What is Organizational Behavior management

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AnOverviewof CHAPTER 1 Organizational Behavior Chapter Outline • What is Organiza- tional Behavior? • Organizational Behavior and the Management Process • Organizational Behavior and the Manager’s Job No Company for Old-Fashioned Management • Contemporary Organizational “When you think about employees first, the bottom line is better.” Behavior • Contextual —Kevin Stickles, VP for Human Resources, Wegmans Food Markets Perspectives on Organizational If you’re looking for the best Parmesan cheese for your chicken parmigiana recipe, Behavior • Managing for you might try Wegmans, especially if you happen to live in the vicinity of Pittsford, Effectiveness New York. Cheese department manager Carol Kent will be happy to recommend the best brandbecause her job callsfor knowing cheese as wellas managing some 20subordinates.Kentisaknowledgeableemployee,andknowledgeableemployees, Chapter Learning boasts Wegmans CEO Danny Wegman, are “something our competitors don’t have Objectives andourcustomerscouldn’tgetanywhereelse.” After studying this WegmansFoodMarkets,afamily-ownedEastCoastchainwithnearly80outlets chapter, you should be in6states,pridesitselfonitscommitmenttocustomers,anditshows:Itranksatthe able to: top of the latest Consumer Reportssurvey ofthe best national andregionalgrocery 1. Define organizational stores. But commitment to customers is only half of the overall Wegmans strategy, behavior. which calls for reaching the company’s customers through its employees. “How do 2. Identifythefunctions we differentiate ourselves?” asks Wegman, who then proceeds to answer his own thatcomprisethe managementprocess question: “If we can sell products that require knowledge in terms of how you use andrelatethemto them, that’s our strategy. Anything that requires knowledge and service gives us a organizational behavior. reasontobe.” That’s the logic behind one of Carol Kent’s recent assignments—one 3. Relateorganizational whichsheunderstandablyregardsasaperk:WegmanssenthertoItalytoconducta behaviortobasic managerialroles and personalstudy of Italiancheese. “Wesat withthe familiesthat makethe cheeses,” skills. she recalls, “broke bread with them. It helped me understand that we’re not just 4. Describe contemporary sellingapieceofcheese.We’resellingatradition,aquality.” organizational Kentandtheemployeesinherdepartmentalsoenjoythebestbenefitspackage behavior characteristics. in the industry, including fully paid health insurance. And that includes part-timers, 5. Discuss contextual who make up about two-thirds of the company’s workforce of more than 42,000. In perspectives on part, the strategy of extending benefits to this large segment of the labor force is organizational behavior. intended to make sure that stores have enough good workers for crucial peak 6. Describetherole periods, but there’s no denying that the costs of employee-friendly policies can oforganizational behaviorinmanaging mount up. At 15 to 17 percent of sales, for example, Wegmans’ labor costs are for effectiveness. well above the 12 percent figure for most supermarkets. But according to one Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.2Part1: Introduction to Organizational Behavior company HR executive, holding down labor costs isn’t necessarily a strategic priority: “We would have stopped offering free health insurance to part-timers a long time ago,” she admits, “if we tried tojustify the costs.” Besides, employee turnover at Wegmans is just 6 percent—about half the industry average. And this is an industry in which total turnover costs have been known to outstrip total annual profits by 40 percent. Wegmans employees tend to be knowledgeable because about 20 percent of them have been with the company for at least 10 years, and many have logged at least a quarter century. Says one 19-year-old college student who works at an upstate New York Wegmans while pursuing a career as a high school history teacher, “I love this place. If teaching doesn’t work out, I would so totally work at Wegmans.” Edward McLaughlin, who directs the Food Industry Management Program at Cornell University, understands this sort of Wegmansisknownasoneofthemosteffectivelymanaged attitude: “When you’re a 16-year-old kid, the supermarketchainsintheworld.MarkLewis,aWegmans last thing you want to do is wear a geeky shirt baker,hasathoroughunderstandingofthebreadbaking and work for a supermarket,” but at Wegmans, processandishappytoexplainittocustomers. heexplains, “it’sabadgeofhonor.You’renota geeky cashier. You’re part of the social fabric.” In2012, Wegmans placed fourthin Fortune magazine’sannuallistof “100 Best CompaniestoWorkFor”—good for 15 consecutive years on the list and 8 straight top-7 finishes. “It says that we’re doing something right,” says a company spokesperson, “and that there’s nobetter way totake care of our customers than to be a great place for our employees to work.”“Our employees,” explains VP for Human Resources Kevin Stickles, “are our number-one asset, period. The first questionyouaskis:‘Isthisthebestthingfortheemployee?’”Theapproach,argues Stickles,anchorsasolidbusinessmodel:“Whenyouthinkaboutemployeesfirst,the bottomlineisbetter.Wewantouremployeestoextendthebrandtoourcustomers.” In addition to its healthcare package, Wegmans has been cited for such perks as fitness center discounts, compressed work weeks, telecommuting, and domestic-partner benefits (which extend to same-sex partners). Under the company’s Employee Scholarship Program, full-time workers can also receive up to 2,200 a year for four years, and part-timers up to 1,500. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. racy A. Woodward/Washington Post/Getty ImagesChapter 1: An Overview of Organizational Behavior 3 Since its inception in 1984, the program has handed out more than 81 million in scholarships to more than 25,000 employees, including 4.5 million in 2011. Like most Wegman policies, this one combines employee outreach with long-term corporate strategy: “This program has made a real difference in the lives of many young people,” says president Colleen Wegman, who adds that it’salso “one of the reasons we’ve been able to attract the best and the brightest to work at Wegmans.” Granted, Wegmans, which has remained in family hands since its founding in 1916, has an advantage in being as generous with its resources as its family of top executives wants to be: It doesn’t have to do everything with quarterly profits in mind. Mired in a “public mentality,” says Stickles, “the first thing other companies think about is the quarter. The first thing is that you cut labor.” The Wegman family, adds senior VP Mary Ellen Burris, has no intention of taking the company public: “It takes away your ability to focus on your people and your customers.” Wegmans likes to point out that taking care of its employees is a longstanding priority. Profit sharing and fully funded medical coverage were introduced in 1950 by Robert Wegman, son and nephew of brothers Walter and John, who opened the firm’s original flagship store in Rochester, New York, in 1930. Why did Robert Wegman make such generous gestures to his employees way back then? “Because,” he says simply, “I was no different from them.” What Do You Think? 1. Why don’t more firms adopt the kind of management practices that have contributed to Wegmans’ success? 