McShane Von Glinow » Readability, presentation of current knowledge » Strong International/Global orientation » Contemporary Theory Foundation (without the jargon) » Active Learning and Critical Thinking Support » Textbook’s philosophy-OB knowledge is for everyone, not just traditional managers. Delivering what we’ve come to expect from this exceptional author team, McShane/Von Glinow 5e helps everyone make sense of OB, and provides the conceptual tools to work more effectively in the workplace. fifth edition To learn more, visit www.mhhe.com/mcshane5e ISBN 978-0-07-338123-7 MHID 0-07-338123-3 EAN www.mhhe.com fifth edition Organizational Behavior emerging knowledge and practice for the real world McShane | Von Glinow MD DALIM 1011736 3/25/09 CYAN MAG YELO BLACK The reality is that everyone needs OB knowledge to successfully thrive in and around organizations, from sales representatives to production employees to physicians. The authors’ ability to engage students by introducing cutting-edge OB topics while providing relevancy to OB concepts through the ‘linking theory with reality’ approach, is the reason OB 5e remains unparalleled in its ability to engage students. Organizational Behavior McShane and Von Glinow 5e is acclaimed for: emerging knowledge and practice for the real world In their new Fifth Edition, McShane and Von Glinow continue the trailblazing innovations that made previous editions of Organizational Behavior recognized and adopted by the new generation of organizational behavior (OB) instructors. mcs81233_fm_i-xxxiv.indd Page i 3/13/09 9:33:10 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Organizational Behavior mcs81233_fm_i-xxxiv.indd Page ii 3/13/09 9:33:13 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Emerging Knowledge and Practice for the Real World mcs81233_fm_i-xxxiv.indd Page iii 3/14/09 11:11:25 AM user /Users/user/Desktop Organizational Behavior Steven L. McShane The University of Western Australia Mary Ann Von Glinow Florida International University 5th Edition Boston Burr Ridge, IL Dubuque, IA New York San Francisco St. Louis Bangkok Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto mcs81233_fm_i-xxxiv.indd Page iv 3/13/09 9:33:15 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM ORGANIZATIONAL BEHAVIOR: EMERGING KNOWLEDGE AND PRACTICE FOR THE REAL WORLD Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2010, 2008, 2005, 2003, 2000 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 0 9 ISBN 978-0-07-338123-7 MHID 0-07-338123-3 Vice president and editor-in-chief: Brent Gordon Publisher: Paul Ducham Executive editor: John Weimeister Senior development editor: Christine Scheid Marketing manager: Natalie Zook Lead project manager: Christine A. Vaughan Production supervisor: Gina Hangos Senior photo research coordinator: Lori Kramer Photo researcher: Jennifer Blankenship Lead media project manager: Brian Nacik Cover and interior design: Pam Verros/pvdesign Cover image: ©Veer Typeface: 10/12 Berthold Baskerville Compositor: Aptara®, Inc. Printer: R. R. Donnelley Library of Congress Cataloging-in-Publication Data McShane, Steven Lattimore. Organizational behavior : emerging knowledge and practice for the real world / Steven L. McShane, Mary Ann Von Glinow. — 5th ed. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-07-338123-7 (alk. paper) ISBN-10: 0-07-338123-3 (alk. paper) 1. Organizational behavior. I. Von Glinow, Mary Ann Young, 1949- II. Title. HD58.7.M42 2010 658—dc22 2009005753 www.mhhe.com mcs81233_fm_i-xxxiv.indd Page v 3/13/09 9:33:17 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM about the authors Steven L. McShane Steven L. McShane is Professor of Management in the Business School at the University of Western Australia (UWA), where he receives high teaching ratings from students in Perth, Singapore, Manila, and other cities where UWA offers its programs. He is also an Honorary Professor at Universiti Tunku Abdul Rahman (UTAR) in Malaysia and previously taught in the business faculties at Simon Fraser University and Queen’s University in Canada. Steve has conducted executive programs with Nokia, TÜV-SÜD, Wesfarmers Group, Main Roads WA, McGraw-Hill, ALCOA World Alumina Australia, and many other organizations. He is also a popular visiting speaker, having given presentations to faculty and students in almost a dozen countries over the past four years. Steve earned his Ph.D. from Michigan State University in organizational behavior, human resource management, and labor relations. He also holds a Master of Industrial Relations from the University of Toronto, and an undergraduate degree from Queen’s University in Canada. Steve has served as President of the Administrative Sciences Association of Canada (the Canadian equivalent of the Academy of Management) and Director of Graduate Programs in the business faculty at Simon Fraser University. Along with coauthoring Organizational Behavior, Fifth Edition, Steve coauthors with Mary Ann Von Glinow on Organizational Behavior: Essentials, Second Edition (2009). He is also the coauthor with Sandra Steen (University of Regina) of Canadian Organizational Behaviour, Seventh Edition (2009), with Tony Travaglione (Curtin University) of Organisational Behaviour on the Pacific Rim, Second Edition (2007), and with Charles Hill (University of Washington) of Principles of Management, First Edition (2008). Steve is also coauthor of Indian, Chinese, and Taiwanese editions or translations of his OB book. Steve has published several dozen articles and conference papers on workplace values, training transfer, organizational learning, exit-voice-loyalty, employee socialization, wrongful dismissal, media bias in business magazines, and other diverse topics. Steve enjoys spending his leisure time swimming, body board surfing, canoeing, skiing, and traveling with his wife and two daughters. Mary Ann Von Glinow Dr. Von Glinow is Director of the Center for International Business Education and Research (CIBER) and is Research Professor of Management and International Business at Florida International University. She also is the 2006 Vice President of the Academy of International Business (AIB) and an editor of JIBS. Previously on the Marshall School faculty of the University of Southern California, she has an MBA and Ph.D. in Management Science from The Ohio State University. Dr. Von Glinow was the 1994–95 President of the Academy of Management, the world’s largest association of academicians in management, and is a Fellow of the Academy and the Pan-Pacific Business Association. She sits on eleven editorial review boards and numerous international panels. She teaches in executive programs in Latin America, Central America, the Caribbean region, Asia, and the U.S. Dr. Von Glinow has authored over 100 journal articles and 11 books. Her most recent books include Managing Multinational Teams (Elsevier, 2005) and Organizational Learning Capability (Oxford University Press, 1999; in Chinese and Spanish translation), which won a Gold Book Award from the Ministry of Economic Affairs in Taiwan in 2002. She has also coauthored the popular Organizational Behavior, Fifth Edition textbook and Organizational Behavior: Essentials, Second Edition (McGraw-Hill/Irwin, 2009). She heads an international consortium of researchers delving into “Best International Human Resource Management Practices,” and her research in this arena won an award from the American Society for Competitiveness’ Board of Trustees. She also received an NSF grant to study globally distributed work. Dr. Von Glinow is the 2005 Academy of Management recipient of the Distinguished Service Award, one of the Academy’s three highest honors bestowed. Mary Ann consults to a number of domestic and multinational enterprises, and serves as a mayoral appointee to the Shanghai Institute of Human Resources in China. Since 1989, she has been a consultant in General Electric’s “Workout” and “Change Acceleration Program” including “Coaching to Management.” Her clients have included Asia Development Bank, American Express, Diageo, KnightRidder, Burger King, Pillsbury, Westinghouse, Southern California Edison, The Aetna, State of Florida, Kaiser Permanente, TRW, Rockwell Int’l, Motorola, N.Y. Life, Amoco, Lucent, and Joe’s Stone Crabs, to name a few. She is on the Board of Friends of WLRN, Fielding University, Friends of Bay Oaks, Pan-Pacific Business Association, and Animal Alliance in Los Angeles. She is actively involved in several animal welfare organizations and received the 1996 Humanitarian Award of the Year from Miami’s Adopt-a-Pet. mcs81233_fm_i-xxxiv.indd Page vi 3/13/09 9:33:17 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Dedicated with love and devotion to Donna, and to our wonderful daughters, Bryton and Madison —S.L.M. Dedicated to Zack, Emma, and Googun! —M.A.V.G. mcs81233_fm_i-xxxiv.indd Page vii 3/13/09 9:33:17 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Preface xvi PART 1 Introduction 1 Chapter 1 Introduction to the Field of Organizational Behavior 2 PART 2 Individual Behavior and Processes 31 Chapter 2 Individual Behavior, Personality, and Values 32 Chapter 3 Perception and Learning in Organizations Chapter 4 66 Workplace Emotions, Attitudes, and Stress Chapter 5 Foundations of Employee Motivation Chapter 6 96 130 Applied Performance Practices 164 Chapter 7 Decision Making and Creativity 196 PART 3 Team Processes 231 Chapter 8 Team Dynamics Chapter 9 232 Communicating in Teams and Organizations 268 Chapter 10 Chapter 11 Power and Influence in the Workplace 298 Conflict and Negotiation in the Workplace 326 Chapter 12 Leadership in Organizational Settings 358 PART 4 Organizational Processes 383 Chapter 13 Organizational Structure 384 brief contents Chapter 14 Organizational Culture Chapter 15 414 Organizational Change 442 Additional Cases 469 Case 1: A Mir Kiss? 469 Case 2: Arctic Mining Consultants 471 Case 3: Big Screen’s Big Failure 473 Case 4: Bridging the Two Worlds—The Organizational Dilemma 478 Case 5: Fran Hayden Joins Dairy Engineering 479 Case 6: From Lippert-Johanson Incorporated to Fenway Waste Management 482 Case 7: Glengarry Regional Medical Center 484 Case 8: High Noon at Alpha Mills 488 Case 9: Keeping Suzanne Chalmers 490 Case 10: Northwest Canadian Forest Products Limited 492 Case 11: Perfect Pizzeria 494 Case 12: Simmons Laboratories 495 Case 13: Treetop Forest Products 500 Video Cases 502 Appendix A Theory Building and Systematic Research Methods 507 Appendix B Scoring Keys for Self-Assessment Activities 514 Glossary References Photo Credits Organization Index Name Index Subject Index URL Index 525 531 589 591 595 616 633 mcs81233_fm_i-xxxiv.indd Page viii 3/13/09 9:33:18 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM contents Preface xvi The Contingency Anchor 24 The Multiple Levels of Analysis Anchor Part 1 Introduction 1 Chapter Summary Key Terms 24 25 25 Critical Thinking Questions 26 Case Study 1.1: Jersey Dairies, Inc. 26 Case Study 1.2: Working from Home—It’s in the Details 28 Team Exercise 1.3: Human Checkers 28 Class Exercise 1.4: Diagnosing Organizational Stakeholders 29 Self-Assessment 1.5: It All Makes Sense? 30 Chapter 1 Introduction to the Field of Organizational Behavior 2 Self-Assessment 1.6: Is Telecommuting for You? The Field of Organizational Behavior 4 Organizational Behavior’s Foundations Why Study Organizational Behavior? 30 Part 2 Individual Behavior and 5 Processes 5 31 Perspectives of Organizational Effectiveness 7 Open-Systems Perspective 7 Global Connections 1.1: Hospitals Take the Lean Journey to Efficiency 10 Organizational Learning Perspective 10 High-Performance Work Practices Perspective Stakeholder Perspective 13 Types of Individual Behavior Task Performance 12 16 Chapter 2 Individual Behavior, Personality, and Values 32 17 Organizational Citizenship 17 Counterproductive Work Behaviors Joining and Staying with the Organization Maintaining Work Attendance MARS Model of Individual Behavior and Performance 34 18 18 18 Ability Contemporary Challenges for Organizations 19 Globalization 20 20 Emerging Employment Relationships Role Perceptions The Systematic Research Anchor 24 36 37 Personality in Organizations 22 Anchors of Organizational Behavior Knowledge 23 23 34 35 Situational Factors Increasing Workforce Diversity The Multidisciplinary Anchor Employee Motivation 38 Personality Determinants: Nature versus Nurture Five-Factor Model of Personality 39 39 Jungian Personality Theory and the Myers-Briggs Type Indicator 41 Caveats about Personality Testing in Organizations 42 mcs81233_fm_i-xxxiv.indd Page ix 3/13/09 9:33:21 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents ix Self-Concept: The “I” in Organizational Behavior 43 Self-Enhancement Self-Verification 44 Self-Evaluation 44 Chapter 3 Perception and Learning in Organizations 66 44 The Perceptual Process Perceptual Organization and Interpretation Social Identity and Stereotyping Global Connections 2.1: Feeling Valued Adds Value at Johnson & Johnson 45 The Social Self Stereotyping in Organizations Values in the Workplace 47 Attribution Theory 47 Attribution Errors 48 Value Congruence Improving Perceptions 50 78 Improving Self-Awareness Uncertainty Avoidance Meaningful Interaction 51 Achievement-Nurturing Orientation Ethical Values and Behavior Three Ethical Principles 79 79 81 Learning in Organizations 82 52 Behavior Modification: Learning through Reinforcement 82 52 53 Social Learning Theory: Learning by Observing Moral Intensity, Ethical Sensitivity, and Situational Influences 53 Supporting Ethical Behavior 77 79 Awareness of Perceptual Biases 50 Power Distance 51 Key Terms 76 Other Perceptual Errors Individualism and Collectivism Chapter Summary 76 Contingencies of Self-Fulfilling Prophecy 49 49 Values across Cultures 71 72 75 Self-Fulfilling Prophecy Values and Individual Behavior 70 Global Connections 3.1: “Your Name Says Everything in France” 74 46 Self-Concept and Organizational Behavior Types of Values 68 Learning through Experience Chapter Summary 56 Key Terms 56 88 89 Case Study 3.1: Hy Dairies, Inc. 90 Case Study 2.1: SK Telecom Goes Egalitarian in a Hierarchical Society 57 Case Study 3.2: How Failure Breeds Success 91 58 Class Exercise 3.3: The Learning Exercise Case Study 2.3: The Trouble with Business Ethics 59 Team Exercise 2.5: Comparing Cultural Values Team Exercise 2.6: Ethics Dilemma Vignettes Self-Assessment 3.5: How Much Perceptual Structure Do You Need? 92 61 Self-Assessment 3.6: Assessing Your Perspective Taking (Cognitive Empathy) 94 62 Self-Assessment 2.7: Are You Introverted or Extroverted? 63 Self-Assessment 2.8: What Are Your Dominant Values? Self-Assessment 2.9: Individualism-Collectivism Scale Self-Assessment 2.10: Estimating Your Locus of Control 64 91 Web Exercise 3.4: Stereotyping in Corporate Annual Reports 92 Class Exercise 2.4: Test Your Knowledge of Personality 60 Self-Assessment 2.11: Identifying Your General Self-Efficacy 64 87 Critical Thinking Questions 89 Critical Thinking Questions 57 Case Study 2.2: Pushing Paper Can Be Fun 86 From Individual to Organizational Learning 54 85 Self-Asssessment 3.7: Assessing Your Emotional Empathy 94 64 64 Chapter 4 Workplace Emotions, Attitudes, and Stress 96 Emotions in the Workplace Types of Emotions 98 99 Emotions, Attitudes, and Behavior 100 mcs81233_fm_i-xxxiv.indd Page x 3/13/09 9:33:21 PM user-s173 x /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents Managing Emotions at Work 103 Emotional Display Norms across Cultures Emotional Dissonance Global Connections 5.1: Shining the Spotlight on Employee Recognition 137 103 What’s Wrong with Needs Hierarchy Models? 138 104 Emotional Intelligence 105 Global Connections 4.1: GM Holden Revs Up Emotional Intelligence 107 Improving Emotional Intelligence Job Satisfaction 107 The Ethics of Job Satisfaction Goal Setting and Feedback 145 Balanced Scorecard 112 Sources of Feedback Consequences of Organizational Commitment 112 114 115 Critical Thinking Questions 123 Case Study 4.1: Riding the Emotional Roller Coaster 123 Case Study 4.2: Dispatches from the War on Stress 124 Class Exercise 4.3: Strength-Based Coaching 125 Chapter Summary 156 157 157 158 127 Self-Assessment 4.7: Dispositional Mood Scale 129 Self-Assessment 4.8: Work Addiction Risk Test 129 Self-Assessment 4.9: Perceived Stress Scale Chapter 5 Foundations of Employee Motivation 130 Employee Engagement 132 159 Team Exercise 5.4: A Question of Feedback 160 Self-Assessment 5.5: Need-Strength Questionnaire 161 Self-Assessment 5.6: Measuring Your Growth-Need Strength 163 163 The Meaning of Money in the Workplace Financial Reward Practices 129 Self-Assessment 4.10: Stress Coping Preference Scale Class Exercise 5.3: Needs Priority Exercise Chapter 6 Applied Performance Practices 164 126 Self-Assessment 4.6: School Commitment Scale 129 134 135 166 167 Membership- and Seniority-Based Rewards 167 Job Status–Based Rewards 168 Competency-Based Rewards 169 Performance-Based Rewards 170 Connections 6.1: Nucor Rewards the Team 134 Maslow’s Needs Hierarchy Theory 155 Self-Assessment 5.7: Your Equity Sensitivity Team Exercise 4.4: Ranking Jobs on Their Emotional Labor 126 Individual Differences in Needs Procedural Justice Case Study 5.2: Motivating Staff When the Money Is Tight 159 122 Employee Drives and Needs 151 Case Study 5.1: Vêtements Ltée 118 151 152 Critical-Thinking Questions 118 122 Team Exercise 4.5: Stage Fright! Equity Theory Key Terms Stressors: The Causes of Stress 116 Managing Work-Related Stress 149 Organizational Justice 113 Work-Related Stress and Its Management 114 Individual Differences in Stress 148 Evaluating Goal Setting and Feedback Building Organizational Commitment General Adaptation Syndrome 147 Characteristics of Effective Feedback Organizational Commitment 112 Key Terms 140 Expectancy Theory in Practice 144 Job Satisfaction and Work Behavior 109 Chapter Summary Four-Drive Theory 138 Expectancy Theory of Motivation 143 108 Consequences of Distress Learned Needs Theory Improving Reward Effectiveness 172 Connections 6.2: When Rewards Go Wrong 174 171 mcs81233_fm_i-xxxiv.indd Page xi 3/13/09 9:33:22 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents Job Design Practices xi 175 Evaluating Decision Outcomes Job Design and Work Efficiency 175 Job Design and Work Motivation Escalation of Commitment 177 Job Design Practices That Motivate 180 210 210 Evaluating Decision Outcomes More Effectively 212 Employee Involvement in Decision Making 213 Empowerment Practices 182 Benefits of Employee Involvement Supporting Empowerment 182 Contingencies of Employee Involvement Self-Leadership Practices 183 Self-Leadership Strategies Creativity 184 Chapter Summary Key Terms 186 214 215 Characteristics of Creative People Effectiveness of Self-Leadership Self-Leadership Contingencies 213 216 Connections 7.1: Going for Wow at NottinghamSpirk 217 186 Organizational Conditions Supporting Creativity 187 Activities That Encourage Creativity 188 Chapter Summary Critical Thinking Questions 188 Case Study 6.1: The Regency Grand Hotel Key Terms 188 Case Study 6.2: How to Make a Microserf Smile 190 Team Exercise 6.3: Is Student Work Enriched? 219 221 222 Critical Thinking Questions 222 Case Study 7.1: Employee Involvement Cases 191 Self-Assessment 6.4: What Is Your Attitude toward Money? 193 223 Case Study 7.2: P&G’s Designer Thinking 224 Team Exercise 7.3: Where in the World Are We? Self-Assessment 6.5: Assessing Your Self-Leadership 194 Team Exercise 7.4: Winter Survival Exercise Self-Assessment 6.6: Student Empowerment Scale 195 218 Class Exercise 7.5: The Hopping Orange Class Exercise 7.6: Creativity Brainbusters 224 227 228 228 Self-Assessment 7.7: Measuring Your Creative Personality 229 Chapter 7 Decision Making and Creativity 196 Self-Assessment 7.8: Testing Your Creative Bench Strength 230 Self-Assessment 7.9: Decision-Making Style Inventory 230 Rational Choice Paradigm of Decision Making 198 Part 3 Team Processes 231 Problems with the Rational Choice Paradigm 200 Identifying Problems and Opportunities Problems with Problem Identification 200 201 Identifying Problems and Opportunities More Effectively 202 Evaluating and Choosing Alternatives 203 Problems with Goals 203 Problems with Information Processing Problems with Maximization Evaluating Opportunities 206 Intuition and Making Choices 207 208 Making Choices More Effectively Implementing Decisions Chapter 8 206 Emotions and Making Choices 209 204 209 Team Dynamics Teams and Informal Groups Informal Groups 232 234 235 Advantages and Disadvantages of Teams The Challenges of Teams 237 236 mcs81233_fm_i-xxxiv.indd Page xii 3/13/09 9:33:23 PM user-s173 xii /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents A Model of Team Effectiveness 238 Organizational and Team Environment Team Design Elements Task Characteristics Team Size Choosing the Best Communication Channel 277 239 Social Acceptance 240 Media Richness 240 Team Composition Communication Barriers (Noise) 242 Global Connections 8.1: Royal Dutch Shell Finds Team Players in Gourami 243 Team Processes 245 Team Development Team Trust 245 249 Team Cohesion 250 Self-Directed Teams Cross-Cultural and Cross-Gender Communication 283 Nonverbal Differences across Cultures 284 Gender Differences in Communication 285 Active Listening 254 255 286 Workspace Design Team Decision Making 256 Constraints on Team Decision Making 287 Web-Based Organizational Communication 256 Team Structures to Improve Decision Making 258 260 Chapter Summary Case Study 8.1: The Shipping Industry Accounting Team 262 Key Terms 289 264 265 Self-Assessment 8.5: What Team Roles Do You Prefer? Self-Assessment 8.6: Are You a Team Player? 290 290 291 Critical Thinking Questions 291 Case Study 8.2: Philanthropic Team Building 263 Case Study 8.3: Seagate’s Morale-athon 265 267 Case Study 9.1: Communicating with the Millennials Team Exercise 9.3: Analyzing the Blogosphere 294 294 Team Exercise 9.5: Cross-Cultural Communication Game 295 Self-Assessment 9.6: Active Listening Skills Inventory Chapter 9 Communicating in Teams and Organizations 268 The Importance of Communication 270 273 Connections 9.1: About-Face on Workplace E-mail 274 Nonverbal Communication 276 271 300 A Model of Power in Organizations Sources of Power in Organizations 272 Computer-Mediated Communication Chapter 10 Power and Influence in the Workplace 298 The Meaning of Power A Model of Communication 271 Communication Channels 292 Case Study 9.2: It’s All about the Face-to-Face 293 Team Exercise 9.4: Active Listening Exercise Self-Assessment 8.7: How Trusting Are You? 267 Influences on Effective Encoding and Decoding 288 Communicating through the Grapevine 289 Grapevine Benefits and Limitations Critical Thinking Questions 261 288 Direct Communication with Top Management Grapevine Characteristics 261 Team Exercise 8.4: Team Tower Power 285 Improving Communication throughout the Hierarchy 287 255 Success Factors for Virtual Teams Key Terms 281 282 Getting Your Message Across 253 Success Factors for Self-Directed Teams Chapter Summary Information Overload Improving Interpersonal Communication 285 251 Virtual Teams 278 Communication Channels and Persuasion 281 242 Team Norms 278 Legitimate Power Reward Power Coercive Power Expert Power 302 302 303 303 301 301 296 mcs81233_fm_i-xxxiv.indd Page xiii 3/13/09 9:33:23 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents Referent Power 303 Information and Power Centrality 306 Discretion 306 Visibility Global Connections 11.2: Conflict Overdrive at VW and Porsche 334 304 Contingencies of Power Substitutability xiii 305 305 334 Scarce Resources 335 Ambiguous Rules 335 Communication Problems 335 Interpersonal Conflict-Handling Styles 307 Social Networking and Power Choosing the Best Conflict-Handling Style 307 Global Connections 10.1: Powered by the Social Network 308 Consequences of Power Types of Influence Tactics Reducing Differentiation 340 340 Improving Communication and Understanding Influence Tactics and Organizational Politics 315 Conditions Supporting Organizational Politics Chapter Summary 337 Cultural and Gender Differences in Conflict-Handling Styles 339 Emphasizing Superordinate Goals 310 Consequences and Contingencies of Influence Tactics 314 Personal Characteristics 336 Structural Approaches to Conflict Management 340 309 Influencing Others 309 Key Terms Interdependence 316 Reducing Interdependence Increasing Resources 341 Clarifying Rules and Procedures 316 341 Resolving Conflict through Negotiation 317 Bargaining-Zone Model of Negotiations 317 Situational Influences on Negotiations Critical Thinking Questions 318 Case Study 10.1: The Rise and Fall of WorldCom 318 Case Study 10.2: Rhonda Clark: Taking Charge at the Smith Foundation 319 Case Study 10.3: Shaking Up Oxford Team Exercise 10.4: Budget Deliberations 322 322 Self-Assessment 10.5: Guanxi Orientation Scale Self-Assessment 10.6: Machiavellianism Scale Negotiator Skills 324 Self-Assessment 10.7: Perceptions of Politics Scale (POPS) 324 342 343 343 345 Third-Party Conflict Resolution 346 Choosing the Best Third-Party Intervention Strategy 347 Chapter Summary 323 341 341 Key Terms 349 349 Critical Thinking Questions 349 Case Study 11.1: Tamarack Industries 350 Case Study 11.2: The New Heat at Ford 351 Chapter 11 Conflict and Negotiation in the Workplace 326 Is Conflict Good or Bad? 328 The Emerging View: Constructive and Relationship Conflict 329 Class Exercise 11.3: The Contingencies of Conflict Handling 352 Team Exercise 11.4: Ugli Orange Role Play 356 Self-Assessment 11.5: The Dutch Test for Conflict Handling 357 Connections 11.1: Constructive Confrontation inside Intel 331 Chapter 12 Leadership in Organizational Settings 358 Conflict Process Model 331 What Is Leadership? Structural Sources of Conflict in Organizations 332 Competency Perspective of Leadership Incompatible Goals Differentiation 333 333 Shared Leadership 360 360 361 Competency Perspective Limitations and Practical Implications 363 mcs81233_fm_i-xxxiv.indd Page xiv 3/13/09 9:33:24 PM user-s173 xiv /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents Behavioral Perspective of Leadership 364 Elements of Organizational Structure Choosing Task- versus People-Oriented Leadership 364 Span of Control Centralization and Decentralization Contingency Perspective of Leadership Path-Goal Theory of Leadership Other Contingency Theories Leadership Substitutes 365 365 Formalization 393 Forms of Departmentalization 370 Simple Structure Transformational Perspective of Leadership 371 Functional Structure 396 Divisional Structure 397 Transformational versus Charismatic Leadership 372 Team-Based Structure Elements of Transformational Leadership Matrix Structure 373 Evaluating the Transformational Leadership Perspective 374 Key Terms External Environment 375 Organizational Size 376 Technology 407 407 Chapter Summary Key Terms 379 408 408 409 Critical Thinking Questions 409 Critical Thinking Questions 379 Case Study 13.1: Macy’s Gets Personal 379 Case Study 12.2: Mack Attack 406 Organizational Strategy 378 Case Study 12.1: Profitel Inc. 403 Contingencies of Organizational Design 405 Cross-Cultural and Gender Issues in Leadership 376 Chapter Summary 400 401 Network Structure Implicit Leadership Perspective 375 The Romance of Leadership 394 395 396 Transformational versus Transactional Leadership 371 Prototypes of Effective Leaders 393 Mechanistic versus Organic Structures 368 390 390 381 Team Exercise 12.3: Leadership Diagnostic Analysis 381 Self-Assessment 12.4: What Is Your Boss’s Preferred Leadership Style? 382 Part 4 Organizational Processes 383 410 Case Study 13.2: More Than Cosmetic Changes at Avon 411 Team Exercise 13.3: The Club Ed Exercise 412 Self-Assessment 13.4: What Organizational Structure Do You Prefer? 412 Chapter 14 Organizational Culture Elements of Organizational Culture Content of Organizational Culture Organizational Subcultures 414 416 418 419 Deciphering Organizational Culture through Artifacts 420 Organizational Stories and Legends Rituals and Ceremonies Organizational Language Chapter 13 Organizational Structure 384 Division of Labor and Coordination Division of Labor 386 Coordinating Work Activities 387 386 420 421 422 Physical Structures and Symbols 422 Is Organizational Culture Important? 423 Contingencies of Organizational Culture and Effectiveness 424 Organizational Culture and Business Ethics 426 mcs81233_fm_i-xxxiv.indd Page xv 3/13/09 9:33:29 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Contents xv Large-Group Interventions Merging Organizational Cultures 426 Bicultural Audit Strategies for Merging Different Organizational Cultures 427 Cross-Cultural and Ethical Issues in Organizational Change 461 Changing and Strengthening Organizational Culture 429 Actions of Founders and Leaders Aligning Artifacts Organizational Behavior: The Journey Continues 462 429 Chapter Summary 430 Key Terms Introducing Culturally Consistent Rewards 431 Case Study 15.2: Inside Intel 433 Additional Cases 437 Critical Thinking Questions 437 438 Case Study 14.2: Merck’s New Cultural Cure 439 Class Exercise 14.3: Diagnosing Corporate Culture Proclamations 440 Self-Assessment 14.4: What Are Your Corporate Culture Preferences? 441 Chapter 15 Organizational Change 442 Restraining Forces 444 469 1: A Mir Kiss? 469 2: Arctic Mining Consultants 471 3: Big Screen’s Big Failure 473 4: Bridging the Two Worlds—The Organizational Dilemma 478 Case 5: Fran Hayden Joins Dairy Engineering 479 Case 6: From Lippert-Johanson Incorporated to Fenway Waste Management 482 Case 7: Glengarry Regional Medical Center 484 Case 8: High Noon at Alpha Mills 488 Case 9: Keeping Suzanne Chalmers 490 Case 10: Northwest Canadian Forest Products Limited 492 Case 11: Perfect Pizzeria 494 Case 12: Simmons Laboratories 495 Case 13: Treetop Forest Products 500 445 Connections 15.1: The FBI Meets Its Own Resistance 448 Unfreezing, Changing, and Refreezing Creating an Urgency for Change 450 Reducing the Restraining Forces 451 Refreezing the Desired Conditions 449 454 Change Agents, Strategic Visions, and Diffusing Change 455 Change Agents and Strategic Visions Diffusion of Change 467 Case Case Case Case 436 Lewin’s Force Field Analysis Model 466 Self-Assessment 15.4: Are You Tolerant of Change? Improving the Socialization Process 435 Case Study 14.1: Hillton’s Transformation 464 465 Team Exercise 15.3: Strategic Change Incidents Socialization as a Learning and Adjustment Process 433 Key Terms 463 Case Study 15.1: TransAct Insurance Corporation Organizational Socialization 432 Stages of Organizational Socialization 462 Critical Thinking Questions 463 431 Attracting, Selecting, and Socializing Employees Chapter Summary 460 Parallel Learning Structure Approach 461 427 455 502 Appendix A Theory Building and Systematic Research Methods Appendix B Scoring Keys for Self-Assessment Activities Glossary 525 References 531 Photo Credits 589 455 Four Approaches to Organizational Change 456 Action Research Approach Video Cases 456 Appreciative Inquiry Approach 458 Organization Index 591 Name Index 595 Subject Index URL Index 616 633 514 507 mcs81233_fm_i-xxxiv.indd Page xvi 3/13/09 9:33:29 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM preface Welcome to the emerging knowledge and practice of organizational behavior! Social networks and virtual teams are replacing committee meetings. Knowledge is replacing infrastructure. Values and self-leadership are replacing command-and-control management. Companies are looking for employees with emotional intelligence and team competencies, not just technical smarts. Diversity and globalization have become challenges as well as competitive opportunities for organizations. Co-workers aren’t down the hall; they’re at the other end of an Internet connection located somewhere else on the planet. Organizational Behavior, Fifth Edition, is written in the context of these emerging workplace realities. This edition explains how emotions guide employee motivation, attitudes, and decisions; how self-concept influences employee motivation and behavior, team cohesion, and leadership; how social networks are gaining importance as a source of personal power and organizational effectiveness; and how appreciative inquiry has become an important strategy for changing organizations. This book also presents the new reality that organizational behavior is not just for managers; it is relevant and useful to anyone who works in and around organizations. Linking Theory with Reality Every chapter of Organizational Behavior, Fifth Edition, is filled with examples that make OB knowledge more meaningful and reflect the relevance and excitement of this field. These stories about real people and organizations translate academic theories into relevant knowledge. For example, you will read how Whole Foods Market and La-Z-Boy have discovered the advantages of teamwork; how Sony Europe has improved employee motivation through the positive organizational behavior practice of strengths-based feedback; how Raytheon and other companies have mapped out informal social networks throughout the organization; and how Ernst & Young, Procter & Gamble, and several other firms are sending employees to overseas social responsibility assignments to improve their global mindset and other perceptual capabilities. These real-life stories appear in many forms. Every chapter of Organizational Behavior, Fifth Edition, offers several detailed photo captions and many more in-text anecdotes. Lengthier stories are distinguished in a feature we call Connections, because it “connects” OB concepts with real organizational incidents. Case studies in each chapter and video case studies for each part of this book also connect OB concepts to the emerging workplace realities. These stories provide representation across the United States and around the planet. They also cover a wide range of industries—from software to government, and from small businesses to the Fortune 500. Global Orientation One of the first things you might notice about this book is its strong global orientation. This goes beyond the traditional practice of describing how U.S. companies operate in other parts of the world. Organizational Behavior, Fifth Edition, takes a truly global approach by illustrating how organizational behavior concepts and practices are relevant to companies in every part of the world. For example, you will read how Mina Ishiwatari faced resistance to change as she transformed sleepy Tokyo-based Hoppy Beverage Co. into a high-profile brand; how Volkswagen and Porsche xvi mcs81233_fm_i-xxxiv.indd Page xvii 3/13/09 9:33:29 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Preface xvii executives are wrapped up in high-stakes conflict over how Volkswagen should be run; how Air New Zealand CEO Rob Fyfe relies on a hands-on approach to improve his and others’ perceptions; how Sweden’s Svenska Handelsbanken relies on employee empowerment and organizational rewards rather than centralized budgets to manage the business; and how Mott MacDonald’s oil and gas team improves emotions and camaraderie through desert safari treks in Abu Dhabi. This global orientation is also apparent in our discussion of many organizational behavior topics. The first chapter of Organizational Behavior, Fifth Edition, introduces the concept of globalization. Global issues are then highlighted throughout the book, such as cross-cultural values and ethics, development of a global mindset, job satisfaction and display of emotions in different societies, cross-cultural issues in the success of self-directed work teams, problems with cross-cultural communication, cultural values and expectations as a factor in preferred influence tactics, the handling of conflict differently across cultures, and preferred leadership styles across cultures. Contemporary Theory Foundation Vivid real-world examples and practices are only valuable if they are connected to good theory. Organizational Behavior has developed a reputation for its solid foundation of contemporary and classic research and writing. You can see this in the references. Each chapter is based on dozens of articles, books, and other sources. The most recent literature receives thorough coverage, resulting in what we believe is the most up-to-date organizational behavior textbook available. These references also reveal that we reach out to marketing, information management, human resource management, and other disciplines for new ideas. At the same time, this textbook is written for students, not the scholars whose work is cited. So, although this book provides new knowledge and its practical implications, it rarely names researchers and their university affiliations. It focuses on organizational behavior knowledge rather than “who’s who” in the field. One of the driving forces for writing Organizational Behavior was to provide a conduit whereby emerging OB knowledge more quickly reaches students, practitioners, and fellow scholars. This objective is so important that we state it in the subtitle of this book. To its credit, Organizational Behavior was the first textbook to discuss workplace emotions, social identity theory, four-drive theory, appreciative inquiry, affective events theory (but without the jargon), somatic marker theory (also without the jargon), virtual teams, future-search events, Schwartz’s value model, resilience, employee engagement, learning orientation, workaholism, and several other groundbreaking topics. This edition introduces additional emerging OB concepts and practices, including social networking communication, the competencies of effective team members, exceptions to media richness theory, the importance of self-concept in organizational behavior, the globally integrated enterprise, the global mindset, and strengths-based feedback. Organizational Behavior Knowledge for Everyone Another distinctive feature of Organizational Behavior, Fifth Edition, is that it is written for everyone in organizations, not just managers. The philosophy of this book is that everyone who works in and around organizations needs to understand and make use of organizational behavior knowledge. The contemporary reality is that people throughout the organization—systems analysts, production employees, accounting professionals—are assuming more responsibilities as companies remove layers of mcs81233_fm_i-xxxiv.indd Page xviii 3/13/09 9:33:29 PM user-s173 xviii /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Preface management and give the rest of us more autonomy over our work. This book helps everyone to make sense of organizational behavior and provides the conceptual tools needed to work more effectively in the workplace. Active Learning and Critical Thinking Support We teach organizational behavior, so we understand how important it is to use a textbook that offers deep support for active learning and critical thinking. The fact that business school accreditation associations also emphasize the importance of the learning experience further reinforces our attention to classroom activities. Organizational Behavior, Fifth Edition, includes more than two dozen case studies in various forms and levels of complexity. It offers three dozen self-assessments, most of which have received construct validation. This book is also a rich resource for in-class activities, some of which are not available in other organizational behavior textbooks, such as “Test Your Knowledge of Personality,” “Where in the World Are We?” and “CrossCultural Communication Game.” Changes to the Fifth Edition Organizational Behavior, Fifth Edition, has benefited from reviews by several dozen organizational behavior teachers and researchers in several countries over the past two years. The most significant structural change is that we have reduced the book to 15 chapters so that it more closely parallels the number of weeks in a typical OB course. This edition also continues to update current knowledge in every chapter and provides fresh examples to illustrate theories and concepts. The most notable improvements to this edition are described below: • • • Chapter 1: Introduction to the Field of Organizational Behavior. This chapter has been substantially revised and updated. It introduces four perspectives of organizational effectiveness (the ultimate dependent variable in OB), so students now have an excellent macro-OB foundation for topics throughout this book. The organizational effectiveness section also provides better organization for open systems, organizational learning, high-performance work practices, and values and ethics. The five types of individual behavior are also described in this chapter as a natural micro-OB flow from the organizational effectiveness discussion. The topic of workforce diversity now distinguishes surface from deep-level diversity. Discussion of the systematic research anchor now includes the concept of evidence-based management. Chapter 2: Individual Behavior, Personality, and Values. This edition provides important new knowledge about self-concept, including its main components (selfenhancement, self-verification, self-evaluation, and social identity) and their relevance for organizational behavior. This edition also has a rewritten and expanded discussion of personality in line with the topic’s increasing importance in OB. The MARS model now includes a fuller conceptual background. Chapter 3: Perception and Learning in Organizations. This edition updates the section on selective attention, organization, and interpretation on the basis of the rapidly developing research on this topic. It also introduces the increasingly popular concept of global mindset in the context of perception and learning. The chapter adds discussion about false-consensus effect as well as the implicit association test. It also reorganizes into one section the discussion about practices that minimize perceptual problems. Positive organizational behavior, mcs81233_fm_i-xxxiv.indd Page xix 3/13/09 9:33:30 PM user-s173 Preface • • • • • • • • /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM xix which was introduced in previous editions, is described in this chapter and mentioned again in subsequent chapters of this book. Chapter 4: Workplace Emotions, Attitudes, and Stress. This chapter now incorporates the topic of stress, which is closely related to workplace emotions. It continues to present a clearer explanation of the dual (cognitive and emotional) processes of attitudes and provides a fuller understanding about the dimensions of emotional intelligence. This chapter also discusses “shock events” in job satisfaction. Chapter 5: Foundations of Employee Motivation. The previous edition was apparently the first OB book to discuss employee engagement. This edition moves the topic to this chapter, so employee engagement is more closely connected to employee motivation as well as the MARS model. The balanced scorecard has also been moved to this chapter, because of its emphasis on goal setting more than rewards. The chapter also distinguishes drives from needs and explains how drives and emotions are the prime movers of human motivation. It describes Maslow’s contribution to the field of human motivation. Organizational Behavior was the first OB textbook to introduce four-drive theory, and this edition further refines the description of that model and its practical implications. Finally, this chapter introduces the positive organizational behavior concept and practice called strengths-based feedback. Chapter 6: Applied Performance Practices. This edition adds emerging information about the situational and personal influences on self-leadership. It also updates information about the meaning of money and reward practices. Chapter 7: Decision Making and Creativity. This edition introduces three of the decision heuristic biases discovered and popularized by Kahneman and Tversky. The chapter also revises and updates the discussion of problems with problem identification, the section on the influence of emotions on making choices, and the section on characteristics of creative people. It also has a more dedicated overview of the rational choice concept of subjective expected utility. Chapter 8: Team Dynamics. This edition combines the two chapters on teams found in previous editions. It summarizes types of teams and more fully discusses the potential benefits and problems with teams. Furthermore, this edition introduces new information on the competencies of effective team members, revises the writing on self-directed teams and virtual teams, and provides emerging knowledge about two key processes in team development: team identity and team competence. Chapter 9: Communicating in Teams and Organizations. The previous edition was apparently the first OB textbook to discuss the role of blogs and wikis in organizations. This edition continues this leadership with new information about social networking communication. Other new knowledge in this chapter includes the topic of multicommunicating, social acceptance as a contingency in the selection of communication channels, conditions that offset the effects of media richness, and four factors that influence the effectiveness of the communication process (i.e., encoding and decoding). Chapter 10: Power and Influence in the Workplace. This chapter further develops the section on social networking as a source of power. It also adds a separate section on the consequences of power. Chapter 11: Conflict and Negotiation in the Workplace. This edition offers a more detailed look at the contingencies of conflict handling. It also revises and mcs81233_fm_i-xxxiv.indd Page xx 3/13/09 9:33:30 PM user-s173 xx /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Preface • • • • updates the development of thinking about whether conflict is good or bad. This description includes the emerging model of constructive versus relationship conflict and the ways to allow the former while suppressing the latter. The discussion of negotiation now includes more specific advice regarding making concessions. Chapter 12: Leadership in Organizational Settings. In this edition, the competency perspective of leadership has been rewritten to incorporate new information about personality, self-concept, practical intelligence, and other specific competencies. The topic of implicit leadership has also been revised to incorporate the distinction between leadership prototypes and the romance of leadership. The topic of shared leadership has been expanded. Chapter 13: Organizational Structure. This edition describes the globally integrated enterprise in the section on forms of departmentalization. The liability of newness is now discussed in the section on organic structures. The chapter also revises writing on span of control and tall/flat structures and introduces concurrent engineering practices in the context of informal coordinating mechanisms. The (dis)advantages of tall versus flat structures also receive more precise discussion. Chapter 14: Organizational Culture. This edition more specifically (than in past editions) critiques the “integration” perspective of organizational culture by referring to the alternative differentiation and fragmentation views of this topic. It also describes attraction-selection-attrition theory as well as the Organizational Culture Profile model. The section on organizational culture and performance and the section on changing and strengthening organizational culture have been substantially rewritten. Chapter 15: Organizational Change. In this edition, the topic of resistance to change is further updated regarding the three functions of resistance. We added a new section on large-group interventions as a distinct fourth approach to organizational change. The topics of urgency for change and future-search conferences also received minor updates. mcs81233_fm_i-xxxiv.indd Page xxi 3/13/09 9:33:30 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM supporting the learning process The changes described previously refer only to the text material. Organizational Behavior, Fifth Edition, also has improved technology supplements, cases, videos, team exercises, and selfassessments. One of Robert Iger’s first tasks as Walt Disney Co.’s new CEO was to acquire Pixar Animation Studios and put its leaders—John Lasseter (shown in this photo) and Ed Catmull—in charge of Disney’s own animation unit, Walt Disney Animation Studios. The studio that brought us Mickey Mouse and The Lion King had become moribund over the past decade, eclipsed by Pixar’s award-winning productions. Disney already had lucrative distribution rights to Pixar’s first five films, including any sequels, but Iger wanted something much more valuable. He wanted the organizational behavior practices that have made Pixar a powerhouse filmmaker, from Toy Storyy to Wall-E E. Pixar’s success is founded on the notion that companies depend on the quality of their employees and how well they collaborate with each other. “From the very beginning, we recognized we had to get the best people, technically, from the computer science world, and from the artistic filmmaking animation world, and get them working together,” explains John Lasseter, who is now chief creative officer of both Pixar and Disney Animation Studios. “That, right there, is probably the secret to Pixar.” Pixar enables people to work together in several ways. First, the company relies on long-term employment relationships rather than short-term project contracts. These long-term relationships improve team development and social networks. “The problem with the Hollywood model is that it’s generally the day you wrap production that you realize you’ve finally figured out how to work together,” says Randy Nelson, head of Pixar University. “We’ve made the leap from an idea-centered business to a mcs81233_ch02_031-065.indd Page 32 1/12/09 9:00:11 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 people-centered business.” Pixar’s campus in Emeryville, California, is another reason why employees work well Several organizational behavior practices have helped Pixar Animation Studios become the world’s most successful animation studio. together. The buildings were designed to cluster people into teams yet also to encourage chance encounters with people from other projects. “When people run into each other and make eye contact, innovative things happen,” says Pixar director Brad Bird. Yasmeen Youssef’s self-confidence was a bit shaky when she and her husband moved from Egypt to Canada a few years ago. “I was worried no one would take a chance on me, would believe in me,” she recalls. But any self-doubts slowly disappeared after taking an entry-level job with Fairmont Hotels & Resorts corporate offices in Toronto. “Everything changed when I started working at Fairmont,” says Youssef, who is now on Fairmont’s human resource team and recently trained new staff in Cairo. “I can’t believe the amount of value, care, respect everyone has extended to me.” As North America’s largest luxury hotel operator, Fairmont discovered long ago that one of the secret Pixar’s egalitarian, no-nonsense, perfectionist culture is a third reason why the animation studio’s staff members work effectively. The company gives power to its production teams rather than to senior executives, but these teams are also ruthless at writing and rendering scenes several times until they look right. All employees—from entry-level newcomers to the CEO—are encouraged to be creative and offer candid feedback about work in progress. Production teams have regular “sweatbox” sessions at which problems are discussed openly. Even the most successful films receive a “postmortem” to discover how they could have been improved. “Our job is to address problems even when we’re successful,” explains Pixar/Disney Animation president Ed Catmull, whose leadership is identified as the foundation of Pixar’s unique culture.1 ingredients for employee performance and well-being is supporting the individual’s self-concept. “People want to feel valued and they stay where they feel valued,” says Carolyn Clark, Fairmont’s senior vice president of human resources. Clark also points out that Fairmont is able to nurture this talent by selecting the best, which means hiring people with the right values and personality for superb customer service. “We believed that we could train the technical skills—that’s the easy part,” Clark explained a few years ago. “What we can’t train is the service orientation. We just can’t put people in the training program and say they are going to come out smiling if that is not inherent in them.” Along with hiring people with the right values and personality and nurturing their self-concept, Fairmont is developing staff to work effectively in a multicultural world. Sean Billing is a case in point. The economics graduate had been working as Fairmont’s director of rooms in Chicago when he casually asked his boss OPENING VIGNETTE Each chapter begins with an engaging opening vignette that sets the stage for the chapter. These brief but interesting case studies introduce students to critical issues, challenge their preconceptions, and highlight some of today’s hottest companies. whether the hotel chain could use his skills and Fairmont Hotels has excelled as North America’s largest luxury hotel operator by hiring people such as Yasmeen Youssef (shown here) with the right values and personality and then nurturing their self-concept and cross-cultural competencies. knowledge elsewhere. Soon after, Billing was offered a position in Kenya, bringing Fairmont’s new properties in the African country up to world-class standards through training and technology without losing the distinctive Kenyan character. Billing jumped at the opportunity, but he also recognizes the challenge of inculcating Fairmont’s deep values of customer service, environmentalism, and empowerment into another culture. “It’s a little bit of hotel culture shock . . . things are quite different here,” he says.1 xxi mcs81233_fm_i-xxxiv.indd Page xxii 3/13/09 9:33:36 PM user-s173 xxii /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Supporting the Learning Process 1 Introduction to the Field of Organizational Behavior LEARNING OBJECTIVES LEARNING OBJECTIVES After reading this chapter, you should be able to: 1. Define organizational behaviorr and organizations and discuss the importance of this field of inquiry. 