Essay

Organizational Behaviour Seventh Canadian Edition

Concepts, Controversies, Applications

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Nancy Langton University of British Columbia

Stephen P. Robbins San Diego State University

Timothy A. Judge University of Notre Dame

With contributions by

Katherine Breward, Ph.D. University of Winnipeg

Toronto

Concepts, Controversies, Applications

Organizational Behaviour

Seventh Canadian Edition

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Library and Archives Canada Cataloguing in Publication

Robbins, Stephen P., 1943-, author Organizational behaviour : concepts, controversies, applications / Nancy Langton (University of British Columbia), Stephen P. Robbins (San Diego State University), Timothy A. Judge (University of Notre Dame) ; with contributions by Katherine Breward, Ph.D. (University of Winnipeg). – Seventh Canadian edition.

Includes bibliographical references and index. ISBN 978-0-13-359178-1 (bound)

1. Organizational behavior—Textbooks. 2. Management—Textbooks. I. Langton, Nancy, author II. Judge, Tim, author III. Breward, Katherine, author IV. Title.

HD58.7.R62 2015 658 C2014-907198-1

ISBN 978-0-13-359178-1

B R I E F C O N T E N T S

PART 1 Understanding the Workplace 2 CHAPTER 1 What Is Organizational Behaviour? 2 CHAPTER 2 Perception, Personality, and Emotions 36 CHAPTER 3 Values, Attitudes, and Diversity in the Workplace 78 OB ON THE EDGE Stress at Work 118

PART 2 Striving for Performance 126 CHAPTER 4 Theories of Motivation 126 CHAPTER 5 Motivation in Action 164 CHAPTER 6 Groups and Teamwork 202 OB ON THE EDGE Trust 240

PART 3 Interacting Effectively 246 CHAPTER 7 Communication 246 CHAPTER 8 Power and Politics 274 CHAPTER 9 Conflict and Negotiation 308 OB ON THE EDGE Workplace Bullying 340

PART 4 Sharing the Organizational Vision 346 CHAPTER 10 Organizational Culture 346 CHAPTER 11 Leadership 378 CHAPTER 12 Decision Making, Creativity, and Ethics 412 OB ON THE EDGE Spirituality in the Workplace 448

PART 5 Reorganizing the Workplace 454 CHAPTER 13 Organizational Structure 454 CHAPTER 14 Organizational Change 486

ADDITIONAL CASES 516 ENDNOTES 544 GLOSSARY/SUBJECT INDEX 612 NAME AND ORGANIZATION INDEX 627 LIST OF CANADIAN COMPANIES, BY PROVINCE 634

PREFACE xvii ABOUT THE AUTHORS xxxiii

PART 1 Understanding the Workplace 2

CHAPTER 1 What Is Organizational Behaviour? 2 Defining Organizational Behaviour 4

What Do We Mean by Organization ? 4 OB Is for Everyone 5 The Importance of Interpersonal Skills 5

OB: Making Sense of Behaviour in Organizations 6 The Building Blocks of OB 7 The Rigour of OB 8

Challenges and Opportunities in the Canadian Workplace 13 Responding to Economic Pressures 13 Responding to Globalization 15 Understanding Workforce Diversity 16 Improving Customer Service 18 Improving People Skills 18 Working in Networked Organizations 18 Enhancing Employee Well-Being at Work 19 Creating a Positive Work Environment 20 Improving Ethical Behaviour 20

Coming Attractions: Developing an OB Model 21 An Overview 21 Inputs 21 Processes 22 Outcomes 22

Summary 25 FOR REVIEW • FOR MANAGERS • FOR YOU 27 POINT/COUNTERPOINT: Lost in Translation? 28 PERSONAL INVENTORY ASSESSMENT 29 BREAKOUT GROUP EXERCISES 29 EXPERIENTIAL EXERCISE: Interpersonal Skills in the Workplace 29 ETHICAL DILEMMA: Jekyll and Hyde 29 CASE INCIDENT: Apple Goes Global 30 CASE INCIDENT: Era of the Disposable Worker? 31 FROM CONCEPTS TO SKILLS: Developing Interpersonal Skills 32

CHAPTER 2 Perception, Personality, and Emotions 36 Perception 38

Factors That Influence Perception 38

OB atWork

C O N T E N T S

Contents vii

Perceptual Errors 39 Why Do Perception and Judgment Matter? 45

Personality 46 What Is Personality? 47 Measuring Personality 47 Personality Determinants 47 Personality Traits 48 The Dark Triad 53 Other Personality Attributes That Influence OB 55

Emotions 57 What Are Emotions and Moods? 58 Choosing Emotions: Emotional Labour 59 Why Should We Care About Emotions in the Workplace? 60

Global Implications 66 Perception 66 Attributions 67 Personality 67 Emotions 68

Summary 69 FOR REVIEW • FOR MANAGERS • FOR YOU 71 POINT/COUNTERPOINT: Millennials Are More Narcissistic 72 PERSONAL INVENTORY ASSESSMENT 73 BREAKOUT GROUP EXERCISES 73 EXPERIENTIAL EXERCISE: Who Can Catch a Liar? 73 ETHICAL DILEMMA: Happiness Coaches for Employees 74 CASE INCIDENT: On the Costs of Being Nice 74 CASE INCIDENT: Can You Read Emotions from Faces? 75 FROM CONCEPTS TO SKILLS: Reading Emotions 76

CHAPTER 3 Values, Attitudes, and Diversity in the Workplace 78 Values 80

Rokeach Value Survey 80 Hodgson’s General Moral Principles 80

Assessing Cultural Values 81 Hofstede’s Framework for Assessing Cultures 81 The GLOBE Framework for Assessing Cultures 84

Values in the Canadian Workplace 84 Generational Differences 85 Cultural Differences 88

Attitudes 92 Job Satisfaction 93 Organizational Commitment 99 Job Involvement 100 Perceived Organizational Support 100 Employee Engagement 101

Managing Diversity in the Workplace 102 Effective Diversity Programs 103 Cultural Intelligence 107

Global Implications 108 Is Job Satisfaction a US Concept? 109 Are Employees in Western Cultures More Satisfied with Their Jobs? 109 Is Diversity Managed Differently across Cultures? 110

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Summary 110 FOR REVIEW • FOR MANAGERS • FOR YOU 112 POINT/COUNTERPOINT: Employer–Employee Loyalty Is an Outdated Concept 113 PERSONAL INVENTORY ASSESSMENT 114 BREAKOUT GROUP EXERCISES 114 EXPERIENTIAL EXERCISE: Feeling Excluded 114 ETHICAL DILEMMA: Is It a Bribe or a Gift? 115 CASE INCIDENT: You Cannot Do That 115 CASE INCIDENT: Thinking Your Way to a Better Job 116 FROM CONCEPTS TO SKILLS: Changing Attitudes 116

OB ON THE EDGE Stress at Work 118

PART 2 Striving for Performance 126

CHAPTER 4 Theories of Motivation 126 What Is Motivation? 128 Needs Theories of Motivation 129

Maslow’s Hierarchy of Needs Theory 129 Motivation–Hygiene Theory 130 McClelland’s Theory of Needs 132 Summarizing Needs Theories 133

Process Theories of Motivation 134 Expectancy Theory 135 Goal-Setting Theory 138 Self-Efficacy Theory 142 Reinforcement Theory 143

Responses to the Reward System 146 Equity Theory 146 Fair Process and Treatment 148 Self-Determination Theory 151 Increasing Intrinsic Motivation 153

Motivation for Whom? 154 Putting It All Together 154

Global Implications 155 Needs Theories 155 Goal Setting 155 Equity Theory and Fairness 155 Intrinsic and Extrinsic Motivation 156 Cross-Cultural Consistencies 156

Summary 157 FOR REVIEW • FOR MANAGERS • FOR YOU 158 POINT/COUNTERPOINT: Goals Get You to Where You Want to Be 159 PERSONAL INVENTORY ASSESSMENT 160 BREAKOUT GROUP EXERCISES 160 EXPERIENTIAL EXERCISE: Organizational Justice 160 ETHICAL DILEMMA: Grade Inflation 161 CASE INCIDENT: Equity and Executive Pay 161 CASE INCIDENT: Wage Reduction Proposal 162 FROM CONCEPTS TO SKILLS: Setting Goals 162

CHAPTER 5 Motivation in Action 164 From Theory to Practice: The Role of Money 166 Creating Effective Reward Systems 167

What to Pay: Establishing a Pay Structure 167

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Contents ix

How to Pay: Rewarding Individuals through Variable-Pay Programs 168 Flexible Benefits: Developing a Benefits Package 173 Intrinsic Rewards: Employee Recognition Programs 174 Beware the Signals That Are Sent by Rewards 175 Can We Eliminate Rewards? 177

Motivating by Job Redesign 178 The Job Characteristics Model 179 Job Redesign in the Canadian Context: The Role of Unions 182 How Can Jobs Be Redesigned? 182 Relational Job Design 183 Alternative Work Arrangements 184 Flextime 184 The Social and Physical Context of Work 188

Employee Involvement 188 Examples of Employee Involvement Programs 189 Linking Employee Involvement Programs and Motivation Theories 190

Motivation: Putting It All Together 190 Global Implications 190

Variable Pay 190 Flexible Benefits 191 Job Characteristics and Job Enrichment 192 Telecommuting 192 Employee Involvement 192

Summary 193 FOR REVIEW • FOR MANAGERS • FOR YOU 194 POINT/COUNTERPOINT: “Face-Time” Matters 195 PERSONAL INVENTORY ASSESSMENT 196 BREAKOUT GROUP EXERCISES 196 EXPERIENTIAL EXERCISE: Analyzing and Redesigning Jobs 196 ETHICAL DILEMMA: Are CEOs Paid Too Much? 197 CASE INCIDENT: Motivation for Leisure 198 CASE INCIDENT: Attaching the Carrot to the Stick 198 FROM CONCEPTS TO SKILLS: Designing Enriched Jobs 199

CHAPTER 6 Groups and Teamwork 202 Teams vs. Groups: What Is the Difference? 204

Why Have Teams Become So Popular? 204 Types of Teams 204

From Individual to Team Member 209 Roles 210 Norms 210

Stages of Group and Team Development 213 The Five-Stage Model 213 The Punctuated-Equilibrium Model 215

Creating Effective Teams 217 Context 219 Composition 222 Process 227

Beware! Teams Are Not Always the Answer 230 Global Implications 231

Extent of Teamwork 231 Self-Managed Teams 231 Team Cultural Diversity and Team Performance 231 Group Cohesiveness 231

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Summary 232 FOR REVIEW • FOR MANAGERS • FOR YOU 233 POINT/COUNTERPOINT: To Get the Most Out of Teams, Empower Them 234 PERSONAL INVENTORY ASSESSMENT 235 BREAKOUT GROUP EXERCISES 235 EXPERIENTIAL EXERCISE: The Paper Tower Exercise 235 ETHICAL DILEMMA: Dealing with Shirkers 236 CASE INCIDENT: Tongue-Tied in Teams 236 CASE INCIDENT: IBM’s Multicultural Multinational Teams 237 FROM CONCEPTS TO SKILLS: Conducting a Team Meeting 238

OB ON THE EDGE Trust 240

PART 3 Interacting Effectively 246

CHAPTER 7 Communication 246 The Communication Process 248

Choosing a Channel 248 Barriers to Effective Communication 251

Filtering 251 Selective Perception 251 Information Overload 252 Emotions 252 Language 252 Silence 253 Nonverbal Communication 254 Lying 255

Organizational Communication 255 Direction of Communication 256 Small-Group Networks 257 The Grapevine 257 Electronic Communications 258

Global Implications 262 Cultural Barriers to Communication 262 Cultural Context 263 A Cultural Guide 263

Summary 265 FOR REVIEW • FOR MANAGERS • FOR YOU 267 POINT/COUNTERPOINT: Employees’ Social Media Presence Should

Matter to Managers 268 PERSONAL INVENTORY ASSESSMENT 269 BREAKOUT GROUP EXERCISES 269 EXPERIENTIAL EXERCISE: An Absence of Nonverbal Communication 269 ETHICAL DILEMMA: The Pitfalls of Email 270 CASE INCIDENT: Using Social Media to Your Advantage 270 CASE INCIDENT: PowerPoint Purgatory 271 FROM CONCEPTS TO SKILLS: Effective Listening 272

CHAPTER 8 Power and Politics 274 A Definition of Power 276 Bases of Power 277

Formal Power 277 Personal Power 279 Evaluating the Bases of Power 279

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Contents xi

Dependency: The Key to Power 280 The General Dependency Postulate 280 What Creates Dependence? 281

Influence Tactics 282 How Power Affects People 283 Empowerment: Giving Power to Employees 284

Definition of Empowerment 284 The Abuse of Power 286

Harassment in the Workplace 287 Politics: Power in Action 290

Definition of Political Behaviour 291 The Reality of Politics 293 Types of Political Activity 294 Impression Management 295 The Ethics of Behaving Politically 296

Global Implications 297 Views on Empowerment 297 Preference for Influence Tactics 298 Response to Politics in the Workplace 298

Summary 299 FOR REVIEW • FOR MANAGERS • FOR YOU 300 POINT/COUNTERPOINT: Everyone Wants Power 301 PERSONAL INVENTORY ASSESSMENT 302 BREAKOUT GROUP EXERCISES 302 EXPERIENTIAL EXERCISE: Understanding Bases of Power 302 ETHICAL DILEMMA: How Much Should You Defer to Those in Power? 303 CASE INCIDENT: Delegate Power, or Keep It Close? 304 CASE INCIDENT: Barry’s Peer Becomes His Boss 304 FROM CONCEPTS TO SKILLS: Politicking 305

CHAPTER 9 Conflict and Negotiation 308 Conflict Defined 310

Functional vs. Dysfunctional Conflict 310 Types of Conflict 310 Loci of Conflict 311 Sources of Conflict 312

Conflict Resolution 314 Conflict Management Strategies Based on Dual Concern Theory 314 What Can Individuals Do to Manage Conflict? 315 Resolving Personality Conflicts 317 Resolving Intercultural Conflicts 317

Conflict Outcomes 318 Negotiation 320

Bargaining Strategies 321 How to Negotiate 324

Individual Differences in Negotiation Effectiveness 326 Personality Traits in Negotiation 326 Moods/Emotions in Negotiation 328 Gender Differences in Negotiation 328

Third-Party Negotiations 330 Mediator 330 Arbitrator 330 Conciliator 330

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xii Contents

Global Implications 331 Conflict Resolution and Culture 331 Cultural Differences in Negotiating Style 331 Culture, Negotiations, and Emotions 331

Summary 332 FOR REVIEW • FOR MANAGERS • FOR YOU 333 POINT/COUNTERPOINT: Conflict: Good or Bad? 334 PERSONAL INVENTORY ASSESSMENT 335 BREAKOUT GROUP EXERCISES 335 EXPERIENTIAL EXERCISE: A Negotiation Role Play 335 ETHICAL DILEMMA: The Lowball Applicant 336 CASE INCIDENT: Choosing Your Battles 336 CASE INCIDENT: The Pros and Cons of Collective Bargaining 337 FROM CONCEPTS TO SKILLS: Negotiating 338

OB ON THE EDGE Workplace Bullying 340

PART 4 Sharing the Organizational Vision 346

CHAPTER 10 Organizational Culture 346 What Is Organizational Culture? 348

Definition of Organizational Culture 348 Levels of Culture 349 Culture’s Functions 350 Culture Creates Climate 351 The Ethical Dimension of Culture 352 Do Organizations Have Uniform Cultures? 353 Strong vs. Weak Cultures 354

Reading an Organization’s Culture 354 Stories 355 Rituals 355 Material Symbols 356 Language 357

Creating and Sustaining an Organization’s Culture 357 How a Culture Begins 357 Keeping a Culture Alive 358

The Liabilities of Organizational Culture 363 Barrier to Change 364 Barrier to Diversity 364 Barrier to Mergers and Acquisitions 364

Changing Organizational Culture 365 Creating an Ethical Organizational Culture 366 Creating a Positive Organizational Culture 366

Global Implications 368 Summary 369

FOR REVIEW • FOR MANAGERS • FOR YOU 370 POINT/COUNTERPOINT: Organizations Should Strive to Create

a Positive Organizational Culture 371 PERSONAL INVENTORY ASSESSMENT 372 BREAKOUT GROUP EXERCISES 372 EXPERIENTIAL EXERCISE: Rate Your Classroom Culture 372 ETHICAL DILEMMA: A Bankrupt Culture 373 CASE INCIDENT: Is a 5S Culture for You? 374 CASE INCIDENT: Google and P&G Swap Employees 374 FROM CONCEPTS TO SKILLS: How to “Read” an Organization’s Culture 375

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Contents xiii

CHAPTER 11 Leadership 378 What Is Leadership? 380 Leadership as Supervision 380

Trait Theories: Are Leaders Different from Others? 380 Behavioural Theories: Do Leaders Behave in Particular Ways? 382 Contingency Theories: Does the Situation Matter? 384 Substitutes for Leadership 388

Inspirational Leadership 389 Charismatic Leadership 389 Transformational Leadership 392

Contemporary Leadership Roles 395 Mentoring 395 Self-Leadership (or Self-Management) 397 Team Leadership 397 Online Leadership 398 Leading without Authority 399

Contemporary Issues in Leadership 399 Authentic Leadership 400 Ethical Leadership 401 Servant Leadership 402