2. Under what circumstances might Wegmans be forced to change its approach to dealing with its employees? References: Maria Panaritis, “Wegmans Tops List in Consumer Survey,” Philadelphia Inquirer, April 3, 2012, www.philly.com on April 5, 2012; Jon Springer, “Danny Wegman,” Supermarket News, July 14, 2009, http://supermarketnews.com on April 15, 2011; David Rohde, “The Anti-Walmart: The Secret Sauce of Wegmans Is People,” The Atlantic, March 23, 2012, www.theatlantic.com on April 5, 2012; Michael A. Prospero, “Employee Innovator: Wegmans,” Fast Company, October 2004, www.fastcompany.com on April 5, 2012; “100 Best Companies to Work For,” Fortune, February 6, 2012, http://money.cnn.com on April 5, 2012; “Wegmans Scholarships” (2012), www.wegmans.com on April 5, 2012; “Wegmans Announces 2011 Employee Scholarship Recipients,” press release, June 17, 2011, www.wegmans.com on April 5, 2012. In many ways a Wegmans store may not look substantially different from a large national chain store. But its dual emphasis on both customer and employee satisfaction had paid big dividends as the firm continues to thrive through good times and bad. Regardless of their size, scope, or location, all organizations have at least one thing in common—they are comprised of people. It is these people who make decisions about the strategic direction of a firm, it is they who acquire the resources the firm uses to create new products, and it is they who sell those products. People manage a firm’s cor- porate headquarters, its warehouses, and its information technology, and it is people who clean up at the end of the day. No matter how effective a manager might be, all Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.4Part1: Introduction to Organizational Behavior organizational successes—and failures—are the result of the behaviors of many people. Indeed, no manager can succeed without the assistance of others. Thus, any manager—whether responsible for a big business such as Google, Abercrombie & Fitch, General Electric, Apple, Starbucks, or British Airways; for a niche business such as the Boston Celtics basketball team or the Mayo Clinic; or for a local Pizza Hut restaurant or neighborhood dry cleaning establishment—must strive to under- stand the people who work in the organization. This book is about those people. It is also about the organization itself and the managers who operate it. The study of organi- zations and the study of the people who work in them together constitute the field of organizational behavior. Our starting point in exploring this field begins with a more detailed discussion of its meaning and its importance to managers. WHAT IS ORGANIZATIONAL BEHAVIOR? What exactly is meant by the term “organizational behavior”? And why should it be studied? Answers to these two fundamental questions will both help establish our foun- dation for discussion and analysis and help you better appreciate the rationale as to how and why understanding the field can be of value to you in the future. The Meaning of Organizational Behavior Organizational Organizational behavior (OB) is the study of human behavior in organizational behavior is the study of settings, of the interface between human behavior and the organization, and of the 1 human behavior in organization itself. Although we can focus on any one of these three areas, we must organizational settings, also remember that all three are ultimately necessary for a comprehensive understanding the interface between of organizational behavior. For example, we can study individual behavior without human behavior and explicitly considering the organization. But because the organization influences and is the organization, and influenced by the individual, we cannot fully understand the individual’s behavior with- the organization itself. out learning something about the organization. Similarly, we can study organizations without focusing explicitly on the people within them. But again, we are looking at only a portion of the puzzle. Eventually we must consider the other pieces, as well as the whole. Figure 1.1 illustrates this view of organizational behavior. It shows the linkages among human behavior in organizational settings, the individual–organization interface, the organization itself, and the environment surrounding the organization. Each individual brings to an organization a unique set of personal characteristics and a unique personal background and set of experiences from other organizations. Therefore, in considering the people who work in their organizations, managers must look at the unique perspec- tive each individual brings to the work setting. For example, suppose managers at The Home Depot review data showing that employee turnover within the firm is gradually but consistently increasing. Further suppose that they hire a consultant to help them bet- ter understand the problem. As a starting point, the consultant might analyze the types of people the company usually hires. The goal would be to learn as much as possible about the nature of the company’s workforce as individuals—their expectations, their personal goals, and so forth. But individuals do not work in isolation. They come in contact with other people and with the organization in a variety of ways. Points of contact include managers, coworkers, the formal policies and procedures of the organization, and various changes implemented by the organization. In addition, over time, individuals change, as a function of personal experiences and maturity as well as through work experiences and Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.Chapter 1: An Overview of Organizational Behavior 5 Environment FIGURE 1.1 The Nature of Organizational Behavior Human Behavior in Thefieldoforganiza- Organizational Settings tionalbehavior attemptstounderstand humanbehaviorin The Individual–Organization Interface organizationalsettings, theorganizationitself, andtheindividual– organizationinterface. The Organization Asillustratedhere, theseareasarehighly interrelated.Thus, althoughitispossible tofocusononlyoneof Environment theseareasatatime,a completeunderstand- ingoforganizational behaviorrequires organizational developments. The organization, in turn, is affected by the presence and knowledgeofallthree eventual absence of the individual. Clearly, then, managers must also consider how the areas. individual and the organization interact. Thus, the consultant studying turnover at The Home Depot might next look at the orientation procedures and initial training for new- comers to the organization. The goal of this phase of the study would be to understand some of the dynamics of how incoming individuals are introduced to and interact with the broader organizational context. An organization, of course, exists before a particular person joins it and continues to exist after he or she leaves. Thus, the organization itself represents a crucial third per- spective from which to view organizational behavior. For instance, the consultant study- ing turnover would also need to study the structure and culture of The Home Depot. An understanding of factors such as a firm’s performance evaluation and reward systems, its decision-making and communication patterns, and the structure of the firm itself can provide added insight into why some people choose to leave a company and others elect to stay. Clearly, then, the field of organizational behavior is both exciting and complex. Myriad variables and concepts accompany the interactions just described, and together these factors greatly complicate the manager’s ability to understand, appreciate, and manage others in the organization. They also provide unique and important opportunities to enhance personal and organizational effectiveness. The Importance of Organizational Behavior The importance of organizational behavior may now be clear, but we should nonetheless take a few moments to make it even more explicit. Most people are raised and educated in organizations, acquire most of their material possessions from organizations, and die as members of organizations. Many of our activities are regulated by the various organiza- tions that make up our governments. And most adults spend the better part of their lives working in organizations. Because organizations influence our lives so powerfully, we have every reason to be concerned about how and why those organizations function. In our relationships with organizations, we may adopt any one of several roles or identities. For example, we can be consumers, employees, suppliers, competitors, owners, or investors. Since most readers of this book are either present or future man- agers, we will adopt a managerial perspective throughout our discussion. The study of Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Cengage