2. Diagram an organization from an open-systems perspective. Page 3. mcs81233_ch01_001-030.indd Define intellectual capitall and describe the 7 organizational learning perspective of organizational effectiveness. 4. Diagnose the extent to which an organization or one of its work units applies high-performance work practices. 5. Explain how the stakeholder perspective emphasizes the importance of values, ethics, and corporate social responsibility. 6. Summarize the five types of individual behavior in organizations. 7. Debate the organizational opportunities and challenges of globalization, workforce diversity, and virtual work. 1/10/09 7:33:57 AM user-s175 8. Discuss how employment relationships are changing and explain why these changes are occurring. 9. Discuss the anchors on which organizational behavior knowledge is based. Learning Objectives A topical guide for the student, a list of Learning Objectives not only can be found at the beginning of each chapter, but correspondingly throughout chapter. /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE After reading the next two sections, you should be able to: 2. Diagram an organization from an open-systems perspective. 3. Define intellectual capital and describe the organizational learning perspective of organizational effectiveness. 4. Diagnose the extent to which an organization or one of its work units applies high-performance work practices. 5. Explain how the stakeholder perspective emphasizes the importance of values, ethics, and corporate social responsibility. 6. Summarize the five types of individual behavior in organizations. mcs81233_fm_i-xxxiv.indd Page xxiii 3/13/09 9:33:39 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM mcs81233_ch01_001-030.indd Page 19 1/10/09 7:34:07 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Supporting the Learning Process xxiii CAPTIONS BEYOND CURSORY Going beyond the simple caption, richly detailed photos are accompanied by more in-depth narrative. Google Attracts and Keeps Talent through “Cool” Campuses Google is ranked by college students in many countries as one of the top 10 places to work. One reason why the Internet technology company is able to attract so many applicants is that its workplaces look like every student’s dream of a college campus and dorm. Google’s headquarters (called Googleplex) in Mountain View, California, is outfitted with lava lamps, exercise balls, casual sofas, foosball, pool tables, workout rooms, video games, slides, and a restaurant with free gourmet meals. Google’s new EMEA engineering hub in Zurich, Switzerland, also boasts a fun, campuslike environment. These photos show a few areas of Google’s offices in Zurich, including private temporary workspaces in beehives and ski gondolas. Google’s offices are so comfortable that executives occasionally remind staff of building code regulations against making Google’s offices their permanent home.59 mcs81233_ch01_001-030.indd Page 10 1/12/09 7:15:05 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 Global Connections 1.1 Connections boxes connect OB concepts with real organizational incidents. Periodically, these boxes highlight organizational behavior issues around the world and are entitled Global Connections. Hospitals Take the Lean Journey to Efficiency Building Nissan automobiles seems unrelated to serving surgical patients, but staff at Sunderland Royal Hospital can see the similarities. The hospital in northern England recently borrowed several lean management ideas from the nearby Nissan factory, one of the most efficient car plants in Europe, to improve its day surgery unit. “We took [Sunderland hospital staff] on a tour of our plant, showing them a variety of lean processes in action, and let them decide which ones could be applied back at the hospital,” says a training manager at Nissan’s factory in Sunderland. Sunderland’s day surgery staff members were actively involved in applying lean management to their work unit. After attending Nissan’s two-day workshop on lean thinking, they mapped out the work processes, questioned assumptions about the value or relevance of some activities, and discovered ways to reduce the lengthy patient wait times (which were up to three hours). There was some initial resistance and skepticism, but the hospital’s day surgery soon realized significant improvements in efficiency and service quality. “By working with Nissan’s staff, we have streamlined the patient pathway from 29 to 11 discrete stages,” says Anne Fleming (shown in photo), who oversees Sunderland’s 32-bed day-case unit and its 54 employees. “We have done this by reducing duplication, halving the time that patients spend in the unit to three hours by giving them individual appointment times, and introducing the just-in-time approach to the patient pathway.” Fleming also reports that Sunderland’s operating rooms are now much more efficient. Sunderland Royal Hospital is one of many health care centers around the world that are improving efficiency through lean thinking. After receiving training in Japan on lean practices, several teams of doctors, nurses, and other staff from Virginia Mason Medical Center in Seattle, Washington, redesigned workflows to cut out 34 miles of unnecessary walking each day. Park Nicollet Health Services in Minneapolis, Minnesota, improved efficiency at its ambulatory clinic to such an extent that the unit does not require a patient waiting area. One Park Nicollet team worked with orthopedic surgeons to reduce by 60 percent the variety of instruments and supplies they ordered for hip and knee surgery. The trauma team at CONNECTIONS Sunderland Royal Hospital learned from the nearby Nissan factory how to implement lean management in its new day surgery unit. Bolton Hospitals NHS Trust in the United Kingdom reduced average wait times for patients with fractured hips by 38 percent (from 2.4 to 1.7 days), which also resulted in a lower mortality rate for these patients. By smoothing out the inflow of work orders and rearranging the work process, Bolton’s pathology department cut the time required to process samples, previously 24 to 30 hours, to just 2 to 3 hours and reduced the space used by 50 percent. “We know that our case for extra funding will fall on deaf ears unless we cut out waste in the system,” explains Dr. Gill Morgan, chief executive of the U.K.’s NHS Confederation. “Lean works because it is based on doctors, nurses, and other staff leading the process and telling us what adds value and what doesn’t. They are the ones who know.”25 mcs81233_fm_i-xxxiv.indd Page xxiv 3/13/09 9:33:43 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM end-of-chapter material geared toward application TEAM EXERCISES AND SELF-ASSESSMENTS An example of a self-assessment found on the Online Learning Center. Experiential exercises and self-assessments represent an important part of the active learning process. Organizational Behavior, Fifth Edition, supports that learning process by offering team and class exercises in every chapter. Many of these learning activities are not available in other organizational behavior textbooks—for example, “Test Your Knowledge of Personality” (Chapter 2), “Cross-Cultural Communication Game” (Chapter 9), and “Contingencies of Conflict Handling” (Chapter 11). This edition also has three dozen self-assessments in the book or at the Online Learning Center. Selfassessments personalize the meaning of several organizational behavior concepts, such as extroversion/introversion, self-leadership, empathy, stress, creative disposition, and tolerance of change. mcs81233_ch02_031-065.indd Page 62 1/10/09 1:34:45 PM user-s175 mcs81233_ch02_031-065.indd Page 63 1/10/09 1:34:45 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Self-Assessment 2.7 ARE YOU INTROVERTED OR EXTROVERTED? PURPOSE This self-assessment is designed to help you estimate the extent to which you are introverted or extroverted. INSTRUCTIONS The statements in the scale below refer to personal characteristics that might or might not be characteristic of you. Mark the box indicating the extent to which the statement accurately or inaccurately describes you. Then use the scoring key in Appendix B at the end of this book to calculate your results. This exercise should be completed alone so that you can assess yourself honestly without concerns of social comparison. Class discussion will focus on the meaning and implications of extroversion and introversion in organizations. IPIP Introversion-Extroversion Scale How accurately does each of the statements listed below describe you? Very accurate description of me Moderately accurate Neither accurate nor inaccurate Moderately inaccurate Very inaccurate description of me 1. I feel comfortable around people. /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE 2. I make friends easily. 3. I keep in the background. 4. I don’t talk a lot. 5. I would describe my experiences as somewhat dull. Team Exercise 2.6 ETHICS DILEMMA VIGNETTES PURPOSE This exercise is designed to make you aware of the ethical dilemmas people face in various business situations, as well as the competing principles and values that operate in these situations. from buying the product at a lower price in another region. The company says this policy allows it to maintain stable prices within a region rather than continually changing prices due to currency fluctuations. INSTRUCTIONS (SMALL CLASS) The instructor will form teams of four or five students. Team members will read each case below and discuss the extent to which the company’s action in each case was ethical. Teams should be prepared to justify their evaluation using ethics principles and the perceived moral intensity of each incident. CASE THREE For the past few years, the design department of a small (40-employee) company has been using a particular software program, but the three employees who use the software have been complaining for more than a year that the software is out of date and is slowing down their performance. The department agreed to switch to a competing software program, costing several thousand dollars. However, the next version won’t be released for six months and buying the current version will not allow much discount on the next version. The company has put in advance orders for the next version. Meanwhile, one employee was able to get a copy of the current version of the software from a friend in the industry. The company has allowed the three employees to use this current version of the software even though they did not pay for it. INSTRUCTIONS (LARGE CLASS) Working alone, read each case below and determine the extent to which the company’s action in each case was ethical. The instructor will use a show of hands to determine the extent to which students believe the case represents an ethical dilemma (high or low moral intensity) and the extent to which the main people or company in each incident acted ethically. CASE ONE An employee who worked for a major food retailer wrote a Weblog (blog) and, in one of his writings, complained that his boss wouldn’t let him go home when he felt sick and that his district manager refused to promote him because of his dreadlocks. His blog named the employer, but the employee didn’t use his real name. Although all blogs are on the Internet, the employee claims that his was lowprofile and that it didn’t show up in a Google search of his name or the company. Still, the employer somehow discovered the blog, figured out the employee’s real name, and fired him for “speaking ill-will of the company in a public domain.” CASE TWO Computer printer manufacturers usually sell printers at a low margin over cost and generate much more income from subsequent sales of the high-margin ink cartridges required for each printer. One global printer manufacturer now designs its printers so that they work only with ink cartridges made in the same region. Ink cartridges purchased in the United States will not work with the same printer model sold in Europe, for example. This “region coding” of ink cartridges does not improve performance. Rather, it prevents consumers and gray marketers xxiv CASE FOUR Judy Price is a popular talk-show radio personality and opinionated commentator on the morning phone-in show of a popular radio station in a large U.S. city. Price is married to John Tremble, an attorney who was recently elected mayor of the city even though he had no previous experience in public office. The radio station’s board of directors is very concerned that the station’s perceived objectivity will be compromised if Price remains on air as a commentator and talk-show host while her husband holds such a public position. For example, the radio station manager believes that Price gave minimal attention to an incident in which environmental groups criticized the city for its slow progress on recycling. Price denied that her views are biased and stated that the incident didn’t merit as much attention as other issues that particular week. To ease the board’s concerns, the station manager transferred Price from her talk-show host and commentator position to the hourly news reporting position, where most of the script is written by others. Although the reporting job is technically a lower position, Price’s total salary package remains the same. Price is now seeking professional advice to determine whether the radio station’s action represents a form of discrimination on the basis of marital status. 6. I know how to captivate people. 7. I don’t like to draw attention to myself. 8. I am the life of the party. 9. I am skilled in handling social situations. 10. I have little to say. Source: Adapted from instruments described and/or presented in L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger, mcs81233_ch02_031-065.indd Page 57 1/10/09 1:34:42 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE and H. C. Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of Research in Personality 40 (2006), pp. 84–96. CRITICAL THINKING QUESTIONS Critical Thinking Questions 1. An insurance company has high levels of absenteeism among the office staff. The head of office administration argues that employees are misusing the company’s sick leave benefits. However, some of the mostly female staff members have explained that family responsibilities interfere with work. Using the MARS model, as well as your knowledge of absenteeism behavior, discuss some of the possible reasons for absenteeism here and how it might be reduced. 2. As the district manager responsible for six stores in a large electronics retail chain, you have had difficulty with the performance of some sales employees. Although they are initially motivated and generally have good interpersonal skills, many have difficulty with the complex knowledge of the wide variety of store products, ranging from computers to high-fidelity sound systems. Describe three strategies you might apply to improve the match between the competencies of new sales employees and the job requirements. 3. Studies report that heredity has a strong influence on an individual’s personality. What are the implications of this in organizational settings? 4. Suppose that you give all candidates applying for a management trainee position a personality test that measures the five dimensions in the five-factor model. Which personality traits would you consider to be the most important for this type of job? Explain your answer. 5. An important aspect of self-concept is the idea that almost everyone engages in self-enhancement. What problems tend to occur in organizations as a result of the self-enhancement phenomenon? What can organizational leaders do to make use of a person’s inherent drive for self-enhancement? 6. This chapter discussed value congruence mostly in the context of an employee’s personal values versus the organization’s values. But value congruence also relates to the juxtaposition of other pairs of value systems. Explain how value congruence is relevant with respect to organizational versus professional values (i.e., values of a professional occupation, such as physician, accountant, pharmacist). 7. People in a particular South American country have high power distance and high collectivism. What does this mean, and what are the implications of this information when you (a senior executive) visit employees working for your company in that country? 8. “All decisions are ethical decisions.” Comment on this statement, particularly by referring to the concepts of moral intensity and ethical sensitivity. mcs81233_fm_i-xxxiv.indd Page xxv 3/13/09 9:33:48 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM End-of-Chapter Material Geared Toward Application xxv BUSINESSWEEK CASE STUDIES Case Study 2.3 Found at the end of each chapter, BusinessWeek case studies introduce the online full-text article and provide critical thinking questions for class discussion or assignments. These cases encourage students to understand and diagnose real-world issues using organizational behavior knowledge. For example, one case study challenges students to identify and evaluate the strategies that Merck CEO Richard Clark has applied to transform the culture of the pharmaceutical company. Another case study asks students to explain design thinking at Procter & Gamble and to relate design thinking to the decision-making process in organizations. mcs81233_ch03_066-095.indd Page 90 1/10/09 2:15:22 PM user-s175 Case Study 3.1 THE TROUBLE WITH BUSINESS ETHICS Business ethics may have risen to the top of most executive agendas, but Wal-Mart Stores has learned that practicing ethics can also present ethical dilemmas. A few months after going through a new employee training session with a heavy emphasis on ethics, Chalace Epley Lowry acted on the guidance to report any activity that seemed the least bit suspicious. Lowry told the company’s ethics office about possible insider trading by one of her supervisors. Wal-Mart’s investigation concluded that the supervisor had done nothing wrong, but Lowry soon discovered that her identity as the whistleblower had been revealed to the supervisor she accused of wrongdoing. Now Lowry is looking for another job, but there’s no guarantee she’ll get transferred at Wal-Mart. This BusinessWeek case study examines the challenges of supporting ethics hotlines and whistleblowing, and it discusses the reasons why employees are reluctant to communicate ethical wrongdoing. Read the full text of this BusinessWeek article at www. mhhe.com/mcshane5e, and prepare for the discussion questions below. Discussion Questions 1. In an organization’s efforts to maintain ethical standards, how important is it to encourage and support employees who report possible incidents of ethical wrongdoing (i.e., engage in whistleblowing)? Why? What can companies do to support whistle-blowers? 2. What actions are described in this case study that companies have taken to improve ethical standards in their organizations? Are these actions substantive changes or mostly symbolic? Why? Source: P. Gogoi, “The Trouble with Business Ethics,” BusinessWeek Online, 22 June 2007. /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE HY DAIRIES, INC. Syd Gilman read the latest sales figures with a great After a long silence, Beauport managed a deal of satisfaction. The vice president of marketing weak “Thank you, Mr. Gilman.” She was too beat Hy Dairies, Inc., a large midwestern milk prod- wildered to protest. She wanted to collect her ucts manufacturer, was pleased to see that the mar- thoughts and reflect on what she had done wrong. keting campaign to improve sagging sales of Hy’s Also, she did not know her boss well enough to be gourmet ice-cream brand was working. Sales vol- openly critical. ume and market share of the product had increased Gilman recognized Beauport’s surprise, which he significantly over the past two quarters compared naturally assumed was her positive response to hearwith the previous year. ing of this wonderful career opportunity. He, too, The improved sales of Hy’s gourmet ice cream had been delighted several years earlier about his could be credited to Rochelle Beauport, who was temporary transfer to marketing research to round assigned to the gourmet ice-cream brand last year. out his marketing experience. “This move will be Beauport had joined Hy less than two years ago as good for both you and Hy Dairies,” said Gilman as an assistant brand manager after leaving a similar he escorted Beauport from his office. job at a food products firm. She was one of the fewmcs81233_ch03_066-095.indd Beauport was preoccupied with several tasks Page 88 1/10/09 2:15:21 PM user-s175 women of color in marketing management at Hy that afternoon, but she was able to consider the Dairies and had a promising career with the com- day’s events that evening. She was one of the top pany. Gilman was pleased with Beauport’s work women and few minorities in brand management and tried to let her know this in the annual perfor- at Hy Dairies and feared that she was being sidemance reviews. He now had an excellent opportu- lined because the company didn’t want women or nity to reward her by offering her the recently people of color in top management. Her previous vacated position of market research coordinator. Al- employer had made it quite clear that women though technically only a lateral transfer with a “couldn’t take the heat” in marketing management modest salary increase, the marketing research coor- and tended to place women in technical support dinator job would give Beauport broader experience positions after a brief term in lower brand managein some high-profile work, which would enhance ment jobs. Obviously Syd Gilman and Hy Dairies her career with Hy Dairies. Few people were aware were following the same game plan. Gilman’s comthat Gilman’s own career had been boosted by ment that the coordinator job would be good for working as marketing research coordinator at Hy her was just a nice way of saying that Beauport several years earlier. couldn’t go any further in brand management at Rochelle Beauport had also seen the latest sales Hy Dairies. figures on Hy’s gourmet ice cream and was expectBeauport now faced the difficult decision of ing Gilman’s call to meet with her that morning. whether to confront Gilman and try to change Hy Gilman began the conversation by briefly mention- Dairies’ sexist and possibly racist practices or to ing the favorable sales figures and then explained leave the company. that he wanted Beauport to take the marketing research coordinator job. Beauport was shocked by Questions the news. She enjoyed brand management and par- Discussion Perception involves selecting, organizing, and interpretticularly the challenge involved with controlling a 1. Apply ing information to make sense of the worldand around your knowledge of stereotyping so- us. product that directly affected the company’s profitPerceptual engageswhat categorical thinking—the cial identity organization theory to explain went wrong ability. Marketing research coordinator was a technimostly nonconscious process of organizing people and here. objects into preconceived categories that are stored in our cal support position—a “backroom” job—far removed othermemory. perceptual error is apparent in this long-term Mental models—internal representafrom the company’s bottom-line activities. Market- 2. What case study? tions of the external world—also help us to make sense of ing research was not the route to top management in incoming stimuli. can organizations do to minimize mispermost organizations, Beauport thought. She had been 3. What Socialinidentity theoryof explains how we perceive people ceptions these types situations? sidelined. CHAPTER CASES AND ADDITIONAL END-OF-TEXT CASES Every chapter includes at least one short case study that challenges students to diagnose issues and apply ideas from that chapter. One dozen additional cases appear at the end of the book. Several cases are new to this book and are written by instructors around the United States and from other countries. Other cases, such as Arctic Mining Consultants, are classics that have withstood the test of time. /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter Summary through categorization, homogenization, and differentiation. Stereotyping is a derivative of social identity theory, in which people assign traits to others based on their membership in a social category. Stereotyping economizes mental effort, fills in missing information, and enhances our selfperception and social identity. However, it also lays the foundation for prejudice and systemic discrimination. The attribution process involves deciding whether an observed behavior or event is caused mainly by the person (internal factors) or the environment (external factors). Attributions are decided by perceptions of the consistency, distinctiveness, and consensus of the behavior. This process helps us to link together the various pieces of our world in cause-effect relationships, but it is also subject to attribution errors, including fundamental attribution error and self-serving bias. Self-fulfilling prophecy occurs when our expectations about another person cause that person to act in a way that is consistent with those expectations. Essentially, our expectations affect our behavior toward the target person, which then affects that employee’s opportunities and attitudes, which then influences his or her behavior. Self-fulfilling prophecies tend to be stronger when the relationship begins (such as when employees first join the department), when several people hold the expectations toward the employee, and when the employee has a history of low achievement. Four other perceptual errors commonly noted in organizations are the halo effect, primacy effect, recency effect, and false-consensus effect. We can minimize these and other perceptual problems through awareness of perceptual bias, self-awareness, and meaningful interaction. Learning is a relatively permanent change in behavior (or behavior tendency) that occurs as a result of a person’s interaction with the environment. Much of what we learn is tacit knowledge, which is embedded in our actions without conscious awareness. The behavior modification perspective of learning states that behavior change occurs by altering its antecedents and consequences. Antecedents are environmental stimuli that provoke (not necessarily cause) behavior. Consequences are events following behavior that influence its future occurrence. Consequences include positive reinforcement, punishment, negative reinforcement, and extinction. The schedules of reinforcement also influence behavior. Social learning theory states that much learning occurs by observing others and then modeling the behaviors that seem to lead to favorable outcomes and avoiding behaviors that lead to punishing consequences. It also recognizes that we often engage in self-reinforcement. Pageit89 1/12/09tacit 9:54:12 PM s-206 Behaviormcs81233_ch03_066-095.indd modeling is effective because transfers knowledge and enhances the observer’s confidence in performing the task. Many companies now use experiential learning because employees do not acquire tacit knowledge through formal classroom instruction. Experiential learning begins with concrete experience, followed by reflection on that experience, formation of a theory from that experience, and then testing of that theory in the environment. Organizational learning is any structured activity that improves an organization’s capacity to acquire, share, and use knowledge in ways that improve its survival and success. Organizations acquire knowledge through indihalo effect, p. 78 attribution process, p. 75 vidual learning and experimentation. Knowledge sharing Johari Window, p. 80 behavior modification, p. 82 occurs mainly through various forms of communication learning, p. 82 categorical thinking, p. 70 reand training. Knowledge use occurs when employees alize that the knowledge iscontact available and that p. they learning orientation, p. 86 hypothesis, 81 have enough freedom to apply empathy, it. mental models, p. 71 p. 82 perception, p. 68 false-consensus effect, p. 79 positive organizational fundamental attribution behavior, p. 77 error, p. 76 primacy effect, p. 78 global mindset, p. 68 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-03 Key Terms recency effect, p. 78 selective attention, p. 68 self-fulfilling prophecy, p. 76 self-reinforcement, p. 86 self-serving bias, p. 76 social learning theory, p. 85 stereotyping, p. 72 tacit knowledge, p. 82 mcs81233_fm_i-xxxiv.indd Page xxvi 3/13/09 9:33:52 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM instructor support materials Organizational Behavior, Fifth Edition, includes a variety of supplemental materials to help instructors prepare and present the material in this textbook more effectively. INSTRUCTOR’S CD-ROM The Instructor’s CD-ROM contains the Instructor’s Manual, the Test Bank, PowerPoint presentation slides, and additional downloads of art from the text. INSTRUCTOR’S MANUAL This is one of the few textbooks for which the authors write the Instructor’s Manual. This ensures that the instructor materials represent the textbook’s content and support instructor needs. Each chapter includes the learning objectives, glossary of key terms, a chapter synopsis, complete lecture outline with thumbnail images of corresponding PowerPoint slides, and suggested answers to the end-of-chapter discussion questions. Also included are teaching notes for the chapter case(s), team exercises, and self-assessments. The Instructor’s Manual also provides complete teaching notes for the additional cases. TEST BANK AND EZ TEST Revised by Floyd Ormsbee of Clarkson University, the Test Bank includes more than 2,400 multiple-choice, true/ false, and essay questions. Each question identifies the relevant page reference and difficulty level. Assurance of Learning Ready Educational institutions are often focused on the notion of assurance of learning, an important element of many accreditation standards. Organizational Behavior is designed specifically to support your assurance-of-learning initiatives with a simple, yet powerful, solution. We’ve aligned our Test Bank questions with Bloom’s Taxonomy and AACSB guidelines, tagging each question according to its knowledge and skill areas. Each Test Bank question for Organizational Behavior also maps to a specific chapter learning objective listed in the text. You can use our Test Bank software, EZ Test, to easily query for learning objectives that directly relate to the learning objectives for your course. You can use the reporting features of EZ Test to aggregate student results in a similar fashion, making the collection and presentation of assurance-of-learning data quick and easy. AACSB Statement McGraw-Hill Companies is a proud corporate member of AACSB International. Understanding the importance and value of AACSB accreditation, the authors of Organizational Behavior have sought to recognize the curricular guidelines detailed in the AACSB standards for business accreditation by connecting selected questions in the Test Bank to the general knowledge and skill guidelines found in the AACSB standards. xxvi mcs81233_fm_i-xxxiv.indd Page xxvii 3/13/09 9:33:53 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Instructor Support Materials xxvii The statements contained in Organizational Behavior are provided only as a guide for the users of this text. The AACSB leaves content coverage and assessment clearly within the realm and control of individual schools, the mission of the school, and the faculty. The AACSB also charges schools with the obligation of doing assessment against their own content and learning goals. While Organizational Behavior and the teaching package make no claim of any specific AACSB qualification or evaluation, we have, within Organizational Behavior, labeled selected questions according to the six general knowledge and skill areas. The labels or tags within Organizational Behavior are as indicated. There are, of course, many more within the Test Bank, the text, and the teaching package that may be used as a standard for your course. EZ Test Online McGraw-Hill’s EZ Test Online is a flexible and easy-to-use electronic testing program. The program allows instructors to create tests from book-specific items, accommodates a wide range of question types, and enables instructors to even add their own questions. Multiple versions of a test can be created, and any test can be exported for use with course management systems such as WebCT and BlackBoard or with any other course management system. EZ Test Online is accessible to busy instructors virtually anywhere via the Web, and the program eliminates the need for them to install test software. Utilizing EZ Test Online also allows instructors to create and deliver multiple-choice or true/false quiz questions using iQuiz for iPod. For more information about EZ Test Online, please see the Web site at www.eztestonline.com. POWERPOINT PRESENTATION SLIDES Organizational Behavior has received considerable praise for its professional-looking PowerPoint slides. Each PowerPoint file has more than two dozen slides relating to the chapter, including two or more photographs from the textbook. MBTI at Southwest Airlines Southwest Airlines uses the Myers-Briggs Type Indicator (MBTI) to help staff understand and respect co-workers’ different personalities. “You can walk by and see someone's four-letter [MBTI type] posted up in their cube,” says Southwest’s leadership development director, Elizabeth Bryant (shown here). McShane/Von Glinow OB 5e 1 © 2010 The McGraw-Hill Companies, Inc. All rights reserved Functions of Strong Corporate Cultures Culture strength advantages depend on: • Environment fit • Not cult-like • Adaptive culture Functions of Strong Cultures Organizational Outcomes • Control system • Social glue • Sense-making McShane/Von Glinow OB 5e • Org performance • Employee well-being 1 © 2010 The McGraw-Hill Companies, Inc. All rights reserved mcs81233_fm_i-xxxiv.indd Page xxviii 3/13/09 9:33:55 PM user-s173 xxviii /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Instructor Support Materials MCGRAW-HILL’S ASSET GALLERY—NEW! McGraw-Hill/Irwin Management is excited to now provide a one-stop shop for our wealth of assets, making it super quick and easy for instructors to locate specific materials to enhance their course. The Asset Gallery includes all our non–textspecific management resources (SelfAssessments, Test Your Knowledge exercises, videos and information, additional group and individual exercises) along with supporting PowerPoint and Instructor’s Manual materials. Additionally, to help incorporate the assets in the classroom, a guide is provided specific to McGraw-Hill/Irwin texts. Instructors can reach the Asset Gallery through a link from the instructor area of the Online Learning Center. GROUP AND VIDEO RESOURCE MANUAL: An Instructor’s Guide to an Active Classroom (in print 0073044342 or online through the OLC) This manual created for instructors contains everything needed to successfully integrate activities into the classroom. It includes a menu of items to use as teaching tools in class. All of our self-assessment exercises, Test Your Knowledge quizzes, group exercises, and Manager’s HotSeat exercises are located in this one manual along with teaching notes and PowerPoint slides to use in class. Group exercises include everything you would need to use the exercise in class—handouts, figures, etc. This manual is organized into 25 topics such as ethics, decisionmaking, change, and leadership for easy inclusion in your lecture. A matrix is included at the front of the manual that references each resource by topic. Students access all of the exercises and self-assessments on their textbook’s Web site. MANAGER’S HOT SEAT ONLINE: www.mhhe.com/MHS In today’s workplace, managers are confronted daily with issues such as ethics, diversity, working in teams, and the virtual workplace. The Manager’s Hot Seat is interactive software that allows students to watch video of 15 real managers as they apply their years of experience to confront these issues. mcs81233_fm_i-xxxiv.indd Page xxix 3/13/09 9:33:56 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Instructor Support Materials xxix Students assume the role of the manager as they watch the video and answer multiple-choice questions that pop up, forcing them to make decisions on the spot. They learn from the manager’s mistakes and successes, and then prepare a report that evaluates and critiques the manager’s approach and justification of that approach. Reports can be e-mailed or printed out for credit. These video segments are a powerful tool for your course that truly immerses your students in the learning experience. Students can obtain access through the Online Learning Center by purchasing the Premium Content for an additional $10.00. Ask your sales representative for more information. VIDEO POSSIBILITIES Organizational Behavior, Fifth Edition, provides a full complement of videos to liven up the classroom experience. Video DVD (ISBN: 0077338928; 13-digit ISBN: 9780077338923) The new video case collection features PBS, NBC, BWTV, and original productions that relate to examples and cases in the text. It includes segments such as: • Wal-Mart’s Public Image Campaign • Clockless Office: Best Buy’s ROWE Program • Team Work: Team Activities for Co-Workers Management in the Movies DVD (ISBN: 0073317713; 13-digit ISBN: 9780073317717) Management in the Movies is available exclusively to adopters of McGraw-Hill textbooks and contains a collection of “Big Screen” Hollywood films that students will recognize. Each movie has been clipped to highlight a specific scene (each is less than two and a half minutes) and is linked to specific topics. Some of the topics include: • • • • • Groups—13 Going On 30 Ethics—John Q Diversity—Inside Man Attitudes, values, culture—Hoosiers Control and change—Gung Ho Along with the DVD, McGraw-Hill provides an instructor manual (at the Online Learning Center) with suggestions for usage of the video clips, clip summaries, and discussion questions to accompany each segment. Ask your McGraw-Hill sales representative how to obtain a copy. mcs81233_fm_i-xxxiv.indd Page xxx 3/13/09 9:33:56 PM user-s173 xxx /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Instructor Support Materials ONLINE LEARNING CENTER Organizational Behavior offers a comprehensive and user-friendly Online Learning Center (OLC). The site includes practice questions in a format similar to that found in the Test Bank, links to relevant external Web sites, additional cases, and other valuable resources for students, such as: • Self-scoring self-assessments. The three dozen self-assessments summarized in this book are available at the OLC, which allows for rapid self-scoring results, complete with detailed feedback. • Additional cases. In addition to the cases provided in this textbook, the OLC offers many others that instructors might assign for class or home assignments. • Additional self-assessments. From the Build Your Management Skills collection, these assessments are for students who want to delve deeper into self-awareness and for professors who’d like to choose additional exercises, along with a matrix to identify the appropriate topic. • Manager’s Hot Seat Online. www.mhhe.com/mhs. TEGRITY CAMPUS Tegrity Campus is a service that makes class time available all the time by automatically capturing every lecture in a searchable format for students to review when they study and complete assignments. With a simple one-click start and stop process, you capture all computer screens and corresponding audio. Students replay any part of any class with easy-to-use browser-based viewing on a PC or Mac. Educators know that the more students can see, hear, and experience class resources, the better they learn. With Tegrity Campus, students quickly recall key moments by using Tegrity Campus’s unique search feature. This search helps students efficiently find what they need, when they need it, across an entire semester of class recordings. Help turn all your students’ study time into learning moments immediately supported by your lecture. To learn more about Tegrity, watch a 2-minute Flash demo at http://tegritycampus.mhhe.com. mcs81233_fm_i-xxxiv.indd Page xxxi 3/13/09 9:33:57 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM acknowledgments Have you ever worked on a high-performance team where everything just seems to “click”? We have—on this fifth edition of Organizational Behavior! Sure, we spent plenty of time alone writing and researching for this book, and of course there were challenges along the way. But it is always amazing how teamwork really does make a difference. Several people provided valued expertise to smooth out the rough spots of writing, search out the most challenging photos, create a fantastic design, develop the various forms of student and instructor support, and pull together these many pieces into a comprehensive textbook. This teamwork is even more amazing when you consider that most of the team members live throughout the United States and one of the authors (Steve) spends most of his time on the other side of the world. Executive editor John Weimeister led the way with unwavering enthusiasm and foresight. Senior developmental editor Christine (Chipper) Scheid demonstrated superhuman skills at coordinating the volumes of e-mails and files that produced this edition. Sue Gottfried was an amazing copy editor, catching the most subtle errors and improving the authors’ writing. Christine Vaughan, our lead project manager, was another true professional as she guided the book through its production schedule. Jennifer Blankenship, our photo researcher, continued to raise the bar at finding the best photos, including obscure images that we thought no one could possibly track down. Pam Kontopoulos created a design that represents the philosophy and style of this book. The eye-catching cover particularly captures the “dynamic flow” of wellperforming contemporary organizations. Finally, marketing manager Natalie Zook created information packages and marketing materials to help McGraw-Hill/Irwin’s superb sales team. These professionals help instructors to discover that this book really does deliver the content and support needed for an excellent learning experience. Thanks to you all. This has been an exceptional team effort! As was mentioned earlier, several dozen instructors around the world reviewed parts or all of Organizational Behavior, Fifth Edition, or related editions in Canada, the Pacific Rim, and elsewhere over the past two years. Their compliments were energizing, and their suggestions significantly improved the final product. The following people from U.S. colleges and universities provided the most recent feedback for improvements specifically for Organizational Behavior, Fifth Edition: Forrest Aven University of Houston—Downtown Prasad Balkundi State University of New York—Buffalo Kathleen Bates California State University—San Marcos Lehman Benson University of Arizona Sandra Deacon-Carr Boston University Diane Galbraith Slippery Rock University of Pennsylvania Nathan Goates Shippensburg University of Pennsylvania Kanata Jackson Hampton University Gary Kohut University of North Carolina—Charlotte Jerry Kopf Radford University Karthik Namasivayam Pennsylvania State University—University Park Howard Rudd College of Charleston We also extend our sincere thanks to Floyd Ormsbee, Clarkson University, for his exceptional work on revision of the Test Bank. We also extend our gratitude to the xxxi mcs81233_fm_i-xxxiv.indd Page xxxii 3/13/09 9:33:57 PM user-s173 xxxii /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Acknowledgments many instructors in the United States and abroad who contributed cases and exercises to this edition of Organizational Behavior. Steve would also like to extend special thanks to his students in Perth, Manila, and Singapore for sharing their learning experiences and assisting with the development of the three organizational behavior textbooks in the United States, Canada, and the Pacific Rim. Along with working with Mary Ann, Steve is honored to work with coauthors on other editions and translations of this book, including Professor Mara Olekalns at the University of Melbourne and Professor Tony Travaglione at Curtin University for the Pacific Rim edition, Sandra Steen at the University of Regina for the Canadian edition, Professor Radha Sharma at MDI for the Indian edition, Professor Runtian Jing at UESTC for the Chinese edition, and Professor Charles Benabou at UQAM for the Quebec French edition. Steve is also very grateful to his colleagues at the University of Western Australia for their support during changing times. But more than anything else, Steve is forever indebted to his wife Donna McClement and to their wonderful daughters, Bryton and Madison. Their love and support give special meaning to Steve’s life. Mary Ann would also like to acknowledge the many professionals at McGraw-Hill/ Irwin who have worked to make the Fifth Edition a reality. In addition, she would like to thank the many, many students who have used and hopefully enjoyed this book. Student appreciation of this book is apparent by the number of times Mary Ann has been stopped on various campuses all over the world by students who say that they recognize her picture and want to thank her! There are a few who have actually asked for Mary Ann’s autograph, and that did not happen when she was president of the Academy of Management! Thus, it is to the students that Mary Ann says thank you, particularly for making this learning venture fun and exciting. She would also like to thank the faculty and staff at Florida International University, as well as her CIBER staff: Sonia, Juan, and Kranthi. By far and away, Mary Ann thanks coauthor Steve McShane for his tireless efforts. Finally, Mary Ann would like to thank her family, starting with the immediate ones—Emma, Zack, and Googun—but also John, Rhoda, Lauren, Lindsay, and Christy. She also wants to acknowledge the critical role that some very special people play in her life: Janet, Peter, Bill, Karen, Alan, Danny, Debra, Mary, and Linda. I thank you all! mcs81233_fm_i-xxxiv.indd Page xxxiii 3/13/09 9:33:57 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Organizational Behavior mcs81233_fm_i-xxxiv.indd Page xxxiv 3/13/09 9:33:58 PM user-s173 /Users/user-s173/Desktop/TEMPWORK/MARCH/13:03:09/MHBR089/MHBR089-FM Emerging Knowledge and Practice for the Real World mcs81233_ch01_001-030.indd Page 1 1/19/09 4:21:10 PM user-s174 /Users/user-s174/Desktop/MHBR089-SAMP/MHBR089-01 Part One Introduction Chapter 1 Introduction to the Field of Organizational Behavior mcs81233_ch01_001-030.indd Page 2 1/12/09 7:14:38 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 One of Robert Iger’s first tasks as Walt Disney Co.’s new CEO was to acquire Pixar Animation Studios and put its leaders—John Lasseter (shown in this photo) and Ed Catmull—in charge of Disney’s own animation unit, Walt Disney Animation Studios. The studio that brought us Mickey Mouse and The Lion King had become moribund over the past decade, eclipsed by Pixar’s award-winning productions. Disney already had lucrative distribution rights to Pixar’s first five films, including any sequels, but Iger wanted something much more valuable. He wanted the organizational behavior practices that have made Pixar a powerhouse filmmaker, from Toy Story to Wall-E. Pixar’s success is founded on the notion that companies depend on the quality of their employees and how well they collaborate with each other. “From the very beginning, we recognized we had to get the best people, technically, from the computer science world, and from the artistic filmmaking animation world, and get them working together,” explains John Lasseter, who is now chief creative officer of both Pixar and Disney Animation Studios. “That, right there, is probably the secret to Pixar.” Pixar enables people to work together in several ways. First, the company relies on long-term employment relationships rather than short-term project contracts. These long-term relationships improve team development and social networks. “The problem with the Hollywood model is that it’s generally the day you wrap production that you realize you’ve finally figured out how to work together,” says Randy Nelson, head of Pixar University. “We’ve made the leap from an idea-centered business to a people-centered business.” Pixar’s campus in Emeryville, California, is another reason why employees work well Several organizational behavior practices have helped Pixar Animation Studios become the world’s most successful animation studio. together. The buildings were designed to cluster people into teams yet also to encourage chance encounters with people from other projects. “When people run into each other and make eye contact, innovative things happen,” says Pixar director Brad Bird. Pixar’s egalitarian, no-nonsense, perfectionist culture is a third reason why the animation studio’s staff members work effectively. The company gives power to its production teams rather than to senior executives, but these teams are also ruthless at writing and rendering scenes several times until they look right. All employees—from entry-level newcomers to the CEO—are encouraged to be creative and offer candid feedback about work in progress. Production teams have regular “sweatbox” sessions at which problems are discussed openly. Even the most successful films receive a “postmortem” to discover how they could have been improved. “Our job is to address problems even when we’re successful,” explains Pixar/Disney Animation president Ed Catmull, whose leadership is identified as the foundation of Pixar’s unique culture.1 mcs81233_ch01_001-030.indd Page 3 1/10/09 7:33:56 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE 1 Introduction to the Field of Organizational Behavior LEARNING OBJECTIVES After reading this chapter, you should be able to: 1. Define organizational behavior and organizations and discuss the importance of this field of inquiry. 