Global Implications 403 Summary 404

FOR REVIEW • FOR MANAGERS • FOR YOU 405 POINT/COUNTERPOINT: Heroes Are Made, Not Born 406 PERSONAL INVENTORY ASSESSMENT 407 BREAKOUT GROUP EXERCISES 407 EXPERIENTIAL EXERCISE: Being Charismatic 407 ETHICAL DILEMMA: Undercover Leaders 407 CASE INCIDENT: Moving from Colleague to Supervisor 408 CASE INCIDENT: Leadership by Algorithm 409 FROM CONCEPTS TO SKILLS: Practising to Be Charismatic 410

CHAPTER 12 Decision Making, Creativity, and Ethics 412 How Should Decisions Be Made? 414

The Rational Decision-Making Process 414 How Do Individuals Actually Make Decisions? 415

Bounded Rationality in Considering Alternatives 416 Intuition 417 Judgment Shortcuts 418

Group Decision Making 422 Groups vs. the Individual 422 Groupthink and Groupshift 423 Group Decision-Making Techniques 426

Creativity in Organizational Decision Making 428 Creative Behaviour 429 Causes of Creative Behaviour 429 Creative Outcomes (Innovation) 431

What About Ethics in Decision Making? 432 Four Ethical Decision Criteria 432 Making Ethical Decisions 434

Corporate Social Responsibility 436 Global Implications 437

Decision Making 437

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Creativity 438 Ethics 438

Summary 439 FOR REVIEW • FOR MANAGERS • FOR YOU 440 POINT/COUNTERPOINT: People Are More Creative When They Work Alone 441 PERSONAL INVENTORY ASSESSMENT 442 BREAKOUT GROUP EXERCISES 442 EXPERIENTIAL EXERCISE: Wilderness Survival 442 ETHICAL DILEMMA: Five Ethical Decisions: What Would You Do? 444 CASE INCIDENT: The Youngest Female Self-Made Billionaire 445 CASE INCIDENT: “If Two Heads Are Better Than One, Are Four Even Better?” 446 FROM CONCEPTS TO SKILLS: Solving Problems Creatively 446

OB ON THE EDGE Spirituality in the Workplace 448

PART 5 Reorganizing the Workplace 454

CHAPTER 13 Organizational Structure 454 What Is Organizational Structure? 456

Work Specialization 456 Departmentalization 457 Chain of Command 459 Span of Control 460 Centralization and Decentralization 461 Formalization 461

Common Organizational Designs 462 The Simple Structure 462 The Bureaucracy 464 The Matrix Structure 465

New Design Options 467 The Virtual Organization 467 The Boundaryless Organization 468 The Leaner Organization: Organization Downsizing 470

Why Do Structures Differ? 471 Organizational Strategy 472 Organizational Size 473 Technology 473 Environment 474

Organizational Designs and Employee Behaviour 475 Global Implications 476

Culture and Organizational Structure 477 Culture and Employee Structure Preferences 477 Culture and the Boundaryless Organization 477 Culture and the Impact of Downsizing 477

Summary 478 FOR REVIEW • FOR MANAGERS • FOR YOU 479 POINT/COUNTERPOINT: The End of Management 480 PERSONAL INVENTORY ASSESSMENT 481 BREAKOUT GROUP EXERCISES 481 EXPERIENTIAL EXERCISE: Words-in-Sentences Company 481 ETHICAL DILEMMA: Just Following Orders 482 CASE INCIDENT: Creative Deviance: Bucking the Hierarchy? 483 CASE INCIDENT: “I Detest Bureaucracy” 483 FROM CONCEPTS TO SKILLS: Delegating Authority 484

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Contents xv

CHAPTER 14 Organizational Change 486 Forces for Change 488

Opportunities for Change 489 Change Agents 490

Approaches to Managing Change 491 Lewin’s Three-Step Model 491 Kotter’s Eight-Step Plan for Implementing Change 493 Action Research 493 Appreciative Inquiry 494

Resistance to Change 495 Individual Resistance 496 Organizational Resistance 497 Overcoming Resistance to Change 498 The Politics of Change 501

Creating a Culture for Change 501 Stimulating a Culture of Innovation 502 Creating a Learning Organization 504

Global Implications 505 Summary 507

FOR REVIEW • FOR MANAGERS • FOR YOU 508 POINT/COUNTERPOINT: Organizational Change Is Like Sailing Calm Waters 509 PERSONAL INVENTORY ASSESSMENT 510 BREAKOUT GROUP EXERCISES 510 EXPERIENTIAL EXERCISE: Power and the Changing Environment 510 ETHICAL DILEMMA: Changes at the Television Station 511 CASE INCIDENT: Starbucks Returns to Its Roots 512 CASE INCIDENT: When Companies Fail to Change 513 FROM CONCEPTS TO SKILLS: Carrying Out Organizational Change 513

ADDITIONAL CASES 516 ENDNOTES 544 GLOSSARY/SUBJECT INDEX 612 NAME AND ORGANIZATION INDEX 627 LIST OF CANADIAN COMPANIES, BY PROVINCE 634

OB atWork

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Preface xvii

Welcome to the seventh Canadian edition of Organizational Behaviour . Since its arrival in Canada, Organizational Behaviour has enjoyed widespread acclaim across the country for its rich Canadian content and has quickly established itself as the leading text in the field.

Organizational Behaviour , Seventh Canadian edition, is truly a Canadian product. While it draws upon the strongest aspects of its American cousin, it expresses its own vision and voice. It provides the context for understanding organizational behaviour (OB) in the Canadian workplace and highlights the many Canadian contributions to the field. Indeed, it goes a step further than most OB texts prepared for the Canadian marketplace.

Specifically, it asks, in many instances:

• How does this theory apply in the Canadian workplace of today?

• What are the implications of the theory for managers and employees working in the twenty-first century?

• What are the implications of the theory for everyday life? OB, after all, is not something that applies only in the workplace.

This text is sensitive to important Canadian issues. Subject matter reflects the broad multicultural flavour of Canada and also highlights the roles of women and visible minorities in the workplace. Examples reflect the broad range of organizations in Canada: large, small, public and private sector, unionized and non-unionized.

Organizational Behaviour continues to be a vibrant and relevant text because it’s a product of the Canadian classroom. It is used in Canada by the first author and her colleagues. Thus, there is a “front-line” approach to considering revisions. We also solicit considerable feedback from OB instructors and students throughout the country. While we have kept the features of the previous edition that adopters continue to say they like, there is also a great deal that is new.

Our Pedagogical Approach in Writing the Text • Relevance. The text reminds both teacher and student alike that we must

contend with a new paradigm of work that is more globally focused and competitive, relies more heavily on part-time and contract jobs, and places a higher premium on entrepreneurial skills, either within the traditional workplace structure, as an individual seeking out an alternative job, or as the creator of your own new business. Today’s younger employees can expect to hold many more jobs, and possibly be self-employed more and longer than their parents.

From its beginning, this text was the first to emphasize that OB is for everyone, from the bottom-rung employee to the CEO, as well as to anyone who has to interact with others to accomplish a task. We continue to emphasize this theme. We remind readers of the material’s relevance beyond a “9-to-5” job by concluding each chapter with a summary that out- lines the implications not only for the workplace and managers, but also for

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individuals in their daily lives. We also include the feature OB in the Street , which further emphasizes how OB applies outside the workplace.

• Writing style. Clarity and readability are the hallmarks of this text. Our reviewers find the text “conversational,” “interesting,” “student-friendly,” and “very clear and understandable.” Students say they really like the informal style and personal examples.

• Examples, examples, examples. From our teaching experience, we know that students may not remember a concept, but they will remember an example. This text is packed full of recent real-world examples drawn from a variety of organizations: business and not-for-profit, large and small, and local and international. We also use examples taken from the world at large, to illustrate the broader applicability of OB material.

• Comprehensive literature coverage. This text is regularly singled out for its comprehensive and up-to-date coverage of OB from both academic journals as well as business periodicals. The latest research can be found in sections marked “Research Findings” and “Focus on Research.”

• Skill-building emphasis. Each chapter’s OB at Work section is full of exercises to help students make the connections between theories and real-world applications. Exercises at the end of each chapter reinforce critical thinking, self-analysis, behavioural analysis, and team building.

Highlights of the Seventh Edition The seventh edition was designed to evolve with today’s students. There are more relevant examples, updated theory coverage, and a continued emphasis on providing the latest research findings. Based on reviews from numerous instructors and students across Canada, we have found that many potential users want chapters that have the right balance of theory, research, and application material, while being relevant to student learning. To accomplish this, we have:

• Continued to highlight the importance of Learning Outcomes as a “road map” leading to focused reading and increased learning comprehension. Learning Outcomes appear initially as an enumerated list on the chapter- opening page and then the numbered outcomes appear throughout the chapter again in the margins to direct readers to the section where the Learning Outcome is addressed. Finally, the numbered outcomes are linked to review questions at the end of the chapter so that students can test whether they have achieved these outcomes.

• Continued to feature current and topical chapter-opening vignettes as well as the subsequent references back to the vignettes that appear throughout the chapter, at the start of most major sections.

• At the beginning of each chapter, a “Big Idea” item appears in the margin which is meant to give readers a big picture view of the topic at hand. Then, at the end of the chapter a “Lessons Learned” appears in the margin to recap the key takeaways for the chapter.

• Continued to integrate a series of relevant and helpful questions throughout the chapters (look for questions that are set in a square design) to encourage students to think about how OB applies to their everyday lives and engage students in their reading of the material. These questions first appear as bullet lists at the bottom of the chapter opener, under the heading “OB Is for Everyone,” and then appear throughout each chapter.

Preface xix

• Updated the boxed features throughout the text, including OB in Action, OB in the Street, OB in the Workplace, Focus on Research, Focus on Ethics, and Focus on Diversity boxes.

• Continued to address and highlight how OB principles vary across cultures in the Global Implications sections. Chapters now conclude with references to the cultural differences that exist within and between countries. Until recently, most OB research was conducted in Western countries. That is changing, however, and we are now in a much better position to answer the question “How does what we know about OB vary based on culture?” Some OB prin- ciples vary little across cultures, while others vary a great deal.

• Continued to include the popular For You feature at the end of each chapter, to highlight the relevance of the chapter to one’s everyday life.

• Reflected the ever-changing world of organizational behaviour through a series of new end-of-chapter case incidents.

• Included four new comprehensive cases in the Additional Cases . Case 1: The Personality Problem deals with the topics of personality, organizational culture, and work attitudes; Case 4: Bad Faith Bargaining? Government Power and Negotiations with the Public Service covers power and politics, conflict and negotiation, and ethics; Case 7: Promotion from Within covers motiva- tion, work attitudes, communication, and politics. Case 9: Boundaryless Organizations deals with organizational structure and boundaryless organiza- tions, organizational culture, diversity and teams, organizational socialization, and organizational change. In addition, a new table was added at the begin- ning of the Additional Cases to show the chapters that apply to the major topic areas addressed in each case for easy reference.

• Continued to include our OB on the Edge feature, which highlights what’s new and hot in OB. OB on the Edge, which is unique to the Canadian edition, provides an opportunity to explore challenging issues and encourages students to read more about these hot topics. In this edition, we cover four topics in this innovative feature: Stress at Work ; Trust ; Workplace Bullying ; and Spirituality in the Workplace .

Chapter-by-Chapter Highlights: What’s New In this seventh edition, we have made a concerted effort to thoroughly update the text. Taken together, the changes we made render this text the leader in the market and the undisputed pioneer vis-à-vis meaningful application of OB concepts and theories. Each chapter offers new examples, the latest cutting-edge research, discus- sions of current issues, and a wide variety of application material. The key changes are listed below.

Chapter 1 : What Is Organizational Behaviour?

• New Opening Vignette about Lululemon Athletica

• New section: “Big Data”

• New exhibit: “Employment Options”

• New major section: “Challenges and Opportunities in the Canadian Workplace”

xx Preface

• New Focus on Diversity : “SaskTel Is a Top Diversity Employer”

• New major section: “Coming Attractions: Developing an OB Model”

• New exhibit: “A Basic OB Model”

• New exhibit: “The Plan of the Book”

• New Point/Counterpoint : “Lost in Translation?”

• New Ethical Dilemma : “Jekyll and Hyde”

• New Case Incident : “Apple Goes Global”

• New Case Incident : “Era of the Disposable Worker?”

Chapter 2 : Perception, Personality, and Emotions

• New Opening Vignette about Matthew Corrin, the CEO of the restaurant Freshii

• New Research Findings : “Stereotyping”

• New section: “The Dark Triad”

• New exhibit: “Jobs in Which Certain Big Five Personality Traits Are More Relevant”

• New exhibit: “Does Business School Make You Narcissistic?”

• New Focus on Research : “First Impressions Count”

• New research and discussion on emotional intelligence

• New exhibit: “A Cascading Model of Emotional Intelligence”

• New Focus on Ethics : “An Ethical Choice”

• New Focus on Research : “Smile, and the Work World Smiles with You”

• New section: “Emotion Regulation”

• New Research Findings : “Emotion Regulation”

• New OB in the Workplace : “Affective Computing: Reading Your State of Mind”

• New exhibit: “Emotional States Cross-Culturally”

• New Point/Counterpoint : “Millennials Are More Narcissistic”

• New Experiential Exercise : “Who Can Catch a Liar?”

• New Ethical Dilemma : “Happiness Coaches for Employees”

• New Case Incident : “On the Costs of Being Nice”

• New Case Incident : “Can You Read Emotions from Faces?”

Chapter 3 : Values, Attitudes, and Diversity in the Workplace

• New Opening Vignette about Corus Entertainment partnering with TD Bank to help a program designed to aid Aboriginal children achieve literacy through summer camps

• New Research Findings : “Hofstede”

• Updated exhibit: “Hofstede’s Cultural Values by Nation”

Preface xxi

• New exhibit: “Dominant Work Values in Today’s Workforce”

• New Research Findings : “Generational Differences”

• New OB in the Street : “Generation Z: Coming to Your Workplace Soon”

• New research in “Francophone and Anglophone Values”

• Updated major section: “Attitudes”

• New exhibit: “The Components of an Attitude”

• New exhibit: “The Worst Jobs for Job Satisfaction, 2013”

• New exhibit: “Relationship between Average Pay in Job and Job Satisfaction of Employees in That Job”

• New section: “Perceived Organizational Support”

• New research and discussion in “Employee Engagement”

• New OB in the Workplace : “Minding Manners, Helping Customers”

• Updated exhibit: “Practices Used by a Selected Sample of Canada’s Most Welcoming Places to Work”

• New exhibit: “Average Levels of Employee Job Satisfaction by Country”

• Updated section with new research: “Are Employees in Western Cultures More Satisfied with Their Jobs?”

• New Point/Counterpoint : “Employer–Employee Loyalty Is an Outdated Concept”

• New Experiential Exercise : “Feeling Excluded”

OB on the Edge: Stress at Work

• New research in “Consequences of Stress”

• New discussion of personality in “Why Do Individuals Differ in Their Experience of Stress?”

• New research and discussion in “Organizational Approaches”

• Updated the list of “The Most and Least Stressful Jobs”

Chapter 4 : Theories of Motivation

• New Opening Vignette about how motivation influenced Olympic snowboarder Mark McMorris to win a medal just weeks after fracturing a rib

• New OB in the Workplace : “Stock Analyst Recommendations and Valence”

• Updated section: “The Importance of Providing Performance Feedback”

• Updated Research Findings : “The Effects of Goal Setting”

• Updated section: “Reinforcement Theory”

• Updated section: “Fair Process and Treatment”

• New Point/Counterpoint : “Goals Get You to Where You Want to Be”

• New Experiential Exercise : “Organizational Justice”

xxii Preface

• New Ethical Dilemma : “Grade Inflation”

• New Case Incident : “Equity and Executive Pay”

Chapter 5 : Motivation in Action

• New Opening Vignette about how high-growth social media start-up Hootsuite manages to keep its workforce engaged and productive

• New research in “What to Pay: Establishing a Pay Structure”

• Updated section: “Merit-Based Pay”

• New research in “Flexible Benefits: Developing a Benefits Package”

• New Focus on Research : “The Reward for Helping Others at Work”

• New OB in the Street : “Rewarding Gym Attendance While Wanting Weight Loss”

• Updated exhibit: “Examples of High and Low Job Characteristics”

• New section: “Relational Job Design”

• New research in “Flextime”

• Updated Research Findings : “Telecommuting”

• New research in “Variable Pay”

• New Point/Counterpoint : “‘Face-Time’ Matters”

• Updated Ethical Dilemma : “Are CEOs Paid Too Much?”

• New Case Incident : “Motivation for Leisure”

• New Case Incident : “Attaching the Carrot to the Stick”

Chapter 6 : Groups and Teamwork

• New research in “Self-Managed Teams”

• New research in “Virtual Teams”

• New Focus on Ethics : “Virtual Teams Leave a Smaller Carbon Footprint”

• New section: “Multiteam Systems”

• New OB in the Workplace : “Turning Around a Losing Team”

• New Focus on Diversity : “Developing Team Members’ Trust across Cultures”

• New research in “(Team) Composition”

• Updated section: “Diversity of Members”

• New Point/Counterpoint : “To Get the Most Out of Teams, Empower Them”

• New Case Incident : “Tongue-Tied in Teams”

OB on the Edge: Trust

• Revised section: “What Determines Trust?”

• New box: “What Are the Consequences of Trust?”

