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Introduction to the Field of Organizational Behavior

Chapter 1

OB Foundations

Distinct field around the 1940s

OB concepts discussed for more than 2,000 years

Some pivotal scholars before OB formed include:

Max Weber

Frederick Winslow Taylor

Elton Mayo

Chester Barnard

Mary Parker Follett

Chester Barnard

1-2

Why Study OB?

Satisfy the need to understand and predict behavior

Helps us to test personal theories

Influence behavior – get things done

OB improves an organization’s financial health

OB is for everyone (not just management)

1-3

Old Perspective of Organizational Effectiveness

Goal oriented -- Effective firms achieve their stated objectives

No longer accepted as indicator of org effectiveness

Could set easy goals

Some goals too abstract to evaluate

Company might achieve wrong goals

1-4

Four Perspectives of Organizational Effectiveness

Stakeholder Perspective

High-Performance WP Perspective

Organizational Learning Perspective

Open Systems Perspective

NOTE: Need to consider all four perspectives when assessing a company’s effectiveness

1-5

Feedback

Environment

1- 6

Open Systems Perspective

Organizations are complex systems that “live” within (and depend upon) the external environment

Effective organizations

Maintain a close “fit” with changing conditions

Transform inputs to outputs efficiently and flexibly

Open systems perspective lays the foundation for the other three perspectives of organizational effectiveness

1-7

An organization’s capacity to acquire, share, use, and store valuable knowledge

Need to consider both stock and flow of knowledge

Stock: intellectual capital

Flow: org learning processes of acquisition, sharing, and use

1-8

Organizational Learning Perspective

Intellectual Capital

Relationship Capital

Value derived from satisfied customers, reliable suppliers, etc.

Structural Capital

Knowledge captured in systems and structures

Human Capital

Knowledge that people possess and generate

1-9

Organizational Learning Processes

Applying knowledge to organizational processes in ways that improves the organization’s effectiveness

Distributing knowledge throughout the organization

Extracting information and ideas from its environment as well as through insight

KNOWLEDGE

ACQUISITION

KNOWLEDGE

SHARING

KNOWLEDGE

USE

Examples in practice

Hiring skilled staff

Posting case studies on intranet

Giving staff freedom to try out ideas

1-10

Organizational Memory

The storage and preservation of intellectual capital

Retain intellectual capital by:

Keeping knowledgeable employees

Transferring knowledge to others

Transferring human capital to structural capital

Successful companies also unlearn

1-11

High Performance Work Practices are internal systems and structures that are associated with successful companies

Employees are competitive advantage

Value of employees increased through specific practices.

Maximum benefit when org practices are bundled

1-12

High-Performance WP Perspective

High Performance Work Practices

No consensus, but HPWPs include:

Employee involvement and job autonomy (and their combination as self-directed teams).

Employee competence (training, selection, etc.).

Performance-based rewards

1-13

Stakeholders: any entity who affects or is affected by the firm’s objectives and actions

Personalizes the open systems perspective

Challenges with stakeholder perspective:

Stakeholders have conflicting interests

Firms have limited resources

1-14

Stakeholder Perspective

Lockheed Martin is rated by engineering students as an “ideal” employer

Pays attention to its many stakeholders

Relies on values and ethics to guide decisions

Strong emphasis on corporate social responsibility (e.g. photo shows clean-up after hurricane Katrina)

Lockheed Martin

1-15

Stakeholders: Values and Ethics

Values and ethics prioritize stakeholder interests

Values

Stable, evaluative beliefs, guide preferences for outcomes or courses of action in various situations

Ethics

Moral principles/values, determine whether actions are right/wrong and outcomes are good or bad

Lockheed Martin

1-16

Stakeholders and CSR

Stakeholder perspective includes corporate social responsibility (CSR)

Benefit society and environment beyond the firm’s immediate financial interests or legal obligations

Organization’s contract with society

Triple bottom line

Economy, society, environment

Lockheed Martin

1- 17

Critical Thinking Question

Corporate social responsibility is one of the hottest issues in corporate boardrooms these days, partly because it is becoming increasingly important to employees and other stakeholders. In your opinion, why have stakeholders given CSR more attention recently? Does abiding by CSR standards potentially cause companies to have conflicting objectives with some stakeholders in some situations?

Types of Individual Behavior

Organizational Citizenship

Contextual performance – cooperation and helpfulness beyond required job duties

Task Performance

Goal-directed behaviors under person’s control

1-19

Types of Individual Behavior (con’t)

Maintaining Work Attendance

Attending work at required times

Joining/staying with the Organization

Agreeing to employment relationship; remaining in that relationship

Counterproductive Work Behaviors

Voluntary behaviors that potentially harm the organization

1-20

Challenges facing Orgs: Globalization

Economic, social, and cultural connectivity with people in other parts of the world

Effects of globalization on organizations

New structures

Increasing diversity

Increasing competitive pressures, intensification

1-21

Challenges facing Orgs: Increasing Workforce Diversity

Surface-level diversity

Observable demographic and other overt differences in people (e.g. race, ethnicity, gender, age)

Deep-level diversity

Differences in psychological characteristics (e.g. personalities, beliefs, values, and attitudes)

Example: Differences across age cohorts (e.g. Gen-Y)

Implications

Leveraging the diversity advantage

Also diversity challenges (e.g. teams, conflict)

Ethical imperative of diversity

1-22

Challenges facing Orgs: Employment Relationships

Work-Life balance

Minimizing conflict between work and nonwork demands number one indicator of career success

Virtual work

Using information technology to perform one’s job away from the traditional physical workplace

Telework – issues of replacing face time, clarifying employment expectations

1-23

Organizational Behavior Anchors

Multidisciplinary anchor

Many OB concepts adopted from other disciplines

OB develops its own theories, but scans other fields

Systematic research anchor

OB researchers rely on scientific method

Should apply evidence-based management, but…

Bombarded with theories and models

Challenge translating general theories to specific situations

Swayed by consultant marketing

Perceptual biases -- ignoring evidence contrary to our beliefs

1-24

Organizational Behavior Anchors (con’t)

Contingency anchor

A particular action may have different consequences in different situations

Need to diagnose the situation and select best strategy under those conditions

Multiple levels of analysis anchor

Individual, team, organizational level of analysis

OB topics usually relevant at all three levels of analysis

1-25

Questions?

1-26

Appendix A: Theory Building and Systematic Research Methods

Theory Building Process

Personal Observation

Preliminary Theory

Forming Hypotheses

Defining and Measuring Constructs

Testing Hypotheses

Inductive

Deductive

Issues in OB Research

Sampling

Representative

Unbiased – random sample and assignment

Large sample size

Causation

Variables must be empirically associated

Independent variable precedes the dependent variable in time

Statistical association can’t be explained by a third variable

Ethics

Freedom to participate in study

Explain potential risks inherent in the study

Protect privacy

Research Design Strategies

Laboratory Experiments

High degree of control over extraneous variables

Lacks realism

Field Surveys

Variables offer a more powerful effect

Hard to satisfy the conditions for causal conclusions

Observational Research

Fuller understanding of activities being studied

Researcher’s presence may influence people being studied

Questions?