2. Diagram an organization from an open-systems perspective. 3. Define intellectual capital and describe the organizational learning perspective of organizational effectiveness. 4. Diagnose the extent to which an organization or one of its work units applies high-performance work practices. 5. Explain how the stakeholder perspective emphasizes the importance of values, ethics, and corporate social responsibility. 6. Summarize the five types of individual behavior in organizations. 7. Debate the organizational opportunities and challenges of globalization, workforce diversity, and virtual work. 8. Discuss how employment relationships are changing and explain why these changes are occurring. 9. Discuss the anchors on which organizational behavior knowledge is based. mcs81233_ch01_001-030.indd Page 4 1/10/09 7:33:56 AM user-s175 4 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction Collaboration, motivation, communication, creativity, empowerment, organizational learning, leadership—these are some of the organizational behavior concepts behind the success of Pixar Animation Studios and other companies. They are also some of the topics featured in this book. Our main objective is to help you understand behavior in organizations and to work more effectively in organizational settings. We begin in this chapter by introducing the field of organizational behavior and explaining why knowledge of this field is important to organizations as well as to your career. Next, the chapter describes the four main perspectives of organizational effectiveness, which is considered the “ultimate dependent variable” in organizational behavior. This is followed by an overview of the five main types of individual behavior in organizations. This chapter also describes three challenges facing organizations—globalization, increasing workforce diversity, and emerging employment relationships—and highlights the anchors that guide organizational behavior knowledge development. Learning Objectives After reading this section, you should be able to: 1. Define organizational behavior and organizations and discuss the importance of this field of inquiry. The Field of Organizational Behavior organizational behavior (OB) The study of what people think, feel, and do in and around organizations. organizations Groups of people who work interdependently toward some purpose. Organizational behavior (OB) is the study of what people think, feel, and do in and around organizations. Its focus is on employee behavior, decisions, perceptions, and emotional responses. It looks at how individuals and teams in organizations relate to each other and to their counterparts in other organizations. OB also encompasses the study of how organizations interact with their external environments, particularly in the context of employee behavior and decisions. OB researchers systematically study these topics at multiple levels of analysis, namely, the individual, team (including interpersonal), and organization.2 The definition of organizational behavior begs the question: What are organizations? Organizations are groups of people who work interdependently toward some purpose.3 Notice that organizations are not buildings or government-registered entities. In fact, many organizations exist without either physical walls or government documentation to confer their legal status. Organizations have existed for as long as people have worked together.4 Massive temples dating back to 3500 BC were constructed through the organized actions of multitudes of people. Craftspeople and merchants in ancient Rome formed guilds, complete with elected managers. More than 1,000 years ago, Chinese factories were producing 125,000 tons of iron each year. Throughout history, organizations have consisted of people who communicate, coordinate, and collaborate with each other to achieve common objectives. One key feature of organizations is that they are collective entities. They consist of human beings (typically, but not necessarily, employees), and these people interact with each other in an organized way. This organized relationship requires some minimal level of communication, coordination, and collaboration to achieve organizational objectives. As such, all organizational members have degrees of interdependence with each other; they accomplish goals by sharing materials, information, or expertise with co-workers. A second key feature of organizations is that their members have a collective sense of purpose. There is some debate among OB experts about whether all organizations mcs81233_ch01_001-030.indd Page 5 1/13/09 10:48:02 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/13.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 5 really have a collective sense of purpose. The collective purpose isn’t always well defined or agreed on. Furthermore, although most companies have vision and mission statements, these documents are sometimes out of date or don’t describe what employees and leaders try to achieve in reality. These points may be true, but imagine an organization without goals: It would consist of a mass of people wandering around aimlessly without any sense of direction. So, whether they are producing animated feature films at Pixar Animation Studios or designing and building automobiles at General Motors, organizational members do have some sense of collective purpose. “A company is one of humanity’s most amazing inventions,” says Steven Jobs, CEO of Apple, Inc. (and former CEO of Pixar Animation Studios). “It’s totally abstract. Sure, you have to build something with bricks and mortar to put the people in, but basically a company is this abstract construct we’ve invented, and it’s incredibly powerful.”5 Organizational Behavior’s Foundations Mary Parker Follett and Chester Barnard were pioneers of contemporary organizational behavior thinking a decade or two before OB became a distinct field of inquiry. Follett was a Boston social worker and political science scholar who suggested that conflict can be “constructive” when the parties gain a better understanding of each other. She was also a strong advocate of employee involvement and organizational democracy. Chester Barnard was a career executive (including president of New Jersey Bell Telephone Company and, later, head of two foundations), who wrote several influential books on management and organizations. He emphasized that organizations depend on effective communication and that a manager’s formal authority depends on the employee’s willingness to accept that power. He also discussed norms of informal groups as well as a rational perspective of employee motivation. Both Barnard and Follett described organizations as holistic cooperative organisms. This was a refreshing contrast to the machinelike metaphor of organizations that dominated management theory and practice in those days.7 Organizational behavior emerged as a distinct field around the 1940s, but organizations have been studied by experts in other fields for many centuries.6 For example, the Greek philosopher Plato wrote about the essence of leadership. Around the same time, the Chinese philosopher Confucius extolled the virtues of ethics and leadership. In 1776, Adam Smith advocated a new form of organizational structure based on the division of labor. One hundred years later, German sociologist Max Weber wrote about rational organizations, the work ethic, and charismatic leadership. Soon after, industrial engineer Frederick Winslow Taylor proposed new ways to organize employees and motivate them through goal setting and rewards. In the 1920s, Elton Mayo and his colleagues reported on how formal and informal group dynamics operate in the workplace. During that same time, Mary Parker Follett pioneered new ways of thinking about several OB topics, including constructive conflict, team dynamics, organizational democracy, power, and leadership. A decade later, Chester Barnard wrote insightful views regarding individual behavior, motivation, communication, leadership and authority, and team dynamics in organizational settings. This brief historical tour indicates that OB has been around for a long time; it just wasn’t organized into a unified discipline until after World War II. Why Study Organizational Behavior? Organizational behavior instructors face a challenge: On the one hand, students just beginning mcs81233_ch01_001-030.indd Page 6 1/10/09 7:33:56 AM user-s175 6 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction their careers tend to value courses related to specific jobs, such as accounting and marketing.8 However, OB doesn’t have a specific career path—there is no “vice president of OB”—so these students sometimes have difficulty recognizing the value that OB knowledge can offer to their future. On the other hand, students with several years of work experience place OB near the top of their list of important courses. Why? Because they have directly observed that OB does make a difference to their career success. To begin with, they have learned that OB theories help us to make sense of the workplace. These theories also give us the opportunity to question and rebuild our personal mental models that have developed through observation and experience. Thus, OB is important because it helps to fulfill our need to understand and predict the world in which we live.9 But the main reason why people with work experience value OB knowledge is that they have discovered how it helps them to get things done in organizations. This practical side of organizational behavior is, according to some experts, a critical feature of the best OB theories.10 Everyone in the organization needs to work with other people, and OB provides the knowledge and tools for working with and through others. Building a high-performance team, motivating co-workers, handling workplace conflicts, influencing your boss, and changing employee behavior are just a few of the areas of knowledge and skills offered in organizational behavior. No matter what career path you choose, you’ll find that OB concepts play an important role in performing your job and working more effectively within organizations. Organizational Behavior Is for Everyone Our explanation of why organizational behavior is important for your career success does not assume that you are, or intend to be, a manager. In fact, this book pioneered the notion that OB knowledge is for everyone. Whether you are a geologist, financial analyst, customer service representative, or chief executive officer, you need to understand and apply the many organizational behavior topics that are discussed in this book. Yes, organizations will continue to have managers, but their roles have changed and the rest of us are increasingly expected to manage ourselves in the workplace. In the words of one forward-thinking OB writer many years ago: Everyone is a manager.11 OB and the Bottom Line So far, our answer to the question “Why study OB?” has focused on how OB knowledge benefits you as an individual. But organizational behavior knowledge is just as important for the organization’s financial health. This was apparent in the opening story about Pixar Animation Studios, which has benefited from several OB concepts and practices. According to one estimate, firms that apply performance-based rewards, employee communication, work–life balance, and other OB practices have three times the level of financial success that companies have where these practices are absent. Another study concluded that companies that earn “the best place to work” awards have significantly higher financial and long-term stock market performance. Essentially, these firms leverage the power of OB practices, which translate into more favorable employee attitudes, decisions, and performance. The benefits of OB are well known to Warren Buffett and other financial gurus; they consider the organization’s leadership and quality of employees as two of the best predictors of the firm’s financial potential.12 mcs81233_ch01_001-030.indd Page 7 1/10/09 7:33:57 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior Learning Objectives 7 After reading the next two sections, you should be able to: 2. Diagram an organization from an open-systems perspective. 3. Define intellectual capital and describe the organizational learning perspective of organizational effectiveness. 4. Diagnose the extent to which an organization or one of its work units applies high-performance work practices. 5. Explain how the stakeholder perspective emphasizes the importance of values, ethics, and corporate social responsibility. 6. Summarize the five types of individual behavior in organizations. Perspectives of Organizational Effectiveness organizational effectiveness A broad concept represented by several perspectives, including the organization’s fit with the external environment, internal-subsystems configuration for high performance, emphasis on organizational learning, and ability to satisfy the needs of key stakeholders. open systems A perspective which holds that organizations depend on the external environment for resources, affect that environment through their output, and consist of internal subsystems that transform inputs to outputs. Almost all organizational behavior theories have the implicit or explicit objective of making organizations more effective.13 Indeed, organizational effectiveness is considered the “ultimate dependent variable” in organizational behavior.14 The first challenge, however, is to define organizational effectiveness. Experts agree that this topic is burdened with too many labels—organizational performance, success, goodness, health, competitiveness, excellence, and so on—with no consensus on the meaning of each label. Long ago, organizational effectiveness was defined as the extent to which an organization achieved its stated goals.15 According to this view, Pixar is effective because it achieves its stated objective of producing animation features on time, on budget, and on target regarding box office sales. The goal attainment view is no longer accepted, however, because a company can be considered effective simply by establishing easily achievable goals. Also, some goals—such as social responsibility to the community—are so abstract that it is difficult to know how well the organization has achieved them. A third flaw with the goal attainment definition is that a company’s stated objectives might threaten its long-term survival. For example, some corporate leaders receive incentives (such as stock options) to maximize shortterm profits. Some accomplish this objective by slashing expenditures, including funds for marketing and product development. The result is often a lack of new products and deterioration in the company’s brand value in the long run. In extreme cases, the company achieves its short-term profitability targets but eventually goes out of business. How is organizational effectiveness defined today? The answer is that there are several perspectives of effectiveness, so this concept is defined in terms of all of these perspectives.16 Organizations are considered effective when they have a good fit with their external environment, when their internal subsystems are configured for a highperformance workplace, when they are learning organizations, and when they satisfy the needs of key stakeholders. Over the next few pages, we will discuss each of these four perspectives of organizational effectiveness in some detail. Open-Systems Perspective The open-systems perspective of organizational effectiveness is one of the earliest and deeply entrenched ways of thinking about organizations. In fact, the other major organizational effectiveness perspectives might be considered detailed extensions of mcs81233_ch01_001-030.indd Page 8 1/10/09 7:33:57 AM user-s175 8 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction External Environment Exhibit 1.1 Open-Systems Perspective of Organizations Feedback Feedback Organization Subsystem • Raw materials • Human resources • Information • Financial resources • Equipment Transforming inputs to outputs Su bs ys Feedback Subsystem m te ys bs Su Inputs te m Outputs • Products/services • Employee behaviors • Profits/losses • Waste/pollution Subsystem Subsystem Feedback the open-systems model.17 As depicted in Exhibit 1.1, the open-systems perspective views organizations as complex organisms that “live” within an external environment. The word open describes this permeable relationship, whereas closed systems can exist without dependence on an external environment. As open systems, organizations depend on the external environment for resources, including raw materials, employees, financial resources, information, and equipment. Pixar, Disney, and other companies could not survive without employees, raw materials, knowledge, and so forth. The open-systems perspective also describes numerous subsystems within the organization, such as processes (communication and reward systems), work units (production, marketing), and social dynamics (informal networks, power relationships). With the aid of technology (such as equipment, work methods, and information), these subsystems transform inputs into various outputs. Some outputs (e.g., products and services) may be valued by the external environment, whereas other outputs (e.g., employee layoffs, pollution) have adverse effects. The organization receives feedback from the external environment regarding the value of its outputs and the availability of future inputs. According to the open-systems perspective, successful organizations monitor their environments and are able to maintain a close fit with changing conditions.18 One way they do this is by finding new opportunities to secure essential inputs. For instance, many fast-food restaurants struggle to find enough employees. To ensure that it has enough qualified staff, McDonald’s restaurants were among the first to recruit retirees. More recently, McDonald’s UK introduced the “family contract,” an employment arrangement that allows members of the employee’s family (spouses, grandparents, and children over the age of 16) to swap shifts without notifying management.19 Successful organizations also redesign outputs so that they remain compatible with demands from the external environment. Food manufacturers have changed their ingredients to satisfy more health-conscious consumers. Automobile manufacturers have redesigned cars to mcs81233_ch01_001-030.indd Page 9 1/10/09 7:33:59 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 9 satisfy demands for more fuel efficiency and safety, while also continually adapting to customer preferences in models and styling. Internal-Subsystems Effectiveness The open-systems perspective considers more organizational efficiency The amount of outputs relative to inputs in the organization’s transformation process. lean management A cluster of practices to improve organizational efficiency by continuously reducing waste, unevenness, and overburden in the production process. than an organization’s fit with the external environment. It also examines how well the organization operates internally, that is, how well it transforms inputs into outputs. The most common indicator of this internal transformation process is organizational efficiency (also called productivity), which is the amount of outputs relative to inputs.20 Companies that produce more goods or services with less labor, materials, and energy are more efficient. A popular strategy for improving efficiency in the transformation process is lean management.21 Based on practices developed by Toyota Motor Company, lean management involves continuously reducing waste, unevenness, and overburden in the production process. Waste (called muda) takes many forms, such as excess travel of the product or service through the production process, too much time during which the work is sitting idle (waiting for the next step in production), too much inventory, too much employee physical movement, and too much finished product without a buyer. Lean management also involves minimizing situations in which people and equipment are overloaded (too much demand per unit time) and smoothing out the production process (e.g., reducing bottlenecks). The “lean” movement originated in manufacturing, but it is now being adopted by hospitals, government, accounting firms, and other service providers.22 Global Connections 1.1 describes how British and American hospitals have improved efficiency and effectiveness through various lean practices. Keep in mind that efficiency does not necessarily translate into effectiveness. Efficiency is about doing things right, whereas effectiveness is about doing the right things. A company might be highly efficient at making a product or providing a service, but it will be ineffective if no one wants that product or service, for example. Also, efficiency often requires standardization, whereas companies operating in rapidly changing environments need to remain nimble and responsive. Organizations often need more adaptive and innovative transformation processes, not just more efficient ones. For example, German engineering conglomerate Siemens AG has an effective transformation process because its subsystems are innovative and responsive, not necessarily the most efficient. “Whether I have additional costs or not doesn’t matter as much as the speed to market and the quality of the design,” says a Siemens executive. “We’re not talking about a pure cost game.”23 Another important issue in the transformation process is how well the organization’s subsystems coordinate with each other. The more each subsystem depends on other subsystems, the higher the risk of problems that undermine the transformation process.24 Information gets lost, ideas are not shared, materials are hoarded, communication messages are misinterpreted, resources and rewards are distributed unfairly, and so forth. These coordination challenges are amplified as organizations grow, such as when employees are clustered into several departments and when departments are clustered into several organizational divisions. That’s why even the best-laid plans are paved with unintended consequences. A slight change in work practices in one subsystem may ripple through the organization and affect other subsystems in adverse ways. For example, an adjustment in accounting procedures might have the unintended effect of motivating sales staff to sell more products with lower profit margin or discouraging administrative staff from accurately completing documents that are vital for executive decisions. mcs81233_ch01_001-030.indd Page 10 1/12/09 7:15:05 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 Global Connections 1.1 Hospitals Take the Lean Journey to Efficiency Building Nissan automobiles seems unrelated to serving surgical patients, but staff at Sunderland Royal Hospital can see the similarities. The hospital in northern England recently borrowed several lean management ideas from the nearby Nissan factory, one of the most efficient car plants in Europe, to improve its day surgery unit. “We took [Sunderland hospital staff] on a tour of our plant, showing them a variety of lean processes in action, and let them decide which ones could be applied back at the hospital,” says a training manager at Nissan’s factory in Sunderland. Sunderland’s day surgery staff members were actively involved in applying lean management to their work unit. After attending Nissan’s two-day workshop on lean thinking, they mapped out the work processes, questioned assumptions about the value or relevance of some activities, and discovered ways to reduce the lengthy patient wait times (which were up to three hours). There was some initial resistance and skepticism, but the hospital’s day surgery soon realized significant improvements in efficiency and service quality. “By working with Nissan’s staff, we have streamlined the patient pathway from 29 to 11 discrete stages,” says Anne Fleming (shown in photo), who oversees Sunderland’s 32-bed day-case unit and its 54 employees. “We have done this by reducing duplication, halving the time that patients spend in the unit to three hours by giving them individual appointment times, and introducing the just-in-time approach to the patient pathway.” Fleming also reports that Sunderland’s operating rooms are now much more efficient. Sunderland Royal Hospital is one of many health care centers around the world that are improving efficiency through lean thinking. After receiving training in Japan on lean practices, several teams of doctors, nurses, and other staff from Virginia Mason Medical Center in Seattle, Washington, redesigned workflows to cut out 34 miles of unnecessary walking each day. Park Nicollet Health Services in Minneapolis, Minnesota, improved efficiency at its ambulatory clinic to such an extent that the unit does not require a patient waiting area. One Park Nicollet team worked with orthopedic surgeons to reduce by 60 percent the variety of instruments and supplies they ordered for hip and knee surgery. The trauma team at Sunderland Royal Hospital learned from the nearby Nissan factory how to implement lean management in its new day surgery unit. Bolton Hospitals NHS Trust in the United Kingdom reduced average wait times for patients with fractured hips by 38 percent (from 2.4 to 1.7 days), which also resulted in a lower mortality rate for these patients. By smoothing out the inflow of work orders and rearranging the work process, Bolton’s pathology department cut the time required to process samples, previously 24 to 30 hours, to just 2 to 3 hours and reduced the space used by 50 percent. “We know that our case for extra funding will fall on deaf ears unless we cut out waste in the system,” explains Dr. Gill Morgan, chief executive of the U.K.’s NHS Confederation. “Lean works because it is based on doctors, nurses, and other staff leading the process and telling us what adds value and what doesn’t. They are the ones who know.”25 Organizational Learning Perspective The open-systems perspective has traditionally focused on physical resources that enter the organization and are processed into physical goods (outputs). This was representative of the industrial economy but not the “new economy,” where the most valued input is knowledge. Knowledge is the driver of competitive advantage, 10 mcs81233_ch01_001-030.indd Page 11 1/10/09 7:34:03 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior organizational learning A perspective which holds that organizational effectiveness depends on the organization’s capacity to acquire, share, use, and store valuable knowledge. absorptive capacity The ability to recognize the value of new information, assimilate it, and use it for valueadded activities. 11 however, in the organizational learning perspective (also called knowledge management). Through this lens, organizational effectiveness depends on the organization’s capacity to acquire, share, use, and store valuable knowledge.26 Knowledge acquisition occurs when information is brought into the organization from the external environment. This can include hiring people, acquiring companies, and scanning the environment for the latest trends. It also includes the process of creative insight—experimenting and discovering new ideas.27 Knowledge sharing refers to the distribution of knowledge throughout the organization. For example, Pixar Animation Studios deliberately centralized its cafeteria, mailroom, and restroom facilities so that employees would “bump into” and coincidentally share knowledge with people from other areas of the organization rather than just their own team members. Knowledge sharing also occurs through electronic whiteboards, wikis, blogs, and other computer-mediated technology. Knowledge use is the application of knowledge to organizational processes in ways that improve the organization’s effectiveness. Essentially, new work activities involve knowledge use because they require the application of new knowledge to break out of past routines and practices. Storage refers to ways that companies retain valuable knowledge. They retain employees, document best practices, record experiments (including those that didn’t work out), and keep samples of past products. To understand knowledge acquisition, sharing, use, and storage, consider how Google engages in organizational learning. The company that brought us the ubiquitous Internet search engine acquires knowledge by hiring the best talent, buying entire companies (such as Keyhole, Inc., whose knowledge created Google Earth), and encouraging employees to try out new ideas. Employees are expected to devote 20 percent of their time to discovering new knowledge of their choosing. Google encourages knowledge sharing in many ways. It has a team-oriented project culture that encourages staff to share information as part of their job. Its campuslike environment (called the Googleplex) increases the chance that employees from different parts of the organization will mingle and casually share information, whether dining at the company’s subsidized gourmet restaurant or playing a game of volleyball in the sports area. Google also relies on sophisticated information technologies—wikis, blogs, and intranet repositories—to support knowledge sharing. Along with promoting knowledge acquisition and sharing, Google encourages knowledge use by giving employees the freedom to apply their newfound knowledge and encouraging them to experiment with that knowledge. “Google is truly a learning organization,” says Google’s chief financial officer, George Reyes.28 An interesting dilemma in organizational learning is that the ability to acquire, share, and use new knowledge is limited by the company’s existing store of knowledge. To recognize the value of new information, assimilate it, and use it for valueadded activities, organizations require sufficient absorptive capacity.29 For example, many companies were slow to develop online marketing practices because no one in the organization had enough knowledge about the Internet to fathom its potential or apply that knowledge to the company’s business. In some cases, companies had to acquire entire teams of people with the requisite knowledge to realize the potential of this marketing channel. Entire countries also suffer from a lack of absorptive capacity. Without sufficient knowledge, a society is slow or completely unable to adopt new information that may improve social and economic conditions.30 Intellectual Capital: The Stock of Organizational Knowledge Knowledge acquisition, sharing, and use represent the flow of knowledge. The organizational mcs81233_ch01_001-030.indd Page 12 1/10/09 7:34:03 AM user-s175 12 intellectual capital A company’s stock of knowledge, including human capital, structural capital, and relationship capital. human capital The stock of knowledge, skills, and abilities among employees that provides economic value to the organization. /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction learning perspective also considers the company’s stock of knowledge, called its intellectual capital.31 The most obvious form of intellectual capital is human capital—the knowledge, skills, and abilities that employees carry around in their heads. This is an important part of a company’s stock of knowledge, and it is a huge risk in companies where knowledge is the main competitive advantage. When key people leave, they take with them some of the knowledge that makes the company effective. Even if every employee left the organization, intellectual capital would still remain in the form of structural capital. This includes the knowledge captured and retained in an organization’s systems and structures, such as the documentation of work procedures and the physical layout of the production line. Structural capital also includes the organization’s finished products because knowledge can be extracted by taking them apart to discover how they work and are constructed (i.e., reverse engineering). Finally, intellectual capital includes relationship capital, which is the value derived from an organization’s relationships with customers, suppliers, and others who provide added mutual value for the organization. Organizational Memory and Unlearning organizational memory The storage and preservation of intellectual capital. Corporate leaders need to recognize that they are the keepers of an organizational memory.32 This unusual metaphor refers to the storage and preservation of intellectual capital. It includes knowledge that employees possess as well as knowledge embedded in the organization’s systems and structures. It includes documents, objects, and anything else that provides meaningful information about how the organization should operate. How do organizations retain intellectual capital? One way is by keeping good employees. Progressive companies achieve this by adapting their employment practices to become more compatible with emerging workforce expectations, including work–life balance, an egalitarian hierarchy, and a workspace that generates more fun. A second organizational memory strategy is to systematically transfer knowledge to other employees. This occurs when newcomers apprentice with skilled employees, thereby acquiring knowledge that is not documented. A third strategy is to transfer knowledge into structural capital. This includes bringing out hidden knowledge, organizing it, and putting it in a form that can be available to others (such as written instructions or a video clip showing the task being performed). The organizational learning perspective states not only that effective organizations learn but also that they unlearn routines and patterns of behavior that are no longer appropriate.33 Unlearning removes knowledge that no longer adds value and, in fact, may undermine the organization’s effectiveness. Some forms of unlearning involve replacing dysfunctional policies, procedures, and routines. Other forms of unlearning erase attitudes, beliefs, and assumptions. For instance, employees rethink the “best way” to perform a task and how to serve clients. High-Performance Work Practices Perspective high-performance work practices (HPWP) A perspective which holds that effective organizations incorporate several workplace practices that leverage the potential of human capital. Although the open-systems perspective states that successful companies are good at transforming inputs into outputs, it does not identify the most important subsystem characteristics of effective organizations. Consequently, an entire field of research has blossomed around the objective of determining specific “bundles” of organizational practices that offer competitive advantage. This research has had various labels over the years, but it is now most widely called high-performance work practices (HPWP).34 The HPWP perspective begins with the idea that human capital—the knowledge, skills, and abilities that employees possess—is an important source of competitive mcs81233_ch01_001-030.indd Page 13 1/12/09 7:15:15 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 Chapter 1 Introduction to the Field of Organizational Behavior 13 advantage for organizations.35 Human capital helps the organization realize opportunities or minimize threats in the external environment. Furthermore, human capital is neither widely available nor easily duplicated. For instance, a newly formed company cannot instantly develop a workforce identical to a workforce at an established company. Nor can technology replace the capabilities that employees bring to the workplace. In short, human capital is valuable, rare, difficult to imitate, and nonsubstitutable.36 Therefore, organizations excel by introducing a bundle of systems and structures that leverage the potential of their workforce. Many high-performance work practices have been studied over the years.37 Four practices with strong research support are employee involvement, job autonomy, employee competence, and performance- and/or skill-based rewards. As you will learn later in this book, employee involvement and job autonomy tend to strengthen employee motivation as well as improve decision making, organizational responsiveness, and commitment to change. In high-performance workplaces, employee involvement and job autonomy often take the form of self-directed teams, which are discussed in Chapter 8. Another key variable in the HPWP model is employee competence. Specifically, organizations are more effective when they recruit and select people with relevant skills, knowledge, values, and other personal characteristics. Furthermore, successful companies invest in their employees by supporting further competency development (see Chapter 2). A fourth characteristic of high-performance organizations is that they link performance and skill development to various forms of financial and nonfinancial rewards valued by employees. We discuss reward systems in Chapter 6 as one of several practices to improve employee performance. The HPWP perspective is currently popular among OB experts and practitioners, but it also has its share of critics. One concern is that many studies try to find out which practices predict organizational performance without understanding why those practices should have this effect.38 In other words, some of the practices identified as HPWPs lack theoretical foundation; the causal connection between work practices and organizational effectiveness is missing. Without this explanation, it is difficult to be confident that the practice will be valuable in the future and in other situations. A second concern with the HPWP perspective is that it may satisfy shareholder and customer needs at the expense of employee well-being.39 Some experts point out that HPWPs increase work stress and that management is reluctant to delegate power or share the financial benefits of productivity improvements. If high-performance work practices improve organizational performance at a cost to employee well-being, then this perspective (along with the open-systems and organizational learning perspectives) offers an incomplete picture of organizational effectiveness. The remaining gaps are mostly filled by the stakeholder perspective of organizational effectiveness. Stakeholder Perspective stakeholders Individuals, organizations, and other entities that affect, or are affected by, the organization’s objectives and actions. The three organizational effectiveness perspectives described so far mainly consider processes and resources, yet they only minimally recognize the importance of relations with stakeholders. Stakeholders include individuals, organizations, and other entities that affect, or are affected by, the organization’s objectives and actions. They include anyone with a stake in the company—employees, shareholders, suppliers, labor unions, government, communities, consumer and environmental interest groups, and so on. The essence of the stakeholder perspective is that companies must take into account how their actions affect others, and this requires that they understand, manage, and mcs81233_ch01_001-030.indd Page 14 1/10/09 7:34:03 AM user-s175 14 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction satisfy the interests of their stakeholders.40 The stakeholder perspective personalizes the open-systems perspective; it identifies specific people and social entities in the external and internal environment. It also recognizes that stakeholder relations are dynamic; they can be negotiated and managed, not just taken as a fixed condition.41 Consider the troubles that Wal-Mart has faced in recent years.42 For decades, the world’s largest retailer concentrated on customers by providing the lowest possible prices and on shareholders by generating healthy financial returns. Yet emphasizing these two stakeholders exposed the company to increasing hostility from other groups in society. Some interest groups accused Wal-Mart of destroying America’s manufacturing base and tacitly allowing unethical business practices (such as child labor) in countries where it purchased goods. Other groups pointed out that Wal-Mart had a poor record of environmental and social responsibility. Still other groups lobbied to keep Wal-Mart out of their communities because the giant retailer typically builds in outlying suburbs where land is cheap, thereby fading the vibrancy of the community’s downtown area. These stakeholder pressure points existed for some time, but Wal-Mart mostly ignored them until they became serious threats. In fact, Wal-Mart recently created the position “senior director of stakeholder engagement” to ensure that it pays more attention to most stakeholders and to proactively manage stakeholder relationships. Understanding, managing, and satisfying the interests of stakeholders is more challenging than it sounds because stakeholders have conflicting interests and organizations don’t have the resources to satisfy every stakeholder to the fullest. Therefore, organizational leaders need to decide how much priority to give to each group. One commonly cited factor is to favor stakeholders with the most power.43 This makes sense when one considers that the most powerful stakeholders hold the greatest threat and opportunity to the company’s survival. Yet stakeholder power should not be the only criterion for determining organizational strategy and resource allocation. Ignoring less powerful stakeholders might motivate them to become more powerful by forming coalitions or seeking government support. It might also irritate more powerful stakeholders if ignoring weaker interests violates the norms and standards of society. values Relatively stable, evaluative beliefs that guide a person’s preferences for outcomes or courses of action in a variety of situations. Values, Ethics, and Corporate Social Responsibility This brings us to one of the key strengths of the stakeholder perspective, namely, that it incorporates values, ethics, and corporate social responsibility into the organizational effectiveness equation.44 The stakeholder perspective states that to manage the interests of diverse stakeholders, leaders ultimately need to rely on their personal and organizational values for guidance. Values are relatively stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations.45 Values help us to know what is right or wrong, or good or bad, in the world. Chapter 2 explains how values are an important part of our self-concept and, as such, motivate our actions. Although values exist within individuals, groups of people often hold similar values, so we tend to ascribe these shared values to the team, department, organization, profession, or entire society. For example, Chapter 14 discusses the importance and dynamics of organizational culture, which includes shared values across the company or within subsystems. Values have become a popular topic in corporate boardrooms because leaders are discovering that the values-driven organizational approach to guiding employee behavior is potentially more effective, as well as more popular, than the old commandand-control approach (i.e., top-down decisions with close supervision of employees). Bank of Montreal (BMO) is a case in point. A few years ago, in a series of meetings, mcs81233_ch01_001-030.indd Page 15 1/10/09 7:34:04 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 15 Focus on Stakeholders Makes Lockheed Martin “Ideal” When choosing a future employer, college graduates look beyond salary and career opportunities. These factors are important, but recent surveys indicate that the company’s ethical standards, values, and corporate social responsibility (CSR) are also top considerations. Based on its reputation for ethics, diversity, and CSR, Lockheed Martin Corporation is ranked by American undergraduate engineering students as one of the top companies for an ideal career and is among the top 60 companies identified by all undergraduate students. “Students have always been impressed with Lockheed Martin’s commitment to diversity and social responsibility,” says the CEO of Universum Communications, the company that surveys more than 37,000 students annually. “The company is well known for its charitable contributions and strong values.” For example, this photo shows a team of Lockheed Martin employees assisting cleanup of New Orleans following Hurricane Katrina.46 ethics The study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad. BMO’s top executives reflected on the financial institution’s history and had deep conversations to identify the values on which the Canadian financial institution was built. Out of this dialogue emerged four value statements that were distributed to employees and built into a revised reward system. Why did BMO go to such trouble to identify and communicate its shared values? “[BMO’s values] provide a stable base for guiding employee decisions and actions in an otherwise rapidly changing workplace,” explains a BMO executive who attended the meetings. “Simply put, values matter and employees care that the organizations they work for and represent are ethical and walk the talk of their values.”47 By incorporating values into organizational effectiveness, the stakeholder perspective also provides the strongest case for ethics and corporate social responsibility. In fact, the stakeholder perspective emerged out of earlier writing on ethics and corporate social responsibility. Ethics refers to the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad. We rely on our ethical values to determine “the right thing to do.” Ethical behavior is driven mcs81233_ch01_001-030.indd Page 16 16 corporate social responsibility (CSR) Organizational activities intended to benefit society and the environment beyond the firm’s immediate financial interests or legal obligations. 