• New discussion in “Basic Principles of Trust”

Preface xxiii

Chapter 7 : Communication

• New Opening Vignette about how the two young entrepreneurs who launched Palette, a mechatronics company, use communication to find investors for their new invention and to stay connected

• Updated major section: “Barriers to Effective Communication”

• New research in “Downward (Communication)”

• New exhibit: “Allocation of Time at Work for Managers and Professionals”

• New OB in the Workplace : “Asleep in Paris, Busy Working in Toronto”

• Updated section: “Social Media”

• Updated section: “A Cultural Guide”

• New Point/Counterpoint : “Employees’ Social Media Presence Should Matter to Managers”

• New Ethical Dilemma : “The Pitfalls of Email”

• New Case Incident : “Using Social Media to Your Advantage”

• New Case Incident : “PowerPoint Purgatory”

Chapter 8 : Power and Politics

• New Opening Vignette about former Toronto mayor Rob Ford

• Updated major section: “Bases of Power”

• New major section: “How Power Affects People”

• New OB in the Workplace : “It’s Not About the Affair, It’s About the Coverup”

• New research in “Sexual Harassment”

• New Focus on Ethics : “Sex at Work”

• Updated Research Findings : “Politicking”

• New Focus on Research : “Powerful Leaders Keep Their (Fr)Enemies Close”

• Updated Research Findings : “Impression Management Techniques”

• New section: “The Ethics of Behaving Politically”

• New Point/Counterpoint : “Everyone Wants Power”

• New Ethical Dilemma : “How Much Should You Defer to Those in Power?”

• New Case Incident : “Delegate Power, or Keep It Close?”

• New Case Incident : “Barry’s Peer Becomes His Boss”

Chapter 9 : Conflict and Negotiation

• New Opening Vignette on the BC Teachers’ Federation strike

• New section: “Types of Conflict”

• New section: “Loci of Conflict”

• Updated Research Findings : “The Constructive Effects of Conflict”

xxiv Preface

• New research and discussion in “Personality Traits in Negotiation”

• New Focus on Ethics : “Using Empathy to Negotiate More Ethically”

• New research in “Moods/Emotions in Negotiation”

• New research and discussion in “Gender Differences in Negotiation”

• New major section: “Third-Party Negotiations”

• New Ethical Dilemma : “The Lowball Applicant”

• New Case Incident : “Choosing Your Battles”

• New Case Incident : “The Pros and Cons of Collective Bargaining”

OB on the Edge: Workplace Bullying

• New research and discussion in “Workplace Violence”

• New section: “Legislation to Prevent Bullying”

• New statistics on workplace bullying

Chapter 10 : Organizational Culture

• New Opening Vignette about how the Calgary Stampede’s organizational culture helped it deal with an unexpected crisis

• New discussion in “Definition of Organizational Culture ”

• New OB in the Workplace : “WestJet Brings on the Fun”

• New section: “The Ethical Dimension of Culture”

• New research in “Strong vs. Weak Cultures”

• New OB in the Workplace : “Making Culture Work”

• New research and discussion in “Socialization”

• New research and discussion in “Barrier to Mergers and Acquisitions”

• New discussion in major section: “Changing Organizational Culture”

• New research in “Creating an Ethical Organizational Culture”

• New Point/Counterpoint : “Organizations Should Strive to Create a Positive Organizational Culture”

• New Ethical Dilemma : “A Bankrupt Culture”

• New Case Incident: “Google and P&G Swap Employees”

Chapter 11 : Leadership

• New Opening Vignette about Bryce Williams and the leadership issues faced by the young chief of the Tsawwassen First Nation

• New Research Findings : “Behavioural Theories of Leadership”

• Updated Research Findings : “Path-Goal Theory”

• Updated Research Findings : “Transformational Leadership”

• New research in “Mentoring”

Preface xxv

• New research and discussion in “Ethical Leadership”

• New section: “Servant Leadership”

• New Point/Counterpoint : “Heroes Are Made, Not Born”

• New Ethical Dilemma : “Undercover Leaders”

• New Case Incident : “Leadership by Algorithm”

Chapter 12 : Decision Making, Creativity, and Ethics

• New Opening Vignette about Billy-Joe Nachuk, a military veteran who suffered discrimination by three police officers due to their poor decision making

• New discussion in “Bounded Rationality in Considering Alternatives”

• New Focus on Research : “Putting Intuition to Work in the Workplace”

• New research in “Escalation of Commitment”

• New OB in the Street : “Groupthink at Target Canada”

• New exhibit: “Three-Stage Model of Creativity in Organizations”

• New section: “Creative Behaviour”

• New section: “Causes of Creative Behaviour”

• New discussion in “Creative Potential”

• New section: “Creative Outcomes (Innovation)”

• New discussion in “Four Ethical Decision Criteria”

• New Focus on Research : “Why People Cheat”

• New research and discussion in “Making Ethical Decisions”

• New OB in the Workplace : “The Ethics of Fostering a ‘Culture of Shortcuts’”

• New Global Implications section: “Creativity”

• New Point/Counterpoint : “People Are More Creative When They Work Alone”

• New Case Incident : “The Youngest Female Self-Made Billionaire”

OB on the Edge: Spirituality in the Workplace

• New definition of workplace spirituality

• New discussion in “Why Spirituality Now?”

• New section: “Spirituality and Mindfulness”

• New research and discussion in “Characteristics of a Spiritual Organization”

• New section: “Achieving a Spiritual Organization”

Chapter 13 : Organizational Structure

• New Opening Vignette about how the nonprofit Revitalization Saint-Pierre owes its success to embedding community participation in its organizational structure

• New research and discussion in “Centralization and Decentralization”

xxvi Preface

• New OB in the Workplace : “The World Is My Corporate Headquarters”

• New research and discussion in “The Virtual Organization”

• New research and discussion in “The Boundaryless Organization”

• New research and discussion in “The Leaner Organization: Organization Downsizing”

• New Focus on Research : “Working from Home”

• New Global Implications section: “Culture and the Impact of Downsizing”

• New Point/Counterpoint : “The End of Management”

• New Case Incident : “Creative Deviance: Bucking the Hierarchy?”

Chapter 14 : Organizational Change

• New Opening Vignette about the organizational changes that the Hudson’s Bay has undergone to stay relevant and profitable in a competitive marketplace

• New research in “Overcoming Resistance to Change”

• New OB in the Workplace : “Habitat for Humanity and Rockwood Institution Partner to Change Lives”

• New Ethical Dilemma : “Changes at the Television Station”

• New Case Incident : “Starbucks Returns to Its Roots”

• New Case Incident : “When Companies Fail to Change”

Pedagogical Features The pedagogical features of Organizational Behaviour: Concepts, Controversies, Applications , Seventh Canadian edition, are designed to complement and reinforce the textual mate- rial. This text offers the most complete assortment of pedagogy available in any OB book on the market.

• The text is developed in a “story-line” format that emphasizes how the topics fit together. Each chapter opens with a list of learning outcomes related to a main example that threads through the chapter. The opening vignette is carried throughout the chapter to help students apply a real-life example to the concepts they are learning. The learning outcome questions appear in the margin of the text, to indicate where they are addressed. In “For Review” at the end of each chapter, students can discover whether they have achieved these learning outcomes.

• OB Is for Everyone in the chapter-opener highlights the integrated questions that students will encounter throughout each chapter. Right from the start, these ques- tions encourage students to think about how OB applies to everyday lives.

• A “Big Idea/Lessons Learned” feature appears at the begin- ning and end of each chapter. These resources are designed to work hand-in-hand. At the beginning of the chapter, a “Big Idea” item appears in the margin which is meant to give readers a big-picture view of the topic at hand. Then, at the end of the chapter a “Lessons Learned” appears in the margin to recap the key takeaways from the chapter.

ark McMorris, number one slopestyle rider

on the 2013 World Snowboard Tour, was

“pretty down,” according to his father. 1

On January 25, a short time before the

opening of the 2014 Olympics in Sochi, McMorris

crashed during the final of the X Games Aspen

Snowboard Slopestyle, fracturing one of the ribs

on his right side. Even with the crash, which hap-

pened on his third and final run, McMorris won a

silver medal. However, he had won the gold medal

at Aspen in both 2011 and 2012.

But now he had to get himself ready for

the Olympics, which was to start in just

two weeks. His father’s description

of the situation showed what McMorris faced:

“When we left him [the day after the injury occurred], he could

bend over and touch his toes because of where [the injury] is at,” Don

McMorris told The Canadian Press on Monday. “You know a cracked rib in the

front, you couldn’t do that. . . . He’s got five or six days before he has to worry about

riding and he’s got the best people around him.”

It generally takes six weeks to heal from a cracked rib, and McMorris was facing com-

peting in the Olympics just two weeks after his injury. Competing in the Olympics was a

dream of his, and he would have to overcome great odds, not to mention pain, if he were to

successfully compete. He still had to qualify for the Olympics, and the qualification round

would take place one day before the opening ceremony. If he made the team, his event

was scheduled to be held exactly two weeks after the crash. Would McMorris be motivated

enough to make the Olympic team?

In this chapter, we review the basics of motivation, assess motivation theories, and pro-

vide an integrative understanding of how the different theories apply to motivating employ-

ees in organizations.

Theories of Motivation

C H A P T E R

LEARNING OUTCOMES

es of Motiva

Mark McMorris, number one slopestyle rider on

the 2013 World Snowboard Tour, won a bronze

medal in the 2014 Olympics a mere two weeks

after fracturing a rib. How did motivation influence

his impressive performance?

Chapter 4 Theories of Motivation 127

4

After studying this chapter, you should be able to:

1 Describe the three key elements of motivation.

2 Evaluate the applicability of early theories of motivation.

3 Apply the key tenets of expectancy theory to motivating employees.

4 Describe goal-setting theory, self-efficacy theory, and reinforcement theory.

5 Describe why equity and fairness matter in the workplace.

6 Demonstrate how organizational justice is a refinement of equity theory.

7 Apply the predictions of self-determination theory to intrinsic and extrinsic rewards.

8 Discuss the ethics behind motivation theories.

9 Summarize the essence of what we know about motivating employees.

M

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ha n

D en

et te

/A P

Im ag

es

P A R T 2

S T R I V I N G F O R

P E R F O R M A N C E  

Successfully

motivating

individuals requires

identifying their

needs and making it

possible for them to

achieve those needs.

THE BIG IDEA

• Are managers manipulating employees when they link rewards to productivity? Is this ethical?

• Why do some managers do a better job of motivating people than others?

• How important is fairness to you?

• What can you do if you think your salary is unfair?

OB IS FOR EVERYONE

Preface xxvii

• Exclusive to the Canadian edition, OB in the Street , OB in the Workplace , Focus on Ethics , Focus on Diversity , and Focus on Research help students see the links between theoretical material and applications.

• OB in Action features provide tips for using the concepts of OB in everyday life, such as Managing Virtual Teams, Choosing Strategies to Deal with Conflicts, Social Networking Responsibly, and Reducing Biases and Errors in Decision Making.

• To help instructors and students readily spot significant discussions of Research Findings , we have included a research icon to indicate where these discussions appear. Focus on Research provides additional links to related research. Marking research discussions so clearly helps emphasize the strong research foundation that underlies OB.

• We have continued to integrate a series of relevant and helpful questions throughout the chapters to encourage students to think about how OB applies to their everyday lives and engage students in their reading of the material. These questions first appear as a bullet list in the chapter opener, under the heading OB Is for Everyone, and then appear throughout each chapter.

• The Global Implications section addresses and highlights how OB principles vary across cultures.

• Summary provides a review of the key points of the chapter, while the Snapshot Summary provides a study tool that helps students to see the overall connections among concepts presented within each chapter.

• Each chapter concludes with OB at Work , a set of resources designed to help students apply the lessons of the chapter. Included in OB at Work are the following features:

• For Review poses a series of questions that are linked to the learning outcomes identified in the chapter opener.

• New For Managers outlines ways that managers can apply OB in the workplace.

• For You outlines how OB can be used by individuals in their daily lives.

The Ethics of Fostering a “Culture of Shortcuts”

How can an organization’s culture contribute to a deadly disaster? The Transportation Safety Board of Canada’s report about the Lac-Mégantic, Quebec, derailment that killed 47 people and obliterated part of the town indicated that MMA’s lax attitude toward safety contributed to the disaster. 102 “The TSB found MMA was a company with a weak safety culture that did not have a functioning safety management system to manage risks,” the agency said. The company’s approach to safety represents a significant breach of ethics given the threat posed by a lack of appropriate standards in the rail industry. Gaps in training, employee monitoring, and maintenance were noted. One such gap, a failure to properly test the air brake system, contributed directly to the tragic events of July 6, 2013. From all indications, this “culture of shortcuts” was well established. Management’s decision to let this culture flourish ultimately led MMA to disaster, bankruptcy, and ruin.

OB IN THE WORKPLACE

M12_LANG1781_07_SE_C12.indd 440 1/6/15 3:04 PM

RESEARCH FINDINGS: Generational Differences Although it’s fascinating to think about generational values, remember that these classifications lack solid research support. Early research was plagued

by methodological problems that made it difficult to assess whether differences actu- ally exist. Recent reviews suggest many of the generalizations are either overblown or incorrect. 29 Studies that have found differences across generations often don’t support popular conceptions of how generations differ. One study that used an appropriate longitudinal design did find the value placed on leisure has increased over generations from the Baby Boomers to the Millennials and work centrality has declined, but it did not find that Millennials had more altruistic work values as expected. 30 Generational classifications may help us understand our own and other generations better, but we must also appreciate their limits. A new generation will be coming to the workplace soon, and researchers suggest that this new generation may be the cause of revolution in the workplace. OB in the Street looks at Generation Z.

M03_LANG1781_07_SE_C03.indd 87 12/29/14 4:56 PM

e should be selected onalities and prefer- iversity and specific that personality has mployee behaviour. team behaviour. ed in the Big Five be relevant to team uggests that three of tant for team performance. 75 Specifically, teams scientiousness and openness to experience tend

Why do some team members

seem to get along better than

others?

M06_LANG7855_07_SE_C06.indd 223 12/30/14 11:24 AM

Summary An understanding of the way people make decisions can help us explain and predict behaviour, but few important decisions are simple or unambiguous enough for the rational decision-making model’s assumptions to apply. We find individuals looking for solutions that satisfice rather than optimize, injecting biases into the decision process, and relying on intuition. Managers should encourage creativity in employees and teams to create a route to innovative decision-making. Individuals are more likely to make ethical decisions when the culture in which they work supports ethical decision making.

LESSONS LEARNED • Individuals often short-cut the

decision-making process and do not consider all options.

• Intuition leads to better results when supplemented with evidence and good judgment.

• Exceptional creativity is rare, but expertise in a subject and a creative environment encourage novel and useful creative outcomes.

SNAPSHOT SUMMARY

How Should Decisions Be Made? • The Rational Decision-

Making Process

How Do Individuals Actually Make Decisions? • Bounded Rationality in

Considering Alternatives • Intuition • Judgment Shortcuts

Group Decision Making • Groups vs. the Individual • Groupthink and Groupshift • Group Decision-Making

Techniques

Creativity in Organizational Decision Making • Creative Behaviour • Causes of Creative Behaviour

• Creative Outcomes (Innovation)

What About Ethics in Decision Making? • Four Ethical Decision Criteria • Making Ethical Decisions

Corporate Social Responsibility

M12_LANG1781_07_SE_C12.indd 443 1/6/15 3:04 PM

OB at W o rk

for Review

1. What is perception? What fac- tors influence our perception?

2. What is attribution theory? What are the three determinants of attri- bution? What are the implications of attribution theory for explaining organizational behaviour?

3. What is personality? How do we typically measure it? What fac- tors determine personality?

4. What is the Myers-Briggs Type Indicator? What are its strengths and weaknesses?

5. What are the key traits in the Big Five Personality Model?

6. How do the Big Five personality traits predict behaviour at work?

7. What is the difference between emotions and moods?

8. What impact does emotional labour have on employees?

9. What is the evidence for and against the existence of emo- tional intelligence?

10. What are some strategies for emotion regulation and their likely effects?

for Managers

■ Consider screening job candidates for high conscientiousness—as well as the other Big Five personal- ity traits, depending on the criteria your organization finds most impor- tant. Other traits, such as core self- evaluation or narcissism, may be relevant in certain situations.

■ Although the MBTI has been widely criticized, it may have a place in organizations. You may consider the results helpful for training and development; the results can also help employees better understand themselves, help team members better understand one another, open up communication in work groups, and possibly reduce conflicts.

■ To foster effective decision mak- ing, creativity, and motivation in employees, model positive emo- tions and moods as much as is authentically possible.

■ Regulate your intense emotional responses to an event by recogniz- ing the legitimacy of the emotion and being careful to vent only to a supportive listener who is not involved in the event.

■ Be careful not to ignore co- workers’ and employees’ emotions; do not assess others’ behaviour as if it were completely rational. As one consultant aptly put it, “You can’t divorce emotions from the work- place because you can’t divorce emotions from people.” 180 Man- agers who understand the role of emotions and moods will sig- nificantly improve their ability to explain and predict their co-work- ers’ and employees’ behaviour.

for You

■ The discussion of perception might get you thinking about how you view the world. When we perceive someone as a troublemaker, for instance, that may be only a per- ception and not a real characteris- tic of the person. It is always good to question your perceptions, just to be sure that you are not reading something into a situation that is not there.

■ One important thing to consider when looking for a job is whether your personality will fit the organi- zation to which you are applying. For instance, let’s say that you are considering working for a highly structured company. If you, by nature, are much less formal, then that company may not be a good fit for you.

