ensuring the cooperation of the remaining 150,000 employees of the company (Nash, 2005).
Provide Support
Employees should feel that their needs are not ignored. Therefore, management may prepare employees for change by providing emotional and instrumental support. Emotional support may be in the form of frequently discussing the changes, encouraging employees to voice their concerns, and simply expressing confidence in employees’ ability to perform effectively under the new system. Instrumental support may be in the form of providing a training program to employees so they know how to function under the new system.
Allow Employees to Participate
Studies show that employees who participate in planning change efforts tend to have more positive opinions about the change. Why? They will have the opportunity to voice their concerns. They can shape the change effort so that their concerns are addressed. They will be more knowledgeable about the reasons for change, alternatives to the proposed changes, and why the chosen alternative was better than the others. Finally, they will feel a sense of ownership of the planned change and are more likely to be on board (Wanberg & Banas, 2000). Participation may be more useful if it starts at earlier stages, preferably while the problem is still being diagnosed. For example, assume that a company suspects there are problems with manufacturing quality. One way of convincing employees that there is a problem that needs to be solved would be to ask them to take customer calls about the product quality. Once employees experience the problem firsthand, they will be more motivated to solve the problem.
Executing Change
The second stage of Lewin’s three-step change model is executing change. At this stage, the organization implements the planned changes on technology, structure, culture, or procedures. The specifics of how change should be executed will depend on the type of change. However, there are some tips that may facilitate the success of a change effort.
Continue to Provide Support
As the change is underway, employees may experience high amounts of stress. They may make mistakes more often or experience uncertainty about their new responsibilities or job descriptions. Management has an important role in helping employees cope with this stress by displaying support, patience, and continuing to provide support to employees even after the change is complete.
Create Small Wins
During a change effort, if the organization can create a history of small wins, change acceptance will be more likely (Kotter, 1996; Reay, Golden-Biddle, & Germann, 2006). If the change is large in scope and the payoff is a long time away, employees may not realize change is occurring during the transformation period. On the other hand, if people see changes, improvements, and successes along the way, they will be inspired and motivated to continue the change effort. For this reason, breaking up the proposed change into phases may be a good idea, because it creates smaller targets. Small wins are also important for planners of change to make the point that their idea is on the right track. Early success gives change planners more credibility, while early failures may be a setback (Hamel, 2000).
Eliminate Obstacles
When the change effort is in place, many obstacles may crop up along the way. There may be key people who publicly support the change effort while silently undermining the planned changes. There may be obstacles rooted in a company’s structure, existing processes, or culture. It is the management’s job to identify, understand, and remove these obstacles (Kotter, 1995). Ideally, these obstacles would have been eliminated before implementing the change, but sometimes unexpected roadblocks emerge as change is underway.
Kotter’s Eight-stage Process for Change
Harvard Business School professor John P. Kotter proposed that companies should follow eight stages when instituting change. Here is a summary of his suggested steps.
1. Create a sense of urgency when introducing the change effort.
2. Build a coalition.
3. Create a vision for change and make change a part of the vision.
4. Communicate a plan for change
5. Eliminate obstacles to change
6. Create small wins
7. Build on change
8. Make change a part of culture.
Refreezing
After the change is implemented, the long-term success of a change effort depends on whether change becomes part of the company’s culture. In other words, the revised ways of thinking, behaving, and performing should become routine. For this reason, there are a number of things management can do.
Publicize Success
In order to make change permanent, the organization may benefit from sharing the results of the change effort with employees. What was gained from the implemented changes? How much money did the company save? How much did the company’s reputation improve? What was the reduction in accidents after new procedures were put in place? Sharing concrete results with employees increases their confidence that the implemented change was a right decision.
Build on Prior Change
Once results start coming, it is important to benefit from the momentum created by these early successes by pushing for even more change. Following the philosophy of continuous improvement may be a good idea here. Instead of declaring victory early, the company is advised to make continuous improvements to how business is conducted.
Reward Change Adoption
In order to ensure that change becomes permanent, organizations may benefit from rewarding those who embrace the change effort. The rewards do not necessarily have to be financial. The simple act of recognizing those who are giving support to the change effort in front of their peers may encourage others to get on board. When the new behaviors employees are expected to demonstrate (such as using a new computer program, filling out a new form, or simply greeting customers once they enter the store) are made part of an organization’s reward system, those behaviors are more likely to be taken seriously and repeated, making the change effort successful (Gale, 2003).
Make Change a Part of Organizational Culture
If the change effort has been successful, change will have become a part of corporate culture. In other words, in addition to the changes in procedures, processes, or technology, the mindset of people will also have changed. If change occurs only in superficial elements, it would be misleading to declare change a success. For example, if a company institutes a wellness program emphasizing healthy habits, rewarding employees for adopting healthy choices and providing resources to maximize health, this change effort would be deemed a true success if valuing employee health and well-being also becomes a part of the organization’s culture. Creating a Web site, and printing booklets and distributing them are all tools leading to this goal, but achieving the true goal also necessitates a change in ingrained assumptions of management and employees putting work before employee health and well-being.
OB Toolbox: Overcome Resistance to Your Proposals
You feel that change is needed. You have a great idea. But people around you do not seem convinced. They are resisting your great idea. How do you make change happen?
• Listen to naysayers. You may think that your idea is great, but listening to those who resist may give you valuable ideas about why it may not work and how to design it more effectively.
• Is your change revolutionary? If you are trying to dramatically change the way things are done, you will find that resistance is greater. If your proposal involves incrementally making things better, you may have better luck.
• Involve those around you in planning the change. Instead of providing the solutions, make them part of the solution. If they admit that there is a problem and participate in planning a way out, you would have to do less convincing when it is time to implement the change.
• Do you have credibility? When trying to persuade people to change their ways, it helps if you have a history of suggesting implementable changes. Otherwise, you may be ignored or met with suspicion. This means you need to establish trust and a history of keeping promises over time before you propose a major change.
• Present data to your audience. Be prepared to defend the technical aspects of your ideas and provide evidence that your proposal is likely to work.
• Appeal to your audience’s ideals. Frame your proposal around the big picture. Are you going to create happier clients? Is this going to lead to a better reputation for the company? Identify the long-term goals you are hoping to accomplish that people would be proud to be a part of.
• Understand the reasons for resistance. Is your audience resisting because they fear change? Does the change you propose mean more work for them? Does it impact them in a negative way? Understanding the consequences of your proposal for the parties involved may help you tailor your pitch to your audience.
Key Takeaways
Organizations change in response to changes in the environment and in response to the way decision makers interpret these changes. When it comes to organizational change, one of the biggest obstacles is resistance to change. People resist change because change disrupts habits, conflicts with certain personality types, causes a fear of failure, can have potentially negative impacts, can result in a potential for loss of power, and, when done too frequently, can exhaust employees. Change effort can be conceptualized as a three-step process in which employees are first prepared for change, then change is implemented, and finally, the new behavioral patterns become permanent.
Exercises
1. Can you think of an organizational or personal change that you had to go through? Have you encountered any resistance to this change? What were the reasons?
2. How would you deal with employees who are resisting change because their habits are threatened? How would you deal with them if they are resisting because of a fear of failure?
3. What are the benefits of employee participation in change management?
4. Imagine that you are introducing a new system to college students in which they would have to use a special ID number the university creates for them for activities such as logging onto campus computers or using library resources. How would you plan and implement the change? Explain using Lewin’s three-step framework.
5. Why are successful companies less likely to change? What should companies do in order to make organizational change part of their culture? | textbooks/biz/Management/Organizational_Behavior/14%3A_Organizational_Structure_and_Change/14.3%3A_Organizational_Change.txt |
Is there a relationship between how a company is structured and the degree of ethical behavior displayed within an organization? Research indicates that such a link exists. Specifically, when corporate culture is too rigid and hierarchical, employees have fewer opportunities to develop their moral intelligence. Understanding what is ethical or not requires employees to be regularly confronted with ethical dilemmas. When employees do not have any autonomy to make decisions, and when such decisions are usually referred to a higher level, they do not find the opportunity to experience moral development, which may have implications for the degree of ethical behaviors demonstrated by employees (White, 1999).
Organizational change is a time when managers are expected to behave ethically, because many moral dilemmas are likely to emerge when an organization is faced with change. One of the common issues occurs when organizational change takes the form of downsizing or rightsizing. Many organizations realize the human impact of downsizing on employees and prefer to deal with the rising cost of human resources in other ways. Retraining employees in different areas, early retirement programs, hiring freezes, and job sharing are all alternatives to downsizing. There are also ethical issues that arise when the decision to terminate some employees is made, such as whether employees are going to be given advance notice regarding the layoffs, if they will be allowed to return to their work stations and say good-bye to their colleagues, or if they will be escorted to the door by security. If the company takes precautions to soften the blow of layoffs, such downsizing is likely to be perceived as more ethical.
Organizational Structure and Change Around the Globe
Organizations around the globe are not uniform in terms of organizational structure. In fact, there seem to be systematic differences in how companies are structured based on the country of origin. For example, one study compared Japanese, Swedish, and British organizations and found significant differences in the degree of centralization and formalization of these structures. Japanese organizations were much more centralized, as evidenced by a decision making system named ringi. The ringi system involves proposals at lower levels being signed and passed along to higher level management in an effort to build consensus (Lincoln, Hanada, & McBride, 1986). In another study, organizations in the United States and Australia were found to be characterized by higher levels of decentralization, whereas organizations in Singapore and Hong Kong emphasized group-centered decision making and higher levels of centralization. These differences can be traced to the degree of individualism inherent in the national culture. Individualistic cultures attach greater importance to autonomy and personal freedom. Therefore, in these cultures, structures giving responsibility to lower level employees will be more common (Harrison et al., 1994).
How change is instituted depends at least partly on national culture. Cultures differ in the degree to which they are open to change. Cultures that are uncertainty avoidant (such as Germany and France) are relatively uncomfortable with change and prefer structured situations that reduce ambiguity, whereas cultures low in uncertainty avoidance (such as the United States and China) are more comfortable with change.
Additionally, the way in which change is introduced to an organization is likely to differ across cultures. Research shows that in the United States, change agents are more likely to use inspirational appeals and rational persuasion (such as “This change will ensure that we will remain competitive in the marketplace.”). On the other hand, in China a more effective influence strategy seems to be asking for the help of a higher level person to ensure the success of the change process. The change agent may visit the higher status individual outside the work environment (such as going to the person’s home to discuss the issue), and then the cooperation of this person becomes instrumental in achieving change (Yukl, Fu, & McDonald, 2003).
Key Takeaways
Structure has implications for the degree of ethical behaviors that may be found in an organization. Moreover, organizational change involves events during which a company’s ethics may be put to test. National culture is one reason companies are structured in a certain way, and individualistic societies may have a greater frequency of organizations that are decentralized. National culture affects the extent to which organizations are open to change and how change is executed within an organization.
Exercises
1. What is an ethical way of conducting layoffs?
2. Do you believe that it is an organization’s ethical obligation to share all information about the planned changes with employees? Why or why not?
3. What is the relationship between organizational change and national culture? | textbooks/biz/Management/Organizational_Behavior/14%3A_Organizational_Structure_and_Change/14.4%3A_The_Role_of_Ethics_and_National_Culture.txt |
Born from a desire to bring quality European-style children’s clothing to the United States, Hanna Andersson Corporation has sold colorful clothing and accessories since 1983. Husband and wife cofounders, Tom and Gun (pronounced “gōōn”) Denhart, started the Portland, Oregon–based company by distributing imported Swedish clothing from their home. Named for Gun’s Swedish grandmother, the company now boasts over \$100 million in annual sales and employs over 500 people. Growing from an exclusive mail-order catalog business in the early 1980s, today Hanna Andersson also distributes products online, in 29 retail stores nationwide, and through select specialty retailers.
Over the years, Hanna Andersson has shown that it deeply values its employees. The company provides supplemental child-care reimbursement to all employees—even part-time sales associates. Additional employee benefits include part-time and flexible work hours, considerable paid time off, and 8 hours per year of paid time for employees to volunteer in the community. More important, though, employees feel like they are part of the Hanna Andersson family. In fact, in the beginning many of the employees were friends and family members of the Denharts.
The considerable growth and development the business experienced did not come without its challenges and necessary organizational change. In the 1990s and early 2000s, increased competition from other retailers and the introduction of online commerce posed some challenges for Hanna Andersson. The Denharts found themselves without a solid growth plan for the future. They worried that they might have lost sight of market forces. Change was necessary if Hanna Andersson was to remain viable.
Realizing the need for help and direction, the Denharts promoted from within the company to help initiate change and strategic growth, and in 1995, Phil Iosca took the strategic lead as CEO. Hanna Andersson was then sold to a private equity firm in 2001 and has since changed ownership several times, leading to a new business direction for the company. After selling the business, Gun remained on the Hanna board of directors until 2007. She also served as chair of the Hanna Andersson Children’s Foundation from 2001 to 2006. She still partners with the company from time to time on charitable events in the community.
Under Iosca’s steady leadership, the company opened several retail stores throughout the country in 2002 and established online commerce. In 2009, Hanna Andersson began distributing merchandise wholesale through retail partners such as Nordstrom and Costco. The implementation of each of these new distribution avenues required a great deal of change within the company. HR Vice President Gretchen Peterson explains, “The growth of the retail business required the greatest shift in our internal processes from both technical systems, to inventory planning and buying to distribution processes to our organizational communication and HR processes (recruitment, compensation, etc.), as well as our marketing communication programs.” Tenured employees throughout the company found themselves in unfamiliar territory, unsure of the company’s future as the board and owners debated the risks and rewards of retail expansion. Fortunately, the changes were mostly offset by a consistent leadership team. Petersen, who has been with the company since 1994, explains, “From 1995 to 2010, we retained the same CEO (Iosca) and therefore, the face of the company and the management style did not fluctuate greatly.”
When Iosca retired in early 2010, chief operating officer Adam Stone took over as CEO. He helped his company weather yet another transition with a calm push for changes within the company. To help understand different points of view at Hanna Andersson, Stone often sat in on inventory and operational planning meetings. Step by step, Stone was able to break down work initiatives so the continuing changes were not so overwhelming to the company and its valued employees. Over time, his and other company leaders’ presence has helped employees make better, more strategic decisions. Rather than resisting change, they now feel heard and understood.
The decision to sell wholesale turned out to be a good one, as it has enabled the company to weather the recession’s negative effect on retail and online purchases. Accounting for approximately 10% of total sales, the company’s wholesale business is expected to boost yearly revenue by 5%. With more conscientious inventory purchases and strategic distribution initiatives, Hanna Andersson has realized a higher sales volume, lower inventory at year-end, and less liquidation. Through it all, company management has done an effective job at interpreting the desired growth goals of its owners while inspiring change within the company. With continued clear communication, direction, and willingness to try new techniques, Hanna Andersson is poised for growth and success in the future while not forgetting to take care of its employees.
Discussion Questions
1. How did company leaders like Iosca, Petersen, and Stone help facilitate change within the company? Did they follow the steps to successful change?
2. What were the reasons for organizational change within Hanna Andersson, both internally and externally?
3. How can a company anticipate change? How can the company effectively prepare for it?
4. What unique challenges do family-owned and -operated businesses face? | textbooks/biz/Management/Organizational_Behavior/14%3A_Organizational_Structure_and_Change/14.5%3A_Changing_for_Good%3A_The_Case_of_Hanna_Andersson_Corporation.txt |
Organizations can function within a number of different structures, each possessing distinct advantages and disadvantages. Although any structure that is not properly managed will be plagued with issues, some organizational models are better equipped for particular environments and tasks. A change in the environment often requires change within the organization operating within that environment.
Change in almost any aspect of a company’s operations can be met with resistance, and different cultures can have different reactions to both the change and the means to promote the change. In order to better facilitate necessary changes, several steps can be taken that have been proven to lower the anxiety of employees and ease the transformation process. Often, the simple act of including employees in the change process can drastically reduce opposition to new methods. In some organizations this level of inclusion is not possible, and instead organizations can recruit a small number of opinion leaders to promote the benefits of coming changes.
Some types of change, such as mergers, often come with job losses. In these situations, it is important to remain fair and ethical while laying off employees. Once change has occurred, it is vital to take any steps necessary to reinforce the new system. Employees can often require continued support well after an organizational change.
14.7: Exercises
Ethical Dilemma
Imagine that you are a manager at a consumer products company. Your company is in negotiations for a merger. If and when the two companies merge, it seems probable that some jobs will be lost, but you have no idea how many or who will be gone. You have five subordinates. One is in the process of buying a house while undertaking a large debt. The second just received a relatively lucrative job offer and asked for your opinion as his mentor. You feel that knowing about the possibility of this merger is important to them in making these life choices. At the same time, you fear that once you let them know, everyone in the company will find out and the negotiations are not complete yet. You may end up losing some of your best employees, and the merger may not even happen. What do you do? Do you have an ethical obligation to share this piece of news with your employees? How would you handle a situation such as this?
Individual Exercise
Planning for a Change in Organizational Structure
Imagine that your company is switching to a matrix structure. Before, you were working in a functional structure. Now, every employee is going to report to a team leader as well as a department manager.
• Draw a hypothetical organizational chart for the previous and new structures.
• Create a list of things that need to be done before the change occurs.
• Create a list of things that need to be done after the change occurs.
• What are the sources of resistance you foresee for a change such as this? What is your plan of action to overcome this potential resistance?
Group Exercise
Organizational Change Role Play
Get your assigned role from your instructor.
Discussion Questions
1. Was the manager successful in securing the cooperation of the employee? Why or why not?
2. What could the manager have done differently to secure the employee’s cooperation?
3. Why was the employee resisting change? | textbooks/biz/Management/Organizational_Behavior/14%3A_Organizational_Structure_and_Change/14.6%3A_Conclusion.txt |
Thumbnail: pixabay.com/photos/men-employees-suit-work-greeting-1979261/
15: Organizational Culture
Nordstrom Inc. (NYSE: JWN) is a Seattle-based department store rivaling the likes of Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. Nordstrom is a Hall of Fame member of Fortune magazine’s “100 Best Companies to Work For” list, including being ranked 34th in 2008. Nordstrom is known for its quality apparel, upscale environment, and generous employee rewards. However, what Nordstrom is most famous for is its delivery of customer service above and beyond the norms of the retail industry. Stories about Nordstrom service abound. For example, according to one story the company confirms, in 1975 Nordstrom moved into a new location that had formerly been a tire store. A customer brought a set of tires into the store to return them. Without a word about the mix-up, the tires were accepted, and the customer was fully refunded the purchase price. In a different story, a customer tried on several pairs of shoes but failed to find the right combination of size and color. As she was about to leave, the clerk called other Nordstrom stores but could only locate the right pair at Macy’s, a nearby competitor. The clerk had Macy’s ship the shoes to the customer’s home at Nordstrom’s expense. In a third story, a customer describes wandering into a Portland, Oregon, Nordstrom looking for an Armani tuxedo for his daughter’s wedding. The sales associate took his measurements just in case one was found. The next day, the customer got a phone call, informing him that the tux was available. When pressed, she revealed that using her connections she found one in New York, had it put on a truck destined to Chicago, and dispatched someone to meet the truck in Chicago at a rest stop. The next day she shipped the tux to the customer’s address, and the customer found that the tux had already been altered for his measurements and was ready to wear. What is even more impressive about this story is that Nordstrom does not sell Armani tuxedos.
How does Nordstrom persist in creating these stories? If you guessed that they have a large number of rules and regulations designed to emphasize quality in customer service, you’d be wrong. In fact, the company gives employees a 5½-inch by 7½-inch card as the employee handbook. On one side of the card, the company welcomes employees to Nordstrom and states that their number one goal is to provide outstanding customer service, and for this they have only one rule. On the other side of the card, the single rule is stated: “Use good judgment in all situations.” By leaving it in the hands of Nordstrom associates, the company seems to have empowered employees who deliver customer service heroics every day.
Discussion Questions
1. Describe Nordstrom’s organizational culture.
2. Despite the low wages and long hours that are typical of retail employment, Nordstrom still has the ability to motivate its staff to exhibit exemplary customer service. How might this be explained?
3. What suggestions would you give Nordstrom for maintaining and evolving the organizational culture that has contributed to its success?
4. What type of organizational culture do you view as most important?
5. What attributes of Nordstrom’s culture do you find most appealing? | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.1%3A_Building_a_Customer_Service_Culture%3A_The_Case_of_Nordstrom.txt |
Learning Objectives
1. Define organizational culture.
2. Understand why organizational culture is important.
3. Understand the different levels of organizational culture.
What Is Organizational Culture?
Organizational culture refers to a system of shared assumptions, values, and beliefs that show employees what is appropriate and inappropriate behavior (Chatman & Eunyoung, 2003; Kerr & Slocum Jr., 2005). These values have a strong influence on employee behavior as well as organizational performance. In fact, the term organizational culture was made popular in the 1980s when Peters and Waterman’s best-selling book In Search of Excellence made the argument that company success could be attributed to an organizational culture that was decisive, customer oriented, empowering, and people oriented. Since then, organizational culture has become the subject of numerous research studies, books, and articles. However, organizational culture is still a relatively new concept. In contrast to a topic such as leadership, which has a history spanning several centuries, organizational culture is a young but fast-growing area within organizational behavior.
Culture is by and large invisible to individuals. Even though it affects all employee behaviors, thinking, and behavioral patterns, individuals tend to become more aware of their organization’s culture when they have the opportunity to compare it to other organizations. If you have worked in multiple organizations, you can attest to this. Maybe the first organization you worked was a place where employees dressed formally. It was completely inappropriate to question your boss in a meeting; such behaviors would only be acceptable in private. It was important to check your e-mail at night as well as during weekends or else you would face questions on Monday about where you were and whether you were sick. Contrast this company to a second organization where employees dress more casually. You are encouraged to raise issues and question your boss or peers, even in front of clients. What is more important is not to maintain impressions but to arrive at the best solution to any problem. It is widely known that family life is very important, so it is acceptable to leave work a bit early to go to a family event. Additionally, you are not expected to do work at night or over the weekends unless there is a deadline. These two hypothetical organizations illustrate that organizations have different cultures, and culture dictates what is right and what is acceptable behavior as well as what is wrong and unacceptable.
Why Does Organizational Culture Matter?
An organization’s culture may be one of its strongest assets, as well as its biggest liability. In fact, it has been argued that organizations that have a rare and hard-to-imitate organizational culture benefit from it as a competitive advantage (Barney, 1986). In a survey conducted by the management consulting firm Bain & Company in 2007, worldwide business leaders identified corporate culture as important as corporate strategy for business success (Why culture can mean life or death, 2007). This comes as no surprise to many leaders of successful businesses, who are quick to attribute their company’s success to their organization’s culture.
Culture, or shared values within the organization, may be related to increased performance. Researchers found a relationship between organizational cultures and company performance, with respect to success indicators such as revenues, sales volume, market share, and stock prices (Kotter & Heskett, 1992; Marcoulides & Heck, 1993). At the same time, it is important to have a culture that fits with the demands of the company’s environment. To the extent shared values are proper for the company in question, company performance may benefit from culture (Arogyaswamy & Byles, 1987). For example, if a company is in the high-tech industry, having a culture that encourages innovativeness and adaptability will support its performance. However, if a company in the same industry has a culture characterized by stability, a high respect for tradition, and a strong preference for upholding rules and procedures, the company may suffer as a result of its culture. In other words, just as having the “right” culture may be a competitive advantage for an organization, having the “wrong” culture may lead to performance difficulties, may be responsible for organizational failure, and may act as a barrier preventing the company from changing and taking risks.
In addition to having implications for organizational performance, organizational culture is an effective control mechanism for dictating employee behavior. Culture is in fact a more powerful way of controlling and managing employee behaviors than organizational rules and regulations. When problems are unique, rules tend to be less helpful. Instead, creating a culture of customer service achieves the same result by encouraging employees to think like customers, knowing that the company priorities in this case are clear: Keeping the customer happy is preferable to other concerns such as saving the cost of a refund.
Levels of Organizational Culture
Organizational culture consists of some aspects that are relatively more visible, as well as aspects that may lie below one’s conscious awareness. Organizational culture can be thought of as consisting of three interrelated levels (Schein, 1992).
At the deepest level, below our awareness lie basic assumptions. Assumptions are taken for granted, and they reflect beliefs about human nature and reality. At the second level, values exist. Values are shared principles, standards, and goals. Finally, at the surface we have artifacts, or visible, tangible aspects of organizational culture. For example, in an organization one of the basic assumptions employees and managers share might be that happy employees benefit their organizations. This assumption could translate into values such as social equality, high quality relationships, and having fun. The artifacts reflecting such values might be an executive “open door” policy, an office layout that includes open spaces and gathering areas equipped with pool tables, and frequent company picnics in the workplace. For example, Alcoa Inc. designed their headquarters to reflect the values of making people more visible and accessible, and to promote collaboration (Stegmeier, 2008). In other words, understanding the organization’s culture may start from observing its artifacts: the physical environment, employee interactions, company policies, reward systems, and other observable characteristics. When you are interviewing for a position, observing the physical environment, how people dress, where they relax, and how they talk to others is definitely a good start to understanding the company’s culture. However, simply looking at these tangible aspects is unlikely to give a full picture of the organization. An important chunk of what makes up culture exists below one’s degree of awareness. The values and, at a deeper level, the assumptions that shape the organization’s culture can be uncovered by observing how employees interact and the choices they make, as well as by inquiring about their beliefs and perceptions regarding what is right and appropriate behavior.
Key Takeaways
Organizational culture is a system of shared assumptions, values, and beliefs that help individuals within an organization understand which behaviors are and are not appropriate within an organization. Cultures can be a source of competitive advantage for organizations. Strong organizational cultures can be an organizing as well as a controlling mechanism for organizations. And finally, organizational culture consists of three levels: assumptions, which are below the surface, values, and artifacts.
Exercises
1. Why do companies need culture?
2. Give an example of an aspect of company culture that is a strength and one that is a weakness.
3. In what ways does culture serve as a controlling mechanism?
4. If assumptions are below the surface, why do they matter?
5. Share examples of artifacts you have noticed at different organizations. | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.2%3A_Understanding_Organizational_Culture.txt |
Learning Objectives
1. Understand different dimensions of organizational culture.
2. Understand the role of culture strength.
3. Explore subcultures within organizations.
Dimensions of Culture
Which values characterize an organization’s culture? Even though culture may not be immediately observable, identifying a set of values that might be used to describe an organization’s culture helps us identify, measure, and manage culture more effectively. For this purpose, several researchers have proposed various culture typologies. One typology that has received a lot of research attention is the organizational culture profile (OCP), in which culture is represented by seven distinct values (Chatman & Jehn, 1991; O’Reilly, Chatman, & Caldwell, 1991). We will describe the OCP as well as two additional dimensions of organizational culture that are not represented in that framework but are important dimensions to consider: service culture and safety culture.
Innovative Cultures
According to the OCP framework, companies that have innovative cultures are flexible and adaptable, and experiment with new ideas. These companies are characterized by a flat hierarchy in which titles and other status distinctions tend to be downplayed. For example, W. L. Gore & Associates Inc. is a company with innovative products such as GORE-TEX® (the breathable fabric that is windproof and waterproof), Glide dental floss, and Elixir guitar strings, earning the company the distinction of being elected as the most innovative company in the United States by Fast Company magazine in 2004. W. L. Gore consistently manages to innovate and capture the majority of market share in a wide variety of industries, in large part due to its unique culture. In this company, employees do not have bosses in the traditional sense, and risk taking is encouraged by celebrating failures as well as successes (Deutschman, 2004). Companies such as W. L. Gore, Genentech Inc., and Google also encourage their employees to take risks by allowing engineers to devote 20% of their time to projects of their own choosing (Deutschman, 2004; Morris, Burke, & Neering, 2006).
Aggressive Cultures
Companies with aggressive cultures value competitiveness and outperforming competitors: By emphasizing this, they may fall short in the area of corporate social responsibility. For example, Microsoft Corporation is often identified as a company with an aggressive culture. The company has faced a number of antitrust lawsuits and disputes with competitors over the years. In aggressive companies, people may use language such as “We will kill our competition.” In the past, Microsoft executives often made statements such as “We are going to cut off Netscape’s air supply.…Everything they are selling, we are going to give away.” Its aggressive culture is cited as a reason for getting into new legal troubles before old ones are resolved (Greene, Reinhardt, & Lowry, 2004; Schlender, 1998). Recently, Microsoft founder Bill Gates established the Bill & Melinda Gates foundation and is planning to devote his time to reducing poverty around the world (Schlender, 2007). It will be interesting to see whether he will bring the same competitive approach to the world of philanthropy.
Outcome-Oriented Cultures
The OCP framework describes outcome-oriented cultures as those that emphasize achievement, results, and action as important values. A good example of an outcome-oriented culture may be Best Buy Co. Inc. Having a culture emphasizing sales performance, Best Buy tallies revenues and other relevant figures daily by department. Employees are trained and mentored to sell company products effectively, and they learn how much money their department made every day (Copeland, 2004). In 2005, the company implemented a results oriented work environment (ROWE) program that allows employees to work anywhere and anytime; they are evaluated based on results and fulfillment of clearly outlined objectives (Thompson, 2005). Outcome-oriented cultures hold employees as well as managers accountable for success and utilize systems that reward employee and group output. In these companies, it is more common to see rewards tied to performance indicators as opposed to seniority or loyalty. Research indicates that organizations that have a performance-oriented culture tend to outperform companies that are lacking such a culture (Nohria, Joyce, & Roberson, 2003). At the same time, some outcome-oriented companies may have such a high drive for outcomes and measurable performance objectives that they may suffer negative consequences. Companies overrewarding employee performance such as Enron Corporation and WorldCom experienced well-publicized business and ethical failures. When performance pressures lead to a culture where unethical behaviors become the norm, individuals see their peers as rivals and short-term results are rewarded; the resulting unhealthy work environment serves as a liability (Probst & Raisch, 2005).
Stable Cultures
Stable cultures are predictable, rule-oriented, and bureaucratic. These organizations aim to coordinate and align individual effort for greatest levels of efficiency. When the environment is stable and certain, these cultures may help the organization be effective by providing stable and constant levels of output (Westrum, 2004). These cultures prevent quick action, and as a result may be a misfit to a changing and dynamic environment. Public sector institutions may be viewed as stable cultures. In the private sector, Kraft Foods Inc. is an example of a company with centralized decision making and rule orientation that suffered as a result of the culture-environment mismatch (Thompson, 2006).Its bureaucratic culture is blamed for killing good ideas in early stages and preventing the company from innovating. When the company started a change program to increase the agility of its culture, one of their first actions was to fight bureaucracy with more bureaucracy: They created the new position of VP of business process simplification, which was later eliminated (Boyle, 2004; Thompson, 2005; Thompson, 2006).
People-Oriented Cultures
People-oriented cultures value fairness, supportiveness, and respect for individual rights. These organizations truly live the mantra that “people are their greatest asset.” In addition to having fair procedures and management styles, these companies create an atmosphere where work is fun and employees do not feel required to choose between work and other aspects of their lives. In these organizations, there is a greater emphasis on and expectation of treating people with respect and dignity (Erdogan, Liden, & Kraimer, 2006). One study of new employees in accounting companies found that employees, on average, stayed 14 months longer in companies with people-oriented cultures (Sheridan, 1992). Starbucks Corporation is an example of a people-oriented culture. The company pays employees above minimum wage, offers health care and tuition reimbursement benefits to its part-time as well as full-time employees, and has creative perks such as weekly free coffee for all associates. As a result of these policies, the company benefits from a turnover rate lower than the industry average (Weber, 2005; Motivation secrets, 2003). The company is routinely ranked as one of the best places to work by Fortune magazine.
Team-Oriented Cultures
Companies with team-oriented cultures are collaborative and emphasize cooperation among employees. For example, Southwest Airlines Company facilitates a team-oriented culture by cross-training its employees so that they are capable of helping each other when needed. The company also places emphasis on training intact work teams (Bolino & Turnley, 2003). Employees participate in twice daily meetings named “morning overview meetings” (MOM) and daily afternoon discussions (DAD) where they collaborate to understand sources of problems and determine future courses of action. In Southwest’s selection system, applicants who are not viewed as team players are not hired as employees (Miles & Mangold, 2005).In team-oriented organizations, members tend to have more positive relationships with their coworkers and particularly with their managers (Erdogan, Liden, & Kraimer, 2006).
Detail-Oriented Cultures
Organizations with detail-oriented cultures are characterized in the OCP framework as emphasizing precision and paying attention to details. Such a culture gives a competitive advantage to companies in the hospitality industry by helping them differentiate themselves from others. For example, Four Seasons Hotels Ltd. and the Ritz-Carlton Company LLC are among hotels who keep records of all customer requests, such as which newspaper the guest prefers or what type of pillow the customer uses. This information is put into a computer system and used to provide better service to returning customers. Any requests hotel employees receive, as well as overhear, might be entered into the database to serve customers better. Recent guests to Four Seasons Paris who were celebrating their 21st anniversary were greeted with a bouquet of 21 roses on their bed. Such clear attention to detail is an effective way of impressing customers and ensuring repeat visits. McDonald’s Corporation is another company that specifies in detail how employees should perform their jobs by including photos of exactly how French fries and hamburgers should look when prepared properly (Fitch, 2004; Ford & Heaton, 2001; Kolesnikov-Jessop, 2005; Markels, 2007).
Service Culture
Service culture is not one of the dimensions of OCP, but given the importance of the retail industry in the overall economy, having a service culture can make or break an organization. Some of the organizations we have illustrated in this section, such as Nordstrom, Southwest Airlines, Ritz-Carlton, and Four Seasons are also famous for their service culture. In these organizations, employees are trained to serve the customer well, and cross-training is the norm. Employees are empowered to resolve customer problems in ways they see fit. Because employees with direct customer contact are in the best position to resolve any issues, employee empowerment is truly valued in these companies. For example, Umpqua Bank, operating in the northwestern United States, is known for its service culture. All employees are trained in all tasks to enable any employee to help customers when needed. Branch employees may come up with unique ways in which they serve customers better, such as opening their lobby for community events or keeping bowls full of water for customers’ pets. The branches feature coffee for customers, Internet kiosks, and withdrawn funds are given on a tray along with a piece of chocolate. They also reward employee service performance through bonuses and incentives (Conley, 2005; Kuehner-Herbert, 2003).
What differentiates companies with service culture from those without such a culture may be the desire to solve customer-related problems proactively. In other words, in these cultures employees are engaged in their jobs and personally invested in improving customer experience such that they identify issues and come up with solutions without necessarily being told what to do. For example, a British Airways baggage handler noticed that first-class passengers were waiting a long time for their baggage, whereas stand-by passengers often received their luggage first. Noticing this tendency, a baggage handler notified his superiors about this problem, along with the suggestion to load first-class passenger luggage last Ford & Heaton, 2001). This solution was successful in cutting down the wait time by half. Such proactive behavior on the part of employees who share company values is likely to emerge frequently in companies with a service culture.
Safety Culture
Some jobs are safety sensitive. For example, logger, aircraft pilot, fishing worker, steel worker, and roofer are among the top 10 most dangerous jobs in the United States (Christie, 2005). In organizations where safety-sensitive jobs are performed, creating and maintaining a safety culture provides a competitive advantage, because the organization can reduce accidents, maintain high levels of morale and employee retention, and increase profitability by cutting workers’ compensation insurance costs. Some companies suffer severe consequences when they are unable to develop such a culture. For example, British Petroleum experienced an explosion in their Texas City, Texas, refinery in 2005, which led to the death of 15 workers while injuring 170. In December 2007, the company announced that it had already depleted the \$1.6-billion fund to be used in claims for this explosion (Tennissen, 2007). A safety review panel concluded that the development of a safety culture was essential to avoid such occurrences in the future (Hofmann, 2007). In companies that have a safety culture, there is a strong commitment to safety starting at management level and trickling down to lower levels. M. B. Herzog Electric Inc. of California, selected as one of America’s safest companies by Occupational Hazards magazine in 2007, had a zero accident rate for the past 3 years. The company uses safety training programs tailored to specific jobs within the company, and all employees are encouraged to identify all safety hazards they come across when they are performing their jobs. They are also asked to play the role of an OSHA (Occupational Safety and Health Administration) inspector for a day to become more aware of the hidden dangers in the workplace. Managers play a key role in increasing the level of safe behaviors in the workplace, because they can motivate employees day-to-day to demonstrate safe behaviors and act as safety role models. A recent study has shown that in organizations with a safety culture, leaders encourage employees to demonstrate behaviors such as volunteering for safety committees, making recommendations to increase safety, protecting coworkers from hazards, whistleblowing, and in general trying to make their jobs safer (Hofman, Morgeson, & Gerras, 2003; Smith, 2007).
Strength of Culture
A strong culture is one that is shared by organizational members (Arogyaswamy & Byles, 1987; Chatman & Eunyoung, 2003). In other words, if most employees in the organization show consensus regarding the values of the company, it is possible to talk about the existence of a strong culture. A culture’s content is more likely to affect the way employees think and behave when the culture in question is strong. For example, cultural values emphasizing customer service will lead to higher quality customer service if there is widespread agreement among employees on the importance of customer service-related values (Schneider, Salvaggio, & Subirats, 2002).
It is important to realize that a strong culture may act as an asset or liability for the organization, depending on the types of values that are shared. For example, imagine a company with a culture that is strongly outcome oriented. If this value system matches the organizational environment, the company outperforms its competitors. On the other hand, a strong outcome-oriented culture coupled with unethical behaviors and an obsession with quantitative performance indicators may be detrimental to an organization’s effectiveness. An extreme example of this dysfunctional type of strong culture is Enron.
A strong culture may sometimes outperform a weak culture because of the consistency of expectations. In a strong culture, members know what is expected of them, and the culture serves as an effective control mechanism on member behaviors. Research shows that strong cultures lead to more stable corporate performance in stable environments. However, in volatile environments, the advantages of culture strength disappear (Sorensen 2002).
One limitation of a strong culture is the difficulty of changing a strong culture. If an organization with widely shared beliefs decides to adopt a different set of values, unlearning the old values and learning the new ones will be a challenge, because employees will need to adopt new ways of thinking, behaving, and responding to critical events. For example, the Home Depot Inc. had a decentralized, autonomous culture where many business decisions were made using “gut feeling” while ignoring the available data. When Robert Nardelli became CEO of the company in 2000, he decided to change its culture, starting with centralizing many of the decisions that were previously left to individual stores. This initiative met with substantial resistance, and many high-level employees left during his first year. Despite getting financial results such as doubling the sales of the company, many of the changes he made were criticized. He left the company in January 2007 (Charan, 2006; Herman & Wernle, 2007).
A strong culture may also be a liability during a merger. During mergers and acquisitions, companies inevitably experience a clash of cultures, as well as a clash of structures and operating systems. Culture clash becomes more problematic if both parties have unique and strong cultures. For example, during the merger of Daimler AG with Chrysler Motors LLC to create DaimlerChrysler AG, the differing strong cultures of each company acted as a barrier to effective integration. Daimler had a strong engineering culture that was more hierarchical and emphasized routinely working long hours. Daimler employees were used to being part of an elite organization, evidenced by flying first class on all business trips. On the other hand, Chrysler had a sales culture where employees and managers were used to autonomy, working shorter hours, and adhering to budget limits that meant only the elite flew first class. The different ways of thinking and behaving in these two companies introduced a number of unanticipated problems during the integration process (Badrtalei & Bates, 2007; Bower, 2001). Differences in culture may be part of the reason that, in the end, the merger didn’t work out.
Do Organizations Have a Single Culture?
So far, we have assumed that a company has a single culture that is shared throughout the organization. However, you may have realized that this is an oversimplification. In reality there might be multiple cultures within any given organization. For example, people working on the sales floor may experience a different culture from that experienced by people working in the warehouse. A culture that emerges within different departments, branches, or geographic locations is called a subculture. Subcultures may arise from the personal characteristics of employees and managers, as well as the different conditions under which work is performed. Within the same organization, marketing and manufacturing departments often have different cultures such that the marketing department may emphasize innovativeness, whereas the manufacturing department may have a shared emphasis on detail orientation. In an interesting study, researchers uncovered five different subcultures within a single police organization. These subcultures differed depending on the level of danger involved and the type of background experience the individuals held, including “crime-fighting street professionals” who did what their job required without rigidly following protocol and “anti-military social workers” who felt that most problems could be resolved by talking to the parties involved (Jermier et al., 1991). Research has shown that employee perceptions regarding subcultures were related to employee commitment to the organization (Lok, Westwood, & Crawford, 2005). Therefore, in addition to understanding the broader organization’s values, managers will need to make an effort to understand subculture values to see its impact on workforce behavior and attitudes. Moreover, as an employee, you need to understand the type of subculture in the department where you will work in addition to understanding the company’s overall culture.
Sometimes, a subculture may take the form of a counterculture. Defined as shared values and beliefs that are in direct opposition to the values of the broader organizational culture (Kerr & Slocum, 2005), countercultures are often shaped around a charismatic leader. For example, within a largely bureaucratic organization, an enclave of innovativeness and risk taking may emerge within a single department. A counterculture may be tolerated by the organization as long as it is bringing in results and contributing positively to the effectiveness of the organization. However, its existence may be perceived as a threat to the broader organizational culture. In some cases this may lead to actions that would take away the autonomy of the managers and eliminate the counterculture.
Key Takeaways
Culture can be understood in terms of seven different culture dimensions, depending on what is most emphasized within the organization. For example, innovative cultures are flexible and adaptable, and they experiment with new ideas, while stable cultures are predictable, rule-oriented, and bureaucratic. Strong cultures can be an asset or a liability for an organization but can be challenging to change. Organizations may have subcultures and countercultures, which can be challenging to manage.
Exercises
1. Think about an organization you are familiar with. Based on the dimensions of OCP, how would you characterize its culture?
2. Out of the culture dimensions described, which dimension do you think would lead to higher levels of employee satisfaction and retention? Which one would be related to company performance?
3. What are the pros and cons of an outcome-oriented culture?
4. When bureaucracies were first invented they were considered quite innovative. Do you think that different cultures are more or less effective at different points in time and in different industries? Why or why not?
5. Can you imagine an effective use of subcultures within an organization? | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.3%3A_Characteristics_of_Organizational_Culture.txt |
Learning Objectives
1. Understand how cultures are created.
2. Learn how to maintain a culture.
3. Recognize organizational culture signs.
How Are Cultures Created?
Where do cultures come from? Understanding this question is important so that you know how they can be changed. An organization’s culture is shaped as the organization faces external and internal challenges and learns how to deal with them. When the organization’s way of doing business provides a successful adaptation to environmental challenges and ensures success, those values are retained. These values and ways of doing business are taught to new members as the way to do business (Schein, 1992).
The factors that are most important in the creation of an organization’s culture include founders’ values, preferences, and industry demands.
Founder’s Values
A company’s culture, particularly during its early years, is inevitably tied to the personality, background, and values of its founder or founders, as well as their vision for the future of the organization. This explains one reason why culture is so hard to change: It is shaped in the early days of a company’s history. When entrepreneurs establish their own businesses, the way they want to do business determines the organization’s rules, the structure set-up in the company, and the people they hire to work with them. As a case in point, some of the existing corporate values of the ice cream company Ben & Jerry’s Homemade Holdings Inc. can easily be traced to the personalities of its founders Ben Cohen and Jerry Greenfield. In 1978, the two ex-hippie high school friends opened up their first ice-cream shop in a renovated gas station in Burlington, Vermont. Their strong social convictions led them to buy only from the local farmers and devote a certain percentage of their profits to charities. The core values they instilled in their business can still be observed in the current company’s devotion to social activism and sustainability, its continuous contributions to charities, use of environmentally friendly materials, and dedication to creating jobs in low-income areas. Even though the company was acquired by Unilever PLC in 2000, the social activism component remains unchanged and Unilever has expressed its commitment to maintaining it (Kiger, 2005; Rubis et al., 2005; Smalley, 2007). There are many other examples of founders’ instilling their own strongly held beliefs or personalities to the businesses they found. For example, as mentioned earlier, Microsoft’s aggressive nature is often traced back to Bill Gates and his competitiveness. According to one anecdote, his competitive nature even extends to his personal life such that one of his pastimes is to compete with his wife in solving identical jigsaw puzzles to see who can finish faster (Schlender, 1998). Similarly, Joseph Pratt, a history and management professor, notes, “There definitely is an Exxon way. This is John D. Rockefeller’s company, this is Standard Oil of New Jersey, this is the one that is most closely shaped by Rockefeller’s traditions. Their values are very clear. They are deeply embedded. They have roots in 100 years of corporate history” (Mouawad, 2008).
Founder values become part of the corporate culture to the degree they help the company be successful. For example, the social activism of Ben & Jerry’s was instilled in the company because founders strongly believed in these issues. However, these values probably would not be surviving 3 decades later if they had not helped the company in its initial stages. In the case of Ben & Jerry’s, these charitable values helped distinguish their brand from larger corporate brands and attracted a loyal customer base. Thus, by providing a competitive advantage, these values were retained as part of the corporate culture and were taught to new members as the right way to do business. Similarly, the early success of Microsoft may be attributed to its relatively aggressive corporate culture, which provided a source of competitive advantage.
Industry Demands
While founders undoubtedly exert a powerful influence over corporate cultures, the industry characteristics also play a role. Industry characteristics and demands act as a force to create similarities among organizational cultures. For example, despite some differences, many companies in the insurance and banking industries are stable and rule oriented, many companies in the high-tech industry have innovative cultures, and companies in the nonprofit industry tend to be people oriented. If the industry is one with a large number of regulatory requirements—for example, banking, health care, and nuclear power plant industries—then we might expect the presence of a large number of rules and regulations, a bureaucratic company structure, and a stable culture. Similarly, the high-tech industry requires agility, taking quick action, and low concern for rules and authority, which may create a relatively more innovative culture (Chatman & Jehn, 1994; Gordon, 1991). The industry influence over culture is also important to know, because this shows that it may not be possible to imitate the culture of a company in a different industry, even though it may seem admirable to outsiders.
How Are Cultures Maintained?
As a company matures, its cultural values are refined and strengthened. The early values of a company’s culture exert influence over its future values. It is possible to think of organizational culture as an organism that protects itself from external forces. Organizational culture determines what types of people are hired by an organization and what types are left out. Moreover, once new employees are hired, the company assimilates new employees and teaches them the way things are done in the organization. We call these processes attraction-selection-attrition and onboarding processes. We will also examine the role of leaders and reward systems in shaping and maintaining an organization’s culture. It is important to remember two points: The process of culture creation is in fact more complex and less clean than the name implies. Additionally, the influence of each factor on culture creation is reciprocal. For example, just as leaders may influence what type of values the company has, the culture may also determine what types of behaviors leaders demonstrate.
Attraction-Selection-Attrition (ASA)
Organizational culture is maintained through a process known as attraction-selection-attrition. First, employees are attracted to organizations where they will fit in. In other words, different job applicants will find different cultures to be attractive. Someone who has a competitive nature may feel comfortable and prefer to work in a company where interpersonal competition is the norm. Others may prefer to work in a team-oriented workplace. Research shows that employees with different personality traits find different cultures attractive. For example, out of the Big Five personality traits, employees who demonstrate neurotic personalities were less likely to be attracted to innovative cultures, whereas those who had openness to experience were more likely to be attracted to innovative cultures (Judge & Cable, 1997). As a result, individuals will self-select the companies they work for and may stay away from companies that have core values that are radically different from their own.
Of course this process is imperfect, and value similarity is only one reason a candidate might be attracted to a company. There may be other, more powerful attractions such as good benefits. For example, candidates who are potential misfits may still be attracted to Google because of the cool perks associated with being a Google employee. At this point in the process, the second component of the ASA framework prevents them from getting in: Selection. Just as candidates are looking for places where they will fit in, companies are also looking for people who will fit into their current corporate culture. Many companies are hiring people for fit with their culture, as opposed to fit with a certain job. For example, Southwest Airlines prides itself for hiring employees based on personality and attitude rather than specific job-related skills, which are learned after being hired. This is important for job applicants to know, because in addition to highlighting your job-relevant skills, you will need to discuss why your personality and values match those of the company. Companies use different techniques to weed out candidates who do not fit with corporate values. For example, Google relies on multiple interviews with future peers. By introducing the candidate to several future coworkers and learning what these coworkers think of the candidate, it becomes easier to assess the level of fit. The Container Store Inc. ensures culture fit by hiring among their customers (Arnold, 2007). This way, they can make sure that job candidates are already interested in organizing their lives and understand the company’s commitment to helping customers organize theirs. Companies may also use employee referrals in their recruitment process. By using their current employees as a source of future employees, companies may make sure that the newly hired employees go through a screening process to avoid potential person-culture mismatch.
Even after a company selects people for person-organization fit, there may be new employees who do not fit in. Some candidates may be skillful in impressing recruiters and signal high levels of culture fit even though they do not necessarily share the company’s values. Moreover, recruiters may suffer from perceptual biases and hire some candidates thinking that they fit with the culture even though the actual fit is low. In any event, the organization is going to eventually eliminate candidates who do not fit in through attrition. Attrition refers to the natural process in which the candidates who do not fit in will leave the company. Research indicates that person-organization misfit is one of the important reasons for employee turnover (Kristof-Brown, Zimmerman, & Johnson, 2005; O’Reilly III, Chatman, & Caldwell, 1991).
Click and Learn More
Texas Instruments Inc. includes a Workplace and Values Check on its Web page for potential applicants to see if they fit Texas Instrument’s culture.
To view this Web site, go to focus.ti.com/careers/docs/fit...152&tabId=1678
As a result of the ASA process, the company attracts, selects, and retains people who share its core values. On the other hand, those people who are different in core values will be excluded from the organization either during the hiring process or later on through naturally occurring turnover. Thus, organizational culture will act as a self-defending organism where intrusive elements are kept out. Supporting the existence of such self-protective mechanisms, research shows that organizations demonstrate a certain level of homogeneity regarding personalities and values of organizational members (Giberson, Resick, & Dickson, 2005).
New Employee Onboarding
Another way in which an organization’s values, norms, and behavioral patterns are transmitted to employees is through onboarding (also referred to as the organizational socialization process). Onboarding refers to the process through which new employees learn the attitudes, knowledge, skills, and behaviors required to function effectively within an organization. If an organization can successfully socialize new employees into becoming organizational insiders, new employees feel confident regarding their ability to perform, sense that they will feel accepted by their peers, and understand and share the assumptions, norms, and values that are part of the organization’s culture. This understanding and confidence in turn translate into more effective new employees who perform better and have higher job satisfaction, stronger organizational commitment, and longer tenure within the company (Bauer et al., 2007).
There are many factors that play a role in the successful adjustment of new employees. New employees can engage in several activities to help increase their own chances of success at a new organization. Organizations also engage in different activities, such as implementing orientation programs or matching new employees with mentors, which may facilitate onboarding.
What Can Employees Do During Onboarding?
New employees who are proactive, seek feedback, and build strong relationships tend to be more successful than those who do not (Bauer & Green, 1998; Kammeyer-Mueller & Wanberg, 2003; Wanberg & Kammeyer-Mueller, 2000). for example, feedback seeking helps new employees. Especially on a first job, a new employee can make mistakes or gaffes and may find it hard to understand and interpret the ambiguous reactions of coworkers. New hires may not know whether they are performing up to standards, whether it was a good idea to mention a company mistake in front of a client, or why other employees are asking if they were sick over the weekend because of not responding to work-related e-mails. By actively seeking feedback, new employees may find out sooner rather than later any behaviors that need to be changed and gain a better understanding of whether their behavior fits with the company culture and expectations. Several studies show the benefits of feedback seeking for new employee adjustment.
Relationship building, or networking, is another important behavior new employees may demonstrate. Particularly when a company does not have a systematic approach to onboarding, it becomes more important for new employees to facilitate their own onboarding by actively building relationships. According to one estimate, 35% of managers who start a new job fail in the new job and either voluntarily leave or are fired within 1.5 years. Of these, over 60% report not being able to form effective relationships with colleagues as the primary reason for their failure (Fisher, 2005). New employees may take an active role in building relations by seeking opportunities to have a conversation with their new colleagues, arranging lunches or coffee with them, participating in company functions, and making the effort to build a relationship with their new supervisor (Kim, Cable, & Kim, 2005).
OB Toolbox: You’ve Got a New Job! Now How Do You Get on Board?
• Gather information. Try to find as much about the company and the job as you can before your first day. After you start working, be a good observer, gather information, and read as much as you can to understand your job and the company. Examine how people are interacting, how they dress, and how they act to avoid behaviors that might indicate to others that you are a misfit.
• Manage your first impression. First impressions may endure, so make sure that you dress appropriately, are friendly, and communicate your excitement to be a part of the team. Be on your best behavior!
• Invest in relationship development. The relationships you develop with your manager and with coworkers will be essential for you to adjust to your new job. Take the time to strike up conversations with them. If there are work functions during your early days, make sure not to miss them!