1/12/09 7:15:22 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 Part One Introduction by the moral principles we use to make decisions. These moral principles represent fundamental values. Chapter 2 provides more detail about ethical principles and related influences on moral reasoning. Corporate social responsibility (CSR) consists of organizational activities intended to benefit society and the environment beyond the firm’s immediate financial interests or legal obligations.48 It is the view that companies have a contract with society, in which they must serve stakeholders beyond shareholders and customers. In some situations, the interests of the firm’s shareholders should be secondary to those of other stakeholders.49 As part of CSR, many companies have adopted the triple-bottom-line philosophy: They try to support or “earn positive returns” in the economic, social, and environmental spheres of sustainability. Firms that adopt the triple bottom line aim to survive and be profitable in the marketplace (economic), but they also intend to maintain or improve conditions for society (social) as well as the physical environment.50 Not everyone agrees with the idea that organizations are more effective when they cater to a wide variety of stakeholders. More than 30 years ago, economist Milton Friedman pronounced that “there is one and only one social responsibility of business— to use its resources and engage in activities designed to increase its profits.” Although few writers take this extreme view today, some point out that companies can benefit other stakeholders only if those with financial interests in the company receive first priority. Yet four out of five Americans say that a company’s commitment to a social issue is an important factor in deciding whether to work for the company and whether to buy its products or services. In another survey, more than two-thirds of North American students said they would not apply for a job if the company is considered irresponsible. Most American and European MBA students also claim they would accept lower financial rewards to work for an organization with a better ethical/CSR reputation. However, another recent survey indicated that while most American MBA students believe socially responsible companies have a better reputation, less than half of these respondents believe CSR improves revenue, employee loyalty, customer satisfaction, community well-being, or the company’s long-term viability.51 Capgemini recently discovered the importance of corporate social responsibility when the Netherlands-based information technology (IT) consulting firm tried to fill 800 IT and management consulting positions in that country. Rather than offering a T-shirt for completing the 30-minute online survey on recruitment issues, Capgemini advised respondents (IT and management consultants) that for each completed survey it would provide funding for a street kid in Kolkata, India, to have one week of schooling and accommodation. The survey included an option for respondents to find out more about employment with the consulting firm. Far beyond its expectations, Capgemini received more than 10,000 completed surveys and 2,000 job inquiries from qualified respondents. The company filled its 800 jobs and developed a waiting list of future prospects. Furthermore, media attention about this initiative raised Capgemini’s brand reputation for corporate social responsibility. The consulting firm supported 10,400 weeks of housing and education for children in Kolkata.52 Types of Individual Behavior The four perspectives described over the past few pages—open systems, organizational learning, high-performance work practices, and stakeholder—provide a multidimensional view of what makes companies effective. Within these models, however, are individual behaviors that enable companies to interact with their environments; mcs81233_ch01_001-030.indd Page 17 1/10/09 7:34:05 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 17 Exhibit 1.2 Types of WorkRelated Behavior Mai Types of work-related behavior al ation an i z Org enship citiz ntai n wor ing k atte nda nce Task performance Jo in in or wit g/st ga h ay ni the ing za tio n ter ork un e w o C ctiv ors u vi od eha r p b acquire, share, and use knowledge to the best advantage; process inputs to outputs efficiently and responsively; and meet the needs of various stakeholders. While organizational effectiveness is the ultimate dependent variable, these employee behaviors are the individual-level dependent variables found in most OB research. Exhibit 1.2 highlights the five types of behavior discussed most often in the organizational behavior literature: task performance, organizational citizenship, counterproductive work behaviors, joining and staying with the organization, and work attendance. Task Performance Task performance refers to goal-directed behaviors under the individual’s control that support organizational objectives. Task performance behaviors transform raw materials into goods and services or support and maintain technical activities.53 For example, foreign exchange traders at Wachovia make decisions and take actions to exchange currencies. Employees in most jobs have more than one performance dimension. Foreign exchange traders must be able to identify profitable trades, work cooperatively with clients and co-workers in a stressful environment, assist in training new staff, and work on special telecommunications equipment without error. Some of these performance dimensions are more important than others, but only by considering all of them can we fully evaluate an employee’s contribution to the organization. organizational citizenship behaviors (OCBs) Various forms of cooperation and helpfulness to others that support the organization’s social and psychological context. Organizational Citizenship Companies could not effectively compete, transform resources, or serve the needs of their stakeholders if employees performed only their formal job duties. Employees also need to engage in organizational citizenship behaviors (OCBs)—various forms of cooperation and helpfulness to others that support the organization’s social and psychological context.54 In other words, companies require contextual performance (i.e., OCBs) along with task performance. mcs81233_ch01_001-030.indd Page 18 1/10/09 7:34:07 AM user-s175 18 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction Organizational citizenship behaviors take many forms. Some are directed toward individuals, such as assisting co-workers with their work problems, adjusting your work schedule to accommodate co-workers, showing genuine courtesy toward coworkers, and sharing your work resources (supplies, technology, staff) with co-workers. Other OCBs represent cooperation and helpfulness toward the organization in general. These include supporting the company’s public image, taking discretionary action to help the organization avoid potential problems, offering ideas beyond those required for your own job, attending voluntary functions that support the organization, and keeping up with new developments in the organization.55 Counterproductive Work Behaviors counterproductive work behaviors (CWBs) Voluntary behaviors that have the potential to directly or indirectly harm the organization. Organizational behavior is interested in all workplace behaviors, including those on the “dark side,” collectively known as counterproductive work behaviors (CWBs). CWBs are voluntary behaviors that have the potential to directly or indirectly harm the organization. They include abuse of others (e.g., insults and nasty comments), threats (threatening harm), work avoidance (e.g., tardiness), work sabotage (doing work incorrectly), and overt acts (theft). CWBs are not minor concerns. One recent study found that units of a fast-food restaurant chain with higher CWBs had a significantly worse performance, whereas organizational citizenship had a relatively minor benefit.56 Joining and Staying with the Organization Task performance, organizational citizenship, and the lack of counterproductive work behaviors are obviously important, but if qualified people don’t join and stay with the organization, none of these performance-related behaviors will occur. Attracting and retaining talented people is particularly important as worries about skill shortages heat up. For instance, a shortage of qualified truck drivers is the main factor restricting growth at Contract Freighters in Joplin, Missouri. “We have plenty of freight; we have plenty of trucks,” says company president Herb Schmidt, but the “severe shortage” of qualified drivers is making it impossible to satisfy the growing customer base. Hotels in many parts of the United States are also struggling to find enough staff to keep up with demand. “We’re woefully understaffed,” says the owner of a St. Petersburg, Florida, resort that employs 265 people and still has 40 unfilled vacancies. “It’s horrible.57” Companies survive and thrive not just by hiring people with talent or potential; they also need to ensure that these employees stay with the company. Organizations with high turnover suffer because of the high cost of replacing people who leave. More important, as mentioned earlier in this chapter, much of an organization’s intellectual capital is the knowledge carried around in employees’ heads. When people leave, some of this vital knowledge is lost, often resulting in inefficiencies, poorer customer service, and so forth. This threat is not trivial: Between one-third and one-half of employees say they would change companies if offered a comparable job.58 Maintaining Work Attendance Along with attracting and retaining employees, organizations need everyone to show up for work at scheduled times. Situational factors—such as severe weather or car breakdown—explain some work absences. Motivation is another factor. Employees mcs81233_ch01_001-030.indd Page 19 1/10/09 7:34:07 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 19 Google Attracts and Keeps Talent through “Cool” Campuses Google is ranked by college students in many countries as one of the top 10 places to work. One reason why the Internet technology company is able to attract so many applicants is that its workplaces look like every student’s dream of a college campus and dorm. Google’s headquarters (called Googleplex) in Mountain View, California, is outfitted with lava lamps, exercise balls, casual sofas, foosball, pool tables, workout rooms, video games, slides, and a restaurant with free gourmet meals. Google’s new EMEA engineering hub in Zurich, Switzerland, also boasts a fun, campuslike environment. These photos show a few areas of Google’s offices in Zurich, including private temporary workspaces in beehives and ski gondolas. Google’s offices are so comfortable that executives occasionally remind staff of building code regulations against making Google’s offices their permanent home.59 who experience job dissatisfaction or work-related stress are more likely to be absent or late for work because taking time off is a way to temporarily withdraw from stressful or dissatisfying conditions. Absenteeism is also higher in organizations with generous sick leave because this benefit limits the negative financial impact of taking time away from work. Studies have found that absenteeism is also higher in teams with strong absence norms, meaning that team members tolerate and even expect co-workers to take time off.60 Learning Objectives After reading the next two sections, you should be able to: 7. Debate the organizational opportunities and challenges of globalization, workforce diversity, and virtual work. 8. Discuss how employment relationships are changing, and explain why these changes are occurring. 9. Discuss the anchors on which organizational behavior knowledge is based. Contemporary Challenges for Organizations Throughout the earlier discussion on organizational effectiveness was an underlying theme that organizations are deeply affected by the external environment. They need to maintain a good fit with their external environment by continuously monitoring and adjusting to changes in that environment. This external environment is continuously mcs81233_ch01_001-030.indd Page 20 1/10/09 7:34:08 AM user-s175 20 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction changing, but some changes, over the past decade and in the decade to come, are more profound than others. These changes require that corporate leaders and all other employees adjust to new realities. In this section, we highlight three of the major challenges facing organizations: globalization, increasing workforce diversity, and emerging employment relationships. Globalization globalization Economic, social, and cultural connectivity with people in other parts of the world. You might not have heard of Fonterra, but chances are that you have purchased or eaten one of its products recently. The New Zealand–based company is the world’s largest dairy exporting business and the world’s lowest-cost dairy ingredient producer. It operates in 140 countries, employs 20,000 people, and represents 40 percent of the global dairy trade. In many countries, it forms joint partnerships, such as those with the Dairy Farmers of America, SanCor in Argentina, and Aria in Europe. Fonterra’s current position on the world stage is quite different from the situation a decade ago, when three New Zealand dairy companies joined forces. They realized that globalization was shaking up the industry and that forming a global enterprise was essential to their survival. The merged company was so globally focused from the outset that it was temporarily called GlobalCo until the name Fonterra was chosen. Fonterra’s adjustment to a global operation was not easy. Executives were replaced as the company needed to adopt a different mindset. “A lot of people in the [pre-merger companies] were very New Zealand–centric and culturally did not understand the global challenges of the teams offshore and the different operating companies,” acknowledges a Fonterra executive.61 Fonterra is a rich example of the globalization of business over the past few decades. Globalization refers to economic, social, and cultural connectivity with people in other parts of the world. Fonterra and other organizations globalize when they actively participate in other countries and cultures. Although businesses have traded goods across borders for centuries, the degree of globalization today is unprecedented because information technology and transportation systems allow a much more intense level of connectivity and interdependence across the planet.62 Globalization offers numerous benefits to organizations in terms of larger markets, lower costs, and greater access to knowledge and innovation. At the same time, there is considerable debate about whether globalization benefits developing nations and whether it is primarily responsible for increasing work intensification, as well as reducing job security and work–life balance in developed countries.63 Globalization is now well entrenched, so the real issue in organizational behavior is how corporate leaders and employees alike can lead and work effectively in this emerging reality.64 OB researchers are turning their attention to this topic. In Project GLOBE, for example, dozens of experts are studying leadership and organizational practices worldwide.65 Increasing Workforce Diversity Walk into the offices of Verizon Communications and you can quickly see that the communications service giant reflects the communities it serves. Minorities make up 35 percent of Verizon’s 230,000 employees and 29 percent of management positions. Women represent 42 percent of its workforce and 38 percent of management positions. Verizon’s inclusive culture has won awards from numerous organizations and publications representing Hispanics, African-Americans, gays and lesbians, people with disabilities, and other groups. “A commitment to diversity is as much about good business as it is about doing the right thing,” says Magda Yrizarry, vice president mcs81233_ch01_001-030.indd Page 21 1/10/09 7:34:08 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior surface-level diversity The observable demographic or physiological differences in people, such as their race, ethnicity, gender, age, and physical disabilities. deep-level diversity Differences in the psychological characteristics of employees, including personalities, beliefs, values, and attitudes. 21 of workplace culture, diversity and compliance for Verizon. “As a company, we serve some of the most diverse markets; so from our leadership to our frontline employees, we understand and value diversity.”66 Verizon Communications is a model employer and a reflection of the increasing diversity of people living in the United States and in many other countries. The description of Verizon’s diversity refers to surface-level diversity—the observable demographic and other overt differences in people, such as their race, ethnicity, gender, age, and physical capabilities. Surface-level diversity has changed considerably in the United States over the past few decades. People with nonwhite or Hispanic origin represent one-third of the American population, and the percentage is projected to increase substantially over the next few decades. Within the next 50 years, one in four Americans will be Hispanic, 14 percent will be African American, and 8 percent will be of Asian descent. By 2060, people with European non-Hispanic ethnicity will be a minority.67 Many other countries are also experiencing increasing levels of racial and ethnic diversification. Diversity also includes differences in the psychological characteristics of employees, including personalities, beliefs, values, and attitudes.68 We can’t directly see this deep-level diversity, but it is evident in a person’s decisions, statements, and actions. One illustration of deep-level diversity is the different attitudes and expectations held by employees across generational cohorts.69 Baby boomers—people born between 1946 and 1964—seem to expect and desire more job security and are more intent on improving their economic and social status. In contrast, Generation-X employees—those born between 1965 and 1979—expect less job security and are motivated more by workplace flexibility, the opportunity to learn (particularly new technology), and egalitarian and “fun” organizations. Meanwhile, some observers suggest that Generation-Y employees (those born after 1979) are noticeably self-confident, optimistic, multitasking, and more independent than even Gen-X co-workers. These statements certainly don’t apply to everyone in each cohort, but they do reflect the dynamics of deep-level diversity and shifting values and expectations across generations. Consequences of Diversity Diversity presents both opportunities and challenges in organizations.70 In some circumstances and to some degree, diversity can become a competitive advantage by improving decision making and team performance on complex tasks. Studies suggest that teams with some forms of diversity (particularly occupational diversity) make better decisions on complex problems than do teams whose members have similar backgrounds. A few studies also report that companies that win diversity awards have higher financial returns, at least in the short run.71 This is consistent with anecdotal evidence from many corporate leaders, namely, that having a diverse workforce improves customer service and creativity. For instance, PepsiCo estimates that one-eighth of its revenue growth is directly attributable to new products inspired by diversity efforts.72 Based on this evidence, the popular refrain is that workforce diversity is a sound business proposition. Unfortunately, it’s not that simple. There is growing evidence that most forms of diversity offer both advantages and disadvantages.73 Teams with diverse employees usually take longer to perform effectively. Diversity brings numerous communication problems as well as “faultlines” in informal group dynamics. Diversity is also a source of conflict, which can lead to lack of information sharing and, in extreme cases, morale problems and higher turnover. Whether or not workforce diversity is a business advantage, companies need to make it a priority because surface-level diversity is a moral and legal imperative. mcs81233_ch01_001-030.indd Page 22 1/10/09 7:34:09 AM user-s175 22 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Part One Introduction Ethically, companies that offer an inclusive workplace are, in essence, making fair and just decisions regarding employment, promotions, rewards, and so on. Fairness is a well-established influence on employee loyalty and satisfaction. “Diversity is about fairness; we use the term inclusive meritocracy,” says Ann M. Limberg, president of Bank of America New Jersey. “What it does for our workforce is build trust and assures that individual differences are valued.”74 Our main point here is that workforce diversity is the new reality and that organizations need to adjust to this reality both to survive and to experience its potential benefits for organizational success. Emerging Employment Relationships work–life balance The degree to which a person minimizes conflict between work and nonwork demands. virtual work Work performed away from the traditional physical workplace by means of information technology. Combine globalization with emerging workforce diversity, and add in new information technology. The resulting concoction has created incredible changes in employment relationships. A few decades ago, most (although not all) employees in the United States and similar cultures would finish their workday after eight or nine hours and could separate their personal time from the workday. There were no BlackBerrys and no Internet connections to keep staff tethered to work on a 24/7 schedule. Even business travel was more of an exception due to its high cost. Most competitors were located in the same country, so they had similar work practices and labor costs. Today, work hours are longer (although arguably less than they were 100 years ago), employees experience more work-related stress, and there is growing evidence that family and personal relations are suffering. Little wonder that one of the emerging issues in this new century is for more work–life balance—minimizing conflict between work and nonwork demands.75 Another employment relationship trend is virtual work, in which employees use information technology to perform their jobs away from the traditional physical workplace. The most common form of virtual work, called telecommuting or teleworking, involves working at home rather than commuting to the office. In another form of virtual work, employees are connected to the office while on the road or at clients’ offices. For instance, nearly 50 percent of employees at Sun Microsystems complete some of their work from home, cafés, drop-in centers, or clients’ offices. More than two-thirds of the employees at Agilent Technologies engage in virtual work some days or all the time.76 Welcome to My Office! One of Ray Ackley’s first decisions each workday is where to put his office. The chief creative officer for Tipping Point Services, a metro Detroit–based marketing and communications firm, sometimes chooses a popular bakery or café. Other times, he sets up shop in a nearby library (Ackley is shown here at Southfield Public Library). As long as the location has a good Wi-Fi connection and comfortable surroundings, Ackley can get on with his work, which includes communicating with co-workers located elsewhere in Detroit as well as in Delhi, India, and Shanghai, China. Tipping Point Services doesn’t even have an official office, although it might eventually establish one. For now, Ackley and his co-workers prefer the virtual work arrangement. “We made a commitment to be a virtual office because we can,” says Ackley. “I can work anywhere, which means I travel less and I can spend more time at home.”77 mcs81233_ch01_001-030.indd Page 23 1/10/09 7:34:09 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 23 Some research suggests that virtual work, particularly telecommuting, potentially reduces employee stress by offering better work–life balance and dramatically reducing time lost through commuting to the office. Nortel Networks reports that 71 percent of its U.K. staff feels more empowered through virtual work arrangements. AT&T estimates that its telecommuters reduce pollution and are about 10 percent more productive than before they started working from home. IBM’s virtual work program annually saves the company $400 million a year globally, mostly in real estate costs.78 Against these potential benefits, virtual workers face a number of real or potential challenges. Family relations may suffer rather than improve if employees lack sufficient space and resources for a home office. Some virtual workers complain of social isolation and reduced promotion opportunities. Virtual work is clearly better suited to people who are self-motivated and organized, can work effectively with contemporary information technologies, and have sufficient fulfillment of social needs elsewhere in their life. It also works better in organizations that evaluate employees by their performance outcomes rather than “face time.”79 Anchors of Organizational Behavior Knowledge Globalization, increasing workforce diversity, and emerging employment relationships are just a few of the trends that challenge organizations and make OB knowledge more relevant than ever before. To understand these and other topics, the field of organizational behavior relies on a set of basic beliefs or knowledge structures (see Exhibit 1.3). These conceptual anchors represent the principles on which OB knowledge is developed and refined. The Multidisciplinary Anchor Organizational behavior is anchored around the idea that the field should develop from knowledge in other disciplines, not just from its own isolated research base. For instance, psychological research has aided our understanding of individual and interpersonal behavior. Sociologists have contributed to our knowledge of team dynamics, organizational socialization, organizational power, and other aspects of the social system. OB knowledge has also benefited from knowledge in emerging fields such as communications, marketing, and information systems. Some OB experts have recently argued that the field suffers from a “trade deficit”—importing far more knowledge Exhibit 1.3 Anchors of Organizational Behavior Knowledge Multidisciplinary anchor OB should import knowledge from many disciplines. Systematic research anchor OB should study organizations using systematic research methods. Contingency anchor OB theory should recognize that the effects of actions often vary with the situation. Multiple levels of analysis anchor OB knowledge should include three levels of analysis: individual, team, and organization. mcs81233_ch01_001-030.indd Page 24 24 1/12/09 7:15:29 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 Part One Introduction from other disciplines than is exported to other disciplines. Although this may be a concern, organizational behavior has thrived through its diversity of knowledge from other fields of study.80 The Systematic Research Anchor evidence-based management The practice of making decisions and taking actions based on research evidence. A critical feature of OB knowledge is that it should be based on systematic research, which typically involves forming research questions, systematically collecting data, and testing hypotheses against those data. Appendix A at the end of this book details some of the features of the systematic research process, including hypotheses, sampling, research design, and qualitative methods research. When research is founded on theory and conducted systematically, we can be more confident that the results are meaningful and useful for practice. This is known as evidence-based management—making decisions and taking actions based on research evidence. Evidence-based management makes sense, yet OB experts are often amazed at how frequently corporate leaders embrace fads, consulting models and their own pet beliefs without bothering to find out if they actually work!81 There are many reasons that people have difficulty applying evidence-based management. One explanation is that corporate decision makers are bombarded with so many ideas from newspapers, books, consultant reports, and other sources that they have difficulty figuring out which ones are based on good evidence. Another reason why people ignore evidence and embrace fads is that good OB research is necessarily generic; it is rarely described in the context of a specific problem in a specific organization. Managers therefore have the difficult task of figuring out which theories are relevant to their unique situation. A third reason is that many consultants and popular book writers are rewarded for marketing their concepts and theories, not for testing to see if they actually work. Indeed, some management concepts have become popular (and are even found in some OB textbooks!) because of heavy marketing, not because of any evidence that they are valid. Finally, as you will learn in Chapter 3, people form perceptions and beliefs quickly and tend to ignore evidence that their beliefs are inaccurate. The Contingency Anchor People and their work environments are complex, and the field of organizational behavior recognizes this by stating that a particular action may have different consequences in different situations. In other words, no single solution is best in all circumstances.82 Of course, it would be so much simpler if we could rely on “one best way” theories, in which a particular concept or practice has the same results in every situation. OB experts do search for simpler theories, but they also remain skeptical about “surefire” recommendations; an exception is somewhere around the corner. Thus, when faced with a particular problem or opportunity, we need to understand and diagnose the situation and select the strategy most appropriate under those conditions.83 The Multiple Levels of Analysis Anchor This textbook divides organizational behavior topics into three levels of analysis: individual, team, and organization. The individual level includes the characteristics and behaviors of employees as well as the thought processes that are attributed to them, such as motivation, perceptions, personalities, attitudes, and values. The team level of analysis looks at the way people interact. This includes team dynamics, communication, power, organizational politics, conflict, and leadership. At the organizational level, we mcs81233_ch01_001-030.indd Page 25 1/10/09 7:34:09 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 1 Introduction to the Field of Organizational Behavior 25 focus on how people structure their working relationships and on how organizations interact with their environments. Although an OB topic is typically pegged into one level of analysis, it usually relates to multiple levels.84 For instance, communication is located in this book as a team (interpersonal) process, but we also recognize that it includes individual and organizational processes. Therefore, you should try to think about each OB topic at the individual, team, and organizational levels, not just at one of these levels. Chapter Summary Organizational behavior is the study of what people think, feel, and do in and around organizations. Organizations are groups of people who work interdependently toward some purpose. Although OB doesn’t have a specific career path, it offers knowledge and skills that are vitally important to anyone who works in organizations. OB knowledge also has a significant effect on the success of organizations. This book takes the view that OB is for everyone, not just managers. Organizational effectiveness is a multidimensional concept represented by four perspectives: open systems, organizational learning, high-performance work practices, and stakeholder. The open-systems perspective says that organizations need to adapt to their external environment and configure their internal subsystems to maximize efficiency and responsiveness. For the most part, the other perspectives of organizational effectiveness are detailed extensions of the open-systems model. The organizational learning perspective states that organizational effectiveness depends on the organization’s capacity to acquire, share, use, and store valuable knowledge. Intellectual capital is knowledge that resides in an organization, including its human capital, structural capital, and relationship capital. Effective organizations also “unlearn,” meaning that they remove knowledge that no longer adds value. The high-performance work practices (HPWP) perspective states that effective organizations leverage the human capital potential of their employees. Specific HPWPs have been identified, and experts in this field suggest that they need to be bundled together for maximum benefit. The stakeholder perspective states that effective organizations take into account how their actions affect others, and this requires them to understand, manage, and satisfy the interests of their stakeholders. This perspective incorporates values, ethics, and corporate social responsibility into the organizational effectiveness equation. The five main types of workplace behavior are task performance, organizational citizenship, counterproductive work behaviors, joining and staying with the organization, and work attendance. These represent the individual-level dependent variables found in most OB research. Three environmental shifts that are challenging organizations include globalization, increasing workforce diversity, and emerging employment relationships. Globalization refers to economic, social, and cultural connectivity with people in other parts of the world. Workforce diversity includes both surface-level and deep-level diversity. Two emerging employment relationship changes are demands for work–life balance and virtual work. Several conceptual anchors represent the principles on which OB knowledge is developed and refined. These anchors include beliefs that OB knowledge should be multidisciplinary and based on systematic research, that organizational events usually have contingencies, and that organizational behavior can be viewed from three levels of analysis (individual, team, and organization). Key Terms absorptive capacity, p. 11 corporate social responsibility (CSR), p. 16 counterproductive work behaviors (CWBs), p. 18 deep-level diversity, p. 21 ethics, p. 15 evidence-based management, p. 24 globalization, p. 20 high-performance work practices (HPWPs), p. 12 human capital, p. 12 intellectual capital, p. 12 lean management, p. 9 open systems, p. 7 organizational behavior (OB), p. 4 organizational citizenship behaviors (OCBs), p. 17 mcs81233_ch01_001-030.indd Page 26 1/12/09 organizational effectiveness, p. 7 organizational efficiency, p. 9 organizational learning, p. 11 organizational memory, p. 12 7:51:12 PM s-206 organizations, p. 4 stakeholders, p. 13 surface-level diversity, p. 21 values, p. 14 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 virtual work, p. 22 work–life balance, p. 22 Critical Thinking Questions A friend suggests that organizational behavior courses are useful only to people who will enter management careers. Discuss the accuracy of your friend’s statement. 2. A number of years ago, employees in a city water distribution department were put into teams and encouraged to find ways to improve efficiency. The teams boldly crossed departmental boundaries and areas of management discretion in search of problems. Employees working in other parts of the city began to complain about these intrusions. Moreover, when some team ideas were implemented, the city managers discovered that a dollar saved in the water distribution unit may have cost the organization two dollars in higher costs elsewhere. Use the open-systems perspective to explain what happened here. 3. After hearing a seminar on organizational learning, a mining company executive argues that this perspective ignores the fact that mining companies cannot rely on knowledge alone to stay in business. They also need physical capital (such as digging and ore-processing equipment) and land (where the minerals are located). In fact, these two may be more important than what employees carry around in their heads. Evaluate the mining executive’s comments. 1. Case Study 1.1 JERSEY DAIRIES, INC. Jersey Dairies, Inc. faced increasing competition that threatened its dominant market share in the Pacific Northwest. Senior management at the 300employee dairy food processing company decided that the best way to maintain or increase market share was to take the plunge into a quality management (QM) program. Jersey hired consultants to educate management and employees about the QM process, and sent several managers to QM seminars. A steering team of managers and a few 26 4. A common refrain among executives is “People are our most important asset.” Relate this statement to any two of the four perspectives of organizational effectiveness presented in this chapter. Does this statement apply better to some perspectives than to others? Why or why not? 5. 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? 6. Look through the list of chapters in this textbook, and discuss how globalization could influence each organizational behavior topic. 7. “Organizational theories should follow the contingency approach.” Comment on the accuracy of this statement. 8. What does evidence-based management mean? Describe situations you have heard about in which companies have practiced evidence-based management, as well as situations in which companies have relied on fads that lacked sufficient evidence of their worth. employees visited other QM companies throughout North America. To strengthen the company’s QM focus, Jersey president Tina Stavros created a new position called vice-president of quality, and hired James Alder into that position. Alder, who previously worked as a QM consultant at a major consulting firm, was enthusiastic about implementing a complete QM program. One of Alder’s first accomplishments was convincing management to give every employee in mcs81233_ch01_001-030.indd Page 27 1/10/09 7:34:10 AM user-s175 the organization several days of training in quality measurement (e.g., Pareto diagrams), structured problem solving, and related QM practices. Jersey’s largely unskilled workforce had difficulty learning this material, so the training took longer than expected and another round was required one year later. Alder worked with production managers to form continuous improvement (CI) teams—groups of employees who looked for ways to cut costs, time, and space throughout the work process. Although Alder was enthusiastic about CI teams, most supervisors and employees were reluctant to get involved. Supervisors complained that the CI teams were “asking too many questions” about activities in their department. Less than one-quarter of the production areas formed CI teams because employees thought QM was a fancy way for management to speed up the work. This view was reinforced by some of management’s subsequent actions, such as setting higher production targets and requiring employees to complete the tasks of those who were absent from work. To gain more support for QM, Jersey president Tina Stavros spoke regularly to employees and supervisors about how QM was their answer to beating the competition and saving jobs. Although these talks took her away from other duties, she wanted every employee to know that their primary objective was to improve customer service and production efficiency in the company. To encourage more involvement in the CI teams, Stavros and Alder warned employees that they must support the QM program to save their jobs. To further emphasize this message, the company placed large signs throughout the company’s production facilities that said, “Our Jobs Depend on Satisfied Customers” and “Quality Management: Our Competitive Advantage.” Alder and Stavros agreed that Jersey’s suppliers must have a strong commitment toward the QM philosophy, so Jersey’s purchasing manager was told to get suppliers “on board” or find alternative sources. Unfortunately, the purchasing manager preferred a more collegial and passive involvement with suppliers, so he was replaced a few months later. The new purchasing manager informed suppliers that they should begin a QM program immediately because Jersey would negotiate for lower prices in the next contracts and would evaluate their bids partly based on their QM programs. /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Twenty months after Jersey Dairies began its QM journey, Tina Stavros accepted a lucrative job offer from a large food products company in the Midwest. Jersey Dairies promoted its vice-president of finance, Thomas Cheun, to the president’s job. The board of directors was concerned about Jersey’s falling profits over the previous couple of years and wanted Cheun to strengthen the bottom line. Although some CI teams did find cost savings, these were mostly offset by higher expenses. The company had nearly tripled its training budget and had significantly higher paid-time-off costs as employees took these courses. A considerable sum was spent on customer surveys and focus groups. Employee turnover was higher, mainly due to dissatisfaction with the QM program. Just before Stavros left the company, she received word that several employees had contacted the Commercial Food Workers Union about organizing Jersey’s nonunion production workforce. A group of suppliers asked for a confidential meeting in which they told Cheun to reconsider the QM demands on them. They complained that their long-term relationships with Jersey were being damaged and that other dairies were being more realistic about price, quality, and delivery requirements. Two major suppliers bluntly stated that they might decide to end their contracts with Jersey rather than agree to Jersey’s demands. Almost two years after Jersey Dairies began QM, Thomas Cheun announced that James Alder was leaving Jersey Dairies, that the position of vice-president of quality would no longer exist, and that the company would end several QM initiatives begun over the previous two years. Instead, Jersey Dairies, Inc. would use better marketing strategies and introduce new technologies to improve its competitive position in the marketplace. Discussion Questions 1. What perspective of organizational effectiveness did Tina Stavros and James Alder attempt to apply in this case? Describe how specific elements of that perspective related to their interventions. 2. Explain what went wrong in this case, using one or more of the other perspectives of organizational effectiveness. Source: Steven L. McShane, © 1995. 27 mcs81233_ch01_001-030.indd Page 28 Case Study 1.2 1/12/09 7:51:19 PM s-206 WORKING FROM HOME—IT’S IN THE DETAILS Roads leading to Microsoft’s headquarters in Redmond, Washington, simply weren’t designed to handle the 35,000 commuters who report for work there each day. The daily gridlock has become so acute that it nearly caused Washington State’s governor to miss his own speech at the software maker on a recent morning. Microsoft has figured out how to tackle the commuter crisis: it has introduced a program to get more staff telecommuting, either working from home or other off-site locales. About 14% of the U.S. workforce gets its job done at a home office more than two days per week. That’s up from 11% in 2004, and will be around 17% in another year or two. But the growth of telecommuting has also awakened many companies to the reality that not everyone is ready for virtual work. Companies also need to make adjustments to the way they operate in order for telecommuting to have lasting benefits. This BusinessWeek case study discusses the issues that companies are facing with the rising tide of Team Exercise 1.3 telecommuting, as well as the strategies these organizations are applying to overcome these obstacles. Read the full text of this BusinessWeek article at www.mhhe.com/mcshane5e, and prepare for the discussion questions below. Discussion Questions 1. Identify and discuss the main problems or concerns mentioned in this case study regarding telecommuting. In your opinion, do most of these problems originate with the company or the employee? 2. Describe the characteristics of people who adjust more easily to telecommuting. How can companies identify these employees or develop others to be better prepared for telecommuting? Source: R. King, “Working from Home: It’s in the Details,” BusinessWeek, 12 February 2007, p. 9. HUMAN CHECKERS PURPOSE This exercise is designed to help students understand the importance and application of organizational behavior concepts. MATERIALS None, but the instructor has more information about the team’s task. INSTRUCTIONS 1. Form teams with eight students. If possible, each team should have a private location where team members can plan and practice the required 28 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-01 task without being observed or heard by other teams. 2. All teams receive special instructions in class about their assigned task. All teams have the same task and have the same amount of time to plan and practice the task. At the end of this planning and practice, each team will be timed while completing the task in class. The team that completes the task in the least time wins. 3. No special materials are required or allowed (see rules below) for this exercise. Although the mcs81233_ch01_001-030.indd Page 29 1/10/09 1:31:02 PM user-s180 task is not described here, students should learn the following rules for planning and implementing the task: a. You cannot use any written form of communication or any props to assist in the planning or implementation of this task. b. You may speak to other students on your team at any time during the planning and implementation of this task. c. When performing the task, you can move only forward, not backward. (You are not allowed to turn around.) d. When performing the task, you can move forward to the next space, but only if it is vacant. In Exhibit 1, the individual (dark circle) can move directly into an empty space (light circle). e. When performing the task, you can move forward two spaces if that space is vacant. In other words, you can move around a person who is one space in front of you to the next space if that space is vacant. (In Exhibit 2, two people Class Exercise 1.4 /Users/user-s180/Desktop/MCSHANE/MHBR089-01 Exhibit 1 4. Exhibit 2 occupy the dark circle, and the light circle is an empty space. A person can move around the person in front to the empty space.) When all teams have completed their task, the class will discuss the implications of this exercise for organizational behavior. DISCUSSION QUESTIONS 1. Identify organizational behavior concepts that the team applied to complete this task. 2. What personal theories of people and work teams were applied to complete this task? 3. What organizational behavior problems occurred, and what actions were (or should have been) taken to solve them? DIAGNOSING ORGANIZATIONAL STAKEHOLDERS PURPOSE This exercise is designed to help you understand how stakeholders influence organizations as part of the open-systems anchor. MATERIALS Students need to select a company and, prior to class, retrieve and analyze publicly available information over the past year or two about that company. This may include annual reports, which are usually found on the Web sites of publicly traded companies. Where possible, students should also scan full-text newspaper and magazine databases for articles published over the previous year about the company. INSTRUCTIONS The instructor may have students work alone or in groups for this activity. Students will select a company and investigate the relevance and influence of various stakeholder groups on the organization. Stakeholders can be identified from annual reports, newspaper articles, Web site statements, and other available sources. Stakeholders should be rank-ordered in terms of their perceived importance to the organization. Students should be prepared to present or discuss their rank ordering of the organization’s stakeholders, including evidence for this ordering. DISCUSSION QUESTIONS 1. What are the main reasons why certain stakeholders are more important than others for this organization? 2. On the basis of your knowledge of the organization’s environmental situation, is this rank order of stakeholders in the organization’s best interest, or should specific other stakeholders be given higher priority? 3. What societal groups, if any, are not mentioned as stakeholders by the organization? Does this lack of reference to these unmentioned groups make sense? 29 mcs81233_ch01_001-030.indd Page 30 3/12/09 4:29:21 PM user-s172 /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-01 Self-Assessment 1.5 IT ALL MAKES SENSE? PURPOSE This exercise is designed to help you comprehend how organizational behavior knowledge can help you to understand life in organizations. INSTRUCTIONS (Note: This activity may be done as a self-assessment or as a team activity.) Read each of the statements below and circle whether each statement is true or false, in your opinion. The class will consider the answers to each question and discuss the implications for studying organizational behavior. Due to the nature of this activity, the instructor will provide the answers to these questions. There is no scoring key in Appendix B. 1. True 2. False True False 3. True False A happy worker is a productive worker. Decision makers tend to continue supporting a course of action even though information suggests that the decision is ineffective. Organizations are more effective when they prevent conflict among employees. 4. True False 5. True False 6. True False 7. True False 8. True False 9. True False 10. True False It is better to negotiate alone than as a team. Companies are more successful when they have strong corporate cultures. Employees perform better without stress. The best way to change people and organizations is by pinpointing the source of their current problems. Female leaders involve employees in decisions to a greater degree than do male leaders. The best decisions are made without emotion. If employees feel they are paid unfairly, nothing other than changing their pay will reduce their feelings of injustice. Self-Assessment 1.6 IS TELECOMMUTING FOR YOU? Some employees adapt better than others to telecommuting (also called teleworking ) and other forms of virtual work. This self-assessment measures personal characteristics that seem to relate to telecommuting, and therefore it provides a rough indication of how well you would adapt to telework. The instrument asks you to indicate how much you agree or disagree with each of the statements provided. You need to be honest with yourself to get a reasonable estimate of your telework disposition. Please keep in mind that this scale considers only your personal characteristics. Other factors, such as organizational, family, and technological systems support, must also be taken into account. After reading this chapter, if you feel that you need additional tips on managing your anxiety, see www.mhhe.com/mcshane5e for more in-depth information and interactivities that correspond to this chapter. 