■ Sometimes personalities get in the way when working in groups. You may want to see if you can figure out ways to get personality differ- ences to work in favour of group goals.

■ Emotions need not always be suppressed when working with others. While emotions can some- times hinder performance, positive emotions can motivate you and those around you.

OB atWork

M02_LANG7855_07_SE_C02.indd 71 12/29/14 4:55 PM

Engaging in Self-Leadership

To engage in effective self-leadership: 90

➔ Think horizontally, not vertically . Vertical relationships in the organization matter, but peers can become trusted colleagues and have a great impact on your work.

➔ Focus on influence, not control . Work with your colleagues, not for them. Be collabora- tive and share credit.

➔ Create opportunities , don’t wait for them. Rather than look for the right time, be more action oriented.

OB IN ACTION

M11_LANG1781_07_SE_C11.indd 401 1/6/15 3:03 PM

xxviii Preface

• Point/Counterpoint promotes debate on contentious OB issues. This feature presents more focused arguments.

• New Personal Inventory Assessment (PIA) is a collection of online exercises designed to promote self-reflection and engagement in students, enhancing their ability to connect with the concepts taught in the text. PIA marginal icons appear throughout the text.

• Breakout Group Exercises , Experiential Exercise , and Ethical Dilemma are valuable application exercises for the classroom. The many new exercises included here are ones that we have found particularly stimulating in our own classrooms. Our students say they like these exercises and they learn from them. Additional exercises can be found on MyManagementLab.

• Case Incidents (two per chapter) deal with real-world scenarios and require students to exercise their decision-making skills. Each case enables an instructor to quickly generate class discussion on a key theme within the chapter.

• From Concepts to Skills provides a wide range of applications for students. The section begins with a practical set of tips on topics such as reading emotions, setting goals, and solving problems creatively, which demonstrate real-world applications of OB theories. These tips are followed by the features Practising Skills and Reinforcing Skills . Practising Skills presents an additional case or group activity to apply the chapter’s learning outcomes. Reinforcing Skills asks students to talk about the material they have learned with others, or to apply it to their own personal experiences.

• Exclusive to the Canadian edition, OB on the Edge (following each part) takes a close look at some of the hottest topics in the field: work-related stress, trust, behavioural pathologies that can lead to workplace bullying, and spiri- tuality in the workplace. Since this is a stand-alone feature, these topics can be introduced at the instructor’s discretion.

• Our reviewers have asked for more cases, and more comprehensive and inte- grated cases. To address this request, we have included 10 Additional Cases that feature a variety of challenges and organizations. All of these cases require students to apply material from a variety of chapters.

Trust Bruce MacLellan, president and CEO of Toronto-based Environics Communications, finds that building trust in the workplace has a high payoff. 1

In fact, he believes that trust is a crucial element of his public relations firm’s success. “Build trust [because] everything you say and do will be watched. … Building a stable and trust- ing atmosphere is essential to other success. People may not always agree, but if they see transparency, consistency and candor, it helps.”

Employees look forward to the annual ESRA (read it

backward to see where the name comes from) award. The award goes to the per- son who made the biggest blooper of the year in front of a client or colleague. One employee won for recom- mending a “suitable” park- ing spot from which the client got towed. Another employee was caught on a television interview looking like she was falling asleep. “She didn’t realize she was on camera and looked like she was fall- ing asleep while our client was speaking,” MacLellan says. The award ensures that

employees feel safe when they make mistakes and that they can trust their col- leagues.

Another way that MacLellan builds trust at Environics is through helping employees achieve work–life balance. After working at the firm for four years, Steve Acken, vice- president of digital services, wanted to travel the world and requested four months of unpaid leave. “They held my job for four months and that was everything,” said Acken, making him even more com- mitted to the firm.

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M06_OB_LANG1781_07_SE_C06_OB.indd 242 12/30/14 10:31 AM

334 Part 3 Interacting Effectively

POINT COUNTERPOINT

OB a

t W o rk

It may be true that conflict is an inherent part of any group or organization. It may not be possible to elimi- nate it completely. However, just because conflicts exist is no reason to glorify them. All conflicts are dysfunctional, and it’s one of management’s major responsibilities to keep conflict intensity as low as humanly possible. A few points will support this case:

• The negative consequences from conflict can be dev- astating. The list of negatives associated with conflict is awesome. The most obvious are increased turnover, decreased employee satisfaction, inefficiencies between work units, sabotage, labour grievances and strikes, and physical aggression. One study estimated that managing conflict at work costs the average employer nearly 450 days of management time a year.

• Effective managers build teamwork. A good man- ager builds a coordinated team. Conflict works against such an objective. A successful work group is like a successful sports team: Members all know their roles and support their teammates. When a team works well, the whole becomes greater than the sum of the parts. Management creates team- work by minimizing internal conflicts and facilitat- ing internal coordination.

• Competition is good for an organization, but not conflict. Competition and conflict should not be con- fused with each other. Conflict is behaviour directed against another party, whereas competition is behav- iour aimed at obtaining a goal without interference from another party. Competition is healthy; it’s the source of organizational vitality. Conflict, on the other hand, is destructive.

• Conflict is avoidable. It may be true that conflict is inevitable when an organization is in a downward spiral, but the goal of good leadership and effective management is to avoid the spiral to begin with.

Let’s briefly review how stimulating conflict can provide benefits to the organization: 111

• Conflict is a means by which to bring about radical change. It’s an effective device by which management can drastically change the existing power structure, current interaction patterns, and entrenched atti- tudes. If there is no conflict, it means the real prob- lems are not being addressed.

• Conflict facilitates group cohesiveness. While conflict increases hostility between groups, external threats tend to cause a group to pull together as a unit. Con- flict with another group brings together those within each group. Such intragroup cohesion is a critical resource that groups draw on in good and especially in bad times.

• Conflict improves group and organizational effective- ness. Groups or organizations devoid of conflict are likely to suffer from apathy, stagnation, groupthink, and other debilitating diseases. In fact, more organi- zations probably fail because they have too little con- flict, not because they have too much. Stagnation is the biggest threat to organizations, but since it occurs slowly, its ill effects often go unnoticed until it’s too late. Conflict can break complacency—although most of us don’t like conflict, it’s often the last best hope of saving an organization.

• Conflict brings about a slightly higher, more construc- tive level of tension. Constructive levels of tension enhance the chances of solving the conflicts in a way satisfactory to all parties concerned. When the level of tension is very low, the parties may not be suffi- ciently motivated to do something about a conflict.

Confl ict: Good or Bad?

M09_LANG1781_07_SE_C09.indd 334 1/27/15 4:20 PM

OB a

t W o rk

374 Part 4 Sharing the Organizational Vision

CASE I N C I D E N T S

Is a 5S Culture for You?

Jay Scovie looked at his workspace. 95 He took pride in how nice and tidy he had made it look. As it turns out, his pride was misplaced. Sweeping visible clutter from your workspace by packing it into boxes hidden in a closet was not acceptable to his employer, Japanese manufacturer Kyocera. Scovie’s habit drew the attention of Dan Brown, Kyocera’s newly appointed inspector. “It became a topic of repeated conversation,” Scovie said.

Why the obsession with order? Kyocera has joined a growing list of organizations that base their culture on 5S, a concept borrowed from lean manufacturing and based on five phases or principles:

1. Sorting (Seiri) . Going through all tools, materials, and supplies so as to keep only what is essential.

2. Straightening (Seiton) . Arranging tools, supplies, equipment, and parts in a manner that promotes maximum efficiency. For everything there should be a place, and everything should be in its place.

3. Shining (Seiso) . Systematic cleaning to make the workplace and workspace as clean and neat as pos- sible. At the end of the shift or workday, everything is left as it was when the workday started.

4. Standardizing (Seiketsu) . Knowing exactly what your responsibilities are to keep the first three S’s.

5. Sustaining (Shitsuke) . Maintaining and reviewing standards, rigorous review, and inspection to ensure order does not slowly slip back into disorder or chaos.

Other companies are following Kyocera in making 5S an important part of their culture, including London,

Ontario-based 3M Canada, Markham, Ontario-based Steelcase, and St. Thomas, Ontario-based Waltec. Lawn mower manufacturer Toro organizes printer output according to 5S principles, and Virginia Mason Hospital in Seattle uses 5S to coordinate office space and arrange the placement of medical equipment, such as stethoscopes. Paul Levy, president and CEO of Beth Israel Deaconess Medical Center in Boston, has used 5S to reduce errors and time lost searching for equipment.

At Kyocera, Brown exercises some discretion—he asked one employee to remove a hook on her door while allowing another to keep a whale figurine on her desk. “You have to figure out how to balance being too picky with upholding the purpose of the program,” he said. While Brown was happy with Scovie’s desk (if not the closet), he wanted to look inside. Scovie tried to redirect the conversation but relented when Brown pressed. Inside one of Scovie’s desk drawers was a box full of CDs, small electronic devices, and items Kyocera no longer makes. “Obviously, we’re at the sorting stage here,” Scovie told Brown.

Questions

1. What would you see as the value in Kyocera using 5S?

2. What are some advantages and disadvantages of trying to impose a similar culture in Canadian com- panies?

3. What might your response be to having to engage in the 5S principles in your workplace?

M10_LANG7855_07_SE_C10.indd 374 1/27/15 4:22 PM

OB a

t W o rk

Reading Emotions Understanding another per- son’s felt emotions is very difficult. But we can learn to read others’ displayed emo- tions. 186 We do this by focus- ing on verbal, nonverbal, and paralanguage cues.

FROM CONCEPTS TO SKILLS

The easiest way to find out what someone is feeling is to ask them. Saying something as simple as “Are you okay? What’s the problem?” can often provide you with the information to assess an individual’s emotional state. But relying on a verbal response has two drawbacks. First, almost all of us conceal our emotions to some extent for privacy and to reflect social expectations. So we might be unwilling to share our true feelings. Second, even if we want to verbally convey our feelings, we may be unable to do so. As we noted earlier, some people have difficulty understanding their own emotions and, hence, are unable to express them verbally. So, at best, verbal responses provide only partial information.

Let’s say you are talking with a co-worker. Does the fact that his back is rigid, his teeth clenched, and his facial muscles tight tell you something about his emotional state? It probably should. Facial expressions, gestures, body movements, and physical distance are nonverbal cues that can pro- vide additional insights into what a person is feeling. The facial expressions shown in Exhibit 2-11 , for instance, are a window into a person’s feelings. Notice the difference in facial features: the height of the cheeks, the rais- ing or lowering of the brow, the turn of the mouth, the positioning of the lips, and the configuration of muscles around the eyes. Even something as subtle as the distance someone chooses to position him- or herself from you can convey how much intimacy, aggressiveness, repugnance, or with- drawal that person feels.

76 Part 1 Understanding the Workplace

M02_LANG7855_07_SE_C02.indd 76 2/5/15 11:42 AM

OB a

t W o rk

Form small groups to discuss the following topics, as assigned by your instructor:

1. How might the job of student be redesigned to make it more motivating?

2. What is your ideal job? To what extent does it match up with the elements of the JCM?

3. Would you prefer working from home or working at the office? Why?

B R E A KOUT GROUP E X E R C I S E S

Analyzing and Redesigning Jobs Break into groups of 5 to 7 members each. 160 Each student should describe the worst job he or she has ever had. Use any criteria you want to select 1 of these jobs for analysis by the group.

Members of the group will analyze the job selected by determining how well it scores on the job characteristics model. Use the following scale for your analysis of each job dimension:

7 = Very high

6 = High

5 = Somewhat high

4 = Moderate

3 = Somewhat low

2 = Low

1 = Very low

The following sample questions can guide the group in its analysis of the job in question:

• Skill variety. Describe the different identifiable skills required to do this job. What is the nature of the oral, written, and/or quantitative skills needed? Physical skills? Does the job holder get the opportunity to use all of his or her skills?

• Task identity. What is the product that the job holder creates? Is he or she involved in its production from beginning to end? If not, is he or she involved in a particular phase of its production from beginning to end?

• Task significance. How important is the product? How important is the job holder’s role in producing it? How important is the job holder’s contribution to the people he or she works with? If the job holder’s job were eliminated, how inferior would the product be?

• Autonomy. How much independence does the job holder have? Does he or she have to follow a strict schedule? How closely is he or she supervised?

• Feedback. Does the job holder get regular feedback from his or her manager? From peers? From his or her staff? From customers? How about intrinsic performance feedback when doing the job?

EXPERIENTIAL E X E R C I S E

OB at W o rk

Are CEOs Paid Too Much?

ET H I C A L DILEMMA

Critics have described the astronomical pay packages given to Canadian and American CEOs as “rampant greed.” 161 In 2013, the median annual compensation of CEOs in Canada’s 100 largest companies was $5.6 million. That means that the compensation of CEOs, which had fallen a bit from 2010 to 2011, is almost back to the levels from before the downturn, when the median CEO earned $5.8 million. The 2013 CEO compensation was 171 times what the average full-time Canadian employee earned in 2013 ($46 634). Canadian CEOs may feel they are underpaid, though, if they compare themselves with a similar group of American CEOs, whose median pay was US$12.75 million in 2012, and 257 times that of the average pay for US employees.

How do you explain such large pay packages for CEOs? Some say that executive compensation represents a classic economic response to a situation in which the demand is great for high-quality top-executive talent, and the supply

is low. Other arguments in favour of paying executives millions a year are the need to compensate people for the tremendous responsibilities and stress that go with such jobs; the motivating potential that seven- and eight-figure annual incomes provide to senior executives and those who might aspire to be; and the influence of senior execu- tives on the company’s bottom line.

Critics of executive pay practices in Canada and the United States argue that CEOs choose board members whom they can count on to support ever-increasing pay for top management. If board members fail to “play along,” they risk losing their positions, their fees, and the prestige and power inherent in board membership.

In addition, it’s not clear that executive compensation is tied to firm performance. For example, a 2014 analysis of compensation data by Equilar showed little correlation between CEO pay and company performance. Consider the data in Exhibit 5-8 , which illustrates the disconnect that can sometimes happen between CEO compensation

Chapter 5 Motivation in Action 197196 Part 2 Striving for Performance

EXHIBIT 5-8 2014 Compensation of Canada’s Most Overpaid CEOs*

CEO(s) Was Paid

(2-Year Avg.) Should Have

Been Paid Amount Overpaid

1. Gerald Schwartz, Onex Corporation, Toronto, Ontario

$19 907 000 $8 668 000 $11 239 000

2. Jim Smith, Thomson Reuters Corp., Toronto, Ontario

$11 659 000 $4 556 000 $7 103 000

3. Scott Saxberg, Crescent Point Energy Corp., Calgary, Alberta

$8 954 000 $2 421 000 $6 533 000

4. Craig Mulhauser, Celestica Inc., Toronto, Ontario

$6 595 000 $3 122 000 $3 473 000

5. Mark Davis, Chemtrade Logistics Income Fund, Toronto, Ontario

$5 042 000 $2 416 000 $2 626 000

* Financial Post Magazine uses a “Bang for the Buck” formula to calculate the amount overpaid, taking into account CEO performance variables. Source: A Guide to “Using the CEO Scorecard,” Financial Post Magazine, November 2014, p. 33; and information in “CEO Scorecard 2014,” Financial Post Magazine , November 2014, pp. 34–37 .

P I A

Diagnosing Poor Performance and Enhancing Motivation: Correcting poor performance is a key management responsibility. This instrument helps you assess your abilities in this area.

Effective Empowerment and Engagement: Some engagement and empowerment techniques are more effective than others. Use this scale to see how your approach measures up, and to get some ideas for improvement.

P E RS O N A L INVENTORY AS S E S S M E N T Using the formula found on page 181 , calculate the job’s motivating potential score. Discuss whether you think this score accurately reflects your perceptions of the motivating potential of these professions. Using the suggestions offered in the chapter for redesigning jobs, describe specific actions that management could

take to increase this job’s motivating potential. Calculate the costs to management of redesigning the job in question. Do the benefits exceed the costs? Conclude the exercise by having a representative of each group share his or her group’s analysis and redesign sugges-

tions with the entire class. Possible topics for class discussion might include similarities in the jobs chosen, problems in rating job dimensions, and the cost–benefit assessment of design changes.

M05_LANG7855_07_SE_C05.indd 196-197 1/27/15 11:48 AM

Preface xxix

Supplements MyManagementLab We have created an outstanding supplements package for Organizational Behaviour , Seventh Canadian edition. In particular, we have provided access to MyManagementLab, which provides students with an assortment of tools to help enrich and expedite learning. MyManagementLab is an online study tool for students and an online homework and assessment tool for faculty. MyManagementLab lets students assess their understanding through auto-graded tests and assignments, develop a personal- ized study plan to address areas of weakness, and practise a variety of learning tools to master management principles. New and updated MyManagementLab resources include the following:

• New Personal Inventory Assessment (PIA). Students learn better when they can connect what they are learning to their personal experience. PIA is a collection of online exercises designed to promote self-reflection and engagement in students, enhancing their ability to connect with concepts taught in principles of management, organizational behaviour, and human resource manage- ment classes. Assessments can be assigned by instructors, who can then track students’ completions. Student results include a written explanation along with a graphic display that shows how their results compare to the class as a whole. Instructors will also have access to this graphic representation of results to promote classroom discussion.

• New Personalized Study Plan . As students work through MyManagementLab’s new Study Plan, they can clearly see which topics they have mastered—and, more importantly, which they need to work on. Each question has been care- fully written to match the concepts, language, and focus of the text, so students can get an accurate sense of how well they’ve understood the chapter content.