• Seek feedback. Ask your manager or coworkers how well you are doing and whether you are meeting expectations. Listen to what they are telling you and also listen to what they are not saying. Then, make sure to act upon any suggestions for improvement. Be aware that after seeking feedback, you may create a negative impression if you consistently ignore the feedback you receive.
• Show success early on. In order to gain the trust of your new manager and colleagues, you may want to establish a history of success early. Volunteer for high-profile projects where you will be able to demonstrate your skills. Alternatively, volunteer for projects that may serve as learning opportunities or that may put you in touch with the key people in the company.
What Can Organizations Do During Onboarding?
Many organizations, including Microsoft, Kellogg Company, and Bank of America, take a more structured and systematic approach to new employee onboarding, while others follow a “sink or swim” approach in which new employees struggle to figure out what is expected of them and what the norms are.
A formal orientation program indoctrinates new employees to the company culture, as well as introduces them to their new jobs and colleagues. An orientation program is important, because it has a role in making new employees feel welcome in addition to imparting information that may help new employees be successful on their new jobs. Many large organizations have formal orientation programs consisting of lectures, videotapes, and written material, while some may follow more unusual approaches. According to one estimate, most orientations last anywhere from one to five days, and some companies are currently switching to a computer-based orientation. Ritz-Carlton, the company ranked number 1 in Training magazine’s 2007 top 125 list, uses a very systematic approach to employee orientation and views orientation as the key to retention. In the two-day classroom orientation, employees spend time with management, dine in the hotel’s finest restaurant, and witness the attention to customer service detail firsthand. For example, they receive hand-written welcome notes and their favorite snacks during the break. During these two days, they are introduced to the company’s intensive service standards, team orientation, and its own language. Later, on their 21st day, they are tested on the company’s service standards and are certified (Durett, 2006; Elswick, 2000; The Ritz-Carlton Company, 2001). Research shows that formal orientation programs are helpful in teaching employees about the goals and history of the company, as well as communicating the power structure. Moreover, these programs may also help with a new employee’s integration into the team. However, these benefits may not be realized to the same extent in computer-based orientations. In fact, compared to those taking part in a regular, face-to-face orientation, individuals undergoing a computer-based orientation were shown to have lower understanding of their job and the company, indicating that different formats of orientations may not substitute for each other (Klein & Weaver, 2000; Moscato, 2005; Wesson & Gogus, 2005).
What Can Organizational Insiders Do During Onboarding?
One of the most important ways in which organizations can help new employees adjust to a company and a new job is through organizational insiders—namely supervisors, coworkers, and mentors. Research shows that leaders have a key influence over onboarding, and the information and support leaders provide determine how quickly employees learn about the company politics and culture. Coworker influence determines the degree to which employees adjust to their teams. Mentors can be crucial to helping new employees adjust by teaching them the ins and outs of their jobs and how the company really operates. A mentor is a trusted person who provides an employee with advice and support regarding career-related matters. Although a mentor can be any employee or manager who has insights that are valuable to the new employee, mentors tend to be relatively more experienced than their protégés. Mentoring can occur naturally between two interested individuals, or organizations can facilitate this process by having formal mentoring programs. These programs may successfully bring together mentors and protégés who would not come together otherwise. Research indicates that the existence of these programs does not guarantee their success, and there are certain program characteristics that may make these programs more effective. For example, when mentors and protégés feel that they had input in the mentor-protégé matching process, they tend to be more satisfied with the arrangement. Moreover, when mentors receive training beforehand, the outcomes of the program tend to be more positive (Allen, Eby, & Lentz, 2006). Because mentors may help new employees interpret and understand the company’s culture, organizations may benefit from selecting mentors who personify the company’s values. Thus, organizations may need to design these programs carefully to increase their chance of success.
Leadership
Leaders are instrumental in creating and changing an organization’s culture. There is a direct correspondence between a leader’s style and an organization’s culture. For example, when leaders motivate employees through inspiration, corporate culture tends to be more supportive and people oriented. When leaders motivate by making rewards contingent on performance, the corporate culture tends to be more performance oriented and competitive (Sarros, Gray, & Dernsten, 2002). In these and many other ways, what leaders do directly influences the cultures their organizations have.
Part of the leader’s influence over culture is through role modeling. Many studies have suggested that leader behavior, the consistency between organizational policy and leader actions, and leader role modeling determine the degree to which the organization’s culture emphasizes ethics (Driscoll & McKee, 2007). The leader’s own behaviors will signal to employees what is acceptable behavior and what is unacceptable. In an organization in which high-level managers make the effort to involve others in decision making and seek opinions of others, a team-oriented culture is more likely to evolve. By acting as role models, leaders send signals to the organization about the norms and values that are expected to guide the actions of organizational members.
Leaders also shape culture by their reactions to the actions of others around them. For example, do they praise a job well done, or do they praise a favored employee regardless of what was accomplished? How do they react when someone admits to making an honest mistake? What are their priorities? In meetings, what types of questions do they ask? Do they want to know what caused accidents so that they can be prevented, or do they seem more concerned about how much money was lost as a result of an accident? Do they seem outraged when an employee is disrespectful to a coworker, or does their reaction depend on whether they like the harasser? Through their day-to-day actions, leaders shape and maintain an organization’s culture.
Reward Systems
Finally, the company culture is shaped by the type of reward systems used in the organization, and the kinds of behaviors and outcomes it chooses to reward and punish. One relevant element of the reward system is whether the organization rewards behaviors or results. Some companies have reward systems that emphasize intangible elements of performance as well as more easily observable metrics. In these companies, supervisors and peers may evaluate an employee’s performance by assessing the person’s behaviors as well as the results. In such companies, we may expect a culture that is relatively people or team oriented, and employees act as part of a family (Kerr & Slocum, 2005). On the other hand, in companies that purely reward goal achievement, there is a focus on measuring only the results without much regard to the process. In these companies, we might observe outcome-oriented and competitive cultures. Another categorization of reward systems might be whether the organization uses rankings or ratings. In a company where the reward system pits members against one another, where employees are ranked against each other and the lower performers receive long-term or short-term punishments, it would be hard to develop a culture of people orientation and may lead to a competitive culture. On the other hand, evaluation systems that reward employee behavior by comparing them to absolute standards as opposed to comparing employees to each other may pave the way to a team-oriented culture. Whether the organization rewards performance or seniority would also make a difference in culture. When promotions are based on seniority, it would be difficult to establish a culture of outcome orientation. Finally, the types of behaviors that are rewarded or ignored set the tone for the culture. Service-oriented cultures reward, recognize, and publicize exceptional service on the part of their employees. In safety cultures, safety metrics are emphasized and the organization is proud of its low accident ratings. What behaviors are rewarded, which ones are punished, and which are ignored will determine how a company’s culture evolves.
OB Toolbox: Best Practices
How to Maximize Onboarding Success
Onboarding plans should have the following characteristics:
• Written down. If your organization does not have a formal plan, write one yourself. It may not make sense to share it with others, but at least you will have a roadmap. If your organization does have one, refer to it on a monthly basis.
• Participatory. The power of onboarding programs is in the interaction. Try to get participation from others to the extent possible and engage in onboarding activities offered to you by the organization.
• Tracked over time. Keep in mind that research shows onboarding has a rhythm of 30-, 60-, 90-, and 180-day milestones. Be sure to track your progress.
• Clear on objectives, timeline, roles, and responsibilities. This will help ensure that role conflict and ambiguity doesn’t detour your onboarding process.
• Clear on scheduled key stakeholder meetings with managers and mentors. Include a plan for
1. going over strengths and development areas;
2. hearing about potential problems and critical advice to help you be successful.
• Be sure to include a list of your key questions and things you need to help you do your job better.
Visual Elements of Organizational Culture
How do you find out about a company’s culture? We emphasized earlier that culture influences the way members of the organization think, behave, and interact with one another. Thus, one way of finding out about a company’s culture is by observing employees or interviewing them. At the same time, culture manifests itself in some visible aspects of the organization’s environment. In this section, we discuss five ways in which culture shows itself to observers and employees.
Mission Statement
A mission statement is a statement of purpose, describing who the company is and what it does. Many companies have mission statements, but they do not always reflect the company’s values and its purpose. An effective mission statement is well known by employees, is transmitted to all employees starting from their first day at work, and influences employee behavior.
Not all mission statements are effective, because some are written by public relations specialists and can be found in a company’s Web site, but it does not affect how employees act or behave. In fact, some mission statements reflect who the company wants to be as opposed to who they actually are. If the mission statement does not affect employee behavior on a day-to-day basis, it has little usefulness as a tool for understanding the company’s culture. An oft-cited example of a mission statement that had little impact on how a company operates belongs to Enron. Their missions and values statement began, “As a partner in the communities in which we operate, Enron believes it has a responsibility to conduct itself according to certain basic principles.” Their values statement included such ironic declarations as “We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here” (Kunen, 2002).
A mission statement that is taken seriously and widely communicated may provide insights into the corporate culture. For example, the Mayo Clinic’s mission statement is “The needs of the patient come first.” This mission statement evolved from the founders who are quoted as saying, “The best interest of the patient is the only interest to be considered.” Mayo Clinics have a corporate culture that puts patients first. For example, no incentives are given to physicians based on the number of patients they see. Because doctors are salaried, they have no interest in retaining a patient for themselves and they refer the patient to other doctors when needed (Jarnagin & Slocum, 2007). Wal-Mart Stores Inc. may be another example of a company who lives its mission statement, and therefore its mission statement may give hints about its culture: “Saving people money so they can live better” (Wal-Mart, 2008). In fact, their culture emphasizes thrift and cost control in everything they do. For example, even though most CEOs of large companies in the United States have lavish salaries and showy offices, Wal-Mart’s CEO Michael Duke and other high-level corporate officers work out of modest offices in the company’s headquarters.
Rituals
Rituals refer to repetitive activities within an organization that have symbolic meaning (Anand, 2005). Usually rituals have their roots in the history of a company’s culture. They create camaraderie and a sense of belonging among employees. They also serve to teach employees corporate values and create identification with the organization. For example, at the cosmetics firm Mary Kay Inc., employees attend award ceremonies recognizing their top salespeople with an award of a new car—traditionally a pink Cadillac. These ceremonies are conducted in large auditoriums where participants wear elaborate evening gowns and sing company songs that create emotional excitement. During this ritual, employees feel a connection to the company culture and its values, such as self-determination, will power, and enthusiasm (Jarnagin & Slocum, 2007). Another example of rituals is the Saturday morning meetings of Wal-Mart. This ritual was first created by the company founder Sam Walton, who used these meetings to discuss which products and practices were doing well and which required adjustment. He was able to use this information to make changes in Wal-Mart’s stores before the start of the week, which gave him a competitive advantage over rival stores who would make their adjustments based on weekly sales figures during the middle of the following week. Today, hundreds of Wal-Mart associates attend the Saturday morning meetings in the Bentonville, Arkansas, headquarters. The meetings, which run from 7:00 to 9:30 a.m., start and end with the Wal-Mart cheer; the agenda includes a discussion of weekly sales figures and merchandising tactics. As a ritual, the meetings help maintain a small-company atmosphere, ensure employee involvement and accountability, communicate a performance orientation, and demonstrate taking quick action (Schlender, 2005; Wal around the world, 2001).
Rules and Policies
Another way in which an observer may find out about a company’s culture is to examine its rules and policies. Companies create rules to determine acceptable and unacceptable behavior, and thus the rules that exist in a company will signal the type of values it has. Policies about issues such as decision making, human resources, and employee privacy reveal what the company values and emphasizes. For example, a company that has a policy such as “all pricing decisions of merchandise will be made at corporate headquarters” is likely to have a centralized culture that is hierarchical, as opposed to decentralized and empowering. Similarly, a company that extends benefits to both part-time and full-time employees, as well as to spouses and domestic partners, signals to employees and observers that it cares about its employees and shows concern for their well-being. By offering employees flexible work hours, sabbaticals, and telecommuting opportunities, a company may communicate its emphasis on work-life balance. The presence or absence of policies on sensitive issues such as English-only rules, bullying or unfair treatment of others, workplace surveillance, open-door policies, sexual harassment, workplace romances, and corporate social responsibility all provide pieces of the puzzle that make up a company’s culture.
Physical Layout
A company’s building, including the layout of employee offices and other work spaces, communicates important messages about a company’s culture. The building architecture may indicate the core values of an organization’s culture. For example, visitors walking into the Nike Inc. campus in Beaverton, Oregon, can witness firsthand some of the distinguishing characteristics of the company’s culture. The campus is set on 74 acres and boasts an artificial lake, walking trails, soccer fields, and cutting-edge fitness centers. The campus functions as a symbol of Nike’s values such as energy, physical fitness, an emphasis on quality, and a competitive orientation. In addition, at fitness centers on the Nike headquarters, only those wearing Nike shoes and apparel are allowed in. This sends a strong signal that loyalty is expected. The company’s devotion to athletes and their winning spirits is manifested in campus buildings named after famous athletes, photos of athletes hanging on the walls, and honorary statues dotting the campus (Capowski, 1993; Collins & Porras, 1996; Labich & Carvell, 1995; Mitchell, 2002). A very different tone awaits visitors to Wal-Mart headquarters, where managers have gray and windowless offices (Berner, 2007). By putting its managers in small offices and avoiding outward signs of flashiness, Wal-Mart does a good job of highlighting its values of economy.
The layout of the office space also is a strong indicator of a company’s culture. A company that has an open layout where high-level managers interact with employees may have a culture of team orientation and egalitarianism, whereas a company where high-level managers have their own floor may indicate a higher level of hierarchy. Microsoft employees tend to have offices with walls and a door, because the culture emphasizes solitude, concentration, and privacy. In contrast, Intel Corporation is famous for its standard cubicles, which reflect its culture of equality. The same value can also be observed in its avoidance of private and reserved parking spots (Clark, 2007). The degree to which playfulness, humor, and fun is part of a company’s culture may be indicated in the office environment. For example, Jive Software boasts a colorful, modern, and comfortable office design. Their break room is equipped with a keg of beer, free snacks and sodas, an XBOX 360, and Nintendo Wii. A casual observation of their work environment sends the message that employees who work there see their work as fun (Jive Software, 2008).
Stories
Perhaps the most colorful and effective way in which organizations communicate their culture to new employees and organizational members is through the skillful use of stories. A story can highlight a critical event an organization faced and the collective response to it, or can emphasize a heroic effort of a single employee illustrating the company’s values. The stories usually engage employee emotions and generate employee identification with the company or the heroes of the tale. A compelling story may be a key mechanism through which managers motivate employees by giving their behavior direction and energizing them toward a certain goal (Beslin, 2007). Moreover, stories shared with new employees communicate the company’s history, its values and priorities, and serve the purpose of creating a bond between the new employee and the organization. For example, you may already be familiar with the story of how a scientist at 3M invented Post-it notes. Arthur Fry, a 3M scientist, was using slips of paper to mark the pages of hymns in his church choir, but they kept falling off. He remembered a super-weak adhesive that had been invented in 3M’s labs, and he coated the markers with this adhesive. Thus, the Post-it notes were born. However, marketing surveys for the interest in such a product were weak, and the distributors were not convinced that it had a market. Instead of giving up, Fry distributed samples of the small yellow sticky notes to secretaries throughout his company. Once they tried them, people loved them and asked for more. Word spread, and this led to the ultimate success of the product. As you can see, this story does a great job of describing the core values of a 3M employee: Being innovative by finding unexpected uses for objects, persevering, and being proactive in the face of negative feedback (Higgins & McAllester, 2002).
OB Toolbox: As a Job Candidate, How Would You Find Out If You Are a Good Fit?
• Do your research. Talking to friends and family members who are familiar with the company, doing an online search for news articles about the company, browsing the company’s Web site, and reading their mission statement would be a good start.
• Observe the physical environment. Do people work in cubicles or in offices? What is the dress code? What is the building structure? Do employees look happy, tired, or stressed? The answers to these questions are all pieces of the puzzle.
• Read between the lines. For example, the absence of a lengthy employee handbook or detailed procedures might mean that the company is more flexible and less bureaucratic.
• How are you treated? The recruitment process is your first connection to the company. Were you treated with respect? Do they maintain contact with you, or are you being ignored for long stretches at a time?
• Ask questions. What happened to the previous incumbent of this job? What does it take to be successful in this firm? What would their ideal candidate for the job look like? The answers to these questions will reveal a lot about the way they do business.
• Listen to your gut. Your feelings about the place in general, and your future manager and coworkers in particular, are important signs that you should not ignore.
Key Takeaways
Organization cultures are created by a variety of factors, including founders’ values and preferences, industry demands, and early values, goals, and assumptions. Culture is maintained through attraction-selection-attrition, new employee onboarding, leadership, and organizational reward systems. Signs of a company’s culture include the organization’s mission statement, stories, physical layout, rules and policies, and rituals.
Exercises
1. Do you think it is a good idea for companies to emphasize person-organization fit when hiring new employees? What advantages and disadvantages do you see when hiring people who fit with company values?
2. What is the influence of company founders on company culture? Give examples based on your personal knowledge.
3. What are the methods companies use to aid with employee onboarding? What is the importance of onboarding for organizations?
4. What type of a company do you feel would be a good fit for you? What type of a culture would be a misfit for you? In your past work experience, were there any moments when you felt that you did not fit with the organization? Why?
5. What is the role of physical layout as an indicator of company culture? What type of a physical layout would you expect from a company that is people oriented? Team oriented? Stable? | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.4%3A_Creating_and_Maintaining_Organizational_Culture.txt |
Learning Objectives
1. Explain why culture change may be necessary.
2. Understand the process of culture change.
How Do Cultures Change?
Culture is part of a company’s DNA and is resistant to change efforts. Unfortunately, many organizations may not even realize that their current culture constitutes a barrier against organizational productivity and performance. Changing company culture may be the key to the company turnaround when there is a mismatch between an organization’s values and the demands of its environment.
Certain conditions may help with culture change. For example, if an organization is experiencing failure in the short run or is under threat of bankruptcy or an imminent loss of market share, it would be easier to convince managers and employees that culture change is necessary. A company can use such downturns to generate employee commitment to the change effort. However, if the organization has been successful in the past, and if employees do not perceive an urgency necessitating culture change, the change effort will be more challenging. Sometimes the external environment may force an organization to undergo culture change. Mergers and acquisitions are another example of an event that changes a company’s culture. In fact, the ability of the two merging companies to harmonize their corporate cultures is often what makes or breaks a merger effort. When Ben & Jerry’s was acquired by Unilever, Ben & Jerry’s had to change parts of its culture while attempting to retain some of its unique aspects. Corporate social responsibility, creativity, and fun remained as parts of the culture. In fact, when Unilever appointed a veteran French executive as the CEO of Ben & Jerry’s in 2000, he was greeted by an Eiffel tower made out of ice cream pints, Edith Piaf songs, and employees wearing berets and dark glasses. At the same time, the company had to become more performance oriented in response to the acquisition. All employees had to keep an eye on the bottom line. For this purpose, they took an accounting and finance course for which they had to operate a lemonade stand (Kiger, 2005). Achieving culture change is challenging, and many companies ultimately fail in this mission. Research and case studies of companies that successfully changed their culture indicate that the following six steps increase the chances of success (Schein, 1990).
Creating a Sense of Urgency
In order for the change effort to be successful, it is important to communicate the need for change to employees. One way of doing this is to create a sense of urgency on the part of employees and explain to them why changing the fundamental way in which business is done is so important. In successful culture change efforts, leaders communicate with employees and present a case for culture change as the essential element that will lead the company to eventual success. As an example, consider the situation at IBM Corporation in 1993 when Lou Gerstner was brought in as CEO and chairman. After decades of dominating the market for mainframe computers, IBM was rapidly losing market share to competitors, and its efforts to sell personal computers—the original “PC”—were seriously undercut by cheaper “clones.” In the public’s estimation, the name IBM had become associated with obsolescence. Gerstner recalls that the crisis IBM was facing became his ally in changing the organization’s culture. Instead of spreading optimism about the company’s future, he used the crisis at every opportunity to get buy-in from employees (Gerstner, 2002).
Changing Leaders and Other Key Players
A leader’s vision is an important factor that influences how things are done in an organization. Thus, culture change often follows changes at the highest levels of the organization. Moreover, in order to implement the change effort quickly and efficiently, a company may find it helpful to remove managers and other powerful employees who are acting as a barrier to change. Because of political reasons, self interest, or habits, managers may create powerful resistance to change efforts. In such cases, replacing these positions with employees and managers giving visible support to the change effort may increase the likelihood that the change effort succeeds. For example, when Robert Iger replaced Michael Eisner as CEO of the Walt Disney Company, one of the first things he did was to abolish the central planning unit, which was staffed by people close to ex-CEO Eisner. This department was viewed as a barrier to creativity at Disney, and its removal from the company was helpful in ensuring the innovativeness of the company culture (McGregor et al., 2007).
Role Modeling
Role modeling is the process by which employees modify their own beliefs and behaviors to reflect those of the leader (Kark & Dijk, 2007). CEOs can model the behaviors that are expected of employees to change the culture. The ultimate goal is that these behaviors will trickle down to lower level employees. For example, when Robert Iger took over Disney, in order to show his commitment to innovation, he personally became involved in the process of game creation, attended summits of developers, and gave feedback to programmers about the games. Thus, he modeled his engagement in the idea creation process. In contrast, modeling of inappropriate behavior from the top will lead to the same behavior trickling down to lower levels. A recent example of this type of role modeling is the scandal involving Hewlett-Packard Development Company LP board members. In 2006, when board members were suspected of leaking confidential company information to the press, the company’s top-level executives hired a team of security experts to find the source of the leak. The investigators sought the phone records of board members, linking them to journalists. For this purpose, they posed as board members and called phone companies to obtain the itemized home phone records of board members and journalists. When the investigators’ methods came to light, HP’s chairman and four other top executives faced criminal and civil charges. When such behavior is modeled at top levels, it is likely to have an adverse impact on the company culture (Barron, 2007).
Training
Well-crafted training programs may be instrumental in bringing about culture change by teaching employees the new norms and behavioral styles. For example, after the space shuttle Columbia disintegrated upon reentry from a February 2003 mission, NASA decided to change its culture to become more safety sensitive and minimize decision-making errors leading to unsafe behaviors. The change effort included training programs in team processes and cognitive bias awareness. Similarly, when auto repairer Midas International Corporation felt the need to change its culture to be more committed to customers, they developed a training program making employees familiar with customer emotions and helping form better connections with them. Customer reports have been overwhelmingly positive in stores that underwent this training (BST to guide culture change effort at NASA, 2004).
Changing the Reward System
The criteria with which employees are rewarded and punished have a powerful role in determining the cultural values in existence. Switching from a commission-based incentive structure to a straight salary system may be instrumental in bringing about customer focus among sales employees. Moreover, by rewarding employees who embrace the company’s new values and even promoting these employees, organizations can make sure that changes in culture have a lasting impact. If a company wants to develop a team-oriented culture where employees collaborate with each other, methods such as using individual-based incentives may backfire. Instead, distributing bonuses to intact teams might be more successful in bringing about culture change.
Creating New Symbols and Stories
Finally, the success of the culture change effort may be increased by developing new rituals, symbols, and stories. Continental Airlines Inc. is a company that successfully changed its culture to be less bureaucratic and more team oriented in the 1990s. One of the first things management did to show employees that they really meant to abolish many of the detailed procedures the company had and create a culture of empowerment was to burn the heavy 800-page company policy manual in their parking lot. The new manual was only 80 pages. This action symbolized the upcoming changes in the culture and served as a powerful story that circulated among employees. Another early action was the redecorating of waiting areas and repainting of all their planes, again symbolizing the new order of things (Higgins & McAllester, 2004). By replacing the old symbols and stories, the new symbols and stories will help enable the culture change and ensure that the new values are communicated.
Key Takeaways
Organizations need to change their culture to respond to changing conditions in the environment, to remain competitive, and to avoid complacency or stagnation. Culture change often begins by the creation of a sense of urgency. Next, a change of leaders and other key players may enact change and serve as effective role models of new behavior. Training can also be targeted toward fostering these new behaviors. Reward systems are changed within the organization. Finally, the organization creates new stories and symbols.
Exercises
1. Can new employees change a company’s culture? If so, how?
2. Are there conditions under which change is not possible? If so, what would such conditions be?
3. Have you ever observed a change process at an organization you were involved with? If so, what worked well and what didn’t?
4. What recommendations would you have for someone considering a major change of culture within their own organization? | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.5%3A_Creating_Culture_Change.txt |
Learning Objectives
1. Consider the role of culture in ethical behavior.
2. Consider the role of national culture on organizational culture.
Organizational Culture and Ethics
A recent study of 3,000 employees and managers in the United States confirms that the degree to which employees in an organization behave ethically depends on the culture of the organization (Gebler, 2006). Without a culture emphasizing the importance of integrity, honesty, and trust, mandatory ethics training programs are often doomed to fail. Thus, creating such a culture is essential to avoiding the failures of organizations such as WorldCom and Enron. How is such a culture created?
The factors we highlighted in this chapter will play a role in creating an ethical culture. Among all factors affecting ethical culture creation, leadership may be the most influential. Leaders, by demonstrating high levels of honesty and integrity in their actions, can model the behaviors that are demanded in an organization. If their actions contradict their words, establishing a culture of ethics will be extremely difficult. As an example, former chairman and CEO of Enron Kenneth Lay forced all his employees to use his sister’s travel agency, even though the agency did not provide high-quality service or better prices (Watkins, 2003). Such behavior at the top is sure to trickle down. Leaders also have a role in creating a culture of ethics, because they establish the reward systems being used in a company. There is a relationship between setting very difficult goals for employees and unethical behavior (Schweitzer, Ordonez, & Douma, 2004). When leaders create an extremely performance-oriented culture where only results matter and there is no tolerance for missing one’s targets, the culture may start rewarding unethical behaviors. Instead, in organizations such as General Electric Company where managers are evaluated partly based on metrics assessing ethics, behaving in an ethical manner becomes part of the core company values (Heineman, 2007).
Organizational Culture Around the Globe
The values, norms, and beliefs of a company may also be at least partially imposed by the national culture. When an entrepreneur establishes an organization, the values transmitted to the organization may be because of the cultural values of the founder and the overall society. If the national culture in general emphasizes competitiveness, a large number of the companies operating in this context may also be competitive. In countries emphasizing harmony and conflict resolution, a team-oriented culture may more easily take root. For example, one study comparing universities in Arab countries and Japan found that the Japanese universities were characterized by modesty and frugality, potentially reflecting elements of the Japanese culture. The study also found that the Arab universities had buildings that were designed to impress and had restricted access, which may be a reflection of the relatively high power distance of the Arab cultures. Similarly, another study found that elements of Brazilian culture such as relationships being more important than jobs, tendency toward hierarchy, and flexibility were reflected in organizational culture values such as being hierarchical and emphasizing relational networks (Dedoussis, 2004; Garibaldi de Hilal, 2006). It is important for managers to know the relationship between national culture and company culture, because the relationship explains why it would sometimes be challenging to create the same company culture globally.
Key Takeaways
Without a culture emphasizing the importance of integrity, honesty, and trust, the mandatory ethics training programs are often doomed to fail. The values, norms, and beliefs of a company may also be at least partially imposed by the national culture.
Exercises
1. Have you seen examples of ethical or unethical organizational cultures? Describe what you observed.
2. Have you seen examples of national culture affecting an organization’s culture?
3. What advice would you give to someone who was interested in starting a new division of a company in another culture? | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.6%3A_The_Role_of_Ethics_and_National_Culture.txt |
Over time, Newell Company grew to be a diversified manufacturer and marketer of simple household items. In the early 1950s, Newell Company’s business consisted solely of manufactured curtain rods. Since the 1960s, however, the company diversified through acquisitions of businesses for paintbrushes, writing pens, pots and pans, hairbrushes, and the like. Over 90% of its growth is attributed to many small acquisitions and the subsequent restructuring and cost cutting Newell instituted. Usually within a year of the acquisition, Newell would bring in new leadership and install its own financial controller in the acquired unit. Then, three standard sets of controls were introduced: an integrated financial accounting system, a sales and order processing and tracking system, and a flexible manufacturing system. Once these systems were in place, managers were able to control costs by limiting expenses to those previously budgeted. Administration, accounting, and customer-related financial accounting aspects of the acquired business were also consolidated into Newell’s corporate headquarters to further reduce and control costs. However, Newell compensated business managers well for performance. They were paid a bonus based on the profitability of their particular unit—in fact, the firm’s strategy was to achieve profits, not simply growth at the expense of profits. Newell managers could expect a base salary equal to the industry average but could earn bonuses ranging from 35% to 100% based on their rank and unit profitability.
In 1999, Newell acquired Rubbermaid, a U.S.-based manufacturer of flexible plastic products like trash cans, reheatable and freezable food containers, and a broad range of other plastic storage containers designed for home and office use. While Rubbermaid was highly innovative (over 80% of its growth came from internal new product development), it had experienced difficulty controlling costs and was losing ground against powerful customers like Wal-Mart. Newell believed that the market power it wielded with retailers like Wal-Mart would help it turn Rubbermaid’s prospects around. The acquisition deal between these two companies resulted in a single company that was twice as big and became known as Newell Rubbermaid Inc. (NYSE: NWL).
However, early on it became clear that the two businesses were incompatible in terms of differing strategies and corresponding organizational cultures. Newell was a low-cost, high-volume supplier while Rubbermaid was a consumer-oriented innovator that offered premium products. After careful consideration, Newell decided to redefine the newly merged company culture. After two unsuccessful CEO attempts to turn things around, in 2001 Newell Rubbermaid hired Joseph Galli to run the company. He rethought the strategies of both companies and embraced the idea of changing the culture by hiring new kinds of people for a new kind of company. He cut 3,000 jobs throughout the company and made 141 changes at the executive level (vice presidents and above). He introduced new incentive plans and 6-week leadership boot camps to align employees around the new company culture and goals. Did his drastic changes pay off? Since this time and continuing under the new leadership of CEO Mark Ketchum, both revenues and profits are up, and in 2010, Fortune named Newell Rubbermaid the number 7 “Most Admired Company” in the home equipment and furnishings category. This indicates that while the changes he implemented were painful for employees at the time, they did seem to put them on the right track.
Discussion Questions
1. What was Newell’s organizational culture like before acquiring Rubbermaid?
2. Is it fair to fire employees to create a new culture? Why or why not?
3. How did Newell Rubbermaid change its organizational culture?
4. If you were in Joseph Galli’s position in 2001, what would you have done differently or similarly to enact a change in organizational culture? Explain your answer.
5. How important is an organization’s strategy in terms of developing an organizational culture? Explain your answer.
15.8: Conclusion
To summarize, in this chapter we have reviewed what defines organizational culture, how it is created, and how it can be changed. Corporate culture may be the greatest strength or a serious limitation for a company, depending on whether the values held are in line with corporate strategy and environmental demands. Even though changing an organization’s culture is difficult, success of the organization may require the change. Leaders, through their actions, role modeling, rule making, and story creation, serve as instrumental change agents. | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.7%3A_Clash_of_the_Cultures_-_The_Case_of_Newell_Rubbermaid.txt |
Ethical Dilemma
Your company is in the process of hiring a benefits specialist. As a future peer of the person to be hired, you will be one of the interviewers and will talk to all candidates. The company you are working for is a small organization that was acquired. The job advertisement for the position talks about the high level of autonomy that will be available to the job incumbent. Moreover, your manager wants you to sell the position by highlighting the opportunities that come from being a part of a Fortune 500, such as career growth and the opportunity to gain global expertise. The problem is that you do not believe being part of a larger company is such a benefit. In fact, since the company has been acquired by the Fortune 500, the way business is being conducted has changed dramatically. Now there are many rules and regulations that prevent employees from making important decisions autonomously. Moreover, no one from this branch was ever considered for a position in the headquarters or for any global openings. In other words, the picture being painted by the hiring managers and the company’s HR department in the job advertisements is inflated and not realistic. Your manager feels you should sell the job and the company because your competitors are doing the same thing, and being honest might mean losing great candidates. You know that you and your manager will interview several candidates together.
Is this unethical? Why or why not? What would you do before and during the interview to address this dilemma?
Individual Exercise
Impact of HR Practices on Organizational Culture
Below are scenarios of critical decisions you may need to make as a manager. Read each question and select one from each pair of statements. Then, think about the impact your choice would have on the company’s culture.
1. You need to lay off 10 people. Would you
1. lay off the newest 10 people?
2. lay off the 10 people who have the lowest performance evaluations?
2. You need to establish a dress code. Would you
1. ask employees to use their best judgment?
2. create a detailed dress code highlighting what is proper and improper?
3. You need to monitor employees during work hours. Would you
1. not monitor them because they are professionals and you trust them?
2. install a program monitoring their Web usage to ensure that they are spending work hours actually doing work?
4. You need to conduct performance appraisals. Would you
1. evaluate people on the basis of their behaviors?
2. evaluate people on the basis of their results (numerical sales figures and so on)?
5. You need to promote individuals. Would you promote individuals based on
1. seniority?
2. objective performance?
Group Exercise
Recruiting Employees Who Fit the Culture
You are an employee of a local bookstore. The store currently employs 50 employees and is growing. This is a family-owned business, and employees feel a sense of belonging to this company. Business is conducted in an informal manner, there are not many rules, and people feel like they are part of a family. There are many friendships at work, and employees feel that they have a lot of autonomy regarding how they perform their jobs. Customer service is also very important in this company. Employees on the sales floor often chat with their customers about books and recommend readings they might like. Because the company is growing, they will need to hire several employees over the next months. They want to establish recruitment and selection practices so that they can hire people who have a high degree of fit with the current culture.
Working within groups, discuss the effectiveness of the following recruitment tools. Evaluate each recruitment source. Which ones would yield candidates with a high degree of fit with the company’s current culture?
1. Newspaper advertisements
2. Magazine advertisements
3. Radio advertisements
4. Hiring customers
5. Hiring walk-ins
6. Employee referrals
7. Using the state unemployment agency
Next, create interview questions for a person who will work on the sales floor. What types of questions would you ask during the interview to assess person-organization fit? How would you conduct the interview (who would be involved in the interviewing process, where would you conduct the interview, and so on) to maximize the chances of someone with a high person-organization fit? | textbooks/biz/Management/Organizational_Behavior/15%3A_Organizational_Culture/15.9%3A_Exercises.txt |
Learning Outcomes
After reading this chapter, you should be able to answer these questions:
1. What is the meaning of work in a societal context?
2. How do recognize and meet the challenges facing managers in the new millennium?
3. What is expected of a manager?
4. What is the role of the behavioral sciences in management and organizations?
01: Management and Organizational Behavior
EXPLORING MANAGERIAL CAREERS
The Management Challenge at Apple and Google
When Apple was developing iOS 10, a group of 600 engineers was able to debug, develop, and deploy the new programming within two years. Contrarily, Microsoft engineers were able to develop and execute the programming on Vista, but it took considerably longer and was a bigger undertaking, with almost 6,000 engineers at hand. What was the difference?
According to the study conducted by leadership consulting firm Bain & Company, companies like Apple, Google, and Netflix are 40 percent more productive than the average company. Some may think that this is a product of the hiring pool; big companies generally attract a more talented group of recruits. With unique benefits and prowess in the industry, this must be the case. Wrong. Google and Apple have found a way to answer the most fundamental question in management: How do you balance productivity while maintaining employee satisfaction and commitment?
Companies such as Google have approximately the same percentage of “star players” as other companies, but instead of spreading out the talent, they group them dynamically to achieve more throughout the day. This grouping focuses on grouping key players in the most business-critical roles, and is the key to success for the overall company. You’ve heard the saying “You’re only as strong as your weakest link,” and in the case of Apple, there were no weak links, making their productivity extremely high overall. To make matters more complicated, the fast-paced workplace and technology changes, including the diversity of employees and the global marketplace, takes a considerable toll on employee expectations, as do the overall stresses of the business performance. Apple is just one example of a company that figured out one of the pieces to this puzzle, but it is illustrative of what is happening in the workplace all around the globe.
Contemporary managers are witnessing changes in technologies, markets, competition, workforce demographics, employee expectations, and ethical standards. At the heart of these changes is the issue of how to manage people effectively. To attain corporate objectives, each manager must discover how to develop and maintain a workforce that can meet today’s needs while getting ready for tomorrow’s challenges. As a result, managers are asking questions such as:
How can we meet the international competition?
How can we make this organization more effective?
How can we better utilize our human resources?
How can we create a more satisfying and rewarding work environment for all employees?
How can we improve the quality of our products?
How can we improve communication and decision-making processes at work?
How should we evaluate and reward performance?
How can we develop the company leaders of tomorrow?
Questions such as these point to the issue of effective management. That is, what can managers do to improve both organizational and employee performance? Effective management requires an in-depth knowledge of financial management, marketing research and consumer behavior, accounting and control practices, manufacturing and production techniques, and quantitative methods. In addition, however, effective management requires “people skills.” That is, a good manager must be able to motivate his employees, to lead skillfully, to make appropriate and timely decisions, to communicate effectively, to organize work, to deal with organizational politics, and to work to develop both employees and the organization as a whole. These issues constitute the subject of this course. We shall examine principles of the behavioral sciences that can help managers improve both their own skills and abilities and those of their subordinates in order to enhance organizational performance and effectiveness.
As a prelude to this analysis, we begin with a brief look at the natures of work and of management. Contemporary challenges are discussed. Next, we consider a model of organizational behavior that will serve as a guide throughout the study of management and organizational behavior. We begin with an examination of work.
1. What is the meaning of work in a societal context?
The Meaning of Work
What is work, and how do people feel about the work they do? These questions may be answered from several perspectives. Perhaps one of the best ways to understand how people feel about their jobs is simply to ask them. A number of years ago Chicago writer Studs Terkel did exactly that. How did the people he interviewed feel about their jobs? Here are some excerpts from his book Working. (S. Terkel, Working (New York: Pantheon, 1974))
"I’m a dying breed. . . . A laborer. Strictly muscle work . . . pick it up, put it down, pick it up, put it down . . . you can’t take pride any more. You remember when a guy could point to a house he built, how many logs he stacked. He built it and he was proud of it."
—Steelworker [p. 1]
"I changed my opinion of receptionists because now I’m one. It wasn’t the dumb broad at the front desk who took telephone messages. She had to be something else because I thought I was something else. I was fine until there was a press party. We were having a fairly intelligent conversation. Then they asked me what I did. When I told them, they turned around to find other people with name tags. I wasn’t worth bothering with. I wasn’t being rejected because of what I said or the way I talked, but simply because of my function."
—Receptionist [p. 57]
"People ask me what I do, I say, “I drive a garbage truck for the city.” . . . I have nothing to be ashamed of. I put in my eight hours. We make a pretty good salary. I feel I earn my money. . . . My wife’s happy; this is the big thing. She doesn’t look down at me. I think that’s more important than the white-collar guy looking down at me."
—Sanitation Truck Driver [p. 149]
"I’m human. I make mistakes like everybody else. If you want a robot, build machines. If you want human beings, that’s what I am."
—Policeman [p. 186]
"I usually say I’m an accountant. Most people think it’s somebody who sits there with a green eyeshade and his sleeves rolled up with a garter, poring over books, adding things—with glasses. I suppose a certified public accountant has status. It doesn’t mean much to me. Do I like the job or don’t I? That’s important."
—Accountant [p. 351]
"The boss . . . lost his secretary. She got promoted. So they told this old timekeeper she’s to be his secretary-assistant. Oh, she’s in her glory. No more money or anything and she’s doing two jobs all day long. She’s rushin’ and runnin’ all the time, all day. She’s a nervous wreck. And when she asked him to write her up for an award, he refused. That’s her reward for being so faithful, obedient."
—Process Clerk [p. 461]
Examples such as these—and there are many, many more—show how some employees view their jobs and the work they perform. Obviously, some jobs are more meaningful than others, and some individuals are more easily satisfied than others. Some people live to work, while others simply work to live. In any case, people clearly have strong feelings about what they do on the job and about the people with whom they work. In our study of behavior in organizations, we shall examine what people do, what causes them to do it, and how they feel about what they do. As a prelude to this analysis, however, we should first consider the basic unit of analysis in this study: work itself. What is work, and what functions does it serve in today’s society?
Work has a variety of meanings in contemporary society. Often we think of work as paid employment—the exchange of services for money. Although this definition may suffice in a technical sense, it does not adequately describe why work is necessary. Perhaps work could be more meaningfully defined as an activity that produces something of value for other people. This definition broadens the scope of work and emphasizes the social context in which the wage-effort bargain transpires. It clearly recognizes that work has purpose—it is productive. Of course, this is not to say that work is necessarily interesting or rewarding or satisfying. On the contrary, we know that many jobs are dull, repetitive, and stressful. Even so, the activities performed do have utility for society at large. One of the challenges of management is to discover ways of transforming necessary yet distasteful jobs into more meaningful situations that are more satisfying and rewarding for individuals and that still contribute to organizational productivity and effectiveness.
Functions of Work
We know why work activities are important from an organization’s viewpoint. Without work there is no product or service to provide. But why is work important to individuals? What functions does it serve?
First, work serves a rather obvious economic function. In exchange for labor, individuals receive necessary income with which to support themselves and their families. But people work for many reasons beyond simple economic necessity.
Second, work also serves several social functions. The workplace provides opportunities for meeting new people and developing friendships. Many people spend more time at work with their co-workers than they spend at home with their own families.
Third, work also provides a source of social status in the community. One’s occupation is a clue to how one is regarded on the basis of standards of importance prescribed by the community. For instance, in the United States a corporate president is generally accorded greater status than a janitor in the same corporation. In China, on the other hand, great status is ascribed to peasants and people from the working class, whereas managers are not so significantly differentiated from those they manage. In Japan, status is first a function of the company you work for and how well-known it is, and then the position you hold. It is important to note here that the status associated with the work we perform often transcends the boundaries of our organization. A corporate president or a university president may have a great deal of status in the community at large because of his position in the organization. Hence, the work we do can simultaneously represent a source of social differentiation and a source of social integration.
Fourth, work can be an important source of identity and self-esteem and, for some, a means for self- actualization. It provides a sense of purpose for individuals and clarifies their value or contribution to society. As Freud noted long ago, “Work has a greater effect than any other technique of living in binding the individual more closely to reality; in his work he is at least securely attached to a part of reality, the human community.” (S. Freud, Lecture XXXIII, New Introductory Lectures on Psychoanalysis (New York: Norton, 1933), p. 34.) Work contributes to self-esteem in at least two ways. First, it provides individuals with an opportunity to demonstrate competence or mastery over themselves and their environment. Individuals discover that they can actually do something. Second, work reassures individuals that they are carrying out activities that produce something of value to others—that they have something significant to offer. Without this, the individual feels that he has little to contribute and is thus of little value to society.
We clearly can see that work serves several useful purposes from an individual’s standpoint. It provides a degree of economic self-sufficiency, social interchange, social status, self-esteem, and identity. Without this, individuals often experience sensations of powerlessness, meaninglessness, and normlessness—a condition called alienation. In work, individuals have the possibility of finding some meaning in their day-to-day activities—if, of course, their work is sufficiently challenging. When employees are not involved in their jobs because the work is not challenging enough, they usually see no reason to apply themselves, which, of course, jeopardizes productivity and organizational effectiveness. This self-evident truth has given rise to a general concern among managers about declining productivity and work values. In fact, concern about this situation has caused many managers to take a renewed interest in how the behavioral sciences can help them solve many of the problems of people at work.
Concept check
1. Define work.
2. What functions does work serve in modern society? | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/01%3A_Management_and_Organizational_Behavior/1.01%3A_The_Nature_of_Work.txt |
2. How do recognize and meet the challenges facing managers in the new millennium?
It has often been said that the only constant in life is change, and nowhere is this truer than in the workplace. As one recent study concluded, “The United States is a competitive location to the extent that firms operating in the U.S. are able to compete successfully in the global economy while supporting high and rising living standards for the average American. Although the U.S. retains profound competitive strengths—for instance, in higher education and entrepreneurship—those strengths are increasingly threatened by weaknesses in areas such as the tax code, basic education, macroeconomic policies, and regulation.”3 Companies face a variety of changes and challenges that will have a profound impact on organizational dynamics and performance. In fact, in many ways these changes and challenges will determine who will survive and prosper into the next century and who will not. Among these challenges are the following:
The Challenge of International Competition
Until the 1980s, many American firms had little in the way of serious international competition. As a result, there was little incentive to innovate and remain efficient and competitive. Many companies became lazy and lost touch with their customers. This situation changed abruptly as companies in Asia and Western Europe developed more sophisticated products and marketing systems and gained significant market shares in home electronics, automobiles, medical equipment, telecommunications, and shipbuilding, to name a few areas. As a result, American companies lost considerable clout—and profitability. In the 1990s and into the new millennium, the lowering of trade barriers and acceptance of trade agreements like NAFTA led corporations to seek less expensive labor overseas. This led to lower costs and the ability to offer products at more competitive prices, but also led to a drop in manufacturing in industries like steel production, a drop in manufacturing of products like iPhones, and the relocation of call centers from the U.S. to India.
If we examine corporate behavior during the early decades of the new millennium, it is not difficult to see some of the reasons for the demise. In short, many North American firms lost their industrial competitiveness; that is, they lost their capacity to compete effectively in global markets, or they chose to locate in foreign countries as a way to broaden their reach and become more competitive. Consider the following examples:4
During the last year reported, India experienced a 7.5 percent annual growth rate in real GDP while China recorded an increase of 6.7 percent. This is a measure of how economies are progressing. Great Britain, France, and Italy all had close to 2 percent increases. At the same time, however, the United States recorded a 3.8 percent annual increase (and Canada had a 3 percent increase), a larger increase after a lethargic recovery from the 2009 financial crisis.
While traditional jobs have shifted to developing countries, countries like the United States and Canada have transformed their economies by incorporating more technology and automation as well as having a greater proportion of the workforce in the service sectors. It is anticipated that the coming decades will continue to bring disruption to traditional workplace skills that will result in challenging workers to continually evolve their skills.
Finally, the number of products that were invented in the United States but are now primarily manufactured overseas has increased dramatically—advances in technology are helping the United States regain the top spot in world manufacturing. There had been a significant decline in our manufacturing sector as less expensive labor in markets like India and China led companies to locate factories there. Since 2010, however, the United States has risen from fourth place to second and is expected to claim the spot as the leading nation by 2020. The major reasons for this are: advanced manufacturing capabilities require fewer “line workers,” and having products produced near their major markets reduces transport and time to market.
Considering several indicators of the relative competitiveness of economies using seven metrics, the U.S. performs quite well. The seven metrics are institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, and labor market efficiency. When taking all of these factors into consideration (see Table 1.1), the United States ranks very well and has an environment of stable growth. One challenge is that workers will need to be nimble and evolve as new skills arise and will need to embrace continuous education and training as a way of managing their careers.
In terms of organizational survival, herein lies what is perhaps management’s biggest challenge: how to become more competitive. Greater competitiveness requires an understanding of individuals, groups, and entire organizational systems. Throughout this course, we shall see numerous examples of how companies from around the world are meeting the challenges of global competition. Particular emphasis will be placed on management practices in other countries as a point of comparison.
The Challenge of New Technologies
Although it is common to think of “high tech” as applying only to the aerospace and telecommunications industries, advanced technologies can be found throughout most industries. For example, most of us are familiar with the explosive growth in computing. Both hardware and software change so rapidly that it is difficult for many companies to keep up. Personal computers are being replaced by cell phones that are now faster and more powerful than their predecessors. Cloud computing and access to big data and applications transform data into useful information that is increasingly complex and increasingly user-friendly. In November of 1971 Intel launched the first microchip. Today, a modern Intel Skylake processor contains around 1.75 billion transistors—half a million of them would fit on a single transistor from the 4004—and collectively they deliver about 400,000 times as much computing muscle.5 More and more companies are using computer-based systems and equipment—such as e-mail, real-time messaging and file sharing, PDAs, and cell phones—for communications. As a result, the way in which employees and managers communicate and make decisions is changing dramatically, and the importance of educated and knowledgeable workers is increasing rapidly.
Technological changes also can be seen in the increased use of robotics, expert systems, and computer- integrated manufacturing systems, which have changed the way many products are manufactured today. Such changes affect not only production efficiency and product quality but also the nature of jobs. In many industries, the first-line supervisors are disappearing and being replaced by self-managing work teams who assume responsibility for production scheduling, quality control, and even performance appraisals. All of these technological changes require managers who are capable of effectively implementing technological change in the workplace—managers who can adapt to the technological imperative while still maintaining and developing the organization’s human resources. We will examine the role of technology as it relates to organization structure, job design, communication, decision-making, and work-related stress. We will see how some companies successfully adapted to technological change in a way that benefited all parties concerned.
Managing Change
Siri Struggles to Keep Up with the Competition
Many executives struggle in the ongoing competitive landscape of technology. With fast-paced changes, staying one step ahead as well as being able to pivot quickly to respond to action are two critical elements to successful leadership.
Apple Inc. has made its third change in the past year to the leadership of the artificial intelligence voice- assistance system Siri. Due to many factors, including being outperformed by the competition such as Google Assistant and Amazon Inc.’s Alexa, the company decided to pivot and make the change.
These two systems have seen incredible growth in 2018, with the Amazon Echo and Google Home claiming each 34 percent of the market. Now John Giannandrea, formerly Google’s head of search and AI, has joined the Apple team and is tasked with getting on the rival’s level from which he came (Verge 2018).
He will be challenged not only by having a new culture and company to fit into, but also by finding a good balance on how to innovate in his new role, as well as taking the best practices that he has from his previous role and applying it to boost the success of the Apple artificial intelligence. Keys to his success will be how quickly he can adapt to the new role, learning, adapting, and making changes along the way to bring Apple back to the playing field of artificial intelligence.
Question 1: What other challenges would a new executive have coming from a competing company?
Question 2: How much change is too much? What cautions should Apple be concerned about with all of the turnover for this position?
Sources: Nick Statt, “Apple’s New AI Chief Now Oversees Siri, Core ML, and Machine Learning Teams,” The Verge, July 10, 2018, https://www.theverge.com/2018/7/10/1...n-giannandrea- machine-learning-core-ml-teams; Stephen Nellis, “Apple Shifts Responsibility For Siri to Operating System Chief,” Reuters, September 1, 2017, www.reuters.com/article/us-a.../apple-shifts- responsibility-for-siri-to-operating-system-chief-idUSKCN1BC65B; Tripp Mickle, Apple Hands Siri Responsibility to Executive Poached from Google,” The Wall Street Journal, July 10, 2018, www.wsj.com/articles/apple-h...-poached-from- google-1531261759.
The Challenge of Increased Quality
The challenge of industrial competitiveness incorporates several interrelated factors, including an appropriate product mix, manufacturing efficiency, effective cost controls, investment in research and development, and so forth. Not to be ignored in this pursuit is the quest for increased quality control of the products and services offered in the marketplace. Total Quality Management (TQM) is a term often used to describe comprehensive efforts to monitor and improve all aspects of quality within a firm. BMW established and continues to maintain its reputation in part because customers have come to respect its high level of quality. Quality is also a major reason for the success of many Japanese products in North America. Simply put, if companies are going to compete, renewed efforts must be devoted to enhanced quality assurance. This, too, is a management challenge. How can managers get employees to care about the products they produce or the services they offer? In this book, we will consider both the issue of quality control (what is it?) and mechanisms of ensuring improved product quality (how do we get it?).
Moreover, quality control includes several organizational issues. For instance, how can managers get parties who are traditionally independently associated with a product to work together to build a better product? That is, how can they get the design staff, manufacturing engineers, workers, suppliers—and potential customers—to come together and cooperate in developing and manufacturing a superior product? Later in the book we will examine several instances in which such teamwork played a major role in quality improvement.
The Challenge of Employee Motication and Commitment
A major hurdle in the pursuit of industrial competitiveness is the traditional adversarial relationship between management and workers. Whether a company is unionized or not, we see situations in which the average employee simply sees no reason to increase output or to improve the quality of existing outputs. Frequently, the company’s reward system restricts, rather than increases, performance. At other times, rewards encourage employees to increase quantity at the expense of quality. Furthermore, North American companies often view their workforce as a variable expense (in contrast to Japan, where the workforce is viewed as a fixed expense) and lay workers off when they are not needed for short-run activities. As a result, returning the favor, employees see little reason to be committed or loyal to their employers. Turnover and absenteeism rates are often unreasonably high, further eroding performance efficiency and effectiveness.
If companies are to succeed in an increasingly turbulent environment, managers must discover better ways to develop and motivate employees. A company’s human resources often represent its biggest single asset, and failing to properly nurture this asset leads to suboptimal return on an organization’s resources. Part of solving this problem involves knowing and understanding today’s employees. Exhibit 1.2 illustrates the various characteristics employees consider important in their employers. Overall, employees seem to have a fairly positive outlook on their employers. As illustrated in Exhibit 1.3, however, many millennials do not see their tenure lasting for a long period and expect to have another job soon.