30 mcs81233_ch02_031-065.indd Page 31 1/19/09 4:21:37 PM user-s174 /Users/user-s174/Desktop/MHBR089-SAMP/MHBR089-02 Part Two Individual Behavior and Processes Chapter 2 Individual Behavior, Personality, and Values Chapter 3 Perception and Learning in Organizations Chapter 4 Workplace Emotions, Attitudes, and Stress Chapter 5 Foundations of Employee Motivation Chapter 6 Applied Performance Practices Chapter 7 Decision Making and Creativity mcs81233_ch02_031-065.indd Page 32 1/12/09 9:00:11 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 Yasmeen Youssef’s self-confidence was a bit shaky when she and her husband moved from Egypt to Canada a few years ago. “I was worried no one would take a chance on me, would believe in me,” she recalls. But any self-doubts slowly disappeared after taking an entry-level job with Fairmont Hotels & Resorts corporate offices in Toronto. “Everything changed when I started working at Fairmont,” says Youssef, who is now on Fairmont’s human resource team and recently trained new staff in Cairo. “I can’t believe the amount of value, care, respect everyone has extended to me.” As North America’s largest luxury hotel operator, Fairmont discovered long ago that one of the secret ingredients for employee performance and well-being is supporting the individual’s self-concept. “People want to feel valued and they stay where they feel valued,” says Carolyn Clark, Fairmont’s senior vice president of human resources. Clark also points out that Fairmont is able to nurture this talent by selecting the best, which means hiring people with the right values and personality for superb customer service. “We believed that we could train the technical skills—that’s the easy part,” Clark explained a few years ago. “What we can’t train is the service orientation. We just can’t put people in the training program and say they are going to come out smiling if that is not inherent in them.” Along with hiring people with the right values and personality and nurturing their self-concept, Fairmont is developing staff to work effectively in a multicultural world. Sean Billing is a case in point. The economics graduate had been working as Fairmont’s director of rooms in Chicago when he casually asked his boss whether the hotel chain could use his skills and Fairmont Hotels has excelled as North America’s largest luxury hotel operator by hiring people such as Yasmeen Youssef (shown here) with the right values and personality and then nurturing their self-concept and cross-cultural competencies. knowledge elsewhere. Soon after, Billing was offered a position in Kenya, bringing Fairmont’s new properties in the African country up to world-class standards through training and technology without losing the distinctive Kenyan character. Billing jumped at the opportunity, but he also recognizes the challenge of inculcating Fairmont’s deep values of customer service, environmentalism, and empowerment into another culture. “It’s a little bit of hotel culture shock . . . things are quite different here,” he says.1 mcs81233_ch02_031-065.indd Page 33 1/10/09 1:34:05 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE 2 Individual Behavior, Personality, and Values LEARNING OBJECTIVES After reading this chapter, you should be able to: 1. Describe the four factors that directly influence voluntary individual behavior and performance. 2. Define personality and discuss what determines an individual’s personality characteristics. 3. Summarize the “Big Five” personality traits in the five-factor model and discuss their influence on organizational behavior. 4. Describe self-concept in terms of selfenhancement, self-verification, and self-evaluation. 5. Explain how social identity theory relates to a person’s self-concept. 6. Distinguish personal, shared, espoused, and enacted values and explain why value congruence is important. 7. Summarize five values commonly studied across cultures. 8. Explain how moral intensity, ethical sensitivity, and the situation influence ethical behavior. mcs81233_ch02_031-065.indd Page 34 1/10/09 1:34:05 PM user-s175 34 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes What makes Fairmont Hotels & Resorts a successful company? There is no single explanation, but this opening vignette reveals that North America’s largest luxury hotel company applies many of the theories and practices discussed in this chapter. It hires people with the right personality traits and values, trains them well, and nurtures their self-concept. As a global enterprise, Fairmont also ensures that its staff members develop cross-cultural competencies. This chapter concentrates our attention on the role of the individual in organizations. We begin by presenting the MARS model, which outlines the four direct drivers of individual behavior and results. Next, we introduce the most stable aspect of individuals—personality—including personality development, personality traits, and how personality relates to organizational behavior. We then look at the individual’s self-concept, including self-enhancement, self-verification, self-evaluation, and social identity. The latter part of this chapter examines another relatively stable characteristic of individuals: their personal values. We look at types of values, issues of value congruence in organizations, cross-cultural values, and ethical values and practices. Learning Objectives After reading this section, you should be able to: 1. Describe the four factors that directly influence voluntary individual behavior and performance. MARS Model of Individual Behavior and Performance For most of the past century, experts in psychology, sociology, and, more recently, organizational behavior have investigated the direct predictors of individual behavior and performance.2 One of the earliest formulas was performance ⫽ person ⫻ situation, where person includes individual characteristics and situation represents external influences on the individual’s behavior. Another frequently mentioned formula is performance ⫽ ability ⫻ motivation. Sometimes known as the “skill-and-will” model, this formula elaborates two specific characteristics within the person that influence individual performance. Ability, motivation, and situation are by far the most commonly mentioned direct predictors of individual behavior and performance, but in the 1960s researchers identified a fourth key factor: role perceptions (the individual’s expected role obligations).3 Exhibit 2.1 illustrates these four variables—motivation, ability, role perceptions, and situational factors—which are represented by the acronym MARS.4 All four factors are critical influences on an individual’s voluntary behavior and performance; if any one of them is low in a given situation, the employee would perform the task poorly. For example, motivated salespeople with clear role perceptions and sufficient resources (situational factors) will not perform their jobs as well if they lack sales skills and related knowledge (ability). Let’s look at each of these four factors in more detail. motivation The forces within a person that affect his or her direction, intensity, and persistence of voluntary behavior. Employee Motivation Motivation represents the forces within a person that affect his or her direction, intensity, and persistence of voluntary behavior.5 Direction refers to the path along which people engage their effort. People have choices about where they put their effort; they have a sense of what they are trying to achieve and at what level of quality, quantity, and so forth. In other words, motivation is goal-directed, not random. mcs81233_ch02_031-065.indd Page 35 1/10/09 1:34:05 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values Exhibit 2.1 35 MARS Model of Individual Behavior and Results Individual characteristics MARS model Values Motivation Personality Situational factors Perceptions Ability Emotions and attitudes Behavior and results Role perceptions Stress People are motivated to arrive at work on time, finish a project a few hours early, or aim for many other targets. The second element of motivation, called intensity, is the amount of effort allocated to the goal. Intensity is all about how much people push themselves to complete a task. For example, two employees might be motivated to finish their project a few hours early (direction), but only one of them puts forth enough effort (intensity) to achieve this goal. Finally, motivation involves varying levels of persistence, that is, continuing the effort for a certain amount of time. Employees sustain their effort until they reach their goal or give up beforehand. Remember that motivation exists within individuals; it is not their actual behavior. Thus, direction, intensity, and persistence are cognitive (thoughts) and emotional conditions that directly cause us to move. Ability ability The natural aptitudes and learned capabilities required to successfully complete a task. Employee abilities also make a difference in behavior and task performance. Ability includes both the natural aptitudes and the learned capabilities required to successfully complete a task. Aptitudes are the natural talents that help employees learn specific tasks more quickly and perform them better. There are many physical and mental aptitudes, and our ability to acquire skills is affected by these aptitudes. For example, finger dexterity is an aptitude by which individuals learn more quickly and potentially achieve higher performance at picking up and handling small objects with their fingers. Employees with high finger dexterity are not necessarily better than others at first; rather, their learning tends to be faster and performance potential tends to be higher. Learned capabilities are the skills and knowledge that you currently possess. These capabilities include the physical and mental skills and knowledge you have acquired. Learned capabilities tend to wane over time when not in use. mcs81233_ch02_031-065.indd Page 36 1/10/09 1:34:08 PM user-s175 36 competencies Skills, knowledge, aptitudes, and other personal characteristics that lead to superior performance. Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes Aptitudes and learned capabilities are closely related to competencies, which has become a frequently used term in business. Competencies are characteristics of a person that result in superior performance.6 Many experts describe these characteristics as personal traits (i.e., knowledge, skills, aptitudes, personality, self-concept, values). Others suggest that competencies represent actions produced by a person’s traits, such as serving customers, coping with heavy workloads, and providing creative ideas. With either definition, the challenge is to match a person’s competencies with the job’s task requirements. A good person-job match not only produces higher performance; it also tends to increase the employee’s well-being. Person-Job Matching Strategies One way to match a person’s competencies with the job’s task requirements is to select applicants who already demonstrate the required competencies. For example, companies ask applicants to perform work samples, provide references for checking their past performance, and complete various selection tests. A second strategy is to provide training so that employees develop required skills and knowledge. Research indicates that training has a strong influence on individual performance and organizational effectiveness.7 The third person-job matching strategy is to redesign the job so that employees are given tasks only within their current learned capabilities. For example, a complex task might be simplified—some aspects of the work are transferred to others—so that a new employee performs only tasks that he or she is currently able to perform. As the employee becomes more competent at these tasks, other tasks are added back into the job. Role Perceptions role perceptions The extent to which people understand the job duties (roles) assigned to or expected of them. Motivation and ability are important influences on individual behavior and performance, but employees also require accurate role perceptions to perform their jobs well. Role perceptions are the extent to which people understand the job duties (roles) assigned to them or expected of them. These perceptions are critical because they guide the employee’s direction of effort and improve coordination with co-workers, suppliers, and other stakeholders. Unfortunately, many employees do not have clear role perceptions. According to one large-scale survey, most employees understand their organization’s business goals, but only 39 percent know what to do in their own jobs to achieve those goals.8 The role perceptions concept has three components. First, employees have accurate role perceptions when they understand the specific tasks assigned to them, that is, when they know the specific duties or consequences for which they are accountable. This may seem obvious, but employees have been (unjustly) fired for failing to perform tasks that they didn’t even know were part of their job duties. Second, people have accurate role perceptions when they understand the priority of their various tasks and performance expectations. This includes the quantity versus quality dilemma, such as how many customers to serve in an hour (quantity) versus how well the employee should serve each customer (quality). It also refers to properly allocating time and resources to various tasks, such as how much time a manager should spend coaching employees in a typical week. The third component of role perceptions is understanding the preferred behaviors or procedures for accomplishing the assigned tasks. This refers to situations in which more than one method could be followed to perform the work. Employees with clear role perceptions know which of these methods is preferred by the organization. mcs81233_ch02_031-065.indd Page 37 1/10/09 1:34:08 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values 37 Best Buy Sorts Out Role Perceptions for Black Friday It’s 5 a.m. on Black Friday, and hundreds of eager shoppers are pouring through the doors of the Best Buy retail outlet in Columbia, Maryland, to grab up the advertised bargains. Fortunately, Best Buy’s 225 employees in Columbia know what is expected of them on this extremely busy day after Thanksgiving. A huge floor plan in the back office has color-coded stickers marking where every staff member will be located; six green dots indicate where employees will stand outside to monitor and support customers who have lined up for hours. Many Best Buy stores held special rehearsals—complete with acting customers—during the week before Black Friday to help employees understand their roles and hone their customer service skills. For example, this photo shows customer assistance supervisor Aaron Sanford orchestrating a Black Friday practice run at a Best Buy store in Denver. “If you do it right, you’re very profitable,” advises Kevin McGrath, Best Buy’s store manager in Columbia. McGrath explains that clear role perceptions are just as important for a retail outlet as for a winning sports team. “The [Baltimore] Ravens are successful because [the players] know what is expected of them,” he says.9 Situational Factors Employees’ behavior and performance also depend on how much the situation supports or interferes with their task goals. Situational factors include conditions beyond the employee’s immediate control that constrain or facilitate behavior and performance.10 Some situational characteristics—such as consumer preferences and economic conditions—originate from the external environment and, consequently, are beyond the employee’s and organization’s control. However, other situational factors— such as time, people, budget, and physical work facilities—are controlled by people within the organization. Therefore, corporate leaders need to carefully arrange these conditions so that employees can achieve their performance potential. The four elements of the MARS model—motivation, ability, role perceptions, and situational factors—affect all voluntary workplace behaviors and their performance outcomes. These elements are themselves influenced by other individual differences. mcs81233_ch02_031-065.indd Page 38 1/10/09 1:34:15 PM user-s175 38 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes In the remainder of this chapter, we introduce three of the most stable individual characteristics: personality, self-concept, and values. Learning Objectives After reading the next two sections, you should be able to: 2. Define personality and discuss what determines an individual’s personality characteristics. 3. Summarize the “Big Five” personality traits in the five-factor model and discuss their influence on organizational behavior. 4. Describe self-concept in terms of self-enhancement, self-verification, and self-evaluation. 5. Explain how social identity theory relates to a person’s self-concept. Personality in Organizations personality The relatively enduring pattern of thoughts, emotions, and behaviors that characterize a person, along with the psychological processes behind those characteristics. Brian McHale carefully screens job applicants to find those who will take his company to the next level of success. “We look for people with passion about our business, a drive to understand consumers and what motivates them, and have a pervasive curiosity,” says the president of Empower MediaMarketing in Cincinnati. McHale emphasizes that his 150 employees are good at selecting applicants from interviews and résumés, but he also asks candidates to complete a personality test indicating whether they are the right fit. “A personality profile is just one more data point, one more window into the person you’re thinking about hiring,” McHale says. “It’s obviously not something that we depend on solely or even primarily when making a decision. But it can help complete a picture.”11 Personality is an important individual characteristic, which explains why Empower MediaMarketing and many other companies are increasingly testing the personality traits of job applicants and employees. Personality is the relatively enduring pattern of thoughts, emotions, and behaviors that characterize a person, along with the psychological processes behind those characteristics.12 It is, in essence, the bundle of characteristics that make us similar to or different from other people. We estimate an individual’s personality by what he or she says and does, and we infer the person’s internal states—including thoughts and emotions—from these observable behaviors. A basic premise of personality theory is that people have inherent characteristics or traits that can be identified by the consistency or stability of their behavior across time and situations.13 For example, you probably have some friends who are more talkative than others. You might know some people who like to take risks and others who are risk-averse. This consistency is an essential requirement for personality theory because it attributes a person’s behavior to something within him or her—the individual’s personality—rather than to purely environmental influences. Of course, people do not act the same way in all situations; in fact, such consistency would be considered abnormal because it indicates a person’s insensitivity to social norms, reward systems, and other external conditions.14 People vary their behavior to suit the situation, even if the behavior is at odds with their personality. For example, talkative people remain relatively quiet in a library where “no talking” rules are explicit and strictly enforced. People typically exhibit a wide range of behaviors, yet within that variety are discernible patterns that we refer to as personality traits. Traits are broad concepts that allow us to label and understand individual differences. Furthermore, traits predict an individual’s behavior far into the future. For example, mcs81233_ch02_031-065.indd Page 39 1/10/09 1:34:15 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values 39 studies report that an individual’s personality in childhood predicts various behaviors and outcomes in adulthood, including educational attainment, employment success, marital relationships, illegal activities, and health-risk behaviors.15 Personality Determinants: Nature versus Nurture What determines an individual’s personality? Most experts now agree that personality is shaped by both nature and nurture, although the relative importance of each continues to be debated and studied. Nature refers to our genetic or hereditary origins— the genes that we inherit from our parents. Studies of identical twins, particularly those separated at birth, reveal that heredity has a very large effect on personality; up to 50 percent of variation in behavior and 30 percent of temperament preferences can be attributed to a person’s genetic characteristics.16 In other words, genetic code not only determines our eye color, skin tone, and physical shape but also has a significant effect on our attitudes, decisions, and behavior. Some similarities of identical twins raised apart are surreal. Consider Jim Springer and Jim Lewis, twins who were separated when only four weeks old and didn’t meet each other until age 39. In spite of being raised in different families and communities in Ohio, the “Jim twins” held similar jobs, smoked the same type of cigarettes, drove the same make and color of car, spent their vacations on the same Florida beach, had the same woodworking hobby, gave their first sons almost identical names, and had been married twice. Both their first and second wives also had the same first names!17 Although personality is heavily influenced by heredity, it is also affected to some degree by nurture—the person’s socialization, life experiences, and other forms of interaction with the environment. Studies have found that the stability of an individual’s personality increases up to at least age 30 and possibly to age 50, indicating that some personality development and change occurs when people are young.18 The main explanation of why personality becomes more stable over time is that people form clearer and more rigid self-concepts as they get older. The executive function—the part of the brain that manages goal-directed behavior—tries to keep our behavior consistent with our self-concept.19 As self-concept becomes clearer and more stable with age, behavior and personality therefore also become more stable and consistent. We discuss self-concept in more detail later in this chapter. The main point here is that personality is not completely determined by heredity; life experiences, particularly early in life, also shape each individual’s personality traits. Five-Factor Model of Personality five-factor model (FFM) The five abstract dimensions representing most personality traits: conscientiousness, emotional stability, openness to experience, agreeableness, and extroversion. One of the most important elements of personality theory is that people possess specific personality traits. Traits such as sociable, depressed, cautious, and talkative represent clusters of thoughts, feelings, and behaviors that allow us to identify, differentiate, and understand people.20 The most widely respected model of personality traits is the five-factor model (FFM). Several decades ago, personality experts identified more than 17,000 words in Roget’s thesaurus and Webster’s dictionary that describe an individual’s personality. These words were aggregated into 171 clusters and then further reduced to five abstract personality dimensions. Using more sophisticated techniques, recent investigations identified the same five personality dimensions. Analyses of trait words in several other languages have produced strikingly similar results, although they also lend support for the notion of six or possibly seven dimensions of personality. Generally, though, the five-factor model is fairly robust mcs81233_ch02_031-065.indd Page 40 1/10/09 1:34:15 PM user-s175 40 Part Two Individual Behavior and Processes Personality dimension Exhibit 2.2 Five-Factor Model’s Big Five Personality Dimensions /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE People with a high score on this dimension tend to be more: Conscientiousness Agreeableness Neuroticism Openness to experience Extroversion across cultures.21 These “Big Five” dimensions, represented by the handy acronym CANOE, are outlined in Exhibit 2.2 and described below: conscientiousness A personality dimension describing people who are careful, dependable, and self-disciplined. • • neuroticism A personality dimension describing people with high levels of anxiety, hostility, depression, and self-consciousness. • extroversion A personality dimension describing people who are outgoing, talkative, sociable, and assertive. • • Conscientiousness. Conscientiousness characterizes people who are careful, dependable, and self-disciplined. Some scholars argue that this dimension also includes the will to achieve. People with low conscientiousness tend to be careless, less thorough, more disorganized, and irresponsible. Agreeableness. This dimension includes the traits of being courteous, good-natured, empathic, and caring. Some scholars prefer the label “friendly compliance” for this dimension, with its opposite being “hostile noncompliance.” People with low agreeableness tend to be uncooperative, short-tempered, and irritable. Neuroticism. Neuroticism characterizes people with high levels of anxiety, hostility, depression, and self-consciousness. In contrast, people with low neuroticism (high emotional stability) are poised, secure, and calm. Openness to experience. This dimension is the most complex and has the least agreement among scholars. It generally refers to the extent to which people are imaginative, creative, curious, and aesthetically sensitive. Those who score low on this dimension tend to be more resistant to change, less open to new ideas, and more conventional and fixed in their ways. Extroversion. Extroversion characterizes people who are outgoing, talkative, sociable, and assertive. The opposite is introversion, which characterizes those who are quiet, shy, and cautious. Extroverts get their energy from the outer world (people and things around them), whereas introverts get their energy from the internal world, such as personal reflection on concepts and ideas. Introverts do not necessarily lack social skills. Rather, they are more inclined to direct their interests to ideas than to social events. Introverts feel quite comfortable being alone, whereas extroverts do not. These five personality dimensions are not independent of each other. Some experts suggest that conscientiousness, agreeableness, and low neuroticism (high emotional mcs81233_ch02_031-065.indd Page 41 1/12/09 9:21:36 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 Chapter 2 Individual Behavior, Personality, and Values 41 stability) represent a common underlying characteristic broadly described as “getting along”; people with these traits are aware of and more likely to abide by rules and norms of society. The other two dimensions share the common underlying factor called “getting ahead”; people with high scores on extroversion and openness to experience exhibit more behaviors aimed at achieving goals, managing their environment, and advancing themselves in teams.22 Studies report fairly strong associations between personality and several workplace behaviors and outcomes, even when employee ability and other factors are taken into account. Conscientiousness and emotional stability (low neuroticism) stand out as the personality traits that best predict individual performance in almost every job group.23 Both are motivational components of personality because they energize a willingness to fulfill work obligations within established rules (conscientiousness) and to allocate resources to accomplish those tasks (emotional stability). Various studies have reported that conscientious employees set higher personal goals for themselves, are more motivated, and have higher performance expectations than do employees with low levels of conscientiousness. They also tend to have higher levels of organizational citizenship and work better in organizations that give employees more freedom than is found in traditional command-and-control workplaces.24 The other three personality dimensions predict more specific types of employee behavior and performance. Extroversion is associated with performance in sales and management jobs, where employees must interact with and influence people. Agreeableness is associated with performance in jobs where employees are expected to be cooperative and helpful, such as working in teams, customer relations, and other conflict-handling situations. People high on the openness-to-experience personality dimension tend to be more creative and adaptable to change. Finally, personality influences employee well-being in various ways. Studies report that personality influences a person’s general emotional reactions to her or his job, how well the person copes with stress, and what type of career paths make that person happiest.25 Jungian Personality Theory and the Myers-Briggs Type Indicator Myers-Briggs Type Indicator (MBTI) An instrument designed to measure the elements of Jungian personality theory, particularly preferences regarding perceiving and judging information. The five-factor model of personality is the most respected and supported in research, but it is not the most popular in practice. That distinction goes to Jungian personality theory, which is measured through the Myers-Briggs Type Indicator (MBTI). Nearly a century ago, Swiss psychiatrist Carl Jung proposed that personality is primarily represented by the individual’s preferences regarding perceiving and judging information.26 Jung explained that perceiving, which involves how people prefer to gather information or perceive the world around them, occurs through two competing orientations: sensing (S) and intuition (N). Sensing involves perceiving information directly through the five senses; it relies on an organized structure to acquire factual and preferably quantitative details. Intuition, on the other hand, relies more on insight and subjective experience to see relationships among variables. Sensing types focus on the here and now, whereas intuitive types focus more on future possibilities. Jung also proposed that judging—how people process information or make decisions based on what they have perceived—consists of two competing processes: thinking (T) and feeling (F). People with a thinking orientation rely on rational cause-effect logic and systematic data collection to make decisions. Those with a strong feeling mcs81233_ch02_031-065.indd Page 42 1/12/09 9:00:48 PM s-206 42 Part Two /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 Individual Behavior and Processes Flying High with MBTI Southwest Airlines is a peoplefriendly place, but even strangers can quickly discover the personalities of some of its employees. That’s because many staff at the Dallas-based airline post their Myers-Briggs Type Indicator (MBTI) results in their offices. “You can walk by and see someone’s four-letter [MBTI type] posted up in their cube,” says Elizabeth Bryant, shown in photo, Southwest’s director of leadership development. Southwest began using the MBTI a decade ago to help staff understand and respect co-workers’ different personalities and thinking styles. The MBTI also helps leaders work more effectively with individuals and teams. For example, Bryant recalls a session at which employees and the manager in one department developed more trust and empathy by discovering their MBTI scores. “We saw a lot of ‘aha’ moments,” Bryant recalls about employee reactions when they saw each other’s MBTI score. “Behaviors that might have once caused misunderstanding and frustration now are viewed through a different filter.”27 orientation, on the other hand, rely on their emotional responses to the options presented, as well as to how those choices affect others. Jung noted that along with differing in the four core processes of sensing, intuition, thinking, and feeling, people also differ in their degrees of extroversion-introversion, which was introduced earlier as one of the Big Five personality traits. In addition to measuring the personality traits identified by Jung, the MBTI measures Jung’s broader categories of perceiving and judging. People with a perceiving orientation are open, curious, and flexible; prefer to adapt spontaneously to events as they unfold; and prefer to keep their options open. Judging types prefer order and structure and want to resolve problems quickly. The MBTI is one of the most widely used personality tests in work settings as well as in career counseling and executive coaching.28 Still, evidence regarding the effectiveness of the MBTI and Jung’s psychological types is mixed.29 On the one hand, MBTI does a reasonably good job of measuring Jung’s psychological types and seems to improve self-awareness for career development and mutual understanding. On the other hand, it poorly predicts job performance and is generally not recommended for employment selection or promotion decisions. Furthermore, MBTI overlaps with the five-factor personality model, yet it does so less satisfactorily than existing measures of the Big Five personality dimensions.30 Caveats about Personality Testing in Organizations Personality is clearly an important concept for understanding, predicting, and changing behavior in organizational settings. However, there are a few problems that continue to hound personality testing.31 One concern is that most tests are self-report scales, which allow applicants or employees to fake their answers. Rather than measuring a person’s personality, many test results might identify the traits that people believe the company values. This concern is compounded by the fact that test takers mcs81233_ch02_031-065.indd Page 43 1/12/09 9:01:08 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 Chapter 2 Individual Behavior, Personality, and Values 43 often don’t know what personality traits the company is looking for and may not know which statements are relevant to each trait. Thus, the test scores might not represent the individual’s personality or anything else meaningful. A second issue is that personality is a relatively weak predictor of a person’s performance. Some experts dispute this claim, pointing to strong associations between a few personality traits and specific types of performance. Still, the effect of personality on a person’s behavior and performance is generally low, and thus personality testing could cause companies to wrongly reject applicants who would have performed well. Finally, some companies have discovered that personality testing does not convey a favorable image of the company. For example, the British operations of PricewaterhouseCoopers (PwC) required that applicants complete an online personality test early in the selection process. The accounting firm learned that the test discouraged female applicants from applying because the process was impersonal and the test could be faked. “Our personality test was seen to alienate women and so we had to respond to that,” says PwC’s head of diversity.32 Overall, we need to understand personality in the workplace but also to be cautious about measuring and applying it too precisely. Self-Concept: The “I” in Organizational Behavior self-concept An individual’s selfbeliefs and selfevaluations. To more fully understand individual behavior in organizations, we need to realize that people develop, nurture, and act in ways that maintain and enhance their selfconcept. Self-concept refers to an individual’s self-beliefs and self-evaluations. It is the “Who am I?” and “How do I feel about myself?” that people ask themselves and that guide their decisions and actions. Self-concept has not received much attention in organizational behavior research, but scholars in psychology, social psychology, and other disciplines have discovered that it is a critically important concept for understanding individual perceptions, attitudes, decisions, and behavior. Indeed, as the opening vignette to this chapter illustrated, managers at Fairmont Hotels & Resorts have known for years that nurturing an employee’s self-concept can be a powerful way to strengthen his or her motivation and well-being. People do not have a single unitary self-concept.33 Rather, they think of themselves in several ways in various situations. For example, you might think of yourself as a creative employee, a health-conscious vegetarian, and an aggressive skier. A person’s self-concept has higher complexity when it consists of many categories. Along with varying in complexity, self-concept varies in the degree of its consistency. People have high consistency when similar personality traits and values are required across all aspects of self-concept. Low consistency occurs when some aspects of self require personal characteristics that conflict with the characteristics required for other aspects of self. A third structural feature of self-concept is clarity, that is, the degree to which a person’s self-conceptions are clearly and confidently described, internally consistent, and stable across time. A clear self-concept necessarily requires a consistent selfconcept. Generally, people develop a clearer self-concept as they get older. These three structural dimensions of self-concept—complexity, consistency, and clarity—influence an individual’s adaptability and well-being. People function better when their self-concept has many elements (high complexity) that are compatible with each other (high consistency) and are relatively clear. In contrast, people are more rigid and inflexible, and therefore less adaptable, when their self-view consists of only a few similar characteristics (low complexity). People also have poorer psychological adjustment when their self-concept is less clear and includes conflicting elements. mcs81233_ch02_031-065.indd Page 44 3/12/09 5:19:00 PM user-s172 44 /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-02 Part Two Individual Behavior and Processes Self-Enhancement A key ingredient in self-concept is the desire to feel valued. People are inherently motivated to promote and protect a self-view of being competent, attractive, lucky, ethical, and important.34 This self-enhancement is observed in many ways. Individuals tend to rate themselves above average, selectively recall positive feedback while forgetting negative feedback, attribute their successes to personal motivation or ability while blaming the situation for their mistakes, and believe that they have a better than average probability of success. People don’t see themselves as above average in all circumstances, but this bias is apparent for conditions that are common rather than rare and that are important to them.35 Self-enhancement has both positive and negative consequences in organizational settings.36 On the positive side, research has found that individuals have better personal adjustment and experience better mental and physical health when they view their self-concept in a positive light. On the negative side, self-enhancement can result in bad decisions. For example, studies report that self-enhancement causes managers to overestimate the probability of success in investment decisions.37 Generally, though, successful companies, such as Fairmont Hotels & Resorts, strive to help employees feel they are valued and integral members of the organization. Global Connections 2.1 describes how Johnson & Johnson, Inc.’s businesses worldwide also support employees’ self-concept by making them feel valued and by aligning their career plans with their self-view. Self-Verification Along with being motivated by self-enhancement, people are motivated to verify and maintain their existing self-concept.38 Self-verification stabilizes an individual’s selfconcept, which, in turn, provides an important anchor that guides his or her thoughts and actions. Self-verification differs from self-enhancement because people usually prefer feedback that is consistent with their self-concept even when that feedback is unflattering. Self-verification has several implications for organizational behavior.39 First, it affects the perceptual process because employees are more likely to remember information that is consistent with their self-concept. Second, the more confident employees are in their self-concept, the less they will accept feedback—positive or negative—that is at odds with their self-concept. Third, employees are motivated to interact with others who affirm their self-concept, and this affects how well they get along with their boss and with co-workers in teams. Self-Evaluation Almost everyone strives to have a positive self-concept, but some people have a more positive evaluation of themselves than do others. This self-evaluation is mostly defined by three concepts: self-esteem, self-efficacy, and locus of control.40 Self-Esteem Self-esteem—the extent to which people like, respect, and are satisfied with themselves—represents a global self-evaluation. People with high self-esteem are less influenced by others, tend to persist in spite of failure, and think more rationally. Self-esteem regarding specific aspects of self (e.g., a good student, a good driver, a good parent) predicts specific thoughts and behaviors, whereas a person’s overall self-esteem predicts only large bundles of thoughts and behaviors.41 mcs81233_ch02_031-065.indd Page 45 3/12/09 5:19:05 PM user-s172 /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-02 Global Connections 2.1 Feeling Valued Adds Value at Johnson & Johnson Every Saturday, Vikas Shirodkar takes his daughter to dance lessons and pops into his office at Johnson & Johnson’s Indian headquarters in Mumbai, which is located next door to the dance class. Doing work at the office saves Shirodkar the trouble of driving home and back again to pick up his daughter after class. After three weeks, Shirodkar received a call from J&J’s managing director, Narendra Ambwani, asking if he was overburdened and needed additional staff. Shirodkar was surprised by the question, until Ambwani explained that he noticed the executive’s name on the register every Saturday and was concerned about his workload. The managing director’s call was a defining moment for Shirodkar because it reflected J&J’s value system, in which every employee “must be considered as an individual” and the company “must respect [employees’] dignity and recognize their merit.” The credo recognizes employees, customers, communities, and the environment, as well as shareholders. In India, where job-hopping has become the norm, the average J&J employee has more than 15 years of service. Asked about J&J’s success at attracting and retaining talented workers, India managing director Narendra Ambwani answers: “We make them feel the company belongs to them.” J&J also supports each employee’s self-concept through day-to-day coaching. For example, J&J’s Pharmaceutical Research & Development division in the United States discovered Johnson & Johnson is one of the world’s most respected employers because it recognizes the value of supporting each employee’s self-concept. “We make them feel the company belongs to them,” says Narendra Ambwani (shown here), the company’s managing director in India. that a key ingredient of employee motivation and well-being is to have managers ensure that employees feel valued as contributors to the company’s success. The European operations of J&J’s Global Pharmaceutical Supply Group also introduced a new career program that takes into account employees’ selfconcept by matching their personal values with corresponding job preferences.42 Self-Efficacy self-efficacy A person’s belief that he or she has the ability, motivation, correct role perceptions, and favorable situation to complete a task successfully. Self-efficacy refers to a person’s belief that he or she can successfully complete a task.43 Those with high self-efficacy have a “can do” attitude. They believe they possess the energy (motivation), resources (situational factors), understanding of the correct course of action (role perceptions), and competencies (ability) to perform the task. In other words, self-efficacy is an individual’s perception regarding the MARS model in a specific situation. Although originally defined in terms of specific tasks, self-efficacy is also a general trait related to self-concept.44 General self-efficacy is a perception of one’s competence to perform across a variety of situations. The higher the person’s general self-efficacy, the higher is his or her overall self-evaluation. locus of control A person’s general belief about the amount of control he or she has over personal life events. Locus of Control Locus of control, the third concept related to self-evaluation, is defined as a person’s general belief about the amount of control he or she has over personal life events. Individuals with more of an internal locus of control believe that their personal characteristics (i.e., motivation and competencies) mainly influence life’s outcomes. Those with more of an external locus of control believe that events in their life are due mainly to fate, luck, or conditions in the external environment. Locus of control is a generalized belief, so people with an external locus can feel in control in familiar situations (such as performing common tasks). However, their underlying locus of control would be apparent in new situations in which control over 45 mcs81233_ch02_031-065.indd Page 46 1/10/09 1:34:23 PM user-s175 46 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes events is uncertain. People with a more internal locus of control have a more positive self-evaluation. They also tend to perform better in most employment situations, are more successful in their careers, earn more money, and are better suited for leadership positions. Internals are also more satisfied with their jobs, cope better in stressful situations, and are more motivated by performance-based reward systems.45 The Social Self social identity theory A theory that explains self-concept in terms of the person’s unique characteristics (personal identity) and membership in various social groups (social identity). A person’s self-concept can be organized into two fairly distinct categories: personal identity characteristics and social identity characteristics.46 Personal identity consists of characteristics that make us unique and distinct from people in the social groups to which we have a connection. For instance, an unusual achievement that distinguishes you from other people typically becomes a personal identity characteristic. Personal identity refers to something about you as an individual without reference to a larger group. At the same time, human beings are social animals; they have an inherent drive to be associated with others and to be recognized as part of social communities. This drive to belong is reflected in self-concept by the fact that all individuals define themselves to some degree by their association with others.47 This social element of self-concept is described by social identity theory. According to social identity theory, people define themselves by the groups to which they belong or have an emotional attachment. For instance, someone might have a social identity as an American, a graduate of the University of Massachusetts, and an employee at IBM (see Exhibit 2.3). Social identity is a complex combination of many memberships arranged in a hierarchy of importance. One factor determining importance is how easily we are identified as a member of the reference group, such as by our gender, age, and ethnicity. It is difficult to ignore your gender in a class where most other students are the opposite gender, for example. In that context, gender tends to become a stronger defining feature of your social identity than it is in social settings where there are many people of the same gender. Along with our demographic characteristics, a group’s status is typically an important influence on whether we include the group in our social identity. We identify with groups that have high status or respect because this aids the self-enhancement of C Exhibit 2.3 t ti Social Identity Theory Example IBM employee Live in the United States An Individual's Social Identity University of Massachusetts graduate Employees at other firms People living in other countries Graduates from other schools mcs81233_ch02_031-065.indd Page 47 1/10/09 1:34:25 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values 47 our self-concept. Medical doctors usually define themselves by their profession because of its high status, whereas people in low-status jobs tend to define themselves by nonjob groups. Some people define themselves in terms of where they work because their employer has a positive reputation in the community. In contrast, other people never mention where they work because their employer is noted for poor relations with employees and has a poor reputation in the community.48 Self-Concept and Organizational Behavior We began this section by stating that self-concept is an important topic for understanding individual perceptions, attitudes, decisions, and behavior. In fact, self-concept may eventually be recognized as one of the more useful ways to understand and improve an employee’s performance and well-being. Some aspects of self-concept, such as self-efficacy and locus of control, already are known influences on job performance. Self-concept also affects how people select and interpret information, as well as their biases in judgments (such as probability of success). Furthermore, as you will learn in future chapters, the social identity component of self-concept influences team dynamics, organizational commitment, and other OB concepts. Learning Objectives After reading the next three sections, you should be able to: 6. Distinguish personal, shared, espoused, and enacted values and explain why value congruence is important. 7. Summarize five values commonly studied across cultures. 