• New Business Today Videos . Business Today is a dynamic and expanding data- base of videos covering the disciplines of management, business, marketing, and more. Instructors will find new videos posted monthly, which makes Business Today the ideal resource for up-to-date video examples that are perfect for classroom use.

• New Learning Catalytics. Learning Catalytics is a “bring your own device” student engagement, assessment, and classroom intelligence system. It allows instructors to engage students in class with a variety of question types designed to gauge student understanding.

• Assignable Mini-Cases and Video Cases. Instructors have access to a variety of case-based assessment material that can be assigned to students, with multiple-choice quizzes or written-response format in MyManagementLab’s new Writing Space.

• eText. Students can study without leaving the online environment. They can access the eText online, including videos and simulations. The interactive eText allows students to highlight sections, bookmark pages, or take notes electronically just as they might do with a traditional text. Instructors can also add their own notes to the text and then share them with their students.

• Glossary Flashcards. This study aid is useful for students’ review of key concepts.

• Simulations. Simulations help students analyze and make decisions in common business situations; the simulations assess student choices and include reinforcement quizzes, outlines, and glossaries.

xxx Preface

Most of the following materials are available for download from a password- protected section of Pearson Canada’s online catalogue ( www.pearsoncanada.ca/ highered ). Navigate to your text’s catalogue page to view a list of those supplements that are available. Contact your local sales representative for details and access.

• Instructor’s Resource Manual with Video Guide. Each chapter of the Instructor’s Resource Manual with Video Guide includes a chapter outline, learning outcomes, chapter synopsis, study questions, suggested teaching plan, anno- tated lecture outlines, answers to questions found under OB at Work’s For Review, a summary and analysis of Point/Counterpoint features, comments on end-of-chapter exercises and notes on the Case Incidents , From Concepts to Skills , and key terms.

• Computerized Test Bank. The Test Bank contains over 1800 items, including multiple choice, true/false, and discussion questions that relate not only to the body of the text but to From Concepts to Skills , Point/Counterpoint , and case materials. For each question we have provided the correct answer, a refer- ence to the relevant section of the text, a difficulty rating, and a classification (recall/applied). Pearson’s computerized test banks allow instructors to filter and select questions to create quizzes, tests, or homework. Instructors can revise questions or add their own, and may be able to choose print or online options. These questions are also available in Microsoft Word format.

• PowerPoint Presentation. A ready-to-use PowerPoint slideshow designed for classroom presentation. Use it as is, or edit content to fit your individual class- room needs.

• Image Gallery. This package provides instructors with images to enhance their teaching.

CourseSmart. CourseSmart goes beyond traditional expectations—providing instant, online access to the texts and course materials you need at a lower cost for students. And even as students save money, you can save time and hassle with a digital eText that allows you to search for the most relevant content at the very moment you need it. Whether it’s evaluating texts or creating lecture notes to help students with difficult concepts, CourseSmart can make life a little easier. See how when you visit www.cours- esmart.com/instructors .

Pearson Custom Library. For enrollments of at least 25 students, you can create your own text by choosing the chapters that best suit your own course needs. To begin building your custom text, visit www.pearsoncustomlibrary.com . You may also work with a dedicated Pearson Custom editor to create your ideal text—publishing your own original content or mixing and matching Pearson content. Contact your local Pearson Representative to get started.

Learning Solutions Managers. Pearson’s Learning Solutions Managers work with faculty and campus course designers to ensure that Pearson technology products, assessment tools, and online course materials are tailored to meet your specific needs. This highly qualified team is dedicated to helping schools take full advantage of a wide range of educational resources, by assisting in the integration of a variety of instructional mate- rials and media formats. Your local Pearson Education sales representative can provide you with more details on this service program.

Preface xxxi

Acknowledgments A number of people worked hard to give this seventh Canadian edition of Organizational Behaviour a new look.

I received incredible support for this project from a variety of people at Pearson Canada. The three people who worked hardest to keep this project on track were Jennifer Murray, Developmental Editor, Claudia Forgas, Copy Editor and Production Editor, and Jessica Hellen, Project Manager. All three were extremely supportive and helpful. Jennifer supplied a number of great ideas for examples and vignettes, never complained when I was late with chapters, and she provided much needed cheerful- ness at some of the most difficult parts of this project. I can’t thank her enough for her dedication to the task.

Claudia Forgas was the Copy Editor and Production Editor for the project. Claudia has worked on a number of my projects and still continues to amaze for how well she makes sure everything is in place and written clearly. Claudia provided a wealth of support, great ideas, and goodwill throughout the production process. Turning the manuscript into the text you hold in your hands could not have happened without her inspired leadership. She was extremely diligent about checking for consistency throughout the text and performed a number of helpful fact-checking activities. Her keen eyes helped to make these pages as clean as they are. I am grateful for the oppor- tunity to work with her again.

There are a variety of other people at Pearson who also had a hand in making sure that the manuscript would be transformed into this book and then delivered to you. To all of them I extend my thanks. I know the Pearson sales team will do everything possible to make this book successful.

I also want to acknowledge my divisional secretary, Nancy Tang, who helps keep me on track in a variety of ways. I could not ask for a better, more dedicated, or more cheerful assistant. She really helps keep things together.

In our continuing effort to improve the text, we have conducted many reviews to elicit feedback over the years and editions. Many thanks to several students from the Northern Alberta Institute of Technology (NAIT) who provided us with suggestions for improving the text. The students are Barb Kosak, Prudence Musinguzi, Andres Sarrate, and Robert Tucci. Student input helps keep the material fresh and alive.

Finally, I want to acknowledge the many reviewers of this text for their detailed, helpful comments. I appreciate the time and care that they put into their reviewing. The reviewers include Ian Anderson (Algonquin College), Julia Dotson (Confederation College), Patricia Fitzgerald (Saint Mary’s University), Judith Hunter (Sheridan Institute of Technology and Advanced Learning), Martha Reavley (University of Windsor), and Yanelia Yabar (Red Deer College).

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Preface xxxiii

Nancy Langton received her Ph.D. from Stanford University. Since completing her graduate studies, Dr. Langton has taught at the University of Oklahoma and the University of British Columbia. Currently a member of the Organizational Behaviour and Human Resources division in the Sauder School of Business, UBC, she teaches at the undergraduate, MBA, and Ph.D. levels and conducts executive programs on attracting and retaining employees, time management, family business issues, as well as women and management issues. Dr. Langton has received several major three-year research grants from the Social Sciences and Humanities Research Council of Canada, and her research interests have focused on human resource issues in the workplace, including pay equity, gender equity, and leadership and communication styles. Her ar- ticles on these and other topics have appeared in such journals as Administrative Science Quarterly , American Sociological Review , Sociological Quarterly , Journal of Management Education , and Gender, Work and Organizations . She has won Best Paper commendations from both the Academy of Management and the Administrative Sciences Association of Canada.

Dr. Langton routinely wins high marks from her students for teaching. She has been nominated many times for the Commerce Undergraduate Society Awards, and has won several honourable mention plaques. She has also won the Sauder School of Business’s most prestigious award for teaching innovation, The Talking Stick. The award was given for Dr. Langton’s redesign of the undergraduate organizational behaviour course as well as the many activities that were a spin-off of these efforts. She was also part of the UBC MBA Core design team that won the Alan Blizzard award, a national award that recognizes innovation in teaching. More recently, she was acknowledged by the Sauder School of Business for her development of the Sauder Africa Initiative, which took her to Kenya with UBC students to help young people in the slums of Nairobi write busi- ness plans.

In Dr. Langton’s “other life,” she engages in the artistry of quiltmaking, and one day hopes to win first prize at Visions , the juried show for quilts as works of art. More recently, she has been working at mastering the art of photography, creating abstract art using segments of real objects. When she is not designing quilts or taking photographs, she is either reading novels recommended by her book club colleagues or studying cookbooks for new ideas. All of her friends would say that she makes the best pizza from scratch in all of Vancouver, and one has even offered to supply venture capital to open a pizza parlour.

A B O U T T H E A U T H O R S

xxxiv About the Authors

Stephen P. Robbins

Education Ph.D., University of Arizona

Professional Experience Academic Positions: Professor, San Diego State University, Southern Illinois University at Edwardsville, University of Baltimore, Concordia University in Montreal, and University of Nebraska at Omaha.

Research: Research interests have focused on conflict, power, and politics in organi- zations; behavioural decision making; and the development of effective interpersonal skills.

Books Published: World’s best-selling author of textbooks in both management and organizational behaviour. His books have sold more than 5 million copies and have been translated into 20 languages; editions have been adapted for Canada, Australia, South Africa, and India, such as these:

• Essentials of Organizational Behavior , 12th ed. (Prentice Hall, 2014)

• Management , 12th ed. with Mary Coulter (Prentice Hall, 2014)

• Fundamentals of Human Resource Management , 10th ed., with David DeCenzo (Wiley, 2010)

• Prentice Hall’s Self-Assessment Library 3.4 (Prentice Hall, 2010)

• Fundamentals of Management , 8th ed., with David DeCenzo and Mary Coulter (Prentice Hall, 2013)

• Supervision Today! 7th ed., with David DeCenzo and Robert Wolter (Prentice Hall, 2013)

• Training in Interpersonal Skills: TIPS for Managing People at Work , 6th ed., with Phillip Hunsaker (Prentice Hall, 2012)

• Managing Today! 2nd ed. (Prentice Hall, 2000)

• Organization Theory , 3rd ed. (Prentice Hall, 1990)

• The Truth About Managing People , 2nd ed. (Financial Times/Prentice Hall, 2008)

• Decide and Conquer: Make Winning Decisions and Take Control of Your Life (Financial Times/Prentice Hall, 2004).

Other Interests In his “other life,” Dr. Robbins actively participates in masters’ track competition. After turning 50 in 1993, he won 18 national championships and 12 world titles. He is the current world record holder at 100 metres (12.37 seconds) and 200 metres (25.20 seconds) for men 65 and over.

About the Authors xxxv

Timothy A. Judge

Education Ph.D., University of Illinois at Urbana-Champaign

Professional Experience Academic Positions: Franklin D. Schurz Chair, Department of Management, Mendoza College of Business, University of Notre Dame; Visiting Distinguished Adjunct Professor of King Abdulaziz University, Saudi Arabia; Visiting Professor, Division of Psychology & Language Sciences, University College London; Matherly-McKethan Eminent Scholar in Management, Warrington College of Business Administration, University of Florida; Stanley M. Howe Professor in Leadership, Henry B. Tippie College of Business, University of Iowa; Associate Professor (with tenure), Department of Human Resource Studies, School of Industrial and Labor Relations, Cornell University; Lecturer, Charles University, Czech Republic, and Comenius University, Slovakia; Instructor, Industrial/ Organizational Psychology, Department of Psychology, University of Illinois at Urbana- Champaign.

Research: Dr. Judge’s primary research interests are in (1) personality, moods, and emotions; (2) job attitudes; (3) leadership and influence behaviours; and (4) careers (person–organization fit, career success). Dr. Judge has published more than 145 articles on these and other major topics in journals such as Journal of Organizational Behavior , Personnel Psychology , Academy of Management Journal , Journal of Applied Psychology , European Journal of Personality , and European Journal of Work and Organizational Psychology .

Fellowship: Dr. Judge is a fellow of the American Psychological Association, the Academy of Management, the Society for Industrial and Organizational Psychology, and the American Psychological Society.

Awards: In 1995, Dr. Judge received the Ernest J. McCormick Award for Distinguished Early Career Contributions from the Society for Industrial and Organizational Psychology. In 2001, he received the Larry L. Cummings Award for mid-career contri- butions from the Organizational Behavior Division of the Academy of Management. In 2007, he received the Professional Practice Award from the Institute of Industrial and Labor Relations, University of Illinois. In 2008, he received the University of Florida Doctoral Mentoring Award. And in 2012, he received the Editorial Board of the European Journal of Work and Organizational Psychology (EJWOP) best paper of the year award.

Other Books Published: H. G. Heneman III, T. A. Judge, and J. D. Kammeyer- Mueller, Staffing Organizations , 7th ed. (Madison, WI: Mendota House/Irwin, 2012)

Other Interests Although he cannot keep up (literally!) with Dr. Robbins’ accomplishments on the track, Dr. Judge enjoys golf, cooking and baking, literature (he’s a particular fan of Thomas Hardy and is a member of the Thomas Hardy Society), and keeping up with his three children, who range in age from 24 to 10.

C H A P T E R

LEARNING OUTCOMES

How can people skills help you run a successful

business?

1

After studying this chapter, you should be able to:

1 Define organizational behaviour (OB).

2 Demonstrate the importance of interpersonal skills in the workplace.

3 Identify the major behavioural science disciplines that contribute to OB.

4 Understand the value of systematic study to OB.

5 Demonstrate why few absolutes apply to OB.

6 Identify workplace challenges that provide opportunities to apply OB concepts.

7 Describe the three levels of analysis in this book’s OB model.

P A R T 1

U N D E R S T A N D I N G

T H E W O R K P L A C E

What Is Organizational Behaviour?

V ancouver-based Lululemon Athletica is

known for its fashionable yoga wear, as

well as its promotion of yoga. 1 Founded in

1998 by Chip Wilson, the company has

grown rapidly, although not without some stumbles.

The company originally manufactured all of its

clothing in Canada, but by 2007 only 50 percent

of its factories were in Canada, and by 2014 only

3 percent of its factories were in Canada. By locat-

ing so much of its manufacturing in other countries,

Lululemon no longer has complete control over

the production of its clothing. This became

embarrassingly clear when black yoga

pants had to be pulled off the

shelves in 2012 because they

were too sheer to be worn.

Christine Day, the former CEO,

said at the time that Lululemon had given too much control over production

to its overseas partners rather than staying personally involved. “If there were 10

technical specs,” she said, “we were probably controlling four. Every single factory has

all the same patterns now.”

Lululemon has acquired cult-brand status, with sales of $1.37 billion in 2012. Wilson

no longer heads the company, although he worries that the board of directors has lost sight

of what Lululemon is about. He also believes the board is focused on short-term goals, to

the detriment of the overall vision of the company.

The challenges that organizations such as Lululemon face illustrate several concepts

you will find as you study the field of organizational behaviour. Let’s take a look, then, at

what organizational behaviour is.

Chapter 1 What Is Organizational Behaviour? 3

THE BIG IDEA

OB helps managers

and employees

make sense of the

workplace and also

applies to work in

groups of all kinds.

• Why do some people do well in organizational settings while others have difficulty?

• Do you know what a “typical” organization looks like?

• Does job satisfaction really make a difference?

• What people-related challenges have you noticed in the workplace?

• Why should you care about understanding other people?

• Are you ready to take on more responsibility at work?

OB IS FOR EVERYONE TH

E C

A N

A D

IA N

P RE

SS /Jo

na th

an H

ay w

ar d

4 Part 1 Understanding the Workplace

Defining Organizational Behaviour Organizational behaviour (often abbreviated as OB ) is a field of study that looks at the impact that individuals, groups, and structure have on behaviour within organiza- tions for the purpose of applying such knowledge toward improving an organization’s effectiveness. Because the organizations studied are often business organizations, OB is often applied to topics such as jobs, work, absenteeism, employment turnover, productivity, human performance, and management. OB also examines the following core topics, although debate exists about their relative importance: 2

• Motivation

• Leader behaviour and power

• Interpersonal communication

• Group structure and processes

• Attitude development and perception

• Change processes

• Conflict and negotiation

Much of OB is relevant beyond the workplace. The study of OB can cast light on the interactions among family members, students working as a team on a class project, the voluntary group that comes together to do something about reviving the downtown area, the parents who sit on the board of their children’s daycare centre, or even the members of a lunchtime pickup basketball team.

What Do We Mean by Organization ? An organization is a consciously coordinated social unit, composed of a group of people, that functions on a relatively continuous basis to achieve a common goal or set of goals. Manufacturing and service firms are organizations, and so are schools, hospitals, churches, military units, retail stores, police departments, volunteer organiza- tions, start-ups, and local, provincial, and federal government agencies. Thus, when we use the term organization in this book , we are referring not only to large manufacturing firms but also to small mom-and-pop stores, as well as to the variety of other forms of organization that exist. Small businesses with less than 100 people made up 98 percent of the employers in Canada in 2012, and they employed 69.7 percent of the private sector workforce. Only 14 percent of businesses have more than 500 employees, and they employ 46 percent of the workforce. Most of these large organizations are in the public sector. 3

The examples in this book present various organizations so that you can gain a better understanding of the many types of organizations that exist. Although you might not have considered this before, the college or university you attend is every bit as much a “real” organization as is Lululemon Athletica, Air Canada, or the Vancouver Canucks. A small for-profit organization that hires unskilled workers to renovate and build in the inner city of Winnipeg is as much a real organization as is London, Ontario-based EllisDon, one of North America’s largest construction companies. Therefore, the theories we cover should be considered in light of the variety of orga- nizations you may encounter. We try to point out instances where the theory may be less applicable (or especially

1 Define organizational behaviour (OB).

organizational behaviour A field of study that investigates the impact of individuals, groups, and structure on behaviour within organizations; its purpose is to apply such knowledge toward improving an organization’s effectiveness.

organization A consciously coordinated social unit, composed of a group of people, that functions on a relatively continuous basis to achieve a common goal or set of goals.

Why do some people do well

in organizational settings while

others have diffi culty?