Learning6Part1: Introduction to Organizational Behavior Southwest Airlines is consistently ranked among the most admired businesses in the United States. One key to Southwest’s success is its commitment to hiring, training, rewarding, and retaining outstanding employees. Concepts and ideas from the field of organizational behavior reinforce many of the employment practices used at Southwest. organizational behavior can greatly clarify the factors that affect how managers manage. Hence, the field attempts to describe the complex human context of organizations and to define the opportunities, problems, challenges, and issues associated with that realm. The value of organizational behavior is that it isolates important aspects of the manager’s job and offers specific perspectives on the human side of management: peo- ple as organizations, people as resources, and people as people. To further underscore the importance of organizational behavior to managers, we should consider this simple fact: Year in and year out, most of the firms on Fortune’s list of the world’s most admired companies have impeccable reputations for valuing and respecting the people 2 who work for them. Clearly, then, an understanding of organizational behavior can play a vital role in managerial work. To most effectively use the knowledge provided by this field, managers must thoroughly understand its various concepts, assumptions, and premises. To provide this foundation, we next tie organizational behavior even more explicitly to management and then turn to a more detailed examination of the manager’s job itself. Organizational Behavior and Management Virtually all organizations have managers with titles such as chief financial officer, mar- keting manager, director of public relations, vice president for human resources, and plant manager. But probably no organization has a position called “organizational behav- ior manager.” The reason for this is simple: Organizational behavior is not a defined business function or area of responsibility similar to finance or marketing. Rather, understanding of organizational behavior provides a set of insights and tools that all managers can use to carry out their jobs more effectively. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Carlos E. Santa Maria/Shutterstock.comChapter 1: An Overview of Organizational Behavior 7 An appreciation and understanding of organizational behavior helps managers better understand why others in the organization behave as they do. For example, most man- agers in an organization are directly responsible for the work-related behaviors of a cer- tain set of other people—their immediate subordinates. Typical managerial activities in this realm include motivating employees to work harder, ensuring that employees’ jobs are properly designed, resolving conflicts, evaluating performance, and helping workers set goals to achieve rewards. The field of organizational behavior abounds with models 3 and research relevant to each of these activities. Unless they happen to be chief executive officers (CEOs), managers also report to others in the organization (and even the CEO reports to the board of directors). In deal- ing with these individuals, an understanding of basic issues associated with leadership, power and political behavior, decision making, organization structure and design, and organizational culture can be extremely beneficial. Again, the field of organizational behavior provides numerous valuable insights into these processes. Managers can also use their knowledge of organizational behavior to better under- stand their own needs, motives, behaviors, and feelings, which will help them improve decision-making capabilities, control stress, communicate better, and comprehend how career dynamics unfold. The study of organizational behavior provides insights into all of these concepts and processes. Managers interact with a variety of colleagues, peers, and coworkers inside the orga- nization. An understanding of attitudinal processes, individual differences, group dynam- ics, intergroup dynamics, organizational culture, and power and political behavior can help managers handle such interactions more effectively. Organizational behavior pro- vides a variety of practical insights into these processes. Virtually all of the insights into behavioral processes already mentioned are also valuable in interactions with people out- side the organization—suppliers, customers, competitors, government officials, represen- tatives of citizens’ groups, union officials, and potential joint-venture partners. In addition, a special understanding of the environment, technology, and global issues is valuable. Again, organizational behavior offers managers many different insights into how and why things happen as they do. Finally, these patterns of interactions hold true regardless of the type of organization. Whether a business is large or small, domestic or international, growing or stagnating, its managers perform their work within a social context. And the same can be said of man- agers in health care, education, and government, as well as those in student organizations such as fraternities, sororities, and professional clubs. We see, then, that it is essentially impossible to understand and practice management without considering the numerous areas of organizational behavior. Further, as more and more organizations hire managers from other countries, the processes of understanding human behavior in organizations will almost certainly grow increasingly complex. We now address the nature of the man- ager’s job in more detail before returning to our primary focus on organizational behavior. ORGANIZATIONAL BEHAVIOR AND THE MANAGEMENT PROCESS Managerial work is fraught with complexity and unpredictability and enriched with opportunity and excitement. However, in characterizing managerial work, most educa- tors and other experts find it useful to conceptualize the activities performed by man- agers as reflecting one or more of four basic functions. These functions are generally referred to as planning, organizing, leading, and controlling. While these functions are Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.8Part1: Introduction to Organizational Behavior FIGURE 1.2 Planning Organizing Leading Controlling Basic Managerial Functions Managers engage Human in the four basic Resources functions of planning, organizing, leading, Financial and controlling. These Resources functions are applied to human, financial, Physical physical, and Resources information resources with the ultimate Information purpose of efficiently Resources and effectively attain- ing organizational goals. Effective and Efficient Attainment of Organizational Goals often described in a sequential manner, in reality, of course, most managerial work involves all four functions simultaneously. Similarly, organizations use many different resources in the pursuit of their goals and objectives. As with management functions, though, these resources can also generally be classified into four groups: human, financial, physical, and/or information resources. As illustrated in Figure 1.2, managers combine these resources through the four basic func- tions, with the ultimate purpose of efficiently and effectively attaining the goals of the organization. That is, the figure shows how managers apply the basic functions across resources to advance the organization toward its goals. Planningistheprocess Planning, the first managerial function, is the process of determining the organiza- of determining an tion’s desired future position and deciding how best to get there. The planning process organization’s desired at Sears, for example, includes studying and analyzing the environment, deciding on future position and the appropriate goals, outlining strategies for achieving those goals, and developing tactics best means of getting to help execute the strategies. Behavioral processes and characteristics pervade each of there. these activities. Perception, for instance, plays a major role in environmental scanning, and creativity and motivation influence how managers set goals, strategies, and tactics for their organization. Larger corporations such as Walmart and Starbucks usually rely on their top management teams to handle most planning activities. In smaller firms, the owner usually takes care of planning. Organizing is the The second managerial function is organizing—the process of designing jobs, group- process of designing ing jobs into manageable units, and establishing patterns of authority among jobs and jobs, grouping jobs into groups of jobs. This process produces the basic structure, or framework, of the organiza- units, and establishing tion. For large organizations such as Apple and Toyota, that structure can be extensive patterns of authority and complicated. The structure includes several hierarchical layers and spans myriad between jobs and activities and areas of responsibility. Smaller firms can often function with a relatively units. simple and straightforward form of organization. As noted earlier, the processes and characteristics of the organization itself are a major theme of organizational behavior. Leading is the process Leading, the third major managerial function, is the process of motivating members of getting the organi- of the organization to work together toward the organization’s goals. An Old Navy zation’s members to store manager, for example, must hire people, train them, and motivate them. Major work together toward components of leading include motivating employees, managing group dynamics, and the organization’s goals. the actual process of leadership itself. These are all closely related to major areas of Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Cengage LearningChapter 1: An Overview of Organizational Behavior 9 organizational behavior. All managers, whether they work in a huge multinational corpo- ration spanning dozens of countries or in a small neighborhood business serving a few square city blocks, must understand the importance of leading. Controlling is the The fourth managerial function, controlling, is the process of monitoring and cor- process of monitoring recting the actions of the organization and its people to keep them headed toward their and correcting the goals. A manager at Best Buy has to control costs, inventory, and so on. Again, behav- actions of the ioral processes and characteristics are a key part of this function. Performance evalua- organization and its tion, reward systems, and motivation, for example, all apply to control. Control is of members to keep them vital importance to all businesses, but it may be especially critical to smaller ones. directed toward their Walmart, for example, can withstand with relative ease a loss of several thousand dollars goals. due to poor control, but an equivalent loss may be devastating to a small firm. ORGANIZATIONAL BEHAVIOR AND THE MANAGER’SJOB As they engage in the basic management functions previously described, managers often find themselves playing a variety of different roles. Moreover, to perform their functions most effectively and to be successful in their various roles, managers must also draw upon a set of critical skills. This section first introduces the basic managerial roles and then describes the core skills necessary for success in an organization. Basic Managerial Roles In an organization, as in a play or a movie, a role is the part a person plays in a given situation. Managers often play a number of different roles. In general, as summarized in Table 1.1, there are ten basic managerial roles, which cluster into three general 4 categories. Table 1.1 Important Managerial Roles CATEGORY ROLE EXAMPLE Interpersonal Figurehead Attend employee retirement ceremony Leader Encourage workers to increase productivity Liaison Coordinate activities of two committees Informational Monitor Scan Business Week for information about competition Disseminator Send out memos outlining new policies Spokesperson Hold press conference to announce new plant Decision-Making Entrepreneur Developideafornew productandconvince others of its merits Disturbance handler Resolve dispute Resource allocator Allocate budget requests Negotiator Settle new labor contract Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Cengage Learning10 Part 1: Introduction to Organizational Behavior interpersonal roles are Interpersonal Roles The interpersonal roles are primarily social in nature; that is, the figurehead, the they are roles in which the manager’s main task is to relate to other people in certain leader, and the liaison. ways. The manager sometimes may serve as a figurehead for the organization. Taking visitors to dinner and attending ribbon-cutting ceremonies are part of the figurehead role. In the role of leader, the manager works to hire, train, and motivate employees. Finally, the liaison role consists of relating to others outside the group or organization. For example, a manager at Intel might be responsible for handling all price negotiations with a key supplier of microchips. Obviously, each of these interpersonal roles involves behavioral processes. informational roles are Informational Roles The three informational roles involve some aspect of informa- the monitor, the dis- tion processing. The monitor actively seeks information that might be of value to the seminator, and the organization in general or to specific managers. The manager who transmits this infor- spokesperson. mation to others is carrying out the role of disseminator. The spokesperson speaks for the organization to outsiders. A manager chosen by Dell Computer to appear at a press con- ference announcing a new product launch or other major deal, such as a recent decision to undertake a joint venture with Microsoft or Amazon, would be serving in this role. Again, behavioral processes are part of each of these roles, because information is almost always exchanged between people. decision-making roles Decision-Making Roles Finally, there are also four decision-making roles.The are the entrepreneur, entrepreneur voluntarily initiates change—such as innovations or new strategies— the disturbance within the organization. The disturbance handler helps settle disputes between handler, the resource various parties, such as other managers and their subordinates. The resource allocator allocator, and the decides who will get what—how resources in the organization will be distributed negotiator. among various individuals and groups. The negotiator represents the organization in reaching agreements with other organizations, such as contracts between management and labor unions. Again, behavioral processes clearly are crucial in each of these decisional roles. Critical Managerial Skills Another important element of managerial work is mastery of the skills necessary to carry out basic functions and fill fundamental roles. In general, most successful managers have 5 a strong combination of technical, interpersonal, conceptual, and diagnostic skills. Technical skills are Technical Skills Technical skills are skills necessary to accomplish specific tasks the skills necessary to within the organization. Designing a new computer for Hewlett-Packard, developing a accomplish specific new formula for a frozen-food additive for Conagra, or writing a press release for tasks within the Halliburton all require technical skills. Hence, these skills are generally associated with organization. the operations employed by the organization in its production processes. For example, David Packard and Bill Hewlett, founders of Hewlett-Packard, started out their careers as engineers. Other examples of managers with strong technical skills include Eric Molson (CEO of Molson Coors Brewing, who began his career as a brewmaster) and Ron Meyer (COO of Universal Studios, who began his career as a filmmaker). The CEOs of the Big Four accounting firms also began their careers as accountants. The manager uses Interpersonal Skills The manager uses interpersonal skills to communicate with, interpersonal skills to understand, and motivate individuals and groups. As we have noted, managers spend a communicate with, large portion of their time interacting with others, so it is clearly important that they get understand, and along well with other people. For instance, David Novak is CEO of YUM Brands, the motivate individuals and groups. firm that owns KFC, Pizza Hut, and Taco Bell. Novak is able to relate to employees Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.Chapter 1: An Overview of Organizational Behavior 11 Eric Molson began his career as a brewmaster and eventually became CEO of Molson Coors Brewing. His technical understanding of beer making processes contributed to his success many times as he climbed the corporate ladder. throughout the firm. He is also known to his employees as a caring, compassionate, and an honest person. These qualities inspire others throughout the firm and motivate them to work hard to help Novak reach the firm’s goals. The manager uses Conceptual Skills Conceptual skills are the manager’s ability to think in the abstract. conceptual skills to A manager with strong conceptual skills is able to see the “big picture.” That is, she or he think in the abstract. can see opportunity where others see roadblocks or problems. For example, after Steve Wozniak and Steve Jobs built a small computer of their own design in a garage, Wozniak essentially saw a new toy that could be tinkered with. Jobs, however, saw far more and convinced his partner that they should start a company to make and sell the computers. The result? Apple Computer. In subsequent years Jobs also used his conceptual skills to identify the potential in digital media technologies, leading to the introduction of such products as the iPod, the iPhone, iTunes, and the iPad as well as his overseeing the crea- tion of Pixar Animation Studios. When he died in 2011 Jobs was hailed as one of the most innovative managers of all time. Diagnostic Skills Most successful managers also bring diagnostic skills to the organi- zation. Diagnostic skills allow managers to better understand cause-and-effect relation- The manager uses ships and to recognize the optimal solutions to problems. For instance, when Ed diagnostic skills to Whitacre was chairman and CEO of SBC Communications, he recognized that, though understand cause- his firm was performing well in the consumer market, it lacked strong brand identifica- and-effect relation- tion in the business environment. He first carefully identified and then implemented an ships and to recognize action to remedy the firm’s shortcoming—SBC would buy AT&T (for 16 billion), the optimal solutions to problems. acquiring in the process the very name recognition that his company needed. After the Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Christinne Muschi cm/Reuters12 Part 1: Introduction to Organizational Behavior Conceptual Skills Diagnostic Skills FIGURE 1.3 Managerial Skills Top at Different Organi- Managers zational Levels Most managers need technical, inter- Middle personal, conceptual, Managers and diagnostic skills, but the importance of these skills varies by First-Line level in the organiza- Managers tion. As illustrated here, conceptual and Technical Skills Interpersonal Skills diagnostic skills are usually more impor- tant for top managers in organizations, acquisition was completed, the firm changed its corporate name from SBC to AT&T. whereas technical and 6 interpersonal skills And it was Whitacre’s diagnostic skills that pulled it all together. Indeed, his legacy of may be more impor- strong diagnostic skills led to his being asked to lead the corporate turnaround at tant for first-line General Motors in 2009. managers. Of course, not every manager has an equal measure of these four basic types of skills. Nor are equal measures critical. As shown in Figure 1.3, for example, the optimal skills mix tends to vary with the manager’s level in the organization. First-line managers generally need to depend more on their technical and interpersonal skills and less on their conceptual and diagnostic skills. Top managers tend to exhibit the reverse combination— more emphasis on conceptual and diagnostic skills and less dependence on technical and interpersonal skills. Middle managers require a more even distribution of skills. Similarly, the mix of needed skills can vary depending on economic circumstances. One recent survey suggested that during very tough economic times, the most important skills for a CEO are to be an effective communicator and motivator, be decisive, and be 7 a visionary. You probably possess all of these skills to a greater or lesser degree, but what about your disruptive skills? At first glance, this doesn’t sound like a particularly desirable skill set, but it certainly can be. To find out how, read the Change box entitled “Do You Have What It Takes to Disrupt Your Work Life?” on page 13. CONTEMPORARY ORGANIZATIONAL BEHAVIOR Now, with this additional understanding of managerial work, we can return to our discussion of organizational behavior. We first introduce two fundamental characteristics of contemporary organizational behavior that warrant special discussion; we then identify the particular set of concepts that are generally accepted as defining the field’s domain. Characteristics of the Field Managers and researchers who use concepts and ideas from organizational behavior must recognize that it has an interdisciplinary focus and a descriptive nature; that is, it draws from a variety of other fields and it attempts to describe behavior (rather than to predict how behavior can be changed in consistent and generalizable ways). Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Cengage LearningChapter 1: An Overview of Organizational Behavior 13 Do You Have What It Takes to Disrupt CHANGE Your Work Life? Let’s say that you’re a doctor who’s tired of practicing much less what workplace value they might have. medicine. It happens. One female physician wrote to According to Johnson, “we often overlook our best Philippa Kennealy, a career coach for medical profes- skills—our innate talents—simply because we perform sionals,tosay,“Idon’twanttopracticeclinicalmedicine them without even thinking.” You could even have a anymore and am currently at home with my children. certain “genius” at some activity, but as Alana Cates, I am at a loss as to what I presidentoftheconsultancy “We often overlook our best skills— candowithmyknowledge and training firm Acceler- our innate talents—simply because we and skills.” Kennealy sug- ated Profit Solutions, puts perform them without even thinking.” gestedthatherattentionto it, “the frustration in genius —WHITNEY JOHNSON, FOUNDING PARTNER, detail and commitment to is in believing that if it is ROSE PARK ADVISORS high performance might easy for you, it must be make her valuable in the field of electronic medical easyforeveryoneelse.” records(EMR)—creatingcomputerizedmedicalrecords Johnsonsuggeststhatyoubeginthinkingaboutyour forsuchhealthcaredeliverersashospitalsorphysicians’ disruptiveskillsbyaskingyourselfthreequestions: offices. Kennealy also cites the example of a Stanford- 1. Whatdoyoudoreflexivelywell?Theseareusuallythe trainedgeneralsurgeonwhoswitchedtoentrepreneur- things that you do well—and often with pleasure— shiptocofoundfourmedical-devicestartups. without thinking about them. Business consultant Granted,whenitcomestomakingsuchcareer-(and and motivational speaker Marcus Buckingham sug- life-) changing decisions, the average physician is at a gests that you think about what you’re doing when- certain advantage over most of the rest of us. At the everyoufeel“invigorated,inquisitive,successful.” very least, your doctor is probably good at listening, 2. What do others identify as being your best skills? “connect-the-dot” problem solving, and remembering “Too many people,” quipped the late publisher extremely complex details. HR experts call these Malcolm Forbes, “overvalue what they are not and disruptive skills—what Whitney Johnson, a founding undervalue what they are.” If you want to be an partner of the investment firm Rose Park Advisors, actor but everyone else keeps saying that you’d identifies as “our distinctive innate talents rather than make a great set designer, you’d probably do well ‘me-too’ skills…. These are the skills,” says Johnson, to heed the feedback. Otherwise, warns Johnson, “that can help you carve out a disruptive niche— “over the course of your career, it will leave you consequently upping your value in the marketplace.” trading at a discount to what you are worth.” She adds that your disruptive skill might actually be “a confluence of skills.” Take, for example, our career- 3. Do you have a confluence of skills? In other words, disaffected physician. Many job candidates can claim is your disruptive skill actually a skill set—what to be good listeners; many others may claim above- Johnson characterizes as “an unusual intersection average problem-solving ability and still others a of ordinary proficiencies”? remarkable capacity for remembering things. A physi- References: Philippa Kennealy, “Physicians Considering a Career cian, however, can honestly put all three skills on Change Need to Figure Out Their ‘Disruptive’ Skills,” The her résumé, and “for the right customer,” observes Entrepreneurial MD for Women, September 29, 2010, www. Johnson, “that combination is your disruptive skill.” mommd.com on April 6, 2012; Philippa Kennealy, “The General At this point, you’re probably saying to yourself, Surgeon Who Sculpted a New Physician Career,” The Entre- “Never mind spoiled doctors. I’m just looking for a job preneurial MD, February 27, 2012, www.entrepreneurialmd.com to help pay for a college education in which I haven’t on April 6, 2012; Whitney Johnson, “How to Identify Your Dis- even decided on a major.” True enough, but most us ruptive Skills,” HBR Blog Network, October 4, 2010, http://blogs. havethingsthatwe’reprettygoodat—abilitiesthatmay hbr.org on April 6, 2012; Whitney Johnson, “To Get Paid What in fact be potential disruptive skills. One big problem is You’re Worth, Know Your Disruptive Skills,” HBR Blog Network, thefactthatalotofusdon’t even know what they are, September 14, 2010, http://blogs.hbr.org on April 6, 2012. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. ©Kesu/Shutterstock14 Part 1: Introduction to Organizational Behavior An Interdisciplinary Focus In many ways, organizational behavior synthesizes sev- eral other fields of study. Perhaps the greatest contribution is from psychology, especially organizational psychology. Psychologists study human behavior, whereas organizational psychologists deal specifically with the behavior of people in organizational settings. Many of the concepts that interest psychologists, such as individual differences and moti- vation, are also central to students of organizational behavior. These concepts are covered in Chapters 3–8. Sociology, too, has had a major impact on the field of organizational behavior. Sociol- ogists study social systems such as families, occupational classes, and organizations. Because a major concern of organizational behavior is the study of organization struc- tures, the field clearly overlaps with areas of sociology that focus on the organization as a social system. Chapters 16–19 reflect the influence of sociology on the field of organi- zational behavior. Anthropology is concerned with the interactions between people and their environ- ments, especially their cultural environment. Culture is a major influence on the struc- ture of organizations and on the behavior of people in organizations. Culture is discussed in Chapters 2 and 18. Political science also interests organizational behaviorists. We usually think of political science as the study of political systems such as governments. But themes of interest to political scientists include how and why people acquire power and such topics as political behavior, decision making, conflict, the behavior of interest groups, and coalition forma- tion. These are also major areas of interest in organizational behavior, as is reflected in Chapters 9–15. Economists study the production, distribution, and consumption of goods and services. Students of organizational behavior share the economist’s interest in areas such as labor market dynamics, productivity, human resource planning and fore- casting, and cost-benefit analysis. Chapters 2, 5, and 6 most strongly illustrate these issues. Engineeringhasalsoinfluencedthefieldoforgani- zationalbehavior.Industrialengineeringinparticular has long been concerned with work measurement, productivity measurement, work flow analysis and design, job design, and labor relations. Obviously theseareasarealsorelevanttoorganizationalbehavior andarediscussedinChapters2,5,and10. Most recently, medicine has come into play in connection with the study of human behavior at work, specifically in the area of stress. Increasingly, research is showing that controlling the causes and consequences of stress in and out of organizational settings is important for the well-being of both the individual and the organization. Chapter 7 is devoted to stress. Some people believe that work stress is approaching A Descriptive Nature A primary goal of epidemic proportions. Researchers in the field of organi- studying organizational behavior is to describe zational behavior are helping to combat this epidemic by relationships between two or more behavioral studying the causes of stress and how it can be most effectively managed. variables. The theories and concepts of the field, for example, cannot predict with certainty that Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Stockbyte/Photos.comChapter 1: An Overview of Organizational Behavior 15 changing a specific set of workplace variables will improve an individual employee’s 8 performance by a certain amount. At best, the field can suggest that certain general concepts or variables tend to be related to one another in particular settings. For instance, research might indicate that in one organization, employee satisfaction and individual perceptions of working conditions are positively related. However, we may not know whether that correlation occurs because better working conditions lead to more satisfac- tion, because more-satisfied people see their jobs differently than dissatisfied people, or because both satisfaction and perceptions of working conditions are actually related through other intervening variables. Also, the relationship between satisfaction and per- ceptions of working conditions observed in one setting may be considerably stronger, weaker, or nonexistent in other settings. Organizational behavior is descriptive for several reasons: the immaturity of the field, the complexities inherent in studying human behavior, and the lack of valid, reliable, and accepted definitions and measures. Whether the field will ever be able to make definitive predictions and prescriptions is still an open question. But even if it never succeeds in these endeavors, the value of studying organizational behavior is firmly established. Because behavioral processes pervade most managerial functions and roles, and because the work of organizations is done primarily by people, the knowledge and understanding 9 gained from the field can significantly help managers in many ways. Basic Concepts of the Field The central concepts of organizational behavior can be grouped into three basic catego- ries: (1) individual processes, (2) interpersonal processes, and (3) organizational pro- cesses and characteristics. As Figure 1.4 shows, these categories provide the basic framework for this book. This chapter and the next develop a managerial perspective on organizational behavior and linkthecoreconceptsoforganizationalbehaviorwithactualmanagementfororganiza- tional effectiveness. Chapter 2 describes the changing environment of organizations, espe- cially relating to diversity, globalization, and similar trends and issues. Together, the two chaptersinPartIprovideafundamentalintroductiontoorganizationalbehavior. The six chapters of Part II cover individual processes in organizations. Chapter 3 explores key individual differences in such characteristics as personality and attitudes. Chapter 4 provides an introduction to and discussion of basic models useful for under- standing employee work motivation. Chapters 5 and 6 are devoted to various methods and strategies that managers can use to enhance employee motivation and performance. Chapter 7 covers the causes and consequences of stress in the workplace. Finally, Chapter 8 explores decision making, problem solving, and creativity. Part III is devoted to interpersonal processes in organizations. Chapter 9 introduces the foundations of interpersonal behavior through its coverage of group dynamics. Chapter 10 describes how managers are using teams in organizations today, while Chapter 11 explores communications processes in organizations. Chapter 12 discusses leadership models and concepts, while Chapter 13 describes contemporary views of lead- ership in organizations. Power, politics, and workplace justice are covered in Chapter 14. Chapter 15 covers conflict and negotiation processes in organizations. Part IV is devoted to organizational processes and characteristics. Chapter 16 sets the stage with its coverage of the foundations of organization structure; Chapter 17 is an in-depth treatment of organization design. Organizational culture is discussed in Chapter 18. Organizational change and development are covered in Chapter 19. Finally, research methods in organizational behavior and the field’s historical development are covered in Appendices A and B. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.16 Part 1: Introduction to Organizational Behavior FIGURE 1.4 The Managerial Context of Organizational Behavior The Framework (Chapter 1) for Understanding Organizational Behavior Organizational behav- The Environmental Context of Organizational Behavior ior is an exciting and (Chapter 2) complexfieldofstudy. The specific concepts and topics that con- stitute the field can be grouped into three Individual Interpersonal Organizational categories: individual, Processes Processes Processes interpersonal, and organizational Foundations Groups and Teams Organization processes and (Chapter 3) (Chapters 9–10) Structure characteristics. Here Motivation Communication (Chapter 16) these concepts and (Chapters 4–6) (Chapter 11) Organization Design classifications are Stress Leadership and (Chapter 17) used to provide an (Chapter 7) Power Politics Organization Culture overall framework Decision Making (Chapters 12–14) (Chapter 18) for the organization (Chapter 8) Conflict and Organization Change of this book. Negotiation (Chapter 19) (Chapter 15) Individual-Level Group-Level Organization-Level Outcomes Outcomes Outcomes Productivity Productivity Productivity Performance Performance Performance Absenteeism Norms Turnover Attitudes Cohesion Survival Turnover Group Satisfaction Stakeholder Satisfaction Stress (Chapter 1) (Chapter 1) (Chapter 1) Organizational Effectiveness CONTEXTUAL PERSPECTIVES ON ORGANIZATIONAL BEHAVIOR Several contextual perspectives—most notably the systems and contingency perspec- tives and the interactional view—also influence our understanding of organizational behavior. Many of the concepts and theories discussed in the chapters that follow reflect these perspectives; they represent basic points of view that influence much of our contemporary thinking about behavior in organizations. In addition, they allow us to see more clearly how managers use behavioral processes as they strive for orga- nizational effectiveness. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Cengage LearningChapter 1: An Overview of Organizational Behavior 17 Feedback FIGURE 1.5 The Systems Approach to Inputs Outputs Organizations Transformation Thesystemsapproach Material Inputs Products/Services Technology to organizations Human Inputs Profits/Losses (including manufacturing, provides a useful Financial Inputs Employee Behaviors operations, and framework for Information Inputs New Information service processes) understanding how the elements of an organization interact among themselves and with their envi- Environment ronment. Various in- puts are transformed Systems and Situational Perspectives into different outputs, with important feed- The systems and situational perspectives share related viewpoints on organizations and back from the envi- how they function. Each is concerned with interrelationships among organizational ele- ronment. If managers ments and between organizational and environmental elements. do not understand these interrelations, The Systems Perspective The systems perspective, or the theory of systems, was they may tend to first developed in the physical sciences, but it has been extended to other areas, such ignore their environ- 10 ment or overlook as management. A system is an interrelated set of elements that function as a whole. important interrela- Figure 1.5 shows a general framework for viewing organizations as systems. tionships within their According to this perspective, an organizational system receives four kinds of inputs organizations. from its environment: material, human, financial, and informational (note that this is consistent with our earlier description of management functions). The organization’s A system is a set of managers then combine and transform these inputs and return them to the environment interrelated elements in the form of products or services, employee behaviors, profits or losses, and additional functioning as a whole. information. Then the system receives feedback from the environment regarding these outputs. As an example, we can apply systems theory to the Shell Oil Company. Material inputs include pipelines, crude oil, and the machinery used to refine petroleum. Human inputs are oil field workers, refinery workers, office staff, and other people employed by the company. Financial inputs take the form of money received from oil and gas sales, stockholder investment, and so forth. Finally, the company receives information inputs from forecasts about future oil supplies, geological surveys on potential drilling sites, sales projections, and similar analyses. Through complex refining and other processes, these inputs are combined and trans- formed to create products such as gasoline and motor oil. As outputs, these products are sold to the consuming public. Profits from operations are fed back into the environment through taxes, investments, and dividends; losses, when they occur, hit the environment by reducing stockholders’ incomes. In addition to having on-the-job contacts with custo- mers and suppliers, employees live in the community and participate in a variety of activities away from the workplace, and their behavior is influenced in part by their experiences as Shell workers. Finally, information about the company and its operations is also released into the environment. The environment, in turn, responds to these out- puts and influences future inputs. For example, consumers may buy more or less gaso- line depending on the quality and price of Shell’s product, and banks may be more or less willing to lend Shell money based on financial information released about the company. The systems perspective is valuable to managers for a variety of reasons. First, it underscores the importance of an organization’s environment. For instance, failing to Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. © Cengage Learning18 Part 1: Introduction to Organizational Behavior SERVICE Having a Thing Makes a Difference A family from the Midwest flew into Orlando, Florida, family’s vacation, which would have lost most of its for a five-day visit to Walt Disney World. Mom, Dad, value had the employee not taken action and saved it and their five-year-old son and eight-year-old daugh- with a hat. ter left the airport on Disney’s Magical Express bus, This story, which Disney trainers like to recount which took them directly to their hotel, Disney’s to new employees, teaches a simple point. All employ- Grand Floridian Resort. The next morning, they all ees need to do whatever they can to ensure that no took the monorail into the Magic Kingdom, where customer leaves Walt Disney World unhappy. The Dad immediately bought two mouse-ear hats embroi- employee in this case listened, learned, and saved the dered with the kids’ names. Over the next few days, family’s vacation by noticing how distressed the family the five-year-old did as many five-year-olds will do, was and acting on what Disney had taught him. and kept his hat on night and day. It was his treasured As a way to introduce the service inserts seen in possession, and he wore it everywhere he went. On each chapter, this example illustrates well the chal- the day before the end of the visit, the family returned lenges that service managers face when customers to the Magic Kingdom for a second time. After exiting enter their organizations and interact directly with the Pirates of the Caribbean attraction, the little boy employees to create an intangible service experience. discovered he no longer had his beloved hat and The challenge of managing an employee who must began crying. Dad realized he had a problem, and coproduce such experiences is far different from that the problem got worse when the little girl, seeing of supervising someone whose only task is to add a that her brother was getting attention by crying, wheel to a car coming down the assembly line. From started to cry herself. an organizational behavior perspective, managers After three fun-filled and magical days, the whole must not only understand the personality characteris- vacation was becoming a disaster because of a lost tics, attitudes, and behaviors of their own employees hat. Dad, hoping the hat might be found, asked the but also teach those employees how to understand ride attendant to look in the boats to see whether and respond to the personality characteristics, atti- the hat could be found. The ride attendant looked tudes, and behaviors of the customers they interact and found nothing. The boy was crying as only a little with on a daily basis. boy who lost his most prized possession could cry. There are several key differences between produc- Mom was unhappy, Dad was frustrated, and Sister ing a physical “thing” and creating an intangible was in tears. Seeing this unhappy situation in what “experience” that lives in the memory. The most is supposed to be the happiest place on earth, the important are the intangible features of experiences. ride attendant went across the aisle, grabbed two Because there is no inventory to balance supply with Mickey hats, and placed one on the boy’s head and demand, customer waits must be managed by employ- the other on Dad’s. The crying stopped, and smiles ees in ways that make the waiting time acceptable. returned. Moreover, there is no inventory to count, store, keep Later, when the family returned home, dad wrote a track of, or reorder when supplies get low. A second letter to the head of Walt Disney World to tell him feature of intangibility is that the experience invariably what a splendid time they’d had. Interestingly, while requires interaction between a customer and an the letter included only one page about the various employee, especially at the customer contact points attractions in the parks and the amenities of the wherethecustomerlooksforandexpectsexcellentser- hotel, there were several pages devoted to describing vice from what often proves to be the lowest-paid, the way this high-school-aged employee had saved shortest-tenured, and least-trained employee. As a this family’s vacation by his prompt action in replacing result, the role of supervisors must change. Unlike in his son’s Mickey hat. The question is, what is a Mickey a manufacturing organization, where the production hat worth? The answer is the entire cost of that worker can be monitored in a set place doing a Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. ©rangizzz/ShutterstockChapter 1: An Overview of Organizational Behavior 19 repetitive task, service employees often go to the the quality measures, performance measures, and customers, interact with them outside the view of productivity measures are all subjective. This last their supervisors, and not only perform their tasks but point brings out the second major difference between also build relationships and fix any problems that cus- experience-creating and product-producing organiza- tomers may have. The fourth difference is that the cus- tions: the value and quality of the experience are sub- tomer is almost always involved in some coproduction jectively determined by the customer. It doesn’t matter activity. Thus, the employee not only must know how whatyourorganization’squalitycontrolteamassesses, to effectively perform his or herrole inthe creation of a what the service planners plan, or what your employ- service experience but must also supervise and some- ees believe is the best service possible. It is all deter- times teach customers how to perform their roles, as mined by the customer and only the customer. The well.Ifcustomerscan’tperformtheirrolessuccessfully, impact of these differences on organizational behavior that failure will inevitably beattributed to the company. will become the focal point of the inserts throughout Thefifthdifferenceisthatthesettinginwhichtheexpe- the remainder of this book. Not having a thing to pro- rience occurs is important to both customer and duce, hold, and show makes a difference in organiza- employee. The mood, attitude, and emotions of both tional behavior. the employee and the customer affect the quality of Discussion Question: How is managing people the service experience and that is directly impacted making things different from managing customer by the environment of the experience itself. Finally, experiences? acquire the appropriate resources and failing to heed feedback from the environment can be disastrous. The systems perspective also helps managers conceptualize the flow and interaction of various elements of the organization itself as they work together to trans- form inputs into outputs. The Situational Perspective Another useful viewpoint for understanding behavior in The situational organizations comes from the situational perspective. In the earlier days of management perspective suggests studies, managers searched for universal answers to organizational questions. They that in most organiza- sought prescriptions, the “one best way” that could be used in any organization under tions, situations and any conditions, searching, for example, for forms of leadership behavior that would outcomes are always lead employees to be more satisfied and to work harder. Eventually, however, influenced by other researchers realized that the complexities of human behavior and organizational settings variables. make universal conclusions virtually impossible. They discovered that in organizations, most situations and outcomes are contingent; that is, the precise relationship between 11 any two variables is likely to be situational (i.e., dependent on other variables). Figure 1.6 distinguishes the universal and situational perspectives. The universal model, shown at the top of the figure, presumes a direct cause-and-effect linkage between variables. For example, it suggests that whenever a manager encounters a partic- ular problem or situation (such as motivating employees to work harder), a universal approach exists (such as raising pay or increasing autonomy) that will lead to the desired outcome. The situational perspective, on the other hand, acknowledges that several other variables alter the direct relationship. In other words, the appropriate managerial action or behavior in any given situation depends on elements of that situation. The field of organizational behavior has gradually shifted from a universal approach in the 1950s and early 1960s to a situational perspective. The situational perspective is especially strong in the areas of motivation (Chapter 4), job design (Chapter 5), leader- ship (Chapters 12 and 13), and organizational design (Chapter 17), but it is becoming increasingly important throughout the entire field. Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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