8. Explain how moral intensity, ethical sensitivity, and the situation influence ethical behavior. Values in the Workplace A person’s self-concept is connected to his or her personal values.49 Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. They are perceptions about what is good or bad, right or wrong. Values tell us what we “ought” to do. They serve as a moral compass that directs our motivation and, potentially, our decisions and actions. Values are related to selfconcept because they partly define who we are as individuals and as members of groups with similar values. People arrange values into a hierarchy of preferences, called a value system. Some individuals value new challenges more than they value conformity. Others value generosity more than frugality. Each person’s unique value system is developed and reinforced through socialization from parents, religious institutions, friends, personal experiences, and the society in which he or she lives. As such, a person’s hierarchy of values is stable and long-lasting. For example, one study found that value systems of a sample of adolescents were remarkably similar 20 years later when they were adults.50 Notice that our description of values has focused on individuals, whereas executives often describe values as though they belong to the organization. In reality, values exist only within individuals—we call them personal values. However, groups of people might hold the same or similar values, so we tend to ascribe these shared values to the team, department, organization, profession, or entire society. The values shared by people throughout an organization (organizational values) receive fuller discussion mcs81233_ch02_031-065.indd Page 48 1/10/09 1:34:25 PM user-s175 48 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes in Chapter 14 because they are a key part of corporate culture. The values shared across a society (cultural values) receive attention later in this chapter. Types of Values Values come in many forms, and experts on this topic have devoted considerable attention to organizing them into clusters. Several decades ago, social psychologist Milton Rokeach developed two lists of values, distinguishing means (instrumental values) from end goals (terminal values). Although Rokeach’s lists are still mentioned in some organizational behavior sources, they are no longer considered acceptable representations of personal values. The instrumental-terminal values distinction was neither accurate nor useful, and experts have identified values that were excluded from Rokeach’s lists. Today, by far the most respected and widely studied set of values is the model developed and tested by social psychologist Shalom Schwartz and his colleagues.51 Schwartz’s list of 57 values builds on Rokeach’s earlier work but does not distinguish instrumental from terminal values. Instead, through painstaking empirical research, Schwartz reported that human values are organized into the circular model (circumplex) shown in Exhibit 2.4.52 The model organizes values into 10 broad categories, each representing several specific values. For example, conformity consists of four values: politeness, honoring parents, self-discipline, and obedience. Exhibit 2.4 Schwartz’s Values Circumplex e Universalism Self-direction Stimulation Benevolence Conformity Tradition Hedonism onism Se enhanc Achievement Security rvation Power Sources: S. H. Schwartz, “Universals in the Content and Structure of Values: Theoretical Advances and Empirical Tests in 20 Countries,” Advances in Experimental Social Psychology, 25 (1992), pp. 1–65; S. H. Schwartz and G. Sagie, “Value Consensus and Importance: A Cross-National Study,” Journal of Cross-Cultural Psychology, 31 (July 2000), pp. 465–497. mcs81233_ch02_031-065.indd Page 49 1/10/09 1:34:25 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values 49 These 10 categories of values are further reduced to two bipolar dimensions. One dimension has the opposing value domains of openness to change and conservation. Openness to change refers to the extent to which a person is motivated to pursue innovative ways. It includes the value domains of self-direction (creativity, independent thought) and stimulation (excitement and challenge). Conservation is the extent to which a person is motivated to preserve the status quo. This dimension includes the value clusters of conformity (adherence to social norms and expectations), security (safety and stability), and tradition (moderation and preservation of the status quo). The other bipolar dimension in Schwartz’s model has the opposing value domains of self-enhancement and self-transcendence. Self-enhancement—how much a person is motivated by self-interest—includes the value categories of achievement (pursuit of personal success) and power (dominance over others). The opposite of self-enhancement is self-transcendence, which refers to motivation to promote the welfare of others and nature. Self-transcendence includes the values of benevolence (concern for others in one’s life) and universalism (concern for the welfare of all people and nature). Values and Individual Behavior Personal values guide our decisions and actions to some extent, but this connection isn’t always as strong as some would like to believe. Habitual behavior tends to be consistent with our values, but our everyday conscious decisions and actions apply our values much less consistently. The main reason for the “disconnect” between personal values and individual behavior is that values are abstract concepts that sound good in theory but are less easily followed in practice. Three conditions strengthen the linkage between personal values and behavior.53 First, we are more likely to apply values when we are reminded of them. For example, co-workers tend to treat each other with much more respect and consideration immediately after a senior executive gives a speech on the virtues of benevolence in the workplace. Second, we tend to apply our values only when we can think of specific reasons for doing so. In other words, we need logical reasons for applying a specific value in a specific situation. Third, we tend to apply our values in situations that facilitate doing so. Work environments shape our behavior, at least in the short term, so they necessarily encourage or discourage value-consistent behavior. Value Congruence Personal values not only define the person’s self-concept; they also affect how comfortable that person is with being associated with the organization and working with specific people. The key concept here is value congruence, which refers to how similar a person’s value hierarchy is to the value hierarchy of the organization, a co-worker, or another source of comparison. Person-organization value congruence occurs when the employee’s and organization’s dominant values are similar. Values are guideposts, so employees whose values are similar to the dominant organizational values are more likely to make decisions compatible with the organization’s value-based mission and objectives. Person-organization value congruence also leads to higher job satisfaction, loyalty, and organizational citizenship as well as lower stress and turnover. “The most difficult but rewarding accomplishment in any career is ‘living true’ to your values and finding companies where you can contribute at the highest level while being your authentic self,” says Cynthia Schwalm, president of the U.S. commercial division of biopharmaceutical company Eisai Co., Ltd. “There is nothing more important in my estimation.”54 mcs81233_ch02_031-065.indd Page 50 1/10/09 1:34:26 PM user-s175 50 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes Do the most successful organizations have the highest possible levels of personorganization value congruence? Not at all! While a comfortable degree of value congruence is necessary for the reasons just noted, organizations also benefit from some level of value incongruence. Employees with diverse values offer different perspectives, which potentially lead to better decision making. Also, too much congruence can create a “corporate cult” that potentially undermines creativity, organizational flexibility, and business ethics. A second type of value congruence involves how consistent the values apparent in our actions (enacted values) are with what we say we believe in (espoused values). This espoused-enacted value congruence is especially important for people in leadership positions because any obvious gap between espoused and enacted values undermines their perceived integrity, a critical feature of effective leaders. One global survey reported recently that 55 percent of employees believe senior management behaves consistently with the company’s core values.55 Meyners & Co., the Albuquerque, New Mexico, accounting firm, tries to maintain high levels of espoused-enacted value congruence by surveying subordinates and peers about whether managers’ decisions and actions are consistent with the company’s espoused values.56 A third type of value congruence involves the compatibility of an organization’s dominant values with the prevailing values of the community or society in which it conducts business.57 For example, an organization headquartered in one country that tries to impose its value system on employees and other stakeholders located in another culture may experience higher employee turnover and have more difficult relations with the communities in which the company operates. Thus, globalization calls for a delicate balancing act: Companies depend on shared values to maintain consistent standards and behaviors, yet they need to operate within the values of different cultures around the world. Let’s look more closely at how values vary across cultures. Values across Cultures individualism A cross-cultural value describing the degree to which people in a culture emphasize independence and personal uniqueness. collectivism A cross-cultural value describing the degree to which people in a culture emphasize duty to groups to which people belong and to group harmony. Fairmont Hotels & Resorts operates world-class hotels in several countries and is rapidly expanding its operations into the Middle East, Africa, and other regions. As the opening story in this chapter described, Fairmont actively develops cross-cultural competencies in its staff through work experience and formal training. Sean Billing and other Fairmont staff soon realize that they need to be sensitive to the fact that cultural differences exist and, although often subtle, can influence decisions, behavior, and interpersonal relations. Individualism and Collectivism Many values have been studied in the context of cross-cultural differences, but the two most commonly mentioned are individualism and collectivism. Individualism is the extent to which we value independence and personal uniqueness. Highly individualist people value personal freedom, self-sufficiency, control over their own lives, and appreciation of the unique qualities that distinguish them from others. As shown in Exhibit 2.5, Americans and Italians generally exhibit high individualism, whereas Taiwanese tend to have low individualism. Collectivism is the extent to which we value our duty to groups to which we belong and to group harmony. Highly collectivist people define themselves by their group memberships and value harmonious relationships within those groups.58 Americans generally have low collectivism, whereas Italians and Taiwanese have relatively high collectivism. mcs81233_ch02_031-065.indd Page 51 1/10/09 1:34:26 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values Exhibit 2.5 51 Five Cross-Cultural Values in Selected Countries Country Individualism Collectivism Power distance Uncertainty avoidance Achievement orientation United States High Low Medium low Medium low Medium high Denmark Medium Medium low Low Low Low India Medium high Medium High Medium low Medium high Italy High High Medium High High Japan Medium high Low Medium High High Taiwan Low High Medium High Medium Sources: Individualism and collectivism results are from the meta-analysis reported in D. Oyserman, H. M. Coon, and M. Kemmelmeier, “Rethinking Individualism and Collectivism: Evaluation of Theoretical Assumptions and Meta-Analyses,” Psychological Bulletin, 128 (2002), pp. 3–72. The other results are from G. Hofstede, Culture’s Consequences, 2d ed (Thousand Oaks, CA: Sage, 2001). Contrary to popular belief, individualism is not the opposite of collectivism. In fact, an analysis of previous studies reports that the two concepts are unrelated.59 Some cultures that highly value duty to one’s group do not necessarily give a low priority to personal freedom and self-sufficiency. The distinction between individualism and collectivism makes sense when we realize that people across all cultures define themselves in terms of both their uniqueness (personal identity) and their relationship to others (social identity). Some cultures clearly reflect one more than the other, but both have a place in a person’s values and self-concept. Power Distance power distance A cross-cultural value describing the degree to which people in a culture accept unequal distribution of power in a society. uncertainty avoidance A cross-cultural value describing the degree to which people in a culture tolerate ambiguity (low uncertainty avoidance) or feel threatened by ambiguity and uncertainty (high uncertainty avoidance). A third frequently mentioned cross-cultural value is power distance—the extent to which people accept unequal distribution of power in a society.60 Those with high power distance accept and value unequal power. They value obedience to authority and are comfortable receiving commands from their superiors without consultation or debate, and they prefer to resolve differences indirectly through formal procedures rather than directly. In contrast, people with low power distance expect relatively equal power sharing. They view the relationship with their boss as one of interdependence, not dependence; that is, they believe their boss is also dependent on them, so they expect power sharing and consultation before decisions affecting them are made. People in India tend to have high power distance, whereas people in Denmark generally have low power distance. Uncertainty Avoidance Uncertainty avoidance is the degree to which people tolerate ambiguity (low uncertainty avoidance) or feel threatened by ambiguity and uncertainty (high uncertainty avoidance). Employees with high uncertainty avoidance value structured situations in which rules of conduct and decision making are clearly documented. They usually prefer direct rather than indirect or ambiguous communications. Uncertainty avoidance tends to be high in Italy and Taiwan and very high in Japan. It is generally low in Denmark. mcs81233_ch02_031-065.indd Page 52 1/12/09 9:01:36 PM s-206 52 Part Two /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 Individual Behavior and Processes You’re the CEO? So What! As a senior manager throughout Asia, Stephen Roberts rarely received questions or critiques from staff about his proposals or ideas. “I spent nine years in Asia and managing in Asia was a relatively easy process because no one pushed back,” he recalls. The high power distance in Asian countries motivated staff to defer to Roberts’s judgment. In contrast, Roberts experienced very low power distance when he transferred to Australia. Even though he was now a chief executive officer at Citibank, his ideas were quickly, and sometimes brutally, questioned. “I remember arriving in Australia and I was asked to present to an executive committee of our equities team, and it felt like a medical examination,” recalls Roberts, who was born and raised in Australia. “I walked out battered and bruised. So to be pushed, challenged all the time, is more Australian than most other [cultures].”61 Achievement-Nurturing Orientation achievement-nurturing orientation A cross-cultural value describing the degree to which people in a culture emphasize competitive versus cooperative relations with other people. Achievement-nurturing orientation reflects a competitive versus cooperative view of relations with other people.62 People with a high achievement orientation value assertiveness, competitiveness, and materialism. They appreciate people who are tough, and they favor the acquisition of money and material goods. In contrast, people in nurturing-oriented cultures emphasize relationships and the well-being of others. They focus on human interaction and caring rather than competition and personal success. People in Sweden, Norway, and Denmark score very low on achievement orientation (i.e., they have a high nurturing orientation). In contrast, very high achievement orientation scores have been reported in Japan and Hungary, with fairly high scores in the United States and Italy. Before leaving this topic, we need to point out two concerns about cross-cultural values.63 One concern is that country scores on power distance, uncertainty avoidance, and achievement-nurturing orientation are based on a survey of IBM staff worldwide more than a quarter century ago. More than 100,000 IBM employees in dozens of countries completed that survey, but IBM employees might not represent the general population. There is also evidence that values have since changed considerably in some countries. A second concern is the assumption that everyone in a society has similar cultural values. This may be true in a few countries, but multiculturalism—in which several microcultures coexist in the same country—is becoming the more common trend. By attributing specific values to an entire society, we are engaging in a form of stereotyping that limits our ability to understand the more complex reality of that society. Ethical Values and Behavior When employees are asked to list the most important characteristic they look for in a leader, the top factor isn’t intelligence, courage, or even being inspirational. Although these characteristics are important, the most important factor in most surveys is honesty/ ethics.64 Ethics refers to the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad. People rely on their ethical values to determine “the right thing to do.” mcs81233_ch02_031-065.indd Page 53 1/10/09 1:34:34 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values 53 Unfortunately, incidents involving corporate wrongdoing continue to raise serious questions about the ethical values of many corporate leaders. Scandals at Enron, WorldCom, Tyco, and other companies led to the Sarbanes-Oxley Act in 2002, which put more controls on U.S. companies and auditing firms to minimize conflict of interest and disclose the company’s financial picture more fully. This legislation might reduce some unethical conduct, but wrongdoing is unlikely to disappear completely. Three Ethical Principles To better understand business ethics, we need to consider three distinct types of ethical principles: utilitarianism, individual rights, and distributive justice.65 While you might prefer one principle more than the others on the basis of your personal values, all three should be actively considered to put important ethical issues to the test. • • • Utilitarianism. This principle advises us to seek the greatest good for the greatest number of people. In other words, we should choose the option that provides the highest degree of satisfaction to those affected. This is sometimes known as a consequential principle because it focuses on the consequences of our actions, not on how we achieve those consequences. One problem with utilitarianism is that it is almost impossible to evaluate the benefits or costs of many decisions, particularly when many stakeholders have wide-ranging needs and values. Another problem is that even if the objective of our behavior is ethical according to utilitarianism, the means to achieving that objective is sometimes considered unethical. Individual rights. This principle reflects the belief that everyone has entitlements that let her or him act in a certain way. Some of the most widely cited rights are freedom of movement, physical security, freedom of speech, fair trial, and freedom from torture. The individual-rights principle includes more than legal rights; it also includes human rights that everyone is granted as a moral norm of society. One problem with individual rights is that certain individual rights may conflict with others. The shareholders’ right to be informed about corporate activities may ultimately conflict with an executive’s right to privacy, for example. Distributive justice. This principle suggests that people who are similar to each other should receive similar benefits and burdens; those who are dissimilar should receive different benefits and burdens in proportion to their dissimilarity. For example, we expect that two employees who contribute equally in their work should receive similar rewards, whereas those who make a lesser contribution should receive less. A variation of the distributive justice principle says that inequalities are acceptable when they benefit the least well off in society. Thus, employees in risky jobs should be paid more if their work benefits others who are less well off. One problem with the distributive justice principle is that it is difficult to agree on who is “similar” and what factors are “relevant.” Moral Intensity, Ethical Sensitivity, and Situational Influences moral intensity The degree to which an issue demands the application of ethical principles. Along with ethical principles and their underlying values, three other factors influence ethical conduct in the workplace: the moral intensity of the issue, the individual’s ethical sensitivity, and situational factors. Moral intensity is the degree to which an issue demands the application of ethical principles. Decisions with high moral intensity are more important, so the decision maker needs to more carefully apply ethical principles to resolve it. Several factors influence the moral intensity of an issue, including those listed in Exhibit 2.6. Keep in mind that this list represents the mcs81233_ch02_031-065.indd Page 54 1/10/09 1:34:34 PM user-s175 54 Exhibit 2.6 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes Factors Influencing Perceived Moral Intensity* Moral intensity factor Moral intensity question Moral intensity is higher when: Magnitude of consequences How much harm or benefit will occur to others as a result of this action? The harm or benefit is larger. Social consensus How many other people agree that this action is ethically good or bad? Many people agree. Probability of effect (a) What is the chance that this action will actually occur? (b) What is the chance that this action will actually cause good or bad consequences? The probability is higher. Temporal immediacy How long after the action will the consequences occur? The consequences are immediate rather than delayed. Proximity How socially, culturally, psychologically, and/or physically close to me are the people affected by this decision? Those affected are close rather than distant. Concentration of effect (a) How many people are affected by this action? (b) Are the people affected by this action easily identifiable as a group? Many people are affected. Those affected are easily identifiable as a group. *These are factors people tend to ask themselves about when determining the moral intensity of an issue. Whether some of these questions should be relevant is itself an ethical question. Source: Based on information in T. J. Jones, “Ethical Decision Making by Individuals in Organizations: An Issue Contingent Model,” Academy of Management Review 16 (1991), pp. 366–395. ethical sensitivity A personal characteristic that enables people to recognize the presence of an ethical issue and determine its relative importance. factors people tend to think about; some of them might not be considered morally acceptable when people are formally making ethical decisions.66 Even if an issue has high moral intensity, some employees might not recognize its ethical importance because they have low ethical sensitivity. Ethical sensitivity is a personal characteristic that enables people to recognize the presence of an ethical issue and determine its relative importance.67 Ethically sensitive people are not necessarily more ethical. Rather, they are more likely to recognize whether an issue requires ethical consideration; that is, they can more accurately estimate the moral intensity of the issue. Ethically sensitive people tend to have higher empathy. They also have more information about the specific situation. For example, accountants would be more ethically sensitive regarding the appropriateness of specific accounting procedures than would someone who has not received training in this profession. The third important factor explaining why good people engage in unethical decisions and behavior is the situation in which the conduct occurs. Employees say they regularly experience pressure from top management that motivates them to lie to customers, breach regulations, or otherwise act unethically.68 Situational factors do not justify unethical conduct. Rather, we need to recognize these factors so that organizations can reduce their influence in the future. Supporting Ethical Behavior Most large and medium-size organizations in the United States, United Kingdom, and several other countries apply one or more strategies to improve ethical conduct. mcs81233_ch02_031-065.indd Page 55 1/10/09 1:34:34 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 2 Individual Behavior, Personality, and Values 55 Creating ethical codes of conduct is the most common. Almost all Fortune 500 companies in the United States and the majority of the 500 largest U.K. companies now have codes of ethics. These statements communicate the organization’s ethical standards and signal to employees that the company takes ethical conduct seriously. However, critics point out that ethics codes alone do little to reduce unethical conduct. After all, Enron had a well-developed code of ethics, but that document didn’t prevent senior executives from engaging in wholesale accounting fraud, resulting in the energy company’s bankruptcy.69 To supplement ethics codes, many firms provide ethics training. At Texas Instruments, employees learn to ask the following questions as their moral compass: “Is the action legal? Does it comply with our values? If you do it, will you feel bad? How would it look in the newspaper? If you know it’s wrong, don’t do it! If you’re not sure, ask. Keep asking until you get an answer.” Molson Coors developed an award-winning online training program set up as an expedition: Employees must resolve ethics violations at each “camp” as they ascend a mountain. The first few camps present real scenarios with fairly clear ethical violations of the company’s ethics code; later camps present much fuzzier dilemmas requiring more careful thought about the company’s underlying values.70 Some companies have also introduced procedures whereby employees can communicate possible ethical violations in confidence. Food manufacturer H. J. Heinz Co. has an ethics hotline that operates Protecting E&Y’s Brand with Value-Based Ethics Training As around the clock and in 150 languages for its global a leading accounting and professional services firm, Ernst & workforce. Heinz’s director of ethics says that the Young (E&Y) has a lot at stake in maintaining its reputation for hotline “has provided an early warning signal of ethical conduct. “We can’t ever be in a position to have our problems we were not aware of.” Rogers Cable ethics challenged,” says Michael Hamilton, E&Y’s chief Communications Inc. also has an anonymous “star learning and development officer for the Americas. Although hotline” as well as a Web link that employees can the financial world has become very rule-based, the rules still use to raise ethical issues or concerns about ethical leave gaps where ethical missteps can occur. To minimize this conduct. Rogers employees can even call back to risk, E&Y invests heavily in values-based ethics training. “Ethics find out what actions have been taken to resolve an training and value training are about providing all of our people ethical issue.71 with a clear message and some guiding principles about what These additional measures support ethical conto do when the rules don’t address a situation or area,” Hamilton duct to some extent, but the most powerful foundation explains. All E&Y staff members are required to complete a is a set of shared values that reinforce ethical contwo-hour Web-based ethics course called “Living Our Core duct. “If you don’t have a culture of ethical decision Values” in which they learn about the company’s values and making to begin with, all the controls and compliethical principles, followed by analysis of several specific ance regulations you care to deploy won’t necessarcase situations. Ethical topics are also being integrated ily prevent ethical misconduct,” warns a senior throughout E&Y’s professional development courses. “We’re executive at British communications giant Vodafone. trying to bake ethics training into all of our curriculum,” says This culture is supported by the ethical conduct and Jeffrey Hoops, ethics and compliance officer for the Americas vigilance of corporate leaders. By acting with the and chief privacy officer. “It’s about continually reminding highest standards of moral conduct, leaders not only people that doing the right thing and speaking up when you gain support and trust from followers; they rolesee the wrong thing is not just accepted—it is the expected model the ethical standards that employees are more way we do things at Ernst & Young.”72 likely to follow.73 mcs81233_ch02_031-065.indd Page 56 1/12/09 9:21:50 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-02 Chapter Summary Individual behavior is influenced by motivation, ability, role perceptions, and situational factors (MARS). Motivation consists of internal forces that affect the direction, intensity, and persistence of a person’s voluntary choice of behavior. Ability includes both the natural aptitudes and the learned capabilities required to successfully complete a task. Role perceptions are a person’s beliefs about what behaviors are appropriate or necessary in a particular situation. Situational factors are environmental conditions that constrain or facilitate employee behavior and performance. Personality is the relatively enduring pattern of thoughts, emotions, and behaviors that characterize a person, along with the psychological processes behind those characteristics. Most experts now agree that personality is shaped by both nature and nurture. Most personality traits are represented within the five-factor model, which includes conscientiousness, agreeableness, neuroticism, openness to experience, and extroversion. Another set of traits, measured by the Myers-Briggs Type Indicator, represents how people prefer to perceive and judge information. Conscientiousness and emotional stability (low neuroticism) stand out as the personality traits that best predict individual performance in almost every job group. The other three personality dimensions predict more specific types of employee behavior and performance. Self-concept includes an individual’s self-beliefs and self-evaluations. It has three structural dimensions: complexity, consistency, and clarity. People are inherently motivated to promote and protect their self-concept; this is self-enhancement. At the same time, people are motivated to verify and maintain their existing self-concept; this is self-verification. Self-evaluation, an important aspect of self-concept, consists of self-esteem, self-efficacy, and locus of control. Self-esteem is the extent to which people like, respect, and are satisfied with themselves. Self-efficacy is a person’s belief that he or she has the ability, motivation, correct role perceptions, and favorable situation to complete a task successfully; general self-efficacy is a perception of one’s competence to perform across a variety of situations. Locus of control is defined as a person’s general belief about the amount of control he or she has over personal life events. Self-concept consists of both personality identity and social identity. Social identity theory explains how people define themselves in terms of the groups to which they belong or have an emotional attachment. Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. People arrange values into a hierarchy of preferences, called a value system. Espoused values—what we say and think we use as values—are different from enacted values, which are values evident from our actions. Values have been organized into a circle with 10 clusters. Value congruence is the similarity of value systems between two entities. Five values that differ across cultures are individualism, collectivism, power distance, uncertainty avoidance, and achievement-nurturing orientation. Three values that guide ethical conduct are utilitarianism, individual rights, and distributive justice. Three factors that influence ethical conduct are the extent to which an issue demands ethical principles (moral intensity), the person’s ethical sensitivity to the presence and importance of an ethical dilemma, and situational factors that cause people to deviate from their moral values. Companies improve ethical conduct through a code of ethics, ethics training, ethics hotlines, and the conduct of corporate leaders. Key Terms ability, p. 35 achievement-nurturing orientation, p. 52 collectivism, p. 50 competencies, p. 36 conscientiousness, p. 40 ethical sensitivity, p. 54 extroversion, p. 40 56 five-factor model (FFM), p. 39 individualism, p. 50 locus of control, p. 43 moral intensity, p. 53 motivation, p. 34 Myers-Briggs Type Indicator (MBTI), p. 41 neuroticism, p. 40 personality, p. 38 power distance, p. 51 role perceptions, p. 36 self-concept, p. 43 self-efficacy, p. 45 social identity theory, p. 46 uncertainty avoidance, p. 52 mcs81233_ch02_031-065.indd Page 57 1/10/09 1:34:42 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Critical Thinking Questions An insurance company has high levels of absenteeism among the office staff. The head of office administration argues that employees are misusing the company’s sick leave benefits. However, some of the mostly female staff members have explained that family responsibilities interfere with work. Using the MARS model, as well as your knowledge of absenteeism behavior, discuss some of the possible reasons for absenteeism here and how it might be reduced. 2. As the district manager responsible for six stores in a large electronics retail chain, you have had difficulty with the performance of some sales employees. Although they are initially motivated and generally have good interpersonal skills, many have difficulty with the complex knowledge of the wide variety of store products, ranging from computers to high-fidelity sound systems. Describe three strategies you might apply to improve the match between the competencies of new sales employees and the job requirements. 3. Studies report that heredity has a strong influence on an individual’s personality. What are the implications of this in organizational settings? 4. Suppose that you give all candidates applying for a management trainee position a personality test that measures the five dimensions in the five-factor 1. model. Which personality traits would you consider to be the most important for this type of job? Explain your answer. 5. An important aspect of self-concept is the idea that almost everyone engages in self-enhancement. What problems tend to occur in organizations as a result of the self-enhancement phenomenon? What can organizational leaders do to make use of a person’s inherent drive for self-enhancement? 6. This chapter discussed value congruence mostly in the context of an employee’s personal values versus the organization’s values. But value congruence also relates to the juxtaposition of other pairs of value systems. Explain how value congruence is relevant with respect to organizational versus professional values (i.e., values of a professional occupation, such as physician, accountant, pharmacist). 7. People in a particular South American country have high power distance and high collectivism. What does this mean, and what are the implications of this information when you (a senior executive) visit employees working for your company in that country? 8. “All decisions are ethical decisions.” Comment on this statement, particularly by referring to the concepts of moral intensity and ethical sensitivity. Case Study 2.1 SK TELECOM GOES EGALITARIAN IN A HIERARCHICAL SOCIETY Until recently, Hur Jae-hoon could end debate with junior staff members just by declaring that the discussion was over. Employed at the fourth tier in SK Telecom Co.’s five-tier management/professional hierarchy, the 33-year-old strategist held the corresponding title of “Hur Daeri” and received plenty of respect from people in lower positions. No one below Hur was allowed to question his decisions, and Hur was expected to silently comply with requests from above. South Korea’s culture of deferring to people in higher positions was deeply ingrained in the telecommunications company. In some South Korean companies, such as Samsung, junior staff members aren’t even allowed to initiate conversations with anyone above their boss. Now, in spite of South Korea’s strong hierarchical culture, SK Telecom wants to support more egalitarian values. It has already removed its five management ranks and their differentiated titles and status. The English word Manager is now used to address anyone employed throughout the five former ranks. (Hur Jae-hoon’s title has changed from Hur Daeri to “Hur Manager”). Only vice presidents and above retain their previous status titles. People in charge of projects or people are also called “Team Leader.” Furthermore, the company is assigning project 57 mcs81233_ch02_031-065.indd Page 58 1/10/09 1:34:43 PM user-s175 leadership responsibilities to employees in their twenties, whereas these roles were previously held only by older staff with much more seniority. As an added change, the company is allowing a more casual dress code at work. Through this dramatic shift in values and practices, SK Telecom’s senior executives hope that junior staff will speak up more freely, thereby improving creativity and decision making. They particularly want to avoid incidents such as one that occurred several years ago in which an excellent idea from younger employees was initially shot down by their bosses. The junior staff suggested that allowing customers to change their cell phone ringtones to music chosen by the friend they’ve phoned would generate revenue through music licensing. Fortunately, the idea was introduced several months later, after a few persistent employees proposed the idea again. SK Telecom’s initiative is not completely new to South Korea. Small high-tech companies already embrace egalitarian values and flatter corporate structures. But SK Telecom is among the first large firms in the country to attempt this culture shift, and it has met with resistance along the way. SK Telecom executives were initially divided over how quickly and to what extent the company should distance itself from South Korea’s traditional hierarchical culture. “There were ideas for gradual versus all-out reforms,” recalls chief executive Kim Shin-bae. “But the word ‘gradually’ means ‘not now’ to some people. So we decided to go all-out.” According to a company survey, 80 percent of employees support the changes. However, even with the changes in titles, many still look for subtle evidence of who has higher status and, therefore, should receive Case Study 2.2 more deference. Some also rely on what positions managers held under the old five-tier hierarchy. “I know what the old titles were,” says an LG Electronics Co. manager who supplies cell phones to SK Telecom. “So unconsciously, I keep that in mind.” Hur Jae-hoon admits there are times when he prefers a more hierarchical culture, but he believes that SK Telecom’s more egalitarian values and practices are already showing favorable results. In one recent meeting, a younger colleague sparred with Hur over the better way to complete a strategy project. “For a moment, I wished it was back in the old days when I could have shut that guy down,” Hur recalls. “But I had to admit his opinion was better than mine, and I adjusted. So the system worked.” Discussion Questions 1. SK Telecom is attempting to distance itself from which South Korean cultural value? What indicators of this value are identified in this case study? What other artifacts of this cultural value would you notice while visiting a South Korean company that upheld this national culture? 2. In your opinion, why is this hierarchical value so strong in South Korea? What are the advantages and disadvantages of this value in societies? 3. Do you think SK Telecom will be successful in integrating a more egalitarian culture, even though it contrasts with South Korea’s culture? What are some of the issues that may complicate or support this transition? Source: Based on E. Ramstad, “Pulling Rank Gets Harder at One Korean Company,” Wall Street Journal, 20 August 2007, p. B1. PUSHING PAPER CAN BE FUN A large city government was putting on a number of seminars for managers of various departments throughout the city. At one of these sessions, the topic discussed was motivation—how we can get public servants motivated to do a good job. The plight of a police captain became the central focus of the discussion: I’ve got a real problem with my officers. They come on the force as young, inexperienced rookies, and we 58 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE send them out on the street, either in cars or on a beat. They seem to like the contact they have with the public, the action involved in crime prevention, and the apprehension of criminals. They also like helping people out at fires, accidents, and other emergencies. The problem occurs when they get back to the station. They hate to do the paperwork, and because they dislike it, the job is frequently put off or done inadequately. This lack of attention hurts us later on when we get to court. We need clear, factual reports. They must mcs81233_ch02_031-065.indd Page 59 3/12/09 5:19:13 PM user-s172 be highly detailed and unambiguous. As soon as one part of a report is shown to be inadequate or incorrect, the rest of the report is suspect. Poor reporting probably causes us to lose more cases than any other factor. I just don’t know how to motivate them to do a better job. We’re in a budget crunch and I have absolutely no financial rewards at my disposal. In fact, we’ll probably have to lay some people off in the near future. It’s hard for me to make the job interesting and challenging because it isn’t—it’s boring, routine paperwork, and there isn’t much you can do about it. Finally, I can’t say to them that their promotions will hinge on the excellence of their paperwork. First of all, they know it’s not true. If their performance is adequate, most are more likely to get promoted just by staying on the force a certain number of years than for some specific outstanding act. Second, they were trained to do the job they do out in the streets, not to fill out forms. All through their career it is the arrests and interventions that get noticed. Some people have suggested a number of things, like using conviction records as a performance criterion. However, we know that’s not fair—too many Case Study 2.3 /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-02 other things are involved. Bad paperwork increases the chance that you lose in court, but good paperwork doesn’t necessarily mean you’ll win. We tried setting up team competitions based upon the excellence of the reports, but the officers caught on to that pretty quickly. No one was getting any type of reward for winning the competition, and they figured why should they bust a gut when there was no payoff. I just don’t know what to do. Discussion Questions 1. What performance problems is the captain trying to correct? 2. Use the MARS model of individual behavior and performance to diagnose the possible causes of the unacceptable behavior. 3. Has the captain considered all possible solutions to the problem? If not, what else might be done? Source: T. R. Mitchell and J. R. Larson, Jr., People in Organizations, 3d ed. (New York: McGraw-Hill, 1987), p. 184. Reproduced with permission from The McGraw-Hill Companies. THE TROUBLE WITH BUSINESS ETHICS Business ethics may have risen to the top of most executive agendas, but Wal-Mart Stores has learned that practicing ethics can also present ethical dilemmas. A few months after going through a new employee training session with a heavy emphasis on ethics, Chalace Epley Lowry acted on the guidance to report any activity that seemed the least bit suspicious. Lowry told the company’s ethics office about possible insider trading by one of her supervisors. Wal-Mart’s investigation concluded that the supervisor had done nothing wrong, but Lowry soon discovered that her identity as the whistleblower had been revealed to the supervisor she accused of wrongdoing. Now Lowry is looking for another job, but there’s no guarantee she’ll get transferred at Wal-Mart. This BusinessWeek case study examines the challenges of supporting ethics hotlines and whistleblowing, and it discusses the reasons why employees are reluctant to communicate ethical wrongdoing. Read the full text of this BusinessWeek article at www. mhhe.com/mcshane5e, and prepare for the discussion questions below. Discussion Questions 1. In an organization’s efforts to maintain ethical standards, how important is it to encourage and support employees who report possible incidents of ethical wrongdoing (i.e., engage in whistleblowing)? Why? What can companies do to support whistle-blowers? 2. What actions are described in this case study that companies have taken to improve ethical standards in their organizations? Are these actions substantive changes or mostly symbolic? Why? Source: P. Gogoi, “The Trouble with Business Ethics,” BusinessWeek Online, 22 June 2007. 59 mcs81233_ch02_031-065.indd Page 60 1/10/09 1:34:44 PM user-s175 Class Exercise 2.4 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE TEST YOUR KNOWLEDGE OF PERSONALITY PURPOSE This exercise is designed to help you think about and understand the effects of the Big Five personality dimensions on individual preferences and outcomes. INSTRUCTIONS (LARGE CLASS) Below are several questions relating to the Big Five personality dimensions and various preferences or outcomes. Answer each of these questions relying on your personal experience or best guess. Later, the instructor will show you the answers based on scholarly results. You will not be graded on this exercise, but it may help you to better understand the effect of personality on human behavior and preferences. INSTRUCTIONS (SMALL CLASS) 1. The instructor will organize students into teams. Members of each team work together to answer each of the questions below relating to the Big Five personality dimensions and various preferences or outcomes. 2. The instructor will reveal the answers based on scholarly results. (Note: The instructor might create a competition to see which team has the most answers correct.) PERSONALITY AND PREFERENCES QUESTIONS 1. Which two Big Five personality dimensions are positively associated with enjoyment of workplace humor? 2. Listed below are several jobs. Please check no more than two personality dimensions that you believe are positively associated with preferences for each occupation. Personality Dimension Job Budget analyst Corporate executive Engineer Journalist Life insurance agent Nurse Physician Production supervisor Public relations director Research analyst Schoolteacher Sculptor 60 Extroversion Conscientiousness Agreeableness Neuroticism Openness to experience mcs81233_ch02_031-065.indd Page 61 1/10/09 1:34:44 PM user-s175 3. Rank order (1 ⫽ highest, 5 ⫽ lowest) the Big Five personality dimensions in terms of how much you think they predict a person’s degree of life satisfaction. (Note: Personality dimensions are ranked by their absolute effect, so ignore the negative or positive direction of association.) Team Exercise 2.5 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE ___ Conscientiousness ___ Agreeableness ___ Neuroticism ___ Openness to experience ___ Extroversion COMPARING CULTURAL VALUES PURPOSE This exercise is designed to help you determine the extent to which students hold similar assumptions about the values that dominate in other countries. INSTRUCTIONS (SMALL CLASS) The terms in the left column represent labels that a major consulting project identified with businesspeople in a particular country, based on its national culture and values. These terms appear in alphabetical order. In the right column are the names of countries, also in alphabetical order, corresponding to the labels in the left column. 1. Working alone, connect the labels with the countries by relying on your perceptions of these countries. Each label is associated with only one country, so each label should be connected to only one country, and vice versa. Draw a line to connect the pairs, or put the label number beside the country name. 2. The instructor will form teams of four or five members. Members of each team will compare their results and try to reach consensus on a common set of connecting pairs. 3. Teams or the instructor will post the results so that all can see the extent to which students hold common opinions about businesspeople in other cultures. Class discussion can then consider the reasons why the results are so similar or different, as well as the implications of these results for working in a global work environment. INSTRUCTIONS (LARGE CLASS) 1. Working alone, connect the labels with the countries by relying on your perceptions of these countries. Each label is associated with only one country, so each label should be connected to only one country, and vice versa. Draw a line to connect the pairs, or put the label number beside the country name. 2. Asking for a show of hands, the instructor will find out which country is identified by most students with each label. The instructor will then post the correct answers. Value Labels and Country Names Value label (alphabetical) Country name (alphabetical) 1. Affable humanists Australia 2. Ancient modernizers Brazil 3. Commercial catalysts Canada 4. Conceptual strategists China 5. Efficient manufacturers France 6. Ethical statesmen Germany 7. Informal egalitarians India 8. Modernizing traditionalists Netherlands 9. Optimistic entrepreneurs New Zealand 10. Quality perfectionists Singapore 11. Rugged individualists Taiwan 12. Serving merchants United Kingdom 13. Tolerant traders United States Source: Based on R. Rosen, P. Digh, M. Singer, and C. Phillips, Global Literacies (New York: Simon & Schuster, 2000). 