Do you know what a “typical”

organization looks like?

Chapter 1 What Is Organizational Behaviour? 5

applicable) to a particular type of organization. For the most part, however, you should expect that the discussions in this book apply across the broad spectrum of organiza- tions. Throughout, we highlight applications to a variety of organizations in our feature OB in the Workplace .

OB Is for Everyone It might seem natural to think that the study of OB is for leaders and managers of organizations. However, many organizations also have informal leadership opportu- nities. In organizations in which employees are asked to share in a greater number of decision-making processes rather than simply follow orders, the roles of managers and employees are becoming blurred. 4 For instance, employees in some retail operations are asked to make decisions about when to accept returned items rather than defer the decision to the manager.

OB is not just for managers and employees. Entrepreneurs and self-employed indi- viduals may not act as managers, but they certainly interact with other individuals and organizations as part of their work. OB applies equally well to all situations in which you interact with others: on the basketball court, at the grocery store, in school, or in church. In fact, OB is relevant anywhere that people come together and share experiences, work on goals, or meet to solve problems. To help you understand these broader connections, you will find a feature called OB in the Street throughout the book .

The Importance of Interpersonal Skills Until the late 1980s, business school curricula emphasized the technical aspects of management, focusing on economics, accounting, finance, and quantitative techniques.

2 Demonstrate the impor- tance of interpersonal skills in the workplace.

David and Penny Chapman understand the importance of organizational behaviour and treating employ- ees well. When Markdale, Ontario-based Chapman’s Ice Cream factory burned down in September 2009, many employees feared that they had lost their jobs. However, the owners quickly put together plans with senior managers on rebuilding the factory and keeping ice cream production going by working with other nearby ice cream producers. Not one employee lost a paycheque, although many had to be bussed to jobs at other locations or put up in hotels.

Ia n

W ill

m s/

G et

St oc

k. co

m

6 Part 1 Understanding the Workplace

Course work in human behaviour and people skills received minimal attention. Over the past three decades, however, business school faculty have come to realize the signifi- cant role that understanding human behaviour plays in determining organizational effectiveness; required courses on people skills have been added to many curricula. Employers are looking for people skills as well. In a 2012 survey, executives said that employees lack “communication, collaboration, critical thinking and creative skills.” 5 In a recent survey, 34 percent of Canadian chief financial officers said that a job applicant’s people skills were more important than industry experience and software proficiency. Five years earlier, only 1 percent cared about interpersonal skills. 6

Organizations that invest in the development of employees’ interpersonal skills are more likely to attract and keep high-performers. Regardless of labour market conditions, outstanding employees are always in short supply. 7 Companies known as great places to work in 2014—such as Toronto-based Royal Bank of Canada (RBC), Woodstock, New Brunswick-based Xplornet Communications, Dartmouth-based Jazz Aviation, Winnipeg-based Aboriginal Peoples Television Network, Regina-based SaskTel, Calgary-based Agrium, and Vancouver-based Mountain Equipment Co-op 8 —have been found to generate superior financial performance. 9 A recent survey of hundreds of workplaces, and more than 200 000 respondents, showed that the social relationships among co-workers and supervisors were strongly related to overall job satisfaction. Positive social relationships also were associated with lower stress at work and lower intentions to quit. 10 Having managers with good interpersonal skills is likely to make the workplace more pleasant, and research indicates that employees who know how to relate to their managers well with supportive dialogue and proactivity find that their ideas are endorsed more often, further improving workplace satisfaction. 11 Creating a pleasant workplace appears to make good economic sense, particularly because wages and benefits are not the main reasons people like their jobs or stay with an employer. 12 Partially for these reasons, universities have begun to incorporate social entrepreneur- ship education into their curricula in order to train future leaders to address social issues within their organizations with interpersonal skills. 13 This is especially important because there is a growing awareness of the need for understanding the means and outcomes of corporate social responsibility. 14

Succeeding in the workplace takes good people skills. This book has been written to help managers and employees develop those people skills. To learn more about the kinds of people skills needed in the workplace, see the Experiential Exercise on page 29 and From Concepts to Skills—Developing Interpersonal Skills on pages 32–35 .

OB: Making Sense of Behaviour in Organizations When Lululemon Athletica faced the sheer yoga pants issue, company CEO Christine Day said

that it was an isolated issue, thus making light of customer complaints. 15 The supplier was

then blamed, although the supplier responded by saying that the product had been made to

specification and that the problem was “a gap between Lululemon’s expectations and reaction

from the market.”

Founder Chip Wilson offered another explanation: Women were buying the wrong size yoga

pants, and this was causing them to stretch out. Eventually the company decided to pull the

product off its shelves and offered refunds to those who had bought the defective product, but

not before creating much customer dissatisfaction with the company.

About six months later, customers again started complaining about some of the yoga pants,

noting that they were pilling. Wilson, in an interview with Bloomberg News, blamed it on women’s

Does job satisfac- tion really make a

difference?

Watch on MyManagementLab

2012 Gavina Gourmet Coffee: Organizational Behaviour

Chapter 1 What Is Organizational Behaviour? 7

thighs, not the pants themselves. “It’s really about the rubbing through the thighs, how much

pressure is there. I mean over a period of time, and how much they use it,” he said. What can

Lululemon learn from OB to do a better job of managing customer satisfaction and engaging

in better communication?

In this next section, we consider the discipline of OB, looking first at the fields of study that have contributed to it. We then discuss the fact that OB is a scientific discipline based on careful research that is conducted to test and evaluate theories.

The Building Blocks of OB OB emerged as a distinct field in the 1940s in the United States. 16 It is an applied behavioural science that builds upon contributions from a number of behavioural disci- plines: mainly psychology, social psychology, sociology, and anthropology. Psychology’s contributions have been primarily at the individual, or micro, level of analysis, while the other three disciplines have contributed to our understanding of macro concepts, such as group processes and organization. Exhibit 1-1 presents an overview of the major contributions of behavioural science to the study of OB.

3 Identify the major behav- ioural science disciplines that contribute to OB.

EXHIBIT 1-1 Toward an OB Discipline

Behavioural science

OutputUnit of analysis

Contribution

Learning Motivation Personality Emotions Perception Training Leadership effectiveness Job satisfaction Individual decision making Performance appraisal Attitude measurement Employee selection Work design Work stress

Behavioural change Attitude change Communication Group processes Group decision making

Formal organization theory Organizational technology Organizational change Organizational culture

Comparative values Comparative attitudes Cross-cultural analysis

Organizational culture Organizational environment Power

Communication Power Conflict Intergroup behaviour

Study of organizational

behaviour

Organization system

Individual

Group

Sociology

Social psychology

Anthropology

Psychology

8 Part 1 Understanding the Workplace

Psychology Psychology seeks to measure, explain, and sometimes change the behaviour of humans and other animals. Those who have contributed and continue to add to the knowledge of OB are learning theorists, personality theorists, counselling psychologists, and, most important, industrial and organizational psychologists.

Early industrial and organizational psychologists studied the problems of fatigue, boredom, and other working conditions that could impede efficient work performance. More recently, their contributions have been expanded to include learning, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, individual decision making, performance appraisal, attitude measure- ment, employee selection techniques, work design, and work stress.

Social Psychology Social psychology, generally considered a branch of psychology, blends concepts from both psychology and sociology to focus on people’s influence on one another. One major study area is behavioural change —how to implement it and how to reduce barriers to its acceptance. Social psychologists also contribute to measuring, understanding, and changing attitudes; identifying communication patterns; and building trust. Finally, they have made important contributions to our study of communication, intergroup behaviour, power, and conflict.

Sociology While psychology focuses on the individual, sociology studies people in relation to their social environment or culture. Sociologists have contributed to OB through their study of group behaviour in organizations, particularly formal and complex organizations. Perhaps most important, sociologists have studied organizational culture and change, formal organizational theory and structure, organizational technology, communication, power, and conflict.

Anthropology Anthropology is the study of societies to learn about human beings and their activi- ties. Anthropologists’ work on cultures and environments has helped us understand differences in fundamental values, attitudes, and behaviour between people in different countries and within different organizations. Much of our current understanding of organizational culture, organizational environments, and differences among national cultures is the result of the work of anthropologists or those using their methodologies.

The Rigour of OB Whether you want to respond to the challenges of the Canadian workplace, manage well, or guarantee satisfying and rewarding employment for yourself, it pays to under- stand organizational behaviour. OB provides a systematic approach to the study of behaviour in organizations. Underlying this systematic approach is the belief that behaviour is not random. It stems from and is directed toward some end that the individual believes, rightly or wrongly, is in his or her best interest. OB is even being adopted by other disciplines, as OB in the Street shows.

Is OB Just for the Workplace?

Can finance learn anything from OB? It may surprise you to learn that, increasingly, other business disciplines are employing OB concepts. 17 Marketing has the closest overlap with OB. Trying to predict consumer behaviour is not that different from trying

OB IN THE STREET

Chapter 1 What Is Organizational Behaviour? 9

OB Looks at Consistencies Certainly there are differences among individuals. Placed in similar situations, all people don’t act exactly alike. However, there are certain fundamental consistencies underlying the behaviour of most individuals that can be identified and then modified to reflect individual differences.

These fundamental consistencies are very important because they allow predict- ability. When you get into your car, you make some definite and usually highly accurate predictions about how other people will behave. In North America, for instance, you predict that other drivers will stop at stop signs and red lights, drive on the right side of the road, pass on your left, and not cross the solid double line on mountain roads. Your predictions about the behaviour of people behind the wheels of their cars are almost always correct. Obviously, the rules of driving make predictions about driving behaviour fairly easy.

What may be less obvious is that rules (written and unwritten) exist in almost every setting. Therefore, it can be argued that it’s possible to predict behaviour (undoubtedly, not always with 100 percent accuracy) in supermarkets, classrooms, doctors’ offices, elevators, and in most structured situations. For instance, do you turn around and face the doors when you get into an elevator? Almost everyone does. Is there a sign inside the elevator that tells you to do this? Probably not! Just as we make predictions about drivers, where there are definite rules of the road, we can make predictions about the behaviour of people in elevators, where there are few written rules. This example supports a major point of this book : Behaviour is generally predictable, and the system- atic study of behaviour is a means to making reasonably accurate predictions.

OB Looks Beyond Common Sense Each of us is a student of behaviour. Whether or not you have explicitly thought about it before, you have been “reading” people almost all your life, watching their actions and trying to interpret what you see and predict what people might do under different

4 Understand the value of systematic study to OB.

to predict employee behaviour. Both require an understanding of the dynamics and underlying causes of human behaviour, and there is a lot of correspondence between the disciplines.

What is perhaps more surprising is the degree to which the so-called hard disciplines are making use of soft OB concepts. Behavioural finance, behavioural accounting, and behavioural economics (also called economic psychology ) all have grown in importance and interest in the past several years.

On reflection, the use of OB by these disciplines should not be so surprising. Your common sense will tell you that humans are not perfectly rational creatures, and in many cases, our actions don’t conform to a rational model of behaviour. Although some elements of irrationality are incorporated into economic thought, finance, accounting, and economics, researchers find it increasingly useful to draw from OB concepts.

For example, investors have a tendency to place more weight on private informa- tion (information that only they, or a limited group of people, know) than on public information, even when there is reason to believe that the public information is more accurate. To understand this phenomenon, finance researchers use OB concepts. In addition, behavioural accounting research might study how feedback influences audi- tors’ behaviour, or the functional and dysfunctional implications of earnings warnings on investor behaviour.

The point is that while you take separate courses in various business disciplines, the lines between them are increasingly being blurred as researchers draw from common disciplines to explain behaviour. We think that this is a good thing because it more accurately matches the way managers actually work, think, and behave.

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Herman Miller

10 Part 1 Understanding the Workplace

conditions. Unfortunately, the casual or common sense approach to reading others can often lead to erroneous predictions. However, you can improve your predictive ability by supplementing intuition with a more systematic approach.

The systematic approach used in this book uncovers important facts and relation- ships and provides a base from which to make more accurate predictions of behaviour. Underlying this systematic approach is the belief that behaviour is not random. Rather, we can identify certain fundamental consistencies underlying the behaviour of all indi- viduals and modify them to reflect individual differences.

These fundamental consistencies are very important. Why? Because they allow predictability. Behaviour is generally predictable, and the systematic study of behaviour is a means to making reasonably accurate predictions. When we use the phrase system- atic study , we mean looking at relationships, attempting to attribute causes and effects, and basing our conclusions on scientific evidence—that is, on data gathered under controlled conditions and measured and interpreted in a reasonably rigorous manner. Exhibit 1-2 illustrates the common methods researchers use to study topics in OB.

Evidence-based management (EBM) complements systematic study by basing managerial decisions on the best available scientific evidence. We would want doctors to make decisions about patient care based on the latest available evidence, and EBM argues that managers should do the same, becoming more scientific in how they think about management problems. For example, a manager might pose a managerial ques- tion, search for the best available evidence, and apply the relevant information to the question or case at hand. You might think it’s difficult to argue against this (what manager would say that decisions should not be based on evidence?), but the vast majority of management decisions are still made “on the fly,” with little or no system- atic study of available evidence. 18

systematic study Looking at relationships, attempting to attribute causes and effects, and drawing con- clusions based on scientific evidence.

evidence-based management (EBM) Basing managerial deci- sions on the best available scientific evidence.

EXHIBIT 1-2 Research Methods in OB

Research Methods

in OB

Field Studies

Surveys

Laboratory Studies

Case Studies

Meta-analyses

• Data collected on-site • Investigation generally involves observation of individuals and groups

• Data collected in laboratory settings • Sometimes difficult to generalize the findings to everyday settings

• Data collected by combining and analyzing the findings of multiple studies • Method permits stronger conclusions about hypothesis

• Data collected through questions • Surveys usually conducted by phone, email, interview, or online

• Data collected through an in-depth investigation of an individual or a group over time • Methods used include direct observation, interviews, and document research

Chapter 1 What Is Organizational Behaviour? 11

Systematic study and EBM add to intuition , or those “gut feelings” about what makes others (and ourselves) “tick.” Of course, the things you have come to believe in an unsystematic way are not necessarily incorrect. Jack Welch (former CEO of GE) noted, “The trick, of course, is to know when to go with your gut.” 19 If we make all decisions with intuition or gut instinct, we are likely working with incomplete infor- mation—imagine making an investment decision with only half the data about the potential for risk and reward.

Relying on intuition is made worse because we tend to overestimate the accuracy of what we think we know. Surveys of human resources managers have also shown that many managers hold “common sense” opinions regarding effective management that have been flatly refuted by empirical evidence.

We find a similar problem in looking to the business and popular media for management wisdom. The business press tends to be dominated by fads. As a writer for the New Yorker put it, “Every few years, new companies succeed, and they are scrutinized for the underlying truths they might reveal. But often there is no under- lying truth; the companies just happened to be in the right place at the right time.” 20 Although we try to avoid it, we might also fall into this trap. It’s not that the business press stories are all wrong; it’s that without a systematic approach, it’s hard to know the truth.

Big Data It is good news for the future of business that researchers, the media, and company leaders have identified the potential of data-driven management and decision making. While “big data”—the extensive use of statistical compilation and analysis— has been applied to many areas of business, increasingly it is applied to making effective decisions (which we cover in Chapter 12 ) and managing human resources. Online retailers may have been the first to notice and act upon information on customer pref- erences that was newly available through Internet shopping, information far superior to data gathered in simple store transactions. This information enabled online retailers to create more targeted marketing strategies than ever before.

The bookselling industry is a case in point: Before online selling, brick-and-mortar bookstores could collect data about book sales only to make their projections about consumer interests and trends. With the advent of Amazon, suddenly a vast array of information about consumer preferences became available for tracking: what customers bought, what they looked at, how they navigated the site, and what they were influenced by (such as promotions, reviews, and page presentation). The challenge for Amazon then was to identify which statistics were persistent , giving relatively constant outcomes over time, and predictive , showing steady causality between certain inputs and outcomes. The company used these statistics to develop algorithms that let it forecast which books customers might like to read next. Amazon then could base its wholesale purchase decisions on the feedback customers provided, both through these passive methods and through solicited recommendations for upcoming titles, by which Amazon could continuously perfect its algorithms.

The success of Amazon has revolutionized bookselling—and even retail industries— and has served as a model for innovative online retailers. It also illustrates what big data can do for other businesses that can capitalize on the wealth of data available through virtually any Internet connection, from Facebook posts to sensor readings to GPS signals from cellphones. Savvy businesses use big data to manage people as well as technology. A 2012 study of 330 companies found that data-driven companies were 5 percent more productive and 6 percent more profitable than their competitors. These may seem like small percentage gains, but they represent a big impact on economic strength and measurable increases in stock market evaluations for these companies, which are in the top third of their industries. 21 Another study of 8000 firms in 20 countries confirms that constant measuring against targets for productivity and other criteria is a hallmark of well-run companies. 22

intuition A gut feeling not necessar- ily supported by research.

12 Part 1 Understanding the Workplace

The use of big data for managerial practices is a relatively new area but one that holds promise. In dealing with people, leaders often rely on hunches and estimate the influence of information that they have heard most recently, that has been frequently repeated, or that is of personal relevance. Obviously, this information is not always the best because all managers (all people) have natural biases. Managers who use data to define objectives, develop theories of causality, and test those theories can determine which employee activities are most relevant to their business objectives. 23

We are not advising that you throw your intuition, or all the business press, out the window. Nor are we arguing that research is always right. Researchers make mistakes, too. What we are advising is to use evidence as much as possible to inform your intu- ition and experience. That is the promise of OB.

Throughout this book, the Focus on Research feature will highlight some of the careful studies that form the building blocks of OB. We have also marked major research find- ings in every chapter with an icon (shown in the margin) so that you can easily see what the research says about various concepts we cover.

If understanding behaviour were simply common sense, we would not observe many of the problems that occur in the workplace, because managers and employees would know how to behave. Unfortunately, as you will see from examples throughout this book, many employees and managers exhibit less than desirable behaviour in the workplace. With a stronger grounding in OB, you might be able to avoid some of these mistakes.

OB Has Few Absolutes Laws in the physical sciences—chemistry, astronomy, physics—are consistent and apply in a wide range of situations. They allow scientists to generalize about the pull of gravity or to confidently send astronauts into space to repair satellites. But as one noted behavioural researcher aptly concluded, “God gave all the easy problems to the physicists.”

Social scientists study human problems—and human beings are complex. Because people are not all alike, our ability to make simple, accurate, and sweeping generaliza- tions is limited. Two people often act very differently in the same situation, and the same person’s behaviour changes in different situations. Not everyone is motivated by money, and people may behave differently at a religious service than they do at a party.

OB Takes a Contingency Approach Just because people can behave differently at different times does not mean, of course, that we cannot offer reasonably accurate explanations of human behaviour or make valid predictions. It does mean, however, that OB must consider behaviour within the context in which it occurs—a strategy known as a contingency approach . In other words, OB’s answers depend upon the situation. For example, OB scholars would avoid stating that everyone likes complex and challenging work (the general concept). Why? Because not everyone wants a challenging job. A job that is appealing to one person may not be to another, so the appeal of the job is contingent on the person who holds it. OB theories mirror the subject matter with which they deal. People are complex and complicated, and so too must be the theories developed to explain their actions.

Consistent with the contingency approach, Point/Counterpoint debates are provided in each chapter. These debates are included to highlight the fact that within OB there are disagreements. Through the Point/Counterpoint format, you will gain the opportunity to explore different points of view, discover how diverse perspectives complement and oppose each other, and gain insight into some of the debates currently taking place within the OB field. Point/Counterpoint on page 28 debates the quality of evidence offered by popular books and academic research studies on organizational behaviour.

5 Demonstrate why few absolutes apply to OB.

FOCUS ON RESEARCH

contingency approach An approach taken by OB that considers behaviour within the context in which it occurs.

Chapter 1 What Is Organizational Behaviour? 13

Challenges and Opportunities in the Canadian Workplace

Lululemon’s approach to developing its employees is to encourage them to work on them-

selves first. 24 “What we try to do is work on the self first. You’ll see that with personal

responsibility, with the opportunity to attend (personal development workshops at) Landmark

as a choice, with setting a vision for all aspects of our life. That’s actually the core of it,”

explained Margaret Wheeler, senior vice-president of Human Resources.

All employees are expected to develop their “vision-and-goals” and to pay attention to their

vision and goals daily. The goals have specified timelines, and employees are expected to review

their goals twice a year. They are posted on cubicle walls and are meant to be discussed with

other employees, including management. Managers and other employees help each person

be accountable to their goals.

Some new employees face culture shock because of these expectations. For some

employees, “to bring your whole self [to the organization], that just feels weird,” goals coach

Chloe Gow-Jarrett said.

Lululemon is committed to being a good employer, with enthusiastic, goal-oriented

employees. Will “vision-and-goals” be enough? What factors affect good teamwork? How can

Lululemon managers motivate employees to perform well in their jobs?

Understanding OB has never been more important for managers. Take a quick look at the dramatic changes in organizations. The typical employee is getting older; more women and members of visible minorities are in the workplace; corporate downsizing and the heavy use of temporary workers are severing the bonds of loyalty that tied many employees to their employers; and global competition requires employees to become more flexible and cope with rapid change. The global recession has brought to the forefront the challenges of working with and managing people during uncertain times, as Case Incident—Era of the Disposable Worker? on page 31 shows.

As a result of these changes and others (for example, the rising use of technology), new employment options have emerged. Exhibit 1-3 details some of the types of options individuals may find offered to them by organizations or for which they would like to negotiate. Under each heading in the exhibit, you will find a grouping of options from which to choose—or combine. For instance, at one point in your career you may find yourself employed full-time in an office in a localized, non-union setting with a salary and bonus compensation package, while at another point you may wish to negotiate for a flextime, virtual posi- tion and choose to work from overseas for a combination of salary and extra paid time off.

In short, today’s challenges bring opportunities for managers to use OB concepts. In this section, we review some of the most critical issues confronting managers for which OB offers solutions—or at least meaningful insights toward solutions.

Responding to Economic Pressures When the US economy plunged into a deep and prolonged recession in 2008, virtually all other large economies around the world followed suit. Canada fared much better than the United States, but still faced widespread layoffs and job losses, and those who survived the axe were often asked to accept pay cuts. When times are bad, managers are on the front lines with employees who must be fired, who are asked to make do with less, and who worry about their futures. The difference between good and bad management can be the difference between profit and loss or, ultimately, between survival and failure.

6 Identify workplace challenges that provide opportunities to apply OB concepts.

What people- related chal-

lenges have you noticed in the

workplace?

Simulate on MyManagementLab

What Is Management?

14 Part 1 Understanding the Workplace

EXHIBIT 1-3 Employment Options

Employed

Underemployed/ underutilized

Re-employed

Unemployed/jobless

Entrepreneur

Retired

Furloughed

Laid off

Categories of Employment

Job seeking

Places of Employment

Anchored (office/cubicle)

Floating (shared space)

Virtual

Flexible

Work from home

Compensation for Employment

Salary

Hourly

Overtime

Bonus

Contract

Time off

Benefits

Conditions of Employment

Local

Expatriate

Flexpatriate

International business traveller

Visa employee

Short-term assignee

Union/non-union employee

Types of Employment

Job share

Contingent

Independent contractor

Temporary

Intern

Full-time

Part-time

Flextime

Reduced hours

(Continued)

Employed: an individual working for a for-profit or nonprofit company, organization, or for another individual, either for money and/or benefits, with established expectations for performance and compensation

Underemployed/underutilized: an individual working in a position or with responsibilities that are below his or her level of education or experience, or an employee working less than full-time who wants full-time employment

Re-employed: an individual who was either dismissed by a company and rehired by the same company or who left the workforce (was unemployed) and found new employment

Unemployed/jobless: an individual who is currently not working; may be job seeking, either with or without government benefits/assistance, either with or without severance pay from the previous job, either new to the workforce or terminated from previous employment, either short-term unem- ployed (months) or long-term/chronic unemployed (years)

Entrepreneur: an individual who runs his or her own business, either as a sole worker or as the founder of a company with employees

Retired: an individual who has ended his or her career in a profession, either voluntarily by choice or involuntarily by an employer’s mandate

Job seeking: an individual who is unemployed but actively looking for a job; either with or without government benefits from the previous job or from disability/need, either with or without severance pay from previous job, or either new to the workforce or terminated from previous employment

Furloughed: similar to a layoff; an employer-required work stoppage, temporary (weeks up to a month, usually); pay is often suspended during this time, although the individual retains employment status with the company

Laid off: sometimes a temporary employer-required work stoppage (usually without pay), but more often a permanent termination from the company in which the employee is recognized to be not at fault

Full-time: hours for full-time employment established by companies, generally more than 30 hours per week in a set schedule, sometimes with salary pay and sometimes with hourly pay, often with a benefits package greater than that for the part-time employment category

Part-time: hours for part-time employment established by companies, generally less than 30 hours per week in a set schedule, often with hourly pay, often with a benefits package less than that for the full-time employment category

Flextime: an arrangement where the employee and employer create nonstandard working hours, which may be a temporary or permanent schedule; may be an expectation for a number of hours worked per week

Job share: an arrangement where two or more employees fill one job, generally by splitting the hours of a full-time position that do not overlap

Contingent: an outsourced employee (e.g., individual from a professional service firm, specialized expert, or business consultant) who is paid hourly or by the job and does not generally receive any company benefits and is not considered as part of the company; a contingent worker may also be a temporary employee or independent contractor

Independent contractor: an entrepreneur in essence, but often a specialist professional who does not aspire to create a business but who provides services or goods to a company

Temporary: an individual who may be employed directly by the organization or through an employment agency/temporary agency; hours may be fixed per week or vary, the employee does not generally receive any company benefits and is not considered as part of the company; a temporary employee is employed for a short duration or as a trial for a position

Chapter 1 What Is Organizational Behaviour? 15

Managing employees well when times are tough is just as hard as when times are good—if not harder. But the OB approaches sometimes differ. In good times, under- standing how to reward, satisfy, and retain employees is at a premium. In bad times, issues such as stress, decision making, and coping come to the fore.

Responding to Globalization Organizations are no longer constrained by national borders. Burger King is in the process of buying Tim Hortons and moving to Canada. McDonald’s sells hamburgers in more than 100 countries on six continents. New employees at Finland-based cellphone maker Nokia are increasingly being recruited from India, China, and other developing countries—non-Finns now outnumber Finns at the company’s renowned research centre in Helsinki. And all major automobile makers now manufacture cars outside their borders; Honda builds cars in Alliston, Ontario, Ford in Brazil, Volkswagen in Mexico,

Reduced hours: a reduction in the normal employee’s work schedule by the employer, sometimes as a measure to retain employees/reduce layoffs in economic downturns (as in Germany’s Kurzarbeit program, which provides government subsidies to keep workers on the job at reduced hours); employees are only paid for the time they work

Intern: an individual employed for a short (often fixed) term; the position is designed to provide practical training to a preprofessional, either with or without pay

Anchored: an employee with an assigned office, cubicle, or desk space

Floating: an employee with a shared-space workplace and no assigned working area

Virtual: an employee who works through the Internet and is not connected with any office location

Flexible: an employee who is connected with an office location but may work from anywhere

Work from home: an employee who is set up by the company to work from an office at home

Local: an employee who works in one established location

Expatriate: an employee who is on extended international work assignments with the expectation that he or she will return (repatriate) after an estab- lished term, usually a year or more; either sent by corporate request or out of self-initiated interest

Short-term assignee: an employee on international assignment longer than business trips yet shorter than typical corporate expatriate assignments, usually 3 to 12 months

Flexpatriate: an employee who travels for brief assignments across cultural or national borders, usually for 1 to 2 months

International business traveller: an employee who takes multiple short international business trips for 1 to 3 weeks

Visa employee: an employee working outside of his or her country of residence who must have a work visa for employment in the current country

Union/non-union employee: an employee who is a member of a labour union, often by trade, and subject to its protections and provisions, which then negotiates with management on certain working condition issues; or an employee who works for a non-union facility or who sometimes elects to stay out of membership in a unionized facility

Salary: employee compensation based on a full-time workweek, where the hours are generally not kept on a time clock but where it is understood that the employee will work according to job needs

Hourly: employee compensation for each hour worked, often recorded on time sheets or by time clocks

Overtime: for hourly employees, compensation for hours worked that are greater than the standard workweek and paid at an hourly rate determined by law

Bonus: compensation in addition to standard pay, usually linked to individual or organizational performance

Contract: prenegotiated compensation for project work, usually according to a schedule as the work progresses

Time off: negotiated time off (either paid or unpaid according to the employment contract) including vacation time, sick leave, personal days, and/or time allotted by management as compensation for time worked

Benefits: advantages other than salary typically stated in the employment contract or the human resources employee handbook; they may include health insurance plans, savings plans, retirement plans, discounts, and other options available to employees at various types of employment

Sources : J. R. Anderson, “Action Items: 42 Trends Affecting Benefits, Compensation, Training, Staffing and Technology,” HR Magazine , January 2013, p. 33 ; M. Dewhurst, B. Hancock, and D. Ellsworth, “Redesigning Knowledge Work,” Harvard Business Review , January–February 2013, pp. 58 – 64 ; E. Frauenheim, “Creating a New Contingent Culture,” Workforce Management , August 2012, pp. 34 – 39 ; N. Koeppen, “State Job Aid Takes Pressure off Germany,” Wall Street Journal , February 1, 2013, p. A8; and M. A. Shaffer, M. L. Kraimer, Y.-P. Chen, and M. C. Bolino, “Choices, Challenges, and Career Consequences of Global Work Experiences: A Review and Future Agenda,” Journal of Management, July 2012, pp. 1282 – 1327 .

16 Part 1 Understanding the Workplace

and both Mercedes and BMW in South Africa. Apple has also moved almost all of its manufacturing overseas, as discussed in Case Incident—Apple Goes Global on page 30 .

In recent years, businesses in Canada have faced tough competition from those in the United States, Europe, Japan, and China, as well as from other businesses within our borders. To survive, they have had to reduce costs, increase productivity, and improve quality. A number of Canadian companies have found it necessary to merge in order to survive. For instance, Rona, the Boucherville, Quebec-based home improvement store, bought out Lansing, Revy, and Revelstoke in recent years to defend its turf against the Atlanta, Georgia-based Home Depot. As a result, in 2014, after some ups and downs, Rona was still holding its own against chief rivals Home Depot and recent entrant Lowes. 25

Some employers have outsourced jobs to other countries where labour costs are lower to remain profitable. For instance, Toronto-based Dell Canada’s technical service lines are handled by technicians working in India. Toronto-based Wall & Associates, a full-service chartered accounting and management consulting firm, outsources docu- ment management to Uganda. Employees in Uganda are willing to work for $1 an hour to sort and record receipts. While these wages might seem low, on average, Ugandans make only $1 a day.

Twenty or 30 years ago, national borders protected most firms from foreign competi- tive pressures. This is no longer the case. Trading blocs such as the North American Free Trade Agreement (NAFTA) and the European Union (EU) have significantly reduced tariffs and barriers to trade, and North America and Europe no longer have a monopoly on highly skilled labour. The Internet has also enabled companies to become more globally connected by opening up international sales and by increasing the opportuni- ties to carry on business across borders. Even small firms can bid on projects in different countries and compete with larger firms via the Internet.

As multinational corporations develop operations worldwide, as companies develop joint ventures with foreign partners, and as employees increasingly pursue job oppor- tunities across national borders, managers and employees must become capable of working with people from different cultures. To be successful, managers and employees need to know the cultural practices of the workforce in each country where they do business. For instance, in some countries a large percentage of the workforce enjoys long holidays. Country and local regulations must be taken into consideration, too. Managers of subsidiaries abroad need to be aware of the unique financial and legal regulations applying to “guest companies” or else risk violating them, which can have economic and even political consequences. Such violations can have implications for their operations in that country and also for political relations between countries. As well, managers need to be cognizant of differences in regulations for their competi- tors in that country; many times, the laws will give national companies significant financial advantages over foreign subsidiaries. The ever-changing global competitive environment means that not only individuals but also organizations have to become increasingly flexible by learning new skills, new ways of thinking, and new ways of doing business.

Understanding Workforce Diversity An important challenge for organizations is workforce diversity , a concept that recog- nizes the heterogeneous nature of employees in the workplace. Whereas globalization focuses on differences among people from different countries, workforce diversity addresses differences among people within given countries. Workforce diversity acknowledges that the workforce consists of women and men; many racial and ethnic groups; individuals with a variety of physical or psychological abilities; and people who differ in age, sexual orientation, and demographic characteristics. We discuss workforce diversity in Chapter 3 .

workforce diversity The mix of people in organizations in terms of gender, race, ethnicity, disability, sex- ual orientation, age, and demographic characteristics such as education and socio-economic status.

Chapter 1 What Is Organizational Behaviour? 17

One workforce diversity challenge in Canadian work- places is the mix of generations—members of the Baby Boomer, Generation X, and Millennial groups—who work side by side. Due to their very different life experiences, they bring different values and different expectations to the workplace.

We used to assume that people in organizations who differed from the stereotypical employee would somehow simply fit in. We now recognize that employees don’t set aside their cultural values and lifestyle preferences when they go to work. The challenge for organizations, therefore, is to accommodate diverse groups of people by addressing their different lifestyles, family needs, and work styles. 27

The Focus on Diversity feature found throughout this book highlights diversity matters that arise in organizations. Our first example looks at Regina-based SaskTel, which values having a diverse workforce.

SaskTel Is a Top Diversity Employer

Does workforce diversity make business sense? Regina- based SaskTel was named one of Canada’s Best Diversity Employers in 2014 because of its commitment to diversity. 28

It has diversity programs for women, people with disabilities, visible minorities, and Aboriginal people. While the company

received this award for a number of reasons, its work with Aboriginal people is particularly outstanding. Aboriginal people are well represented in the SaskTel workplace: 10 percent of its employees and 8.1 percent of its managers are Aboriginal. Aboriginal people currently represent 15 percent of the Saskatchewan population, and that number is expected to grow to 21 to 24 percent in 20 years.

FOCUS ON DIVERSITY

Why should you care about

understanding other people?

Dallas, Texas-based Pizza Hut has responded to globalization by expanding its restaurants and delivery services worldwide. The company considers mainland China to be the primary market for new restaurant development because of the country’s enormous growth potential. Currently, Pizza Hut is the number one Western casual dining brand in China, with over 1200 restaurants in 305 cities and an additional 200 Pizza Hut Home Service units in 26 cities. 26

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18 Part 1 Understanding the Workplace

Improving Customer Service Today, the majority of employees in developed countries work in service jobs, including 78 percent in Canada. 29 Service employees include technical support representatives, fast-food counter workers, sales clerks, nurses, automobile repair technicians, consul- tants, financial planners, and flight attendants. The shared characteristic of their jobs is substantial interaction with an organization’s customers. OB can increase the success of these interactions by showing how employee attitudes and behaviour influence customer satisfaction.