This problem is made all the more difficult by the changing nature of occupations. As shown in Table 1.2, we are seeing a sharp increase in the number of technicians, service workers, and sales workers. Growth also can be expected in engineering and managerial positions. These changes require a new look at how such employees are motivated. For example, do we motive an engineer the same way we motivate a sales representative? How do we motivate senior executives as opposed to junior managers? In this book, we shall touch on these issues when we examine approaches to employee motivation. Managers have at their disposal several ways in which to increase employee motivation and performance, and an effective manager learns how and when to use each approach.
The Challenge of Managing a Diverse Workforce
Historically, the American economy has been dominated by white males. They have filled the vast majority of managerial positions and many of the more important blue-collar jobs, becoming skilled craftsmen. Traditionally, women filled lower-paying clerical positions and often left the workforce to raise their families. Minorities of both genders found considerable barriers to entering the labor market at the higher (and higher- paying) levels. Now, things are changing, and the pace of this change is accelerating. Among other changes, the twenty-first century will also bring major changes in terms of workforce demographics. We will see changes in gender, race, and age.
For example, we are seeing a drop in the percentage of white American-born male workers in the workplace.6 Only 15 percent of new entrants into the workforce will be white males.
immigrants of both genders will increase (see Exhibit 1.5). In general, there are more women in positions of responsibility in both the public and private sectors and more opportunities for minorities. Some predict that the coming labor shortage will cause many companies to try to retain older workers for longer periods of time, beyond the traditional retirement age. Additionally, the belief that mentally or physically challenged individuals can play productive roles at work is increasing. Such changes bring opportunities for companies but also potential problems of adjustment if not managed intelligently. We will examine several of these issues when we discuss careers and employee development.
The Challenge of Ethical Behaviour
Finally, the future will bring a renewed concern with maintaining high standards of ethical behavior in business transactions and in the workplace. Many executives and social scientists see unethical behavior as a cancer working on the fabric of society both in business and beyond. Many are concerned that we face a crisis of ethics in the West that is undermining our competitive strength. This crisis involves business, government, customers, and employees. Especially worrisome is unethical behavior among employees at all levels of the organization. For example, recent reports found that employees and vendors accounted for a higher percentage of thefts than did retail customers.7
Ethics in practice
Papa John’s Founder under Fire
As a manager, and leader, the words and actions you take are incredibly important. John Schnatter, founder and chairman of Papa John’s Pizza, found this out the hard way. During a media training conference call, Schnatter used derogatory comments and racial slurs. This call, although intended to be a role-playing exercise, quickly turned into a bad dream for Schnatter. In response to this action, and having admitted the fault, Schnatter was forced to resign as chairman after the local NAACP branch called for his resignation. In addition, the board of directors decided that he would be removed from all marketing, publicity, and pizza boxes, and they took the stance that “Papa John’s is not an individual.
Papa John’s is a pizza company with 120,000 corporate and franchise team members around the world” (Forbes 2018). Shares of stock for Papa John’s soared after the announcement of his resignation, adding \$50 million to Schnatter’s total net worth (CNN Money 2018). The values of the company prevailed through the actions of Schnatter, showcasing that despite making a mistake, the commitment to maintaining an ethical standard is still an important value to Schnatter as well as the company overall.
Question 1: Do you think the actions of the board of directors were enough to uphold Papa John’s reputation?
Question 2: What other actions or types of training should Papa John’s take with their employees in light of the current state of ethical defamation of the company and founder?
Sources: Julie Jargon, “Papa John’s Stock Soars After Chairman’s resignation,” The Wall Street Journal, July 12, 2018, https://www.wsj.com/articles/papa-jo...ion-1531404524; Megan Friedman, “John Schnatter Will No longer Be the Face of Papa John’s,” Delish, July 16, 2018, https://www.delish.com/food-news/a22...ved-marketing/; Noah Kirsch, “Papa John’s Founder Resigns, Gains \$50 Million in a Day,” Forbes, July 13, 2018, www.forbes.com/sites/noahkir...r-resigns-net- worth-rises-50-million-in-a-day/#6aaf997f7123; Jordan Valinsky, “Papa John’s Founder John Schnatter Kicked Out of His Office,” CNN Money, July 16, 2018, money.cnn.com/2018/07/16/news/ companies/papa-johns-office/index.html
In addition, we hear about illegal and unethical behavior on Wall Street—pension scandals in which disreputable executives gamble on risky business ventures with employee retirement funds, companies that expose their workers to hazardous working conditions, and blatant favoritism in hiring and promotion practices. Although such practices occur throughout the world, their presence nonetheless serves to remind us of the challenges we face.
This challenge is especially difficult because standards for what constitutes ethical behavior lie in a “gray zone” where clear-cut right-or-wrong answers may not always exist. For example, if you were a sales representative for an American company abroad and your foreign competitors used bribes to get business, what would you do? In the United States such behavior is illegal, yet it is perfectly acceptable in other countries. What is ethical here? Similarly, in many countries women are systematically discriminated against in the workplace; it is felt that their place is in the home. In the United States, again, this practice is illegal. If you ran an American company in one of these countries, would you hire women in important positions? If you did, your company might be isolated in the larger business community, and you might lose business. If you did not, you might be violating what most Americans believe to be fair business practices.
Effective managers must know how to deal with ethical issues in their everyday work lives; therefore, we will devote parts of this course to the role of ethics in decision-making, the exercise of power, performance appraisals and reward systems, and so forth.
Concept Check
1. Describe the extent and nature of the challenges facing the workplace in the next decade.
2. What can be done about these challenges?
3 Michael E. Porter and Jan V. Rivkin, The Looming Challenge to U.S. Competitiveness, Harvard Business Review, March 2012.
4 World Economic Outlook Database, International Monetary Fund. Retrieved 2018-07-15.
5 “The Future of Computing,” The Economist, March 12, 2015, www.economist.com/leaders/2016/03/ 12/the-future-of-computing.
6 Bureau of labor Statistics, “Labor Force Characteristics by Race and Ethnicity, 2016,” October 2017, https://www.bls.gov/opub/reports/rac.../2016/home.htm.
Table 1.1 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 1.2 Source: Adapted from Deloitte, “2016 Deloitte Millennial Survey,” accessed July 18, 2018, https://www2.deloitte.com/content/da...ec-summary.pdf. (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 1.3 Source: Adapted from Deloitte, “2016 Deloitte Millennial Survey,” accessed July 18, 2018, https://www2.deloitte.com/content/da...ec-summary.pdf. (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 1.4 The winner of the E Pluribus Unum Corporate Leadership Award, Kaiser Permanente focuses on the elimination of racial and ethnic health care disparities and has been in the vanguard of efforts to create innovative, scalable approaches that address the cultural and linguistic needs of patients, and thereby improve overall health care quality and outcomes. Its industry-leading training, testing, and certification process for multilingual staff who serve as health care interpreters, as well as for the physicians who speak with patients in languages other than English, helps to improve the quality of patient care while also capitalizing on the organization’s diverse workforce. (Credit: Ted Eytan/ flickr/ Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0))
Exhibit 1.5 Note: People whose ethnicity is identified as Hispanic or Latino may be of any race. Data may not sum to 100 percent because of rounding. Source: U.S. Bureau of Labor Statistics, Current Population Survey (CPS). (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/01%3A_Management_and_Organizational_Behavior/1.02%3A_The_Changing_Workplace.txt |
3. What is expected of a manager?
If organizations are to be successful in meeting these challenges, management must lead the way. With effective management, contemporary companies can accomplish a great deal toward becoming more competitive in the global environment. On the other hand, ineffective management dooms the organization to mediocrity and sometimes outright failure. Because of this, we turn now to a look at the nature of management. However, we want to point out that even though our focus is on managers, what we discuss is also relevant to the actions of nonmanagers. On the basis of this examination, we should be ready to begin our analysis of what managers can learn from the behavioral sciences to improve their effectiveness in a competitive environment.
What is Management?
Many years ago, Mary Parker Follett defined management as “the art of getting things done through people.” A manager coordinates and oversees the work of others to accomplish ends he could not attain alone. Today this definition has been broadened. Management is generally defined as the process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational objectives. In a broad sense, then, the task of management is to facilitate the organization’s effectiveness and long-term goal attainment by coordinating and efficiently utilizing available resources. Based on this definition, it is clear that the topics of effectively managing individuals, groups, or organizational systems is relevant to anyone who must work with others to accomplish organizational objectives.
Management exists in virtually all goal-seeking organizations, whether they are public or private, large or small, profit-making or not-for-profit, socialist or capitalist. For many, the mark of an excellent company or organization is the quality of its managers.
Managerial Responsibilities
An important question often raised about managers is: What responsibilities do managers have in organizations? According to our definition, managers are involved in planning, organizing, directing, and controlling. Managers have described their responsibilities that can be aggregated into nine major types of activities. These include:
1. Long-range planning. Managers occupying executive positions are frequently involved in strategic planning and development.
2. Controlling. Managers evaluate and take corrective action concerning the allocation and use of human, financial, and material resources.
3. Environmental scanning. Managers must continually watch for changes in the business environment and monitor business indicators such as returns on equity or investment, economic indicators, business cycles, and so forth.
4. Supervision. Managers continually oversee the work of their subordinates.
5. Coordinating. Managers often must coordinate the work of others both inside the work unit and out.
6. Customer relations and marketing. Certain managers are involved in direct contact with customers and potential customers.
7. Community relations. Contact must be maintained and nurtured with representatives from various constituencies outside the company, including state and federal agencies, local civic groups, and suppliers
8. Internal consulting. Some managers make use of their technical expertise to solve internal problems, acting as inside consultants for organizational change and development.
9. Monitoring products and services. Managers get involved in planning, scheduling, and monitoring the design, development, production, and delivery of the organization’s products and services.
As we shall see, not every manager engages in all of these activities. Rather, different managers serve different roles and carry different responsibilities, depending upon where they are in the organizational hierarchy. We will begin by looking at several of the variations in managerial work.
Variations in Managerial Work
Although each manager may have a diverse set of responsibilities, including those mentioned above, the amount of time spent on each activity and the importance of that activity will vary considerably. The two most salient perceptions of a manager are (1) the manager’s level in the organizational hierarchy and (2) the type of department or function for which he is responsible. Let us briefly consider each of these.
Management by Level. We can distinguish three general levels of management: executives, middle management, and first-line management (see Exhibit 1.6). Executive managers are at the top of the hierarchy and are responsible for the entire organization, especially its strategic direction. Middle managers, who are at the middle of the hierarchy, are responsible for major departments and may supervise other lower-level managers. Finally, first-line managers supervise rank-and-file employees and carry out day-to-day activities within departments.
Figure \(1\) shows differences in managerial activities by hierarchical level. Senior executives will devote more of their time to conceptual issues, while first-line managers will concentrate their efforts on technical issues. For example, top managers rate high on such activities as long-range planning, monitoring business indicators, coordinating, and internal consulting. Lower-level managers, by contrast, rate high on supervising because their responsibility is to accomplish tasks through rank-and-file employees. Middle managers rate near the middle for all activities. We can distinguish three types of managerial skills:8
1. Technical skills. Managers must have the ability to use the tools, procedures, and techniques of their special areas. An accountant must have expertise in accounting principles, whereas a production manager must know operations management. These skills are the mechanics of the job.
2. Human relations skills. Human relations skills involve the ability to work with people and understand employee motivation and group processes. These skills allow the manager to become involved with and lead his or her group.
3. Conceptual skills. These skills represent a manager’s ability to organize and analyze information in order to improve organizational performance. They include the ability to see the organization as a whole and to understand how various parts fit together to work as an integrated unit. These skills are required to coordinate the departments and divisions successfully so that the entire organization can pull together.
As shown in Figure \(2\), different levels of these skills are required at different stages of the managerial hierarchy. That is, success in executive positions requires far more conceptual skill and less use of technical skills in most (but not all) situations, whereas first-line managers generally require more technical skills and fewer conceptual skills. Note, however, that human or people skills remain important for success at all three levels in the hierarchy.
Management by Department or Function. In addition to level in the hierarchy, managerial responsibilities also differ with respect to the type of department or function. There are differences found for quality assurance, manufacturing, marketing, accounting and finance, and human resource management departments. For instance, manufacturing department managers will concentrate their efforts on products and services, controlling, and supervising. Marketing managers, in comparison, focus less on planning, coordinating, and consulting but more on customer relations and external contact. Managers in both accounting and human resource management departments rate high on long-range planning, but will spend less time on the organization’s products and service offerings. Managers in accounting and finance are also concerned with controlling and with monitoring performance indicators, while human resource managers provide consulting expertise, coordination, and external contacts. The emphasis on and intensity of managerial activities varies considerably by the department the manager is assigned to.
At a personal level, knowing that the mix of conceptual, human, and technical skills changes over time and that different functional areas require different levels of specific management activities can serve at least two important functions. First, if you choose to become a manager, knowing that the mix of skills changes over time can help you avoid a common complaint that often young employees want to think and act like a CEO before they have mastered being a first-line supervisor. Second, knowing the different mix of management activities by functional area can facilitate your selection of an area or areas that best match your skills and interests.
In many firms, managers are rotated through departments as they move up in the hierarchy. In this way they obtain a well-rounded perspective on the responsibilities of the various departments. In their day-to-day tasks they must emphasize the right activities for their departments and their managerial levels. Knowing what types of activity to emphasize is the core of the manager’s job. In any event, we shall return to this issue when we address the nature of individual differences in the next chapter.
The Twenty-First Century Manager
We discussed above many of the changes and challenges facing organizations in the twenty-first century. Because of changes such as these, the managers and executives of tomorrow will have to change their approaches to their jobs if they are to succeed in meeting the new challenges. In fact, their profiles may even look somewhat different than they often do today. Consider the five skills that Fast Company predicts that successful future managers, compared to the senior manager in the year 2000, will need. The five skills are: the ability to think of new solutions, being comfortable with chaos, an understanding of technology, high emotional intelligence, and the ability to work with people and technology together.
For the past several decades, executive profiles have typically looked like this: He started out in finance with an undergraduate degree in accounting. He methodically worked his way up through the company from the controller’s office in a division, to running that division, to the top job. His military background shows. He is used to giving orders—and to having them obeyed. As head of the philanthropic efforts, he is a big man in his community. However, the first time he traveled overseas on business was as chief executive. Computers, which became ubiquitous during his career, make him nervous.9
Her [or his] undergraduate degree might be in French literature, but she also has a joint MBA/engineering degree. She started in research and was quickly picked out as a potential CEO. She is able to think creatively and thrives in a chaotic environment. She zigzagged from research to marketing to finance. She is comfortable with technology and people, with a high degree of emotional intelligence. She proved valuable in Brazil by turning around a failing joint venture. She speaks multiple languages and is on a first-name basis with commerce ministers in half a dozen countries. Unlike her predecessor’s predecessor, she isn’t a drill sergeant. She is first among equals in a five-person office of the chief executive.
Clearly, the future holds considerable excitement and promise for future managers and executives who are properly prepared to meet the challenges. How do we prepare them? One study suggested that the manager of the future must be able to fill at least the following four roles:10
Global strategist. Executives of the future must understand world markets and think internationally. They must have a capacity to identify unique business opportunities and then move quickly to exploit them.
Master of technology. Executives and managers of the future must be able to get the most out of emerging technologies, whether these technologies are in manufacturing, communications, marketing, or other areas.
Leadership that embraces vulnerability. The successful executive of the future will understand how to cut through red tape to get a job done, how to build bridges with key people from highly divergent backgrounds and points of view, and how to make coalitions and joint ventures work.
Follow-from-the-front motivator. Finally, the executive of tomorrow must understand group dynamics and how to counsel, coach, and command work teams and individuals so they perform at their best. Future organizations will place greater emphasis on teams and coordinated efforts, requiring managers to understand participative management techniques.
Great communicator. To this list of four, we would add that managers of the future must be great communicators. They must be able to communicate effectively with an increasingly diverse set of employees as well as customers, suppliers, and community and government leaders.
Whether these predictions are completely accurate is difficult to know. Suffice it to say that most futurists agree that the organizational world of the twenty-first century will likely resemble, to some extent, the portrait described here. The task for future managers, then, is to attempt to develop these requisite skills to the extent possible so they will be ready for the challenges of the next decade.
8 R. Katz, “Skills of an Effective Administrator,” Harvard Business Review, September-October 1974, pp. 34–56.
9 J. Lindzon, “Five Skills That You’ll Need to Lead the Company of the Future,” Fast Company, May 18, 2017, https://www.fastcompany.com/40420957...-of-the-future; A. Bennett, “Going Global: The Chief Executives in the Year 2000 Are Likely to Have Had Much Foreign Experience,” Wall Street Journal, February 27, 1989, p. A–4.
10 Jacob Morgan, “5 Qualities of the Modern Manager,” Forbes, July 23, 2013, https://www.forbes.com/sites/jacobmo.../#644a2b6a3a0b.
Exhibit 1.6 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 1.7 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/01%3A_Management_and_Organizational_Behavior/1.03%3A_The_Nature_of_Management.txt |
4. What is the role of the behavioral sciences in management and organizations?
A major responsibility—perhaps the major responsibility—of managers is to make organizations operate effectively. Bringing about effective performance, however, is no easy task. As Nadler and Tushman note:
Understanding one individual’s behavior is challenging in and of itself; understanding a group that’s made up of different individuals and comprehending the many relationships among those individuals is even more complex. Imagine, then, the mind-boggling complexity of a large organization made up of thousands of individuals and hundreds of groups with myriad relationships among these individuals and groups.11
Despite this difficulty, however, organizations must be managed. Nadler and Tushman continue:
Ultimately the organization’s work gets done through people, individually or collectively, on their own or in collaboration with technology. Therefore, the management of organizational behavior is central to the management task—a task that involves the capacity to understand the behavior patterns of individuals, groups, and organizations, to predict what behavioral responses will be elicited by various managerial actions, and finally to use this understanding and these predictions to achieve control.12
The work of society is accomplished largely through organizations, and the role of management is to see to it that organizations perform this work. Without it, the wheels of society would soon grind to a halt.
What is Organizational Behaviour?
the focus is on applying what we can learn from the social and behavioral sciences so we can better understand and predict human behavior at work. We examine such behavior on three levels—the individual, the group, and the organization as a whole. In all three cases, we seek to learn more about what causes people—individually or collectively—to behave as they do in organizational settings. What motivates people? What makes some employees leaders and others not? Why do groups often work in opposition to their employer? How do organizations respond to changes in their external environments? How do people communicate and make decisions? Questions such as these constitute the domain of organizational behavior and are the focus of this course.
To a large extent, we can apply what has been learned from psychology, sociology, and cultural anthropology. In addition, we can learn from economics and political science. All of these disciplines have something to say about life in organizations. However, what sets organizational behavior apart is its particular focus on the organization (not the discipline) in organizational analysis (see Exhibit 1.8). Thus, if we wish to examine a problem of employee motivation, for example, we can draw upon economic theories of wage structures in the workplace. At the same time, we can also draw on the psychological theories of motivation and incentives as they relate to work. We can bring in sociological treatments of social forces on behavior, and we can make use of anthropological studies of cultural influences on individual performance. It is this conceptual richness that establishes organizational behavior as a unique applied discipline. And throughout our analyses, we are continually concerned with the implications of what we learn for the quality of working life and organizational performance. We always look for management implications so the managers of the future can develop more humane and more competitive organizations for the future.
For convenience, we often differentiate between micro- and macro-organizational behavior. Micro- organizational behavior is primarily concerned with the behavior of individuals and groups, while macro- organizational behavior (also referred to as organization theory) is concerned with organization-wide issues, such as organization design and the relations between an organization and its environment. Although there are times when this distinction is helpful, it is always important to remember that in most instances we learn the most when we take a comprehensive view of organizational behavior and integrate these two perspectives. That is, issues such as organization structure can influence employee motivation. Hence, by keeping these two realms separate we lose valuable information that can help us better understand how to manage organizations.
Building Blocks of Organizations
Understanding the behavior of people at work is fundamental to the effective management of an organization. Obviously, a number of factors come together to determine this behavior and its organizational consequences. In order to understand the origins and characteristics of these factors, it is necessary to have a model that organizes and simplifies the variables involved. We offer such a model here in the hope that it will bring some order to the study of this subject. The model can be considered in two parts (see Exhibit 1.10).
The first part of the model is the simple recognition of organizational inputs and outcomes. That is, organizations receive inputs from the external environment in the form of capital, raw materials, labor, community or government support, and so forth. In addition, organizations experience or produce certain outcomes, including (1) organizational goal attainment, (2) group performance and effectiveness, and (3) individual performance and effectiveness. Thus, organizations and the people in them exist in a constant state of flux, receiving and transforming inputs from the environment and returning those transformed inputs in the form of finished goods and services, return on stockholders’ equity, salaries that are paid to employees, and so forth. It is, in short, a dynamic system.
The second aspect of the model is the organization itself and all of its parts. One way to understand the complexity of organizations is to think of them simply as a set of building blocks, including:
Individuals and groups. Organizations are collectives of individuals and groups working to pursue common objectives. Their members come from various backgrounds and have varying abilities and skills, differing motivational levels, and different ambitions. Within the organizational context, these people must communicate, make decisions, show leadership, and handle power and organizational politics as they carry out their assigned activities.
Tasks and technology. In addition to variations among individuals and groups, we must recognize variations in the technology of the workplace. That is, how does the work actually get done? Technology includes both the actual design of jobs and the tools and techniques used in manufacture (e.g., robotics and expert systems).
Organization design. Putting together these factors—individuals and groups and tasks—is the subject of organization design. That is, how do we structure an organization so it effectively coordinates and controls employee behavior to facilitate performance?
Organizational processes. In addition to people, machines, and structure, we must recognize a series of organizational processes, such as leadership, communication, decision-making, power and politics, and so forth. The processes largely determine the nature and quality of interpersonal and intergroup relations within the workplace and, as such, influence ultimate organizational performance.
Management. Finally, the glue that holds these building blocks together is the character of management. Throughout this text, we shall see numerous examples of how the degree of managerial effectiveness and prowess have determined the success or failure of a venture. We shall take a managerial view throughout our survey of organizational behavior.
There have been many attempts to provide a differentiation between leadership and management over time. While they are not the same thing, they are necessarily linked, and complementary. Any effort to separate the two is likely to cause more problems than it solves and as business evolved the content of leadership and management has changed. The emergence of the “knowledge worker,” and the profound differences that this causes the way business is organized. With the rise of the knowledge worker, one does not ‘manage’ people, and instead the task is to lead people and the goal is to make productive the specific strengths and knowledge of every individual.
These five variables, then, will constitute the primary ingredients of this book. We shall proceed sequentially, beginning with individual behavior and moving to group and intergroup behavior and finally to organization design and structure. On the basis of this, we will turn to a consideration of several of the more important organizational processes. Finally, we will look to the future and examine ways that organizations can continue to develop and improve their workforces and the organization as a whole. Throughout, the roles of technology and management will be considered. Also, throughout, we will blend theory with research and practice.
Concept Check
1. Discuss the role of management in the larger societal context.
2. What do you think the managers of the future will be like?
3. Identify what you think are the critical issues facing contemporary management. Explain.
11 D. Nadler and M. Tushman, “A Model for Diagnosing Organizational Behavior,” Organizational Dynamics, 1980, p. 35.
12 Ibid.
Exhibit 1.8 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 1.9 Xinyu Liu was hired as the studio as a designer at Invo, a Massachusetts-based firm. Prior to joining Invo, she was a user experience researcher at Samsung, where she investigated how to apply future technologies in everyday living. Changing behavior for good was a key component of the R&D work, leveraging invisible sensing tech, devising emotional effects, and crafting just-in-time graphic communication. Her wide-ranging skills, from analyzing social behavior to 3D modeling to electronics to UI design, are well-suited for the multi- domain projects at Invo. As part of the employee selection process, the hiring managers at Invo needed to recognize that their employees come from various backgrounds and have varying abilities and skills, differing motivational levels, and different ambitions. Within the organizational context, they needed to consider how Xinyu would fit on the team in the areas of communication, decision-making, and leadership, and how she would handle power and organizational politics as she carried out her responsibilities. (Credit: Juhan Sonin/ flickr/ Attribution 2.0 Generic (CC BY 2.0))
Exhibit 1.10 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/01%3A_Management_and_Organizational_Behavior/1.04%3A_A_Model_of_Organizational_Behavior_and_Management.txt |
Alienation The experience of being isolated from a group or an activity to which one should belong, or in which one should be involved.
Ethics Moral principles that govern a person's behavior or the conducting of an activity.
Executive managers Generally, a team of individuals at the highest level of management of an organization.
First-line management The level of management directly managing nonmanagerial employees.
Industrial competitiveness The ability to provide products and services more effectively and efficiently than competitors.
Long-range planning A process of setting goals that outlines the path for the company's future. Macro-organizational behavior Macro-organizational behavioral research steps back and looks at an organization as a whole.
Management The process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational objectives.
Micro-organizational behavior Micro-organizational behavioral studies focus on individual and group dynamics within an organization.
Middle management The managers in an organization at a level just below that of senior executives.
Organization theory The study of organization designs and organization structures, relationship of organizations with their external environment, and the behavior of managers and workers within organizations.
Organizational behavior The study of the actions and attitudes of individuals and groups toward one another and toward the organization as a whole.
Organizational design A formal methodology that identifies dysfunctional aspects of workflow, procedures, structures and systems, and then realigns them to fit current business goals and develops plans to implement change.
Organizational processes The activities that establish the business goals of the organization and develop processes, product and resource assets that when used will help to achieve business goals. Technology The application of scientific knowledge for practical purposes.
Theory A set of principles on which the practice of an activity is based.
Work All activity involving mental or physical effort done in order to achieve a purpose or result.
Summary of Learning Outcomes
1.1 The Nature of Work
1. What is the meaning of work in a societal context?
Work will almost inevitably be a large part of your life. An understanding of organizational behavior will aid you in making that part of life more productive and enjoyable for yourself as well those you are in a position to influence. In this course, our objective is to provide sound and relevant insights concerning individuals, groups, and overall organizational systems that will be helpful to you not just as an executive or CEO but also when you are starting your career as an individual contributor or subordinate.
1.2 The Changing Workplace
2. How do recognize and meet the challenges facing managers in the new millennium?
The fundamental challenge facing managers is how to achieve performance goals while simultaneously providing for employee welfare and satisfaction. Work may be defined as an activity that produces something of value for other people. Work serves several functions, including economic, social, status, self-esteem, and self-actualization. As managers in today’s environment, several challenges arise, including international competition, new technologies, the need for increased quality, employee motivation and commitment, a diverse workforce, and ethical behavior. These challenges must be met by managers concerned about survival and competitiveness in the future.
1.3 The Nature of Management
3. What is expected of a manager?
Management is the process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational goals. Managerial responsibilities include long- range planning, controlling, environmental scanning, supervision, coordination, customer relations, community relations, internal consulting, and monitoring of products and services. These responsibilities differ by level in the organizational hierarchy and by department or function. The twenty-first-century manager will differ from most current managers in four ways. In essence, he or she will be a global strategist, a master of technology, a good politician, and a premier leader-motivator.
1.4 A Model of Organizational Behavior and Management
4. What is the role of the behavioral sciences in management and organizations?
Organizational behavior is the study of people in organizations. It can be studied on a micro level, which focuses on individual or group behavior, or on a macro level, which focuses on organization-wide actions and events. A model of organizational behavior is presented, consisting of five building blocks: individuals and groups, tasks and technology, organization design, organizational processes, and management.
Chapter Review Questions
1. Define work.
2. What functions does work serve in modern society?
3. Describe the extent and nature of the challenges facing the workplace in the next decade.
4. What can be done about these challenges?
5. Define management.
6. How does the nature of management change according to one’s level and function in the organization?
7. Discuss the role of management in the larger societal context. What do you think the managers of the
future will be like?
8. Identify what you think are the critical issues facing contemporary management. Explain.
Critical Thinking Case
New Management Challenges for the New Age
Today’s news is littered with scandals, new allegations of sexual assault, and tragedy. Since 2017 and the #metoo movement, stemming from the Harvey Weinstein scandal, more and more public figures have been put into the spotlight to defend themselves against allegations from women around the globe.
Not only publicly, but privately in companies around the world, there have been firings and investigations into misconduct from coworkers, managers, and CEOs. It is a relevant topic that is getting long-overdue publicity and encouraging more men and women to come forward to discuss openly rather than hide the events and injustices of the past. Other events showcase the tumultuous and on-edge society we are living in, such as the Charlottesville, VA, attack that left one dead and 19 injured when a person drove a car through a crowd of protestors during a white nationalist gathering.
With unanticipated events on a daily business, it is important for companies to take a stand against racial hatred and harassment of any kind, and to have firm policies when such events occur. Take Netflix, for example, who in July 2018 fired their chief communications officer for saying the “N-word” in full form. This event occurred during an internal meeting in which the speaker was not directing the slur at anyone specific, but claimed it was being made as an emphatic point about offensive words in comedy programming. The “Netflix way,” the culture that is built around radical candor and transparency, was put to the test during this occurrence.
The offender, Jonathan Friedland, attempted to apologize for his misdeed, hoping it would fade away and his apology would be accepted. However, it didn’t work that way; instead, the anger was palpable between coworkers and eventually led to the firing of Friedland after a few months of inaction.
Netflixers are given a high level of freedom and responsibility within their “Netflix way” culture. Blunt feedback is encouraged, and trust and discretion are the ultimate gatekeeper, as employees have access to sensitive information and are ultimately trusted for how they expense items and take vacation time.
In the insanely fast-paced streaming-services industry, it is hard to keep this culture at a premium, but it is imperative for the success of the company overall. “As you scale a company to become bigger and bigger, how do you scale that kind of culture?” said Colin Estep, a former senior engineer who left voluntarily in 2016. “I don’t know that we ever had a good answer.”
In order to keep up, sometimes the company is seen as harsh in their tactics to keep the best of the best. “I think we’re transparent to a fault in our culture and that can come across as cutthroat,” said Walta Nemariam, an employee in talent acquisition at Netflix.
Netflix has stayed true to their cultural values despite the pressures and sometimes negative connotations associated with this “cutthroat” environment. Their ability to remain agile, while displaying no tolerance for societal injustices, puts them at the forefront of new-age companies. It is a difficult pace to stay in line with, but it seems that they are keeping in stride and remaining true to who they are, for now.
Questions:
1. How has the current cultural environment of our country shaped the way that companies are looking at their own corporate cultural standards?
2. What are the potential downfalls and positive influences of the “Netflix way”?
3. How does Netflix’s internal culture negatively or positively affect their ability to stay competitive and deliver cutting-edge content?
Sources: B. Stelter, “The Weinstein Effect: Harvey Weinstein scandal sparks movements in Hollywood and beyond,” CNN Business, October 20, 2017, money.cnn.com/2017/10/20/med...effect-harvey- weinstein/; L. Hertzler, “Talking #MeToo, one year after bombshell Weinstein allegations,” Penn Today, October 30, 2018, https://penntoday.upenn.edu/news/tal...one-year-later; S. Ramachandaran and J. Flint, “At Netflix, Radical Transparency and Blunt Firings Unsettle the Ranks,” Wall Street Journal, October 25, 2018, www.wsj.com/articles/at-netf...-unsettle-the- ranks-1540497174. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/01%3A_Management_and_Organizational_Behavior/1.05%3A_Glossary.txt |
Learning Outcomes
After reading this chapter, you should be able to answer these questions:
1. How do managers and organizations appropriately select individuals for particular jobs?
2. How do people with different abilities, skills, and personalities build effective work teams?
3. How do managers and employees deal effectively with individual differences in the workplace?
4. How can organizations foster a work environment that allows employees an opportunity to develop and
grow?
5. How do managers know how to get the best from each employee?
6. What is the role of ethical behavior in managerial actions?
7. How do you manage and do business with people from different cultures?
02: Individual and Cultural Differences
exploring managerial careers
Building Back Trust on the Back End
One institution that has been around for generations is banking. However, many individuals have lost faith in the banking system, and who’s to blame them? Big banks have let the general consumer down with security breaches and countless stories of scandals. One glaring example is Wells Fargo & Co., who are still recovering their brand from their admission of creating nearly two million accounts for customers without their permission. But this problem is not new. The approach to bolstering this trust factor is, however, taking on a new perspective with some quick adaptation and managerial foresight.
One CEO, Cathie Mahon, chief executive officer of the National Federation of Community Development Credit Unions, is not taking the disparities between credit unions and big banks lying down. Credit unions have always operated differently from big banks, and one key factor is that they are nonprofit while their big-bank counterparts are for-profit enterprises. This also can mean that they offer higher interest rates on deposits due to their size. Mahon has begun a keen undertaking to educate and empower low-income residents about financial resources. Her most recent endeavor is to provide a platform called CU Impact that keeps customers more informed about their balances, creates more trustworthy auto-pay features, more information delivered at ATMs as well. The improvements to the back-end reliability within the credit union system sustain the small, community feel of the credit union, while providing powerful, trustworthy systems that restore faith in their business. Her willingness to embrace technology and embrace differences of customers, employees, and the company structure overall made her the key to success for the future of their business.
Sources: Cohen, Arianne, “The CEO Who’s Leveling the Playing Field Between Credit Unions and Big Banks,” Bloomberg Businessweek, July 9, 2018, https://www.bloomberg.com/news/articles/2018-07-09/ the-ceo-who-s-leveling-the-playing-field-between-credit-unions-and-big-banks; Koren, James Rufus, “It’s been a year since the Wells Fargo scandal broke—and new problems are still surfacing,” Los Angeles Times, September 8, 2017, www.latimes.com/business/la-f...lls-fargo-one- year-20170908-story.html.
1. How do managers and organizations appropriately select individuals for particular jobs?
As we can see in the example of Cathie Mahon, our unique personal characteristics can have a dramatic influence on both individual behavior and the behavior of those around us. To succeed in any managerial position, it is necessary to have the appropriate skills and abilities for the situation. Moreover, when selecting subordinates, managers have similar concerns. In short, individual differences can play a major role in how well someone performs on the job. They can even influence whether someone gets the job in the first place. Because of this, we begin this section with a look at individual differences in the workplace.
Several factors can be identified that influence employee behavior and performance. One early model of job performance argued simply that performance was largely a function of ability and motivation. 1 Using this simple model as a guide, we can divide our discussion of individual factors in performance into two categories: those that influence our capacity to respond and those that influence our will or desire to respond. The first category includes such factors as mental and physical abilities, personality traits, perceptual capabilities, and stress-tolerance levels. The second category includes those variables dealing with employee motivation. Both of these sets of factors are discussed in this part of the book as a prelude to more complex analyses of overall organizational performance.
Specifically, we begin our analysis in this chapter with a look at individual differences, including employee abilities and skills, personality variables, and work values. We will also examine the nature of culture and cultural diversity as it affects behavior in organizations both at home and abroad. Later we look at perception and job attitudes, and we review basic learning and reinforcement techniques. The basic theories of employee motivation are then introduced, including the concept of employee needs. More complex cognitive models of motivation will be examined, and finally, we review contemporary approaches to performance appraisals and reward systems in organizations. All told, this coverage aims to introduce the reader to the more salient aspects of individual behavior as they relate to organizational behavior and effectiveness.
concept check
1. What are the various abilities and skills that should be considered when hiring employees?
2. How should the personality differences and work values be taken into account when selecting employees?
3. What is the role of cultural diversity in selecting employees? | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.01%3A_Individual_and_Cultural_Factors_in_Employee_Performance.txt |
2. How do people with different abilities, skills, and personalities build effective work teams?
We begin with a look at employee abilities and skills. Abilities and skills generally represent those physical and intellectual characteristics that are relatively stable over time and that help determine an employee’s capability to respond. Recognizing them is important in understanding organizational behavior, because they often bound an employee’s ability to do the job. For example, if a clerk-typist simply does not have the manual dexterity to master the fundamentals of typing or keyboard entry, her performance will likely suffer. Similarly, a sales representative who has a hard time with simple numerical calculations will probably not do well on the job.
Mental Abilities
It is possible to divide our discussion of abilities and skills into two sections: mental abilities and physical abilities. Mental abilities are an individual’s intellectual capabilities and are closely linked to how a person makes decisions and processes information. Included here are such factors as verbal comprehension, inductive reasoning, and memory. A summary is shown in Table 2.1.
From a managerial standpoint, a key aspect of mental ability is cognitive complexity. Cognitive complexity represents a person’s capacity to acquire and sort through various pieces of information from the environment and organize them in such a way that they make sense. People with high cognitive complexity tend to use more information—and to see the relationships between aspects of this information—than people with low cognitive complexity. For example, if a manager was assigned a particular problem, would she have the capacity to break the problem down into its various facets and understand how these various facets relate to one another? A manager with low cognitive complexity would tend to see only one or two salient aspects of the problem, whereas a manager with higher cognitive complexity would understand more of the nuances and subtleties of the problem as they relate to each other and to other problems.
People with low cognitive complexity typically exhibit the following characteristics:2
They tend to be categorical and stereotypical. Cognitive structures that depend upon simple fixed rules of
integration tend to reduce the possibility of thinking in terms of degrees.
Internal conflict appears to be minimized with simple structures. Since few alternative relationships are generated, closure is quick.
Behavior is apparently anchored in external conditions. There is less personal contribution in simple structures.
Fewer rules cover a wider range of phenomena. There is less distinction between separate situations.
On the other hand, people with high levels of cognitive complexity are typically characterized by the following:3
Their cognitive system is less deterministic. Numerous alternative relationships are generated and considered.
The environment is tracked in numerous ways. There is less compartmentalization of the environment.
The individual utilizes more internal processes. The self as an individual operates on the process.
Research on cognitive complexity has focused on two important areas from a managerial standpoint:
leadership style and decision-making. In the area of leadership, it has been found that managers rated high on cognitive complexity are better able to handle complex situations, such as rapid changes in the external environment. Moreover, such managers also tend to use more resources and information when solving a problem and tend to be somewhat more considerate and consultative in their approach to managing their subordinates.4 In the area of decision-making, fairly consistent findings show that individuals with highcognitive complexity (1) seek out more information for a decision, (2) actually process or use more information, (3) are better able to integrate discrepant information, (4) consider a greater number of possible solutions to the problem, and (5) employ more complex decision strategies than individuals with low cognitive complexity.5
Physical Abilities
The second set of variables relates to someone’s physical abilities. Included here are both basic physical abilities (for example, strength) and psychomotor abilities (such as manual dexterity, eye-hand coordination, and manipulation skills). These factors are summarized in Table 2.2.6 Considering both mental and physical abilities helps one understand the behavior of people at work and how they can be better managed. The recognition of such abilities—and the recognition that people have different abilities—has clear implications for employee recruitment and selection decisions; it brings into focus the importance of matching people to jobs. For example, Florida Power has a 16-hour selection process that involves 12 performance tests. Over the test period of a couple of years, 640 individuals applied for “lineperson” jobs. Of these, 259 were hired. As a consequence of the new performance tests and selection process, turnover went from 43 percent to 4.5 percent, and the program saved net \$1 million.7 In addition to selection, knowledge of job requirements and individual differences is also useful in evaluating training and development needs. Because human resources are important to management, it is imperative that managers become more familiar with the basic characteristics of their people.
concept check
1. Why should abilities and skills be taken into account when selecting employees?
2. Describe the components of mental abilities, cognitive complexity, physical ability, and psychomotor abilities.
2 R.J. Ebert and T.R. Mitchell, Organization Decision Processes: Concepts and Analysis (New York: Crane, Russak, 1975), p. 81.
3 Ibid.
4 T.R. Mitchell, “Cognitive Complexity and Leadership Style,” Journal of Personality and Social Psychology, 1970, 16, pp. 166–174.
5 H. M. Schroder, M. H. Driver, and S. Streufert, Human Information Processing (New York: Holt, Rinehart and Winston, 1967).
6 E. J. McCormick and J. Tiffin, Industrial Psychology (Englewood Cliffs, N.J.: Prentice-Hall, 1976).
7 Dale Feuer & Chris Lee. 1988. The Kaizen Connection: How Companies Pick Tomorrow’s Workers. Training. May, 23–35.
Table 2.1 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Table 2.2 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.02%3A_Employee_Abilities_and_Skills.txt |
3. How do managers and employees deal effectively with individual differences in the workplace?
The second individual difference variable deals with the concept of personality. We often hear people use and misuse the term personality. For example, we hear that someone has a “nice” personality. For our purposes, we will examine the term from a psychological standpoint as it relates to behavior and performance in the workplace. To do this, let us start with a more precise definition of the concept.
Definition of Personality
Personality can be defined in many ways. Perhaps one of the more useful definitions for purposes of organizational analysis is offered by Salvatore Maddi, who defines personality as follows:
“. . . a stable set of characteristics and tendencies that determine those communalities and differences in the psychological behavior (thoughts, feelings, and actions) of people that have continuity in time and that may not be easily understood as the sole result of the social and biological pressures of the moment.”8
Several aspects of this definition should be noted. First, personality is best understood as a constellation of interacting characteristics; it is necessary to look at the whole person when attempting to understand the phenomenon and its effects on subsequent behavior. Second, various dimensions of personality are relatively stable across time. Although changes—especially evolutionary ones—can occur, seldom do we see major changes in the personality of a normal individual. And third, the study of personality emphasizes both similarities and differences across people. This is important for managers to recognize as they attempt to formulate actions designed to enhance performance and employee well-being.
Influences on Personality Development
Early research on personality development focused on the issue of whether heredity or environment determined an individual’s personality. Although a few researchers are still concerned with this issue, most contemporary psychologists now feel this debate is fruitless. As noted long ago by Kluckhohn and Murray:
“The two sets of determinants can rarely be completely disentangled once the environment has begun to operate. The pertinent questions are: (1) which of the various genetic potentialities will be actualized as a consequence of a particular series of life-events in a given physical, social, and cultural environment? and (2) what limits to the development of this personality are set by genetic constitution?”9
In other words, if the individual is viewed from the whole-person perspective, the search for the determinants of personal traits focuses on both heredity and environment as well as the interaction between the two over time. In this regard, five major categories of determinants of personal traits may be identified: physiological, cultural, family and social group, role, and situational determinants.
Physiological Determinants. Physiological determinants include factors such as stature, health, and sex that often act as constraints on personal growth and development. For instance, tall people often tend to become more domineering and self-confident than shorter people. Traditional sex-role stereotyping has served to channel males and females into different developmental patterns. For example, males have been trained to be more assertive and females more passive.
Cultural Determinants. Because of the central role of culture in the survival of a society, there is great emphasis on instilling cultural norms and values in children growing up. For instance, in capitalist societies, where individual responsibility is highly prized, emphasis is placed on developing achievement-oriented, independent, self-reliant people, whereas in socialistic societies, emphasis is placed on developing cooperative, group-oriented individuals who place the welfare of the whole society ahead of individual needs. Cultural determinants affect personal traits. As Mussen notes, “The child’s cultural group defines the range of experiments and situations he is likely to encounter and the values and personality characteristics that will be reinforced and hence learned.”10 Consider, for example, how Japanese society develops its world-renowned work ethic.
Family and Social Group Determinants. Perhaps the most important influences on personal development are family and social group determinants. For instance, it has been found that children who grow up in democratic homes tend to be more stable, less argumentative, more socially successful, and more sensitive to praise or blame than those who grow up in authoritarian homes.11 One's immediate family and peers contribute significantly to the socialization process, influencing how individuals think and behave through an intricate system of rewards and penalties.
Role Determinants. People are assigned various roles very early in life because of factors such as sex, socioeconomic background, and race. As one grows older, other factors, such as age and occupation, influence the roles we are expected to play. Such role determinants often limit our personal growth and development as individuals and significantly control acceptable behavior patterns.
Situational Determinants. Finally, personal development can be influenced by situational determinants. These are factors that are often unpredictable, such as a divorce or death in the family. For instance, James Abegglen studied 20 successful male executives who had risen from lower-class childhoods and discovered that in three-fourths of the cases these executives had experienced some form of severe separation trauma from their fathers. Their fathers (and role models) had either died, been seriously ill, or had serious financial setbacks. Abegglen hypothesized that the sons’ negative identification with their fathers’ plights represented a major motivational force for achievement and success.12
concept check
1. What is the role of personality and personality development in the workplace?
8 S.R. Maddi, Personality Theories: A Comparative Analysis (Homewood, III.: Dorsey, 1980), p. 10.
9. C. Kluckhohn and H. Murray, Personality in Society and Nature, (New York: Knopf, 1953).
10. P.H. Mussen, The Psychological Development of the Child (Englewood Cliffs, N.J.: Prentice-Hall, 1963).
11. Ibid.
12. J. C. Abegglen, “Personality Factors in Social Mobility: A Study of Occupationally Mobile Businessmen,” Genetic Psychology Monographs, August 1958, pp. 101–159. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.03%3A_Personality-_An_Introduction.txt |
4. How can organizations foster a work environment that allows employees an opportunity to develop and grow?
Personality theories that utilize the trait approach have proven popular among investigators of employee behavior in organizations. There are several reasons for this. To begin with, trait theories focus largely on the normal, healthy adult, in contrast to psychoanalytic and other personality theories that focus largely on abnormal behavior. Trait theories identify several characteristics that describe people. Allport insisted that our understanding of individual behavior could progress only by breaking behavior patterns down into a series of elements (traits).13 "The only thing you can do about a total personality is to send flowers to it," he once said. Hence, in the study of people at work, we may discuss an employee’s dependability, emotional stability, or cognitive complexity. These traits, when taken together, form a large mosaic that provides insight into individuals. A third reason for the popularity of trait theories in the study of organizational behavior is that the traits that are identified are measurable and tend to remain relatively stable over time. It is much easier to make comparisons among employees using these tangible qualities rather than the somewhat mystical psychoanalytic theories or the highly abstract and volatile self theories.
The number of traits people are believed to exhibit varies according to which theory we employ. In an exhaustive search, over 17,000 can be identified. Obviously, this number is so large as to make any reasonable analysis of the effects of personality in the workplace impossible. In order for us to make any sense out of this, it is necessary for us to concentrate on a small number of personality variables that have a direct impact on work behavior. If we do this, we can identify six traits that seem to be relatively important for our purposes here. It will be noted that some of these traits (for example, self-esteem or locus of control) have to do with how we see ourselves, whereas other traits (for example, introversion-extroversion or dependability) have to do with how we interact with others. Moreover, these traits are largely influenced by one’s personality development and, in turn, influence actual attitudes and behaviors at work, as shown in Exhibit 2.2.
Self-Esteem
One trait that has emerged recently as a key variable in determining work behavior and effectiveness is an employee’s self-esteem. Self-esteem can be defined as one’s opinion or belief about one’s self and self-worth. It is how we see ourselves as individuals. Do we have confidence in ourselves? Do we think we are successful? Attractive? Worthy of others’ respect or friendship?
Research has shown that high self-esteem in school-age children enhances assertiveness, independence, and creativity. People with high self-esteem often find it easier to give and receive affection, set higher goals for personal achievement, and exert energy to try to attain goals set for them. Moreover, individuals with high self-esteem will be more likely to seek higher-status occupations and will take more risks in the job search. For example, one study found that students possessing higher self-esteem were more highly rated by college recruiters, received more job offers, and were more satisfied with their job search than students with low self-esteem.14 Hence, personality traits such as this one can affect your job and career even before you begin work!
Locus of Control
Locus of control refers to the tendency among individuals to attribute the events affecting their lives either to their own actions or to external forces; it is a measure of how much you think you control your own destiny. Two types of individual are identified. People with an internal locus of control tend to attribute their successes—and failures—to their own abilities and efforts. Hence, a student would give herself credit for passing an examination; likewise, she would accept blame for failing.
In contrast, people with an external locus of control tend to attribute things that happen to them as being caused by someone or something else. They give themselves neither credit nor blame. Hence, passing an exam may be dismissed by saying it was “too easy,” whereas failing may be excused by convincing one’s self that the exam was “unfair.”
If you want to determine your own locus of control, fill out the self-assessment in the end-of-chapter assignments. This is an abbreviated and adapted version of the scale originally developed by Rotter. When you have finished, refer to that reference for scoring procedures.
Recent research on locus of control suggests that people with an internal locus of control (1) exhibit greater work motivation, (2) have stronger expectations that effort will lead to actual high job performance, (3) perform better on tasks requiring learning or problem-solving, (4) typically receive higher salaries and salary increases, and (5) exhibit less job-related anxiety than externals.15 Locus of control has numerous implications for management. For example, consider what would happen if you placed an “internal” under tight supervision or an “external” under loose supervision. The results probably would not be very positive. Or what would happen if you placed both internals and externals on a merit-based compensation plan? Who would likely perform better? Who might perform better under a piece-rate system?
Introversion-Extroversion
The third personality dimension we should consider focuses on the extent to which people tend to be shy and retiring or socially gregarious. Introverts (introversion) tend to focus their energies inwardly and have a greater sensitivity to abstract feelings, whereas extroverts (extroversion) direct more of their attention to other people, objects, and events. Research evidence suggests that both types of people have a role to play in organizations.16 Extroverts more often succeed in first-line management roles, where only superficial "people skills” are required; they also do better in field assignments—for example, as sales representatives. Introverts, on the other hand, tend to succeed in positions requiring more reflection, analysis, and sensitivity to people’s inner feelings and qualities. Such positions are included in a variety of departments within organizations, such as accounting, personnel, and computer operations. In view of the complex nature of modern organizations, both types of individuals are clearly needed.
Authoritarianism and Dogmatism
Authoritarianism refers to an individual’s orientation toward authority. More specifically, an authoritarian orientation is generally characterized by an overriding conviction that it is right and proper for there to be clear status and power differences among people.17 According to T.W. Adorno, a high authoritarian is typically (1) demanding, directive, and controlling of her subordinates; (2) submissive and deferential toward superiors;
(3) intellectually rigid; (4) fearful of social change; (5) highly judgmental and categorical in reactions to others; (6) distrustful; and (7) hostile in response to restraint. Nonauthoritarians, on the other hand, generally believe that power and status differences should be minimized, that social change can be constructive, and that people should be more accepting and less judgmental of others.
In the workplace, the consequences of these differences can be tremendous. Research has shown, for example, that employees who are high in authoritarianism often perform better under rigid supervisory control, whereas those rated lower on this characteristic perform better under more participative supervision.18 Can you think of other consequences that might result from these differences?
Related to this authoritarianism is the trait of dogmatism. Dogmatism refers to a particular cognitive style that is characterized by closed-mindedness and inflexibility.19 The dimension has particularly profound implications for managerial decision-making; it is found that dogmatic managers tend to make decisions quickly, based on only limited information and with a high degree of confidence in the correctness of their decisions.20 Do you know managers (or professors) who tend to be dogmatic? How does this behavior affect those around them?
Dependability
Finally, people can be differentiated with respect to their behavioral consistency, or dependability. Individuals who are seen as self-reliant, responsible, consistent, and dependable are typically considered to be desirable colleagues or group members who will cooperate and work steadfastly toward group goals.21 Personnel managers often seek a wide array of information concerning dependability before hiring job applicants. Even so, contemporary managers often complain that many of today’s workers simply lack the feeling of personal responsibility necessary for efficient operations. Whether this is a result of the personal failings of the individuals or a lack of proper motivation by superiors remains to be determined.
Obviously, personality factors such as those discussed here can play a major role in determining work behavior both on the shop floor and in the executive suite. A good example of this can be seen in the events leading up to the demise of one of America’s largest and oldest architectural firms. Observe the role of personality in the events that follow.
managing change
Personality Clash: Design vs. Default
Philip Johnson, at age 86, was considered the dean of American architecture and was known for such landmarks as the AT&T building in New York and the Pennzoil Center in Houston, but he was also forced out of the firm that he built, only to watch it fall into default and bankruptcy.
In 1969, Johnson invited John Burgee, who was just 35, to become his sole partner to handle the management side of the business and thereby allow him to focus on the creative side. “I picked John Burgee as my righthand man. Every design architect needs a Burgee. The more leadership he took, the happier I was,” Johnson said. Burgee’s personality was perfectly suited to the nuts-and-bolts tasks of managing the firm and overseeing the projects through construction.
For all his management effort, Burgee felt that only Johnson’s name ever appeared in the press. “It was always difficult for me, being a younger man and less flamboyant,” commented Burgee. Eventually, Burgee was able to get Johnson to change the name of the firm, first to Philip Johnson & John Burgee Architects, then to Johnson/Burgee Architects, and finally to John Burgee Architects, with Philip Johnson. Although Burgee wanted to be involved in all aspects of the business, Johnson was unwilling to relinquish control over design to Burgee.
In 1988, Burgee sent a four-page memo to Johnson in which he listed each of the firm’s 24 projects and outlined the ones for which Johnson could initiate designs, initiate contact with clients, or work on independently at home. Burgee also instructed Johnson not to involve himself with the younger architects or advise them on their drawings.
The clash of the creative personality of Johnson and the controlling personality of Burgee came to a climax when Burgee asked Johnson to leave the firm. Unfortunately, Burgee underestimated the reaction of clients and lost many key contracts. Eventually, Burgee had to file for bankruptcy, and Johnson continued working on his own, including a project for Estée Lauder.
Source: Michelle Pacelle, “Design Flaw.” Wall Street Journal, September 2, 1992, p. A1, A5.
concept check
1. What are the things that managers can do to foster an environment where employees can gain personal development and grow?
13. G.W. Allport, Pattern and Growth in Personality (New York: Holt, Rinehart and Winston, 1961).
14. R. A. Ellis and M. S. Taylor, “Role of Self-Esteem within the Job Search Process,” Journal of Applied Psychology, 1983, 68, pp. 632–640.
15. P. Spector, “Behavior in Organizations as a Function of Locus of Control,” Psychological Bulletin, May 1982, pp. 482–497; P. Nystrom, “Managers’ Salaries and Their Beliefs About Reinforcement Control,” Journal of Social Psychology, August 1983, pp. 291–292.
16. L. R. Morris, Extroversion and Introversion: An Interactional Perspective (New York: Hemisphere, 1979), p.8.
17. T. W. Adorno, E. Frenkel-Brunswik, and D. J. Levinson, The Authoritarian Personality (New York: Harper & Row, 1950).
18. V. H. Vroom, Some Personality Determinants of the Effects of Participation (Englewood Cliffs, N.J.: Prentice- Hall, 1960).
19. M. Rokeach, The Open and Closed Mind (New York: Basic Books, 1960).
20. R. N. Taylor and M. D. Dunnette, “Influence of Dogmatism, Risk-Taking Propensity, and Intelligence on Decision-Making Strategies for a Sample of Industrial Managers,” Journal of Applied Psychology, 1974, 59, pp. 420–423.
Exhibit 2.2 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.04%3A_Personality_and_Work_Behavior.txt |
5. How do managers know how to get the best from each employee?
Most theories of personality stress that an individual’s personality becomes complete only when the individual interacts with other people; growth and development do not occur in a vacuum. Human personalities are the individual expressions of our culture, and our culture and social order are the group expressions of individual personalities. This being the case, it is important to understand how work organizations influence the growth and development of the adult employee.
A model of person-organization relationships has been proposed by Chris Argyris.22 This model, called the basic incongruity thesis, consists of three parts: what individuals want from organizations, what organizations want from individuals, and how these two potentially conflicting sets of desires are harmonized.
Argyris begins by examining how healthy individuals change as they mature. On the basis of previous work, Argyris suggests that as people grow to maturity, seven basic changes in needs and interests occur:
1. People develop from a state of passivity as infants to a state of increasing activity as adults.
2. People develop from a state of dependence upon others to a state of relative independence.
3. People develop from having only a few ways of behaving to having many diverse ways of behaving.
4. People develop from having shallow, casual, and erratic interests to having fewer, but deeper, interests.
5. People develop from having a short time perspective (i.e., behavior is determined by present events) to having a longer time perspective (behavior is determined by a combination of past, present, and future events).
6. People develop from subordinate to superordinate positions (from child to parent or from trainee to manager).
7. People develop from a low understanding or awareness of themselves to a greater understanding of and control over themselves as adults.
Although Argyris acknowledges that these developments may differ among individuals, the general tendencies from childhood to adulthood are believed to be fairly common.
Next, Argyris turns his attention to the defining characteristics of traditional work organizations. In particular, he argues that in the pursuit of efficiency and effectiveness, organizations create work situations aimed more at getting the job done than at satisfying employees’ personal goals. Examples include increased task specialization, unity of command, a rules orientation, and other things aimed at turning out a standardized product with standardized people. In the pursuit of this standardization, Argyris argues, organizations often create work situations with the following characteristics:
1. Employees are allowed minimal control over their work; control is often shifted to machines.
2. They are expected to be passive, dependent, and subordinate.
3. They are allowed only a short-term horizon in their work.
4. They are placed on repetitive jobs that require only minimal skills and abilities.
5. On the basis of the first four items, people are expected to produce under conditions leading to psychological failure.
Hence, Argyris argues persuasively that many jobs in our technological society are structured in such a way that they conflict with the basic growth needs of a healthy personality. This conflict is represented in Exhibit 2.3. The magnitude of this conflict between personality and organization is a function of several factors. The strongest conflict can be expected under conditions where employees are very mature, organization are highly structured and rules and procedures are formalized, and jobs are fragmented and mechanized. Hence, we would expect the strongest conflict to be at the lower levels of the organization, among blue-collar and clerical workers. Managers tend to have jobs that are less mechanized and tend to be less subject to formalized rules and procedures.
Where strong conflicts between personalities and organizations exist, or, more precisely, where strong conflicts exist between what employees and organizations want from each other, employees are faced with difficult choices. They may choose to leave the organization or to work hard to climb the ladder into the upper echelons of management. They may defend their self-concepts and adapt through the use of defense mechanisms. Disassociating themselves psychologically from the organization (e.g., losing interest in their work, lowering their work standards, etc.) and concentrating instead on the material rewards available from the organization is another possible response. Or they may find allies in their fellow workers and, in concert, may further adapt as a group by such activities as quota restrictions, unionizing efforts, strikes, and sabotage.
Unfortunately, although such activities may help employees feel that they are getting back at the organization, they do not alleviate the basic situation that is causing the problem. To do this, one has to examine the nature of the job and the work climate. Personality represents a powerful force in the determination of work behavior and must be recognized before meaningful change can be implemented by managers to improve the effectiveness of their organizations.
managing change
Integrating Employee and Organizational Goals at Kayak
In many ways the above scenario paints a bleak portrait of the relationship of many workers to their employers. However, it should be noted that many companies are trying to change this relationship and create a partnership between employees and company in which the goals of both are realized. In doing so, however, these companies are careful to select and hire only those employees who have the potential to fit in with the company’s unique culture. A case in point is Kayak, an Internet-based travel company in Stamford, Connecticut. The company strives to create customer satisfaction, starting with their own culture and employees within the walls of their building. Cofounder and former CTO Paul English’s goal was to bring a constant stream of “new-new ideas” and surround himself with “childlike creative people” to liven up the space and be able to promote inspiration.
Kayak doesn’t hire based on technical skills; their philosophy is to hire an employee on the basis of being the smartest person that somebody knows. Employees are constantly pushed to put their ideas to the test, and the company emphasizes a work-life balance that puts their employees first, which in turn makes for a productive work environment.
Kayak’s ability to make fast-paced decisions comes from the empowerment of their employees to try out their ideas. Current CTO Giorgos Zacharia takes pride in the way they are able to keep order and drive deadlines. “Anyone on any team can come up with the idea, prototype it, and then we see what the user thinks about it. If it works, great! But there’s no grand design; it’s very organic and we see that as a strength,” says Zacharia.
By encouraging and rewarding risk-taking, Kayak is able to make fast decisions, fail fast, and then turn around and come up with something more innovative that will be better than the last idea. Overall, the company hopes to offer its employees a work environment that allows for considerable personal growth and need-satisfaction. In short, the company aims to reduce the possibility of a basic incongruity developing between employee and organizational goals.
Sources: Hawkes, Jocelyn, “KAYAK on Creating a Culture of Innovation,” Fast Company, April 4, 2012. (https://www.fastcompany.com/1827003/...ure-innovation); Hickey, Matt, “How KAYAK
Converts Employee Well-Being Into Customer satisfaction,” Forbes, October 4, 2015. www.forbes.com/sites/matthic...ll-being-into- customer-satisfaction/#6c97f519b7a4.
Personality and Employee Selection
Recent years have seen an increased interest in the use of preemployment screening tests. Several key assumptions underlie the use of personality tests as one method of selecting potential employees: (1) individuals have different personalities and traits, (2) these differences affect their behavior and performance, and (3) different job have different requirements. Consequently, tests can be used to select individuals who match the overall company as well as match particular types of people to specific jobs. However, managers must be careful in their use of these selection instruments. Legally all selection tests must meet the guidelines for nondiscrimination set forth in the Equal Employment Opportunity Commission’s Uniform Guidelines on Employee Selection Procedures. Specifically, in 1971 the Supreme Court ruled (Griggs v. Duke Power Company) that “good intent or the absence of discriminatory intent does not redeem . . . testing mechanisms that operate as built-in ‘head-winds’ for minority groups and are unrelated to measuring job capability.” This ruling led to two important cases in which discrimination might apply to selection practices. First, “disparate treatment” involves the intentional discrimination against an individual based on race, color, gender, religion, or national origin. Second, “disparate impact” involves the adverse effect of selection practices (as well as other practices) on minorities regardless of whether these practices were intended to have an adverse impact or not. Consequently, although personality tests can be an important means of selecting potential employees as well as matching them to appropriate jobs, care must be taken to demonstrate that the characteristics measured actually predict job performance.
concept check
1. What are some things that managers can do to foster organizational harmony where they get the best results from all employees?
22 C. Argyris, “Personality and Organization Theory Revisited,” Administrative Science Quarterly, 1973, 18, pp. 141–167.
Exhibit 2.3 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.05%3A_Personality_and_Organization-_A_Basic_Conflict.txt |
6. What is the role of ethical behavior in managerial actions?
A factor that has surprised many business leaders is the alarming rise in accusations of unethical or disreputable behavior in today’s companies. We hear with increasing regularity of stock market manipulations, disregard of environmental hazards, bribes, and kickbacks. To understand these behaviors, we must examine the role of values and personal ethics in the workplace. We begin with the concept of values.
A value may be defined as “an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.”23 In other words, a value represents a judgment by an individual that certain things are “good” or “bad,” “important” or “unimportant,” and so forth. As such, values serve a useful function in providing guidelines or standards for choosing one’s own behavior and for evaluating the behavior of others.
Characteristics of Values
The values people have tend to be relatively stable over time. The reason for this lies in the manner in which values are acquired in the first place. That is, when we first learn a value (usually at a young age), we are taught that such-and-such behavior is always good or always bad. For instance, we may be taught that lying or stealing is always unacceptable. Few people are taught that such behavior is acceptable in some circumstances but not in others. Hence, this definitive quality of learned values tends to secure them firmly in our belief systems. This is not to say that values do not change over time. As we grow, we are increasingly confronted with new and often conflicting situations. Often, it is necessary for us to weigh the relative merits of each and choose a course of action. Consider, for example, the worker who has a strong belief in hard work but who is pressured by her colleagues not to outperform the group. What would you do in this situation?
Rokeach has identified two fundamental types of values: instrumental and terminal.24 Instrumental values represent those values concerning the way we approach end-states. That is, do we believe in ambition, cleanliness, honesty, or obedience? What factors guide your everyday behavior? Terminal values, on the other hand, are those end-state goals that we prize. Included here are such things as a comfortable life, a sense of accomplishment, equality among all people, and so forth. Both sets of values have significant influence on everyday behavior at work.
You can assess your own instrumental and terminal values by completing the self-assessment in the end-of- chapter assignments. Simply rank-order the two lists of values, and then refer to the reference for scoring procedures.
Role of Values and Ethics in Organizations
Personal values represent an important force in organizational behavior for several reasons. In fact, at least three purposes are served by the existence of personal values in organizations: (1) values serve as standards of behavior for determining a correct course of action; (2) values serve as guidelines for decision-making and conflict resolution; and (3) values serve as an influence on employee motivation. Let us consider each of these functions.
Standards of Behavior. First, values help us determine appropriate standards of behavior. They place limits on our behavior both inside and outside the organization. In such situations, we are referring to what is called ethical behavior, or ethics. Employees at all levels of the organization have to make decisions concerning what to them is right or wrong, proper or improper. For example, would you conceal information about a hazardous product made by your company, or would you feel obliged to tell someone? How would you respond to petty theft on the part of a supervisor or coworker in the office? To some extent, ethical behavior is influenced by societal values. Societal norms tell us it is wrong to engage in certain behaviors. In addition, however, individuals must often determine for themselves what is proper and what is not. This is particularly true when people find themselves in “gray zones”—situations where ethical standards are ambiguous or unclear. In many situations, a particular act may not be illegal. Moreover, one’s colleagues and friends may disagree about what is proper. In such circumstances, people have to determine their own standards of behavior.
expanding around the globe
Two Cultures’ Perspectives of Straight Talk
Yukiko Tanabe, a foreign exchange student from Tokyo, Japan, was both eager and anxious about making new friends during her one-year study abroad in the United States. After a month-long intensive course in English over the summer, she began her studies at the University of California. Yukiko was in the same psychology class as Jane McWilliams. Despite Yukiko’s somewhat shy personality, it did not take long before she and Jane were talking before and after class and studying together.
Part of the way through the term, the professor asked for volunteers to be part of an experiment on personalities and problem-solving. The professor also offered extra credit for participation in the experiment and asked interested students to stay after class to discuss the project in more detail.
When class was over, Jane asked Yukiko if she wanted to stay after and learn more about the project and the extra credit. Yukiko hesitated and then said that she was not sure. Jane replied that it would only take a few minutes to listen to the explanation, and so the two young women went up to the front of the class, along with about 20 other students, to hear the details.
The project would simply involve completing a personality questionnaire and then attempting to solve three short case problems. In total, it would take about one hour of time and would be worth 5 percent extra credit. Jane though it was a great idea and asked Yukiko if she wanted to participate. Yukiko replied that she was not sure. Jane responded that they could go together, that it would be fun, and that 5 percent extra credit was a nice bonus. To this Yukiko made no reply, so Jane signed both of them up for the project and suggested that they meet at the quad about 10 minutes before the scheduled beginning of the experiment.
On the day of the experiment, however, Yukiko did not show up. Jane found out later from Yukiko that she did not want to participate in the experiment. “Then why didn’t you just say so?” asked Jane. “Because I did not want to embarrass you in front of all your other friends by saying no,” explained Yukiko.
Source: Personal communication by the author. Names have been disguised.
Guidelines for Decision-Making and Conflict Resolution. In addition, values serve as guidelines for making decisions and for attempting to resolve conflicts. Managers who value personal integrity are less likely to make decisions they know to be injurious to someone else. Relatedly, values can influence how someone approaches a conflict. For example, if your boss asks your opinion about a report she wrote that you don’t like, do you express your opinion candidly or be polite and flatter her?
An interesting development in the area of values and decision-making involves integrity or honesty tests. These tests are designed to measure an individual’s level of integrity or honesty based on the notion that honest or dishonest behavior and decisions flow from a person’s underlying values. Today over 5,000 firms use these tests, some of which use direct questions and some of which use camouflaged questions. Although the reliability of the most common tests seem good, their validity (i.e., the extent to which they can accurately predict dishonest behavior) is more open to question.25 Nevertheless, because they do not cost much and are less intrusive than drug or polygraph testing, integrity are increasingly used to screen potential employees.
Influence on Motivation. Values affect employee motivation by determining what rewards or outcomes are sought. Employees are often offered overtime work and the opportunity to make more money at the expense of free time and time with their families. Which would you choose? Would you work harder to get a promotion to a perhaps more stressful job or “lay back” and accept a slower and possibly less rewarding career path? Value questions such as these confront employees and managers every day.
Prominent among work-related values is the concept of the work ethic. Simply put, the work ethic refers to the strength of one’s commitment and dedication to hard work, both as an end in itself and as a means to future rewards. Much has been written lately concerning the relative state of the work ethic in North America. It has been repeatedly pointed out that one reason for our trouble in international competition lies in our rather mediocre work ethic. This is not to say that many Americans do not work hard; rather, it is to say that others (most notably those in East Asia) simply work harder.
There are many ways to assess these differences, but perhaps the simplest way is to look at actual hours worked on average in different countries both in Asia and Western Europe. Looking at Table 2.3, you may be surprised to discover that although the average American works 1,789 hours (and takes an average of 19.5 vacation days) per year, the average South Korean works 2,070 hours per year (and takes only 4.5 days of vacation)!26 The typical Japanese worker works 1,742 hours per year and takes 9.6 days of vacation. Meanwhile, Western Europeans work fewer hours and take more vacation days. Thus, although Americans may work longer hours than many Europeans, they fall far behind many in East Asia.
Example: A Country Tries to Reduce Its Workweek
What does a country do when its people are overmotivated? Consider the case of Japan. On the basis of Japan’s newfound affluence and success in the international marketplace, many companies—and the government—are beginning to be concerned that perhaps Japanese employees work too hard and should slow down. They may be too motivated for their own good. As a result, the Japanese Department of Labor has initiated a drive to shorten the workweek and encourage more Japanese employees to take longer holidays. The effort is focusing on middle-aged and older employees, because their physical stamina may be less than that of their more junior colleagues. Many companies are following this lead and are beginning to reduce the workweek. This is no easy task in a land where such behavior may be seen by employees as showing disloyalty toward the company. It requires a fundamental change in employee attitudes.
At the same time, among younger employees, cracks are beginning to appear in the fabled Japanese work ethic. Younger workers are beginning to express increased frustration with dull jobs and routine assignments, and job satisfaction appears to be at an all-time low. Young Japanese are beginning to take longer lunch periods and look forward to Friday and the coming weekend. Whether this is attributable to increasing affluence in changing society or simply the emergence of a new generation, things are changing—however slowly-in the East.27
concept check
1. What role do managers undertake to ensure an environment where ethics and values are followed?
23. M. Rokeach, The Nature of Human Values (New York: Free Press, 1973), p. 5.
24. Ibid.
25. Paul R. Sackett, Laura R. Burris, and Christine Callahan. 1989. Integrity Testing for Personnel Selection. Personnel Psychology, 42, 491–529.
26. R. M. Steers, Y. K. Shin, and G. R. Ungson, The Chaebol: Korea’s New Industrial Might (New York: Harper & Row, 1989), p. 96.
27. L. Smith, “Cracks in the Japanese Work Ethic,” Fortune, May 14, 1984, pp. 162–168; K. Van Wolferen, The Enigma of Japanese Power (New York: Knopf, 1989).
Table 2.3 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.06%3A_Personal_Values_and_Ethics.txt |
7. How do you manage and do business with people from different cultures?
The final topic we will discuss in this chapter is the role of culture and cultural diversity in organizational behavior. Cultural diversity can be analyzed in many ways. For instance, we can compare cultural diversity within one country or company, or we can compare cultures across units. That is, we can look inside a particular North American firm and see employees who are Asian, black, Latino, American Indian, white, and so forth. Clearly, these individuals have different cultural backgrounds, frames of reference, traditions, and so forth. Or we can look more globally and compare a typical American firm with a typical Mexican, Italian, or Chinese firm and again see significant differences in culture.
We can also analyze cultural diversity by looking at different patterns of behavior. For instance, Americans often wonder why Japanese or Korean businesspeople always bow when they meet; this seems strange to some. Likewise, many Asians wonder why Americans always shake hands, a similarly strange behavior. Americans often complain that Japanese executives say “yes” when they actually mean something else, while Japanese executives claim many Americans promise things they know they cannot deliver. Many of these differences result from a lack of understanding concerning the various cultures and how they affect behavior both inside and outside the workplace. As the marketplace and economies of the world merge ever closer, it is increasingly important that we come to understand more about cultural variations as they affect our world.
What Is Culture?
Simply put, culture may be defined as “the collective programming of the mind which distinguishes the members of one human group from another; the interactive aggregate of common characteristics that influences a human group’s response to its environment.”28 More to the point, culture is the “collective mental programming of a people.”29 It is the unique characteristics of a people. As such, culture is:
• Something that is shared by all or most of the members of a society
• Something that older members of a society attempt to pass along to younger members
• Something that shapes our view of the world
The concept of culture represents an easy way to understand a people, albeit on a superficial level. Thus, we refer to the Chinese culture or the American culture. This is not to say that every member within a culture behaves in exactly the same way. On the contrary, every culture has diversity, but members of a certain culture tend to exhibit similar behavioral patterns that reflect where and how they grew up. A knowledge of a culture’s patterns should help us deal with its members.
Culture affects the workplace because it affects what we do and how we behave. As shown in Exhibit 2.4, cultural variations influence our values, which in turn affect attitudes and, ultimately, behaviors. For instance, a culture that is characterized by hard work (e.g., the Korean culture discussed above) would exhibit a value or ethic of hard work. This work ethic would be reflected in positive attitudes toward work and the workplace; people would feel that hard work is satisfying and beneficial—they might feel committed to their employer and they might feel shame if they do not work long hours. This, in turn, would lead to actual high levels of work. This behavior, then, would serve to reinforce the culture and its value, and so on.
To see how this works, consider the results of a survey of managerial behavior by French researcher Andre Laurent.30 He asked managers how important it was for managers to have precise answers when asked a question by subordinates.The results, shown in Exhibit 2.5, clearly show how culture can influence very specific managerial behavior. In some countries, it is imperative for the manager to “know” the answer (even when she really doesn’t), whereas in other countries it made little difference. Thus, if we want to understand why someone does something in the workplace, at least part of the behavior may be influenced by her cultural background.
Dimensions of Culture
There are several ways to distinguish different cultures from one another. Kluckhohn and Strodtbeck have identified six dimensions that are helpful in understanding such differences.31 These are as follows:
1. How people view humanity. Are people basically good, or are they evil? Can most people be trusted or not? Are most people honest? What is the true nature of humankind?
2. How people see nature. What is the proper relationship between people and the environment? Should people be in harmony with nature, or should they attempt to control or harness nature?
3. How people approach interpersonal relationships. Should one stress individualism or membership in a group? Is the person more or less important than the group? What is the “pecking order” in a society? Is it based on seniority or on wealth and power?
4. How people view activity and achievement. Which is a more worthy goal: activity (getting somewhere) or simply being (staying where one is)?
5. How people view time. Should one focus on the past, the present, or the future? Some cultures are said to be living in the past, whereas others are looking to the future.
6. How people view space. How should physical space be used in our lives? Should we live communally or separately? Should important people be physically separated from others? Should important meetings be held privately or in public?
To see how this works, examine Exhibit 2.7, which differentiates four countries (Mexico, Germany, Japan, and the United States) along these six dimensions. Although the actual place of each country on these scales may be argued, the exhibit does serve to highlight several trends that managers should be aware of as they approach their work. For example, although managers in all four countries may share similar views on the nature of people (good versus bad), significant differences are noted on such dimensions as people’s relation to nature and interpersonal relations. This, in turn, can affect how managers in these countries approach contract negotiations, the acquisition of new technologies, and the management of employees.
Dimensions such as these help us frame any discussion about how people differ. We can say, for example, that most Americans are individualistic, activity-oriented, and present/future-oriented. We can further say that they value privacy and want to control their environment. In another culture, perhaps the mode is past-oriented, reflective, group-oriented, and unconcerned with achievement. In Japan we hear that “the nail that sticks out gets hammered down”—a comment reflecting a belief in homogeneity within the culture and the importance of the group. In the United States, by contrast, we hear “Look out for Number One” and “A man’s home is his castle”—comments reflecting a belief in the supremacy of the individual over the group. Neither culture is “right” or “better.” Instead, each culture must be recognized as a force within individuals that motivates their behaviors within the workplace. However, even within the U.S. workforce, we must keep in mind that there are subcultures that can influence behavior. For example, recent work has shown that the Hispanic culture within the United States places a high value on groups compared to individuals and as a consequence takes a more collective approach to decision-making.32 As we progress through this discussion, we shall continually build upon these differences as we attempt to understand behavior in the workplace.
concept check
1. What role do managers play to ensure that the culture of individuals are valued and appreciated and contribute to a successful work environment?
28. G. Hofstede, Culture’s Consequence, (Beverly Hills, Calif.: Sage, 1980), p. 25.
29. Ibid.
30. A. Laurent, “The Cultural Diversity of Western Conceptions of Management,” International Studies of Management and Organization, XII, 1–2, Spring-Summer 1983, pp. 75–96.
31. F. Kluckhohn and F. Strodtbeck, Variations in Value Orientations (Evanston, III.: Row, Peterson, 1961).
32. T. Cox, et al., “Effects of Ethnic Group Cultural Differences on Cooperative and Competitive Behavior on a Group Task,” Academy of Management J., 34, pp. 827–847; and S. Gruman, cited in N. Adler, International Dimensions of Organizational Behavior (Boston: PWS/Kent, 1986), pp. 13–14.
Exhibit 2.4 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC- SA 4.0 license)
Exhibit 2.5 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 2.6 Kluckhohn and Strodtbeck identified six dimensions that are helpful in understanding such differences. Japan is a populous country that requires workers to take public transportation to and from work. How does the Japanese geography affect Japanese culture? (Credit: elminium/ flickr/ Attribution 2.0 Generic (CC BY 2.0))
Exhibit 2.7 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.07%3A_Cultural_Differences.txt |
Authoritarianism Refers to an individual’s orientation toward authority.
Basic incongruity thesis Consists of three parts: what individuals want from organizations, what organizations want from individuals, and how these two potentially conflicting sets of desires are harmonized.
Cognitive complexity Represents a person’s capacity to acquire and sort through various pieces of information from the environment and organize them in such a way that they make sense.
Culture The collective programming of the mind that distinguishes the members of one human group from another; the interactive aggregate of common characteristics that influences a human group’s response to its environment.
Dependability Individuals who are seen as self-reliant, responsible, and consistent, are viewed as dependable.
Dogmatism Refers to a particular cognitive style that is characterized by closed-mindedness and inflexibility.
Ethics Values that help us determine appropriate standards of behavior and place limits on our behavior both inside and outside the organization.
Extroversion Refers to people who direct more of their attention to other people, objects, and events.
Instrumental values Represent those values concerning the way we approach end-states and whether individuals believe in ambition, cleanliness, honesty, or obedience.
Introversion Refers to people who focus their energies inwardly and have a greater sensitivity to abstract feelings.
Locus of control Refers to the tendency among individuals to attribute the events affecting their lives either to their own actions or to external forces; it is a measure of how much you think you control your own destiny.
Mental abilities An individual’s intellectual capabilities and are closely linked to how a person makes decisions and processes information. Included here are such factors as verbal comprehension, inductive reasoning, and memory.
Personal values Represent an important force in organizational behavior for several reasons.
Personality A stable set of characteristics and tendencies that determine those communalities and differences in the psychological behavior (thoughts, feelings, and actions) of people that have continuity in time and that may not be easily understood as the sole result of the social and biological pressures of the moment.
Physical abilities Basic functional abilities such as strength, and psychomotor abilities such as manual dexterity, eye-hand coordination, and manipulation skills.
Psychomotor abilities Examples are manual dexterity, eye-hand coordination, and manipulation skills.
Self-esteem One’s opinion or belief about one’s self and self-worth.
Terminal values End-state goals that we prize.
Work ethic Refers to the strength of one’s commitment and dedication to hard work, both as an end in itself and as a means to future rewards.
2.09: Summary of Learning Outcomes
2.1 Individual and Cultural Factors in Employee Performance
1. How do managers and organizations appropriately select individuals for particular jobs?
Because people enter organizations with preset dispositions, it is important to be able to analyze important individual characteristics, effectively select individuals, and appropriately match them to their jobs. However, this must be done carefully in light of both ethical and legal issues that face managers today.
2.2 Employee Abilities and Skills
2. How do people with different abilities, skills, and personalities build effective work teams?
Ability refers to one’s capacity to respond, whereas motivation refers to one’s desire to respond. Abilities can be divided into mental abilities and physical abilities. Personality represents a stable set of characteristics and tendencies that determines the psychological behavior of people.
Personality development is influenced by several factors, including physiological, cultural, family and group, role, and situational determinants.
2.3 Personality: An Introduction
3. How do managers and employees deal effectively with individual differences in the workplace? Self-esteem represents opinions and beliefs concerning one’s self and one’s self-worth.
Locus of control is a tendency for people to attribute the events affecting their lives either to their own actions (referred to as internal locus of control) or to external forces (referred to as external locus of control).
2.4 Personality and Work Behavior
4. How can organizations foster a work environment that allows employees an opportunity to develop and grow?
Authoritarianism represents an individual’s orientation toward authority and is characterized by an overriding conviction that it is appropriate for there to be clear status and power differences between people.
2.5 Personality and Organization: A Basic Conflict?
5. How do managers know how to get the best from each employee?
Dogmatism refers to a cognitive style characterized by closed-mindedness and inflexibility.
The basic incongruity thesis asserts that individuals and organizations exist in a constant state of conflict because each has different goals and expectations from the other. Employees want organizations to provide more autonomy and meaningful work, while organizations want employees to be more predictable, stable, and dependable.
2.6 Personal Values and Ethics
6. What is the role of ethical behavior in managerial actions?
A value is an enduring belief that one specific mode of conduct or end-state is preferable to others. Instrumental values are beliefs concerning the most appropriate ways to pursue end-states, whereas terminal values are beliefs concerning the most desirable end-states themselves.
Ethics are important to individuals because they serve as (1) standards of behavior for determining a correct course of action, (2) guidelines for decision-making and conflict resolution, and (3) influences on employee motivation. The work ethic refers to someone’s belief that hard work and commitment to a task are both ends in themselves and means to future rewards.
2.7 Cultural Differences
7. How do you manage and do business with people from different cultures?
Culture refers to the collective mental programming of a group or people that distinguishes them from others. Culture (1) is shared by the members of the group, (2) is passed on from older members to younger members, and (3) shapes our view of the world. Six dimensions of culture can be identified: (1) how people see themselves, (2) how people see nature, (3) how people approach interpersonal relationships, (4) how people view activity and achievement, (5) how people view time, and (6) how people view space. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.08%3A_Glossary.txt |
1. What Is Your Locus of Control?
Instructions: This instrument lists several pairs of statements concerning the possible causes of behavior. For each pair, select the letter (A or B) that better describes your own beliefs. Remember: there are no right or wrong answers. To view the scoring key, go to Appendix B.
1. A. In the long run, the bad things that happen to us are balanced by the good ones. B. Most misfortunes are the result of lack of ability, ignorance, laziness, or all three.
2. A. I have often found that what is going to happen will happen.
B. Trusting to fate has never turned out as well for me as making a decision to take a definite course of
action.
3. A. Many of the unhappy things in people’s lives are partly due to bad luck.
B. People’s misfortunes result from the mistakes they make.
4. A. Without the right breaks, one cannot be an effective leader.
B. Capable people who fail to become leaders have not taken advantage of their opportunities.
5. A. Many times, I feel I have little influence over the things that happen to me.
B. It is impossible for me to believe that chance or luck plays an important role in my life.
6. A. Most people don’t realize the extent to which their lives are controlled by accidental happenings.
B. There really is no such thing as “luck.”
7. A. Unfortunately, an individual’s worth often passes unrecognized no matter how hard she tries.
B. In the long run, people get the respect they deserve.
Source: Adapted from Julian B. Rotter, “Generalized Expectancies for Internal Versus External Control of Reinforcement.” Psychological Monographs, 80 (Whole No. 609, 1966), pp. 11–12.
2. Which Values Are Most Important to You?
Instructions: People are influenced by a wide variety of personal values. In fact, it has been argued that values represent a major influence on how we process information, how we feel about issues, and how we behave. In this exercise, you are given an opportunity to consider your own personal values. Below are listed two sets of statements. The first list presents several instrumental values, while the second list presents several terminal values. For each list you are asked to rank the statements according to how important each is to you personally. In the list of instrumental values, place a “1” next to the value that is most important to you, a “2” next to the second most important, and so forth. Clearly, you will have to make some difficult decisions concerning your priorities. When you have completed the list for instrumental values, follow the same procedure for the terminal values. Please remember that this is not a test—there are no right or wrong answers—so be completely honest with yourself. To view the scoring key, go to Appendix B.
Instrumental Values
_____ Assertiveness; standing up for yourself
_____ Being helpful or caring toward others
_____ Dependability; being counted upon by others
_____ Education and intellectual pursuits
_____ Hard work and achievement
_____ Obedience; following the wishes of others
_____ Open-mindedness; receptivity to new ideas
_____ Self-sufficiency; independence
_____ Truthfulness; honesty
_____ Being well-mannered and courteous toward others
Terminal Values
_____ Happiness; satisfaction in life _____ Knowledge and wisdom
_____ Peace and harmony in the world _____ Pride in accomplishment
_____ Prosperity; wealth
_____ Lasting friendships
_____ Recognition from peers
_____ Salvation; finding eternal life _____ Security; freedom from threat _____ Self-esteem; self-respect | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.10%3A_Management_Skills_Application_Exercises.txt |
1. You work for a large multinational corporation with offices around the globe. One of your colleagues has been offered an assignment overseas to either the Japanese, South Korean, or German offices for a long- term assignment (three to seven years). She has asked your advice on the opportunity because she is concerned about the failure some others have encountered. Often, they want to return home before their assignment is complete, or they decide to quit. She is also concerned about building relationships as a manager with the local employees. Your friend is very skilled technically and you know that she could be successful in the positions being offered. You wonder whether her apprehension has to do with her personality, and whether that might have an impact on her success for this role.
a. Identify the personality traits you think might be relevant to being successful in a global assignment in either Japan, South Korea, or Germany.
b. Develop a personality test aimed at measuring these dimensions.
c. Do you think that your friend will fill out this questionnaire honestly? If not, how would you ensure that the results you get would be honest and truly reflect her personality?
d. How would you validate such a test? Describe the steps you would take.
2. It’s your final semester in college and you’re going through several interviews with recruiters on campus. Among the opportunities that you are interviewing for is an entry-level position as a data analyst with a large accounting firm. You have been told during the initial interview that the firm uses a personality assessment as part of their selection process. You feel that this job requires someone who is very high in introversion since it involves a lot of individual work involving analysis of data on the one hand, but that in potential future roles on an audit team, one would need a high level of extroversion dealing with colleagues on the team and with clients. You have a high level of technical ability and can concentrate on tasks for long periods and also feel that you are sociable, but perhaps not as much as some other students in other disciplines. The opportunity is terrific, it is a great stepping-stone to career advancement, and your faculty adviser is very supportive. Refer to the personality test in the Managerial Skills Application Exercises question 2 as an example of the personality test that will be given. How are you going to respond when completing the personality test? Are you going to answer the questions truthfully?
a. What are the advantages and disadvantages of completing the questions honestly?
b. What are the advantages and disadvantages of completing the questions in a way you think the company is looking for?
2.12: Critical Thinking Case
Making a Diverse Workplace the Top Priority
Johnson & Johnson is a leader in multinational medical devices as well as pharmaceutical and consumer packaged goods. Founded in 1886, the company has been through generations of cultural differences and is consistently listed among the Fortune 500. Johnson & Johnson is a household name for millions with many of their products lining the shelves of medicine cabinets around the globe. In 2017, Johnson & Johnson took the number two spot on the Thomson Reuters Diversity & Inclusion Index.
At such a multinational company, with over 130,000 employees worldwide, the forefront of the focus on their internal workforce is diversity. At the forefront of their mission statement, this is clearly stated: “Make diversity and inclusion how we work every day.” Having a mission statement is wonderful, but how does Johnson & Johnson live up to these standards day in and day out?
Chief Diversity & Inclusion Officer Wanda Bryant Hope works tirelessly to inject the company with the very founding principles that built the company 130 years ago. She is one of 46 percent of employees worldwide that are women, and is delivering solutions that serve all of the patients and companies that work with Johnson & Johnson.
One initiative that sets Johnson & Johnson apart in the diversity category is their programs and initiatives such as the Scientist Mentoring and Diversity Program (SMDP), which is a yearlong mentorship program pairing ethnically diverse students with industry leaders.
Additionally, the company commits to alignment with Human Rights Campaign Equality Index benchmarks, as well as supporting the armed forces and wounded soldiers. These benefits include transgender-inclusive health insurance coverage and paid time off after military leave for soldiers to acclimate back to life at home.
These commitments make Johnson & Johnson one of the best cases for a company that is making great strides in a tough cultural climate to bridge the gaps and make all of their employees, customers, and clients feel included and a part of the bigger whole.
Questions:
1. What diversity challenges do you think Johnson & Johnson management and employees face due to their presence as worldwide organization?
2. What other considerations should the company take in order to increase their impact of diversity and inclusion in the workplace?
3. Johnson & Johnson prides themselves on bridging the gender equality gap. What are some challenges or concerns to consider in the future with their hiring practices?
Sources: Johnson & Johnson website accessed August 1, 2018, https://www.jnj.com/about-jnj/diversity; Johnson & Johnson website accessed August 1, 2018, http://www.careers.jnj.com/careers/w...sity-inclusion. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/02%3A_Individual_and_Cultural_Differences/2.11%3A_Managerial_Decision_Exercises.txt |
After reading this chapter, you should be able to answer these questions:
1. How do differences in perception affect employee behavior and performance?
2. How can managers and organizations minimize the negative impact of stereotypes and other barriers to accurate social perception in interpersonal relations?
3. How do people attribute credit and blame for organizational events?
4. How can a work environment characterized by positive work attitudes be created and maintained?
5. How can managers and organizations develop a committed workforce?
03: Perception and Job Attitudes
exploring perceptions affect workplace harmony
Personal Perceptions Affect Workplace Harmony
Conflict was a feeling that James and Chaz were familiar with in their workplace. It was just a matter of time before their differences bubbled up to form a real hardship on themselves as well as their management teams.
Chaz is anxious to get ahead, really focused on how fast he can accelerate his career. In order to showcase his tenacity, he stays extra hours and often takes on extra assignments from upper management and doesn’t seem to mind. James, on the other hand, is content in his position and believes that if he does his regular job, he will be seen a stable part of the team and will be rewarded for his everyday efforts. James views Chaz’s behavior as “kissing up” and resents Chaz for his extra efforts because it may make his own work look bad. James doesn’t give a thought to the personal reasons why Chaz may be acting that way, and instead ends up treating Chaz poorly, with a short temper every time they have to work together.
Chaz talks to his manager, Jerry, about the way that he is being treated by James. He explains that he has been having some personal troubles at home, his wife is expecting, and they are trying to save for the new addition to their family. Chaz is feeling pressure to work hard and showcase his talents in order to get a raise. He also expresses his feelings against James, mainly that he shouldn’t be scrutinized for going above and beyond when his colleagues may just decide to do the minimum requirements. Jerry understands, and he appreciates Chaz coming to him with his concerns. They talk about ways to measure Chaz’s extra efforts and plan a conversation during their annual review period to discuss his raise again. Jerry also suggests that Chaz talk with James to alleviate some of the negative behavior he is experiencing. He feels that if James understood the reasons behind Chaz’s actions, he may be less jealous and feel less threatened by him.
Questions:
1. How can an individual’s perceptions be a challenge in the workplace?
2. What can James do in the future to address Chaz in a different manner and better understand his actions?
3. What do you think Jerry could have done differently to help his employees overcome their differences and work more efficiently together?
1. How do differences in perception affect employee behavior and performance?
By perception, we mean the process by which one screen, selects, organizes, and interprets stimuli to give them meaning.1 It is a process of making sense out of the environment in order to make an appropriate behavioral response. Perception does not necessarily lead to an accurate portrait of the environment, but rather to a unique portrait, influenced by the needs, desires, values, and disposition of the perceiver. As described by Kretch and associates.2 an individual's perception of a given situation is not a photographic representation of the physical world; it is a partial, personal construction in which certain objects, selected by the individual for a major role, are perceived in an individual manner. Every perceiver is, as it were, to some degree a nonrepresentational artist, painting a picture of the world that expresses an individual view of reality.
The multitude of objects that vie for attention are first selected or screened by individuals. This process is called perceptual selectivity. Certain of these objects catch our attention, while others do not. Once individuals notice a particular object, they then attempt to make sense out of it by organizing or categorizing it according to their unique frame of reference and their needs. This second process is termed perceptual organization. When meaning has been attached to an object, individuals are in a position to determine an appropriate response or reaction to it. Hence, if we clearly recognize and understand we are in danger from a falling rock or a car, we can quickly move out of the way.
Because of the importance of perceptual selectivity for understanding the perception of work situations, we will examine this concept in some detail before considering the topic of social perception.
Perceptual Selectivity: Seeing What We See
As noted above, perceptual selectivity refers to the process by which individuals select objects in the environment for attention. Without this ability to focus on one or a few stimuli instead of the hundreds constantly surrounding us, we would be unable to process all the information necessary to initiate behavior. In essence, perceptual selectivity works as follows (see Exhibit 3.2). The individual is first exposed to an object or stimulus—a loud noise, a new car, a tall building, another person, and so on. Next, the individual focuses attention on this one object or stimulus, as opposed to others, and concentrates his efforts on understanding or comprehending the stimulus. For example, while conducting a factory tour, two managers came across a piece of machinery. One manager’s attention focused on the stopped machine; the other manager focused on the worker who was trying to fix it. Both managers simultaneously asked the worker a question. The first manager asked why the machine was stopped, and the second manager asked if the employee thought that he could fix it. Both managers were presented with the same situation, but they noticed different aspects. This example illustrates that once attention has been directed, individuals are more likely to retain an image of the object or stimulus in their memory and to select an appropriate response to the stimulus. These various influences on selective attention can be divided into external influences and internal (personal) influences (see Exhibit 3.3).
External Influences on Selective Attention
External influences consist of the characteristics of the observed object or person that activate the senses. Most external influences affect selective attention because of either their physical properties or their dynamic properties.
Physical Properties. The physical properties of the objects themselves often affect which objects receive attention by the perceiver. Emphasis here is on the unique, different, and out of the ordinary. A particularly important physical property is size. Generally, larger objects receive more attention than smaller ones. Advertising companies use the largest signs and billboards allowed to capture the perceiver’s attention. However, when most of the surrounding objects are large, a small object against a field of large objects may receive more attention. In either case, size represents an important variable in perception. Moreover, brighter, louder, and more colorful objects tend to attract more attention than objects of less intensity. For example, when a factory foreman yells an order at his subordinates, it will probably receive more notice (although it may not receive the desired response) from workers. It must be remembered here, however, that intensity heightens attention only when compared to other comparable stimuli. If the foreman always yells, employees may stop paying much attention to the yelling. Objects that contrast strongly with the background against which they are observed tend to receive more attention than less-contrasting objects. An example of the contrast principle can be seen in the use of plant and highway safety signs. A terse message such as “Danger” is lettered in black against a yellow or orange background. A final physical characteristic that can heighten perceptual awareness is the novelty or unfamiliarity of the object. Specifically, the unique or unexpected seen in a familiar setting (an executive of a conservative company who comes to work in Bermuda shorts) or the familiar seen in an incongruous setting (someone in church holding a can of beer) will receive attention.
Dynamic Properties. The second set of external influences on selective attention are those that either change over time or derive their uniqueness from the order in which they are presented. The most obvious dynamic property is motion. We tend to pay attention to objects that move against a relatively static background. This principle has long been recognized by advertisers, who often use signs with moving lights or moving objects to attract attention. In an organizational setting, a clear example is a rate-buster, who shows up his colleagues by working substantially faster, attracting more attention.
Another principle basic to advertising is repetition of a message or image. Work instructions that are repeated tend to be received better, particularly when they concern a dull or boring task on which it is difficult to concentrate. This process is particularly effective in the area of plant safety. Most industrial accidents occur because of careless mistakes during monotonous activities. Repeating safety rules and procedures can often help keep workers alert to the possibilities of accidents.
Personal Influences on Selective Attention
In addition to a variety of external factors, several important personal factors are also capable of influencing the extent to which an individual pays attention to a particular stimulus or object in the environment. The two most important personal influences on perceptual readiness are response salience and response disposition.
Response Salience. This is a tendency to focus on objects that relate to our immediate needs or wants. Response salience in the work environment is easily identified. A worker who is tired from many hours of work may be acutely sensitive to the number of hours or minutes until quitting time. Employees negotiating a new contract may know to the penny the hourly wage of workers doing similar jobs across town. Managers with a high need to achieve may be sensitive to opportunities for work achievement, success, and promotion. Finally, female managers may be more sensitive than many male managers to condescending male attitudes toward women. Response salience, in turn, can distort our view of our surroundings. For example, as Ruch notes:
“Time spent on monotonous work is usually overestimated. Time spent in interesting work is usually underestimated. . . . Judgment of time is related to feelings of success or failure. Subjects who are experiencing failure judge a given interval as longer than do subjects who are experiencing success. A given interval of time is also estimated as longer by subjects trying to get through a task in order to reach a desired goal than by subjects working without such motivation.”3
Response Disposition. Whereas response salience deals with immediate needs and concerns, response disposition is the tendency to recognize familiar objects more quickly than unfamiliar ones. The notion of response disposition carries with it a clear recognition of the importance of past learning on what we perceive in the present. For instance, in one study, a group of individuals was presented with a set of playing cards with the colors and symbols reversed—that is, hearts and diamonds were printed in black, and spades and clubs in red. Surprisingly, when subjects were presented with these cards for brief time periods, individuals consistently described the cards as they expected them to be (red hearts and diamonds, black spades and clubs) instead of as they really were. They were predisposed to see things as they always had been in the past.4
Thus, the basic perceptual process is in reality a fairly complicated one. Several factors, including our own personal makeup and the environment, influence how we interpret and respond to the events we focus on. Although the process itself may seem somewhat complicated, it in fact represents a shorthand to guide us in our everyday behavior. That is, without perceptual selectivity we would be immobilized by the millions of stimuli competing for our attention and action. The perceptual process allows us to focus our attention on the more salient events or objects and, in addition, allows us to categorize such events or objects so that they fit into our own conceptual map of the environment.
expanding around the globe
Which Car Would You Buy?
When General Motors teamed up with Toyota to form California-based New United Motor Manufacturing Inc. (NUMMI), they had a great idea. NUMMI would manufacture not only the popular Toyota Corolla but would also make a GM car called the Geo Prizm. Both cars would be essentially identical except for minor styling differences. Economies of scale and high quality would benefit the sales of both cars. Unfortunately, General Motors forgot one thing. The North American consumer holds a higher opinion of Japanese-built cars than American-made ones. As a result, from the start of the joint venture, Corollas have sold rapidly, while sales of Geo Prizms have languished.
With hindsight, it is easy to explain what happened in terms of perceptual differences. That is, the typical consumer simply perceived the Corolla to be of higher quality (and perhaps higher status) and bought accordingly. Not only was the Prizm seen more skeptically by consumers, but General Motors’ insistence on a whole new name for the product left many buyers unfamiliar with just what they were buying. Perception was that main reason for lagging sales; however, the paint job on the Prizm was viewed as being among the worst ever. As a result, General Motors lost \$80 million on the Prizm in its first year of sales. Meanwhile, demand for the Corolla exceeded supply.
The final irony here is that no two cars could be any more alike than the Prizm and the Corolla. They are built on the same assembly line by the same workers to the same design specifications. They are, in fact, the same car. The only difference is in how the consumers perceive the two cars—and these perceptions obviously are radically different.
Over time, however, perceptions did change. While there was nothing unique about the Prizm, the vehicle managed to sell pretty well for the automaker and carried on well into the 2000s. The Prizm was also the base for the Pontiac Vibe, which was based on the Corolla platform as well, and this is one of the few collaborations that worked really well.
Sources: C. Eitreim, “10 Odd Automotive Brand Collaborations (And 15 That Worked),” Car Culture, January 19, 2019; R. Hof, “This Team-Up Has It All—Except Sales,” Business Week, August 14, 1989, p. 35; C. Eitreim, “15 GM Cars With The Worst Factory Paint Jobs (And 5 That'll Last Forever),” Motor Hub, November 8, 2018.
Social Perception in Organizations
Up to this point, we have focused on an examination of basic perceptual processes—how we see objects or attend to stimuli. Based on this discussion, we are now ready to examine a special case of the perceptual process—social perception as it relates to the workplace. Social perception consists of those processes by which we perceive other people.5 Particular emphasis in the study of social perception is placed on how we interpret other people, how we categorize them, and how we form impressions of them.
Clearly, social perception is far more complex than the perception of inanimate objects such as tables, chairs, signs, and buildings. This is true for at least two reasons. First, people are obviously far more complex and dynamic than tables and chairs. More-careful attention must be paid in perceiving them so as not to miss important details. Second, an accurate perception of others is usually far more important to us personally than are our perceptions of inanimate objects. The consequences of misperceiving people are great. Failure to accurately perceive the location of a desk in a large room may mean we bump into it by mistake. Failure to perceive accurately the hierarchical status of someone and how the person cares about this status difference might lead you to inappropriately address the person by their first name or use slang in their presence and thereby significantly hurt your chances for promotion if that person is involved in such decisions. Consequently, social perception in the work situation deserves special attention.
We will concentrate now on the three major influences on social perception: the characteristics of (1) the person being perceived, (2) the particular situation, and (3) the perceiver. When taken together, these influences are the dimensions of the environment in which we view other people. It is important for students of management to understand the way in which they interact (see Exhibit 3.4).
The way in which we are evaluated in social situations is greatly influenced by our own unique sets of personal characteristics. That is, our dress, talk, and gestures determine the kind of impressions people form of us. In particular, four categories of personal characteristics can be identified: (1) physical appearance, (2) verbal communication, (3) nonverbal communication, and (4) ascribed attributes.
Physical Appearance. A variety of physical attributes influence our overall image. These include many of the obvious demographic characteristics such as age, sex, race, height, and weight. A study by Mason found that most people agree on the physical attributes of a leader (i.e., what leaders should look like), even though these attributes were not found to be consistently held by actual leaders. However, when we see a person who appears to be assertive, goal-oriented, confident, and articulate, we infer that this person is a natural leader. Another example of the powerful influence of physical appearance on perception is clothing. People dressed in business suits are generally thought to be professionals, whereas people dressed in work clothes are assumed to be lower-level employees.
Verbal and Nonverbal Communication. What we say to others—as well as how we say it—can influence the impressions others form of us. Several aspects of verbal communication can be noted. First, the precision with which one uses language can influence impressions about cultural sophistication or education. An accent provides clues about a person’s geographic and social background. The tone of voice used provides clues about a speaker’s state of mind. Finally, the topics people choose to converse about provide clues about them.
Impressions are also influenced by nonverbal communication—how people behave. For instance, facial expressions often serve as clues in forming impressions of others. People who consistently smile are often thought to have positive attitudes.7 A whole field of study that has recently emerged is body language, the way in which people express their inner feelings subconsciously through physical actions: sitting up straight versus being relaxed, looking people straight in the eye versus looking away from people. These forms of expressive behavior provide information to the perceiver concerning how approachable others are, how self-confident they are, or how sociable they are.
Ascribed Attributes. Finally, we often ascribe certain attributes to a person before or at the beginning of an encounter; these attributes can influence how we perceive that person. Three ascribed attributes are status, occupation, and personal characteristics. We ascribe status to someone when we are told that he or she is an executive, holds the greatest sales record, or has in some way achieved unusual fame or wealth. Research has consistently shown that people attribute different motives to people they believe to be high or low in status, even when these people behave in an identical fashion.8 For instance, high-status people are seen as having greater control over their behavior and as being more self-confident and competent; they are given greater influence in group decisions than low-status people. Moreover, high-status people are generally better liked than low-status people. Occupations also play an important part in how we perceive people. Describing people as salespersons, accountants, teamsters, or research scientists conjures up distinct pictures of these various people before any firsthand encounters. In fact, these pictures may even determine whether there can be an encounter.
Characteristics of the Situation
The second major influence on how we perceive others is the situation in which the perceptual process occurs. Two situational influences can be identified: (1) the organization and the employee’s place in it, and (2) the location of the event.
Organizational Role. An employee’s place in the organizational hierarchy can also influence his perceptions. A classic study of managers by Dearborn and Simon emphasizes this point. In this study, executives from various departments (accounting, sales, production) were asked to read a detailed and factual case about a steel company.9 Next, each executive was asked to identify the major problem a new president of the company should address. The findings showed clearly that the executives’ perceptions of the most important problems in the company were influenced by the departments in which they worked. Sales executives saw sales as the biggest problem, whereas production executives cited production issues. Industrial relations and public relations executives identified human relations as the primary problem in need of attention.
In addition to perceptual differences emerging horizontally across departments, such differences can also be found when we move vertically up or down the hierarchy. The most obvious difference here is seen between managers and unions, where the former see profits, production, and sales as vital areas of concern for the company whereas the latter place much greater emphasis on wages, working conditions, and job security. Indeed, our views of managers and workers are clearly influenced by the group to which we belong. The positions we occupy in organizations can easily color how we view our work world and those in it. Consider the results of a classical study of perceptual differences between superiors and subordinates.10 Both groups were asked how often the supervisor gave various forms of feedback to the employees. The results, shown in Table 3.1, demonstrate striking differences based on one’s location in the organizational hierarchy.
Location of Event. Finally, how we interpret events is also influenced by where the event occurs. Behaviors that may be appropriate at home, such as taking off one’s shoes, may be inappropriate in the office. Acceptable customs vary from country to country. For instance, assertiveness may be a desirable trait for a sales representative in the United States, but it may be seen as being brash or coarse in Japan or China. Hence, the context in which the perceptual activity takes place is important.
Characteristics of the Perceiver
The third major influence on social perception is the personality and viewpoint of the perceiver. Several characteristics unique to our personalities can affect how we see others. These include (1) self-concept, (2) cognitive structure, (3) response salience, and (4) previous experience with the individual.11
Self-Concept. Our self-concept represents a major influence on how we perceive others. This influence is manifested in several ways. First, when we understand ourselves (i.e., can accurately describe our own personal characteristics), we are better able to perceive others accurately. Second, when we accept ourselves (i.e., have a positive self-image), we are more likely to see favorable characteristics in others. Studies have shown that if we accept ourselves as we are, we broaden our view of others and are more likely to view people uncritically. Conversely, less secure people often find faults in others. Third, our own personal characteristics influence the characteristics we notice in others. For instance, people with authoritarian tendencies tend to view others in terms of power, whereas secure people tend to see others as warm rather than cold.12 From a management standpoint, these findings emphasize how important it is for administrators to understand themselves; they also provide justification for the human relations training programs that are popular in many organizations today.
Cognitive Structure. Our cognitive structures also influence how we view people. People describe each other differently. Some use physical characteristics such as tall or short, whereas others use central descriptions such as deceitful, forceful, or meek. Still others have more complex cognitive structures and use multiple traits in their descriptions of others; hence, a person may be described as being aggressive, honest, friendly, and hardworking. (See the discussion in Individual and Cultural Differences on cognitive complexity.) Ostensibly, the greater our cognitive complexity—our ability to differentiate between people using multiple criteria—the more accurate our perception of others. People who tend to make more complex assessments of others also tend to be more positive in their appraisals.13 Research in this area highlights the importance of selective managers who exhibit high degrees of cognitive complexity. These individuals should form more accurate perceptions of the strengths and weaknesses of their subordinates and should be able to capitalize on their strengths while ignoring or working to overcome their weaknesses.
Response Salience. This refers to our sensitivity to objects in the environment as influenced by our particular needs or desires. Response salience can play an important role in social perception because we tend to see what we want to see. A company personnel manager who has a bias against women, minorities, or handicapped persons would tend to be adversely sensitive to them during an employment interview. This focus may cause the manager to look for other potentially negative traits in the candidate to confirm his biases. The influence of positive arbitrary biases is called the halo effect, whereas the influence of negative biases is often called the horn effect. Another personnel manager without these biases would be much less inclined to be influenced by these characteristics when viewing prospective job candidates.
Previous Experience with the Individual. Our previous experiences with others often will influence the way in which we view their current behavior. When an employee has consistently received poor performance evaluations, a marked improvement in performance may go unnoticed because the supervisor continues to think of the individual as a poor performer. Similarly, employees who begin their careers with several successes develop a reputation as fast-track individuals and may continue to rise in the organization long after their performance has leveled off or even declined. The impact of previous experience on present perceptions should be respected and studied by students of management. For instance, when a previously poor performer earnestly tries to perform better, it is important for this improvement to be recognized early and properly rewarded. Otherwise, employees may give up, feeling that nothing they do will make any difference.
Together, these factors determine the impressions we form of others (see Exhibit 3.4). With these impressions, we make conscious and unconscious decisions about how we intend to behave toward people. Our behavior toward others, in turn, influences the way they regard us. Consequently, the importance of understanding the perceptual process, as well as factors that contribute to it, is apparent for managers. A better understanding of ourselves and careful attention to others leads to more accurate perceptions and more appropriate actions.
concept check
1. How can you understand what makes up an individual’s personality?
2. How does the content of the situation affect the perception of the perceiver?
3. What are the characteristics that the perceiver can have on interpreting personality?
1. M. W. Levine and J. M. Shefner, Fundamentals of Selection and Perception (Reading, Mass.: Addison-Wesley, 1981).
2. D. Kretch, R. S. Crutchfield, and E. L. Ballachey, Individual in Society (New York: McGraw-Hill, 1962).
3. F. L. Ruch, Psychology and life (Glenview: Scott, Foresman, 1983).
4. J. S. Bruner and L. Postman, “On the Perception of Incongruity: A Paradigm,” Journal of Personality, 1949, 18, pp. 206–223.
5. S. T. Fiske and S. E. Taylor, Social Cognition (Reading, Mass.: Addison-Wesley, 1984).
6. D. J. Mason, “Judgements of Leadership Based on Physiognomic Cues,” Journal of Abnormal and Social Psychology, 1957, 54, pp. 273–274.
7. P. F. Secord, “The Role of Facial Features in Interpersonal Perception,” in R. Tagiuri and L. Petrullo, eds., Person Perception and Interpersonal Behavior (Palo Alto: Stanford University Press, 1958), pp. 300–315.
8. J. W. Thibaut and H. W. Riecker, “Authoritarianism, Status, and the Communication of Aggression,” Human Relations, 1955, 8, pp. 95–120.
9. D. C. Dearborn and H. A. Simon, “Selective Perception: A Note on Departmental Identification of Executives,” Sociometry, 1958, 21, p. 142.
10. R. Likert, New Patterns of Management (New York: McGraw-Hill, 1961).
11. Levine and Shefner, op. cit.
12. Ibid.
13. K. J. Frauenfelder, “A Cognitive Determinant of Favorability of Impression,” Journal of Social Psychology, 1974, 94, pp. 71–81.
Table 3.1 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 3.2 The Process of Perceptual Selectivity (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 3.3 Major Influences on Selective Attention (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 3.4 Major Influences on Social Perception in Organizations (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.01%3A_The_Perceptual_Process.txt |
2. How can managers and organizations minimize the negative impact of stereotypes and other barriers to accurate social perception in interpersonal relations?
In the perceptual process, several barriers can be identified that inhibit the accuracy of our perception. These barriers are (1) stereotyping, (2) selective perception, and (3) perceptual defense. Each of these will be briefly considered as it relates to social perception in work situations (see Table 3.2).
Stereotyping
One of the most common barriers in perceiving others at work is stereotyping. A stereotype is a widely held generalization about a group of people. Stereotyping is a process in which attributes are assigned to people solely on the basis of their class or category. It is particularly likely to occur when one meets new people, since very little is known about them at that time. On the basis of a few prominent characteristics such as sex, race, or age, we tend to place people into a few general categories. We ascribe a series of traits to them based upon the attributes of the category in which we have put them. We assume that older people are old-fashioned, conservative, obstinate, and perhaps senile. We view professors as absentminded, impractical, idealistic, or eccentric.
One explanation for the existence of stereotypes has been suggested by Jain, Triandis, and Weick.14 They argue that stereotypes may be to some extent based upon fact. People tend to compare other groups with their own group, accentuating minor differences between groups to form a stereotype. For example, older people as a group may indeed be more conservative or more old-fashioned. These traits then become emphasized and attributed to particular older individuals.
At least three types of stereotype can be found in organizations: those dealing with age, race, and gender. Age stereotypes can be found throughout organizations. A recent study by15 found that there are still clear stereotypes of older employees. They are thought to be (1) more resistant to organizational change, (2) less creative, (3) less likely to take calculated risks, (4) lower in physical capacity, (5) less interested in learning new techniques, and (6) less capable of learning new techniques. When asked to make personnel decisions concerning older people, the business students generally followed several trends. First, they gave older people lower consideration in promotion decisions. Older people also received less attention and fewer resources for training and development. Finally, older people tended to be transferred to other departments instead of confronted by their superiors when a problem with their performance emerged.
Similar problems arise for people from different racial or cultural backgrounds and for gender. A particular problem in many companies today is that of attitudes toward women as managers or executives. Although succeeding in a managerial position is always difficult, the job is all the harder if your coworkers, superiors, or subordinates are not supportive.
expanding around the globe
To See Ourselves as Others See Us
In considering stereotyping in organizations, it may be interesting to examine how people in different countries and cultures see others around the world. Specifically, we should note that “foreigners” often hold certain stereotypes of what a “typical” American looks and acts like. Look, for example, at Table 3.3. This table shows how people in seven countries around the globe view the typical American. Note the sizable differences in perceptions.
Foreign Observations of Americans
The following are quotations from foreign visitors to the United States:
India: “Americans seem to be in a perpetual hurry. Just watch the way they walk down the street. They never allow themselves the leisure to enjoy life; there are too many things to do.”
Kenya: “Americans appear to us rather distant. They are not really as close to other people—even fellow Americans—as Americans overseas tend to portray. It’s almost as if an American says, ‘I won’t let you get too close to me.’ It’s like building a wall.”
Turkey: “Once we were out in a rural area in the middle of nowhere and saw an American come to a stop sign. Though he could see in both directions for miles and no traffic was coming, he still stopped!”
Colombia: “The tendency in the United States to think that life is only work hits you in the face. Work seems to be the one type of motivation.”
Indonesia: “In the United States everything has to be talked about and analyzed. Even the littlest thing has to be ‘Why, Why, Why?’ I get a headache from such persistent questions.”
Ethiopia: “The American is very explicit; he wants a ‘yes’ or ‘no.’ If someone tries to speak figuratively, the American is confused.”
Iran: “The first time . . . my [American] professor told me, ‘I don’t know the answer, I will have to look it up,’ I was shocked. I asked myself, ‘Why is he teaching me?’ In my country a professor would give the wrong answer rather than admit ignorance.”
Source: J. Feig and G. Blair, There Is a Difference, 2nd ed. (Washington: Meridian House International). Meridian House International is an organization that conducts intercultural training for visitors to the United States and for Americans going abroad.
Table 3.3
When examining these comments, consider the extent to which you think these perceptions and stereotypes are accurate or inaccurate. Why do people in different countries form such divergent opinions of our country? How do their perceptions color the behavior and effectiveness of American managers working abroad? On the basis of this assessment, you might want to reassess your own stereotypes of people in different countries. How accurate do you think your own stereotypes have been?
Selective Perception
Selective perception is the process by which we systematically screen out information we don’t wish to hear, focusing instead on more salient information. Saliency here is obviously a function of our own experiences, needs, and orientations. The example of the Dearborn and Simon16 study of managers described earlier provides an excellent glimpse of selective perception. Production managers focused on production problems to the exclusion of other problems. Accountants, personnel specialists, and sales managers were similarly exclusive. Everyone saw his own specialty as more important in the company than other specialties.
Another example of selective perception in groups and organizations is provided by Miner.17 Miner summarizes a series of experiments dealing with groups competing on problem-solving exercises. Consistently, the groups tended to evaluate their own solutions as better than the solutions proposed by others. Such findings resemble a syndrome found in many research organizations. There is a frequent tendency for scientists to view ideas or products originating outside their organization or department as inferior and to judge other researchers as less competent and creative than themselves. This is often referred to as the “Not-Invented-Here” syndrome. Similar patterns of behavior can be found among managers, service workers, and secretaries.
Perceptual Defense
A final barrier to social perception is perceptual defense.18 Perceptual defense is founded on three related principles:
1. Emotionally disturbing or threatening stimuli have a higher recognition threshold than neutral stimuli.
2. Such stimuli are likely to elicit substitute perceptions that are radically altered so as to prevent recognition
of the presented stimuli.
3. These critical stimuli arouse emotional reactions even though the stimuli are not recognized.
In other words, through perceptual defense we tend to distort or ignore information that is either personally threatening or culturally unacceptable. Because emotionally disturbing stimuli have a higher recognition threshold, people are less likely to fully confront or acknowledge the threat. Instead, they may see entirely different or even erroneous stimuli that are safer. Even so, the presence of the critical stimulus often leads to heightened emotions despite the lack of recognition. For instance, suppose that during a contract negotiation for an assembly plant, word leaked out that because of declining profits, the plant might have to close down permanently. Anxious workers might ignore this message and instead choose to believe the company management is only starting false rumors to increase their leverage during wage negotiations. Even if the leverage claim is accepted by the workers as truth, strong emotional reactions against the company can be expected.
One effect of perceptual defense is to save us from squarely facing events that we either do not wish to handle or may be incapable of handling. We dissipate our emotions by directing our attention to other (substitute) objects and hope the original event that distressed us will eventually disappear.
Perceptual defense is especially pronounced when people are presented with a situation that contradicts their long-held beliefs and attitudes. In a classic study of perceptual defense among college students, Haire and Grunes presented the students with descriptions of factory workers. Included in these descriptions was the word intelligent. Because the word was contrary to the students’ beliefs concerning factory workers, they chose to reject the description by using perceptual defenses.19 Four such defense mechanisms can be identified.20
1. Denial. A few of the subjects denied the existence of intelligence in factory workers.
2. Modification and distortion. This was one of the most frequent forms of defense. The pattern was to
explain away the perceptual conflict by joining intelligence with some other characteristics—for instance,
“He is intelligent but doesn’t possess initiative to rise above his group.”
3. Change in perception. Many students changed their perception of the worker because of the intelligence
characteristic. Most of the change, however, was very subtle—for example, “cracks jokes” became “witty.”
4. Recognition, but refusal to change. A very few students explicitly recognized the conflict between their perception of the worker and the characteristic that was confronting them. For example, one subject
stated, “The trait seems to be conflicting . . . most factory workers I have heard about aren’t too intelligent.”
Perceptual defense makes any situation in which conflict is likely to be present more difficult. It creates blind spots, causing us to fail to hear and see events as they really are. The challenge for managers is to reduce or minimize the perception of threat in a situation so these defenses are not immediately called into play. This can be accomplished by reassuring people that things that are important to them will not be tampered with, or by accentuating the positive.
concept check
1. What are the barriers that can inhibit the accuracy of our perception?
2. What are the cultural factors that can influence perception?
3. What is perceptual defense, and what are examples of the mechanisms that can be identified?
14. R. Jain, H. C. Triandis, and C. W. Weick, Managing Research, Development and Innovation: Managing the Unmanageable, 3rd Edition (New York: Wiley, 2010).
15. C. von Hippel, et al, “Age-based stereotype threat and work outcomes: Stress appraisals and ruminations as mediators,” Psychology and Aging, February 2019, pp. 68-84.
16. Dearborn and Simon, op. cit.
17. J. B. Miner, Organizational Behavior 2: Essentials Theories of Process and Structure (Routledge, 2015).
18. Levine and Shefner, op. cit.
19. M. Haire and W. Grunes, “Perceptual Defenses: Processes Protecting an Organized Perception of Another’s Personality,” Human Relations, 1950, 3, pp. 403–412.
20. Ibid., p. 409.
Table 3.2 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Table 3.3 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.02%3A_Barriers_to_Accurate_Social_Perception.txt |
3. How do people attribute credit and blame for organizational events?
A major influence on how people behave is the way they interpret the events around them. People who feel they have control over what happens to them are more likely to accept responsibility for their actions than those who feel control of events is out of their hands. The cognitive process by which people interpret the reasons or causes for their behavior is described by attribution theory.21 Specifically, "attribution theory concerns the process by which an individual interprets events as being caused by a particular part of a relatively stable environment."22
Attribution theory is based largely on the work of Fritz Heider. Heider argues that behavior is determined by a combination of internal forces (e.g., abilities or effort) and external forces (e.g., task difficulty or luck). Following the cognitive approach of Lewin and Tolman, he emphasizes that it is perceived determinants, rather than actual ones, that influence behavior. Hence, if employees perceive that their success is a function of their own abilities and efforts, they can be expected to behave differently than they would if they believed job success was due to chance.
The Attribution Process
The underlying assumption of attribution theory is that people are motivated to understand their environment and the causes of particular events. If individuals can understand these causes, they will then be in a better position to influence or control the sequence of future events. This process is diagrammed in Exhibit 3.5. Specifically, attribution theory suggests that particular behavioral events (e.g., the receipt of a promotion) are analyzed by individuals to determine their causes. This process may lead to the conclusion that the promotion resulted from the individual’s own effort or, alternatively, from some other cause, such as luck. Based on such cognitive interpretations of events, individuals revise their cognitive structures and rethink their assumptions about causal relationships. For instance, an individual may infer that performance does indeed lead to promotion. Based on this new structure, the individual makes choices about future behavior. In some cases, the individual may decide to continue exerting high levels of effort in the hope that it will lead to further promotions. On the other hand, if an individual concludes that the promotion resulted primarily from chance and was largely unrelated to performance, a different cognitive structure might be created, and there might be little reason to continue exerting high levels of effort. In other words, the way in which we perceive and interpret events around us significantly affects our future behaviors.
Internal and External Causes of Behavior
Building upon the work of Heider, Harold Kelley attempted to identify the major antecedents of internal and external attributions.23 He examined how people determine-or, rather, how they actually perceive-whether the behavior of another person results from internal or external causes. Internal causes included ability and effort, whereas external causes include luck and task ease or difficulty.24 Kelley's conclusion, illustrated in Exhibit 3.6, is that people actually focus on three factors when making causal attributions:
1. Consensus. The extent to which you believe that the person being observed is behaving in a manner that is consistent with the behavior of his or her peers. High consensus exists when the person’s actions reflect or are similar to the actions of the group; low consensus exists when the person’s actions do not.
2. Consistency. The extent to which you believe that the person being observed behaves consistently—in a similar fashion—when confronted on other occasions with the same or similar situations. High consistency exists when the person repeatedly acts in the same way when faced with similar stimuli.
3. Distinctiveness. The extent to which you believe that the person being observed would behave consistently when faced with different situations. Low distinctiveness exists when the person acts in a similar manner in response to different stimuli; high distinctiveness exists when the person varies his or her response to different situations.
How do these three factors interact to influence whether one’s attributions are internal or external? According to the exhibit, under conditions of high consensus, high consistency, and high distinctiveness, we would expect the observer to make external attributions about the causes of behavior. That is, the person would attribute the behavior of the observed (say, winning a golf tournament) to good fortune or some other external event. On the other hand, when consensus is low, consistency is high, and distinctiveness is low, we would expect the observer to attribute the observed behavior (winning the golf tournament) to internal causes (the winner’s skill).
In other words, we tend to attribute the reasons behind the success or failure of others to either internal or external causes according to how we interpret the underlying forces associated with the others’ behavior. Consider the example of the first female sales manager in a firm to be promoted to an executive rank. How do you explain her promotion—luck and connections or ability and performance? To find out, follow the model. If she, as a sales representative, had sold more than her (male) counterparts (low consensus in behavior), consistently sold the primary product line in different sales territories (high consistency), and was also able to sell different product lines (low distinctiveness), we would more than likely attribute her promotion to her own abilities. On the other hand, if her male counterparts were also good sales representatives (high consensus) and her sales record on secondary products was inconsistent (high distinctiveness), people would probably attribute her promotion to luck or connections, regardless of her sales performance on the primary product line (high consistency).
Attributional Bias
One final point should be made with respect to the attributional process. In making attributions concerning the causes of behavior, people tend to make certain errors of interpretation. Two such errors, or attribution biases, should be noted here. The first is called the fundamental attribution error. This error is a tendency to underestimate the effects of external or situational causes of behavior and to overestimate the effects of internal or personal causes. Hence, when a major problem occurs within a certain department, we tend to blame people rather than events or situations.
The second error in attribution processes is generally called the self-serving bias. There is a tendency, not surprisingly, for individuals to attribute success on an event or project to their own actions while attributing failure to others. Hence, we often hear sales representatives saying, “I made the sale,” but “They stole the sale from me” rather than “I lost it.” These two biases in interpreting how we see the events around us help us understand why employees looking at the same event often see substantially different things.
concept check
1. What is attribution theory? Describe the attribution process.
2. What are the internal and external causes of attribution?
21. H. H. Kelley, “The Process of Causal Attributions,” American Psychologist, February 1973, pp. 107–128; F. Forsterling, “Attributional Retraining: A Review,” Psychological Bulletin, November 1985, pp. 495–512; B. Weiner, Human Motivation (New York: Holt, Rinehart and Winston, 1980).
22. Kelley, op. cit., p. 193.
23. Ibid.
24. Ibid.
Exhibit 3.6 Causes of Internal and External Attributions Adapted from Nyla Branscombe and Robert A. Baron. Social Psychology. Fourteenth Edition, 2016, Pearson. (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 3.7 Golf What internal and external attributions can you make about this golfer who is celebrating a hole in one? (Notice the untied shoe.) (Credit: John Fink/ flickr/ Attribution 2.0 Generic (CC BY 2.0)) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.03%3A_Attributions_-_Interpreting_the_Causes_of_Behavior.txt |
5. How can managers and organizations develop a committed workforce?
When we apply the concept of attitudes to work settings, we have to specify which attitude we are concerned with. Although a variety of work-related attitudes can be identified, the one receiving the most attention is job satisfaction. As this is one of the most widely studied concepts in organizational behavior, we will examine it here in some detail.
Job Involvement and Organizational Commitment
First, however, we should introduce two job attitudes that should also be recognized: job involvement and organizational commitment. Job involvement refers to the extent to which a person is interested in and committed to assigned tasks. This is not to say that the person is “happy” (or satisfied) with the job, only that he feels a certain responsibility toward ensuring that the job itself is done correctly and with a high standard of competence. Here the focus of the attitude is the job itself.30
Organizational commitment, on the other hand, represents the relative strength of an individual’s identification with and involvement in an organization.31 Commitment can be characterized by three factors: (1) a strong belief in and acceptance of the organization’s goals and values, (2) a willingness to exert considerable effort on behalf of the organization, and (3) a strong desire to maintain membership in the organization. When viewed this way, commitment represents something beyond mere passive loyalty to the company. Instead, it involves an active relationship with the organization in which individuals are willing to give something of themselves in order to help the company succeed and prosper. A careful reading of the research on keys to the success of many Japanese firms will highlight the importance played by a committed work force. Now we turn to the third work attitude of job satisfaction.
Job Satisfaction
Job satisfaction may be defined as “a pleasurable or positive emotional state resulting from the appraisal of one's job or job experience.32 It results from the perception that an employee's job actually provides what he values in the work situation.
Several characteristics of the concept of job satisfaction follow from this definition. First, satisfaction is an emotional response to a job situation. It can be fully understood only by introspection. As with any attitude, we cannot observe satisfaction; we must infer its existence and quality either from an employee’s behavior or verbal statements.
Second, job satisfaction is perhaps best understood in terms of discrepancy. Several writers have pointed to the concept of job satisfaction as being a result of how much a person wants or expects from the job compared to how much he actually receives.33 People come to work with varying levels of job expectations. These expectations may vary not only in quality (different people may value different things in a job), but also in intensity. On the basis of work experiences, people receive outcomes (rewards) from the job. These include not only extrinsic rewards, such as pay and promotion, but also a variety of intrinsic rewards, such as satisfying coworker relations and meaningful work. To the extent that the outcomes received by an employee meet or exceed expectations, we would expect the employee to be satisfied with the job and wish to remain. On those occasions when outcomes actually surpass expectations, we would expect employees to reevaluate their expectations and probably raise them to meet available outcomes. However, when outcomes do not meet expectations, employees are dissatisfied and may prefer to seek alternative sources of satisfaction, either by changing jobs or by placing greater value on other life activities, such as outside recreation.
Dimensions of Job Satisfaction. It has been argued that job satisfaction actually represents several related attitudes. So, when we speak of satisfaction, we must specify “satisfaction with what?” Research has suggested that five job dimensions represent the most salient characteristics of a job about which people have affective responses. These five are:
1. Work itself. The extent to which tasks performed by employees are interesting and provide opportunities for learning and for accepting responsibility.
2. Pay. The amount of pay received, the perceived equity of the pay, and the method of payment.
3. Promotional opportunities. The availability of realistic opportunities for advancement.
4. Supervision. The technical and managerial abilities of supervisors; the extent to which supervisors demonstrate consideration for and interest in employees.
5. Coworkers. The extent to which coworkers are friendly, technically competent, and supportive.
Although other dimensions of job satisfaction have been identified, these five dimensions are used most often when assessing various aspects of job attitudes in organizations.
Measurement of Job Satisfaction. Probably the most common attitude surveys in organizations today focus on job satisfaction. Satisfaction is considered by many managers to be an important indicator of organizational effectiveness, and therefore it is regularly monitored to assess employee feelings toward the organization. By far the most common means of assessing satisfaction is the rating scale. Rating scales represent direct verbal self-reports concerning employee feelings; they have been widely used in companies since the 1930s. Several job satisfaction scales exist. One of the most popular is the Minnesota Satisfaction Questionnaire (MSQ). This instrument uses a Likert-response format to generate satisfaction scores on 26 scales, including satisfaction with compensation, promotion opportunities, coworkers, recognition, and so forth. You can assess your scoring on a short version of this instrument in the assessment section of this chapter.
The MSQ and similar rating scales have several advantages for evaluating levels of job satisfaction. First, they are relatively short and simple and can be completed by large numbers of employees quickly. Second, because of the generalized wording of the various terms, the instruments can be administered to a wide range of employees in various jobs. It is not necessary to alter the questionnaire for each job classification. Finally, extensive normative data (or norms) are available. These norms include summaries of the scores of thousands of people who have completed the instruments. Hence, it is possible for employers in other organizations to determine relative standings.
However, although rating scales have many virtues compared to other techniques, at least two drawbacks must be recognized. First, as with any self-report inventory, it is assumed that respondents are both willing and able to describe their feelings accurately. As noted by several researchers,34 people often consciously or unconsciously distort information that they feel is damaging and enhance information that they feel is beneficial. For example, it is possible that employees who think their supervisors may see the results of their questionnaire may report overly favorable job attitudes.
A second problem with rating scales is the underlying assumption that questionnaire items mean the same thing to all people. There may, in fact, not be a common interpretation across individuals. Even so, rating scales have proved to be helpful in assessing satisfaction in various aspects of the job situation. Managers can use the results to identify potential problem areas and to generate discussions and action plans of how to correct aspects of jobs or the organization that are causing unacceptable levels of dissatisfaction.
customer satisfaction and quality
How Satisfied Are Employees?
If you’ve ever flown on Southwest Airlines, you can tell something is different just from the first interaction with their employees. From the flight attendants, to the pilot’s announcements, and even to their customer service representatives, they have a cheerful disposition, and contrary to popular belief, this isn’t an act.
In 2017, Southwest Airlines announced that it would be sharing their \$586 million in profits with its 54,000 employees, given them a bonus of approximately 13.2 percent on average. This doesn’t account for the extra \$351 million that they contributed to the employee’s 401(k) plans either. This is just one of the many ways that Southwest has given back to their employees in a day and age when minimum wage for even qualified candidates seems like a fight.
Southwest CEO Gary Kelly reflects that “Our people-first approach, which has guided our company since it was founded, means our company does well, our people do really, really well. Our people work incredibly hard and deserve to share in Southwest’s success.” With this attitude, it is no wonder the employees on and off your flight are showing their satisfaction in their everyday attitudes. The year 2017 was the 43rd year that Southwest shared its profits with their people. While compensation ranks among one of the most attributed traits of a company to help with employee satisfaction, it goes much deeper than that to keep motivation high.
At Southwest, they rank employees first and customers second. They create a culture of fun and inclusive core values that help to give their employees a sense of community and belonging. When their employees are motivated and take pride in what they do, they are able to give their best to their customers every day, which accounts for their highly ranked customer satisfaction results on surveys each year.
Sources: Dahl, Darren, “Why do Southwest Employees Always Seem so Happy,” Forbes, July, 28, 2017, www.forbes.com/sites/darrend...loyees-always- seem-so-happy/#3cba8dbc59b0; Martin, Emmie, “A major airline says there's something it values more than its customers, and there's a good reason why,” Business Insider, July 29, 2015, https://www.businessinsider.com/sout...s-first-2015-7; Ramdas, Shreesha, “The Southwest Way to Employee Satisfaction: Flying High Like the High Flier,” Customer Think, May 12, 2018, (http://customerthink.com/the-southwe...like-the-high- flier/.
Questions:
1. Oftentimes it is hard to stay at the top. What considerations should Southwest take to maintain their employee satisfaction and keep improving?
2. Not all companies can share profits. What would you suggest to a new company that is just starting off to help gain high employee satisfaction?
concept check
1. How can organizations foster positive job involvement and instill positive attitudes in their employees?
2. What are the dimensions of job satisfaction?
30. T. Lodahl and M. Kejner, “The Definition and Measurement of Job Involvement,” Journal of Applied Psychology, 1965, 49, pp. 24–33.
31. R. T. Mowday, L. W. Porter, and R. M. Steers, Employee-Organization Linkages: The Psychology of Employee Commitment, Absenteeism and Turnover (New York: Academic Press, 1982).
32. E. A. Locke, “The Nature and Causes of Job Satisfaction,” in M. D. Dunnette, ed., Handbook of Industrial and Organizational Psychology (Chicago: Rand McNally, 1976).
33. L. W. Porter and R. M. Steers, “Organizational, Work, and Personal Factors in Employee Turnover and Absenteeism,” Psychological Bulletin, 1973, 80, pp. 151–176.
34. B. M. Staw, Intrinsic and Extrinsic Motivation (Morristown, N. J.: General Learning Press, 1976) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.04%3A_Work-Related_Attitudes.txt |
Affect Dealing with a person’s feelings toward the person or object.
Attitude A predisposition to respond in a favorable or unfavorable way to objects or persons in one’s environment.
Attribution biases Covers both the fundamental attribution error and the self-serving bias.
Attribution theory Concerns the process by which an individual interprets events as being caused by a particular part of a relatively stable environment.
Behavioral justification The need to ensure that one’s behaviors are consistent with their attitudes toward the event.
Body language The manner in which people express their inner feelings subconsciously through physical actions such as sitting up straight versus being relaxed or looking people straight in the eye versus looking away from people.
Cognitive consistency The need for behavioral justification to ensure that a person’s behaviors are consistent with their attitudes toward an event.
Cognitive dissonance Finding one’s self acting in a fashion that is inconsistent with their attitudes and experiencing tension and attempting to reduce this tension and return to a state of cognitive consistency.
Dispositional approach Argues that attitudes represent relatively stable predispositions to respond to people or situations around them.
Fundamental attribution error The tendency to underestimate the effects of external or situational causes of behavior and to overestimate the effects of internal or personal causes.
Halo effect The influence of positive arbitrary biases.
Job involvement Refers to the extent to which a person is interested in and committed to assigned tasks.
Job satisfaction A pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience.
Organizational commitment Represents the relative strength of an individual’s identification with and involvement in an organization.
Perception The process by which one screens, selects, organizes, and interprets stimuli to give them meaning.
Perceptual defense A defense that perceives emotionally disturbing or threatening stimuli as having a higher recognition threshold than neutral stimuli. Such stimuli are likely to elicit substitute perceptions that are radically altered so as to prevent recognition of the presented stimuli that arouse emotional reactions even though the stimuli are not recognized.
Perceptual organization When meaning has been attached to an object, individuals are in a position to determine an appropriate response or reaction to it.
Perceptual selectivity Refers to the process by which individuals select objects in the environment for attention.
Response disposition The tendency to recognize familiar objects more quickly than unfamiliar ones.
Response salience The tendency to focus on objects that relate to our immediate needs or wants.
Selective perception The process by which we systematically screen out information we don’t wish to hear, focusing instead on more salient information.
Self-serving bias The tendency for individuals to attribute success on an event or project to their own actions while attributing failure to others.
Situational approach This approach argues that attitudes emerge as a result of the uniqueness of a given situation.
Social perception Consists of those processes by which we perceive other people. Social-information-processing approach Asserts that attitudes result from “socially constructed realities” as perceived by the individual.
Stereotyping A tendency to assign attributes to people solely on the basis of their class or category. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.05%3A_Glossary.txt |
3.1 The Perceptual Process
1. How do differences in perception affect employee behavior and performance?
One of the key determinants of people’s behavior in organizations is how they see and interpret situations and people around them. It is vital for anyone (manager or subordinate) who desires to be more effective to understand the critical aspects of context, object, and perceiver that influence perceptions and interpretations and the relationship between these and subsequent attitudes, intentions, and behaviors. This understanding will not only facilitate the ability to correctly understand and anticipate behaviors, but it will also enhance the ability to change or influence that behavior. Perception is the process by which individuals screen, select, organize, and interpret stimuli in order to give them meaning. Perceptual selectivity is the process by which individuals select certain stimuli for attention instead of others. Selective attention is influenced by both external factors (e.g., physical or dynamic properties of the object) and personal factors (e.g., response salience). Social perception is the process by which we perceive other people. It is influenced by the characteristics of the person perceived, the perceiver, and the situation.
3.2 Barriers to Accurate Social Perception
2. How can managers and organizations minimize the negative impact of stereotypes and other barriers to accurate social perception in interpersonal relations?
Stereotyping is a tendency to assign attributes to people solely on the basis of their class or category. Selective perception is a process by which we systematically screen or discredit information we don’t wish to hear and instead focus on more salient information. Perceptual defense is a tendency to distort or ignore information that is either personally threatening or culturally unacceptable.
3.3 Attributions: Interpreting the Causes of Behavior
3. How do people attribute credit and blame for organizational events?
Attribution theory concerns the process by which individuals attempt to make sense of the cause-effect relationships in their life space. Events are seen as being either internally caused (that is, by the individual) or externally caused (that is, by other factors in the environment). In making causal attributions, people tend to focus on three factors: consensus, consistency, and distinctiveness. The fundamental attribution error is a tendency to underestimate the effects of external or situational causes of behavior and overestimate the effects of personal causes.
The self-serving bias is a tendency for people to attribute success on a project to themselves while attributing failure to others.
3.4 Attitudes and Behavior
4. How can a work environment characterized by positive work attitudes be created and maintained?
An attitude can be defined as a predisposition to respond in a favorable or unfavorable way to objects or persons in one’s environment. There are two theories concerning the manner in which attitudes are formed. The first, called the dispositional approach, asserts that attitudes are fairly stable tendencies to respond to events in certain ways, much like personality traits. Thus, some people may be happy on almost any job regardless of the nature of the job. The second, called the situational approach, asserts that attitudes result largely from the particular situation in which the individual finds himself. Thus, some jobs may lead to more favorable attitudes than others. The social-information-processing approach to attitudes is a situational model that suggests that attitudes are strongly influenced by the opinions and assessments of coworkers. Cognitive consistency is a tendency to think and act in a predictable manner. Cognitive dissonance occurs when our actions and our attitudes are in conflict. This dissonance will motivate us to attempt to return to a state of cognitive consistency, where attitudes and behaviors are congruent.
3.5 Work-Related Attitudes
5. How can managers and organizations develop a committed workforce?
Job involvement refers to the extent to which an individual is interested in his or her assigned tasks. Organizational commitment refers to the relative strength of an individual’s identification with and involvement in a particular organization. Job satisfaction is a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experience. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.06%3A_Summary_of_Learning_Outcomes.txt |
1. Describe how the basic perceptual process works. Why should managers understand this process?
2. How can variations in social perception affect everyday work behavior? Provide an example to illustrate.
3. What can managers do to reduce the incidences of stereotyping in the workplace?
4. How does the attributional process work? Provide an example to show why this process is so important in understanding organizational behavior.
5. How do attributional biases work? What can managers do to reduce such biases?
6. What are the differences between job involvement, organizational commitment, and job satisfaction? Are all three influenced by the same factors?
7. What are the major reasons for job satisfaction? What are the primary consequences of dissatisfaction?
8. Explain.
3.08: Management Skills Application Exercises
1. In order to understand how response salience works, you may want to complete this self-assessment. Read the passage, and rate it on its comprehensibility. Does it make sense to you? Next, look at the appropriate frame of reference given in Appendix B. Now read the passage again, and rate it for its comprehensibility. Does it make more sense now that you have a specific frame of reference?
Can You Understand This Passage?
Instructions: The procedure is actually quite simple. First you arrange things into different groups. Of course, one pile may be sufficient depending on how much there is to do. If you have to go somewhere else due to lack of facilities that is the next step, otherwise you are pretty well set. It is important not to overdo things. That is, it is better to do too few things at once than too many. In the short run this may not seem important, but complications can easily arise. A mistake can be expensive as well. At first the whole procedure will seem complicated. Soon, however, it will become just another facet of life. It is difficult to foresee any end to the necessity for this task in the immediate future, but then one never can tell. After the procedure is completed one arranges the materials into different groups again. Then they can be put into their appropriate places. Eventually they will be used once more and the whole cycle will then have to be repeated. However, that is part of life.
2. How Do You Feel About Women Executives?
Instructions: This instrument focuses on your attitudes toward women in executive positions. For each item, circle the number that best represents your feelings concerning women executives in organizations. Be completely honest with yourself in responding. For a scoring key, refer to Appendix B.
3. Examples of the MSQ for two scales (compensation and recognition) can be seen in this self-assessment. If you wish to complete this sample questionnaire, simply refer to a (paid or unpaid) job that you have had and answer the questionnaire. To score the instrument, refer to Appendix B.
Are You Satisfied with Your Job?
Instructions: Answer each of the ten questions by circling the numbers that best describe how satisfied or dissatisfied you are with the particular item. Then sum your results for questions 1–5 and 6–10 separately. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.07%3A_Chapter_Review_Questions.txt |
1. You remember from your Organizational Behavior class that several assessments to increase one’s self- awareness, like the Minnesota Multiphasic Personality Inventory that you read about in this chapter and is profiled in the Managerial Skill Application Exercises of this chapter, were very beneficial for you as an understanding of your emotional intelligence, values, cognitive style, and ability to cope with change. You have been assigned to a team that will interview both internal and external candidates for a new sales manager position for the California region, which is a position at the same level organizationally as your present position. During the initial orientation meeting, one of the team members—the manager of a distribution center for the organization—says, “I like to use the results of the Myers-Briggs Types Indicator assessment to screen applicants for this position, and since sales managers should be extroverts and should possess sensing, thinking, and judging skills, we should only consider ESTJ types.” Your boss, the national sales manager, asks you to write a report on whether the selection process should only consider ESTJ types and to provide it to the team for discussion. Write a report and share it for discussion with a team of students in this class who will assume the role of the hiring interview team.
2. Recall a meeting that you recently had, such as a team presentation of a case analysis. What were your impressions of what happened in the planning of the presentation and how things like the assignment of roles and timetables for subsequent meetings and deliverables unfolded. What were the behaviors of the others at the meeting, and why do you think they acted as they did? Finally, how do you think that others perceived your behavior at the meeting? After you have recorded these recollections, meet with another attendee of that meeting. Ask them these questions, and record what they say happened at that meeting and what they thought of the behavior of the participants, including you. Let them know that this is for your class and you want them to be as honest as possible. As they are answering, record their recollections and do not interrupt or offer possible corrections. Finally, compare your recollections and notes with those of the interviewee and use the knowledge from this chapter to assess the differences and similarities in perception and attribution.
3. As a way to measure job satisfaction, ask someone at a local business the following questions:
a. What is your job title, and what do you do in your own words? How do these match up to tasks, duties, and responsibilities in your job description?
b. Are you satisfied with the work that you do?
c. How satisfied are you with the training and supervision that you receive?
d. How satisfied are you with the people that you work with?
e. Are you happy with your salary?
f. Are you happy with the benefits that are offered as part of the job?
g. Do you see any possibilities for advancement in the organization?
h. What are your general feelings about your employer?
i. Do you have any additional comments regarding how you feel about your job?
Write an assessment of this individual’s job satisfaction and what a supervisor and organization could do to improve the level of job satisfaction for their employees.
3.10: Critical Thinking Case
Stereotypes at Pitney Bowes
Many times, we think of stereotypes or discrimination only being an issue when it comes to things like gender, race, or religion. However, at Pitney Bowes Inc., the toughest stereotype to overcome is age.
Brigitte Van Den Houte starts her day in the normal way; however, she has taken a keen focus on persuading employees in their 20s that they have a future at Pitney Bowes.
For almost 100 years, Pitney Bowes, founded in 1920, has been all about commerce. But as the world turned to technology, the definition of what that meant for the traditional postage-meter equipment company had to change as well.
One of the biggest challenges of this ever-changing technological world is how the generations of employees can step aside from their stereotypes and understand one another to better work effectively.
At Pitney Bowes, their proactive approach puts younger colleagues with older colleagues in a mentoring situation. This is not the typical older mentor to younger mentor setup, however. Every few months, Houte arranges for the younger employees to spend the day with a seasoned executive with the plan of sharing experiences and ideas and offering advice. Houte states, “the old way of working no longer works,” and she’s right.
With over one-third of the workforce aging to 50 or older and millennials (young people aged 22–37) being the largest workforce group, it is imperative to put stereotypes aside and learn to work together. One big mistake for a manager would be to focus on the age difference rather than on what skills each person individually can bring to the table.Stereotypes such as “older individuals don’t know about technology” or “millennials are constantly job hopping and feel entitled” are put aside at Pitney Bowes in order to get the job done. With a more proactive approach, the range of variables within each generation can be utilized in the most effective way possible for an organization.
Questions:
1. What are other ways that a company can utilize a multigenerational team to their advantage?
2. What challenges does a multigenerational team pose for management?
3. What should the company and management team consider when attracting new employees of all
4. generations?
Sources: Hymowitz, Carol, “The Tricky Task of Managing the New, Multigenerational Workplace,” The Wall Street Journal, August 12, 2018, https://www.wsj.com/articles/the-tri...s&page=1&pos=9; Ault, Nicole, “ Don’t Trust Anyone Over 21,” The Wall Street Journal, August 22, 2018, https://www.wsj.com/articles/dont-tr...s&page=1&pos=1. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/03%3A_Perception_and_Job_Attitudes/3.09%3A_Managerial_Decision_Exercises.txt |
Learning Outcomes
After reading this chapter, you should be able to answer these questions:
1. How do organizations offer appropriate rewards in a timely fashion?
2. What are the best practices that organizations utilize to train employees in new job skills?
3. How do managers and organizations reduce undesirable employee behavior while reinforcing desirable
behavior?
4. How can employees be trained to assume more responsibility for self-improvement and job
performance with the goal of creating a work environment characterized by continual self-learning and employee development?
04: Learning and Reinforcement
exploring managerial careers
The Google Way to a Culture of Continued Learning
Google is great at many things—attracting top talent, maintaining employee satisfaction, and encouraging creativity, to name a few.
According to the Association of Training and Development (ATD), companies that offer comprehensive training programs have 218 percent higher income per employee than companies without formalized training. Not only that, but companies that have required programs for their employees see a much higher profit margin than those that don’t. Investing in people and promoting a self-learning environment is the right plan for companies that are looking to keep employees’ behavior in check, train or new skills, and increase employee development.
Spending millions of dollars is not necessary to create a culture that promotes learning.
Google follows the simple principles that gives their employees purpose and a career path. They provide information that is relevant and important to their employees. They know that in order to get this information to stick, it must be pertinent and presented at the right time, and in the right format. They also archive important information, which empowers employees to access this information at any and all times. Instead of providing gateways that impede learning, they open the doors.
Secondly, they share “dumb questions.” This may seem like a silly tactic, but encouraging employees to share their questions and opinions allows for sharing of information and learning on all levels. Google also employs the values of celebrated failure, which allows for the teams to learn from their mistakes and their failures. Then they can move on to the next project with newly found valuable information to get better each time.
Lastly, formalized plans for continued learning are employed for “informal and continuous learning” to occur. Examples of these events can be allowing employees to pursue their own interests, utilizing coaching and support tools, and then training being requested at various times. With these tactics, the cultivation of learning can be expressed throughout the company. Google is at the forefront of this pursuit, but other companies can learn from their methods to get ahead and get their employees on track as well.
Questions:
1. What considerations should Google take into account when creating formalized training for their employees?
2. Name three reasons why training and continued learning can be important for a company’s success.
3. Why is encouraging and celebrating failure an important thing for a company to promote?
A major responsibility of managers is to evaluate and reward their subordinates. If managers are to maximize the impact of available (and often limited) rewards, a thorough knowledge of reinforcement techniques is essential. We shall devote this chapter to developing a detailed understanding of learning processes in organizations. We begin by looking at basic models of learning.
Sources: Ault, Nicole, “Don’t Trust Anyone Over 21,” The Wall Street Journal, August 22, 2018, www.wsj.com/articles/dont-trust-anyone- over-21-1534977740?mod=searchresults&page=1&pos=1; and Gutierrez, Karla, “Mind-blowing Statistics that Prove the Value of Employee Training and Development, Shift, August 22, 2017, https://www.shiftelearning.com/blog/...nd-development.
1. How do organizations offer appropriate rewards in a timely fashion?
Learning may be defined, for our purposes, as a relatively permanent change in behavior that occurs as a result of experience. That is, a person is said to have learned something when she consistently exhibits a new behavior over time. Several aspects of this definition are noteworthy.1 First, learning involves a change in an attitude or behavior. This change does not necessarily have to be an improvement, however, and can include such things as learning bad habits or forming prejudices. In order for learning to occur, the change that takes place must be relatively permanent. So changes in behavior that result from fatigue or temporary adaptation to a unique situation would not be considered examples of learning. Next, learning typically involves some form of practice or experience. For example, the change that results from physical maturation, as when a baby develops the physical strength to walk, is in itself not considered learning. Third, this practice or experience must be reinforced over time for learning to take place. Where reinforcement does not follow practice or experience, the behavior will eventually diminish and disappear (“extinction”). Finally, learning is an inferred process; we cannot observe learning directly. Instead, we must infer the existence of learning from observing changes in overt behavior.
We can best understand the learning process by looking at four stages in the development of research on learning (see Exhibit 4.2). Scientific interest in learning dates from the early experiments of Pavlov and others around the turn of the century. The focus of this research was on stimulus-response relationships and the environmental determinants of observable behaviors. This was followed by the discovery of the law of effect, experiments in operant conditioning, and, finally, the formulation of social learning theory.
Classical Conditioning
Classical conditioning is the process whereby a stimulus-response (S-R) bond is developed between a conditioned stimulus and a conditioned response through the repeated linking of a conditioned stimulus with an unconditioned stimulus. This process is shown in Exhibit 4.3. The classic example of Pavlov’s experiments illustrates the process. Pavlov was initially interested in the digestive processes of dogs but noticed that the dogs started to salivate at the first signal of approaching food. On the basis of this discovery, he shifted his attention to the question of whether animals could be trained to draw a causal relationship between previously unconnected factors. Specifically, using the dogs as subjects, he examined the extent to which the dogs could learn to associate the ringing of a bell with the act of salivation. The experiment began with unlearned, or unconditioned, stimulus-response relationships. When a dog was presented with meat (unconditioned stimulus), the dog salivated (unconditioned response). No learning was necessary here, as this relationship represented a natural physiological process.
Next, Pavlov paired the unconditioned stimulus (meat) with a neutral one (the ringing of a bell). Normally, the ringing of the bell by itself would not be expected to elicit salivation. However, over time, a learned linkage developed for the dog between the bell and meat, ultimately resulting in an S-R bond between the conditioned stimulus (the bell) and the response (salivation) without the presence of the unconditioned stimulus (the meat). Evidence emerged that learning had occurred and that this learning resulted from conditioning the dogs to associate two normally unrelated objects, the bell and the meat.
Although Pavlov’s experiments are widely cited as evidence of the existence of classical conditioning, it is necessary from the perspective of organizational behavior to ask how this process relates to people at work. Ivancevich, Szilagyi, and Wallace provide one such work-related example of classical conditioning:
An illustration of classical conditioning in a work setting would be an airplane pilot learning how to use a newly installed warning system. In this case the behavior to be learned is to respond to a warning light that indicates that the plane has dropped below a critical altitude on an assigned glide path. The proper response is to increase the plane’s altitude. The pilot already knows how to appropriately respond to the trainer’s warning to increase altitude (in this case we would say the trainer’s warning is an unconditioned stimulus and the corrective action of increasing altitude is an unconditioned response). The training session consists of the trainer warning the pilot to increase altitude every time the warning light goes on. Through repeated pairings of the warning light with the trainer’s warning, the pilot eventually learns to adjust the plane’s altitude in response to the warning light even though the trainer is not present. Again, the unit of learning is a new S-R connection, or habit.2
Although classical conditioning clearly has applications to work situations, particularly in the area of training and development, it has been criticized as explaining only a limited part of total human learning. Psychologist B. F. Skinner argues that classical conditioning focuses on respondent, or reflexive, behaviors; that is, it concentrates on explaining largely involuntary responses that result from stimuli.3 More complex learning cannot be explained solely by classical conditioning. As an alternative explanation, Skinner and others have proposed the operant conditioning model of learning.
Operant Conditioning
The major focus of operant conditioning is on the effects of reinforcements, or rewards, on desired behaviors. One of the first psychologists to examine such processes was J. B. Watson, a contemporary of Pavlov, who argued that behavior is largely influenced by the rewards one receives as a result of actions.4 This notion is best summarized in Thorndike’s law of effect. This law states that of several responses made to the same situation, those that are accompanied or closely followed by satisfaction (reinforcement) will be more likely to occur; those that are accompanied or closely followed by discomfort (punishment) will be less likely to occur.5
In other words, it posits that behavior that leads to positive or pleasurable outcomes tends to be repeated, whereas behavior that leads to negative outcomes or punishment tends to be avoided. In this manner, individuals learn appropriate, acceptable responses to their environment. If we repeatedly dock the pay of an employee who is habitually tardy, we would expect that employee to learn to arrive early enough to receive a full day’s pay.
A basic operant model of learning is presented in Exhibit 4.2. There are three important concepts of this model:
Drive. A drive is an internal state of disequilibrium; it is a felt need. It is generally believed that drive increases with the strength of deprivation. A drive, or desire, to learn must be present for learning to take place. For example, not currently being able to afford the house you want is likely to lead to a drive for more money to buy your desired house. Living in a run-down shack is likely to increase this drive compared to living in a nice apartment.
Habit. A habit is the experienced bond or connection between stimulus and response. For example, if a person learns over time that eating satisfies hunger, a strong stimulus-response (hunger-eating) bond will develop. Habits thus determine the behaviors, or courses of action, we choose.
Reinforcement or reward. This represents the feedback individuals receive as a result of action. For example, if as a salesperson you are given a bonus for greater sales and plan to use the money to buy the house you have always wanted, this will reinforce the behaviors that you believed led to greater sales, such as smiling at customers, repeating their name during the presentation, and so on.
A stimulus activates an individual’s motivation through its impact on drive and habit. The stronger the drive and habit (S-R bond), the stronger the motivation to behave in a certain way. As a result of this behavior, two things happen. First, the individual receives feedback that reduces the original drive. Second, the individual strengthens his or her belief in the veracity of the S-R bond to the extent that it proved successful. That is, if one’s response to the stimulus satisfied one’s drive or need, the individual would come to believe more strongly in the appropriateness of the particular S-R connection and would respond in the same way under similar circumstances.
An example will clarify this point. Several recent attempts to train chronically unemployed workers have used a daily pay system instead of weekly or monthly systems. The primary reason for this is that the workers, who do not have a history of working, can more quickly see the relationship between coming to work and receiving pay. An S-R bond develops more quickly because of the frequency of the reinforcement, or reward.
Operant versus Classical Conditioning
Operant conditioning can be distinguished from classical conditioning in at least two ways.6 First, the two approaches differ in what is believed to cause changes in behavior. In classical conditioning, changes in behavior are thought to arise through changes in stimuli—that is, a transfer from an unconditioned stimulus to a conditioned stimulus. In operant conditioning, on the other hand, changes in behavior are thought to result from the consequences of previous behavior. When behavior has not been rewarded or has been punished, we would not expect it to be repeated.
Second, the two approaches differ in the role and frequency of rewards. In classical conditioning, the unconditioned stimulus, acting as a sort of reward, is administered during every trial. In contrast, in operant conditioning the reward results only when individuals choose the correct response. That is, in operant conditioning, individuals must correctly operate on their environment before a reward is received. The response is instrumental in obtaining the desired reward.
Social Learning Theory
The last model of learning we should examine is noted psychologist Albert Bandura’s social learning theory. Social learning theory is defined as the process of molding behavior through the reciprocal interaction of a person's cognitions, behavior, and environment.7 This is done through a process that Bandura calls reciprocal determinism. This concept implies that people control their own environment (for example, by quitting one’s job) as much as the environment controls people (for example, being laid off). Thus, learning is seen as a more active, interactive process in which the learner has at least some control.
Social learning theory shares many of the same roots as operant conditioning. Like Skinner, Bandura argues that behavior is at least in part controlled by environmental cues and consequences, and Bandura uses observable behavior (as opposed to attitudes, feelings, etc.) as the primary unit of analysis. However, unlike operant conditioning, social learning theory posits that cognitive or mental processes affect our response to the environmental cues.
Social learning theory has four central elements: attention, retention, reproduction, and incentives. Before someone can learn something, they must notice or pay attention to the thing that is to be learned. For example, you probably would not learn much as a student in any class unless you paid attention to information conveyed by the text or instructor. Retention is the process by which what you have noticed is encoded into your memory. Reproduction involves the translation of what was recorded in your mind into overt actions or behaviors. Obviously, the higher the level of attention and the greater the retention, the better the reproduction of what was learned. Finally, incentives can influence all three processes. For example, if you are rewarded (say, praised) for paying attention, you will pay more attention. If you are rewarded for remembering what you studied (say, good grades), you will retain more. If you are rewarded for reproducing what you learned (say, a promotion for effectively motivating your subordinates), you will produce that behavior more.
Central to this theory is the concept of vicarious learning. Vicarious learning is learning that takes place through the imitation of other role models. That is, we observe and analyze what another person does and the resulting consequences. As a result, we learn without having to experience the phenomenon firsthand. Thus, if we see a fellow employee being disciplined or fired for being disruptive in the workplace, we might learn not to be disruptive ourselves. If we see that gifts are usually given with the right hand in the Middle East, we might give gifts in that manner ourselves.
A model of social learning processes is shown in Exhibit 4.4. As can be seen, three factors—the person, the environment, and the behavior—interact through such processes as vicarious learning, symbolic representations, and self-control to cause actual learned behaviors.
Major Influences on Learning. On the basis of this work, it is possible by way of summary to identify several general factors that can enhance our learning processes. An individual’s desire to learn, background knowledge of a subject, and the length of the learning period are some of the components of a learning environment. Filley, House, and Kerr identify five major influences on learning effectiveness.8
Drawn largely from behavioral science and psychology literature, substantial research indicates that learning effectiveness is increased considerably when individuals have high motivation to learn. We sometimes encounter students who work day and night to complete a term paper that is of interest to them, whereas writing an uninteresting term paper may be postponed until the last possible minute. Maximum transfer of knowledge is achieved when a student or employee is motivated to learn by a high need to know.
Considerable evidence also demonstrates that we can facilitate learning by providing individuals with feedback on their performance. A knowledge of results serves a gyroscopic function, showing individuals where they are correct or incorrect and furnishing them with the perspective to improve. Feedback also serves as an important positive reinforcer that can enhance an individual’s willingness or desire to learn. Students who are told by their professor how they performed on an exam and what they could do to improve next time are likely to study harder.
In many cases, prior learning can increase the ability to learn new materials or tasks by providing needed background or foundation materials. In math, multiplication is easier to learn if addition has been mastered. These beneficial effects of prior learning on present learning tend to be greatest when the prior tasks and the present tasks exhibit similar stimulus-response connections. For instance, most of the astronauts selected for the space program have had years of previous experience flying airplanes. It is assumed that their prior experience and developed skill will facilitate learning to fly the highly technical, though somewhat similar, vehicles.
Another influence on learning concerns whether the materials to be learned are presented in their entirety or in parts—whole versus part learning.9 Available evidence suggests that when a task consists of several distinct and unrelated duties, part learning is more effective. Each task should be learned separately. However, when a task consists of several integrated and related parts (such as learning the components of a small machine), whole learning is more appropriate, because it ensures that major relationship among parts, as well as proper sequencing of parts, is not overlooked or underemphasized.
The final major influence on learning highlights the advantages and disadvantages of concentrated as opposed to distributed training sessions. Research suggests that distribution of practice—short learning periods at set intervals—is more effective for learning motor skills than for learning verbal or cognitive skills. Distributed practice also seems to facilitate learning of very difficult, voluminous, or tedious material. It should be noted, however, that concentrated practice appears to work well where insight is required for task completion. Apparently, concentrated effort over short durations provides a move synergistic approach to problem-solving.
Although there is general agreement that these influences are important (and are under the control of management in many cases), they cannot substitute for the lack of an adequate reinforcement system. In fact, reinforcement is widely recognized as the key to effective learning. If managers are concerned with eliciting desired behaviors from their subordinates, a knowledge of reinforcement techniques is essential.
expanding around the globe
Learning to Be Effective Overseas
General Motors has learned by experience that it pays not to have managers learn only by experience how to function effectively while working in foreign countries. Managing expatriate assignments in difficult locations was brought to life by the experiences of Richard Pennington, General Motors’ head of global mobility for the EMEA (Europe, Middle East, and Africa) region. He knows from experience some of the things that tend to go well, as well as some of those that don’t, and has learned lessons from moving employees to places like Uzbekistan. This became important when the company took on a new engine manufacturing operation in the capital, Tashkent, as well as an existing manufacturing plant in Andijan. The objectives were the same as for most global mobility projects: to get the right people to the right place at the right time for the right cost. The general approach was Action—Plan—Do—Check. Pennington urged potential relocation candidates not to be overreliant on the Internet and, if possible, to go and see for themselves. “Nothing beats going to a location—particularly a harsh location—yourself,” he says. Pennington also emphasizes the importance of selecting suppliers on the ground carefully, even if you already have a network of existing suppliers. Strong relationships in the host location are of paramount importance. In difficult locations, it is particularly important that the local HR, finance, and legal staff work with you proactively, as making payments at the right time can be critical. Equally, cultural training and language providers are essential.
These training programs involve a wide variety of teaching methods. Factual information may be conveyed through lectures or printed material. More subtle information is learned through role plays, case studies, and simulations.
The research on cross-cultural training suggests that the more involved participants are in the training, the more they learn, and that the more they practice or simulate new behaviors that they need to master in the foreign environment, the more effective they will be in actual situations.
The results for GM have been impressive. Most companies that do not provide cross-cultural training for their employees sent on international assignments experience failure rates of about 25 percent, and each failure or early return costs the company on average \$150,000. GM has a failure rate of less than 1 percent. Also, in GM’s case, the training has been extended to the manager’s family and has helped reluctant spouses and children more readily accept, if not embrace, the foreign assignment.
Sources: F. Furnie, “International assignments: Managing change and complexity,” Relocate Global, September 23, 2015, www.relocatemagazine.com/art...l-assignments- managing-change-and-complexity; J. Lublin. “Companies Use Cross-Cultural Training to Help Their Employees Adjust Abroad.” Wall Street Journal, August 4, 2004 p. B1.
concept check
• How can learning theory be used to change behaviors?
• Define classical conditioning, and differentiate it from operant conditioning.
• What is social learning theory?
1. Rose E. Spielman, Kathryn Dumper, William Jenkins, Arlene Lacombe, Marilyn Lovett, and Marion Perlmutter, Psychology (Houston: OpenStax, 2015).
2. J. M. Ivancevich, A. D. Szilagyi, and M. Wallace, Organizational Behavior and Performance (Glenview, Ill.: Scott, Foresman, 1977), p. 80.
3. B. F. Skinner, “Operant Behavior,” American Psychologist, 1963, 18, pp. 503–515.
4. J. B. Watson, Behavior: An Introduction to Comparative Psychology (New York: Holt, Rinehart and Winston, 1914).
5. E. L. Thorndike, Animal Intelligence (New York: Macmillan, 1911), p. 244.
6. F. Luthans, et. al., Organizational Behavior 13th Edition (Charlotte: Information Age Publishing, 2016).
7. A. Bandura, Social Learning Theory (Englewood Cliffs, N.J.: Prentice-Hall, 1977).
8. A. Filley, R. J. House, and S. Kerr, Managerial Process and Organizational Behavior (Glenview, III.: Scott, Foresman, 1975).
9. E. J. McCormick and D. Illgen, Industrial Psychology 8th edition (Englewood Cliffs, N.J.: Prentice-Hall, 1984). 10. B. M. Bass and J. Vaughn, Training in Industry: The Management of Learning (Belmont, Ca.: Wadsworth, 1966); G. Wexley and G. P. Latham, Developing and Training Human Resources in Organizations, Third Edition (Pearson: 2002); and G. P. Latham, “Human Resource Training and Development,” in M. Rosenzweig and L. W. Porter, eds., Annual Review of Psychology (Palo Alto: Annual Reviews, 1988), pp. 545–581.
Exhibit 4.2 The Development of Modern Behavioral Learning Theory (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 4.3 Classical versus Operant Conditioning (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 4.4 A Basic Model of Social Learning Source: Adapted from “A Social Learning Approach to Behavioral Management: Radical Behaviorists ‘Mellowing Out,’ ” by Robert Kreitner et al. Organizational Dynamics. (Attribution: Copyright Rice University, OpenStax, under CC BY- NC-SA 4.0 license)
Exhibit 4.5 Stop sign in Quebec Would your prior learning lead you to come to a full stop while driving in Quebec, just north of New York State? (Credit: Joe Schlabotnik/ flickr/ Attribution 2.0 Generic (CC BY 2.0)) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/04%3A_Learning_and_Reinforcement/4.01%3A_Basic_Models_of_Learning.txt |
2. What are the best practices that organizations utilize to train employees in new job skills?
A central feature of most approaches to learning is the concept of reinforcement. This concept dates from Thorndike’s law of effect, which, as mentioned earlier, states that behavior that is positively reinforced tends to be repeated, whereas behavior that is not reinforced will tend not to be repeated. Hence, reinforcement can be defined as anything that causes a certain behavior to be repeated or inhibited.
Reinforcement versus Motivation
It is important to differentiate reinforcement from the concept of employee motivation. Motivation, as described in the next chapter, represents a primary psychological process that is largely cognitive in nature. Thus, motivation is largely internal—it is experienced by the employee, and we can see only subsequent manifestations of it in actual behavior. Reinforcement, on the other hand, is typically observable and most often externally administered. A supervisor may reinforce what he or she considers desirable behavior without knowing anything about the underlying motives that prompted it. For example, a supervisor who has a habit of saying “That’s interesting” whenever she is presented with a new idea may be reinforcing innovation on the part of the subordinates without the supervisor really knowing why this result is achieved. The distinction between theories of motivation and reinforcement should be kept in mind when we examine behavior modification and behavioral self-management later in this chapter.
Strategies for Behavioral Change
From a managerial standpoint, several strategies for behavioral change are available to facilitate learning in organizational settings. At least four different types should be noted: (1) positive reinforcement; (2) avoidance learning, or negative reinforcement; (3) extinction; and (4) punishment. Each type plays a different role in both the manner in which and extent to which learning occurs. Each will be considered separately here.
Positive Reinforcement. Positive reinforcement consists of presenting someone with an attractive outcome following a desired behavior. As noted by Skinner, “A positive reinforcer is a stimulus which, when added to a situation, strengthens the probability of an operant response.”11 A simple example of positive reinforcement is supervisory praise for subordinates when they perform well in a certain situation. That is, a supervisor may praise an employee for being on time consistently (see Exhibit 4.6). This behavior-praise pattern may encourage the subordinate to be on time in the future in the hope of receiving additional praise.
In order for a positive reinforcement to be effective in facilitating the repetition of desired behavior, several conditions must be met. First, the reinforcer itself (praise) must be valued by the employee. It would prove ineffective in shaping behavior if employees were indifferent to it. Second, the reinforcer must be strongly tied to the desired behavior. Receipt of the reinforcer by the employee must be directly contingent upon performing the desired behavior. “Rewards must result from performance, and the greater the degree of performance by an employee, the greater should be his reward.”12 It is important to keep in mind here that “desired behavior” represents behavior defined by the supervisor, not the employee. Thus, for praise to be a reinforcer, not only must it be valued by the employee, but it must directly follow the desired behavior and should be more intense as the behavior is closer to the ideal the supervisor has in mind. Praise thrown out at random is unlikely to reinforce the desired behavior. Third, there must be ample occasion for the reinforcer to be administered following desired behavior. If the reinforcer is tied to certain behavior that seldom occurs, then individuals will seldom be reinforced and will probably not associate this behavior with a reward. For example, if praise is only provided for truly exceptional performance, then it is unlikely to have a powerful impact on the desired behavior. It is important that the performance-reward contingencies be structured so that they are easily attainable.
Avoidance Learning. A second method of reinforcement is avoidance learning, or negative reinforcement. Avoidance learning refers to seeking to avoid an unpleasant condition or outcome by following a desired behavior. Employees learn to avoid unpleasant situations by behaving in certain ways. If an employee correctly performs a task or is continually prompt in coming to work (see Exhibit 4.6), the supervisor may refrain from harassing, reprimanding, or otherwise embarrassing the employee. Presumably, the employee learns over time that engaging in correct behavior diminishes admonition from the supervisor. In order to maintain this condition, the employee continues to behave as desired.
Extinction. The principle of extinction suggests that undesired behavior will decline as a result of a lack of positive reinforcement. If the perpetually tardy employee in the example in Exhibit 4.6 consistently fails to receive supervisory praise and is not recommended for a pay raise, we would expect this nonreinforcement to lead to an “extinction” of the tardiness. The employee may realize, albeit subtly, that being late is not leading to desired outcomes, and she may try coming to work on time.
Punishment. Finally, a fourth strategy for behavior change used by managers and supervisors is punishment. Punishment is the administration of unpleasant or adverse outcomes as a result of undesired behavior. An example of the application of punishment is for a supervisor to publicly reprimand or fine an employee who is habitually tardy (see Exhibit 4.6). Presumably, the employee would refrain from being tardy in the future in order to avoid such an undesirable outcome. The most frequently used punishments (along with the most frequently used rewards) are shown in Table 4.1.
The use of punishment is indeed one of the most controversial issues of behavior change strategies. Although punishment can have positive work outcomes—especially if it is administered in an impersonal way and as soon as possible after the transgression—negative repercussions can also result when employees either resent the action or feel they are being treated unfairly. These negative outcomes from punishment are shown in Exhibit 4.7. Thus, although punishment represents a potent force in corrective learning, its use must be carefully considered and implemented. In general, for punishment to be effective the punishment should “fit the crime” in severity, should be given in private, and should be explained to the employee.
ethics in practice
Detracting a Workplace Bully
Studies showcase that nearly 50 percent of employees in the U.S. workforce face bullying at one point in time. All types of bullying, not just discrimination or harassment, are important to consider.
Angela Anderson was working for a law school administration council and experienced bullying firsthand. Often her manager would yell at her in front of other coworkers, and it was clear to Angela that she was not well-liked. Unfortunately it was not just Angela who felt the wrath of this manager, who often handled interactions with other employees the same way. Many of the employees, including Angela, attempted to appease their bullying manager, but nothing would help. One day Angela was threatened by her manager, and before Angela could reach the HR department, she was fired. This example is an extreme case, but being able to take recourse against unwanted and disruptive employee behavior is an important action for any workplace manager.
Questions:
1. What steps can you take to ensure that your company can detract from employees’ bullying behavior?
2. What actions should an employee take if they are experiencing unwanted behaviors from another employee or manager?
3. What other departments should be involved when developing a plan and policies for how to handle unacceptable workplace behavior?
Sources: Acceptable and Unacceptable Behaviours, University of Cambridge website, accessed January 15, 2019, www.hr.admin.cam.ac.uk/polic...ance-managers- and-staff/guidance-managers/acceptable-and; Hedges, Kristi, How to Change Your Employee’s Behavior,” Forbes, March, 4, 2015, www.forbes.com/sites/work-in.../03/04/how-to- change-your-employees-behavior/#c32ad4b6732a; and Kane, Sally, Workplace Bullying: True Stories, Statistics and Tips, The Balance Careers, January 29, 2019, https://www.thebalancecareers.com/bu...tories-2164317.
In summary, positive reinforcement and avoidance learning focus on bringing about the desired response from the employee. With positive reinforcement the employee behaves in a certain way in order to gain desired rewards, whereas with avoidance learning the employee behaves in order to avoid certain unpleasant outcomes. In both cases, however, the behavior desired by the supervisor is enhanced. In contrast, extinction and punishment focus on supervisory attempts to reduce the incidence of undesired behavior. That is, extinction and punishment are typically used to get someone to stop doing something the supervisor doesn’t like. It does not necessarily follow that the individual will begin acting in the most desired, or correct, manner.
Often students have difficulty seeing the distinction between avoidance and extinction or in understanding how either could have a significant impact on behavior. Two factors are important to keep in mind. The first we will simply call the “history effect.” Not being harassed could reinforce an employee’s prompt arrival at work if in the past the employee had been harassed for being late. Arriving on time and thereby avoiding the past harassment would reinforce arriving on time. This same dynamic would hold true for extinction. If the employee had been praised in the past for arriving on time, then arrived late and was not praised, this would serve to weaken the tendency to arrive late. The second factor we will call the “social effect.” For example, if you see others harassed when they arrive late and then you are not harassed when you arrive on time, this could reinforce your arriving at work on time. Again, this same dynamic would hold true for extinction. If you had observed others being praised for arriving on time, then not receiving praise when you arrived late would serve to weaken the tendency to arrive late.
From a managerial perspective, questions arise about which strategy of behavioral change is most effective. Advocates of behavioral change strategies, such as Skinner, answer that positive reinforcement combined with extinction is the most suitable way to bring about desired behavior. There are several reasons for this focus on the positive approach to reinforcement. First, although punishment can inhibit or eliminate undesired behavior, it often does not provide information to the individual about how or in which direction to change. Also, the application of punishment may cause the individual to become alienated from the work situation, thereby reducing the chances that useful change can be effected. Similarly, avoidance learning tends to emphasize the negative; that is, people are taught to stay clear of certain behaviors, such as tardiness, for fear of repercussions. In contrast, it is felt that combining positive reinforcement with the use of extinction has the fewest undesirable side effects and allows individuals to receive the rewards they desire. A positive approach to reinforcement is believed by some to be the most effective tool management has to bring about favorable changes in organizations.
Schedules of Reinforcement
Having examined four distinct strategies for behavioral change, we now turn to an examination of the various ways, or schedules, of administering these techniques. As noted by Costello and Zalkind, “The speed with which learning takes place and also how lasting its effects will be is determined by the timing of reinforcement.”13 Thus, a knowledge of the types of schedules of reinforcement is essential to managers if they are to know how to choose rewards that will have maximum impact on employee performance. Although there are a variety of ways in which rewards can be administered, most approaches can be categorized into two groups: continuous and partial (or intermittent) reinforcement schedules. A continuous reinforcement schedule rewards desired behavior every time it occurs. For example, a manager could praise (or pay) employees every time they perform properly. With the time and resource constraints most managers work under, this is often difficult, if not impossible. So, most managerial reward strategies operate on a partial schedule. A partial reinforcement schedule rewards desired behavior at specific intervals, not every time desired behavior is exhibited. Compared to continuous schedules, partial reinforcement schedules lead to slower learning but stronger retention. Thus, learning is generally more permanent. Four kinds of partial reinforcement schedules can be identified: (1) fixed interval, (2) fixed ratio, (3) variable interval, and (4) variable ratio (see Table 4.2).
Fixed-Interval Schedule. A fixed-interval reinforcement schedule rewards individuals at specified intervals for their performance, as with a biweekly paycheck. If employees perform even minimally, they are paid. This technique generally does not result in high or sustained levels of performance because employees know that marginal performance usually leads to the same level of reward as high performance. Thus, there is little incentive for high effort and performance. Also, when rewards are withheld or suspended, extinction of desired behavior occurs quickly. Many of the recent job redesign efforts in organizations were prompted by recognition of the need for alternate strategies of motivation rather than paying people on fixed-interval schedules.
Fixed-Ratio Schedule. The second fixed schedule is the fixed-ratio schedule. Here the reward is administered only upon the completion of a given number of desired responses. In other words, rewards are tied to performance in a ratio of rewards to results. A common example of the fixed-ratio schedule is a piece-rate pay system, whereby employees are paid for each unit of output they produce. Under this system, performance rapidly reaches high levels. In fact, according to Hamner, “The response level here is significantly higher than that obtained under any of the interval (time-based) schedules.”14 On the negative side, however, performance declines sharply when the rewards are withheld, as with fixed-interval schedules.
Variable-Interval Schedule. Using variable reinforcement schedules, both variable-interval and variable-ratio reinforcements are administered at random times that cannot be predicted by the employee. The employee is generally not aware of when the next evaluation and reward period will be. Under a variable-interval schedule, rewards are administered at intervals of time that are based on an average. For example, an employee may know that on the average her performance is evaluated and rewarded about once a month, but she does not know when this event will occur. She does know, however, that it will occur sometime during the interval of a month. Under this schedule, effort and performance will generally be high and fairly stable over time because employees never know when the evaluation will take place.
Variable-Ratio Schedule. Finally, a variable-ratio schedule is one in which rewards are administered only after an employee has performed the desired behavior a number of times, with the number changing from the administration of one reward to the next but averaging over time to a certain ratio of number of performances to rewards. For example, a manager may determine that a salesperson will receive a bonus for every 15th new account sold. However, instead of administering the bonus every 15th sale (as in a fixed-interval schedule), the manager may vary the number of sales that is necessary for the bonus, from perhaps 10 sales for the first bonus to 20 for the second. On the average, however, the 15:1 ratio prevails. If the employee understands the parameters, then the “safe” level of sales, or the level of sales most likely to result in a bonus, is in excess of 15. Consequently, the variable-ratio schedule typically leads to high and stable performance. Moreover, extinction of desired behavior is slow.
Which of these four schedules of reinforcement is superior? In a review of several studies comparing the various techniques, Hamner concludes:
The necessity for arranging appropriate reinforcement contingencies is dramatically illustrated by several studies in which rewards were shifted from a response-contingent (ratio) to a time-contingent (interval) basis. During the period in which rewards were made conditional upon occurrence of the desired behavior, the appropriate response patterns were exhibited at a consistently high level. When the same rewards were given based on time and independent of the worker’s behavior, there was a marked drop in the desired behavior. The reinstatements of the performance-contingent reward schedule promptly restored the high level of responsiveness.
In other words, the performance-contingent (or ratio) reward schedules generally lead to better performance than the time-contingent (or interval) schedules, regardless of whether such schedules are fixed or variable. We will return to this point in a subsequent chapter on performance appraisal and reward systems.
Two additional approaches to learning are found in the work of David Kolb and Mel Silberman. Kolb's experiential learning style theory is typically represented by a four-stage learning cycle in which the learner 'touches all the bases’. The Four stages are achieved when a person progresses through a cycle of four stages: of (1) having a concrete experience followed by (2) observation of and reflection on that experience which leads to (3) the formation of abstract concepts (analysis) and generalizations (conclusions) which are then (4) used to test hypothesis in future situations, resulting in new experiences. Silberman in his book Active Training, identified eight qualities of an effective and active learning experience. The eight qualities are: a moderate level of content; a balance between affective, behavioral, and cognitive learning, a variety of learning approaches, opportunities for group participation, encouraging participants to share their expertise, recycling concepts and skills learned earlier, advocating real-life problem solving, and allowing time for re-entry.15
managerial leadership
Shaping a Salesperson’s Behavior
Sharon Johnson worked for a publishing company based in Nashville, Tennessee, that sold a line of children’s books directly to the public through a door-to-door sales force. Sharon had been a very successful salesperson and was promoted first to district and then to regional sales manager after just four years with the company. Sales bonuses were fixed, and a fixed-dollar bonus was tied to every \$1,000 in sales over a specific minimum quota. However, there was a wide variety of rewards, from praise to gift certificates, that were left to Sharon’s discretion.
Sharon knew from her organizational behavior class that giving out praise to those who liked it and gifts to those who preferred them was an important means of reinforcing desired behavior, and she had been quite successful in implementing this principle. She also knew that if you reinforced a behavior that was “on the right track” to the ideal behavior you wanted out of a salesperson, eventually you could shape their behavior, almost without their realizing it.
Sharon had one particular salesperson, Lyle, that she thought had great potential, yet his weekly sales were somewhat inconsistent and often lower than she thought possible. When Lyle was questioned about his performance, he indicated that sometimes he felt that the families he approached could not afford the books he was selling and so he did not think it was right to push the sale too hard. Although Sharon argued that it was not Lyle’s place to decide for others what they could or could not afford, Lyle still felt uncomfortable about utilizing his normal sales approach with these families.
Sharon believed that through subtle reinforcement of certain behaviors she could shape Lyle’s behavior and that over time he would increasingly use his typical sales approach with the families he thought could not afford the books. For example, she knew that in the cases of families Lyle thought could not afford the books, he spent only 3.5 minutes in the house compared to 12.7 minutes in homes of families he judged able to afford the books. Sharon believed that if she praised Lyle when the average time he spent in each family’s home was quite similar that Lyle would increase the time he spent in the homes of families he judged unable to afford the books. She believed that the longer he spent in these homes, the more likely Lyle was to utilize his typical sales approach. This was just one of several ways Sharon thought she could shape Lyle’s behavior without trying to change his mind about pushing books onto people he thought could not afford them.
Sharon saw no ethical issues in this case until she told a friend about it and the friend questioned whether it was ethical to utilize learning and reinforcement techniques to change people’s behavior “against their will” even if they did not realize that this was happening.
Source: This ethical challenge is based on a true but disguised case observed by author J. Stewart Black.
concept check
• What is reinforcement, and how can it be applied to motivation?
• What are the four strategies to use for behavioral change?
• What is the significance of schedules in changing behavior?
11. B. F. Skinner, Science and Human Behavior (New York: Macmillan, 1953), p. 73.
12. W. C. Hamner, “Reinforcement Theory,” in H. L. Tosi and W. C. Hamner, eds., Organizational Behavior and Management: A Contingency Approach (Chicago: St. Clair, 1977), p. 98.
13. T. W. Costello and S. S. Zalkind, Psychology in Administration: A Research Orientation (Englewood Cliffs, N. J.: Prentice-Hall, 1963), p. 193.
14. Hamner, op. cit., p. 105.
15. David Kolb, Experiential Learning, 2nd Edition, (Pearson FT Press: New York, 2015) and Mel Silberman, Elaine Beich and Carol Auerbach, Active Training, (Wiley: New York, 2016).
Table 4.1 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Table 4.2 (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 4.6 Strategies for Behavioral Change (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 4.7 Potential Negative Consequences of Punishment (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/04%3A_Learning_and_Reinforcement/4.02%3A_Reinforcement_and_Behavioral_Change.txt |
3. How do managers and organizations reduce undesirable employee behavior while reinforcing desirable behavior?
When the above principles and techniques are applied to the workplace, we generally see one of two approaches: behavior modification or behavioral self-management. Both approaches rest firmly on the principles of learning described above. Because both of these techniques have wide followings in corporations, we shall review them here. First, we look at the positive and negative sides of behavior modification.
Behavior modification is the use of operant conditioning principles to shape human behavior to conform to desired standards defined by superiors. In recent years, behavior modification has been applied in a wide variety of organizations. In most cases, positive results are claimed. There is interest in the technique as a management tool to improve performance and reduce costs.
Because of its emphasis on shaping behavior, it is more appropriate to think of behavior modification as a technique for motivating employees rather than as a theory of work motivation. It does not attempt to provide a comprehensive model of the various personal and job-related variables that contribute to motivation. Instead, its managerial thrust is how to motivate, and it is probably this emphasis that has led to its current popularity among some managers. Even so, we should be cautioned against the unquestioned acceptance of any technique until we understand the assumptions underlying the model. If the underlying assumptions of a model appear to be uncertain or inappropriate in a particular situation or organization, its use is clearly questionable.
expanding around the globe
In Japan’s Hell Camp
There is a saying in Japan that “the nail that sticks up gets hammered down.” This means that in corporate Japan employees are supposed to act together and move in unison. Individuality is not encouraged. Although Japanese companies use many techniques to train their employees to work hard and overcome adversity as a group, one rather notable approach that is used by many companies is known as Hell Camp.
The purpose of Hell Camp is to develop employees so they can “concentrate under difficulty.”
Representing something of a blend of Outward Bound and assertiveness training, Hell Camp is designed to toughen employees by putting them through numerous humiliating exercises (e.g., making them shout their company song outside the local train station). If they pass each exercise (for example, if they shout loud enough and with sufficient emotion), they are allowed to remove one of several “badges of shame.” Criteria for removing a badge are left vague, so, in essence, the program uses a variable-ratio reinforcement system. The employee never quite knows when the trainer will say she has succeeded; therefore, the most likely level of performance that will result in the removal of shame badges is that at the higher end of the spectrum of performance. If the employee succeeds during the week-long program in removing all of the badges and shows her sincerity and commitment, she graduates. If not, she must repeat the program.
Far from the trust-building exercises and fun runs of modern corporate retreats, Japan’s executive Hell Camps were run with the discipline and intensity of military basic training. The goal was to whip into shape underperforming middle-management types, as well as give them the assertiveness the Japanese felt they lacked in dealing with Western competitors.
It is estimated that over 50,000 Japanese managers have gone through the program. Companies like it because they see it as a way to keep managers from getting soft. As one executive notes, “Companies have been getting very soft, very weak in their way of demanding excellence.” It is thought that the harassment received during Hell Camp and the reinforcement following satisfactory task accomplishment instill character, and Japanese companies show no sign of losing interest in the program.
Sources: Richarz, Allan, “ The Intense Corporate ‘Hell Camps’ of 1980s Japan,” Atlas Obscura, May 30, 2017, https://www.atlasobscura.com/article...camp-japan-80s; Phallon, R., “Hell Camp,” Forbes, June 18, 1984; Neill, Michael and Lustig, David, “ A 13-Day Japanese Boot Camp Shows U.S. Executives How to Succeed in Business Through Suffering,” People, May 30, 1988, people.com/archive/a-13-day- japanese-boot-camp-shows-u-s-executives-how-to-succeed-in-business-through-suffering-vol-29-no-21/.
Assumptions of Behavior Modification
The foundation of behavior modification as a technique of management rests on three ideas.16 First, advocates of behavior modification believe that individuals are basically passive and reactive (instead of proactive). They tend to respond to stimuli in their environment rather than assuming personal responsibility in initiating behavior. This assertion is in direct contrast to cognitive theories of motivation (such as expectancy/valence theory), which hold that individuals make conscious decisions about their present and future behaviors and take an active role in shaping their environment.
Second, advocates of behavior modification focus on observable and measurable behavior instead of on unobservable needs, attitudes, goals, or motivational levels. In contrast, cognitive theories focus on both observable and unobservable factors as they relate to motivation. Social learning theory, in particular, argues that individuals can change their behavior simply by observing others and noticing the punishments or rewards that the observed behaviors produce.
Third, behavior modification stresses that permanent changes can be brought about only as a result of reinforcement. Behaviors that are positively reinforced will be repeated (that is, learned), whereas behaviors not so reinforced will diminish (according to the law of effect, discussed earlier).
Designing a Behavior Modification Program
If behavior modification techniques are to work, their application must be well-designed and systematically applied. Systematic attempts to implement these programs typically go through five phases (see Exhibit 4.8).
Establishing Clear Behavioral Criteria. First, management attempts to define and clearly specify the behavioral aspects of acceptable performance. Management must be able to designate what constitutes acceptable behavior in terms that employees can understand, and this specification must be in objective, measurable terms. Examples of behavioral criteria include good attendance, promptness in arriving for work, and completing tasks on schedule. Sometimes it is difficult to determine suitable objective indicators of successful performance. For instance, as a training director of a major airline asked, “How do you quantify what a flight attendant does?” Even so, there are many situations and work behaviors that do lend themselves to clear specification.
Conducting a Performance Audit. Once acceptable behavioral criteria have been specified, a performance audit can be done. Because management is concerned about the extent to which employees are successfully meeting the behavioral criteria, the audit is aimed at pinpointing trouble spots where desired behaviors are not being carried out. For instance, a review of attendance records of various department may reveal a department in which absenteeism or tardiness is unusually high. Action can then be taken to focus on the problem area. In short, the performance audit aims to identify discrepancies between what management sees as desired or acceptable behavior and actual behavior.
Setting Specific Behavioral Goals. Third, specific behavioral goals must be set for each employee. Failure to specify concrete behavioral goals is a primary reason for the failure of many behavior modification programs. Examples of such goals are decreasing absenteeism or tardiness, reducing product defects on an assembly line, and meeting production schedules. The goals should be both realistic (that is, reasonably achievable by the employees) and acceptable to the employee. Otherwise, the goals lack relevance, and resulting effort will diminish.
Evaluating Results. Next, employees and supervisors keep track of the employee’s performance record as compared to the preset behavioral criteria and goals. Discrepancies are noted and discussed. For example, the record could provide employees with continuous feedback concerning the extent to which they are on target in meeting their defect reduction goals.
Administering Feedback and Rewards. Finally, on the basis of the assessment of the employee’s performance record, the supervisor administers feedback and, where warranted, praise. For example, praise could strengthen the employees’ efforts to reduce defects (positive reinforcement). The withholding of praise for defect levels deemed less than adequate or below established goals could cause employees to stop behavior that was contributing to defects or work harder to reduce defects (extinction).
Central to this phase of the process is the notion of shaping. Shaping is the process of improving performance incrementally, step by step. Suppose that an employee is absent 30 percent of the time during one month. To improve attendance, we would set a goal of being absent only 5 percent of the time. After implementing the above procedure, we find that absenteeism falls to 20 percent in the second month. Although this is not at goal level, it is clearly an improvement and, as such, is rewarded. The next month, absenteeism falls to 15 percent, and, again, we reward the incremental improvement. Hence, by this incremental approach, the employee gets ever closer to the desired level of behavior. In other words, we have “shaped” her behavior.
Behavior Modification in Practice
There are many ways to see how the principles of behavior modification can be applied in organizational settings. Perhaps one of the best examples can be found in a classic study carried out by Luthans and Kreitner.17 These researchers carried out a field experiment in a medium-sized light manufacturing plant. Two separate groups of supervisors were used in the study. In one group (the experimental group—see Appendix A), the supervisors were trained in the techniques of behavior modification. This program was called “behavioral contingency management,” or BCM. Included here were ten 90-minute lectures conducted over 10 weeks on behavioral change strategies. The second group of supervisors (the control group) received no such training. Following this, the trained supervisors were asked to implement what they had learned among their groups; obviously, the control group supervisors were given no such instructions.
After 10 weeks, group performance was examined for all groups. Two types of data were collected. First, the researchers were interested in any possible behavioral changes among the various workers in the experimental groups (compared to the control groups) as a result of the behavior modification efforts. Significantly, the following changes were noted for these groups in areas that were targeted for change: (1) the frequency of complaints among group members declined, (2) the scrap rates declined, (3) group quality indicators increased, and (4) the frequency of individual performance problems declined. No such changes were recorded for the control groups not exposed to behavior modification. The second measure taken focused on the overall performance rates for the various groups. This was calculated as a measure of direct labor effectiveness for each group. Again, overall group performance—that is, labor effectiveness ratings—improved significantly in the experimental groups but remained unchanged in the control groups. This can be seen in Exhibit 4.9. The researchers concluded that the introduction of the behavioral modification program led to substantive improvements in factory performance.
concept check
• What is behavior modification?
• What is a performance audit, and what are the components?
16. B. F. Skinner, Beyond Freedom and Dignity (New York: Knopf, 1971).
17. F. Luthans and R. Kreitner, Organizational Behavior Modification and Beyond (Glenview, III.: Scott, Foresman, 1985), pp. 150–159.
Exhibit 4.8 Steps in Implementing a Behavior Modification Program (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 4.9 Intergroup Comparison of Performance using BCM (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/04%3A_Learning_and_Reinforcement/4.03%3A_Behavior_Modification_in_Organizations.txt |
4. How can employees be trained to assume more responsibility for self-improvement and job performance with the goal of creating a work environment characterized by continual self-learning and employee development?
The second managerial technique for shaping learned behavior in the workplace is behavioral self-management (or BSM). Behavioral self-management is the process of modifying one’s own behavior by systematically managing cues, cognitive processes, and contingent consequences.18 BSM is an approach to learning and behavioral change that relies on the individual to take the initiative in controlling the change process. The emphasis here is on “behavior” (because our focus is on changing behaviors), not attitudes, values, or personality. Although similar to behavior modification, BSM differs in one important respect: there is a heavy emphasis on cognitive processes, reflecting the influence of Bandura’s social learning theory.
The Self-Regulation Process
Underlying BSM is a firm belief that individuals are capable of self-control; if they want to change their behavior (whether it is to come to work on time, quit smoking, lose weight, etc.), it is possible through a process called self-regulation, as depicted in Exhibit 4.10.19 According to the model, people tend to go about their day’s activities fairly routinely until something unusual or unexpected occurs. At this point, the individual initiates the self-regulation process by entering into self-monitoring (Stage 1). In this stage, the individual tries to identify the problem. For example, if your supervisor told you that your choice of clothing was unsuitable for the office, you would more than likely focus your attention on your clothes.
Next, in Stage 2, or self-evaluation, you would consider what you should be wearing. Here, you would compare what you have on to acceptable standards that you learned from colleagues, other relevant role models, and advertising, for example. Finally, after evaluating the situation and taking corrective action if necessary, you would assure yourself that the disruptive influence had passed and everything was now fine. This phase (Stage 3) is called self-reinforcement. You are now able to return to your normal routine. This self-regulation process forms the foundation for BSM.
Self-Management in Practice
When we combine the above self-regulation model with social learning theory (discussed earlier), we can see how the self-management process works. As shown in Exhibit 4.11, four interactive factors must be considered. These are situational cues, the person, behaviors, and consequences.20 (Note that the arrows in this diagram go in both directions to reflect the two-way process among these four factors.)
Situational Cues. In attempting to change any behavior, people respond to the cues surrounding them. One reason it is so hard for some people to give up smoking is the constant barrage of advertisements on billboards, in magazines, and so forth. There are too many cues reminding people to smoke. However, situational cues can be turned to our advantage when using BSM. That is, through the use of six kinds of cue (shown in Exhibit 4.11, column 1), people can set forth a series of positive reminders and goals concerning the desired behaviors. These reminders serve to focus our attention on what we are trying to accomplish. Hence, a person who is trying to quit smoking would (1) avoid any contact with smokers or smoking ads, (2) seek information on the hazards of smoking, (3) set a personal goal of quitting, and (4) keep track of cigarette consumption. These activities are aimed at providing the right situational cues to guide behavior.
Cognitive Supports. Next, the person makes use of three types of cognitive support to assist with the self- management process. Cognitive supports represent psychological (as opposed to environmental) cues. Three such supports can be identified:
1. Symbolic Coding. First, people may use symbolic coding, whereby they try to associate verbal or visual stimuli with the problem. For example, we may create a picture in our mind of a smoker who is coughing and obviously sick. Thus, every time we think of cigarettes, we would associate it with illness.
2. Rehearsal. Second, people may mentally rehearse the solution to the problem. For example, we may imagine how we would behave in a social situation without cigarettes. By doing so, we develop a self- image of how it would be under the desired condition.
3. Self-Talk. Finally, people can give themselves “pep talks” to continue their positive behavior. We know from behavioral research that people who take a negative view of things (“I can’t do this”) tend to fail more than people who take a more positive view (“Yes, I can do this”). Thus, through self-talk, we can help convince ourselves that the desired outcome is indeed possible.
Behavioral Dilemmas. Obviously, self-management is used almost exclusively to get people to do things that may be unappealing; we need little incentive to do things that are fun. Hence, we use self-management to get individuals to stop procrastinating on a job, attend to a job that may lack challenge, assert themselves, and so forth. These are the “behavioral dilemmas” referred to in the model (Exhibit 4.11). In short, the challenge is to get people to substitute what have been called low-probability behaviors (e.g., adhering to a schedule or forgoing the immediate gratification from one cigarette) for high-probability behaviors (e.g., procrastinating or contracting lung cancer). In the long run, it is better for the individual—and her career—to shift behaviors, because failure to do so may lead to punishment or worse. As a result, people often use self-management to change their short-term dysfunctional behaviors into long-range beneficial ones. This short-term versus long- term conflict is referred to as a behavioral dilemma.
Self-Reinforcement. Finally, the individual can provide self-reinforcement. People can, in effect, pat themselves on the back and recognize that they accomplished what they set out to do. According to Bandura, self-reinforcement requires three conditions if it is to be effective: (1) clear performance standards must be set to establish both the quantity and quality of the targeted behavior, (2) the person must have control over the desired reinforcers, and (3) the reinforcers must be administered only on a conditional basis—that is, failure to meet the performance standard must lead to denial of the reward.21 Thus, through a process of working to change one’s environment and taking charge of one’s own behavior, self-management techniques allow individuals to improve their behavior in a way that can help them and those around them.
Reducing Absenteeism through Self-Management
In a recent study, efforts were made to reduce employee absenteeism using some of the techniques found in behavioral self-management. The employees were unionized state government workers with a history of absenteeism. Self-management training was given to these workers. Training was carried out over eight one-hour sessions for each group, along with eight 30-minute one-on-one sessions with each participant.
Included in these sessions were efforts to (1) teach the participants how to describe problem behaviors (e.g., disagreements with coworkers) that led to absences, (2) identify the causes creating and maintaining the behaviors, and (3) develop coping strategies. Participants set both short-term and long-term goals with respect to modifying their behaviors. In addition, they were shown how to record their own absences in reports including their frequency and the reasons for and consequences of them. Finally, participants identified potential reinforcers and punishments that could be self-administered contingent upon goal attainment or failure.
When, after nine months, the study was concluded, results showed that the self-management approach had led to a significant reduction in absences (compared to a control group). The researchers concluded that such an approach has important applications to a wide array of behavioral problems in the workplace.22
concept check
• Understand Kanfer’s behavioral self-management process.
• What are things you can do to instill self-management techniques for yourself?
• What behavioral self-management techniques can you use as a manager?
18. F. Luthans and R. Davis, “Behavioral Self-Management—The Missing Link in Managerial Effectiveness,” Organizational Dynamics, Summer 1979, p. 43; F. Luthans and R. Kreitner, Organizational Behavior Modification and Beyond: An Operant and Social Learning Approach (Glenview, III.: Scott, Foresman, 1985).
19. F. H. Kanfer and A. P. Goldstein, Helping People Change: A Textbook of Methods (New York: Pergamon Press, 1980).
20. C. C. Neck and C. P. Manz, Mastering Self Leadership 6th edition, (Pearson, 2013).
21. A. Bandura, “Self-Reinforcement: Theoretical and Methodological Considerations,” Behaviorism, Fall 1976, pp. 135–155; Luthans and Kreitner, Organizational Behavior Modification and Beyond.
22. G. Latham and C. Fayne, “Self-Management Training for Increasing Job Attendance,” Journal of Applied Psychology, 1989, pp. 411–416.
Exhibit 4.10 Kanfer’s Model of Self-Regulation (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license)
Exhibit 4.11 A Social Learning Theory Model of Self-Management (Attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/04%3A_Learning_and_Reinforcement/4.04%3A_Behavioral_Self-Management.txt |
Avoidance learning Refers to seeking to avoid an unpleasant condition or outcome by following a desired behavior.
Behavior modification The use of operant conditioning principles to shape human behavior to conform to desired standards defined by superiors.
Behavioral criteria Defining what constitutes acceptable behavior in terms that employees can understand in objective, measurable terms.
Behavioral dilemmas The process of getting people to substitute what have been called low-probability behaviors for high-probability behaviors.
Behavioral self-management The use of operant conditioning principles to shape your own behavior to conform to desired standards defined by superiors.
Classical conditioning The process whereby a stimulus-response bond is developed between a conditioned stimulus and a conditioned response through the repeated linking of a conditioned stimulus with an unconditioned stimulus.
Conditioned response The process of conditioning through the repeated linking of a conditioned stimulus with an unconditioned stimulus.
Continuous reinforcement Rewards desired behavior every time it occurs.
Drive An internal state of disequilibrium; it is a felt need. It is generally believed that drive increases with the strength of deprivation.
Extinction The principle that suggests that undesired behavior will decline as a result of a lack of positive reinforcement.
Habit The experienced bond or connection between stimulus and response.
Law of effect States that of several responses made to the same situation, those that are accompanied or closely followed by satisfaction (reinforcement) will be more likely to occur; those that are accompanied or closely followed by discomfort (punishment) will be less likely to occur.
Operant conditioning Measures the effects of reinforcements, or rewards, on desired behaviors.
Partial reinforcement Rewards desired behavior at specific intervals, not every time desired behavior is exhibited.
Performance audit Aims to identify discrepancies between what management sees as desired or acceptable behavior and actual behavior.
Positive reinforcement Consists of presenting someone with an attractive outcome following a desired behavior.
Punishment The administration of unpleasant or adverse outcomes as a result of undesired behavior.
Reciprocal determinism This concept implies that people control their own environment as much as the environment controls people.
Reinforcement Anything that causes a certain behavior to be repeated or inhibited.
Self-regulation The belief that individuals are capable of self-control if they want to change their behavior.
Self-reinforcement The stage in Kanfer’s model where, by evaluating the situation and taking corrective action if necessary, one would assure themselves that the disruptive influence had passed and everything was now fine.
Self-talk The process of convincing ourselves that the desired outcome is indeed possible.
Shaping The process of improving performance incrementally, step by step.
Social learning theory The process of molding behavior through the reciprocal interaction of a person’s cognitions, behavior, and environment.
Symbolic coding When people try to associate verbal or visual stimuli with the problem.
Unconditioned response From classical conditioning, a response to an unconditioned stimulus that is naturally evoked by that stimulus.
Vicarious learning Learning that takes place through the imitation of other role models.
4.06: Summary of Learning Objectives
4.1 Basic Models of Learning
1. How do organizations offer appropriate rewards in a timely fashion?
People learn through both direct experience and vicarious experience. What is retained and produced as behavior is a function of the positive and negative consequences either directly experience by individuals or observed as the result of the actions of others. Often, managers and trainers underestimate the power of vicarious learning. Also, keep in mind that reinforcement that has some variability in its application (variable ratio or interval) has the strongest and longest-lasting impact on desired learned behaviors.
Learning is a relatively permanent change in behavior that occurs as a result of experience.
Thorndike’s law of effect notes that behavior that is rewarded is likely to be repeated, whereas behavior that is punished is unlikely to be repeated. Operant conditioning can be distinguished from classical conditioning in two ways: (1) it asserts that changes in behavior result from the consequences of previous behaviors instead of changes in stimuli, and (2) it asserts that desired behaviors result only when rewards are tied to correct responses instead of when unconditioned stimuli are administered after every trial.
Social learning is the process of altering behavior through the reciprocal interaction of a person’s cognitions, previous behavior, and environment. This is done through a process of reciprocal determinism.
Vicarious learning is learning that takes place through observation and imitation of others.
Learning is influenced by (1) a motivation to learn, (2) knowledge of results, (3) prior learning, (4) the extent to which the task to be learned is presented as a whole or in parts, and (5) distribution of practice.
4.2 Reinforcement and Behavioral Change
2. What are the best practices that organizations utilize to train employees in new job skills?
Reinforcement causes a certain behavior to be repeated or inhibited. Positive reinforcement is the practice of presenting someone with an attractive outcome following a desired behavior.
Avoidance learning occurs when someone attempts to avoid an unpleasant condition or outcome by behaving in a way desired by others.
Punishment is the administration of an unpleasant or adverse outcome following an undesired behavior. Reinforcement schedules may be continuous or partial. Among the partial reinforcement schedules are (1) fixed interval, (2) fixed ratio, (3) variable interval, and (4) variable ratio.
4.3 Behavior Modification in Organizations
3. How do managers and organizations reduce undesirable employee behavior while reinforcing desirable behavior?
Behavior modification is the use of operant principles to shape human behavior to conform to desired standards as defined by superiors. A behavior modification program follows five steps: (1) establish clear objectives, (2) conduct a performance audit, (3) set specific goals and remove obstacles, (4) evaluate results against preset criteria, and (5) administer feedback and praise where warranted.
4.4 Behavioral Self-Management
4. How can employees be trained to assume more responsibility for self-improvement and job performance with the goal of creating a work environment characterized by continual self-learning and employee development?
Behavioral self-management is the process of modifying one’s own behavior by systematically managing cues, cognitions, and contingent consequences. BSM makes use of the self-regulation process. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/04%3A_Learning_and_Reinforcement/4.05%3A_Glossary.txt |
1. Define learning. Why is an understanding of learning important for managers?
2. Compare and contrast operant conditioning with classical conditioning. Provide examples of each.
3. What is social learning theory? Describe how this process works.
4. What implications of social learning theory for management can you identify?
5. Identify four strategies for reinforcement, and provide an example of each.
6. Describe the four different schedules of reinforcement, and show how their use by managers can vary.
7. How might you design a simple behavior modification program for a group of employees? Explain.
8. What are some problems in trying to implement a behavioral self-management program? How can managers attempt to overcome these problems?
4.08: Managerial Skills Application Exercise
1. In order to better understand how behavioral self-management programs operate, you might want to complete this self-assessment and design your own self-management program. This exercise allows you to see firsthand how these programs can be applied to a wide array of problems. It also highlights the advantages and drawbacks of such programs. Refer to Appendix B when you are finished in order to evaluate your results.
Designing Your Own Behavioral Self-Management Program
Instructions: Think of a personal problem that you would like to overcome. This problem could be to stop smoking, improve your grades, stop a certain habit, and so forth. With this problem in mind, design your own behavioral self-management program using the procedures and principles previously outlined in this chapter. After you have designed and started the program, monitor your performance over time and see how effective you are both in following the program and in meeting your objectives. In light of your experience, how do you feel about the potential of behavioral self-management programs in the industrial setting? (See Appendix B.)
4.09: Managerial Decision Exercise
1. You manage the human resources department for a mid-sized retailer. Part of the operations consists of a call center with 100 employees spread over three shifts operating 24 hours a day, seven days a week. There is a main group with 20 people reporting to a shift supervisor on the main daytime shift from 8 a.m. to 4 p.m. There are regularly scheduled times for breaks and lunch. Recently senior management reported to you that they were concerned regarding tardiness of some employees. While the customer relationship management reports signal that there are no service issues, senior managers are concerned that they are overstaffed. You feel that the daytime shift is the most experienced group, and you do not want to lose some of the best employees through termination. You also do not have any budget money to use for incentive payments aimed at reducing tardiness. What ideas from operant conditioning, behavior modification, and social learning theory would you use to reduce the problems of tardiness?
2. Organizations are facing changes in their business environment because of globalization of markets and competition, growth of immediate digital information and communications, growth of the service-based economy, and changes in rules affecting corporate governance and trade relationships. Assume the role of a CEO who needs to change their corporate culture and their standards of operation. The organizational structures in your industry have trended from tall, hierarchical bureaucracies to flat, decentralized operations that encourage innovation. Changes like this do not happen automatically. What theories and techniques would you use to change your organization’s culture?
4.10: Critical Thinking Case
Walt Disney World
When it comes to presenting world-class customer experiences, Walt Disney World is at the top of the list. It’s literally called the Most Magical Place on Earth. However, it isn’t just their customers who are receiving rewards for visiting—their cast members and crew are getting rewarded big-time as well.
Incentives go above and beyond a 401(k) program, and they can go a long way in retaining employees and increasing employee satisfaction as well. Disney has over 180 employee recognition programs to give their employees a sense of accomplishment, recognition, and appreciation.
There are over 70,000 cast members at Walt Disney World, each of whom receives extensive training to make sure that they make the customer experience a world-class enjoyment. According to Mike Fox, author of Hidden Secrets & Stories of Walt Disney World, “it always impresses me, especially at the cast member level, the training that goes into helping these folks to provide a superior experience and to see it on stage and see it executed.”
Walt Disney exemplifies many ways of recognition, lots of them being physical in-park recognitions. These include names in windows on Main Street tributes, featuring Disney’s best “imagineers” that helped create some of the park’s greatest rides and innovations. One of the most unique is the Lifetime Fred award, which recognizes employees who exhibit the core company values of friendliness and dependability. It is these varying types of recognition that make Walt Disney’s rewards program so robust and versatile and keep employees engaged and willing to work hard to achieve more.
Questions:
1. What key factors are important to consider when creating a rewards program?
2. Why is timing a key component of a rewards program?
3. What can be problematic about the wrong type of reward or the wrong frequency of the reward fo employees?
Sources: Rhatigan, Chris, “These 4 Companies Totally Get Employee Recognition,” TINY pulse, July 21, 2015, https://www.tinypulse.com/blog/these...ee-recognition; “Rewarding Your Employees: 15 Examples of Successful Incentives in The Corporate World,” Robinson Resource Group, June 30, 2013, http://www.rrgexec.com/rewarding-you...ntives-in-the- corporate-world/; Kober, Jeff, “Reward & Recognition at Walt Disney World,” World Class Benchmarking,October 17, 2016, http://worldclassbenchmarking.com/re...-world-resort/; Cain, Áine, “15 insider facts about working at Walt Disney World only cast members know,” Business Insider, May 1, 2018, https://www.businessinsider.com/walt...if-the-guests- can-see-you-youre-technically-onstage-5. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/04%3A_Learning_and_Reinforcement/4.07%3A_Chapter_Review_Questions.txt |
Learning Outcomes
After reading this chapter, you should be able to answer these questions:
1. What is diversity?
2. How diverse is the workforce?
3. How does diversity impact companies and the workforce?
4. What is workplace discrimination, and how does it affect different social identity groups?
5. What key theories help managers understand the benefits and challenges of managing the diverse workforce?
6. How can managers reap benefits from diversity and mitigate its challenges?
7. What can organizations do to ensure applicants, employees, and customers from all backgrounds are valued?
05: Diversity in Organization
exploring managerial careers
Dr. Tamara A. Johnson, Assistant Chancellor for Equity, Diversity, and Inclusion at University of Wisconsin-Eau Claire
Dr. Tamara Johnson’s role as assistant chancellor for equity, diversity, and inclusion at the University of Wisconsin-Eau Claire involves supervising and collaborating with various campus entities to ensure their operations continue to support the university’s initiatives to foster diversity and equity within the university community. Dr. Johnson oversees the Affirmative Action, Blugold Beginnings (pre-college program), Gender and Sexuality Resource Center, Office of Multicultural Affairs, Ronald E. McNair Program, Services for Students with Disabilities, Student Support Services, University Police, and Upward Bound units and leads campus-wide initiatives to educate and train faculty, students, and staff about cultural awareness, diversity, and institutional equity.
Dr. Johnson’s journey to her current role began more than 20 years ago when she worked as a counselor for the Office of Multicultural Student Affairs at the University of Illinois. Her role in this office launched her on a path through university service—Dr. Johnson went on to work as the associate director for University Career Services at Illinois State University, the director for multicultural student affairs at Northwestern University, and the director for faculty diversity initiatives at the University of Chicago. As faculty at the Chicago School of Professional Psychology, Argosy University, and Northwestern University, Dr. Johnson taught counseling courses at the undergraduate, master’s, and doctorate levels.
Dr. Johnson’s work at the University of Wisconsin-Eau Claire involves developing a program and protocols to ensure all faculty and staff across the institution receive baseline diversity training. In addition, one of her goals is to include criteria related to diversity factors in the evaluations of all faculty/ staff. A primary issue that she seeks to address is to increase the awareness of the challenges experienced by underrepresented students. This includes individuals who may come from backgrounds of low income, students of color, first-generation students, and other marginalized groups such as lesbian, gay, bisexual, and transgender students. Dr. Johnson understands the importance of creating initiatives to support individuals in those groups so their specific concerns may be addressed in multiple ways. As you will learn in this chapter, when leaders proactively create an inclusive and supportive climate that values diversity, benefits are produced that result in positive outcomes for organizations.
What is diversity?
Diversity refers to identity-based differences among and between two or more people1 that affect their lives as applicants, employees, and customers. These identity-based differences include such things as race and ethnicity, gender, sexual orientation, and age. Groups in a society based on these individual differences are referred to as identity groups. These differences are related to discrimination and disparities between groups in areas such as education, housing, healthcare, and employment. The term managing diversity is commonly used to refer to ways in which organizations seek to ensure that members of diverse groups are valued and treated fairly within organizations2 in all areas including hiring, compensation, performance evaluation, and customer service activities. The term valuing diversity is often used to reflect ways in which organizations show appreciation for diversity among job applicants, employees, and customers.3 Inclusion, which represents the degree to which employees are accepted and treated fairly by their organization,4 is one way in which companies demonstrate how they value diversity. In the context of today’s rapidly changing organizational environment, it is more important than ever to understand diversity in organizational contexts and make progressive strides toward a more inclusive, equitable, and representative workforce.
Three kinds of diversity exist in the workplace (see Table \(1\) ). Surface-level diversity represents an individual’s visible characteristics, including, but not limited to, age, body size, visible disabilities, race, or sex.5 A collective of individuals who share these characteristics is known as an identity group. Deep-level diversity includes traits that are non-observable such as attitudes, values, and beliefs.6 Hidden diversity includes traits that are deep-level but may be concealed or revealed at the discretion of individuals who possess them.7
These hidden traits are called invisible social identities8 and may include sexual orientation, a hidden disability (such as a mental illness or chronic disease), mixed racial heritage,9 or socioeconomic status. Researchers investigate these different types of diversity in order to understand how diversity may benefit or hinder organizational outcomes.
Diversity presents challenges that may include managing dysfunctional conflict that can arise from inappropriate interactions between individuals from different groups. Diversity also presents advantages such as broader perspectives and viewpoints. Knowledge about how to manage diversity helps managers mitigate some of its challenges and reap some of its benefits.
Table \(1\): Types of Diversity
Surface level diversity Diversity in the form of characteristics of individuals that are readily visible including, but not limited to age, body size, visible disabilities, race or sex
Deep level diversity Diversity in characteristics that are nonobservable such as attitudes, values and beliefs, such as religion
Hidden diversity Diversity in characteristics that are deep level but may be concealed or revealed at discretion by individuals who posses them such as sexual orientation
concept check
• What is diversity?
• What are the three types of diversity encountered in the workplace?
1. McGrath, J. E., Berdahl, J.L., & Arrow, H. (1995). Traits, expectations, culture, and clout: The dynamics of diversity in work groups. In S.E. Jackson & M.N. Ruderman (Eds.), Diversity in Work Teams, 17-45. Washington, D.C.: American Psychological Association.
2. Thomas, R. R. 1991. Beyond race and gender. New York, NY: AMACOM.
3. Cox, Taylor H., and Stacy Blake. "Managing cultural diversity: Implications for organizational competitiveness." The Executive (1991): 45-56.
4. Pelled, L. H., Ledford, G. E., Jr., & Mohrman, S. A. (1999). Demographic dissimilarity and workplace inclusion. Journal of Management Studies, 36, 1013-1031.
5. Lambert, J.R., & Bell, M.P. (2013). Diverse forms of difference. In Q. Roberson (Ed.) Oxford Handbook of Diversity and Work (pp. 13 – 31). New York: Oxford University Press.
6. Harrison, D.A., Price, K.H., & Bell, M.P. (1998). Beyond relational demography: time and the effects of surface- and deep-level diversity on work group cohesion. Academy of Management Journal, 41(1), 96-107.
7. Lambert, J.R., & Bell, M.P. (2013). Diverse forms of difference. In Q. Roberson (Ed.) Oxford Handbook of Diversity and Work (pp. 13 – 31). New York: Oxford University Press.
8. Clair, J.A., Beatty, J.E., & Maclean, T.L. (2005). Out of sight but not out of mind: Managing invisible social identities in the workplace. Academy of Management Review, 30 (1), 78-95.
9. Philips, K.W., Rothbard, N.P., & Dumas, T.L. (2009). To disclose or not to disclose? Status distance and self- disclosure in diverse environments. Academy of Management Review, 34(4), 710-732.
Table 5.1 (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.01%3A_An_Introduction_to_Workplace_Diversity.txt |
How diverse is the workforce?
In 1997, researchers estimated that by the year 2020, 14% of the workforce would be Latino, 11% Black, and 6% Asian.10 Because of an increase in the number of racial minorities entering the workforce over the past 20 years, most of those projections have been surpassed as of 2016, with a workforce composition of 17% Hispanic or Latino of any race, followed by 12% Black and 6% Asian (see Exhibit \(1\) ). American Indians, Alaska Natives, Native Hawaiians, and Other Pacific Islanders together made up a little over 1% of the labor force, while people of two or more races made up about 2% of the labor force.11 Women constitute approximately 47% of the workforce compared to approximately 53% for men,12 and the average age of individuals participating in the labor force has also increased because more employees retire at a later age.13 Although Whites still predominantly make up the workforce with a 78% share,14 the U.S. workforce is becoming increasingly more diverse, a trend that presents both opportunities and challenges. These demographic shifts in the labor market affect the workforce in a number of ways due to an increasing variety of workers who differ by sex, race, age, sexual orientation, disability status, and immigrant status.
Gender
Increasingly more women are entering the workforce.15 Compared to 59% in 1977, the labor force participation rate for men is now approximately 53% and is expected to decrease through 2024 to 52%.16 As the labor force participation rate decreases for men, the labor force growth rate for women will be faster. Their percentage of the workforce has steadily risen, as can be seen in Exhibit \(2\), which compares the percentage of the workforce by gender in 1977 to 2017.17
Although more women are entering the labor force and earning bachelor’s degrees at a higher rate than men,18 women still face a number of challenges at work. The lack of advancement opportunities awarded to qualified women is an example of a major challenge that women face called the glass ceiling,19 which is an invisible barrier based on the prejudicial beliefs that underlie organizational decisions that prevent women from moving beyond certain levels within a company. Additionally, in organizations in which the upper-level managers and decision makers are predominantly men, women are less likely to find mentors, which are instrumental for networking and learning about career opportunities. Organizations can mitigate this challenge by providing mentors for all new employees. Such a policy would help create a more equal playing field for all employees as they learn to orient themselves and navigate within the organization.
One factor that greatly affects women in organizations is sexual harassment. Sexual harassment is illegal, and workers are protected from it by federal legislation.20 Two forms of sexual harassment that can occur at work are quid pro quo and hostile environment.21 Quid pro quo harassment refers to the exchange of rewards for sexual favors or punishments for refusal to grant sexual favors. Harassment that creates a hostile environment refers to behaviors that create an abusive work climate. If employees are penalized (for example by being demoted or transferred to another department) for refusing to respond to repeated sexual advances, quid pro quo sexual harassment has taken place. The telling of lewd jokes, the posting of pornographic material at work, or making offensive comments about women, in general, are examples of actions that are considered to create a hostile work environment. According to the Equal Employment Opportunity Commission, sexual harassment is defined as the “unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature. Harassment can also include offensive remarks about a person’s sex.”22 Although both men and women can be sexually harassed, women are sexually harassed at work more often.23 In addition, Black and other minority women are especially likely to be subjected to sexual discrimination and harassment.24
It is in the organization’s best interest to prevent sexual harassment from occurring. Ways to do this include companies providing ongoing (e.g., annual) training so that employees are able to recognize sexual harassment. Employees should know what constitutes acceptable and unacceptable behavior and what channels and protocols are in place for reporting unacceptable behaviors. Managers should understand their role and responsibilities regarding harassment prevention, and a clear and understandable policy should be communicated throughout the organization.
Just as gender-based discrimination is illegal and inappropriate, so is discrimination or mistreatment based on pregnancy, childbirth, or related medical conditions. While organizations may have different policies regarding maternity and paternity leave, they must comply with both the Pregnancy Discrimination Act and the Family Medical Leave Act.
Race
Another important demographic shift in workforce diversity is the distribution of race. (Note that we are using categories defined by the U.S. Census Bureau. It uses the term “Black (African American)” to categorize U.S. residents. In this chapter, we use the term “Black.”)
While the White non-Hispanic share of the workforce continues to shrink, the share of racial and ethnic minority groups will continue to grow.25 Specifically, Hispanics and Asians will grow at a faster rate than other racial minorities, and Hispanics are projected to make up almost one-fifth of the labor force by 2024.26 The projected changes in labor force composition between 2014 and 2024 are as follows:
White non-Hispanic participation in the labor force will decline by 3%. Other groups’ share of the labor force is expected to increase: Black (10.1%), Hispanic/Latino (28%), Asian (23.2%), and Other groups (i.e., multiracial, American Indian, Alaska Native, Native Hawaiian, and Other Pacific Islanders) labor force share is expected to increase by 22.2%.27 With the workforce changing, managers will need to be mindful of issues employees encounter that are uniquely tied to their experiences based on race and ethnicity, including harassment, discrimination, stereotyping, and differential treatment by coworkers and decision-makers in organizations.
Discrimination Against Black Employees
Race is one of the most frequent grounds for discrimination.28 Although Blacks do not make up the largest share of the workforce for racial minorities, research studies show they face discrimination more often than other racial minorities. As a matter of fact, some experts believe that hiring discrimination against Blacks has not declined over the past 25 years while workplace discrimination against other racial minority groups has declined.29
ethics in practice
Discrimination in the Sharing Economy—#AirbnbWhileBlack
Airbnb, a popular home-sharing website founded in San Francisco in 2008, offers millions of homes for short-term rental in more than 190 countries. This company has revolutionized the sharing economy in the same way that ride-sharing services such as Uber and Lyft have, and according to the company, the site’s drive to connect hosts and potential renters has been able to contribute to the quality of life of both homeowners and travelers. According to Airbnb’s press releases and information campaigns, their services can reduce housing costs for travelers on a budget and can provide unique experiences for adventurous travelers who wish to have the flexibility to experience a city like a local. The organization also claims that most of its users are homeowners looking to supplement their incomes by renting out rooms in their homes or by occasionally renting out their whole homes. According to a statement, most of the listings on the site are rented out fewer than 50 nights per year.
Despite the carefully crafted messages Airbnb has presented to the public, in 2016 the company came under intense scrutiny when independent analyses by researchers and journalists revealed something startling: While some Airbnb hosts did in fact use the services only occasionally, a significant number of hosts were using the services as though they were hotels. These hosts purchased a large number of properties and continuously rented them, a practice that affected the availability of affordable housing in cities and, because these hosts were not officially registered as hoteliers, made it possible for Airbnb hosts to avoid paying the taxes and abiding by the laws that hotels are subject to.
Title II of the Civil Rights Act of 1964 mandates that hotels and other public accommodations must not discriminate based on race, national origin, sex, or religion, and Title VIII of the Civil Rights Act of 1968 (also known as the Fair Housing Act [FHA]) prohibits discrimination specifically in housing. However, Airbnb’s unique structure allows it to circumvent those laws. The company also claims that while it encourages hosts to comply with local and federal laws, it is absolved from responsibility if any of its hosts break these laws. In 2017, researcher Ben Edelman conducted a field experiment and found that Airbnb users looking to rent homes were 16% less likely to have their requests to book accepted if they had traditionally African American sounding names like Tamika, Darnell, and Rasheed.
These findings, coupled with a viral social media campaign, #AirbnbWhileBlack, in which users claimed they were denied housing requests based on their race, prompted the state of California’s Department of Fair Employment and Housing (DFEH) to file a complaint against the company. In an effort to resolve the complaint, Airbnb reported banning any hosts who were found to have engaged in discriminatory practices, and they hired former U.S. Attorney General Eric Holder and former ACLU official Laura Murphy to investigate any claims of discrimination within the company.30 In 2016, Airbnb released a statement outlining changes to company practices and policies to combat discrimination, and while they initially resisted demands by the DFEH to conduct an audit of their practices, the company eventually agreed to an audit of roughly 6,000 of the hosts in California who have the highest volume of properties listed on the site.
Discussion Questions
1. What are some efforts companies in the sharing economy can take before problems of discrimination threaten to disrupt operations?
2. Should Airbnb be held responsible for discriminatory actions of its hosts?
Sources: AirBnB Press Room, accessed December 24, 2018, https://press.atairbnb.com/about-us/; “Airbnb's data shows that Airbnb helps the middle class. But does it?”, The Guardian, accessed December 23, 2018, www.theguardian.com/technolo...atic-national- convention-survey ; and Quittner, Jeremy, “Airbnb and Discrimination: Why It’s All So Confusing”, Fortune, June 23, 2016, http://fortune.com/2016/06/23/airbnb...mination-laws/.
Currently, White men have higher participation rates in the workforce than do Black men,31 and Black women have slightly higher participation rates than White women.32 Despite growth and gains in both Black education and Black employment, a Black person is considerably more likely to be unemployed than a White person, even when the White person has a lower level of education33 or a criminal record.34
Blacks frequently experience discrimination in the workplace in spite of extensive legislation in place to prohibit such discrimination. Research has shown that stereotypes and prejudices about Blacks can cause them to be denied the opportunity for employment when compared to equally qualified Whites.35 It is estimated that about 25% of businesses have no minority workers and another 25% have less than 10% minority workers.36 In terms of employed Blacks, research has shown that, regardless of managers’ race, managers tended to give significantly higher performance ratings to employees who were racially similar to them. Because Whites are much more likely to be managers than Blacks, this similarity effect tends to advantage White employees over Black employees.37 Blacks are also significantly more likely to be hired in positions that require low skills, offer little to no room for growth, and pay less. These negative employment experiences affect both the mental and physical health of Black employees.38
Hispanic/Latino
Hispanics are the second-fastest-growing minority group in the United States behind Asians,39 and they make up 17% of the labor force.40 Despite this and the fact that Hispanics have the highest labor participation rate of all the minority groups, they still face discrimination and harassment in similar ways to other minority groups. (Note that we are again using the categories as defined by the U.S. Census Bureau, which predominantly uses the term "Hispanic" to refer to people of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin.)
Hispanics can be of any race.41 As a matter of fact, increasingly more Hispanics are identifying racially as White. In 2004 almost half of Hispanics identified themselves racially as White, while just under half identified themselves as “some other race.”42 More than 10 years later, approximately 66% of Hispanics now identify themselves racially as White while only 26% identify themselves as “some other race.”43 The remaining Hispanic population, totaling approximately 7%, identify as either Black, American Indian, Asian, Alaskan Native, Pacific Islander, or Native Hawaiian.44
Why would a minority identity group identify racially as White? A Pew study found that the longer Hispanic families lived in the United States, the more likely they were to claim White as their race even if they had not done so in the past.45 This suggests that upward mobility in America may be perceived by some Hispanics to be equated with “Whiteness.”46 Consequently, Hispanics who self-identify racially as White experience higher rates of education and salary, and lower rates of unemployment.47 Additionally, only 29% of Hispanics polled by the Pew Hispanic Center believe they share a common culture.48 According to the Pew Research Center, this finding may be due to the fact that the Hispanic ethnic group in the United States is made up of at least 14 Hispanic origin groups (such as Puerto Rican, Cuban, Spanish, Mexican, Dominican, and Guatemalan, among many others.)49 Each of these groups has its own culture with different customs, values, and norms.
These cultural differences among the various Hispanic groups, combined with different self-perceptions of race, may also affect attitudes toward their workplace environment. For example, one study found that the absenteeism rate among Blacks was related to the level of diversity policies and activities visible in the organization, while the absenteeism rate among Hispanics was similar to that of Whites and not related to those diversity cues.50 Results from this study suggest that managers need to be aware of how diversity impacts their workplace, namely addressing the relationship between Hispanic job seekers or workers and organizational outcomes concerning diversity policies as it may differ from that of other racial minorities.
Asian and Asian American
Asians are the fastest-growing ethnic group in the United States, growing 72% between 2000 and 2015.51 Compared to the rest of the U.S. population overall, households headed by Asian Americans earn more money and are more likely to have household members who hold a bachelor’s degree.52 However, there is a wide range of income levels among the Asian population that differs between the more than 19 groups of Asian origin in the United States.53
Similar to other racial and ethnic minority groups, Asians are stereotyped and face discrimination at work. Society through media often stereotypes Asian men as having limited English-speaking skills and as being highly educated, affluent, analytical, and good at math and science.54 Asian women are often portrayed as weak and docile.55 For Asian women, and other minority women as well, social stereotypes depicting them as exotic contribute to reports of sexual harassment from women minority groups.56
The model minority myth57 is a reflection of perceptions targeting Asians and Asian Americans that contrast the stereotypes of “conformity” and “success” of Asian men with stereotypes of “rebelliousness” and “laziness” of other minority men. It also contrasts the stereotyped “exotic” and “obedient” nature of Asian women against the stereotypical beliefs that White women are “independent” and “pure.”58 These perceptions are used not only to invalidate injustice that occurs among other racial minorities, but also to create barriers for Asian and Asian Americans seeking leadership opportunities as they are steered toward “behind the scenes” positions that require less engagement with others. These stereotypes also relegate Asian women into submissive roles in organizations, making it challenging for Asian men and women to advance in rank at the same rate as White male employees.59
Multiracial
Although the U.S. Census Bureau estimates that approximately 2% of the U.S. population describes themselves as belonging to more than one race, the Pew Research Center estimates that number should be higher, with around 7% of the U.S. population considered multiracial.60 This is due to the fact that some individuals may claim one race for themselves even though they have parents from different racial backgrounds. To complicate matters even more, when collecting data from multiracial group members, racial identity for individuals in this group may change over time because race is a social construct that is not necessarily based on a shared culture or country of origin in the same way as ethnicity. As a result, multiracial individuals (and Hispanics) have admitted to changing their racial identity over the course of their life and even based on the situation. Approximately 30% of multiracial individuals polled by the Pew Research Center say that they have varied between viewing themselves as belonging to one race or belonging to multiple races. Within the group polled, the order in which they first racially identified as belonging to one racial group versus belonging to more than one group varied.61
Despite the fact that multiracial births have risen tenfold between 1970 and 2013,62 their participation in the labor force is only 2%.63 Additionally, multiracial individuals with a White racial background are still considered a racial minority unless they identify themselves solely as White, and approximately 56% of them on average say they have been subjected to racial jokes and slurs.64 Discrimination also varies when multiracial groups are broken down further, with Black–American Indians having the highest percentage of individuals reporting discrimination and White-Asians having the lowest percentage.65
At work, multiracial employees are sometimes mistaken for races other than their own. If their racial minority background is visible to others, they may experience negative differential treatment. Sometimes they are not identified as having a racial or ethnic minority background and are privy to disparaging comments from unsuspecting coworkers about their own race, which can be demoralizing and can lead to lower organizational attachment and emotional strain related to concealing their identity.66
Other Groups
Approximately 1% of the labor force identifies as American Indian, Alaska Native, Native Hawaiian or Pacific Islander, or some other race.67
Age
The age distribution of an organization’s workforce is an important dimension of workplace diversity as the working population gets older. Some primary factors contributing to an older population include the aging of the large Baby Boomer generation (people born between 1946 and 1964), lower birth rates, and longer life expectancies68 due to advances in medical technology and access to health care. As a result, many individuals work past the traditional age of retirement (65 years old) and work more years than previous generations in order to maintain their cost of living.
Exhibit \(4\) compares the percentage of the population over the age of 65 to those under the age of 18 between 2010 and 2016. The number of older individuals has increased and is projected to reach 20.6% by the year 2030 while the number of younger individuals has steadily decreased within that time period. These numbers imply that organizations will increasingly have employees across a wide range of ages, and cross- generational interaction can be difficult manage. Although older workers are viewed as agreeable and comfortable to work with, they are also stereotyped by some employees as incompetent69 and less interested in learning new tasks at work compared to younger workers.70 Studies have found support for the proposition that age negatively relates to cognitive functioning.71 However, if managers offer less opportunity to older workers solely because of declining cognitive functioning, it can be detrimental to organizational performance because older workers outperform younger workers on a number of other job performance measures. Compared to younger workers, older workers are more likely to perform above their job expectations and follow safety protocols. They are also less likely to be tardy, absent, or abuse drugs or alcohol at work compared to their younger counterparts.
Sexual Orientation and Gender Identity
Sexual orientation diversity is increasing in the workforce.72 However, only 21 states and Washington D.C. prohibit discrimination based on sexual orientation.73 Without federal protection, individuals who do not live in these states could ve overlooked for employment or fired for their sexual orientation unless their employer has policies to protect them.74 Many employers are beginning to understand that being perceived as inclusive will make them more attractive to a larger pool of job applicants.75 So although the Civil Rights Act does not explicitly provide federal protection to lesbian, gay, bisexual and transgender, and queer/questioning (LGBTQ) employees, more than half of the Fortune 500 companies have corporate policies that protect sexual minorities from discrimination at work and offer domestic-partner benefits.76
Unfortunately, the percentage of hate crimes relating to sexual orientation discrimination has increased.77 Indeed, LGBTQ employees are stigmatized so much that in a recent study, researchers found that straight-identifying participants were more attracted to employers with no job security to offer them compared to gay-friendly employers.78 In other words, individuals would waive job security to avoid working with sexual minorities. Also, compared to heterosexuals, sexual minorities have higher education levels79 but still face hiring and treatment discrimination frequently.80
LGBTQ employees are often faced with the decision of whether or not to be truthful about their sexual orientation at work for fear of being stigmatized and treated unfairly. The decision to not disclose is sometimes called passing, and for some it involves a great risk of emotional strain that can affect performance.81 Individuals who pass may distance themselves from coworkers or clients to avoid disclosure about their personal life. This behavior can also result in decreased networking and mentoring opportunities, which over time can limit advancement opportunities. The decision to be transparent about sexual orientation is sometimes called revealing.82 Just like passing, revealing has its own set of risks including being ostracized, stigmatized, and subjected to other forms of discrimination at work. However, compared to passing, the benefits of building relationships at work and using their identity as a catalyst for tolerance and progressive organizational change may outweigh the risks when LGBTQ employees decide to reveal. The decision to "come out" should be made exclusively by the individual; "outing" someone else as any sexual orientation or gender identity is considered highly inappropriate and hurtful, and may have employment-related consequences.
Research shows that when local or state laws are passed to prevent sexual orientation discrimination, incidents of workplace discrimination decrease.83 This same effect occurs when firms adopt policies that protect the rights of sexual minority employees.84 By creating a safe and inclusive work environment for LGBTQ employees, companies can create a culture of tolerance for all employees regardless of their sexual orientation or gender identity.
managing change
Blind Recruiting
An increasing number of companies are testing a new and innovative way of recruiting. Blind recruiting is a process by which firms remove any identifying information about applicants during the recruitment process. An example of this may include anonymous applications that omit fields requesting information such as an applicant’s name or age. Using computer application technology, some companies like Google administer surveys to their anonymous applicants that measure the abilities required for the job before they are considered in the next step of the recruitment process. Alternatively, companies may request that applicants remove identifying information such as names and address from their resumes before applying for positions. As resumes are received, hiring managers can assign a temporary identification number.
Although more companies are using this method of recruiting, the idea is not new for symphony orchestras, many of which have been using blind auditioning since the 1970s. In some instances musicians audition behind screens so they are evaluated only by their music. This process removes bias associated with race and gender because the performer cannot be seen and only heard. A study investigating this practice examined 11 symphony orchestras that varied on the use of blind auditions. Researchers found that blind auditions increased the likelihood that a woman would be hired by between 25 and 46%. A recruitment process like this can help organizations attract more candidates, hire the best talent, increase their workplace diversity, and avoid discrimination liability.
Discussion Questions
1. Should all companies use blind recruiting in place of traditional recruiting, or are there exceptions that must be considered?
1. If blind recruiting helps eliminate bias during the recruitment process, then what does that say about social media platforms such as Linked In that are commonly used for recruiting applicants? Will using those platforms expose companies to greater liability compared to using more traditional means of recruiting?
2. How does blind recruiting help organizations? How may it hinder organizations?
Sources: Grothaus, M. (Mar 14 2016). How “blind” recruitment works and why you should consider it. Fast Company. Retrieved from https://www.fastcompany.com/3057631/...uitment-works- and-why-you-should-consider; and MIller, C.C. (Feb 25 2016). Is blind hiring the best hiring? The New York Times Magazine. Retrieved from www.nytimes.com/2016/02/28/m...-blind-hiring- the-best-hiring.html.
Immigrant Workers
Every year a new record is set for the time it takes to reach the U.S. cap of H-1B visas granted to employers.85 H-1B visas are a type of work visa, a temporary documented status that authorizes individuals to permanently or temporarily live and work in the United States.86 As a result of the demand for work visas by employers, the number of immigrant workers in the U.S. workforce has steadily grown within the last decade from 15% in 2005 to 17% in 2016.87 Compared to those born in the United States, the immigrant population in America is growing significantly faster.88 This is partly because of the U.S. demand for workers who are proficient in math and science89 and wish to work in America.
Although a huge demand for immigrant labor exists in the United States, immigrant labor exploitation occurs, with immigrant employees receiving lower wages and working longer hours compared to American workers.90 Foreign-born job seekers are attracted to companies that emphasize work visa sponsorship for international employees, yet they are still mindful of their vulnerability to unethical employers who may try to exploit them. For example, Lambert and colleagues found that some of the job-seeking MBA students from the Philippines in their study believed that companies perceived to value international diversity and sponsor H-1B visas signaled a company wishing to exploit workers.91 Others believed that those types of companies might yield diminishing returns to each Filipino in the company because their token value becomes limited. In news stories, companies have been accused of drastically shortchanging foreign student interns on their weekly wages.92 In another case, Infosys, a technology consulting company, paid \$34 million to settle allegations of visa fraud due to suspicion of underpaying foreign workers to increase profits.93
Other Forms of Diversity at Work
Workers with disabilities are projected to experience a 10% increase in job growth through the year 2022.94 This means that more public and corporate policies will be revised to allow greater access to training for workers with disabilities and employers.95 Also, more companies will use technology and emphasize educating employees about physical and mental disabilities as workplace accommodations are used more often.
In the past, the United States has traditionally been a country with citizens who predominantly practice the Christian faith. However, over the past almost 30 years the percentage of Americans who identify as Christian has significantly decreased—by approximately 12%. Over that same time period, affiliation with other religions overall increased by approximately 25%.96 The increase in immigrant workers from Asian and Middle Eastern countries means that employers must be prepared to accommodate religious beliefs other than Christianity. Although federal legislation protects employees from discrimination on the basis of race, religion, and disability status, many employers have put in place policies of their own to deal with the variety of diversity that is increasingly entering the workforce.
concept check
• How is diversity defined in relation to the workplace?
• What are the components that make up a diverse workplace and workforce?
10. Judy, R.W., D'Amico, C., & Geipel, G.L.(1997). Workforce 2020: Work and Workers in the 21st Century. Indianapolis, Ind: Hudson Institute.
11. U.S. Bureau of Labor Statistics. (2017). Labor force characteristics by race and ethnicity, 2016. Retrieved from https://www.bls.gov/opub/reports/rac.../2016/home.htm
12. U.S. Department of Labor, Bureau of Labor Statistics. (2017). Table A-1. Employment status of the civilian population by sex and age. Retrieved from https://www.bls.gov/news.release/empsit.t01.htm; DeWolf, M. (Mar 1 2017). 12 stats about working women. Retrieved from blog.dol.gov/2017/03/01/12-stats-about- working-women
13. Toosi, Mitra,"Labor force projections to 2024: the labor force is growing, but slowly," Monthly Labor Review, U.S. Bureau of Labor Statistics, December 2015, https://doi.org/10.21916/mlr.2015.48.
14. U.S. Bureau of Labor Statistics. (2017). Labor force characteristics by race and ethnicity, 2016. Retrieved from https://www.bls.gov/opub/reports/rac.../2016/home.htm
15. U.S. Department of Labor, Bureau of Labor Statistics. (2017). Table 2: Employment status of the civilian noninstitutional population 16 years and over by sex, 1977 to date 11. Retrieved from https://www.bls.gov/ cps/cpsaat02.pdf.
16. Toosi, Mitra,"Labor force projections to 2024: the labor force is growing, but slowly," Monthly Labor Review, U.S. Bureau of Labor Statistics, December 2015, https://doi.org/10.21916/mlr.2015.48.
17. U.S. Department of Labor, Bureau of Labor Statistics. (2017). Table 2: Employment status of the civilian noninstitutional population 16 years and over by sex, 1977 to date 11. Retrieved from https://www.bls.gov/ cps/cpsaat02.pdf.
18. DeWolf, M. (2017). 12 stats about working women. U.S. Department of Labor Blog.
19. Eagly, A.H., & Karau, S.J.(2002). Role congruity theory of prejudice toward female leaders. Psychological Review, 109 (3): 573-598.
20. EEOC, “Facts About Sexual Harassment.” Retrieved from www.eeoc.gov/eeoc/publications/fs- sex.cfm
21. Ibid.
22. EEOC, “Sexual Harassment.” Retrieved from https://www.eeoc.gov/laws/types/sexual_harassment.cfm
23. Feldblum, C.R., & Lipnic, V.A. (2016).Report of the Co-Chairs of the EEOC Select Task Force on the Study of Harassment in the Workplace. Retrieved from https://www.eeoc.gov/eeoc/task_force...ent/report.cfm
24. Hernandez, T.K. (2000). Sexual Harassment and Racial Disparity: The Mutual Construction of Gender and Race. Gender, Race and Justice (4J): 183 -224. Retrieved from http://ir.lawnet.fordham.edu/faculty_scholarship/ 12
25. Toosi, Mitra,"Labor force projections to 2024: the labor force is growing, but slowly," Monthly Labor Review, U.S. Bureau of Labor Statistics, December 2015, https://doi.org/10.21916/mlr.2015.48.
26. Ibid.
27. Ibid.
28. U.S. Equal Employment Opportunity Commission. African-Americans in the American Workforce. Retrieved from www1.eeoc.gov/eeoc/statistic...n_experiences/ african_americans.cfm?renderforprint=1
29. Quilian, L., Pager, D., Midtboen, A.H., & Hexel, O. (Oct 2017). Hiring discrimination against Black Americans hasn’t declined in 25 years. Harvard Business Review.
30. www.theguardian.com/technolo...hanges-racial- discrimination
31. U.S. Department of Labor, Bureau of Labor Statistics. (2017). Table 11: Employed persons by detailed occupation, sex, race, and Hispanic or Latino ethnicity. Retrieved from https://www.bls.gov/cps/ tables.htm#charemp.
32. Ibid
33. Adams, S. (June 2014). White high school drop-outs are as likely to land jobs as black college students. Forbes. Retrieved from www.forbes.com/sites/susanad...ool-drop-outs- are-as-likely-to-land-jobs-as-black-college-students/#51715c547b8f
34. Pager, D. (2003). The mark of a criminal record. American Journal of Sociology, 108 (5): 937-975.
35. Bertrand, M. & Mullainathan, S. (2004). Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on labor market discrimination. American Economic Review, 94 (4): 991-1013
36. Robinson, C. L., Taylor, T., Tomaskovic-Devey, D., Zimmer, C. & Irwin Jr., M.W. (2005). “Studying race or ethnic and sex segregation at the establishment level: Methodological issues and substantive opportunities using EEO-1 reports.” Work and Occupations 32(1): 5–38.
37. Kraiger, K., & Ford, J. K. (1985). A Meta-Analysis of Ratee Race Effects in Performance Ratings. Journal of Applied Psychology, 70(1), 56-65.
38. Mays, V. M., Coleman, L. M., & Jackson, J. S. (1996). Perceived Race-Based Discrimination, Employment Status, and Job Stress in a National Sample of Black Women: Implications for Health Outcomes. Journal of Occupational Health Psychology, 1(3), 319–329.
39. Lopez, G., Ruiz, N.G., & Patten, E. (2017). Key facts about Asian Americans, a diverse and growing population. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank/2017/09/08/key- facts-about-asian-americans/; Flores, A. (Sep 18 2017). How the U.S. Hispanic population is changing. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank...-u-s-hispanic- population-is-changing/ft_17-09-18_hispanics_ushispanicpop/
40. U.S. Bureau of Labor Statistics. (2017). Labor force characteristics by race and ethnicity, 2016. Retrieved from https://www.bls.gov/opub/reports/rac.../2016/home.htm
41. Tafoya, S. (2004). Shades of belonging. Pew Hispanic Center. Retrieved from http://www.pewhispanic.org/ 2004/12/06/shades-of-belonging/
42. Ibid.
43. Hispanics in the U.S. fast facts. (Mar 31 2017). CNN. Retrieved from www.cnn.com/2013/09/20/us/ hispanics-in-the-u-s-/index.html
44. Ibid.
45. Liu, E. (May 30 2014). Why are Hispanics identifying as white? CNN.
46. Ibid.
47. Tafoya, S. (2004). Shades of Belonging. Washington D.C.: Pew Hispanic Center. Retrieved from pewhispanic.org/files/reports/35.pdf.
48. Taylor, P., Lopex, M.H., Martinez, J., & Velasco. G. (2012). When labels don’t fit: Hispanics and their views of identity. Retrieved from http://www.pewhispanic.org/2012/04/0...ics-and-their- views-of-identity/
49. Flores, A. (Sep 18 2017). How the U.S. Hispanic population is changing. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank...n-is-changing/ ft_17-09-18_hispanics_ushispanicpop/
50. Avery, D.R., McKay, P.F., Wilson, D.C., Tonidandel, S. (2007). Unequal attendance: The relationships between race, organizational diversity cues, and absenteeism. Personnel Psychology, 60: 875-902.
51. Lopez, G., Ruiz, N.G., & Patten, E. (2017). Key facts about Asian Americans, a diverse and growing population. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank/2017/09/08/key- facts-about-asian-americans/
52. Ibid.
53. Ibid.
54. Ono, K. A., & Pham, V. N. (2009). Asian Americans and the Media. Cambridge, England: Polity.; Paek, H.J., & Shah, H. (2003). Racial ideology, model minorities, and the ‘not so silent partner:” Stereotyping of Asian Americans in U.S. magazine advertising. Howard Journal of Communications, 14(4): 225-244.
55. Hernandez, T.K. (2000). Sexual Harassment and Racial Disparity: The Mutual Construction of Gender and Race. Gender, Race and Justice (4J): 183 -224. Retrieved from http://ir.lawnet.fordham.edu/faculty_scholarship/ 12
56. Ibid.
57. Committee of 100: American attitudes toward Chinese Americans and Asian Americans. (2004, Summer). The Diversity Factor, 12(3): 38-44. Retrieved from www.committee100.org/publications/survey/ C100survey.pdf
58. Hernandez, T.K. (2000). Sexual Harassment and Racial Disparity: The Mutual Construction of Gender and Race. Gender, Race and Justice (4J): 183 -224. Retrieved from http://ir.lawnet.fordham.edu/faculty_scholarship/ 12
59. Committee of 100: American attitudes toward Chinese Americans and Asian Americans. (2004, Summer). The Diversity Factor, 12(3): 38-44. Retrieved from www.committee100.org/publications/survey/ C100survey.pdf
60. Multiracial in America. (June 11 2015) Pew Research Center. Retrieved from http://www.pewsocialtrends.org/2015/...al-in-america/
61. Ibid.
62. Ibid.
63. U.S. Bureau of Labor Statistics. (2017). Labor force characteristics by race and ethnicity, 2016. Retrieved from https://www.bls.gov/opub/reports/rac.../2016/home.htm
64. Ibid.
65. Ibid.
66. Philips, K.W., Rothbard, N.P., & Dumas, T.L. (2009). To disclose or not to disclose? Status distance and self- disclosure in diverse environments. Academy of Management Review, 34(4), 710-732.
67. U.S. Bureau of Labor Statistics. (2017). Labor force characteristics by race and ethnicity, 2016. Retrieved from https://www.bls.gov/opub/reports/rac.../2016/home.htm
68. Alley, D., & Crimmins, E. 2007. The demography of aging and work. In K. S. Shultz & G. A. Adams (Eds.), Aging and work in the 21st century: 7-23. New York: Psychology Press.
69. Cuddy, A. J. C., & Fiske, S. T. (2002). Doddering but dear: Process, content, and function in stereotyping of older persons. In T. D. Nelson (Ed.), Ageism: Stereotyping and prejudice against older persons (pp. 3–26). Cambridge, MA: MIT Press.; Cuddy, A. J. C., Norton, M. I., & Fiske, S. T. (2005). This old stereotype: The pervasiveness and persistence of the elderly stereotype. Journal of Social Issues, 61, 267–285.
70. Desmette, D., & Gaillard, M. (2008). When a “worker” becomes an “older worker”: The effects of age- related social identity on attitudes towards retirement and work. Career Development International, 13, 168–185.
71. Ng, T. W., & Feldman, D. C. (2008). The relationship of age to ten dimensions of job performance. Journal of Applied Psychology, 93, 392–423.
72. Bell, M.P., Ozbilgin, M.F., Beauregard, T.A. and Surgevil, O. (2011), “Voice, silence, and diversity in 21st century organizations: strategies for inclusion of gay, lesbian, bisexual, and transgender employees”, Human Resource Management, Vol. 50 No. 1, pp. 131-146.
73. Human Rights Campaign. (2018). State maps of laws and policies. Retrieved from http://www.hrc.org/ state-maps/employment
74. Ragins, B.R., Cornwell, J.M. and Miller, J.S. (2003), “Heterosexism in the workplace: do race and gender matter?”, Group & Organization Management, Vol. 28, pp. 45-74.
75. Button, S.B. (2001), “Organizational efforts to affirm sexual diversity: a cross-level examination”, Journal of Applied Psychology, Vol. 86 No. 1, pp. 17-28.
76. Human Rights Campaign Foundation (2018), “Corporate equality index 2018 ”, available at:assets2.hrc.org/files/assets/resources/ CEI-2018-FullReport.pdf?_ga=2.120762824.1791108882.1521675202-2105331900.1521675202
77. GLAAD media reference guide (10th ed.). 2016. Los Angeles, CA: Gay and Lesbian Alliance Against Defamation. Retrieved from www.glaad.org/sites/default/f...e-Guide-Tenth- Edition.pdf
78. Lamber, J. (2015). The impact of gay-friendly recruitment statements and due process employment on a firm’s attractiveness as an employer. Equality, Diversity, and Inclusion: An International Journal, 34 (6): 510-526.
79. Black, D., Gates, G., Sanders, S., & Taylor, L. 2000. Demographics of the gay and lesbian population in the United States: Evidence from available systematic data sources. Demography, 37(2): 139-154.
80. Ragins, B.R., Cornwell, J.M., & Miller, J.S. 2003. Heterosexism in the workplace: Do race and gender matter? Group & Organization Management, 28: 45-74.;Tilcsik, A. (2011), “Pride and prejudice: employment discrimination against openly gay men in the United States”, American Journal of Sociology, Vol. 117 No. 2, pp. 586-626.
81. Clair, J.A., Beatty, J.E., & Maclean, T.L. (2005). Out of sight but not out of mind: Managing invisible social identities in the workplace. Academy of Management Review, 30 (1), 78-95.
82. Ibid.
83. Barron, G.L. and Hebl, M. (2013), “The force of law: The effects of sexual orientation anti-discrimination legislation on interpersonal discrimination in employment”, Psychology, Public Policy, and Law, Vol. 19 No. 2, pp. 191-205.
84. Button, S.B. (2001), “Organizational efforts to affirm sexual diversity: a cross-level examination”, Journal of Applied Psychology, Vol. 86 No. 1, pp. 17-28.
85. Trautwein, C. Apr 7 2017. H-1B Visa applications just hit their limit for the year in less than a week. Time. Retrieved 4/21/2017 from http://time.com/4731665/h1b-visa-application-cap/; U.S. Citizenship and Immigration Services. (2017, Apr 7). USCIS reaches FY 2018 H-1B Cap. Retrieved on 4/21/2017 at www.uscis.gov/news/news-rele...-2018-h-1b-cap
86. U.S. Citizenship and Immigration Services. (2013). Working in the U.S. Retrieved from http://www.uscis.gov/working-united-states/working-us; U.S. Department of State, Bureau of Consular Affairs. (2014). Directory of Visa Categories. Retrieved from travel.state.gov/content/visa...h/general/all- visa-categories.html#iv
87. Bureau of Labor Statistics, U.S. Department of Labor. (2016, May 19). Labor force characteristics of foreign- born workers summary. Economic News Release. Retrieved online at https://www.bls.gov/news.release/ forbrn.nr0.htm
88. Kandel, W. A. (2011). The US foreign-born population: Trends and selected characteristics. Congressional Research Service Report. Retrieved from www.fas.org/sgp/crs/misc/R41592.pdf
89. Bound, J., Demirci, M., Khanna, G., & Turner, S. (2014). Finishing degrees and finding jobs: U.S. higher education and the flow of foreign IT workers (NBER Working Paper No. 20505). Retrieved January 4, 2015, from http://www.nber.org/papers/w20505
90. Avery, D. R., Tonidandel, S., Volpone, S. D., & Raghuram, A. (2010). Overworked in America?: How work hours, immigrant status, and interpersonal justice affect perceived work overload. Journal of Managerial Psychology, 25(2), 133–147.; Bloomekatz, R. (2007). Rethinking immigration status discrimination and exploitation in the low-wage workplace. UCLA Law Review, 54, 1963-2010.
91. Lambert, J.R., Basuil, D.A., Bell, M.P., & Marquardt, D. (2017).Coming to America: Work Visas, International Diversity, and Organizational Attractiveness among Highly Skilled Asian Immigrants. International Journal of Human Resource Management, 1-27.
92. Jamieson, D. (2011). Student guest workers at Hershey plant allege exploitative conditions.Huffington Post. Retrieved from http://www.huffingtonpost.com/2011/0...rs-at-hershey- plant_n_930014.html.
93. Wigglesworth, V. (2013). Tech giant Infosys settles allegation of visa fraud in Plano office for \$34 million. Dallas News. Retrieved from www.dallasnews.com/news/commu...ano/headlines/ 20131030-tech-giant-infosys-settles-allegations-of-visa-fraud-in-plano-office-for-34-million.ece?nclick_check=1
94. U.S. Department of Labor. (2012). Key points on Disability and Occupational Projections Tables. Retrieved from https://www.dol.gov/odep/pdf/20141022-KeyPoints.pdf
95. Ibid.
96. U.S. Census Bureau. (2008). Table 75. Self-Described Religious Identification of Adult Population: 1990, 2001 and 2008. Retrieved from https://www2.census.gov/library/publ.../statab/130ed/ tables/11s0075.pdf
Exhibit \(1\) Percentage distribution of the labor force by race (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)
Exhibit \(2\) Percentage Distribution of the Labor Force by Sex (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)
Exhibit \(3\) Tamara Johnson The treatment of women in business has become a hot topic in corporate boardrooms, human resources departments, and investment committees. Tamara Johnson, who is profiled in the opening feature to this chapter, moves beyond simply acknowledging widespread discrimination to focusing on solutions. Also on the agenda: the need to improve diversity and inclusion across the board and breaking through the glass ceiling. (Credit: Tamara Johnson/ Attribution 2.0 Generic (CC BY 2.0))
Exhibit \(4\) Change in U.S. population by age (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.02%3A_Diversity_and_the_Workforce.txt |
How does diversity impact companies and the workforce?
Due to trends in globalization and increasing ethnic and gender diversity, it is imperative that employers learn how to manage cultural differences and individual work attitudes. As the labor force becomes more diverse there are both opportunities and challenges to managing employees in a diverse work climate. Opportunities include gaining a competitive edge by embracing change in the marketplace and the labor force. Challenges include effectively managing employees with different attitudes, values, and beliefs, in addition to avoiding liability when leadership handles various work situations improperly.
Reaping the Advantages of Diversity
The business case for diversity introduced by Taylor Cox and Stacy Blake outlines how companies may obtain a competitive advantage by embracing workplace diversity.97 Six opportunities that companies may receive when pursuing a strategy that values diversity include cost advantages, improved resource acquisition, greater marketing ability, system flexibility, and enhanced creativity and better problem solving (see Exhibit \(1\) ).
Cost Advantages
Traits such as race, gender, age, and religion are protected by federal legislation against various forms of discrimination (covered later in this chapter). Organizations that have policies and procedures in place that encourage tolerance for a work climate of diversity and protect female and minority employees and applicants from discrimination may reduce their likelihood of being sued due to workplace discrimination. Cox and Blake identify this decreased liability as an opportunity for organizations to reduce potential expenses in lawsuit damages compared to other organizations that do not have such policies in place.
Additionally, organizations with a more visible climate of diversity experience lower turnover among women and minorities compared to companies that are perceived to not value diversity.98 Turnover costs can be substantial for companies over time, and diverse companies may ameliorate turnover by retaining their female and minority employees. Although there is also research showing that organizations that value diversity experience a higher turnover of White employees and male employees compared to companies that are less diverse,99 some experts believe this is due to a lack of understanding of how to effectively manage diversity. Also, some research shows that Whites with a strong ethnic identity are attracted to diverse organizations similarly to non-Whites.100
Resource Acquisition
Human capital is an important resource of organizations, and it is acquired through the knowledge, skills, and abilities of employees. Organizations perceived to value diversity attract more women and minority job applicants to hire as employees. Studies show that women and minorities have greater job-pursuit intentions and higher attraction toward organizations that promote workplace diversity in their recruitment materials compared to organizations that do not.101 When employers attract minority applicants, their labor pool increases in size compared to organizations that are not attractive to them. As organizations attract more job candidates, the chances of hiring quality employees increases, especially for jobs that demand highly skilled labor. In summary, organizations gain a competitive advantage by enlarging their labor pool by attracting women and minorities.
Marketing
When organizations employ individuals from different backgrounds, they gain broad perspectives regarding consumer preferences of different cultures. Organizations can gain insightful knowledge and feedback from demographic markets about the products and services they provide. Additionally, organizations that value diversity enhances their reputation with the market they serve, thereby attracting new customers.
System Flexibility
When employees are placed in a culturally diverse work environment, they learn to interact effectively with individuals who possess different attitudes, values, and beliefs. Cox and Blake contend that the ability to effectively interact with individuals who differ from oneself builds cognitive flexibility, the ability to think about things differently and adapt one’s perspective. When employees possess cognitive flexibility, system flexibility develops at the organizational level. Employees learn from each other how to tolerate differences in opinions and ideas, which allows communication to flow more freely and group interaction to be more effective.
Creativity and Problem Solving
Teams from diverse backgrounds produce multiple points of view, which can lead to innovative ideas. Different perspectives lead to a greater number of choices to select from when addressing a problem or issue.
Life experience varies from person to person, sometimes based on race, age, or sex. Creativity has the opportunity to flourish when those experiences are shared. Diverse teams not only produce more alternatives, but generate a broader range of perspectives to address tasks and problems. One way in which diverse teams enhance problem-solving ability is by preventing groupthink,102 a dysfunction in decision-making that occurs in homogeneous groups as a result of group pressures and group members’ desire for conformity and consensus. Diverse group membership prevents groupthink because individuals from varied backgrounds with different values, attitudes, and beliefs can test the assumptions and reasoning of group members’ ideas.
Aligning Diversity Programs with an Organization's Mission and Strategic Goals
Diversity helps organizations perform best when it is aligned with a specific business strategy. For example, when companies use heterogeneous management teams that are directed by an entrepreneurial strategy focusing on innovation, the companies’ productivity increases.
When an entrepreneurial strategy is not present, however, team diversity has little effect on productivity.103 An entrepreneurial strategy includes innovation that reflects a company’s commitment to being creative, supporting new ideas, and supporting experimentation as a way to gain a competitive advantage. In other words, managers may properly utilize the multiple perspectives that emerge from heterogeneous teams by integrating them as a resource for pursuing the overall strategy of the organization.
Using Human Resources Tools Strategically
To effectively align diversity with an organization’s strategy, the human resources function must be able to engage employees at dynamic levels. Using a strategic human resources management approach to an organization can successfully integrate diversity with the organization’s goals and objectives.104 Strategic human resources management (SHRM) is a system of activities arranged to engage employees in a manner that assists the organization in achieving a sustainable competitive advantage. SHRM practices vertically integrate with the mission and strategy of the organization while horizontally integrating human resources activities across its functional areas. By doing so, a unique set of resources can be made available to specific to the needs of the organization. Furthermore, when human resources becomes a part of the strategic planning process instead of just providing ancillary services, improved communication, knowledge sharing, and greater synergy between decision makers can occur within the organization to improve organizational functioning.
The resource-based view of the firm has been used to support the argument for diversity because it demonstrates how a diverse workforce can create a sustainable competitive advantage for organizations. Based on the resource-based view of the firm, when companies possess resources that are rare, valuable, difficult to imitate, and non-substitutable, a sustained competitive advantage can be attained.105 The SHRM approach assumes that human capital—the current and potential knowledge, skills, and abilities of employees—is instrumental to every organization’s success and sustainability and longevity.
If a diverse composition of employees within organizations is rare, employing minorities in positions of leadership is even rarer. One exception is Northern Trust, an investment management firm that was recently listed on Forbes magazine’s 2018 Best Employers for Diversity list.106 Thirty-eight percent of Northern Trust' stop executives are women, which is impressive because it matches the average percentage of women in full-time one-year MBA programs over the past five years.107 The average for S&P 500 companies is just 27%. In addition, African Americans make up 23% of Northern Trust’s board, which also demonstrates the commitment Northern Trust has to diversity. This rare degree of diversity helps Northern Trust become an employer of choice for minorities and women. In turn, attracting minority applicants increases the labor pool available to Northern Trust and increases its ability to find good talent.
Diverse companies may capitalize on the multiple perspectives that employees from different backgrounds contribute to problem solving and idea generation. In group settings, members from collectivist cultures from Asia and South America, for example, engage with others on tasks differently than members from North America. Similarly, Asians, Blacks, and Hispanics usually act more collectively and engage more interdependently than Whites, who are generally more individualistic. More harmonious working interactions benefit group cohesion and team performance,108 and employees can grasp better ways of doing things when there is a diverse population to learn from.
For a company to attain a sustained competitive advantage, its human resource practices must be difficult to copy or imitate. As we will see later in the chapter, companies may hold one of three perspectives on workplace diversity. The integration and learning perspective results in the best outcomes for employees and the organization. However, it is not easy to become an employer that can effectively manage diversity and avoid the challenges we learned about earlier in this chapter. Historical conditions and often-complex interplay between various organizational units over time can contribute to a company’s ability to perform effectively as a diverse organization. Best practices for targeting diverse applicants or resolving conflicts based on cultural differences between employees may occur organically and later become codified into the organizational culture. Sometimes, however, the origin of diversity practices is unknown because they arose from cooperation among different functional areas (e.g., marketing and human resources working strategically with leadership to develop recruitment ideas) that occurred so long ago that not even the company itself, let alone other companies, could replicate the process.
Diversity and Organizational Performance
Research indicates that having diversity in an organization produces mixed results for its success. Some studies show a positive relationship, some show a negative relationship, and others show no relationship between diversity and performance. Some researchers believe that although findings regarding a direct relationship between diversity and success in the marketplace may be inconsistent, the relationship may be due to other variables not taken into account.
Taking the resource-based view perspective, Richard and colleagues demonstrated that racially diverse banking institutions focused on innovation experienced greater performance than did racially diverse banks with a low focus on innovation.109 These findings suggest that for the potential of racial diversity to be fully realized, companies should properly manage the system flexibility, creativity, and problem-solving abilities used in an innovative strategy. Other studies show that when top management includes female leadership, firm performance improves when organizations are innovation driven.110
concept check
• What are the challenges and opportunities that diversity provides to companies?
• What are the responsibilities of human resources regarding diversity?
• Can diversity be a strategic advantage to organizations?
97. Cox, T.H. & Blake, S. (1991). Managing cultural diversity: Implications for organizational competitiveness. Academy of Management Executive, 5(3): 45-56.
98. Williams, K., & O'Reilly, CA. 1998. Demography and diversity: A review of 40 years of research.In B. Staw and R. Sutton (Eds.), Research in organizational behavior, 20: 77-140. Greenwich, CT: JAI Press.
99. Tsui, A.S., Egan, T. D., & O’Reilly, C.A. 1992. Being different: relational demography and organizational attachment. Administrative Science Quarterly, 37: 549-579.
100. Kim, S.S. & Gelfand, M. J. (2003).The influence of ethnic identity on perceptions of organizational recruitment. Journal of Vocational Behavior, 63: 396- 416.
101. Perkins, L. A., Thomas, K. M., & Taylor, G. A. 2000. Advertising and recruitment: Marketing tominorities. Psychology and Marketing, 17: 235-255.; Thomas, K.M., & Wise, P.G. 1999. Organizational attractiveness and individual differences: Are diverse applicants attracted by different factors? Journal of Business and Psychology,13: 375-390.
102. Janis, I.L. (1972). Victims of groupthink: A psychological study of foreign policy decisions and fiascoes. Boston: Houghton Mifflin Company.
103. Richard, O.C., Barnett, T., Dwyer, S., Chadwick, K. (2004). Cultural diversity in management, firmperformance, and the moderating role of entrepreneurial orientation dimensions. Academy of Management Journal, 47 (2): 255-266.
104. McMahan, G.C., Bell, M.P., & Virick, M. (1998). Strategic human resource management: Employee involvement, diversity, and international issues. Human Resource Management Review, 8 (3): 193-214.
105. Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1): 99-120.
106. Kauflin, J. (Jan 23 2018). America’s best employers for diversity. Forbes. Retrieved from https://www.forbes.com/sites/jeffkau.../#84f151c71647 107. Graduate Management Admission Council. (Oct 6 2016Where are women in graduate business school? Retrieved from www.gmac.com/market-intellig...s/application- trends/where-are-women-in-graduate-business-school.aspx
108. Cox, T. H., Lobel, S. A., & McLeod, P. L. (1991). Effects of ethnic group cultural differences on cooperative and competitive behavior on a group task. Academy of management journal, 34(4), 827-847.
109. Richard, O.C., Barnett, T., Dwyer, S., Chadwick, K. (2004). Cultural diversity in management, firm performance, and the moderating role of entrepreneurial orientation dimensions. Academy of Management Journal, 47 (2): 255-266.
110. Dezso, C.L., & Ross, D.G. (2012). Does female representation in top management improve firm performance? A panel data investigation. Strategic Management Journal, 33: 1072-1089.
Exhibit 5.6 Managing Cultural Diversity (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)
Exhibit 5.7 Bank staff watching presentation The Disability Awareness Players present to the staff at Northern Trust. (Credit: JJ’s List/ flickr/ Attribution 2.0 Generic (CC BY 2.0)) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.03%3A_Diversity_and_Its_Impact_on_Companies.txt |
What is workplace discrimination, and how does it affect different social identity groups?
Although diversity has it benefits, there are also challenges that managers must face that can only be addressed with proper leadership. Some of the most common challenges observed in organizations and studied in research include lower organizational attachment and misunderstanding work diversity initiatives and programs.
Lower Organizational Attachment
Although diversity programs attract and retain women and minorities, they may have the opposite effect on other, nonminority employees. When diversity is not managed effectively, White and male employees can feel alienated from or targeted by the organization as diversity programs are put in place. A study that examined 151 work groups across three large organizations investigated whether the proportion of group membership based on race or sex affected the group members’ absentee rates, psychological attachment to their work group, and turnover intentions,111 three factors that play significant roles in an employee’s attachment to their organization. Results showed a positive relationship between group heterogeneity and lower organizational attachment, higher turnover intentions, and greater frequency of absences for men and for White group members. In other words, as work group diversity increased, White employees and male employees felt less attached to the organization and were more likely to quit. Because heterogeneous groups improve creativity and judgement, managers should not avoid using them because they may be challenging to manage. Instead, employers need to make sure they understand the communication structure and decision-making styles of their work groups and seek feedback from employees to learn how dominant group members may adjust to diversity.
Legal Challenges and Diversity
The legal system is used to combat discrimination. Among the ways that we will cover here are reverse discrimination, workplace discrimination, harassment, age discrimination, disability discrimination, national origin discrimination, pregnancy discrimination, race/color discrimination, religious discrimination, sex-based discrimination and other forms of discrimination.
Reverse Discrimination
As research shows, workplace discrimination against women and racial or ethnic minorities is common. Reverse discrimination is a term that has been used to describe a situation in which dominant group members perceive that they are experiencing discrimination based on their race or sex. This type of discrimination is uncommon, but is usually claimed when the dominant group perceives that members of a protected (diverse) class of citizens are given preference in workplace or educational opportunities based not on their merit or talents, but on a prescribed preferential treatment awarded only on the basis of race or sex.
Research conducted in the 1990s shows that only six federal cases of reverse discrimination were upheld over a four-year period (1990–1994), and only 100 of the 3,000 cases for discrimination over that same four-year period were claims of reverse discrimination.112 Interestingly, a recent poll administered by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found that a little more than half of White Americans believe that White people face discrimination overall, and 19% believe they have experienced hiring discrimination due to the color of their skin.113 This misperception stems in part from the recalibration of the labor force as it become more balanced due to increased equal employment opportunities for everyone. Members of dominant identity groups, Whites and men, perceive fewer opportunities for themselves when they observe the workforce becoming more diverse. In reality, the workforce of a majority of companies is still predominantly White and male employees. The only difference is that legislation protecting employees from discrimination and improvements in equal access to education have created opportunities for minority group members when before there were none.
Workplace Discrimination
Workplace discrimination occurs when an employee or an applicant is treated unfairly at work or in the job- hiring process due to an identity group, condition, or personal characteristic such as the ones mentioned above. Discrimination can occur through marital status, for example when a person experiences workplace discrimination because of the characteristics of a person to whom they are married. Discrimination can also occur when the offender is of the same protected status of the victim, for example when someone discriminates against someone based on a national origin that they both share.
The Equal Employment Opportunity Commission (EEOC) was created by Title VII of the Civil Rights Act of 1964 with the primary goal of making it illegal to discriminate against someone in the workplace due to their race, national origin, sex, disability, religion, or pregnancy status.114 The EEOC enforces laws and issues guidelines for employment-related treatment. It also has the authority to investigate charges of workplace discrimination, attempt to settle the charges, and, if necessary, file lawsuits when the law has been broken.
All types of workplace discrimination are prohibited under different laws enacted and enforced by the EEOC, which also considers workplace harassment and sexual harassment forms of workplace discrimination and mandates that men and women must be given the same pay for equal work.115
The provision for equal pay is covered under the Equal Pay Act of 1963, which was an amendment to the Fair Labor Standards Act of 1938. Virtually all employers are subject to the provisions of the act, which was an attempt to address pay inequities between men and women. More than 50 years later, however, women still earn about 80 cents to every dollar that men earn, even while performing the same or similar jobs.116
Harassment
Harassment is any unwelcome conduct that is based on characteristics such as age, race, national origin, disability, sex, or pregnancy status. Harassment is a form of workplace discrimination that violates Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, and the Americans with Disabilities Act of 1990.117
Sexual harassment specifically refers to harassment based on a person’s sex, and it can (but does not have to) include unwanted sexual advances, requests for sexual favors, or physical and verbal acts of a sexual nature. Though members of any sex can be the victim of sexual harassment, women are the primary targets of this type of harassment.118
Age Discrimination
Age discrimination consists of treating an employee or applicant less favorably due to their age. The Age Discrimination in Employment Act (ADEA) forbids discrimination against individuals who are age 40 and above. The act prohibits harassment because of age, which can include offensive or derogatory remarks that create a hostile work environment.119
Disability Discrimination
A person with a disability is a person who has a physical or mental impairment that limits one or more of the person’s life actions. Disability discrimination occurs when an employee or applicant who is covered by the Americans with Disabilities Act (ADA) is treated unfavorably due to their physical or mental disability. The ADA is a civil rights law that prohibits discrimination in employment, public services, public accommodations, and telecommunications against people with disabilities.120 To be covered under the ADA, individuals must be able to perform the essential functions of their job with or without reasonable accommodations. Research has shown that reasonable accommodations are typically of no or low cost (less than \$100) to employers.121
National Origin Discrimination
National origin discrimination involves treating someone unfavorably because of their country of origin, accent, ethnicity, or appearance. EEOC regulations make it illegal to implement an employment practice or policy that applies to everyone if it has a negative impact on people of a certain national origin. For example, employers cannot institute an “English-only” language policy unless speaking English at all times is essential to ensure the safe and efficient operation of the business. Employers also cannot mandate employees be fluent in English unless fluency in English is essential to satisfactory job performance. The EEOC also prohibits businesses from hiring only U.S. citizens or lawful residents unless the business is required by law to do so.122
Pregnancy Discrimination
Pregnancy discrimination involves treating an employee or applicant unfairly because of pregnancy status, childbirth, or medical conditions related to pregnancy or childbirth. The Pregnancy Discrimination Act (PDA) prohibits any discrimination as it relates to pregnancy in any of the following areas: hiring, firing, compensation, training, job assignment, insurance, or any other employment conditions. Further, certain conditions that result from pregnancy may be protected under the ADA, which means employers may need to make reasonable accommodations for any employee with disabilities related to pregnancy.
Under the Family and Medical Leave Act (FMLA), new parents, including adoptive and foster parents, may be eligible for 12 weeks of unpaid leave (or paid leave only if earned by the employee) to care for the new child. Also, nursing mothers have the right to express milk on workplace premises.123
Race/Color Discrimination
Race/color discrimination involves treating employees or applicants unfairly because of their race or because of physical characteristics typically associated with race such as skin color, hair color, hair texture, or certain facial features.
As with national origin discrimination, certain workplace policies that apply to all employees may be unlawful if they unfairly disadvantage employees of a certain race. Policies that specify that certain hairstyles must or must not be worn, for example, may unfairly impact African American employees, and such policies are prohibited unless their enforcement is necessary to the operations of the business.124
Religious Discrimination
Religious discrimination occurs when employees or applicants are treated unfairly because of their religious beliefs. The laws protect those who belong to traditional organized religions and those who do not belong to organized religions but hold strong religious, ethical, or moral beliefs of some kind. Employers must make reasonable accommodations for employees’ religious beliefs, which may include flexible scheduling or modifications to workplace practices. Employees are also permitted accommodation when it comes to religious dress and grooming practices, unless such accommodations will place an undue burden on the employer. Employees are also protected from having to participate (or not participate) in certain religious practices as terms of their employment.125
Sex-Based Discrimination
Sex-based discrimination occurs when employees or applicants are treated unfairly because of their sex. This form of discrimination includes unfair treatment due to gender, transgender status, and sexual orientation. Harassment and policies that unfairly impact certain groups protected under sex discrimination laws are prohibited under EEOC legislation.126
The key diversity-related federal laws are summarized in Table \(1\).
Table \(1\): Key Diversity Related Legislation
Title VII of the Civil Rights Act of 1964 Created the Equal Employment Opportunity Commission with the primary role of making it illegal to discriminate against someone in the workplace due to their race, national origin, sex, disability, religion or pregnancy status
Equal Pay Act of 1963 Mandates that men and women must be given the same pay for equal work
Age Discrimination in Employment Act (ADEA) Forbids discrimination against individuals who are age 40 and above
Americans with Disabilities Act (ADA) Prohibits discrimination against people with disabilities in employment, public services, public accomodations and in telecommunitcations
Pregnancy Discrimination Act (PDA) Prohibits any discrimination as it relates to pregnancy, including hiring, firing, compensation, training, job assignment, insurance or any other employment conditions
Family and Medical Leave Act (FMLA) Grants new parents up to 12 weeks of paid or unpaid leave to care for the new child and gives nursing mothers the right to express milk on workplace premises
Other Types of Discrimination
Beyond the key types of discrimination outlined by the EEOC, diversity and management scholars have identified other types of discrimination that frequently impact certain identity groups more than others. Access discrimination is a catchall term that describes when people are denied employment opportunities because of their identity group or personal characteristics such as sex, race, age, or other factors. Treatment discrimination describes a situation in which people are employed but are treated differently while employed, mainly by receiving different and unequal job-related opportunities or rewards.127 Scholars have also identified a form of discrimination called interpersonal or covert discrimination that involves discrimination that manifests itself in ways that are not visible or readily identifiable, yet is serious because it can impact interpersonal interactions between employees, employees and customers, and other important workplace relationships.
This type of discrimination poses unique challenges because it is difficult to identify. For example, one study examining customer service and discrimination found that obese customers were more likely to experience interpersonal discrimination than average-weight customers. Salespersons spent less time interacting with obese customers than average-weight customers, and average-weight customers reported more positive interactions with salespeople when asked about standard customer service metrics such as being smiled at, receiving eye contact, and perceived friendliness.128
concept check
• What is the role of the EEOC?
• What are the types of discrimination encountered in the workplace?
111. Tsui, A.S., Egan, T. D., & O’Reilly, C.A. 1992. Being different: relational demography and organizational attachment. Administrative Science Quarterly, 37: 549-579.
112. New York Times. (March 31, 1995). Reverse discrimination complaints rare, labor study reports. Retrieved from www.nytimes.com/1995/03/31/u...e-labor-study- reports.html
113. Mosbergen, D. (Oct 25 2017). Majority of White Americans believe White people face discrimination. Huff Post. Retrieved from https://www.huffingtonpost.com/entry...mination-poll-
114. U.S. Equal Employment Opportunity Commission. (2018). About EEOC. Retrieved from www.eeoc.gov/eeoc/
115. Discrimination by Type. https://www.eeoc.gov/laws/types/index.cfm (Accessed February 15, 2018); Equal Pay and Compensation Discrimination. https://www.eeoc.gov/laws/types/equalcompensation.cfm (Accessed February 15, 2018)
116. Institute for Women’s Policy Research. https://www.iwpr.org (Accessed February 22, 2018)
117. U.S. Equal Employment Opportunity Commission. https://www.eeoc.gov (Accessed February 22, 2018)
118. Harassment. https://www.eeoc.gov/laws/types/harassment.cfm (Accessed February 22, 2018)
119. Age Discrimination. www.eeoc.gov/laws/types/age.cfm(Accessed February 22, 2018)
120. ADA at 25. The Law. www.eeoc.gov/eeoc/history/ada25th/thelaw.cfm (Accessed November 26, 2017).
121. Disability Discrimination. https://www.eeoc.gov/laws/types/disability.cfm (Accessed February 27, 2018)
122. National Origin Discrimination. https://www.eeoc.gov/laws/types/nationalorigin.cfm (Accessed February 27, 2018)
123. Pregnancy Discrimination. https://www.eeoc.gov/laws/types/pregnancy.cfm (Accessed February 27, 2018)
124. Race/Color Discrimination. https://www.eeoc.gov/laws/types/race_color.cfm (Accessed February 27, 2018)
125. Religious Discrimination. https://www.eeoc.gov/laws/types/religion.cfm (Accessed February 27, 2018)
126. Sex-Based Discrimination. https://www.eeoc.gov/laws/types/sex.cfm (Accessed February 27, 2018)
127. Bell, Myrtle P. Diversity in organizations. Cengage Learning, 2011.
128. King, Eden B., et al. "The stigma of obesity in customer service: A mechanism for remediation and bottom-line consequences of interpersonal discrimination." Journal of Applied Psychology 91.3 (2006): 579.
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Table \(1\) (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license) | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.04%3A_Challenges_of_Diversity.txt |
What key theories help managers understand the benefits and challenges of managing the diverse workforce?
Many theories relevant to managing the diverse workforce center on an individual’s reactions (such as categorization and assessment of the characteristics of others) to people who are different from the individual. Competing viewpoints attempt to explain how diversity is either harmful or beneficial to organizational outcomes.
• The cognitive diversity hypothesis suggests that multiple perspectives stemming from the cultural differences between group or organizational members result in creative problem solving and innovation.
• The similarity-attraction paradigm and social identity theory hold that individuals’ preferences for interacting with others like themselves can result in diversity having a negative effect on group and organizational outcomes.
• The justification-suppression model explains under what conditions individuals act on their prejudices.
Cognitive Diversity Hypothesis
Some research shows that diversity has no relationship to group performance, and some shows that there is a relationship. Of the latter research, some shows a negative relationship (greater diversity means poorer group performance, less diversity means better group performance) and some shows a positive relationship.
These various findings may be due to the difference in how diversity can affect group members. Cognitive diversity refers to differences between team members in characteristics such as expertise, experiences, and perspectives.129 Many researchers contend that physical diversity characteristics such as race, age, or sex (also known as bio-demographic diversity) positively influence performance because team members contribute unique cognitive attributes based on their experiences stemming from their demographic background.130
There is research that supports the relationship between group performance and task-related diversity as reflected in characteristics not readily detectable such as ability, occupational expertise, or education. However, the relationship between bio-demographic diversity and group performance has produced mixed results.131 For example, Watson and colleagues studied the comparison of group performance between culturally homogeneous and culturally heterogeneous groups. Groups were assigned business cases to analyze, and their group performance was measured over time based on four factors: the range of perspectives generated, the number of problems identified in the case, the number of alternatives produced, and the quality of the solution. Overall performance was also calculated as the average of all the factors. The factors were measured at four intervals: Interval 1 (at 5 weeks), Interval 2 (at 9 weeks), Interval 3 (at 13 weeks), and Interval 4 (at 17 weeks).
For Intervals 1 and 2, the overall performance of homogeneous groups was higher than heterogeneous groups. However, by Intervals 3 and 4, there were no significant differences in overall performance between the groups, but the heterogeneous group outperformed the homogeneous group in generating a greater range of perspectives and producing a greater number of alternatives.
This research suggests that although homogeneous groups may initially outperform culturally diverse groups, over time diverse groups benefit from a wider range of ideas to choose from when solving a problem. Based on the cognitive diversity hypothesis, these benefits stem from the multiple perspectives generated by the cultural diversity of group members. On the other hand, it takes time for members of diverse groups to work together effectively due to their unfamiliarity with one another, which explains why homogeneous groups outperform heterogeneous groups in the early stages of group functioning. (This is related to the similarity- attraction paradigm, discussed in the next section.) Other studies have shown that ethnically diverse groups cooperate better than homogeneous groups at tasks that require decision-making and are more creative and innovative. While homogeneous groups may be more efficient, heterogeneous groups sacrifice efficiency for effectiveness in other areas.
Similarity-Attraction Paradigm
The cognitive diversity hypothesis explains how diversity benefits organizational outcomes. The similarity- attraction paradigm explains how diversity can have negative outcomes for an organization.
Some research has shown that members who belong to diverse work units may become less attached, are absent from work more often, and are more likely to quit.132 There is also evidence that diversity may produce conflict and higher employee turnover. Similarity-attraction theory is one of the foundational theories that attempts to explain why this occurs; it posits that individuals are attracted to others with whom they share attitude similarity.133
Attitudes and beliefs are common antecedents to interpersonal attraction. However, other traits such as race, age, sex, and socioeconomic status can serve as signals to reveal deep-level traits about ourselves. For example, numerous studies investigating job-seeker behaviors have shown that individuals are more attracted to companies whose recruitment literature includes statements and images that reflect their own identity group. One study showed that companies perceived to value diversity based on their recruitment literature are more attractive to racial minorities and women compared to Whites.134 Another study showed that when organizations use recruitment materials that target sexual minorities, the attraction of study participants weakened among heterosexuals.135 Even foreign-born potential job candidates are more attracted to organizations that depict international employees in their job ads.136
Social Cognitive Theory
Social cognitive theory is another theory that seeks to explain how diversity can result in negative outcomes in a group or organization. Social cognitive theory suggests that people use categorization to simplify and cope with large amounts of information. These categories allow us to quickly and easily compartmentalize data, and people are often categorized by their visible characteristics, such as race, sex, and age. Thus, when someone sees a person of a particular race, automatic processing occurs and beliefs about this particular race are activated. Even when the person is not visible, he or she can be subject to this automatic categorization. For example, when sorting through resumes a hiring manager might engage in sex categorization because the person's name provides information about the person's sex or racial categorization because the person's name provides information about their race.137 Stereotypes are related to this categorization and refer to the overgeneralization of characteristics about large groups. Stereotypes are the basis for prejudice and discrimination. In a job-related context, using categorization and stereotyping in employment decision-making is often illegal. Whether illegal or not, this approach is inconsistent with a valuing-diversity approach.
Social Identity Theory
Social identity theory is another explanation of why diversity may have a negative outcome. Social identity theory suggests that when we first come into contact with others, we categorize them as belonging to an in-group (i.e., the same group as us) or an out-group (not belonging to our group).138 We tend to see members of our in-group as heterogeneous but out-group members as homogeneous. That is, we perceive out-group members as having similar attitudes, behaviors, and characteristics (i.e., fitting stereotypes).
Researchers posit that this perspective may occur because of the breadth of interactions we have with people from our in-group as opposed to out-groups. There is often strong in-group favoritism and, sometimes, derogation of out-group members. In some cases, however, minority group members do not favor members of their own group.139 This may happen because of being continually exposed to widespread beliefs about the positive attributes of Whites or men and to common negative beliefs about some minorities and women. When in-group favoritism does occur, majority-group members will be hired, promoted, and rewarded at the expense of minority-group members, often in violation of various laws.
Schema Theory
Schema theory explains how individuals encode information about others based on their demographic characteristics.140 Units of information and knowledge experienced by individuals are stored as having patterns and interrelationships, thus creating schemas that can be used to evaluate one’s self or others. As a result of the prior perceived knowledge or beliefs embodied in such schemas, individuals categorize people, events, and objects. They then use these categories to evaluate newly encountered people and make decisions regarding their interaction with them.
Based on schema theory, employees develop schemas about coworkers based on race, gender, and other diversity traits. They also form schemas about organizational policies, leadership, and work climates. Schemas formed can be positive or negative and will affect the attitudes and behaviors employees have toward one another.
Justification-Suppression Model
The justification-suppression model explains the circumstances in which prejudiced people might act on their prejudices. The process by which people experience their prejudice is characterized as a “two-step” process in which people are prejudiced against a certain group or individual but experience conflicting emotions in regard to that prejudice and are motivated to suppress their prejudice rather than act upon it.141 Theory about prejudice suggests that all people have prejudices of some sort, that they learn their prejudices from an early age, and that they have a hard time departing from them as they grow older. Prejudices are often reinforced by intimate others, and individuals use different methods to justify those prejudices.
Most people will attempt to suppress any outward manifestations of their prejudices. This suppression can come from internal factors like empathy, compassion, or personal beliefs regarding proper treatment of others. Suppression can also come from societal pressures; overt displays of prejudice are no longer socially acceptable, and in some cases are illegal.
At times, however, prejudiced individuals will look for reasons to justify acting on their prejudiced beliefs. Research has shown people are more likely to act in prejudiced ways when they are physically or emotionally tired, when they can do so and remain anonymous, or when social norms are weak enough that their prejudiced behavior will not be received negatively.
concept check
• What are the theories that can help managers understand diversity?
129. Miller, C. C., Burke, L. M., & Glick,W. H. 1998. Cognitive diversity among upper-echelon executives: Implications for strategic decision processes. Strategic Management Journal, 19: 39-58.
130. Horwitz, S.K., & Horwitz, I.B. (2007). The effects of team diversity on team outcomes: A meta-analytic review of team demography. Journal of Management, 33 (6): 987-1015.
131. Watson, W.E., Kumar, K., & Michaelsen, L.K. (1993). Cultural diversity's impact on interaction process and performance: Comparing homogeneous and diverse task groups. Academy of Management Journal, 36(3): 590-602.
132. Tsui, A.S., Egan, T. D., & O’Reilly, C.A. 1992. Being different: relational demography and organizational attachment. Administrative Science Quarterly, 37: 549-579.
133. Byrne, D. (1971). The attraction paradigm. New York: Academic Press.
134. Perkins, L. A., Thomas, K. M., & Taylor, G. A. 2000. Advertising and recruitment: Marketing to minorities. Psychology and Marketing, 17: 235-255.; Thomas, K.M., & Wise, P.G. 1999. Organizational attractiveness and individual differences: Are diverse applicants attracted by different factors? Journal of Business and Psychology, 13: 375-390.
135. Lambert, J. R. (2015). The impact of gay-friendly recruitment statements and due process employment on a firm’s attractiveness as an employer. Equality, Diversity and Inclusion: An International Journal, 34, 510–526.
136. Lambert, J.R., Basuil, D.A., Bell, M.P., & Marquardt, D. J. (2017). Coming to America: Work visas, international diversity, and organizational attractiveness among highly skilled Asian immigrants. The International Journal of Human Resource Management, 0, 1-27.
137. Bertrand, Marianne, and Sendhil Mullainathan. "Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on labor market discrimination." The American Economic Review 94, no. 4 (2004): 991-1013.
138. Tajfel, H. 1974. Social identity and intergroup behavior. Social Science Information, 15: 1010-118.; Tajfel H, Turner JC. (1985). The social identity theory of intergroup behavior. In S. Worchel, and W.G. Austin (Eds.), Psychology of Intergroup Relations (2nd ed., pp. 7–24). Chicago:Nelson-Hall.
139. Goldberg, Caren B. "Relational demography and similarity-attraction in interview assessments and subsequent offer decisions: are we missing something?." Group & Organization Management 30, no. 6 (2005): 597-624.
140. Fiske ST, Taylor SE. (1991). Social cognition (2nd ed.). New York: McGraw-Hill.
141. Crandall, Christian S., and Amy Eshleman. "A justification-suppression model of the expression and experience of prejudice." Psychological bulletin 129.3 (2003): 414. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.05%3A_Key_Diversity_Theories.txt |
How can managers reap benefits from diversity and mitigate its challenges?
Much theoretical work has espoused the benefits of workplace diversity, but empirical studies have often had conflicting results, which have shown researchers that certain conditions can affect how successful initiatives to increase and enhance workplace diversity are. Managers can work to make sure that the efforts and initiatives they enact to increase diversity in the workplace come from a perspective that ensures and strives for equity and fairness, and not simply from the perspective of only benefitting the company’s bottom line. By approaching diversity and diversity issues in a thoughtful, purposeful way, managers can mitigate the challenges posed by a diverse workforce and enhance the benefits a diverse workforce can offer.
Three Perspective on Workplace Diversity
Ely and Thomas’s work on cultural diversity was designed to theoretically and empirically support some of the hypothesized relationships between diversity and workplace outcomes. Their research yielded a paradigm that identifies three perspectives regarding workplace diversity:142 integration and learning, access and legitimacy, and discrimination and fairness.
The Integration-and-Learning Perspective
The integration-and-learning perspective posits that the different life experiences, skills, and perspectives that members of diverse cultural identity groups possess can be a valuable resource in the context of work groups. Under this perspective, the members of a culturally diverse workgroup can use their collective differences to think critically about work issues, strategies, products, and practices in a way that will allow the group to be successful in its business operations. The assumption under this perspective is that members of different cultural identity groups can learn from each other and work together to best achieve shared goals. This perspective values cultural identity and strongly links diversity of the group to the success of the firm.
Downfalls of the integration-and-learning perspective can be that White members of the work group can feel marginalized when they are not asked to join in on diversity-related projects or discussions. Similarly, workforce members of color might experience burnout if they are always expected to work on those projects and discussions that specifically deal with diversity issues.
The Access-and-Legitimacy Perspective
The access-and-legitimacy perspective focuses on the benefit that a diverse workforce can bring to a business that wishes to operate within a diverse set of markets or with culturally diverse clients. Work groups that operate under this perspective are doing so in order to gain access to diverse markets and because their diversity affords them some level of legitimacy when attempting to gain access to diverse markets. This type of workplace diversity is more of a functional type of diversity that does not attempt to integrate or value diversity at the business’s core. The danger of this diversity perspective is that it can limit the roles of certain minority groups by valuing members of these groups only because they can increase the access to diverse markets and clients and not because they can make other potentially valuable contributions.143
The Discrimination-and-Fairness Perspective
The discrimination-and-fairness perspective stems from a belief that a culturally diverse workforce is a moral duty that must be maintained in order to create a just and fair society. This perspective is characterized by a commitment to equal opportunities in hiring and promotions, and does not directly link a work group’s productivity or success with diversity. Many times firms operating under this perspective will have a spoken or unspoken assumption that assimilation into the dominant (White) culture should take place by the members of other cultural identity groups. One drawback of this perspective is that because it measures progress by the recruitment and retention of diverse people, employees of traditionally underrepresented groups can feel devalued. Often, assimilation is pushed on diverse employees under the guise of reducing conflict or in an effort to demonstrate that differences between cultural identity groups are unimportant.144 Exhibit \(1\): shows the degrees of effectiveness and benefits for each perspective
Concept Check
• How can managers reap the benefits of diversity?
• How can managers mitigate the challenges of diversity?
• What is the access-and-legitimacy perspective? Differentiate it from the discrimination-and-fairness perspective.
142. Ely, Robin J., and David A. Thomas. "Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes." Administrative science quarterly. 46.2 (2001): 229-273.
143. Ely, Robin J., and David A. Thomas. "Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes." Administrative science quarterly. 46.2 (2001): 229-273.
144. Ely, Robin J., and David A. Thomas. "Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes." Administrative science quarterly. 46.2 (2001): 229-273.
Exhibit 5.8 Cultural Diversity Perspectives at Work Source: Adapted from Ely, Robin J., and David A. Thomas. “Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes.” Administrative science quarterly. 46.2 (2001): 229-273. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.06%3A_Benefits_and_Challenges_of_Workplace_Diversity.txt |
What can organizations do to ensure applicants, employees, and customers from all backgrounds are valued?
Organizations that are committed to equality and inclusion must take steps to combat the examples of discrimination and harassment that have been covered in this chapter. And they must take steps to make diversity a goal in the pre-employment stages as well as in the post-employment stages. Anyone with managerial or supervisory responsibilities should pay careful attention to hiring and performance-rewarding practices, and make sure to rely on relevant information for making decisions and ignore race-based stereotypes. The following are examples of what leaders and organizations can do make sure employees feel valued.
Interview Selection Process
To ensure fairness for all applicants, organizations should use highly structured interviews during the selection process to avoid bias based on race or gender.145 Highly structured interviews consists of the following 15 characteristics: “(1) job analysis, (2) same questions, (3) limited prompting, (4) better questions, (5) longer interviews, (6) control of ancillary information, (7) limited questions from candidates, (8) multiple rating scales, (9) anchored rating scales, (10) detailed notes, (11) multiple interviewers, (12) consistent interviewers, (13) no discussion between interviews, (14) training, and (15) statistical prediction.”146 Similarity bias can occur when interviewers prefer interviewees with whom they share similar traits. Organizations can mitigate this challenge if all 15 characteristics of a structured interview are used consistently with each job applicant.
Diversified Mentoring Relationships
Thanks to the rapid growth of international travel and globalization, managers are often called upon to manage a workforce that is increasingly diverse. Research has shown that racially and ethnically diverse firms have better financial performance than more homogeneous firms, because, as mentioned, employees from different backgrounds and with different experiences can give the firm a competitive advantage in various ways. It is necessary, however, that managers and those in positions of power are adequately equipped to manage diverse workforces in ways that are beneficial to all. Diversified mentoring relationships are relationships in which the mentor and the mentee differ in terms of their status within the company and within a larger society. The differences could be in terms of race, gender, class, disability, sexual orientation, or other status. Research has found that these types of relationships are mutually beneficial and that the mentor and the mentee both have positive outcomes in terms of knowledge, empathy, and skills related to interactions with people from different power groups.147
managerial leadership
Diversity Training Programs
As the workforce becomes increasingly more diverse, managers will face a major challenge in understanding how to manage diversity. One of many decisions to be made is whether an organization should offer diversity training and, if so, what topics and issues should be addressed based on the organizational goals.
There has been a debate over the effectiveness of corporate diversity training since the Civil Rights Act of 1964 helped prompt corporate diversity training with the organizational goal of simply being compliant with the law. Prior research shows that it can be effective, ineffective, or even detrimental for employees, but as diversity training has evolved through the years, it has become an important factor in helping employers manage diversity.
In the 1980s through the late 1990s, diversity training evolved from focusing solely on compliance to addressing the needs of women and minorities as they entered the workforce at a faster rate. Unfortunately, this type of training was perceived by Whites and men as singling them out as the problem; sometimes such training was even formatted as “confession” sessions for White employees to express their complicity in institutional racism. Not unexpectedly, this type of training would often backfire and would further separate employees from each other, the exact opposite of its intention.
Recently, diversity training has evolved to focus on (1) building cultural competencies regarding fellow employees, (2) valuing differences, and (3) learning how diversity helps make better business decisions. This perspective toward diversity training is more effective than simply focusing on causes of a lack of diversity and the historical roots of discrimination. Understanding how to comply with the law is still important, but training has a greater effect when the other factors are also included.
A recent study investigated various diversity-training methods, including having participants engage in activities on perspective taking and goal setting. For perspective-taking activities, participants were asked to write a few sentences about the challenges they believed minority group members might experience. Goal-setting activities involved writing specific and measurable goals related to workplace diversity such as crafting future policies or engaging in future behaviors. Researchers found that when these activities were used as a diversity-training method, pro-diversity attitudes and behavioral intentions persisted months later.
Issues regarding employee sexual orientation have also been introduced into corporate diversity training in recent years. Because employees’ religious beliefs are protected by Title VII of the Civil Rights Act, employers should be sensitive to balancing the rights of lesbian, gay, and bisexual employees and employees’ religious rights. Attempting to protect the rights of one group and not be perceived to disrespect another is a difficult situation for managers. In order to mitigate any backlash from some employees, employers should seek feedback from all groups to learn the best ways to accommodate them, and should assess the organizational climate. Additionally, managers should explain how diversity based on sexual orientation aligns with the company’s strategic objectives and explain the company’s legal position with supportive reasoning. Lastly, based on their organizational climate and how it reshapes itself over time, some companies may wish to address diversity training on sexual orientation in a voluntary training separate from other diversity issues.
Sources: Young, Cheri A., Badiah Haffejee, and David L. Corsun. "Developing Cultural Intelligence and Empathy Through Diversified Mentoring Relationships." Journal of Management Education (2017): 1052562917710687; Bezrukova, K., Jehn, K.A., & Spell, C.S. (2012). Reviewing diversity training: Where we have been and where we should go. Academy of Management Learning & Education, 11 (2): 207-227; Anand, R., & Winters, M. (2008). A retrospective view of corporate diversity training from 1964 to the present. Academy of Management Learning & Education, 7 (3): 356-372; Lindsey, A., King, E., Membere, A., & Cheung, H.K. (July 28, 2017). Two types of diversity training that really work. Harvard Business Review.
Discussion Questions:
1. Why do you believe diversity training is resisted by some employees?
2. Do you believe there will always be a need for workplace diversity training?
3. How would you determine what types of diversity training are needed at your company?
Visible Leadership
Another key to ensure that employees are treated fairly is utilizing appropriate leadership strategies.148 Leadership must sincerely value variety of opinions, and organizational culture must encourage openness and make workers feel valued. Organizations must also have a well-articulated and widely understood mission and a relatively egalitarian, nonbureaucratic structure. Having such a work environment will ensure that the attitudes and values of employees are aligned with those of the organization. In this way, culture serves as a control mechanism for shaping behaviors.
Strategies for Employees
Individuals can increase positive employment outcomes by obtaining high levels of education because for all groups education is a predictor of employment and increased earnings. Individuals can also seek employment in larger firms, which are more likely to have formal hiring programs and specific diversity provisions in place. Individuals of any race or ethnic background can also take steps to eliminate discrimination by being aware of their own personal stereotypes or biases and taking steps to challenge and address them.
concept check
• How can managers ensure fairness in the interviewing and selection process regarding diversity?
• What is the role of leadership regarding diversity? | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.07%3A_Recommendations_for_Managing_Diversity.txt |
deep-level diversity Diversity in characteristics that are nonobservable such as attitudes, values, and beliefs, such as religion.
diversity Identity-based differences among and between people that affect their lives as applicants, employees, and customers.
hidden diversity Differences in traits that are deep-level and may be concealed or revealed at discretion by individuals who possess them.
identity group A collective of individuals who share the same demographic characteristics such as race, sex, or age.
inclusion The degree to which employees are accepted and treated fairly by their organization.
invisible social identities Membership in an identity group based on hidden diversity traits such as sexual orientation or a nonobservable disability that may be concealed or revealed.
managing diversity Ways in which organizations seek to ensure that members of diverse groups are valued and treated fairly within organizations.
surface-level diversity Diversity in the form of characteristics of individuals that are readily visible, including, but not limited to, age, body size, visible disabilities, race, or sex.
glass ceiling An invisible barrier based on the prejudicial beliefs of organizational decision-makers that prevents women from moving beyond certain levels within a company.
model minority myth A stereotype that portrays Asian men and women as obedient and successful and is often used to justify socioeconomic disparities between other racial minority groups.
passing The decision to not disclose one’s invisible social identity.
revealing The decision to disclose one’s invisible social identity.
sexual harassment Harassment based on a person’s sex, and can (but does not have to) include unwanted sexual advances, requests for sexual favors, or physical and verbal acts of a sexual nature.
work visa A temporary documented status that authorizes individuals from other countries to permanently or temporarily live and work in the United States.
groupthink A dysfunction in decision-making that is common in homogeneous groups due to group pressures and group members’ desire for conformity and consensus.
strategic human resources management (SHRM) System of activities arranged to engage employees in a manner that assists the organization in achieving a sustainable competitive advantage.
resource-based view Demonstrates how a diverse workforce can create a sustainable competitive advantage for organizations.
reverse discrimination Describes a situation in which dominant group members perceive that they are experiencing discrimination based on their race or sex.
Equal Pay Act of 1963 An amendment to the Fair Labor Standards Act of 1938.
harassment Any unwelcome conduct that is based on characteristics such as age, race, national origin, disability, sex, or pregnancy status.
sexual harassment Harassment based on a person’s sex; it can (but does not have to) include unwanted sexual advances, requests for sexual favors, or physical and verbal acts of a sexual nature.
age discrimination Treating an employee or applicant less favorably due to their age.
Age Discrimination in Employment Act (ADEA) Forbids discrimination against individuals who are age 40 and above, including offensive or derogatory remarks that create a hostile work environment.
disability discrimination Occurs when an employee or applicant is treated unfavorably due to their physical or mental disability.
Americans with Disabilities Act (ADA) Prohibits discrimination in employment, public services, public accommodations, and telecommunications against people with disabilities.
national origin discrimination Treating someone unfavorably because of their country of origin, accent, ethnicity, or appearance.
pregnancy discrimination Treating an employee or applicant unfairly because of pregnancy status, childbirth, or medical conditions related to pregnancy or childbirth.
Pregnancy Discrimination Act (PDA) Prohibits any discrimination as it relates to pregnancy in hiring, firing, compensation, training, job assignment, insurance, or any other employment conditions.
Family and Medical Leave Act (FMLA) Provides new parents, including adoptive and foster parents, with 12 weeks of unpaid leave (or paid leave only if earned by the employee) to care for the new child and requires that nursing mothers have the right to express milk on workplace premises.
race/color discrimination Treating employees or applicants unfairly because of their race or because of physical characteristics typically associated with race such as skin color, hair color, hair texture, or certain facial features.
religious discrimination When employees or applicants are treated unfairly because of their religious beliefs.
sex-based discrimination When employees or applicants are treated unfairly because of their sex, including unfair treatment due to gender, transgender status, or sexual orientation.
access discrimination A catchall term that describes when people are denied employment opportunities because of their identity group or personal characteristics such as sex, race, or age.
covert discrimination (interpersonal) An interpersonal form of discrimination that manifests in ways that are not visible or readily identifiable.
Equal Employment Opportunity Commission An organization that enforces laws and issues guidelines for employment-related treatment according to Title VII of the Civil Rights Act of 1964.
treatment discrimination A situation in which people are employed but are treated differently while employed, mainly by receiving different and unequal job-related opportunities or rewards.
workplace discrimination Unfair treatment in the job hiring process or at work that is based on the identity group, physical or mental condition, or personal characteristic of an applicant or employee.
cognitive diversity Differences between team members regarding characteristics such as expertise, experiences, and perspectives.
social identity theory Self-concept based on an individual’s physical, social, and mental characteristics.
stereotypes Overgeneralization of characteristics about groups that are the basis for prejudice and discrimination.
schema theory Explains how individuals encode information about others based on their demographic characteristics.
justification-suppression model Explains the circumstances in which prejudiced people might act on their prejudices.
cognitive diversity hypothesis Multiple perspectives stemming from the cultural differences between group or organizational members result in creative problem-solving and innovation.
similarity-attraction paradigm Individuals’ preferences for interacting with others like themselves can result in diversity having a negative effect on group and organizational outcomes.
justification-suppression model Explains under what conditions individuals act on their prejudices.
integration-and-learning perspective Posits that the different life experiences, skills, and perspectives that members of diverse cultural identity groups possess can be a valuable resource in the context of workgroups.
access-and-legitimacy perspective Focuses on the benefits that a diverse workforce can bring to a business that wishes to operate within a diverse set of markets or with culturally diverse clients.
discrimination-and-fairness perspective A culturally diverse workforce is a moral duty that must be maintained in order to create a just and fair society.
diversified mentoring relationships Relationships in which the mentor and the mentee differ in terms of their status within the company and within larger society.
highly structured interviews Interviews that are being structured objectively to remove bias from the selection process. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.08%3A_Glossary.txt |
An Introduction to Workplace Diversity
What is diversity?
Diversity refers to identity-based differences among and between people that affect their lives as applicants, employees, and customers. Surface-level diversity represents characteristics of individuals that are readily visible, including, but not limited to, age, body size, visible disabilities, race, or sex. Deep-level diversity includes traits that are nonobservable such as attitudes, values, and beliefs. Finally, hidden diversity includes traits that are deep-level but may be concealed or revealed at the discretion of individuals who possess them.
Diversity and the Workforce
How diverse is the workforce?
In analyzing the diversity of the workforce, several measures can be used. Demographic measures such as gender and race can be used to measure group sizes. Measures of such things as discrimination toward specific groups can be analyzed to gauge the diversity of the workforce. Other measures of diversity in the workforce can include examination of differences in age and sexual orientation.
Diversity and Its Impact on Companies
How does diversity impact companies and the workforce?
The demography of the labor force is changing in many ways as it becomes racially diverse and older and includes more women and individuals with disabilities. Diversity affects how organizations understand that employing people who hold multiple perspectives increases the need to mitigate conflict between workers from different identity groups, enhances creativity and problem-solving in teams, and serves as a resource to create a competitive advantage for the organization.
Challenges of Diversity
What is workplace discrimination, and how does it affect different social identity groups?
Workplace discrimination occurs when an employee or an applicant is treated unfairly at work or in the job-hiring process due to an identity group, condition, or personal characteristics such as age, race, national origin, sex, disability, religion, or pregnancy status. The Equal Employment Opportunity Commission enforces laws and legislation related to individuals with those protected statuses.
Harassment is any unwelcome conduct that is based on the protected characteristics listed above. Sexual harassment refers specifically to harassment based on a person’s sex, and it can (but does not have to) include unwanted sexual advances, requests for sexual favors, or physical and verbal acts of a sexual nature.
Key Diversity Theories
What key theories help managers understand the benefits and challenges of managing a diverse workforce?
The cognitive-diversity hypothesis suggests that multiple perspectives stemming from the cultural differences between groups or organizational members result in creative problem solving and innovation. The similarity-attraction paradigm and social identity theory explains how, because individuals prefer to interact with others like themselves, diversity may have a negative effect on the group and organizational outcomes. The justification-suppression model explains under what conditions individuals act on their prejudice.
Benefits and Challenges of Workplace Diversity
How can managers reap benefits from diversity and mitigate their challenges?
By approaching diversity and diversity issues in a thoughtful, purposeful way, managers can mitigate the challenges posed by a diverse workforce and enhance the benefits a diverse workforce can offer.
Managers can work to make sure that the efforts and initiatives they enact to increase diversity in the workplace come from a perspective that ensures and strives for equity and fairness, not simply one that will benefit the company’s bottom line.
Using an integration-and-learning perspective strongly links diversity to the work and success of the firm by viewing cultural identity, different life experiences, skills, and perspectives from members of diverse cultural identity groups as a valuable resource.
Recommendations for Managing Diversity
What can organizations do to ensure applicants, employees, and customers from all backgrounds are valued?
Organizations should use objective and fair recruitment and selection tools and policies.
Leadership should make employees feel valued, be open to varied perspectives, and encourage a culture of open dialogue. Women and racial minorities can increase positive employment outcomes by pursuing higher levels of education and seeking employment in larger organizations. All individuals should be willing to listen, empathize with others, and seek to better understand sensitive issues that affect different identity groups.
5.10: Chapter Review Questions
1. Define the three types of diversity and compare them using examples for each type.
2. How are the demographics of the workforce changing?
3. What are some major challenges that women face in organizations?
4. What is the model minority myth? How does it compare to how Blacks and Hispanics are stereotyped?
5. What are some benefits of hiring older workers?
6. Why would an employee “pass” or “reveal” at work? What are the positive and negative consequences of doing so?
7. Explain the six benefits of workplace diversity described by Cox and Blake’s business case for diversity.
8. Compare how the cognitive diversity hypothesis and the similarity-attraction paradigm relate to diversity outcomes.
9. Based on the justification-suppression model, explain why individuals act on their prejudicial beliefs.
10. Describe the challenges that managers must face when managing diversity.
11. How can employees ensure they are compliant with the laws and legislation enforced by the EEOC?
12. What are some recommendations for managing diversity?
5.11: Managerial Skills Application Exercise
1. Do you agree that diversity can be a source of greater benefit than harm to organizations? Why or why not?
2. Have you ever worked in a diverse team setting before? If so, did you encounter any attitudes or behaviors that could potentially cause conflict? If not, how would you manage conflict stemming from diversity?
3. List three organizational goals you would implement to create an organizational culture of diversity and inclusion.
4. Have you or has someone you know experienced discrimination? How did that affect you or that person emotionally, physically, or financially?
5. Pick an identity group (e.g., gay, Black, or woman) other than your own. Imagine and list the negative experiences and interactions you believe you might encounter at work. What policies or strategies could an organization implement to prevent those negative experiences from occurring?
6. Provide a concrete example of how different perspectives stemming from diversity can positively impact an organization or work group. You may use a real-life personal example or make one up. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.09%3A_Summary_of_Learning_Objectives.txt |
1. As a manager for a hospital, you oversee a staff of marketing associates. Their job is to find doctors and persuade them to refer their patients to your hospital. Associates have a very flexible work schedule and manage their own time. They report to you weekly concerning their activities in the field. Trusting them is very important, and it is impossible to track and confirm all of their activities. Your assistant, Nancy, manages the support staff for the associates, works very closely with them, and often serves as your eyes and ears to keep you informed as to how well they are performing.
One day, Nancy comes into your office crying and tells you that your top-performing associate, Susan, has for the past few weeks repeatedly asked her out to dinner and she has repeatedly refused. Susan is a lesbian and Nancy is not. Today, when she refused, Susan patted her on the bottom and said, “I know, you are just playing hard to get.”
After Nancy calms down, you tell her that you will fill out the paperwork to report a sexual harassment case. Nancy says that she does not want to report it because it would be too embarrassing if word of the incident got out. To impress upon you how strongly she feels, she tells you that she will consider resigning if you report the incident. Nancy is essential to the effective operation of your group, and you dread how difficult it would be to get things done without her assisting you.
What do you do? Do you report the case, lose Nancy’s trust, and jeopardize losing a high-performing employee? Or do you not report it, thereby protecting what Nancy believes to be her right to privacy?
2. Recently your company has begun to promote its diversity efforts, including same-sex (and heterosexual) partner benefits and a nonharassment policy that includes sexual orientation, among other things. Your department now has new posters on the walls with photos of employees who represent different aspects of diversity (e.g., Black, Hispanic, gay). One of your employees is upset about the diversity initiative and has begun posting religious scriptures condemning homosexuality on his cubicle in large type for everyone to see. When asked to remove them, your employee tells you that the posters promoting diversity offend Christian and Muslim employees. What should you do?
3. You are a recently hired supervisor at a paper mill factory. During your second week on the job, you learn about a White employee who has been using a racial slur during lunch breaks when discussing some of her Black coworkers with others. You ask the person who reported it to you about the woman and learn that she is an older woman, around 67 years old, and has worked at the factory for more than 40 years. You talk to your boss about it, and he tells you that she means no harm by it, she is just from another era and that is just her personality. What would you do in this situation?
4. You are a nurse manager who oversees the triage for the emergency room, and today is a slow day with very few patients. During the downtime, one of your subordinates is talking with another coworker about her new boyfriend. You observe her showing her coworkers explicit images of him that he emailed her on her phone. Everyone is joking and laughing about the ordeal. Even though it appears no one is offended, should you address it? What would you say?
5. You work for a company that has primarily Black and Hispanic customers. Although you employ many racial minorities and women, you notice that all of your leaders are White men. This does not necessarily mean that your organization engages in discriminatory practices, but how would you know if your organization was managing diversity well? What information would you need to determine this, and how would you collect it?
6. Your company’s founder believes that younger workers are more energetic and serve better in sales positions. Before posting a new job ad for your sales division, he recommends that you list an age requirement of the position for applicants between ages 18 and 25. Is his recommendation a good one? Why or why not?
7. You work for a real estate broker who recently hired two gay realtors, Steven and Shauna, to be a part of the team. During a staff meeting, your boss mentions an article she read about gay clients feeling ostracized in the real estate market. She tells the new employees she hired them to help facilitate the home-buying process for gay buyers and sellers. She specifically instructs them to focus on recruiting gay clients, even telling them that they should pass along any straight customers to one of the straight realtors on the team. A few weeks later, Shauna reports that she has made her first sale to a straight couple that is expecting a baby. During the next staff meeting, your boss congratulates Shauna on her sale but again reiterates that Shauna and Steven should pass along straight clients to another realtor so they can focus on recruiting gay clients. After the meeting, Shauna tells you that she thinks it is unfair that she should have to focus on gay clients and that she is thinking of filing a discrimination complaint with HR. Do you think that Shauna is correct in her assessment of the situation? Is there merit to your boss’s desire to have the gay realtors focus on recruiting gay clients? What might be a better solution to help gay clients feel more comfortable in the home-buying and -selling process? | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.12%3A_Managerial_Decision_Exercise.txt |
Uber Pays the Price
Nine years ago, Uber revolutionized the taxi industry and the way people commute. With the simple mission “to bring transportation—for everyone, everywhere,” today Uber has reached a valuation of around \$70 billion and claimed a market share high of almost 90% in 2015. However, in June 2017 Uber experienced a series of bad press regarding an alleged culture of sexual harassment, which is what most experts believe caused their market share to fall to 75%.
In February of 2017 a former software engineer, Susan Fowler, wrote a lengthy post on her website regarding her experience of being harassed by a manager who was not disciplined by human resources for his behavior. In her post, Fowler wrote that Uber’s HR department and members of upper management told her that because it was the man’s first offense, they would only give him a warning. During her meeting with HR about the incident, Fowler was also advised that she should transfer to another department within the organization. According to Fowler, she was ultimately left no choice but to transfer to another department, despite having specific expertise in the department in which she had originally been working.
As her time at the company went on, she began meeting other women who worked for the company who relayed their own stories of harassment. To her surprise, many of the women reported being harassed by the same person who had harassed her. As she noted in her blog, “It became obvious that both HR and management had been lying about this being his 'first offense.'” Fowler also reported a number of other instances that she identified as sexist and inappropriate within the organization and claims that she was disciplined severely for continuing to speak out. Fowler eventually left Uber after about two years of working for the company, noting that during her time at Uber the percentage of women working there had dropped to 6% of the workforce, down from 25% when she first started.
Following the fallout from Fowler’s lengthy description of the workplace on her website, Uber’s chief executive Travis Kalanick publicly condemned the behavior described by Fowler, calling it “abhorrent and against everything Uber stands for and believes in.” But later in March, Uber board member Arianna Huffington claimed that she believed “sexual harassment was not a systemic problem at the company.” Amid pressure from bad media attention and the company’s falling market share, Uber made some changes after an independent investigation resulted in 215 complaints. As a result, 20 employees were fired for reasons ranging from sexual harassment to bullying to retaliation to discrimination, and Kalanick announced that he would hire a chief operating officer to help manage the company. In an effort to provide the leadership team with more diversity, two senior female executives were hired to fill the positions of chief brand officer and senior vice president for leadership and strategy.
Critical Thinking Questions:
1. Based on Cox’s business case for diversity, what are some positive outcomes that may result in changes to Uber’s leadership team?
2. Under what form of federal legislation was Fowler protected?
3. What strategies should have been put in place to help prevent sexual harassment incidents like this from happening in the first place?
Sources: Uber corporate Website, https://www.uber.com/newsroom/company-info/ (February, 2017); Marco della Cava, “Uber has lost market share to Lyft during crisis,” USA Today, June 13, 2017, https://www.usatoday.com/story/tech/...als/102795024/; Tracey Lien, “Uber fires 20 workers after harassment investigation,” Los Angeles Times, Jun 6, 2017, http://www.latimes.com/business/la-f...606-story.html; Susan Fowler, “Reflecting On One Very, Very Strange Year At Uber,” February 19, 2017, https://www.susanjfowler.com/blog/20...e-year-at-uber. | textbooks/biz/Management/Organizational_Behavior_(OpenStax)/05%3A_Diversity_in_Organization/5.13%3A_Critical_Thinking_Case.txt |
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