61 mcs81233_ch02_031-065.indd Page 62 3/12/09 5:19:19 PM user-s172 Team Exercise 2.6 /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-02 ETHICS DILEMMA VIGNETTES PURPOSE This exercise is designed to make you aware of the ethical dilemmas people face in various business situations, as well as the competing principles and values that operate in these situations. from buying the product at a lower price in another region. The company says this policy allows it to maintain stable prices within a region rather than continually changing prices due to currency fluctuations. INSTRUCTIONS (SMALL CLASS) The instructor will form teams of four or five students. Team members will read each case below and discuss the extent to which the company’s action in each case was ethical. Teams should be prepared to justify their evaluation using ethics principles and the perceived moral intensity of each incident. CASE THREE For the past few years, the design department of a small (40-employee) company has been using a particular software program, but the three employees who use the software have been complaining for more than a year that the software is out of date and is slowing down their performance. The department agreed to switch to a competing software program, costing several thousand dollars. However, the next version won’t be released for six months and buying the current version will not allow much discount on the next version. The company has put in advance orders for the next version. Meanwhile, one employee was able to get a copy of the current version of the software from a friend in the industry. The company has allowed the three employees to use this current version of the software even though they did not pay for it. INSTRUCTIONS (LARGE CLASS) Working alone, read each case below and determine the extent to which the company’s action in each case was ethical. The instructor will use a show of hands to determine the extent to which students believe the case represents an ethical dilemma (high or low moral intensity) and the extent to which the main people or company in each incident acted ethically. CASE ONE An employee who worked for a major food retailer wrote a Weblog (blog) and, in one of his writings, complained that his boss wouldn’t let him go home when he felt sick and that his district manager refused to promote him because of his dreadlocks. His blog named the employer, but the employee didn’t use his real name. Although all blogs are on the Internet, the employee claims that his was lowprofile and that it didn’t show up in a Google search of his name or the company. Still, the employer somehow discovered the blog, figured out the employee’s real name, and fired him for “speaking ill of the company in a public domain.” CASE TWO Computer printer manufacturers usually sell printers at a low margin over cost and generate much more income from subsequent sales of the high-margin ink cartridges required for each printer. One global printer manufacturer now designs its printers so that they work only with ink cartridges made in the same region. Ink cartridges purchased in the United States will not work with the same printer model sold in Europe, for example. This “region coding” of ink cartridges does not improve performance. Rather, it prevents consumers and gray marketers 62 CASE FOUR Judy Price is a popular talk-show radio personality and opinionated commentator on the morning phone-in show of a popular radio station in a large U.S. city. Price is married to John Tremble, an attorney who was recently elected mayor of the city even though he had no previous experience in public office. The radio station’s board of directors is very concerned that the station’s perceived objectivity will be compromised if Price remains on air as a commentator and talk-show host while her husband holds such a public position. For example, the radio station manager believes that Price gave minimal attention to an incident in which environmental groups criticized the city for its slow progress on recycling. Price denied that her views are biased and stated that the incident didn’t merit as much attention as other issues that particular week. To ease the board’s concerns, the station manager transferred Price from her talk-show host and commentator position to the hourly news reporting position, where most of the script is written by others. Although the reporting job is technically a lower position, Price’s total salary package remains the same. Price is now seeking professional advice to determine whether the radio station’s action represents a form of discrimination on the basis of marital status. mcs81233_ch02_031-065.indd Page 63 1/10/09 1:34:45 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Self-Assessment 2.7 ARE YOU INTROVERTED OR EXTROVERTED? PURPOSE This self-assessment is designed to help you estimate the extent to which you are introverted or extroverted. INSTRUCTIONS The statements in the scale below refer to personal characteristics that might or might not be characteristic of you. Mark the box indicating the extent to which the statement accurately or inaccurately describes you. Then use the scoring key in Appendix B at the end of this book to calculate your results. This exercise should be completed alone so that you can assess yourself honestly without concerns of social comparison. Class discussion will focus on the meaning and implications of extroversion and introversion in organizations. IPIP Introversion-Extroversion Scale How accurately does each of the statements listed below describe you? Very accurate description of me Moderately accurate Neither accurate nor inaccurate Moderately inaccurate Very inaccurate description of me 1. I feel comfortable around people. 2. I make friends easily. 3. I keep in the background. 4. I don’t talk a lot. 5. I would describe my experiences as somewhat dull. 6. I know how to captivate people. 7. I don’t like to draw attention to myself. 8. I am the life of the party. 9. I am skilled in handling social situations. 10. I have little to say. Source: Adapted from instruments described and/or presented in L. R. Goldberg, J. A. Johnson, H. W. Eber, R. Hogan, M. C. Ashton, C. R. Cloninger, and H. C. Gough, “The International Personality Item Pool and the Future of Public-Domain Personality Measures,” Journal of Research in Personality 40 (2006), pp. 84–96. 63 mcs81233_ch02_031-065.indd Page 64 3/12/09 8:44:47 PM user-s172 /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-02 Self-Assessment 2.8 WHAT ARE YOUR DOMINANT VALUES? Values have taken center stage in organizational behavior. Increasingly, OB experts are realizing that our personal values influence our motivation, decisions, and attitudes. This self-assessment is designed to help you estimate your personal values and value system. The instrument consists of several words and phrases, and you are asked to indicate whether each word or phrase is highly opposite or highly similar to your personal values or is at some point between these two extremes. As with all selfassessments, you need to be honest with yourself when completing this activity in order to get the most accurate results. Self-Assessment 2.9 INDIVIDUALISM-COLLECTIVISM SCALE Two of the most important concepts in cross-cultural organizational behavior are individualism and collectivism. This self-assessment measures your levels of individualism and collectivism with one of the most widely adopted measures. This scale consists of several statements, and you are asked to indicate how well each statement describes you. You need to be honest with yourself to receive a reasonable estimate of your level of individualism and collectivism. Self-Assessment 2.10 ESTIMATING YOUR LOCUS OF CONTROL This self-assessment is designed to help you estimate the extent to which you have an internal or external locus-of-control personality. The instrument asks you to indicate the degree to which you agree or disagree with each of the statements provided. As with all self-assessments, you need to be honest with yourself when completing this activity to get the most accurate results. The results show your relative position on the internal-external locus continuum and the general meaning of this score. Self-Assessment 2.11 IDENTIFYING YOUR GENERAL SELF-EFFICACY Self-efficacy refers to a person’s belief that he or she has the ability, motivation, and resources to complete a task successfully. Self-efficacy is usually 64 conceptualized as a situation-specific belief. You may believe that you can perform a certain task in one situation but may be less mcs81233_ch02_031-065.indd Page 65 3/12/09 5:23:12 PM user-s172 confident with that task in another situation. However, there is evidence that people develop a more general self-efficacy. This exercise helps you estimate your general self-efficacy. Read each of the statements in this self-assessment and select the re- /Users/user-s172/Desktop/Tempwork/MARCH 2009/MHBR089:Mcshane:/MHBR089-02 sponse that best fits your personal belief. This selfassessment should be completed alone so that you rate yourself honestly without concerns of social comparison. Class discussion will focus on the meaning and importance of self-efficacy in the workplace. After reading this chapter, if you feel that you need additional tips on managing your anxiety, see www.mhhe.com/mcshane5e for more in-depth information and interactivities that correspond to this chapter. 65 mcs81233_ch03_066-095.indd Page 66 1/12/09 9:52:59 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-03 In his regular job, John Leiter helps American companies carry out internal investigations into financial wrongdoing. But the Boston-based Ernst & Young senior manager found himself in a completely different environment as a participant in the accounting firm’s corporate social responsibility fellows program. For three months, Leiter was transplanted to Montevideo, Uruguay, assisting Infocorp, a young information technology company, with its first real five-year strategic plan. Leiter was performing different work in a different country with a different culture and language. “I worked out of my comfort zone the entire time,” he recalls. Leiter particularly noticed that he had to adjust his fast-paced American business style to the more personal approach in John Leiter (second from left) and other employees at Ernst & Young are developing more cosmopolitan perceptions of the world by assisting entrepreneurs in other cultures, such as this information technology company in Uruguay. Uruguay, which included traditional quarter-hour chitchats before meetings. The experience gave him a different perspective of the world and his approach to working with clients. “Oftentimes, we have such a myopic focus, and it doesn’t allow us to take a large view of the issue,” says Leiter, who now spends more time learning about the client’s needs before launching into the work. International corporate volunteering is more than an important form of corporate social responsibility; it is also a valuable tool to help employees at Ernst & Young and other companies develop more cosmopolitan perceptions of the world. “We need people with a global mindset, and what better way to develop a global mindset, and what more realistic way, than for somebody to have an immersion experience with just enough safety net,” says Deborah K. Holmes, Ernst & Young Americas director of corporate responsibility. Ernst & Young has sent John Leiter and two dozen other high-performing employees to work with entrepreneurs in South America. At Pfizer, the world’s largest pharmaceutical company, between 25 and 45 employees work up to six months in Africa and elsewhere each year to combat HIV-AIDS and other illnesses. Through its Project Ulysses program, PricewaterhouseCoopers sends 25 partners each year to developing countries, where they spend eight weeks working with nongovernmental organizations (NGOs) on community projects. IBM has also made international corporate volunteering part of its global leadership development curriculum through its recently launched Corporate Service Corps program. mcs81233_ch03_066-095.indd Page 67 1/10/09 2:14:19 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE 3 Perception and Learning in Organizations LEARNING OBJECTIVES After reading this chapter, you should be able to: 1. Outline the perceptual process. 2. Explain how social identity and stereotyping influence the perceptual process. 3. Describe the attribution process and two attribution errors. 4. Summarize the self-fulfilling-prophecy process. 5. Explain how halo, primacy, recency, and false-consensus effects bias our perceptions. 6. Discuss three ways to improve social perception, with specific application to organizational situations. 7. Describe the A-B-C model of behavior modification and the four contingencies of reinforcement. 8. Describe the three features of social learning theory. 9. Outline the elements of organizational learning and ways to improve each element. IBM CEO Sam Palmisano explains that these corporate social responsibility initiatives will develop its global leaders because participants “work in these other kinds of environments, so they can get a perspective and learn . . . how to think about problems from another perspective, from another point of view.”1 mcs81233_ch03_066-095.indd Page 68 1/10/09 2:14:19 PM user-s175 68 Part Two global mindset The capacity for complex perceiving and thinking characterized by superior awareness of and openness to different ways that others perceive their environment. Learning Objectives /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes International corporate volunteering programs have become a key component of global leadership development because they nurture a global mindset.2 They help employees develop a superior awareness of and openness to different “spheres of meaning and action,” that is, the various ways that others perceive their environment. Global mindset is gaining interest among organizational behavior experts. It is also a fitting topic to begin this chapter because it encompasses the dynamics of perceptions and learning. From a perceptual view, global mindset begins with self-awareness—understanding our own beliefs, values, and attitudes. Through selfawareness, we are more open-minded and nonjudgmental when receiving and processing complex information for decision making. Having a global mindset also relates to learning because employees working in a global environment need to quickly absorb large volumes of information about the diverse environments in which they work. Furthermore, people with a global mindset have a strong learning orientation. They welcome new situations as learning opportunities rather than view them as threats, and they continually question rather than quickly confirm what they know. This chapter describes these two related topics of perceptions and learning in organizations. We begin by describing the perceptual process, that is, the dynamics of selecting, organizing, and interpreting external stimuli. Next, we examine the perceptual processes of social identity and stereotyping, attribution, and selffulfilling prophecy, including biases created within these processes. Four other perceptual biases—halo, primacy, recency, and false consensus—are also briefly introduced. We then identify potentially effective ways to improve perceptions, including practices similar to corporate volunteering. The latter part of this chapter looks at three perspectives of learning: behavior modification, social learning theory, and experiential learning, followed by the key elements in organizational learning. After reading the next two sections, you should be able to: 1. Outline the perceptual process. 2. Explain how social identity and stereotyping influence the perceptual process. The Perceptual Process perception The process of receiving information about and making sense of the world around us. selective attention The process of attending to some information received by our senses and ignoring other information. Perception is the process of receiving information about and making sense of the world around us. It entails determining which information to notice, how to categorize this information, and how to interpret it within the framework of our existing knowledge. This perceptual process is far from perfect, as you will learn in this chapter, but it generally follows the steps shown in Exhibit 3.1. Perception begins when environmental stimuli are received through our senses. Most stimuli that bombard our senses are screened out; the rest are organized and interpreted. The process of attending to some information received by our senses and ignoring other information is called selective attention. Selective attention is influenced by characteristics of the person or object being perceived, particularly size, intensity, motion, repetition, and novelty. For example, a small, flashing red light on a nurse station console is immediately noticed because it is bright (intensity), flashing (motion), a rare event mcs81233_ch03_066-095.indd Page 69 1/10/09 2:14:19 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations Exhibit 3.1 69 Environmental stimuli Model of the Perceptual Process Feeling Hearing Seeing Smelling Tasting Selective attention and emotional marker response Perceptual organization and interpretation Attitudes and behavior (novelty), and has symbolic meaning that a patient’s vital signs are failing. Notice that selective attention is also influenced by the context in which the target is perceived. The selective attention process is triggered by things or people who might be out of context, such as hearing someone with a foreign accent in a setting where most people have American accents. Characteristics of the perceiver play an important role in selective attention, much of it without the perceiver’s awareness.3 When information is received through the senses, our brain quickly and nonconsciously assesses whether it is relevant or irrelevant to us and then attaches emotional markers (worry, happiness, boredom) to that information. The emotional markers help us to store information in memory; they also reproduce the same emotions when we are subsequently thinking about this information.4 The selective attention process is far from perfect. As mentioned in Chapter 2, we have a natural and usually nonconscious tendency to seek out information that supports our self-concept or puts us in a favorable light and to ignore or undervalue information that is contrary to our self-concept. This confirmation bias also screens out information that is contrary to our values and assumptions.5 Several studies have found that people fail to perceive (or soon forget) statements and events that undermine political parties that they support. One recent study examined how people perceived and accepted stories during the first weeks of the Iraq War that were subsequently retracted (acknowledged by the media as false stories). The study found that most of the Germans and Australians surveyed dismissed the retracted events, whereas a significantly large percentage of Americans continued to believe these false stories, even though many of them recalled that the stories had been retracted by the media. In essence, people in the American sample were reluctant to reject and forget about information that supported their beliefs about the Iraq War.6 Finally, selective attention is influenced by our assumptions and conscious anticipation of future events. You are more likely to notice a co-worker’s e-mail among the daily bombardment of messages when you expect to receive that e-mail (particularly mcs81233_ch03_066-095.indd Page 70 1/12/09 9:53:47 PM s-206 70 Part Two Individual Behavior and Processes Detectives Avoid Tunnel Vision with Art Appreciation Good detective work involves more than forming a good theory about the crime. It also involves not forming a theory too early in the investigation. “The longer it goes, the more theories there are,” warns FBI special agent Mark MacKizer when describing a six-year-old investigation in which a family was murdered in Henry County, Virginia. “We’re very careful to let the evidence drive the investigation, not theories. All the investigators on this case are cognizant of not having tunnel vision.” Keith Findley, codirector of the Wisconsin Innocence Project, advises that becoming preoccupied with a single theory “leads investigators, prosecutors, judges, and defense lawyers alike to focus on a particular conclusion and then filter all evidence in a case through the lens provided by that conclusion.” To minimize this selective attention problem, officers in the New York Police Department are attending art classes, where they learn to be more mindful and take multiple perspectives of all information. “[The class] reminded me to stop and take in the whole scene and not just have tunnel vision,” says NYPD captain David Grossi, adding that the class helped him to discover evidence outside the area he normally would have investigated.9 categorical thinking Organizing people and objects into preconceived categories that are stored in our longterm memory. /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-03 when it is important to you). Unfortunately, expectations and assumptions also cause us to screen out potentially important information. In one study, students were asked to watch a 30-second video clip in which several people passed around two basketballs. Students who were asked just to watch the video clip easily noticed someone dressed in a gorilla suit walking among the players for nine seconds and stopping to thump its chest. But only half of the students who were asked to carefully count the number of times one basketball was passed around noticed the intruding gorilla.7 This perceptual blindness also occurs when we form an opinion or theory about something, such as a consumer trend or an employee’s potential. The preconception causes us to select information that is consistent with the theory and to ignore contrary or seemingly irrelevant information. Studies have reported that this faulty selective attention occurs when police detectives and other forensic experts quickly form theories about what happened.8 These experts are now increasingly aware of the need to avoid selective attention traps by keeping an open mind, absorbing as much information as possible, and avoiding theories too early in the investigation. Perceptual Organization and Interpretation People make sense of information even before they become aware of it. This sense making partly includes categorical thinking—the mostly nonconscious process of organizing people and objects into preconceived categories that are stored in our longterm memory.10 Categorical thinking relies on a variety of automatic perceptual grouping principles. Things are often grouped together on the basis of their similarity or proximity to others. If you notice that a group of similar-looking people includes several professors, for instance, you will likely assume that the others in that group are also professors. Another form of perceptual grouping is based on the need for cognitive closure, such as filling in missing information about what happened at a meeting that you didn’t attend (e.g., who was there, where it was held). A third form of grouping occurs when we think we see trends in otherwise ambiguous information. Several studies have found that people have a natural tendency to see patterns that really are random events, such as presumed winning streaks among sports stars or in gambling.11 The process of “making sense” of the world around us also involves interpreting incoming information. This happens quickly as selecting and organizing because the previously mentioned emotional markers are tagged to incoming mcs81233_ch03_066-095.indd Page 71 1/10/09 2:14:28 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations 71 stimuli, which are essentially quick judgments about whether that information is good or bad for us. To give you an idea of how quickly and systematically this nonconscious perceptual interpretation process occurs, consider the following study:12 After viewing video clips of university instructors teaching an undergraduate class, eight observers rated the instructors on several personal characteristics (optimistic, likable, anxious, active, etc.). The observers, who had never seen the instructors before, were similar to each other on how they rated the instructors, even though they completed their ratings alone. Equally important, these ratings were very similar to the ratings completed by students who attended the actual class. These results may be interesting, but they become extraordinary when you realize that the observers formed their perceptions from as little as six seconds of video—three segments of two seconds each selected randomly from the one-hour class! Furthermore, the video didn’t have any sound. In other words, people form similar perceptions and judgments on the basis of very thin slices of information. Other studies have reported similar findings for observations of high school teachers, courtroom judges, and physicians. Collectively, these “thin slice” studies reveal that selective attention, as well as perceptual organization and interpretation, operates very quickly and to a large extent without our awareness. mental models Visual or relational images in our mind that represent the external world. Mental Models To achieve our goals with some degree of predictability and sanity, we need road maps of the environments in which we live. These road maps, called mental models, are internal representations of the external world.13 They consist of visual or relational images in our mind, such as what the classroom looks like or, conceptually, what happens when we submit an assignment late. We rely on mental models to make sense of our environment through perceptual grouping; the models fill in the missing pieces, including the causal connection among events. For example, you have a mental model about attending a class lecture or seminar, including assumptions or expectations about where the instructor and students arrange themselves in the room, how they ask and answer questions, and so forth. We can create a mental image of a class in progress. Mental models play an important role in sense making, yet they also make it difficult to see the world. For example, accounting professionals tend to see corporate problems in terms of accounting solutions, whereas marketing professionals see the same problems from a marketing perspective. Mental models also block our recognition of new opportunities. How do we change mental models? That’s a tough challenge. After all, we developed models from several years of experience and reinforcement. The most important way to minimize the perceptual problems with mental models is to constantly question them. We need to ask ourselves about the assumptions we make. Working with people from diverse backgrounds is another way to break out of existing mental models. Colleagues from different cultures and areas of expertise tend to have different mental models, so working with them makes our own assumptions more obvious. Social Identity and Stereotyping In the previous chapter, you learned that social identity is an important component of a person’s self-concept. We define ourselves to a large extent by the groups to which we belong or have an emotional attachment. Along with shaping our mcs81233_ch03_066-095.indd Page 72 1/10/09 2:14:28 PM user-s175 72 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes self-concept, social identity theory explains the dynamics of social perception—how we perceive others.14 Social perception is influenced by three activities in the process of forming and maintaining our social identity: categorization, homogenization, and differentiation. • • • Categorization. Social identity is a comparative process, and the comparison begins by categorizing people into distinct groups. By viewing someone (including yourself) as a Texan, for example, you remove that person’s individuality and, instead, see him or her as a prototypical representative of the group “Texans.” This categorization then allows you to distinguish Texans from people who live in, say, California or New Hampshire. Homogenization. To simplify the comparison process, we tend to think that people within each group are very similar to each other. For instance, we think Texans collectively have similar attitudes and characteristics, whereas Californians collectively have their own set of characteristics. Of course, every individual is unique, but we tend to lose sight of this fact when thinking about our social identity and how we compare to people in other social groups. Differentiation. Social identity fulfills our inherent need to have a distinct and positive self-concept. To achieve this, we do more than categorize people and homogenize them; we also differentiate groups by assigning more favorable characteristics to people in our groups than to people in other groups. This differentiation is often subtle, but it can escalate into a “good-guy–bad-guy” contrast when groups are in conflict with each other.15 Stereotyping in Organizations stereotyping The process of assigning traits to people on the basis of their membership in a social category. Stereotyping is an extension of social identity theory and a product of our natural process of organizing information through categorical thinking.16 Stereotyping has three elements. First, we develop social categories and assign traits that are difficult to observe. For instance, students might form the stereotype that professors are both intelligent and absentminded. Personal experiences shape stereotypes to some extent, but stereotypes are mainly provided to us through cultural upbringing and media images (e.g., movie characters). Second, we assign people to one or more social categories on the basis of easily observable information about them, such as their gender, appearance, or physical location. Third, people who seem to belong to the stereotyped group are assigned nonobservable traits associated with the group. For example, if we learn that someone is a professor, we implicitly tend to assume the person is also intelligent and absentminded. One reason why people engage in stereotyping is that, as a form of categorical thinking, it is a natural and mostly nonconscious “energy-saving” process that simplifies our understanding of the world. It is easier to remember features of a stereotype than the constellation of characteristics unique to everyone we meet.17 A second reason is that we have an innate need to understand and anticipate how others will behave. We don’t have much information when first meeting someone, so we rely heavily on stereotypes to fill in the missing pieces. People with a strong need for cognitive closure have a higher tendency to rely on stereotypes. A third reason is that stereotyping enhances our self-concept. As mentioned earlier, the social identity process includes differentiation—we have more favorable views of members of our own groups than we do of people in other groups. When out-group members threaten our mcs81233_ch03_066-095.indd Page 73 1/10/09 2:14:28 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations 73 self-concept, we are particularly motivated (often without our awareness) to assign negative stereotypes to them.18 Problems with Stereotyping Stereotypes are not completely fictional, but neither do they accurately describe every person in a social category. For instance, the widespread “bean counter” stereotype of accountants views people in this profession as “single-mindedly preoccupied with precision and form, methodical and conservative, and a boring joyless character.”19 Although this may be true of some accountants, it is certainly not characteristic of all—or even most—people in this profession. Even so, once we categorize someone as an accountant, the features of accountants in general rather than the features of the specific person get recalled, even when the person does not possess many of the stereotypic traits. Another problem with stereotyping is that it lays the foundation for discriminatory attitudes and behavior. Most of this perceptual bias occurs as unintentional (systemic) discrimination, whereby decision makers rely on stereotypes to establish notions of the “ideal” person in specific roles. A person who doesn’t fit the ideal tends to receive a less favorable evaluation. This subtle discrimination often shows up in age discrimination claims, such as the case in which Ryanair’s recruitment advertising said it was looking for “young dynamic” employees. Recruiters at the Irish discount airline probably didn’t intentionally discriminate against older people, but the tribunal concluded that systemic discrimination did occur because none of the job applicants were over 40 years old.20 The more serious form of stereotype bias is intentional discrimination or prejudice, in which people hold unfounded negative attitudes toward people belonging to a particular stereotyped group.21 Overt prejudice seems to be less common today than a few decades ago, but it still exists. Over each of the past four years, for instance, more than one-quarter of Americans say they overhead racial slurs in the workplace.22 In one recent case, three female advisers in California successfully sued their employer, Smith Barney, on the grounds that their male co-workers were deliberately assigned more lucrative clients (and therefore received higher pay) and more administrative support. These complaints were raised less than a decade after Smith Barney was ordered to correct discriminatory practices in its New York offices, where female employees complained of sexist and discriminatory behavior. A tribunal in Quebec was shocked to discover that one of Canada’s largest vegetable farms prevented black employees from eating in the regular cafeteria. Instead, they were relegated to a “blacks only” eating area that lacked heat, running water, proper toilets, and refrigeration.23 As Global Connections 3.1 describes, France is also coming to terms with both intentional and unintentional discrimination against non-Caucasian job applicants. If stereotyping is such a problem, shouldn’t we try to avoid this process altogether? Unfortunately, it’s not that simple. Most experts agree that categorical thinking (including stereotyping) is an automatic and nonconscious process. Intensive training can minimize stereotype activation to some extent, but for the most part the process is hardwired in our brain cells.24 Also remember that stereotyping helps us in several valuable (although fallible) ways described earlier: minimizing mental effort, filling in missing information, and supporting our social identity. The good news is that while it is very difficult to prevent the activation of stereotypes, we can minimize the application of stereotypic information. Later in this chapter, we identify ways to minimize stereotyping and other perceptual biases. mcs81233_ch03_066-095.indd Page 74 1/10/09 2:14:28 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Global Connections 3.1 “Your Name Says Everything in France” Hamid Senni wears a shirt and tie whenever he strolls along the Champs Elysées in Paris. The reason for this formality? “If I’m in jeans, people think I’m a shoplifter,” he says. What makes this misperception even worse is that Senni, the son of Moroccan immigrants, was born and raised in France. And in spite of his education (three degrees in economics) and fluent language skills, Senni was told more than once that he would never find a job in France. A well-intentioned high school teacher once told him that he should replace Hamid with a more traditional French name. Incensed by the daily discrimination he experienced in his own country, Senni moved to Sweden and now lives in London, where he advises companies on ethnic diversity and has written a book on his experience. “Going abroad was like an exorcism,” he says bluntly. “In the U.K., diversity is seen as an opportunity. In France it’s still seen as a problem.” Senni’s perception of racial and ethnic discrimination in France is supported by a recent study conducted jointly by the French government and the International Labour Organization (ILO). Researchers submitted two nearly identical job applications to 2,440 help-wanted ads. The main difference was that the candidate in one application had a French-sounding name whereas the individual in the other application had a North African or sub-Saharan African name. Almost 80 percent of employers preferred the applicant with the French-sounding name. Furthermore, when applicants personally visited human resource staff, those who had foreign names seldom received job interviews; instead, they were often told that the job had been filled or that the company would not be hiring after all. The report concluded that “almost 90 percent of overall discrimination occurred before the employer had even bothered to interview both test candidates.” One young black resident near Paris who calls himself Billy Fabrice knows about the undercurrents of racial discrimination. “Your name says everything in France,” says Fabrice. “If you are called Diallo or Amir, that’s all they want to know. If you are called Jean-Pierre, you show up for a job and they take you.” Some employers specifically ask hiring agencies for applicants who are “BBR.” This acronym for the colors of Learning Objectives 74 Hamid Senni was born and raised in France but eventually moved to the United Kingdom because race discrimination in his home country limited job opportunities. the French flag (bleu, blanc, rouge) is apparently a well-known employment code to hire only white French people. In one recent court case, prosecutors claimed that Garnier, a division of L’Oréal, tried to hire mostly white staff for in-store promotions. Garnier sent its temporary recruitment agency a fax specifying that those hired should be within a specific age range (18 to 22), have a certain clothing size, and be “BBR.” Initially, 38 percent of candidates sent by the recruitment agency were non-Caucasian. After the fax was sent, this dropped to less than 5 percent. While many French employers, including Garnier, deny prejudice or even systemic discrimination against non-Caucasian applicants, others are taking steps to make the hiring process more color-blind. Axa SA, the giant French insurance company, introduced anonymous résumés, in which job applicants provide their qualifications but not their names, addresses, gender, or age. Serge Simon, a 20-something French resident with Haitian origins, is hopeful. “I think that with an anonymous résumé, a person will be hired for what they are—for their qualifications and not for the color of their skin,” he believes.25 After reading the next three sections, you should be able to: 3. Describe the attribution process and two attribution errors. 4. Summarize the self-fulfilling-prophecy process. 5. Explain how halo, primacy, recency, and false-consensus effects bias our perceptions. mcs81233_ch03_066-095.indd Page 75 1/13/09 1:37:39 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/13.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations 75 Attribution Theory attribution process The perceptual process of deciding whether an observed behavior or event is caused largely by internal or external factors. Exhibit 3.2 Rules of Attribution The attribution process involves deciding whether an observed behavior or event is caused mainly by the person (internal factors) or by the environment (external factors).26 Internal factors include the person’s ability or motivation, whereas external factors include lack of resources, other people, or just luck. If a co-worker doesn’t show up for an important meeting, for instance, we infer either internal attributions (the co-worker is forgetful, lacks motivation, etc.) or external attributions (traffic, a family emergency, or other circumstances prevented the co-worker from attending). People rely on the three attribution rules shown in Exhibit 3.2 to determine whether someone’s behavior mainly has an internal or external attribution. Internal attributions are made when the observed individual behaved this way in the past (high consistency), he or she behaves like this toward other people or in different situations (low distinctiveness), and other people do not behave this way in similar situations (low consensus). On the other hand, an external attribution is made when there is low consistency, high distinctiveness, and high consensus. To illustrate how these three attribution rules operate, suppose that an employee is making poor-quality products one day on a particular machine. We would probably conclude that there is something wrong with the machine (an external attribution) if the employee has made good-quality products on this machine in the past (low consistency), Internal Attribution Behavior is attributed to internal factors. External Attribution Behavior is attributed to external factors. mcs81233_ch03_066-095.indd Page 76 1/10/09 2:14:39 PM user-s175 76 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes the employee makes good-quality products on other machines (high distinctiveness), and other employees have recently had quality problems on this machine (high consensus). We would make an internal attribution, on the other hand, if the employee usually makes poor-quality products on this machine (high consistency), other employees produce good-quality products on this machine (low consensus), and the employee also makes poor-quality products on other machines (low distinctiveness).27 Attribution is an essential perceptual process because it forms cause-effect relationships, which, in turn, affect how we respond to others’ behavior and how we act in the future. How we react to a co-worker’s poor performance depends on our internal or external attribution of that performance. Students who make internal attributions about their poor performance are more likely to drop out of their programs, for instance.28 Attribution Errors fundamental attribution error The tendency to see the person rather than the situation as the main cause of that person’s behavior. self-serving bias The tendency to attribute our favorable outcomes to internal factors and our failures to external factors. People are far from perfect when making attributions. One bias, called fundamental attribution error, refers to our tendency to see the person rather than the situation as the main cause of that person’s behavior.29 If an employee is late for work, observers are more likely to conclude that the person is lazy than to realize that external factors may have caused this behavior. Fundamental attribution error occurs because observers can’t easily see the external factors that constrain the person’s behavior. We didn’t see the traffic jam that caused the person to be late, for instance. Research suggests that fundamental attribution error is more common in Western countries than in Asian cultures, where people are taught from an early age to pay attention to the context in interpersonal relations and to see everything as being connected in a holistic way.30 Another attribution error, known as self-serving bias, is the tendency to attribute our favorable outcomes to internal factors and our failures to external factors. Simply put, we take credit for our successes and blame others or the situation for our mistakes. Self-serving bias is one of several related biases that maintain a positive self-concept, particularly engaging in self-enhancement to maintain a positive self-evaluation. It is evident in many aspects of work life. In annual reports, for example, executives mainly refer to their personal qualities as reasons for the company’s successes and to external factors as reasons for the company’s failures.31 Self-Fulfilling Prophecy self-fulfilling prophecy The perceptual process in which our expectations about another person cause that person to act in a way that is consistent with those expectations. Self-fulfilling prophecy occurs when our expectations about another person cause that person to act in a way that is consistent with those expectations. In other words, our perceptions can influence reality. Exhibit 3.3 illustrates the four steps in the selffulfilling-prophecy process using the example of a supervisor and a subordinate.32 The process begins when the supervisor forms expectations about the employee’s future behavior and performance. These expectations are sometimes inaccurate, because first impressions are usually formed from limited information. The supervisor’s expectations influence his or her treatment of employees. Specifically, high-expectancy employees (those expected to do well) receive more emotional support through nonverbal cues (e.g., more smiling and eye contact), more frequent and valuable feedback and reinforcement, more challenging goals, better training, and more opportunities to demonstrate good performance. The third step in self-fulfilling prophecy includes two effects of the supervisor’s behavior on the employee. First, through better training and more practice opportunities, a high-expectancy employee learns more skills and knowledge than a low-expectancy mcs81233_ch03_066-095.indd Page 77 1/13/09 10:51:12 AM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/13.