Many an organization has failed because its employees failed to please customers. Management needs to create a customer-responsive culture. OB can provide consid- erable guidance in helping managers create such cultures—in which employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs, and willing to do what is necessary to please the customer. 30

Improving People Skills Throughout the chapters of this book, we will present relevant concepts and theories that can help you explain and predict the behaviour of people at work. You will also gain insights into specific people skills that you can use on the job. For instance, you will learn how to design motivating jobs, improve your listening skills, and create more effective teams.

Working in Networked Organizations Networked organizations allow people to communicate and work together even though they may be thousands of kilometres apart. Independent contractors can telecommute via computer to workplaces around the globe and change employers as the demand for their services changes. Software programmers, graphic designers, systems analysts, tech- nical writers, photo researchers, book and media editors, and medical transcribers are just a few examples of people who can work from home or other nonoffice locations.

The manager’s job is different in a networked organization. Motivating and leading people and making collaborative decisions online requires different techniques than when individuals are physically present in a single location. As more employees do their jobs by linking to others through networks, managers and employees must develop new skills. OB can provide valuable insights to help with honing those skills.

The number of Aboriginal employees at SaskTel speaks to the effectiveness of the company’s Aboriginal recruitment strategy, which was intended to increase the number of Aboriginal employees and address the chronic labour shortages of information and communications technologies workers it faced. SaskTel partners with First Nations bands, tribal councils, and Aboriginal employment agencies.

SaskTel also keeps a database of Aboriginal-owned and operated businesses, which it consults when it is looking for new suppliers and partners.

SaskTel is not just a good employer. It also tries to be a good community member. Several years ago it started an initiative to bring Internet and wireless coverage to the 28 First Nations communities in Saskatchewan. “We have always believed in the importance of all Saskatchewan people benefitting from having access to the most powerful and extensive communications network available,” said Don McMorris, Minister Responsible for SaskTel. “With increased access to technology, residents of these communities will be able to take advantage of numerous educational and business opportunities that were not available to them before.”

SaskTel strives to have a workforce that is as diverse as its customers—a goal the company finds makes good sense not only for the community but also for the future of the company.

Richard Branson, CEO of Virgin Group, thinks that “the custom- er is only right sometimes” more accurately reflects how custom- ers should be treated. Instead, he believes that by recognizing the value of employees, who are the ambassadors of the organi- zation, they will give great cus- tomer service.

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Chapter 1 What Is Organizational Behaviour? 19

Enhancing Employee Well-Being at Work Employees are increasingly complaining that the line between work and nonwork time has become blurred, creating personal conflicts and stress. 31 At the same time, however, today’s workplace presents opportunities for workers to create and structure their own roles. And even if employees work at home or from half a continent away, managers need to consider their well-being at work.

One of the biggest challenges to maintaining employee well-being is the new reality that many workers never get away from the virtual workplace. Communication tech- nology allows employees to do their work at home, in their cars, or on the ski slopes at Whistler—but it also means many feel like they never really get a break. Another chal- lenge is that organizations are asking employees to be available in off-work hours via cellphones and email. According to a recent study, one in four employees show signs of burnout, partially as a result of longer work hours, and two in three report high stress levels and fatigue. 32 These findings may actually underestimate how common employee burnout is because many employees maintain “always on” access for their managers through email and texting. Finally, employee well-being is challenged by heavy outside commitments. Millions of single-parent households and employees with dependent parents have even more significant challenges in balancing work and family responsi- bilities, for instance.

As a result of their increased responsibilities in and out of the workplace, employees want more time off. Recent studies suggest that employees want jobs that give them flexibility in their work schedules so they can better manage work–life conflicts. 33 In fact, 56 percent of men and women in a recent study reported that work–life balance was their definition of career success, more than money, recognition, and autonomy. 34 Most college and university students say that attaining a balance between personal life and work is a primary career goal; they want “a life” as well as a job. Organizations that don’t help their people achieve work–life balance will find it increasingly difficult to attract and retain the most capable and motivated employees. As you will see in later chapters, the field of OB offers a number of suggestions for designing workplaces and jobs that can help employees deal with work–life conflicts. OB in the Workplace looks at how Habañero helps its employees manage work–life balance.

Habañero’s Employees Help Set Policies

What do empowered employees do? Steven Fitzgerald, president of Vancouver- based IT firm Habañero Consulting Group, believes in empowering his employees. 35 Employees share human resources duties by mentoring each other, encouraging career development, and making sure everyone understands their jobs.

Fitzgerald knows that an “all work and no play” ethic is not a good way to define the business. As a result, he gives his employees autonomy, telling them they will be “judged on the quality of their work—not the number of hours they put in.” Habañero allows telecommuting and flextime, and does not track sick days.

More recently, Fitzgerald’s employees noted that Habañero’s invoicing model, which was based on a target number of billable hours per month, contradicted the company’s commitment to work–life balance. The employees worked with manage- ment to develop a new model of project-based billing that was more consistent with a truly flexible workplace, while still maintaining profitability. Fitzgerald is pleased with how empowerment has worked for Habañero. He says that knowing what employees want and acting on that knowledge can help you “attract people who are engaged for the right reasons.”

OB IN THE WORKPLACE

20 Part 1 Understanding the Workplace

Creating a Positive Work Environment Although competitive pressures on most organizations are stronger than ever, some organizations are trying to realize a competitive advantage by encouraging a positive work environment. Sometimes they do this by creating pleasing physical environments with attractive modern workstations, workplace “perks” such as Google’s free lunches, or a shared commitment to environmental sustainability initiatives such as recycling. 36 But, more often, employees perceive a work environment as positive or negative in terms of their work experiences with other employees, rather than in the quality of its physical surroundings. For example, Jeff Immelt and Jim McNerney, both disciples of Jack Welch (former CEO of GE), have tried to maintain high performance expectations (a characteristic of GE’s culture) while also encouraging a positive work environment in their organizations (GE and Boeing, respectively). “In this time of turmoil and cyni- cism about business, you need to be passionate, positive leaders,” Immelt recently told his top managers. 37

A real growth area in OB research is positive organizational scholarship (also called positive organizational behaviour ), which studies how organizations develop human strengths, foster vitality and resilience, and unlock potential. Researchers in this area argue that too much of OB research and management practice has been targeted toward identifying what is wrong with organizations and their employees. In response, they try to study what is good about organizations. 38 Some key independent variables in posi- tive OB research are engagement, hope, optimism, and resilience in the face of strain.

Positive organizational scholars have studied a concept called “reflected best-self”— asking employees to think about situations in which they were at their “personal best” to understand how to exploit their strengths. The idea is that we all have things at which we are unusually good, yet too often we focus on addressing our limitations and too rarely think about how to exploit our strengths. 39

Although positive organizational scholarship does not deny the negative (such as critical feedback), it does challenge researchers to look at OB through a new lens and pushes organizations to think about how to use their employees’ strengths rather than dwell on their limitations.

Improving Ethical Behaviour In an organizational world characterized by cutbacks, expectations of increasing productivity, and tough competition, it’s not surprising that many employees feel pressured to cut corners, break rules, and engage in other forms of questionable prac- tices. Increasingly they face ethical dilemmas and ethical choices , in which they are required to identify right and wrong conduct. Should they “blow the whistle” if they uncover illegal activities taking place in their company? Do they follow orders with which they don’t personally agree? Should they give an inflated performance evaluation to an employee they like, knowing that such an evaluation could save that employee’s job? Do they allow themselves to “play politics” to advance their careers?

Ethics is the study of moral values or principles that guide our behaviour and inform us whether actions are right or wrong. Ethical principles help us “do the right thing,” such as not padding expense reports, or not phoning in sick to attend the opening of Avengers 2: Age of Ultron .

As we show in Chapter 11 , the study of ethics does not come with black and white answers. What constitutes good ethical behaviour has never been clearly defined, and, in recent years, the line differentiating right from wrong has blurred. Nonetheless, individuals who strive hard to create their own set of ethical values will more often do the right thing. Moreover, companies that promote a strong ethical mission encourage employees to behave with integrity, and provide strong ethical leadership that can influence employee decisions to behave ethically. 40 The Ethical Dilemma on page 29 asks you to consider whether it’s ever appropriate to lie about salary expectations. It

positive organizational scholar- ship An area of OB research that concerns how organizations develop human strength, foster vitality and resilience, and unlock potential.

ethical dilemmas and ethi- cal choices Situations in which individuals are required to define right and wrong conduct.

ethics The study of moral values or principles that guide our behaviour and inform us whether actions are right or wrong.

Chapter 1 What Is Organizational Behaviour? 21

also asks you whether you should consider the ethical reputation of a company before becoming one of its employees.

Throughout this book, you will find references to ethical and unethical behaviour. The Focus on Ethics feature will provide you with thought-provoking illustrations of how ethics is treated in various organizations.

Coming Attractions: Developing an OB Model We conclude this chapter by presenting a general model that defines the field of OB, stakes out its parameters, and identifies inputs, processes, and outcomes. The result will be “coming attractions” of the topics in the remainder of this book.

An Overview A model is an abstraction of reality, a simplified representation of some real-world phenomenon. Exhibit 1-4 presents the skeleton on which we will construct our OB model. It proposes three types of variables (inputs, processes, and outcomes) at three levels of analysis (individual, group, and organizational). The model proceeds from left to right, with inputs leading to processes and processes leading to outcomes. Notice that the model also shows that outcomes can influence inputs in the future.

Inputs Inputs are the variables like personality, group structure, and organizational culture that lead to processes. These variables set the stage for what will occur in an organization later. Many are determined in advance of the employment relationship. For example, individual diversity characteristics, personality, and values are shaped by a combination of an individual’s genetic inheritance and childhood environment. Group structure, roles, and team responsibilities are typically assigned immediately before or after a group is formed. Finally, organizational structure and culture are usually the result of years of development and change as the organization adapts to its environment and builds up customs and norms.

7 Describe the three levels of analysis in this book’s OB model.

model An abstraction of reality. A simplified representation of some real-world phenomenon.

input Variables that lead to processes.

EXHIBIT 1-4 A Basic OB Model

Processes

Individual Level • Emotions and moods • Motivation • Perception • Decision making

Group Level • Communication • Leadership • Power and politics • Conflict and negotiation

Organizational Level • Change practices

Outcomes

Individual Level • Attitudes and stress • Task performance • Citizenship behaviour • Withdrawal behaviour

Group Level • Group cohesion • Group functioning

Organizational Level • Productivity • Survival

Inputs

Individual Level • Diversity • Personality • Values

Group Level • Group structure • Group roles • Team responsibilities

Organizational Level • Structure • Culture

22 Part 1 Understanding the Workplace

Processes If inputs are like the nouns in organizational behaviour, processes are like the verbs. Processes are actions that individuals, groups, and organizations engage in as a result of inputs and that lead to certain outcomes. At the individual level, processes include emotions and moods, motivation, perception, and decision making. At the group level, they include communication, leadership, power and politics, and conflict and negotia- tion. Finally, at the organizational level, processes include change practices.

Outcomes Outcomes are the key variables that you want to explain or predict, and that are affected by some other variables. What are the primary outcomes in OB? Scholars have emphasized individual-level outcomes such as attitudes and stress, task performance, citizenship behaviour, and withdrawal behaviour. At the group level, cohesion and functioning are the dependent variables. Finally, at the organizational level, we look at overall profitability and survival. Because these outcomes will be covered in all the chapters, we will briefly discuss each here so you can understand what the “goal” of OB will be.

Attitudes and Stress Employee attitudes are the evaluations employees make, ranging from positive to negative, about objects, people, or events. For example, the statement, “I really think my job is great,” is a positive job attitude, and “My job is boring and tedious” is a negative job attitude. Stress is an unpleasant psychological process that occurs in response to environmental pressures.

Some people might think that influencing employee attitudes and stress is purely soft stuff and not the business of serious managers, but as we will show, attitudes often have behavioural consequences that directly relate to organizational effectiveness. The belief that satisfied employees are more productive than dissatisfied employees has been a basic tenet among managers for years, although only now has research begun to support it. Ample evidence shows that employees who are more satisfied and treated fairly are more willing to engage in the above-and-beyond citizenship behaviour so vital in the contemporary business environment. For more information on the causes and consequences of stress as well as coping mechanisms, see OB on the Edge—Stress at Work on pages 118 – 125 .

Task Performance The combination of effectiveness and efficiency at doing your core job tasks is a reflec- tion of your level of task performance . If we think about the job of a factory worker, task performance could be measured by the number and quality of products produced in an hour. The task performance of a teacher would be the level of education that students obtain. The task performance of a consultant might be measured by the time- liness and quality of the presentations they offer to the client firm. All these types of performance relate to the core duties and responsibilities of a job and are often directly related to the functions listed on a formal job description.

Obviously task performance is the most important human output contributing to organizational effectiveness, so in every chapter we devote considerable time to detailing how task performance is affected by the topic in question.

Organizational Citizenship Behaviour The discretionary behaviour that is not part of an employee’s formal job requirements, and that contributes to the psychological and social environment of the workplace, is called organizational citizenship behaviour (OCB) . 41 Recent research has also looked at expanding the work on OCB to team behaviour. 42

organizational citizenship behav- iour (OCB) Discretionary behaviour that is not part of an employee’s formal job requirements, but that nevertheless promotes the effective functioning of the organization.

processes Actions that individuals, groups, and organizations engage in as a result of inputs and that lead to certain outcomes.

outcomes Key factors that are affected by some other variables.

attitudes Evaluations individuals make about objects, people, or events.

stress An unpleasant psychological process that occurs in response to environmental pressures.

task performance The combina- tion of effectiveness and efficiency at doing your core job tasks.

Watch on MyManagementLab

East Haven Fire Department: Managing Stress

Chapter 1 What Is Organizational Behaviour? 23

Successful organizations need employees who will do more than their usual job duties—who will provide perfor- mance that is beyond expectations. In today’s dynamic workplace, where tasks are increasingly performed by teams and flexibility is critical, employees who engage in “good citizenship” behaviours help others on their team, volun- teer for extra job activities, avoid unnecessary conflicts, respect the spirit as well as the letter of rules and regula- tions, and gracefully tolerate the occasional work-related impositions and nuisances.

Toronto-based BBDO Canada, one of the country’s leading creative agencies, encourages an entrepreneurial spirit as a way of inspiring organizational citizenship behaviour. The agency’s president and CEO, Gerry Frascione, notes that a team leader on the Campbell Soup account overheard a Campbell’s representative musing about a program that would launch Campbell Soup ads when the temperature dipped. “Instead of waiting to get approvals, she acted very entrepreneurially and took it upon herself and made the whole thing happen in one week,” says Frascione. “She went back to the client, analyzed the situation, fleshed out the opportunity, came up with an integrated communication plan, came up with a budget, and it was all done within five days.” 43

Organizations want and need employees who will do those things that are not in any job description. Evidence indicates that organizations that have such employees outperform those that don’t. 44 As a result, OB is concerned with organizational citizen- ship behaviour.

Withdrawal Behaviour We have already mentioned behaviour that goes above and beyond task requirements, but what about behaviour that in some way is below task requirements? Withdrawal behaviour is the set of actions that employees take to separate themselves from the organization. There are many forms of withdrawal, ranging from showing up late or failing to attend meetings to absenteeism and turnover.

Employee withdrawal can have a very negative effect on an organization. The cost of employee turnover alone has been estimated to run into the thousands of dollars, even for entry-level positions. Absenteeism also costs organizations significant amounts of money and time every year. For instance, a recent survey found the average direct cost to employers for absenteeism in Canada is $16.6 billion. 45 In Sweden, an average of 10 percent of the country’s workforce is on sick leave at any given time. 46

It’s obviously difficult for an organization to operate smoothly and attain its objectives if employees fail to report to their jobs. The workflow is disrupted, and important decisions may be delayed. In organizations that rely heavily on assembly-line production, absen- teeism can be considerably more than a disruption; it can drastically reduce the quality of output or even shut down the facility. Levels of absenteeism beyond the normal range have a direct impact on any organization’s effectiveness and efficiency. A high rate of turnover can also disrupt the efficient running of an organization when knowledgeable and experienced personnel leave and replacements must be found to assume positions of responsibility.

All organizations, of course, have some turnover. If the “right” people are leaving the organization—the marginal and submarginal employees—turnover can actually be posi- tive. It can create an opportunity to replace an underperforming individual with someone who has higher skills or motivation, open up increased opportunities for promotions, and bring new and fresh ideas to the organization. 47 In today’s changing world of work, reasonable levels of employee-initiated turnover improve organizational flexibility and employee independence, and they can lessen the need for management-initiated layoffs.

So why do employees withdraw from work? As we will show later in the book, reasons include negative job attitudes, emotions and moods, and negative interactions with co-workers and supervisors.

withdrawal behaviour The set of actions employees take to separate themselves from the organization.

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24 Part 1 Understanding the Workplace

Group Cohesion Although many outcomes in our model can be conceptualized as individual level phenomena, some relate to how groups operate. Group cohesion is the extent to which members of a group support and validate one another at work. In other words, a cohesive group is one that sticks together. When employees trust one another, seek common goals, and work together to achieve these common ends, the group is cohesive; when employees are divided among themselves in terms of what they want to achieve and have