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations Exhibit 3.3 77 Supervisor forms expectations about employee. The Self-FulfillingProphecy Cycle Supervisor's expectations affect his/her behavior toward the employee. becomes consistent with the supervisor's expectations. Supervisor's behavior affects employee's abilities and self-confidence. employee. Second, the employee becomes more self-confident, which results in higher motivation and willingness to set more challenging goals.33 In the final step, highexpectancy employees have higher motivation and better skills, resulting in better performance, while the opposite is true of low-expectancy employees. There are plenty of examples of self-fulfilling prophecies in work and school settings.34 Research has found that women perform less well on math tests after being informed that men tend to perform better on them. Women perform better on these tests when they are not exposed to this negative self-fulfilling prophecy. Similarly, people over 65 receive lower results on memory tests after hearing that mental ability declines with age. Another study reported that the performance of Israeli Defense Force trainees was influenced by their instructor’s expectations regarding the trainee’s potential in the program. Self-fulfilling prophecy was at work here because the instructor’s expectations were based on a list provided by researchers showing which recruits had high and low potential, even though the researchers had actually listed these trainees randomly. Contingencies of Self-Fulfilling Prophecy positive organizational behavior A perspective of organizational behavior that focuses on building positive qualities and traits within individuals or institutions as opposed to focusing on what is wrong with them. Self-fulfilling prophecies are more powerful under some conditions than others. The self-fulfilling-prophecy effect is stronger at the beginning of a relationship, such as when employees are first hired. It is also stronger when several people (rather than just one person) hold the same expectations of the individual. In other words, we might be able to ignore one person’s doubts about our potential but not the collective doubts of several people. The self-fulfilling-prophecy effect is also stronger among people with a history of low achievement. High achievers can draw on their past successes to offset low expectations, whereas low achievers do not have past successes to support their self-confidence. Fortunately, the opposite is also true: Low achievers respond more favorably than high achievers to positive self-fulfilling prophecy. Low achievers don’t receive this positive encouragement very often, so it probably has a stronger effect on their motivation to excel.35 The main lesson from the self-fulfilling-prophecy literature is that leaders need to develop and maintain a positive, yet realistic, expectation toward all employees. This recommendation is consistent with the emerging philosophy of positive organizational behavior, which suggests that focusing on the positive rather than negative aspects of mcs81233_ch03_066-095.indd Page 78 1/10/09 2:14:41 PM user-s175 78 Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes life will improve organizational success and individual well-being. Communicating hope and optimism is so important that it is identified as one of the critical success factors for physicians and surgeons. Unfortunately, training programs that make leaders aware of the power of positive expectations seem to have minimal effect. Instead, generating positive expectations and hope depends on a corporate culture of support and learning. Hiring supervisors who are inherently optimistic toward their staff is another way of increasing the incidence of positive self-fulfilling prophecies. Other Perceptual Errors halo effect A perceptual error whereby our general impression of a person, usually based on one prominent characteristic, colors our perception of other characteristics of that person. primacy effect A perceptual error in which we quickly form an opinion of people on the basis of the first information we receive about them. recency effect A perceptual error in which the most recent information dominates our perception of others. Self-fulfilling prophecy, attribution, and stereotyping are among the most common perceptual processes and biases in organizational settings, but there are many others. Four others are briefly described below because they can also bias our perception of the world around us. • • • Halo effect. The halo effect occurs when our general impression of a person, usually based on one prominent characteristic, distorts our perception of other characteristics of that person.36 If a supervisor who values punctuality notices that an employee is sometimes late for work, the supervisor might form a negative image of the employee and evaluate that person’s other traits unfavorably as well. The halo effect is most likely to occur when concrete information about the perceived target is missing or we are not sufficiently motivated to search for it. Instead, we use our general impression of the person to fill in the missing information. Primacy effect. The primacy effect is our tendency to quickly form an opinion of people on the basis of the first information we receive about them.37 This rapid perceptual organization and interpretation occurs because we need to make sense of the world around us. The problem is that first impressions—particularly negative first impressions—are difficult to change. After categorizing someone, we tend to select subsequent information that supports our first impression and screen out information that opposes that impression. Recency effect. The recency effect occurs when the most recent information dominates our perceptions.38 This perceptual bias is most common when people (especially those with limited experience) are making an evaluation involving complex information. For instance, auditors must digest large volumes of information in their judgments about financial documents, and the most recent mcs81233_ch03_066-095.indd Page 79 1/10/09 2:14:43 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations false-consensus effect A perceptual error in which we overestimate the extent to which others have beliefs and characteristics similar to our own. Learning Objectives • 79 information received prior to the decision tends to get weighted more heavily than information received at the beginning of the audit. Similarly, when supervisors evaluate the performance of employees over the previous year, the most recent performance information dominates the evaluation because it is the most easily recalled. False-consensus effect. Sometimes called the similar-to-me effect, the false-consensus effect is a widely observed bias in which we overestimate the extent to which others have beliefs and characteristics similar to our own.39 Employees who are thinking of quitting their jobs believe that a large percentage of their co-workers are also thinking about quitting. This bias occurs to some extent because we associate with others who are similar to us, and we selectively remember information that is consistent with our own views. We also believe “everyone does it” to reinforce our self-concept regarding behaviors that do not have a positive image (quitting, parking illegally, etc.). After reading this section, you should be able to: 6. Discuss three ways to improve social perception, with specific application to organizational situations. Improving Perceptions We can’t bypass the perceptual process, but we should make every attempt to minimize perceptual biases and distortions. Three potentially effective ways to improve perceptions include awareness of perceptual biases, self-awareness, and meaningful interaction. Awareness of Perceptual Biases One of the most obvious and widely practiced ways to reduce perceptual biases is by knowing that they exist. For example, diversity awareness training tries to minimize discrimination by making people aware of systemic discrimination as well as prejudices that occur through stereotyping. This training also attempts to dispel myths about people from various cultural and demographic groups. Awareness of perceptual biases can reduce these biases to some extent by making people more mindful of their thoughts and actions. However, awareness has only a limited effect.40 For example, trying to correct misinformation about demographic groups has limited effect on people with deeply held prejudices against those groups. Also, self-fulfillingprophecy training informs managers about this perceptual bias and encourages them to engage in more positive rather than negative self-fulfilling prophecies, yet research has found that managers continue to engage in negative self-fulfilling prophecies after they complete the training program. Improving Self-Awareness A more powerful way to minimize perceptual biases is to help people become more aware of biases in their own decisions and behavior. As mentioned at the beginning of this chapter, self-awareness is a critical foundation for developing a global mindset. We need to understand our beliefs, values, and attitudes to be more open-minded and nonjudgmental toward others. Self-awareness is equally important in other ways. mcs81233_ch03_066-095.indd Page 80 1/10/09 2:14:43 PM user-s175 80 Johari Window A model of mutual understanding that encourages disclosure and feedback to increase our own open area and reduce the blind, hidden, and unknown areas. Part Two /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes The emerging concept of authentic leadership, for instance, emphasizes self-awareness as the first step in a person’s ability to effectively lead others (see Chapter 12).41 But how do we become more self-aware? One formal procedure, called the Implicit Association Test (IAT), detects subtle race, age, and gender bias by associating positive and negative words with specific demographic groups.42 Many people are much more cautious about their stereotypes and prejudices after discovering that their test results show a personal bias against older people or individuals from different ethnic backgrounds. For example, Jennifer Smith-Holladay was surprised to learn after taking the IAT that she is biased in favor of white people, a group to which she belongs, and in favor of heterosexuals, a group to which she does not belong. “I discovered that I not only have some in-group favoritism lurking in my subconscious, but also possess some internalized oppression in terms of my sexuality,” says SmithHolladay. She adds that the IAT results will make her more aware of personal biases and help her to minimize their application in decision making. “In the case of my own subconscious in-group favoritism for white people, for example, my charge is to be color conscious, not color blind, and to always explicitly consider how race may affect behaviors and decisions.”43 More generally, people tend to reduce their perceptual biases by “knowing themselves”—increasing awareness of their own values, beliefs, and prejudices.44 The Johari Window is a popular model for understanding how co-workers can increase their mutual understanding.45 Developed by Joseph Luft and Harry Ingram (hence the name “Johari”), this model divides information about you into four “windows”—open, blind, hidden, and unknown—based on whether your own values, beliefs, and experiences are known to you and to others (see Exhibit 3.4). The open area includes information about you that is known both to you and to others. The blind area refers to information that is known to others but not to you. For example, your colleagues might notice that you are self-conscious and awkward when meeting the company chief executive, but you are unaware of this fact. Information known to you but unknown to others is found in the hidden area. Finally, the unknown area includes your values, beliefs, and experiences that aren’t known to you or others. Feedback Exhibit 3.4 The Johari Window Model of SelfAwareness and Mutual Understanding Unknown to self Known to others Open area Blind area Unknown to others Hidden area Unknown area Disclosure Known to self Source: Based on J. Luft, Group Processes (Palo Alto, CA: Mayfield, 1984). mcs81233_ch03_066-095.indd Page 81 1/10/09 2:14:46 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations 81 The main objective of the Johari Window is to increase the size of the open area so that both you and colleagues are aware of your perceptual limitations. This is partly accomplished by reducing the hidden area through disclosure—informing others of your beliefs, feelings, and experiences that may influence the work relationship.46 The open area also increases through feedback from others about your behavior. This information helps you to reduce your blind area, because coworkers often see things in you that you do not see. Finally, the combination of disclosure and feedback occasionally produces revelations about information in the unknown area. contact hypothesis A theory stating that the more we interact with someone, the less prejudiced or perceptually biased we will be against that person. Meaningful Interaction While the Johari Window relies on dialogue, self-awareness and mutual understanding can also improve through meaningful interaction.47 This statement is based on the contact hypothesis, which states that, under certain conditions, people who interact with each other will be less prejudiced or perceptually biased against each other. Simply spending time with members of other groups can improve your understanding and opinion of those persons to some extent. However, the contact hypothesis effect is much stronger when people have close and frequent interaction working toward a shared goal and need to rely on each other (i.e., cooperate rather than compete with each other). Everyone should have equal status in that context and should be engaged in a meaningful task. An hour-long social gathering between executives and frontline employees would not satisfy the contact hypothesis conditions. On the other hand, meaningful interaction might occur in many of the international volunteering activities described in the opening vignette to this chapter. In these programs, Air New Zealand Executives Get Meaningful Interaction If professionals from developed countries work alongthe meal service seems a bit slower than usual on your next side people from developing countries. Although the Air New Zealand flight, it might be that CEO Rob Fyfe is doing volunteers have expertise (and therefore status), they the serving while chatting with passengers. Every month, Fyfe often perform work outside that expertise and in unand his top executive team fill the roster as flight attendants, familiar environments requiring the expertise of check-in counter staff, or baggage handlers. (The executives people in the local community. Another potential had to pass tests to work as cabin crew.) The frontline jobs application of the contact hypothesis occurs when give the Air New Zealand executives a regular reality check senior executives and other staff from headquarters while working alongside employees. It also gives employees work in frontline jobs frequently or for an extended an opportunity to see that the airline’s leaders are human time. Everyone at Domino’s head office in Ann beings who care about staff and customers. The process is Arbor, Michigan, attends Pizza Prep School, where also somewhat reversed; every month one staff member they learn how to make pizzas and run a pizza store. spends a day with the CEO. “That will include sitting in on an Every new hire at 1-800-GOT-JUNK? (North Amerexecutive briefing and possibly even a lunch with a politician,” ica’s largest rubbish removal company) spends an Fyfe explains. “They go everywhere with me for the entire day.” entire week on a junk removal truck to better underThat program has been extended to other senior executives. stand how the business works. “How can you possiThe result of this meaningful interaction and many other bly empathize with someone out in the field unless initiatives to support employees is that morale and customer you’ve been on the truck yourself?” asks CEO and service at Air New Zealand have soared in recent years.48 founder Brian Scudamore.49 mcs81233_ch03_066-095.indd Page 82 1/10/09 2:15:02 PM user-s175 82 Part Two empathy A person’s understanding of and sensitivity to the feelings, thoughts, and situations of others. Learning Objectives /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes Meaningful interaction does more than reduce our reliance on stereotypes. It also potentially improves empathy toward others, that is, the extent to which we understand and are sensitive to the feelings, thoughts, and situations of others.50 You have empathy when actively visualizing the other person’s situation and feeling that person’s emotions in that situation. Empathizing with others improves our sensitivity to the external causes of another person’s performance and behavior, thereby reducing fundamental attribution error. A supervisor who imagines what it’s like to be a single mother, for example, would become more sensitive to the external causes of lateness and other events among such employees. The perceptual process represents the filter through which information passes from the external environment to our memory. As such, it is really the beginning of the learning process, which we discuss next. After reading the next two sections, you should be able to: 7. Describe the A-B-C model of behavior modification and the four contingencies of reinforcement. 8. Describe the three features of social learning theory. 9. Outline the elements of organizational learning and ways to improve each element. Learning in Organizations learning A relatively permanent change in behavior (or behavioral tendency) that occurs as a result of a person’s interaction with the environment. tacit knowledge Knowledge that is embedded in our actions and ways of thinking and is transmitted only through observation and experience. Learning is a relatively permanent change in behavior (or behavioral tendency) that occurs as a result of a person’s interaction with the environment. Learning occurs when the learner behaves differently. For example, you have “learned” computer skills when you operate the keyboard and software more quickly than before. Learning occurs when interaction with the environment leads to behavior change. This means that we learn through our senses, such as through study, observation, and experience. Some of what we learn is explicit knowledge, such as reading information in this book. However, explicit knowledge is really only the tip of the knowledge iceberg. Most of what we know is tacit knowledge.51 Tacit knowledge is not documented; rather, it is acquired through observation and direct experience. For example, airline pilots learn to operate commercial jets more by watching experts and practicing on flight simulators than by attending lectures. They acquire tacit knowledge by directly experiencing the complex interaction of behavior with the machine’s response. Three perspectives of learning tacit and explicit knowledge are reinforcement, social learning, and direct experience. Each perspective offers a different angle for understanding the dynamics of learning. Behavior Modification: Learning through Reinforcement behavior modification A theory that explains learning in terms of the antecedents and consequences of behavior. One of the oldest perspectives on learning, called behavior modification (also known as operant conditioning and reinforcement theory), takes the rather extreme view that learning is completely dependent on the environment. Behavior modification does not question the notion that thinking is part of the learning process, but it views human thoughts as unimportant intermediate stages between behavior and the environment. The environment teaches us to alter our behaviors so that we maximize positive consequences and minimize adverse consequences.52 mcs81233_ch03_066-095.indd Page 83 1/10/09 2:15:02 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations Exhibit 3.5 83 A-B-Cs of Behavior Modification Antecedents What happens before the behavior Behavior What the person says or does Consequences What happens after the behavior Operator switches off the machine’s power source. Co-workers thank operator for stopping the machine. Example Warning light flashes on operator’s console. Sources: Adapted from T. K. Connellan, How to Improve Human Performance (New York: Harper & Row, 1978), p. 50; F. Luthans and R. Kreitner, Organizational Behavior Modification and Beyond (Glenview, IL: Scott, Foresman, 1985), pp. 85–88. A-B-Cs of Behavior Modification The central objective of behavior modification is to change behavior (B) by managing its antecedents (A) and consequences (C). This process is nicely illustrated in the A-B-C model of behavior modification, shown in Exhibit 3.5.53 Antecedents are events preceding the behavior, informing employees that certain behaviors will have particular consequences. An antecedent may be a sound from your computer signaling that an e-mail has arrived or a request from your supervisor asking you to complete a specific task by tomorrow. Such antecedents let employees know that a particular action will produce specific consequences. Notice that antecedents do not cause behaviors. The computer sound doesn’t cause us to open our e-mail. Rather, the sound is a cue telling us that certain consequences are likely to occur if we engage in certain behaviors. In behavior modification, consequences are events following a particular behavior that influence its future occurrence. Generally speaking, people tend to repeat behaviors that are followed by pleasant consequences and are less likely to repeat behaviors that are followed by unpleasant consequences or no consequences at all. Contingencies of Reinforcement Behavior modification identifies four types of consequences, called the contingencies of reinforcement, that increase, maintain, or reduce the probability that behavior will be repeated.54 • • • Positive reinforcement occurs when the introduction of a consequence increases or maintains the frequency or future probability of a specific behavior. Receiving a bonus after successfully completing an important project is considered positive reinforcement because it typically increases the probability that you will use that behavior in the future. Punishment occurs when a consequence decreases the frequency or future probability of a behavior. This consequence typically involves introducing something that employees try to avoid. For instance, most of us would consider being demoted or being ostracized by our co-workers as forms of punishment.55 Negative reinforcement occurs when the removal or avoidance of a consequence increases or maintains the frequency or future probability of a specific behavior. Supervisors apply negative reinforcement when they stop criticizing employees mcs81233_ch03_066-095.indd Page 84 1/10/09 2:15:04 PM user-s175 84 Part Two • /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes whose substandard performance has improved. When the criticism is withheld, employees are more likely to repeat behaviors that improved their performance. Notice that negative reinforcement is not punishment. Whereas punishment extinguishes behavior by introducing a negative consequence, negative reinforcement actually reinforces behavior by removing the negative consequence. Extinction occurs when the target behavior decreases because no consequence follows it. In this respect, extinction is a do-nothing strategy. Generally, behavior that is no longer reinforced tends to disappear; it becomes extinct. For instance, research suggests that performance tends to decline when managers stop congratulating employees for their good work.56 Which contingency of reinforcement should be used in the learning process? In most situations, positive reinforcement should follow desired behaviors and extinction (do nothing) should follow undesirable behaviors. This approach is preferred because punishment and negative reinforcement generate negative emotions and attitudes toward the punisher (e.g., supervisor) and organization. However, some form of punishment (dismissal, suspension, demotion, etc.) may be necessary for extreme behaviors, such as deliberately hurting a co-worker or stealing inventory. Indeed, research suggests that, under certain conditions, punishment maintains a sense of fairness.57 Schedules of Reinforcement Along with the types of reinforcement, the frequency and timing of the reinforcers also influence employee behaviors.58 These reinforcement schedules can be continuous or intermittent. The most effective reinforcement schedule for learning new tasks is continuous reinforcement—providing positive reinforcement after every occurrence of the desired behavior. Employees learn desired behaviors quickly, and when the reinforcer is removed, extinction also occurs very quickly. The best schedule for reinforcing learned behavior is a variable ratio schedule in which employee behavior is reinforced after a variable number of times. Salespeople experience variable ratio reinforcement because they make a successful sale (the reinforcer) after a varying number of client calls. They might make four unsuccessful calls before receiving an order on the fifth one, then make 10 more calls before receiving the next order, and so on. The variable ratio schedule makes behavior highly resistant to extinction because the reinforcer is never expected at a particular time or after a fixed number of accomplishments. Behavior Modification in Practice Everyone practices behavior modification in one form or another. We thank people for a job well done, are silent when displeased, and sometimes try to punish those who go against our wishes. Behavior modification also occurs in various formal programs to reduce absenteeism, improve task performance, encourage safe work behaviors, and have a healthier lifestyle.59 In Arkansas, for example, the North Little Rock School Board introduced an absenteeism reduction plan in which teachers can earn $300 after every six months with perfect attendance. Those with no more than one day of absence receive $100. ExxonMobil’s Fawley refinery in the United Kingdom introduced a “Behave Safely Challenge” program in which supervisors rewarded employees and contractors on the spot when they exhibited good safety behavior or intervened to improve the safe behavior of co-workers. These rewards were a form of positive reinforcement using a variable ratio schedule (safe work behaviors were reinforced after a variable number of times that they occurred).60 mcs81233_ch03_066-095.indd Page 85 1/10/09 2:15:04 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations 85 Reinforcing the Long (and Healthy) Walk For many of Horton Group’s 350 employees, the best parking spots aren’t closest to the building; they are deep in the outfield. The Chicago-based insurance broker reinforces the healthy lifestyle of walking by rewarding staff who take at least 7,000 steps each day—more than twice the normal daily average. Humana, Inc., has introduced a similar program. Employees at the Kentucky-based health insurance company use a pedometer to count the number of steps, and the results are uploaded from the pedometer to a Web site. The more steps taken, the higher the rewards in the form of cash cards that can be used at popular retail stores. “This program has changed the culture within Humana,” says Phil Smeltzer, Humana’s wellness strategy leader. “People have started paying attention to how many steps they are taking. When it gets late in the day and they haven’t walked enough, they take the long way to their car.”61 Although a natural part of human interaction, behavior modification has a number of limitations when applied strategically in organizational settings. One limitation is “reward inflation,” in which the reinforcer is eventually considered an entitlement. For this reason, most behavior modification programs must run infrequently and for a short duration. Another concern is that the variable ratio schedule of reinforcement tends to create a lottery-style reward system, which is unpopular with people who dislike gambling. Probably the most significant problem is behavior modification’s radical view that behavior is learned only through personal interaction with the environment.62 This view is no longer accepted; instead, learning experts recognize that people also learn by observing others and thinking logically about possible consequences. This learning-through-observation process is explained by social learning theory. Social Learning Theory: Learning by Observing social learning theory A theory stating that much learning occurs by observing others and then modeling the behaviors that lead to favorable outcomes and avoiding behaviors that lead to punishing consequences. Social learning theory states that much learning occurs by observing others and then modeling the behaviors that lead to favorable outcomes and avoiding behaviors that lead to punishing consequences.63 This form of learning occurs in three ways: behavior modeling, learning behavior consequences, and self-reinforcement. • Behavior modeling. People learn by observing the behaviors of a role model on a critical task, remembering the important elements of the observed behaviors, and then practicing those behaviors.64 This is a valuable form of learning because tacit knowledge and skills are mainly acquired through observation and practice. As an example, it is difficult to document or explain in a conversation all the steps necessary to bake professional-quality bread. Student chefs also need to observe the master baker’s subtle behaviors. Behavioral modeling also mcs81233_ch03_066-095.indd Page 86 1/10/09 2:15:10 PM user-s175 86 Part Two • self-reinforcement Reinforcement that occurs when an employee has control over a reinforcer but doesn’t “take” it until completing a self-set goal. • /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes increases self-efficacy because people gain more self-confidence after seeing someone else perform the task. This is particularly true when observers identify with the model, such as someone who is similar in age, experience, gender, and related features. Learning behavior consequences. People learn the consequences of behavior through logic and observation, not just through direct experience. They logically anticipate consequences after completing a task well or poorly. They also learn behavioral consequences by observing the experiences of other people. Consider the employee who observes a co-worker receiving a stern warning for working in an unsafe manner. This event would reduce the observer’s likelihood of engaging in unsafe behaviors because he or she has learned to anticipate a similar reprimand following those behaviors.65 Self-reinforcement. Self-reinforcement occurs whenever an employee has control over a reinforcer but doesn’t “take” it until completing a self-set goal.66 For example, you might be thinking about having a snack after you finish reading the rest of this chapter. Raiding the refrigerator is a form of self-induced positive reinforcement for completing this reading assignment. Self-reinforcement takes many forms, such as taking a short walk, watching a movie, or simply congratulating yourself for completing a task. Learning through Experience learning orientation An individual attitude and organizational culture in which people welcome new learning opportunities, actively experiment with new ideas and practices, view reasonable mistakes as a natural part of the learning process, and continuously question past practices. Along with behavior modification and social learning, another way that employees learn is through direct experience. In fact, most tacit knowledge and skills are acquired through experience as well as observation. Generally, experiential learning begins when we engage with the environment; then we reflect on that experience and form theories about how the world around us works. This is followed by experimentation, in which we find out how well the newly formed theories work.67 Experiential learning requires all these steps, although people tend to prefer one step more than the others. One of the most important ingredients for learning through experience is that the organization and its employees should possess a strong learning orientation.68 As mentioned at the beginning of this chapter, people with a global mindset have a strong learning orientation, meaning that they welcome new learning opportunities, actively experiment with new ideas and practices, view reasonable mistakes as a natural part of the learning process, and continuously question past practices. This individual orientation becomes part of the organization’s culture when it is held by many people throughout the organization. Organizations develop and maintain a learning orientation culture by supporting experimentation, acknowledging reasonable mistakes without penalty, and supporting the mindset that employees should engage in continuous learning. They encourage employees to question long-held assumptions or mental models and to actively “unlearn” practices that are no longer ideal. Without a learning orientation, mistakes are hidden and problems are more likely to escalate or reemerge later. It’s not surprising, then, that one of the most frequently mentioned lessons from the bestperforming manufacturers is to expect mistakes. “At CIMB we have learnt to admit our mistakes openly,” says Datuk Nazir Razak, chief executive of CIMB Group, Malaysia’s second-largest financial services company. “Some of these mistakes cost us a lot of money,” he adds, but “each mistake is a learning opportunity.”69 mcs81233_ch03_066-095.indd Page 87 1/10/09 2:15:10 PM user-s175 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Chapter 3 Perception and Learning in Organizations 87 Learning from Near Misses If there is one thing more serious than making mistakes in a hospital setting, it would be failing to report and learn from those mistakes. With that idea in mind, Osaka University Hospital in Japan has developed a “no-blame” Web-based system whereby staff can anonymously report “near-miss” incidents, thereby enabling the hospital to quickly identify practices that most urgently require better procedures or training. For example, when the reporting system identified medication ordering and dispensing as the most common near misses, staff developed new procedures to reduce those errors. Canossa Hospital in Hong Kong also encourages staff to speak up about near misses so that everyone can improve the quality of hospital care. “The hospital believes through staff’s alertness of potential risk and early reporting of near misses, both quality and safety of the hospital could be improved,” explains Terence Chow, Canossa Hospital’s physiotherapy department manager. “The training program also serves to help employees cultivate a positive attitude towards learning from mistakes.”70 From Individual to Organizational Learning One of the most popular contemporary perspectives of organizational effectiveness is organizational learning, which was defined in Chapter 1 as any structured activity that improves an organization’s capacity to acquire, share, and use knowledge in ways that improve its survival and success. Organizational learning is heavily dependent on individual learning, but the “capacity” to acquire, share, and use knowledge means that companies establish systems, structures, and organizational values that support the knowledge management process.71 • • Knowledge acquisition. This includes extracting information and ideas from the external environment as well as through insight. One of the fastest and most powerful ways to acquire knowledge is by hiring individuals or acquiring entire companies. Knowledge also enters the organization when employees learn from external sources, such as by discovering new resources from suppliers or becoming aware of new trends from clients. A third knowledge acquisition strategy is experimentation. Companies receive knowledge through insight as a result of research and other creative processes. Knowledge sharing. This aspect of organizational learning involves distributing knowledge to others across the organization. Although typically associated with computer intranets and digital repositories of knowledge, knowledge sharing also occurs through informal online or face-to-face communication.72 Most social learning (such as behavioral modeling) and experiential learning are forms of knowledge sharing because the learning is transferred from one employee to another. mcs81233_ch03_066-095.indd Page 88 1/10/09 2:15:21 PM user-s175 88 Part Two • /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE Individual Behavior and Processes Knowledge use. The competitive advantage of knowledge comes from applying it in ways that add value to the organization and its stakeholders. To do this, employees must realize that the knowledge is available and that they have enough freedom to apply it. This requires a culture that supports the learning process. This chapter has introduced two fundamental activities in human behavior in the workplace: perceptions and learning. These activities involve receiving information from the environment, organizing it, and acting on it as a learning process. Our knowledge about perceptions and learning in the workplace lays the foundation for the next chapter, which looks at workplace emotions and attitudes. Chapter Summary Perception involves selecting, organizing, and interpreting information to make sense of the world around us. Perceptual organization engages categorical thinking—the mostly nonconscious process of organizing people and objects into preconceived categories that are stored in our long-term memory. Mental models—internal representations of the external world—also help us to make sense of incoming stimuli. Social identity theory explains how we perceive people through categorization, homogenization, and differentiation. Stereotyping is a derivative of social identity theory, in which people assign traits to others based on their membership in a social category. Stereotyping economizes mental effort, fills in missing information, and enhances our selfperception and social identity. However, it also lays the foundation for prejudice and systemic discrimination. The attribution process involves deciding whether an observed behavior or event is caused mainly by the person (internal factors) or the environment (external factors). Attributions are decided by perceptions of the consistency, distinctiveness, and consensus of the behavior. This process helps us to link together the various pieces of our world in cause-effect relationships, but it is also subject to attribution errors, including fundamental attribution error and self-serving bias. Self-fulfilling prophecy occurs when our expectations about another person cause that person to act in a way that is consistent with those expectations. Essentially, our expectations affect our behavior toward the target person, which then affects that employee’s opportunities and attitudes, which then influences his or her behavior. Self-fulfilling prophecies tend to be stronger when the relationship begins (such as when employees first join the department), when several people hold the expectations toward the employee, and when the employee has a history of low achievement. Four other perceptual errors commonly noted in organizations are the halo effect, primacy effect, recency effect, and false-consensus effect. We can minimize these 88 and other perceptual problems through awareness of perceptual bias, self-awareness, and meaningful interaction. Learning is a relatively permanent change in behavior (or behavior tendency) that occurs as a result of a person’s interaction with the environment. Much of what we learn is tacit knowledge, which is embedded in our actions without conscious awareness. The behavior modification perspective of learning states that behavior change occurs by altering its antecedents and consequences. Antecedents are environmental stimuli that provoke (not necessarily cause) behavior. Consequences are events following behavior that influence its future occurrence. Consequences include positive reinforcement, punishment, negative reinforcement, and extinction. The schedules of reinforcement also influence behavior. Social learning theory states that much learning occurs by observing others and then modeling the behaviors that seem to lead to favorable outcomes and avoiding behaviors that lead to punishing consequences. It also recognizes that we often engage in self-reinforcement. Behavior modeling is effective because it transfers tacit knowledge and enhances the observer’s confidence in performing the task. Many companies now use experiential learning because employees do not acquire tacit knowledge through formal classroom instruction. Experiential learning begins with concrete experience, followed by reflection on that experience, formation of a theory from that experience, and then testing of that theory in the environment. Organizational learning is any structured activity that improves an organization’s capacity to acquire, share, and use knowledge in ways that improve its survival and success. Organizations acquire knowledge through individual learning and experimentation. Knowledge sharing occurs mainly through various forms of communication and training. Knowledge use occurs when employees realize that the knowledge is available and that they have enough freedom to apply it. mcs81233_ch03_066-095.indd Page 89 1/12/09 9:54:12 PM s-206 /Users/s-206/Desktop/Tempwork/JANUARY 09/12:01:09/MHBR089-03 Key Terms attribution process, p. 75 behavior modification, p. 82 categorical thinking, p. 70 contact hypothesis, p. 81 empathy, p. 82 false-consensus effect, p. 79 fundamental attribution error, p. 76 global mindset, p. 68 halo effect, p. 78 Johari Window, p. 80 learning, p. 82 learning orientation, p. 86 mental models, p. 71 perception, p. 68 positive organizational behavior, p. 77 primacy effect, p. 78 recency effect, p. 78 selective attention, p. 68 self-fulfilling prophecy, p. 76 self-reinforcement, p. 86 self-serving bias, p. 76 social learning theory, p. 85 stereotyping, p. 72 tacit knowledge, p. 82 Critical Thinking Questions Several years ago, senior executives at energy company CanOil wanted to acquire an exploration company (HBOG) that was owned by another energy company, AmOil. Rather than face a hostile takeover and unfavorable tax implications, CanOil’s two top executives met with the CEO of AmOil to discuss a friendly exchange of stock to carry out the transaction. AmOil’s chief executive was previously unaware of CanOil’s plans, and as the meeting began, the AmOil executive warned that he was there merely to listen. The CanOil executives were confident that AmOil wanted to sell HBOG because energy legislation at the time made HBOG a poor investment for AmOil. AmOil’s CEO remained silent for most of the meeting, which CanOil executives interpreted as an implied agreement to proceed to buy AmOil stock on the market. But when CanOil launched the stock purchase a month later, AmOil’s CEO was both surprised and outraged. He thought he had given the CanOil executives the cold shoulder, remaining silent to show his disinterest in the deal. The misunderstanding nearly bankrupted CanOil because AmOil reacted by protecting its stock. What perceptual problem(s) likely occurred that led to this misunderstanding? 2. What mental models do you have about attending a college or university lecture? Are these mental models helpful? Could any of these mental models hold you back from achieving the full benefit of the lecture? 3. Do you define yourself in terms of the university or college you attend? Why or why not? What are the 1. 4. 5. 6. 7. 8. implications of your answer for your university or college? During a diversity management session, a manager suggests that stereotypes are a necessary part of working with others. “I have to make assumptions about what’s in the other person’s head, and stereotypes help me do that,” she explains. “It’s better to rely on stereotypes than to enter a working relationship with someone from another culture without any idea of what they believe in!” Discuss the merits of and problems with the manager’s statement. Describe how a manager or coach could use the process of self-fulfilling prophecy to enhance an individual’s performance. Describe a situation in which you used behavior modification to influence someone’s behavior. What specifically did you do? What was the result? Why are organizations moving toward the use of experiential approaches to learning? What conditions are required for success? BusNews Corp. is the leading stock market and business news service. Over the past two years, BusNews has experienced increased competition from other news providers. These competitors have brought in Internet and other emerging computer technologies to link customers with information more quickly. There is little knowledge within BusNews about how to use these computer technologies. On the basis of the knowledge acquisition processes for knowledge management, explain how BusNews might gain the intellectual capital necessary to become more competitive in this respect. 89 mcs81233_ch03_066-095.indd Page 90 1/10/09 2:15:22 PM user-s175 Case Study 3.1 HY DAIRIES, INC. Syd Gilman read the latest sales figures with a great deal of satisfaction. The vice president of marketing at Hy Dairies, Inc., a large midwestern milk products manufacturer, was pleased to see that the marketing campaign to improve sagging sales of Hy’s gourmet ice-cream brand was working. Sales volume and market share of the product had increased significantly over the past two quarters compared with the previous year. The improved sales of Hy’s gourmet ice cream could be credited to Rochelle Beauport, who was assigned to the gourmet ice-cream brand last year. Beauport had joined Hy less than two years ago as an assistant brand manager after leaving a similar job at a food products firm. She was one of the few women of color in marketing management at Hy Dairies and had a promising career with the company. Gilman was pleased with Beauport’s work and tried to let her know this in the annual performance reviews. He now had an excellent opportunity to reward her by offering her the recently vacated position of market research coordinator. Although technically only a lateral transfer with a modest salary increase, the marketing research coordinator job would give Beauport broader experience in some high-profile work, which would enhance her career with Hy Dairies. Few people were aware that Gilman’s own career had been boosted by working as marketing research coordinator at Hy several years earlier. Rochelle Beauport had also seen the latest sales figures on Hy’s gourmet ice cream and was expecting Gilman’s call to meet with her that morning. Gilman began the conversation by briefly mentioning the favorable sales figures and then explained that he wanted Beauport to take the marketing research coordinator job. Beauport was shocked by the news. She enjoyed brand management and particularly the challenge involved with controlling a product that directly affected the company’s profitability. Marketing research coordinator was a technical support position—a “backroom” job—far removed from the company’s bottom-line activities. Marketing research was not the route to top management in most organizations, Beauport thought. She had been sidelined. 90 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE After a long silence, Beauport managed a weak “Thank you, Mr. Gilman.” She was too bewildered to protest. She wanted to collect her thoughts and reflect on what she had done wrong. Also, she did not know her boss well enough to be openly critical. Gilman recognized Beauport’s surprise, which he naturally assumed was her positive response to hearing of this wonderful career opportunity. He, too, had been delighted several years earlier about his temporary transfer to marketing research to round out his marketing experience. “This move will be good for both you and Hy Dairies,” said Gilman as he escorted Beauport from his office. Beauport was preoccupied with several tasks that afternoon, but she was able to consider the day’s events that evening. She was one of the top women and few minorities in brand management at Hy Dairies and feared that she was being sidelined because the company didn’t want women or people of color in top management. Her previous employer had made it quite clear that women “couldn’t take the heat” in marketing management and tended to place women in technical support positions after a brief term in lower brand management jobs. Obviously Syd Gilman and Hy Dairies were following the same game plan. Gilman’s comment that the coordinator job would be good for her was just a nice way of saying that Beauport couldn’t go any further in brand management at Hy Dairies. Beauport now faced the difficult decision of whether to confront Gilman and try to change Hy Dairies’ sexist and possibly racist practices or to leave the company. Discussion Questions 1. Apply your knowledge of stereotyping and social identity theory to explain what went wrong here. 2. What other perceptual error is apparent in this case study? 3. What can organizations do to minimize misperceptions in these types of situations? mcs81233_ch03_066-095.indd Page 91 1/10/09 2:15:22 PM user-s175 Case Study 3.2 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE HOW FAILURE BREEDS SUCCESS Coca-Cola chairman and former CEO E. Neville Isdell knows that the best companies embrace their mistakes and learn from them. That’s why Isdell doesn’t mind rhyming off the list of Coke’s failures over the years. In fact, he is keen to convince employees and shareholders that he will tolerate the failures that will inevitably result from the bigger risks that he wants Coke to take. At the same time, say analysts, balancing a learning culture with a performance culture is a perennial challenge. Intuit, the tax software company, thinks it has a solution. When one of its marketing strategies recently flopped, the company celebrated the failure and spent a lot of time dissecting it. This BusinessWeek case study describes several ways that companies learn from their mistakes while Class Exercise 3.3 still maintaining a strong focus on performance and the bottom line. Read the full text of this BusinessWeek article at www.mhhe.com/mcshane5e, and prepare for the discussion questions below. Discussion Questions 1. Describe the experiential learning process that companies mentioned in this case study apply to learn from their mistakes and failures. 2. What perceptual problems do managers need to overcome with failures? How can these perceptual problems be minimized? Source: J. McGregor, “How Failure Breeds Success,” BusinessWeek, 10 July 2006, p. 42. THE LEARNING EXERCISE PURPOSE This exercise is designed to help you understand how the contingencies of reinforcement in behavior modification affect learning. MATERIALS Any objects normally available in a classroom will be acceptable for this activity. INSTRUCTIONS (LARGE OR SMALL CLASS) The instructor will ask for three volunteers, who are then briefed outside the classroom. The instructor will spend a few minutes briefing the remaining students in the class about their duties. Then, one of the three volunteers will enter the room to participate in the exercise. When completed, the second volunteer enters the room and participates in the exercise. When completed, the third volunteer enters the class and participates in the exercise. For students to gain the full benefit of this exercise, no other information will be provided here. However, the instructor will have more details at the beginning of this fun activity. 91 mcs81233_ch03_066-095.indd Page 92 1/10/09 2:15:23 PM user-s175 Class Exercise 3.4 /Users/user-s175/Desktop/ANIL KHANNA/09.01.09/MHBR089:210:MCSHANE STEREOTYPING IN CORPORATE ANNUAL REPORTS PURPOSE This exercise is designed to help you diagnose evidence of stereotyping and identify corporate role models that minimize stereotyping in corporate annual reports. MATERIALS Students need to complete their research for this activity prior to class, including selecting a publicly traded company and downloading the past four or more years of its fully illustrated annual reports. INSTRUCTIONS The instructor may have students work alone or in groups for this activity. Students will select a company that is publicly traded and posts its annual reports on the company Web site. Ideally, annual reports for at least the past four years should be available, and these reports should be presented in the final illustrated format (typically PDF replicas of the original hard-copy report). Students will closely examine images in the selected company’s recent annual reports in terms of how women, visible minorities, and older employees and clients are presented. Specifically, students should be prepared to discuss and provide details in class regarding: 1. The percentage of images showing (i.e., visual representation of) women, visible minorities, and older workers and clients. Students should also be sensitive to the size and placement of these images on the page and throughout the annual report. 2. The roles in which women, visible minorities, and older workers and clients are depicted. For example, are women shown more in traditional or nontraditional occupations and nonwork roles in these annual reports? If several years of annual reports are available, students should pick one that is a decade or more old and compare its visual representation of and role depiction of women, visible minorities, and older employees and clients. If possible, students should pick one of the most blatantly stereotypic illustrations they can find in these annual reports to show in class, either as a hard-copy printout or as a computer projection. Self-Assessment 3.5 HOW MUCH PERCEPTUAL STRUCTURE DO YOU NEED? PURPOSE This self-assessment is designed to help you estimate your personal need for perceptual structure. INSTRUCTIONS Read each of the statements below and decide how much you agree with each according to your attitudes, beliefs, and experiences. Then use the scoring key in Appendix B at the end of this book to calculate your results. It is important 92 for you to realize that there are no right or wrong answers to these questions. This self-assessment should be completed alone so that you can rate yourself honestly without concerns of social comparison. Class discussion will focus on the meaning of need for structure in terms of how we engage differently in the perceptual process at work and in other settings. mcs81233_ch03_066-095.indd Page 93 3/12/09 5: