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What is organizational behaviour?
Isn’t organizational behaviour common sense? Or just like psychology?
How does know ing about organizational behaviour make w ork and life more understandable?
What challenges do managers and employees face in the w orkplace of the tw enty-first century?
CH A PTER
1
What Is
Organizat ional
Behaviour?
O B I S FO R EV ERY O N E
Why do some people do well in organizational settings while others have difficulty?
Do you know what a “ typical” organization looks like ?
Doe s job satisfaction re ally make a diffe re nce ?
Are you re ady to assume more re sponsibility at work?
1
What is organizational
behaviour?
rundown inner city residential and com-mercial buildings, with the aim of revital-izing the area.1As part of its mission, the
company employs and trains low-income residents of the inner city. ICR is a for-profit company that was created by five not-for-profit joint venture partners: North End Housing Project (NEHP), Winnipeg Partners in Housing (WPH), Spence Neighbourhood Association (SNA), West Broadw ay Development Corporation (WBDC), and Community Ow nership Solutions (COS). ICR has completed over 50 residential and commercial projects since opening its doors in August 2002.
Because ICR hires a number of employees who have few skills and little job experience, managers must teach the employees how to perform the role of employee. M anagers must also teach employees about teamw ork and leadership w hile w orking side by side w ith them on construction projects. Can a company like ICR survive as w ell as a company not as committed to social values?
The challenges that the managers at ICR face in running a successful organization and getting people to w ork w ell together illustrate several concepts you w ill find as you study the field of organizational behav-iour. Let’s take a look, then, at w hat organizational behaviour is.
W
3
D
EFINING
O
RGANIZATIONAL
B
EHAVIOUR
Organizatio nal behavio ur( o ften abbreviated as O B) is a field o f study that investi-gates ho w individuals, gro ups, and structure affect and are affected by behavio ur within o rganizatio ns. Behavio ur refers to what peo ple do in the o rganizatio n, ho w they per-fo rm, and what their attitudes are. Because the o rganizatio ns studied are o ften business o rganizatio ns, O B is frequently applied to address wo rkplace issues such as absenteeism, turno ver, pro ductivity, mo tivatio n, wo rking in gro ups, and jo b satisfactio n. Managers o ften apply the kno wledge gained fro m O B research to help them manage their o rgan-izatio ns mo re effectively.
organizational behaviour A field of study that investigates the impact of individuals, groups, and structure on behaviour within organizations; the aim is to apply such knowledge toward improving organizational effectiveness.
What pe ople - re late d challe nge s have you notice d in the workplace ?
It may seem natural to think that the study o f O B is fo r lead-ers and managlead-ers o f o rganizatio ns. After all, they o ften set the agenda fo r everyo ne else. Ho wever, O B is fo r everyo ne. Fo r instance, m any em plo yees have info rm al leadership ro les. They are o ften expected to mo ve beyo nd simply pro -viding labo ur to playing a mo re pro active ro le in achieving o rganizatio nal success. As well, managers are increasingly asking emplo yees to share in their decisio n-making pro cesses rather than simply fo llo w o rders. Fo r instance, emplo yees in so me retail sto res can make decisio ns abo ut when to accept returned item s o n their o wn, witho ut invo lving the m anager. Thus, in m any o rganizatio ns, the ro les o f managers and emplo yees have beco me blurred.2
O B is no t just fo r managers and emplo yees. Entrepreneurs and self-emplo yed indi-viduals may no t act as managers, but they certainly interact with o ther indiindi-viduals and o rganizatio ns as part o f their wo rk. In fact, much o f OB is relevant beyo nd the wo rkplace. O B applies equally well to all situatio ns in which yo u interact with o thers. In fact, O B is relevant anywhere that peo ple co me to gether and share experiences, wo rk o n go als, o r meet to so lve pro blems. The study o f O B can shed light o n the interactio ns amo ng fam ily m em bers, the vo luntary gro up that co m es to gether to do so m ething abo ut reviving the do wnto wn area, students wo rking as a team o n a class pro ject, the parents
What is organizational behaviour? It’s a field of study that focuses on three levels of behaviour in organ-izations. One level is the individ-ual, such as the Wal-M art greeter handing out smiley balloons. Another level is the group, such as the three employees of Praxair, a distributor of bottled industrial gases, w ho meet to discuss their w ork. The third level is structure, w hich is depict ed here by employees w orking in cubicles at Bloomberg, a f inancial media company.
Why do some pe ople do we ll in organizational settings while othe rs have difficulty?
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pickup basketball team. Thro ugho ut the textbo o k, a feature called O B in the Streetwill help yo u understand these bro ader co nnectio ns.
What Do We M ean
b
y Organization?
An o rganizatio nis a co nscio usly co o rdinated so cial unit, made up o f a gro up o f peo ple, who wo rk to gether o n co mmo n go als o n a relatively co ntinuo us basis. Manufacturing and service firms are o rganizatio ns, and so are scho o ls, ho spitals, churches, military units, retail sto res, po lice departments, vo lunteer o rganizatio ns, start-ups, and lo cal, pro vin-cial, and federal go vernment agencies. Inner City Reno vatio n, which we discussed in the o pening vignette, is a fo r-pro fit o rganizatio n, but its partners are no npro fit o rganiza-tio ns. Thus, when we say “o rganizarganiza-tio n” thro ugho ut this textbo o k, we are referring no t o nly to large manufacturing firms but also to small mo m-and-po p sto res, as well as to the variety o f o ther fo rms o f o rganizatio n that exist. Small businesses make up a significant part o f the eco no my.3Businesses that employ no mo re than 20 peo ple are respo nsible fo r abo ut o ne-quarter o f all Canadian jo bs. Small businesses emplo ying 50 o r fewer peo ple make up 24 percent o f Canada’s gro ss natio nal pro duct. Micro businesses ( co mpanies with 5 o r fewer emplo yees managed by an o wner/ o perato r, o ften as so le pro prieto r-ships) acco unt fo r abo ut 8 percent o f the emplo yment in this co untry.
The examples in this textbo o k present vario us o rgani-zatio ns so that yo u gain a better understanding o f the many types that exist. Tho ugh yo u might no t have co n-sidered this befo re, the co llege o r university yo u attend is every bit as much a “real” o rganizatio n as is Hudso n’s Bay Co mpany o r Air Canada o r the To ro nto Rapto rs. A small, fo r-pro fit o rganizatio n that hires peo ple with limited skills to reno vate and build in the inner city o f Winnipeg is as much a real o rganizatio n as is Lo ndo n, O ntario -based EllisDo n, o ne o f No rth America’s largest co nstructio n co mpanies. Therefo re, the theo ries we co ver sho uld be co nsidered in light o f the variety o f o rganizatio ns yo u may enco unter. We try to po int o ut instances where the theo ry may be less applicable ( o r especially applicable) to a particular type o f o rganizatio n. Fo r the mo st part, ho wever, yo u sho uld expect that the discussio ns in this textbo o k apply acro ss the bro ad spectrum o f o rganizatio ns. Thro ugho ut, we highlight applicatio ns to a variety o f o rganizatio ns in o ur feature O B in the Workplace.
OB: M
AKING
S
ENSE OF
B
EHAVIOUR IN
O
RGANIZATIONS
The managers at Inner City Renovation (ICR) quickly noticed that some of their employees had special challenges, such as their unemployment rates, their inconsistent job records, and their low education levels.4M anagers interview ed employees about their career interests and their
needs for skill development. In addition, employees have had one-on-one meetings with the ICR president and the employee support w orker. Interview s and meetings are w ays to collect data about employee behaviour. While ICR managers are not researchers, they understand the need for doing some research on their employees. How is OB research carried out, and in w hat sit-uations does it apply?
We have thus far co nsidered why O B can be applied in a variety o f settings. In this next sectio n, we co nsider the o ther fields o f study that have co ntributed to O B and discuss the fact that O B is a scientific discipline, with careful research that is co nducted to test and evaluate theo ries.
organization A consciously coordinated social unit, made up of a group of people, that functions on a relatively continuous basis to achieve common goals.
Do you know what a “ typical” organization looks like ?
*
O B is an applied behavio ural science that is built upo n co ntributio ns fro m a number o f behavio ural disciplines. The main areas are psycho lo gy, so cio lo gy, so cial psycho lo gy, anthro po lo gy, and po litical science.5As we will learn, psycho lo gy’s co ntributio ns have been mainly at the individual o r micro -level o f analysis. The o ther fo ur disciplines have co n-tributed to o ur understanding o f macro co ncepts, such as gro up pro cesses and o rgani-zatio n. Exhibit 1-1 presents an o verview o f the majo r co ntributio ns to the study o f O B.
Social psychology Psychology
Behavioural
science Contribution analysisUnit of Output
Anthropology Sociology
Political science
Study of Organizational
Behaviour
Organization system Learning
M otivation Personality Emotions Perception Training
Leadership effectiveness Job satisfaction
Individual decision making Performance appraisal Attitude measurement Employee selection Work design Work stress
Group dynamics Work teams Communication Pow er
Conflict
Intergroup behaviour
Formal organization theory Organizational technology Organizational change Organizational culture
Conflict
Intraorganizational politics Pow er
Organizational culture Organizational environment Behavioural change Attitude change Communication Group processes Group decision making
Group
Comparative values Comparative attitudes Cross-cultural analysis
Individual
Whether yo u want to respo nd to the challenges o f the Canadian wo rkplace, which we discuss later in the chapter, manage well, guarantee satisfying and rewarding employment fo r yo urself, o r kno w ho w to wo rk better in gro ups and teams, it pays to understand o rganizatio nal behavio ur. O B pro vides a systematic appro ach to the study o f behav-io ur in o rganizatbehav-io ns, as well as gro ups and teams. Underlying this systematic appro ach is the belief that behavio ur is no t rando m. Thus research studies are co nducted and are the basis fo r all o f the claims made in this textbo o k.
OB Lo o ks at Co nsistencies
Certainly there are differences amo ng individuals. Placed in similar situatio ns, peo ple do n’t all act exactly alike. Ho wever, there are certain fundamental co nsistencies under-lying the behavio ur o f mo st individuals that can be identified and then mo dified to reflect individual differences.
These fundamental co nsistencies are very impo rtant because they allo w predictabil-ity. Fo r instance, when yo u get into yo ur car, yo u make so me definite and usually highly accurate predictio ns abo ut ho w o ther peo ple will behave.
What may be less o bvio us is that there are rules ( written and unwritten) in almo st every setting. Thus, it can be argued that it’s po ssible to predict behavio ur ( undo ubtedly, no t always with 100-percent accuracy) in supermarkets, classro o ms, do cto rs’ o ffices, elevato rs, and in mo st structured situatio ns. Fo r instance, do yo u turn aro und and face the do o rs when yo u get into an elevato r? Almo st everyo ne do es. Is there a sign inside the elevato r that tells yo u to do this? Pro bably no t! Just as we make predictio ns abo ut driv-ers, where there are definite rules o f the ro ad, so we can make predictio ns abo ut the behavio ur o f peo ple in elevato rs, where there are few written rules. This example sup-po rts a majo r fo undatio n o f this textbo o k: Behavio ur is generally predictable, and the systematic studyo f behavio ur is a means to making reaso nably accurate predictio ns.
OB Lo o ks Beyo nd Co mmo n Sense
When we use the phrase systematic study, we mean lo o king at relatio nships, attempt-ing to attribute causes and effects, and basattempt-ing o ur co nclusio ns o n scientific evidence— that is, o n data gathered under co ntro lled co nditio ns, and measured and interpreted in a reaso nably rigo ro us manner— rather than relying o n co mmo n sense. O B uses sci-entific research to uncover how behavio ur wo rks in o rganizatio ns. Exhibit 1-2 o n page 8 illustrates the co mmo n metho ds researchers use to study to pics in O B.
A systematic appro ach do es no t mean that tho se things yo u have co me to believe in an unsystematic way are necessarily inco rrect. So me o f the co nclusio ns we make in this textbo o k, based o n so lid research findings, will suppo rt what yo u always knew was true. Yo u will also be expo sed to research evidence that runs co unter to what yo u might have tho ught was co mmo n sense. In fact, o ne o f the challenges to teaching a subject such as O B is to o verco me the no tio n, held by many, that “ it’s all co mmo n sense.”6
Yo u will find that many o f the so -called co mmo n-sense views yo u ho ld abo ut human behavio ur are wro ng, o n clo ser examinatio n. Mo reover, what o ne perso n co nsiders co m-mo n sense frequently runs co unter to ano ther’s versio n. Are leaders bo rn o r made? What is it that motivates people at work nowadays? You probably have answers to such questions, and individuals who have no t reviewed the research are likely to differ o n their answers. If understanding behavio ur were simply co mmo n sense, we wo uld no t o bserve many o f the pro blems that o ccur in the wo rkplace, because managers and emplo yees wo uld kno w ho w to behave. Fo r instance, we likely wo uld no t see peo ple being bullied in the wo rkplace, managers who do n’t kno w ho w to manage, and team members who do n’t info rm teammates when their wo rk is go ing to be late. Unfo rtunately, as yo u will see fro m
examples thro ugho ut the textbo o k, many individuals exhibit less than desirable behav-io ur in the wo rkplace. With a stro nger gro unding in the systematic analysis o f O B, indi-viduals wo uld be able to avo id so me o f these mistakes. This chapter’s Point/Counterpoint o n page 22 lo o ks at ho w systematic O B is.
O ne o f the o bjectives o f this textbo o k is to expo se yo u to a systematic analysis o f behavio ur, in the belief that such analysis will impro ve yo ur accuracy in explaining and predicting behavio ur. Understanding O B may also help yo u behave better in o rgani-zatio ns and gro ups as well. Fo r example, after studying O B, yo u may realize that yo u sho uld no t discuss The Apprenticeat 8:00 a.m. in the manager’s o ffice if yo ur manager needs quiet time, is an intro vert, and is pro ductio n-o riented.7
OB Has Few Abso lutes
There are few, if any, simple and universal principles that explain O B. In co ntrast, the physical sciences— chemistry, astro no my, and physics, fo r example— have laws that are co nsistent and apply in a wide range o f situatio ns. Such laws allo w scientists to gener-alize abo ut the pull o f gravity o r to co nfidently send astro nauts into space to repair satellites. However, as o ne no ted behavio ural researcher co ncluded, “Go d gave all the easy pro blems to the physicists.” Human beings are co mplex. Because we are no t alike, o ur ability to make simple, accurate, and sweeping generalizatio ns is limited. Two peo ple o ften act differently in the same situatio n, and the same perso n’s behavio ur changes in different situatio ns.
OB Takes a Co ntingency Appro ach
Just because peo ple can behave differently at different times do es no t mean, o f co urse, that we canno t o ffer reaso nably accurate explanatio ns o f human behavio ur o r make
Sources of research insight
in OB Field Studies
in real-life organizations
M eta-Analysis
using statistics to pool results of different studies
Laboratory Studies
in simulated and controlled settings
Case Studies
looking in depth at single situations
Survey Studies
using questionnaires and interview s in sample populations
EXHIBIT 1-2
Research M et hods in OB
co ntext in which it o ccurs— kno wn as a co ntingency appro ach. So , fo r example, O B scho lars wo uld avo id stating that effective leaders sho uld alwaysseek the ideas o f their emplo yees befo re making a decisio n. Rather, we may find that in so me situatio ns a par-ticipative style is clearly superio r, but in o ther situatio ns an auto cratic decisio n style is mo re effective. In o ther wo rds, as yo u will see in Chapter 8, the effectiveness o f a particular leadership style depends o n the situatio n in which it is used. The O B scho lar wo uld therefo re try to describe the situatio ns to which each style is suited.
Co nsistent with the co ntingency appro ach, the Point/Counterpointfeature included in each chapter presents debates o n so me o f the mo re co ntro versial issues in O B. These debates highlight the fact that within O B there is disagreement o n many issues. The Point/Counterpointfo rmat gives yo u the o ppo rtunity to explo re different po ints o f view o n an issue, disco ver ho w diverse perspectives co mplement and o ppo se each o ther, and gain insight into so me o f the current debates in the O B field.
H
OW
W
ILL
K
NOWING
OB M
AKE A
D
IFFERENCE
?
When we talk abo ut the impact o f O B in each chapter, we co nsider the impact o n bo th the wo rkplace and the individual ( see o ur features O B in the Workplaceand O B in the Street) . So let’s begin o ur discussio n o f O B’s impact by lo o king bro adly at ho w kno wing abo ut O B makes a difference in the wo rkplace, befo re we lo o k at ho w O B affects us individually.
In the Workpla
c
e
Fro m a management po int o f view, understanding O B can help yo u manage well. Still, yo u might wo nder whether managing well really makes a difference. Markham, O ntario -based Black Pho to Co rpo ratio n’s president, Ro d Smith, learned that no t listening to emplo yee demands can have undesirable co nsequences when he was co nfro nted with a unio n drive at Black’s. He no tes the difficulties he has experienced in wo rking with a unio n. “ O ne o f the things that yo u lo se when yo u get unio nized is that ability to be co mpassio nate, because the rules are the rules, and they catch peo ple in ways we prefer no t to catch them.”8
Co nsider ano ther manager’s perspective. Aris Kaplanis, president and CEO o f To ro nto -based Teranet, understands the impo rtance o f managing well. In the high-tech industry, where turno ver is typically 10 to 20 percent, Teranet’s annual turno ver rate is less than 1 percent. Kaplanis believes that his turnover is low because Teranet develo ped a co rpo rate culture that is bo th humane and family-friendly. “My perspective is that the co mpany has two assets— o ne is the custo mers, the o ther is o ur emplo yees. Bo th o f these assets have to be serviced.”9
The evidence indicates that m anaging peo ple well m akes fo r better co rpo ratio ns overall. Exhibit 1-3 o n page 10 shows that many o f the firms that made the KPMG/ Ipso s Reid list o f “ Mo st Respected Co rpo ratio ns fo r Hum an Reso urce Managem ent” also sco red high o n financial perfo rmance and best lo ng-term investment value. Five o f the co mpanies placed in the to p 10 o n bo th financial measures.
Each year, Report on Business(ROB) magazine publishes a list o f the “50 Best Employers in Canada.” The magazine’s 2005 survey identified three main traits o f best-lo ved co m-panies: (1) they show appreciatio n fo r their employees, (2) they co ach employees to help them mo ve up in the o rganizatio n, and ( 3) they have go o d leaders who present the co rpo rate strategy clearly and co nsistently.10
Black Photo Corporation www.blackphoto.com
Teranet www.teranet.ca
contingency approach An approach taken by OB that considers behaviour within the context in which it occurs.
While the KPMG/ Ipso s Reid survey shows that managing well adds to the bo tto m line, the RO Bsurvey sho ws mo re directly that managing well pro vides managers with dayto -day returns. RO B’s 50 best employers have low turnover, and employees want to stay with their firm s— even when they are o ffered higher-paying jo b s by o ther co m panies. Em plo yees with the 50 best em plo yers who participated in the RO Bsurvey did no t mentio n mo ney. Instead, they no ted that the co mpany reco gnizes their perfo rmance in little ways that make a difference.
The message fro m bo th surveys is this: Managing peo ple well pays o ff. Do ing so may also lead to greater o rganizatio nal co mmitment. We use this term to describe the degree to which an emplo yee identifies with the o rganizatio n and wishes to maintain membership in the o rganizatio n.11 This type o f co mmitment is o ften called affective
co mmitment, which describes the strength o f an individual’s emo tio nal attachment to , identificatio n with, and invo lvement in the o rganizatio n. Emplo yees who are highly co mmitted go beyo nd expected behavio urs to pro vide extra service, extra insight, o r whatever else is needed to get the jo b do ne. There is so me co ncern that extreme o nizatio nal co mmitment can have negative effects, in that emplo yees with stro ng o rga-nizatio nal co mmitment may behave unethically to pro tect the o rgarga-nizatio n. Ho wever, this co ncern sho uld no t be a reaso n to avo id enco uraging co mmitment. O ne benefit o f having co mmitted employees is that they are less resistant to change when o rganizatio ns need to carry o ut changes.
Finally, managing well may impro ve o rganizatio nal citizenship behavio ur, a to pic we discuss later in the chapter.
For You a
s
an In
d
ivi
d
ual
Yo u may be wo ndering exactly ho w O B applies to yo u if yo u are still in scho o l and no t yet wo rking. Or yo u may want to know how OB applies to yo u if yo u are planning to run yo ur own business o r wo rk fo r a small no npro fit o rganizatio n, rather than a large o rgan-izatio n. O r yo u may be asking yo urself ho w O B applies to yo u if yo u are no t planning o n being a manager. We lo o k at each o f these scenario s belo w to help yo u see that O B is relevant in a variety o f situatio ns.
organizational commitment The degree to which an employee identifies with the organization and wishes to remain with the organization.
EXHIBIT 1-3
M ost Respect ed Corporat ions for Human Resource M anagement
(KPM G/Ipsos Reid’s 2005 Survey)
Source:KPM G/Ipsos Reid, Eleventh Annual Survey of Canada’s M ost Respected Corporations,
Yo u may think that O B is o nly useful o nce yo u reach the wo rkplace. Ho wever, many o f the co ncepts that apply to o rganizatio ns also apply to teamwo rk, so mething many stu-dents have to do . As a team member, it’s impo rtant to kno w ho w perso nality differ-ences affect the ability o f peo ple to wo rk to gether. Yo u may need to mo tivate members o f yo ur team. Or yo u may want to know how to create a mo re effective team o r so lve co n-flict in a team. Individually o r as part o f a team, yo u also have decisio ns to make and need to kno w ho w to co mmunicate with o thers. All o f these to pics are co vered by O B.
“What if I Am No t Go ing to Wo rk in a Large Organizatio n?”
Yo u may think that when we say “o rganizatio n” we are referring to large financial firms in o ffice to wers, to the exclusio n o f the variety o f o ther fo rms o f o rganizatio n that exist. Yo u may be thinking that yo u want to wo rk in a small business, o r in yo ur family’s business, so O B has no relevance fo r yo u. But this wo uld be sho rt-sighted. Thro ugho ut yo ur life yo u will wo rk with a variety o f o rganizatio ns, and O B will help yo u better understand ho w tho se o rganizatio ns wo rk.
“What if I D o No t Want to Be a Manager?”
Many o f us carry aro und a simplistic view o f wo rk o rganizatio ns, with the participants divided into set catego ries: o wners, leaders and/ o r managers, and emplo yees. These distinct ro les are fo und mo st o ften in large, publicly held o rganizatio ns. Distinct o rga-nizatio nal ro les beco me mo re blurred when we discuss smaller, privately o wned firms. When we talk abo ut leadership in o rganizatio ns, we typically mean the perso n o r perso ns respo nsible fo r setting the o verall visio n o f the o rganizatio n, altho ugh leader-ship can co me fro m info rmal so urces as well. While managers and leaders have seen their ro les expand as a result o f facto rs such as glo balizatio n and e-co mmerce, emplo yees are also being asked to “ mo ve beyo nd their traditio nal ro le as inputs to the pro cess o f achieving o rganizatio nal go als.”12Mo re and mo re emplo yees are taking o n this new ro le and respo nsibility. In particular, The Co nference Bo ard o f Canada says that in high-perfo rmance o rganizatio ns, “ Emplo yees are willing to be acco untable fo r their o wn and the o rganizatio n’s success.”13To be acco untable means that emplo yees “take charge o f their o wn careers, decide what skills they need to acquire and determine where they wish to emplo y these skills.”14
Yo u may be thinking that yo u are no t planning to wo rk in an o rganizatio n at all because yo u wo uld prefer to be self-emplo yed. While self-emplo yed individuals o ften do no t act as managers, they certainly interact with o ther individuals and o rganizatio ns as part o f their wo rk. Thus, the study o f O B is just as impo rtant fo r the so le pro prieto r o r entrepreneur as fo r tho se who wo rk in large o rganizatio ns. It gives all o f us mo re insight into ho w to wo rk with o thers, and ho w to prepare to beco me emplo yees in the twenty-first-century wo rkplace.
T
ODAY
’
S
C
HALLENGES IN THE
C
ANAD IAN
W
ORKPLACE
Inner City Renovation (ICR) employees are different from many typical for-profit organizations.15
Forty-seven percent have not completed high school, 58 percent have criminal records, 79 per-cent w ere unemployed before being hired by ICR, and 37 perper-cent had not held a job for more than 2 years. Employees often have had jobs that last only a few days to a month; 26 percent have held 30 jobs or more. The lives of these employees are marked by unstable employment, and thus, within the first year of employment at ICR, 42 percent missed or were not able to work because of domestic or family issues.
The Conference Board of Canada
would motivate employees to show up for work. Managers recognized the need to create a sup-portive w ork environment for its employees.
M any of ICR’s employees are Aboriginal peoples w ho live in the inner city. To better under-stand the needs of these and its other employees, ICR managers conducted a formal survey of all employees and had a staff retreat near the end of the first year of operation. Because of the large number of Aboriginal peoples employed by ICR, the retreat incorporated certain Aboriginal traditions as part of the event. All discussions w ere held in a circle format, and the retreat included a sw eat (a ceremony done for meditation and cleansing). In addition, employees had one-on-one meetings w ith the ICR president and the employee support w orker.
ICR is a very committed employer. The company w ants to change the life circumstances of its employees. What factors affect employee motivation? How can ICR socialize its employees to perform w ell in their jobs? How can ICR survive in the face of competition w hile maintain-ing its goal of employmaintain-ing people w ith limited skills and job experience?
O B co nsiders that o rganizatio ns are made up o f levels, mo ving up fro m the individ-ual, to the gro up, to the entire o rganizatio nal structure. Each level co ntributes to the variety o f activities that o ccur in to day’s wo rkplace. Exhibit 1-4 presents the three levels o f analysis we co nsider in this textbo o k, and sho ws that as we mo ve fro m the individ-ual level to the o rganizatio n systems level, we deepen o ur understanding o f behavio ur in o rganizatio ns. The three basic levels are like building blo cks: Each level is co nstructed upo n the previo us level. Gro up co ncepts gro w o ut o f the fo undatio n we lay o ut in the sectio n o n individual behavio ur. We then o verlay structural co nstraints o n the individ-ual and gro up in o rder to arrive at O B.
When we lo o k at the different levels in the o rganizatio n, we reco gnize that each has challenges that can affect how the levels above and/ o r below might o perate. We co nsider the challenges at the individual, gro up, and o rganizatio nal levels.
This chapter’s CBC Video Case Incidentfurther explo res o rganizatio nal challenges in the twenty-first century.
Challenge
s
at the In
d
ivi
d
ual Level
At the individual level, managers and emplo yees need to learn ho w to wo rk with peo ple who may be different fro m themselves in a variety o f dimensio ns, including perso nality, perceptio n, values, and attitudes. This po int is illustrated by the employee situatio n at ICR, where emplo yees have a variety o f experiences and co me fro m several cultures.
Individuals also have different levels o f jo b satisfactio n and mo tivatio n, and these affect ho w managers manage emplo yees. Fo r instance, so me o f ICR’s emplo yees had drug and alco ho l dependencies that affected their mo tivatio n and pro ductivity.
Mo re o rganizatio ns expect emplo yees to be empo wered and to take o n mo re respo n-sibility than ever befo re. This expectatio n puts demands o n bo th managers and emplo y-ees. ICR initially created three co m m ittees where em plo yees co uld give input o n a variety o f issues, but the managers were so busy trying to make sure the co mpany met financial go als that they didn’t have time to help the emplo yees wo rk o n these co mmittees.
Perhaps the greatest challenge facing individuals ( and o rganiza-tio ns) is ho w to behave ethically, as the findings fro m the Go mery Co mmissio n, lo o king into the $250-millio n spo nso rship scandal o f the Liberal party, sho w. At his sentencing hearing, Jean Brault, fo und guilty o f defrauding the go vernment o f $1.23 millio n o n co ntracts his co m pany, Mo ntreal-b ased Gro upactio n Marketing, o b tained claimed the external pressures he faced led to his actio ns: “I’m no t trying to excuse what I did, but essentially it’s the po litical demands, the demands o n me, that led me to take that first step.”16
Organization systems level
Group level
Individual level
EXHIBIT 1-4
Basic OB M odel
4
What challenges do
managers and
employees face in the
w orkplace of the
tw enty-first century?
Peo ple enter gro ups and o rganizatio ns with certain char-acteristics that influence their behavio ur, the mo re o bvio us o f these being perso nality characteristics, perceptio n, val-ues, and attitudes. These characteristics are essentially intact when an individual jo ins an o rganizatio n, and fo r the mo st part, there is little that tho se in the o rganizatio n can do to alter them. Yet they have a very real impact o n behavio ur. In this light, we lo o k at perceptio n, perso nality, values, and attitudes, and their im pact o n individual b ehavio ur in Chapters 2 and 3.
Jo b Satisfactio n
Em plo yees are increasingly demanding satisfying jo bs. As we discuss in Chapter 3, less th an h alf o f C an ad ian
em plo yees are very satisfied with their jo bs. The belief that satisfied em plo yees are m o re pro ductive than dis-satisfied emplo yees has been a basic assumptio n amo ng managers fo r years. Altho ugh there is evidence that ques-tio ns that causal relaques-tio nship,17it can be argued that so ciety sho uld be co ncerned no t o nly with the quantity o f life— that is, with co ncerns such as higher pro ductivity and material acquisitio ns— but also with its quality. Researchers with stro ng humanistic values argue that satisfactio n is a legitimate o bjective o f an o rganizatio n. They believe that o rganizatio ns sho uld be respo nsible fo r pro viding emplo yees with jo bs that are challenging and intrinsically rewarding. This chapter’s Ethical D ilemma Exercise, o n page 24, questio ns the extent to which o rganizatio ns sho uld be respo nsible fo r help-ing individuals achieve balance in their lives.
Emplo yers can pay the price when emplo yees are no t satisfied with wo rking co ndi-tio ns. Bank tellers at To ro nto -Do minio n Bank and Canadian Imperial Bank o f Co mmerce in Sudb ury, O ntario , vo ted to jo in the United Steelwo rkers o f Am erica in 2005. Emplo yees at a Sears Canada department sto re in Sudbury also pursued the po ssibility o f jo ining the Steelwo rkers in 2005. Brian Whalen, a maintenance wo rker fo r the sto re, said that “jo b satisfactio n levels...have declined dramatically o ver the past two years.”
He no ted that employees were upset abo ut low ho urly wages, a benefits package that was no t affo rdable, and jo b security.18While unio nizatio n do es no t necessarily increase jo b satisfactio n, it do es provide a mechanism fo r employees to have so me bargaining power with their emplo yers.
Mo tivatio n
An Angus Reid survey sho wed that 29 percent o f emplo yees do no t feel they receive fair o r reaso nable rewards fo r the wo rk that they do .19To address this co ncern, Chapter 4 discusses the impo rtance o f rewards in mo tivating emplo yees. Yo u may find the dis-cussio n o f mo tivatio n and rewards particularly interesting in Case Incident— How a UPS Manager Cut Turnover,o n page 25, where a manager faces the challenges o f mo tivating different types o f emplo yees in o rder to reduce turno ver.
Empo werment
At the same time that managers are being held respo nsible fo r emplo yee satisfactio n and happiness, they are also being asked to share mo re o f their po wer. If yo u read any
Sears Canada www.sears.ca
Toronto-based Royal Bank of Canada, Canada’s largest financial institution in terms of assets, commands the respect of many business leaders. In a 2004 KPM G/ Ipsos Reid poll of 250 Canadian CEOs, the company w as ranked first in six out of nine categories, including “ Top of M ind M ost Respected Corporations,” “ Best Long-Term Investment Value,” and “ Human Resources Management.”
“co aches,” “advisers,” “ spo nso rs,” o r “ facilitato rs,” rather than “ bo sses.”20
Emplo yees’ respo nsibilities are increasing to o . In many o rganizatio ns, emplo yees have beco me “asso ciates” o r “ teammates.”21Decisio n making is being pushed do wn to the o perating level, where emplo yees are being given the freedo m to make cho ices abo ut schedules, pro cedures, and so lving wo rk-related pro blems.
What is happening is that m anagers are em po wering em plo yees. Empo wermen t m eans m anagers are putting emplo yees in charge o f what they do . In the pro cess, man-agers are learning how to give up co ntro l, and employees are learning ho w to take respo nsibility fo r their wo rk and make appro priate decisio ns. The ro les fo r b o th m anagers and emplo yees are changing, o ften witho ut much guidance o n ho w to perfo rm these new ro les.
Ho w widespread are these changes in the wo rkplace? While we have no specific Canadian data, a survey by the American Management Asso ciatio n o f 1040 executives fo und that 46 percent o f their co mpanies were still using a hierarchical structure, but 31 percent defined their co mpanies as empo wered.22 O B in the Workplacelo o ks at ho w WestJet Airlines empo wers its emplo yees.
empow erment Giving employees responsibility for what they do.
American M anagement Association
www.amanet.org
O B
I N T H E W O RK PL A C E
WestJet Airline’s Employees Work Together
What do empow ered employeesdo? Calgary-based WestJet Airlines emplo yees are given lo ts o f freedo m to manage themselves.23Clive Beddo e, the co mpany’s president and CEO, was determined to create a co mpany “ where peo ple wanted to manage themselves.”
At WestJet, emplo yees are asked to be respo nsible fo r their tasks, rather than rely o n superviso rs to tell them what to do . That includes Beddo e: “I do n’t direct things,” he says. “We set so me standards and expectatio ns, but [I] do n’t interfere in ho w o ur peo ple do their jo bs.” Instead, emplo yees are given guidelines fo r behavio ur. Fo r instance, flight attendants are directed to serve custo mers in a caring, po sitive, and cheerful manner. Ho w do they carry that o ut? It’s up to them. Emplo yees also share tasks. When a plane lands, all emplo yees o n the flight, even tho se who are flying o ff-duty, are expected to prepare the plane fo r its next takeo ff.
O bvio usly, WestJet can lower its co sts by keeping the number o f superviso rs down. The co mpany o perates with abo ut 60 emplo yees per aircraft, while a typical full-service airline such as Air Canada needs mo re than 140. But allo wing emplo yees to manage themselves has a bigger benefit. Beddo e believes it enco urages emplo yees to take pride in what they do . “ They are the o nes making the decisio ns abo ut what they’re do ing and ho w they’re do ing it,” says Beddo e.
Are you re ady to assume more re sponsibility at work?
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Thro ugho ut the textbo o k yo u will find references to empo werment. We discuss it in terms o f po wer in Chapter 7, and we discuss ho w leaders co ntribute to empo werment in Chapter 8.
Behaving Ethically
subject o f ethics. Enro n executives creatively changed ho w they repo rted their pro fits and lo sses. When challenged, the co mpany’s chair, Kenneth Lay, cho se to lo o k the o ther way. The reputatio n o f acco unting firm Arthur Andersen was destro yed because it failed to questio n Enro n’s acco unting practices.
Ethics starts at the individual level. While the word refers to moral conduct, ethicsis also the study o f mo ral values o r principles that guide o ur behavio ur and info rm us whether actions are right or wrong. Ethics helps us “do the right thing,” such as not padding expense repo rts, o r no t pho ning in sick to attend the o pening o f Superman Returns.
Individuals as well as o rganizatio ns can face ethical dilemmas. As we show in Chapter 9, the study of ethics does not come with black and white answers. Rather, many factors need to be co nsidered in determining the ethical thing to do . Tho se individuals who strive hard to create their own set o f ethical values and tho se o rganizatio ns that enco urage an ethical climate in the face o f financial and o ther pressures will be mo re likely to do the right thing. Thro ugho ut this textbo o k yo u will find references to ethical and unethical behav-io ur. The Focus on Ethicsvignettes pro vide tho ught-pro vo king illustratio ns o f ho w var-io us o rganizatvar-io ns deal with ethics.
Challenge
s
at the
G
roup Level
The behavio ur o f peo ple in gro ups is mo re than the sum to tal o f all the individuals acting in their own way. Peo ple’s behaviour when they are in a group differs from their behav-io ur when they are alo ne. Therefo re, the next step in devel-o p ing an und erstand ing devel-o f O B is the stud y devel-o f grdevel-o up behavio ur.
Chapter 5 lays the fo undatio n fo r an understanding o f the dynam ics o f gro up and team behavio ur. That chapter discusses ho w individ-uals are influenced by the patterns o f behavio ur they are expected to exhibit, what the team co nsiders to b e acceptab le standards o f b ehavio ur, and ho w to m ake team s m o re effective.
Chapters 6 and 7 examine so me o f the mo re co mplex issues o f interactio n: co m-municatio n, co nflict, and nego tiatio n; and po wer and po litics. These two chapters give yo u an o ppo rtunity to think abo ut ho w co mmunicatio n pro cesses so metimes beco me co mplicated because o f o ffice po liticking and interperso nal and gro up co nflict.
Few peo ple wo rk entirely alo ne, and so me o rganizatio ns make widespread use o f teams. Therefo re, mo st individuals interact with o thers during the wo rkday. This can lead to a need fo r greater interperso nal skills. The wo rkplace is also made up o f peo ple fro m a variety o f backgro unds. Thus, learning ho w to wo rk with peo ple fro m different cultures has beco me mo re impo rtant. We review so me o f the challenges that o ccur at the gro up level belo w.
Wo rking With Others
Much o f the success in any jo b invo lves develo ping go o d interperso nal, o r “ peo ple,” skills. In fact, The Co nference Bo ard o f Canada identified the skills that fo rm the fo un-datio n fo r a high-quality wo rkfo rce in to day’s wo rkplace as co mmunicatio n, thinking, learning, and wo rking with o thers. Po sitive attitudes and behavio urs and an ability to take respo nsibility fo r o ne’s actio ns are also key skills, acco rding to the Co nference Bo ard.24Because many peo ple will wo rk in small and medium-sized firms in the future, Human Reso urces and Skills Develo pment Canada has no ted that additio nal impo r-tant skills are team building and prio rity management.25
In Canada’s increasingly co mpetitive and demanding wo rkplace, neither managers no r emplo yees can succeed o n their technical skills alo ne. They must also have go o d peo ple
ethics The study of moral values or principles that guide our behaviour and inform us whether actions are right or wrong.
What people-related challenges have you observed in the organizations in which you have worked?
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sho ws that 40 percent o f managers either leave o r sto p perfo rming within 18 mo nths o f starting at an o rganizatio n “ because they have failed to develo p relatio nships with bo sses, co lleagues o r subo rdinates.”26Cho i’s co mment undersco res the impo rtance o f develo ping interperso nal skills. This bo o k has been written to help yo u develo p tho se peo ple skills, whether as an emplo yee, manager, o r po tential manager.
To learn mo re abo ut the interperso nal skills needed in to day’s wo rkplace, read From Concepts to Skills o n pages 27–29.
Wo rkfo rce D iversity
O rganizatio ns are beco m ing m o re diverse, em plo ying a greater variety o f peo ple in terms o f gender, race, ethnicity, sexual o rientatio n, and age. A diverse wo rkfo rce includes, fo r instance, wo men, Abo riginal peo ples, Asian Canadians, African Canadians, Indo -Canadians, peo ple with disabili-ties, gays and lesbians, and senio r citizens. It also includes peo ple with different demo graphic characteristics, such as educatio n and so cio -eco no mic status. The ability to adapt to many different peo ple is o ne o f the mo st impo rtant and bro ad-based challenges facing o rganizatio ns. We discuss wo rkfo rce diversityissues in Chapter 3.
O ne o f the challenges in Canadian wo rkplaces is the mix o f generatio ns wo rking side by side: the Elders (tho se over 60), Baby Bo o mers (bo rn between the mid-1940s and mid-1960s) , Generatio n Xers ( bo rn between the mid-1960s and early 1980s) , and the Net Generatio n ( bo rn between 1977 and 1997) . Due to their very different life experi-ences, they bring different values and different expectatio ns to the wo rkplace.
We used to assume that peo ple in o rganizatio ns who differed fro m the stereo typical emplo yee wo uld so meho w simply fit in. We no w kno w that emplo yees do n’t set aside their cultural values and lifestyle preferences when they co me to wo rk. O rganizatio ns therefo re try to acco mmo date diverse gro ups o f peo ple by addressing their different lifestyles, family needs, and wo rk styles.27We need to keep in mind that what mo ti-vates o ne perso n may no t mo tivate ano ther. O ne perso n may like a straightfo rward and o pen style o f co mmunicatio n that ano ther finds unco mfo rtable and threatening. To wo rk effectively with different peo ple, we need to understand ho w culture shapes them, and learn to adapt o ur interactio n style.
The Focus on Diversityfeature fo und thro ugho ut the textbo o k helps create awareness o f the diversity issues that arise in o rganizatio ns. O ur first exam ple lo o ks at acco m -m o datio ns -m ade to help Abo riginal cadets feel welco -m e at the RCMP training acad-emy in Regina.
workforce diversityThe mix of people in organizations in terms of gender, race, ethnicity, disability, sexual orientation, and age, and demographic characteristics such as education and socio-economic status.
Why should you care about unde rstanding othe r pe ople ?
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FO C U S O N
D I V E R S I T Y
Bringing Aboriginal Culture to the RCM P
How does a Heritage Room promote RCM P diversity? The sweet-smelling smo ke o f burning buffalo sage cleansed the air at o pening ceremo nies fo r the Abo riginal Heritage Ro o m in the RCMP’s Regina training academy. With cedar walls, Plains Indian artifacts, and repro ductio ns o f o ld pho to graphs o f Abo riginal Canadians, this is no t a typical ro o m in a po lice academy.28
Wo rkfo rce diversity has impo rtant implicatio ns fo r management practice. Managers need to shift their philo so phy fro m treating everyo ne alike to reco gnizing differences. They need to respo nd to tho se differences in ways that will ensure emplo yee retentio n and greater pro ductivity, while at the sam e tim e no t discrim inating against certain gro ups. This shift includes, fo r instance, pro viding diversity training and revising ben-efit pro grams to be mo re “ family-friendly.” At ICR, managers bro ught in a part-time so cial suppo rt wo rker to help new emplo yees adjust to full-time emplo yment. Many o f ICR’s emplo yees faced family issues, do mestic disputes, and substance abuse issues that made it difficult to meet wo rk respo nsibilities. The suppo rt wo rker helped indi-vidual emplo yees develo p steps to deal with perso nal issues.
Diversity, if po sitively managed, can increase creativity and inno vatio n in o rganiza-tio ns, as well as impro ve decisio n making by pro viding different perspectives o n pro b-lems.29When diversity is no t managed pro perly, there is po tential fo r higher turno ver, misco mmunicatio n, and mo re interperso nal co nflicts.
Challenge
s
at the Organizational Level
O B beco mes mo re co mplex when we mo ve to the o rganizatio nal level o f analysis. Just as gro ups are no t the sum to tal o f individuals, so o rganizatio ns are no t the sum to tal o f individuals and gro ups. There are many mo re interacting facto rs that place co nstraints o n individual and gro up behavio ur. In Chapter 8 we co nsider ho w leadership and man-agement affect emplo yee behavio ur. In Chapter 9 we discuss decisio n making and cre-ativity, and then lo o k at the issues o f ethics and co rpo rate so cial respo nsibility. In Chapter 10 we lo o k at o rganizatio nal culture, which is generally co nsidered the glue that ho lds o rganizatio ns to gether. We also discuss o rganizatio nal change in Chapter 10. As we have no ted already, and as will beco me clear thro ugho ut the textbo o k, change has beco me a key issue fo r o rganizatio ns.
Canadian businesses face many challenges in the twenty-first century. Their ability to be as pro ductive as US businesses is co nstantly tested.30The need to develo p effective emplo yees, and to manage human reso urce issues such as absenteeism and turno ver, is critical. Meanwhile, Canadian businesses face greater co mpetitio n because o f the glo bal eco no my. Many co mpanies have expanded their o peratio ns o verseas, which means they have to learn ho w to manage peo ple fro m different cultures.
Pro ductivity
An o rganizatio n o r gro up is pro ductive if it achieves its go als and do es so by transferring inputs (labo ur and raw materials) to o utputs (finished go o ds o r services) at the lowest co st.
Pro ductivityimplies a co ncern fo r bo th effectiveness( achieving go als) and effi-ciency( watching co sts) . The late management expert Peter Drucker stated that effec-tivenessis “do ing the right thing,” while efficiencyis “do ing things right.” 31Fo r example, a ho spital is effectivewhen it successfully meets the needs o f its patients. It is efficientwhen it can do so at a lo w co st. If a ho spital manages to achieve higher o utput fro m its pres-ent staff—say, by reducing the average number o f days a patipres-ent is co nfined to a bed, o r
productivity A performance measure including effectiveness and efficiency.
effectiveness The achievement of goals.
efficiency The ratio of effective work output to the input required to produce the work.
RCMP welco mes First Natio ns Mo unties. It sho ws the children ho pe that they can co me here so me day and be an RCMP cadet.”
has gained pro ductive efficiency.Sim ilarly, a student team is effective when it puts to gether a gro up pro ject that gets a high m ark. It is efficient when all the m em bers manage their time appro priately and are no t at each o ther’s thro ats. ICR faced effec-tiveness issues because it started o ut by having o ne team leader fo r three wo rk teams. O n paper, this appeared to be an efficient strategy. Ho wever, each team needed mo re super-visio n than the m anager co uld pro vide while trying to m anage three team s, which decreased each team’s pro ductivity. Therefo re, ICR’s strategy was no t effective.
As yo u study O B, yo u will begin to understand tho se facto rs that influence the effec-tiveness and efficiency o f individuals, gro ups, and the o verall o rganizatio n.
D evelo ping Effective Emplo yees
O ne o f the majo r challenges facing o rganizatio ns in the twenty-first century is ho w to engage emplo yees effectively so that they are co mmitted to the o rganizatio n. We use the term o rgan izatio n al citizen s h ip beh avio ur ( OCB) to describe discretio nary behavio ur that is no t part o f an emplo yee’s fo rmal jo b requirements, but that never-theless pro mo tes the effective functio ning o f the o rganizatio n.32Recent research has also lo o ked at expanding the wo rk o n O CB to team behavio ur.33
Successful organizations need employees who will go beyond their usual job duties, pro-viding perfo rmance that is beyo nd expectatio ns. In to day’s dynamic wo rkplace, where tasks are increasingly do ne in teams and where flexibility is critical, o rganizatio ns need emplo yees who will engage in “go o d citizenship” behavio urs, such as making co nstruc-tive statements abo ut their wo rk gro up and the o rganizatio n, helping o thers o n their team, vo lunteering fo r extra jo b activities, avo iding unnecessary co nflicts, showing care fo r o rganizatio nal pro perty, respecting the spirit as well as the letter o f rules and regulatio ns, and gracefully to lerating the o ccasio nal wo rk-related impo sitio ns and nuisances.
To ro nto -based BBDO Canada enco urages an entrepreneurial spirit as a way o f inspir-ing O CB. The ad agency’s president and CEO Gerry Frascio ne no tes that a team leader o n the Campbell So up acco unt o verheard a Campbell’s representative musing abo ut a pro gram that wo uld launch Cam pb ell’s So up ads when the tem perature dipped. “ Instead o f waiting to get appro vals, she acted very entrepreneurially and to o k it upo n herself and m ade the who le thing happen in o ne week,” says Frascio ne. “ She went back to the client, analyzed the situatio n, fleshed o ut the o ppo rtunity, came up with an integrated co mmunicatio n plan, came up with a budget, and it was all do ne within five days.”34
O rganizatio ns want and need emplo yees who will do tho se things that are no t in any jo b descriptio n. The evidence indicates that o rganizatio ns that have such emplo y-ees o utperfo rm tho se that do n’t.35As a result, O B is co ncerned with o rganizatio nal cit-izenship behavio ur.
Putting Peo ple First
Pro fesso r Jeffery Pfeffer o f the Stanfo rd Graduate Scho o l o f Business advo cates that managers sho uld spend mo re time reco gnizing the value o f the peo ple who wo rk fo r them. He emphasizes the need to “put peo ple first” in co nsidering o rganizatio nal o bjec-tives and suggests the peo ple-first strategy no t o nly generates a co mmitted wo rkfo rce, but also significantly affects the bo tto m line.36Pfeffer no tes that research sho ws that when o rganizatio ns co ncern themselves with develo ping their emplo yees, they are mo re suc-cessful. Fo r instance, a study o f 968 US firms fo und that tho se that used peo ple-first strategies had significantly less turnover, and significantly greater sales, market value, and pro fits.37Similar results were fo und in a study o f 100 German co mpanies.38
BBDO Canada www.bbdo.ca
they have “ m o re co ntro l and say in their wo rk.” They wo rk smarter when they are “enco uraged to build skills and co mpe-tence.” They wo rk m o re respo nsibly when “ respo nsibility is placed in the hands o f emplo yees farther do wn in the o rgani-zatio n.” O B in Action— Practices of Successful O rganizationso ut-lines the practices that successful peo ple-first o rganizatio ns use to enco urage their em plo yees to wo rk harder, sm arter, and mo re respo nsibly. Case Incident— Great Plains Software: Pursuing a People-First Strategy o n the CD-RO M that acco mpanies this textbo o k asks yo u to examine the impact o f “ putting peo ple first” in managing an o rganizatio n.
Glo bal Co mpetitio n
In recent years, Canadian businesses have faced to ugh co mpe-titio n fro m the United States, Euro pe, Japan, and even China, as well as fro m o ther co mpanies within o ur bo rders. To sur-vive, they have had to reduce co sts, increase pro ductivity, and improve quality. A number o f Canadian co mpanies have fo und it necessary to merge in o rder to survive. Fo r instance, Ro na, the Bo ucherville, Q ueb ec-b ased ho m e im pro vem ent sto re, bo ught o ut Lansing, Revy, and Revelsto ke in recent years in o rder to defend its turf against the Atlanta, Geo rgia-based Ho me Depo t. That may no t be eno ugh to keep it fro m being swal-lo wed up by the Mo o resville, No rth Caro lina-based Lo we’s ho me impro vement co mpany, ho wever.
So me employers are starting to o utso urce jo bs to o ther co un-tries, where labo ur co sts are lo wer. Fo r instance, To ro nto -based
Dell Canada’s technical service lines are handled by technicians wo rking in India. To ro nto -based Wall & Asso ciates, a full-service chartered acco unting and management co nsulting firm, o utso urces do cument management to Uganda. Employees in Uganda are willing to wo rk fo r $1 an ho ur to so rt and reco rd receipts. While these wages might seem lo w, o n average, Ugandans make o nly $1 a day.
These changes in the wo rkplace, and the lo ss o f jo bs to internatio nal o utso urcing, mean that the actual jo bs that employees perfo rm, and even tho se o f managers to who m they repo rt, are in a permanent state o f change. To stay emplo yable under these co ndi-tio ns, employees need to co ntinually update their knowledge and skills to meet new jo b requirements.39To day’s managers and emplo yees have to learn to live with flexibility, spo ntaneity, uncertainty, and unpredictability.
Managing and Wo rking in a Multicultural Wo rld
Twenty o r 30 years ago , natio nal bo rders pro tected mo st firms fro m fo reign co mpetitive pressures. This is no lo nger the case. Trading blo cks such as the No rth American Free Trade Agreement (NAFTA) and the Euro pean Unio n (EU) have greatly reduced tariffs and barriers to trade, and No rth America and Euro pe are no lo nger the o nly co ntinents with highly skilled labo ur. The Internet also helps co mpanies beco me mo re glo bally co n-nected, by o pening up internatio nal sales and by increasing o ppo rtunities to carry o n business. Even small firms can bid o n pro jects in different co untries and co mpete with larger firms thro ugh the Internet. An implicatio n o f all these changes is that yo u co uld find yo urself managing o r wo rking in a multicultural enviro nment.
North American Free Trade
According to professor Jeffery Pfeffer of the Stanford Graduate School of Business, the following practices char-acterize organizations that benefit from how they manage their employees:
➔ Providing employment securityso that employ-ees don’t fear loss of jobs
➔ Hiringpeople who have the right skills and abilities
➔ Creating self-managed teamsthat have decision-making power
➔ Paying w ell, and tying pay to organizational performance
➔ Providing extensive trainingfor skills, knowledge, and initiative
➔ Reducing status differences so that all employees feel valued
➔ Sharing informationabout organizational per-formance
S
UMMARY AND
I
MPLICATIONS
1 What is organizational behaviour?O rganizatio nal behavio ur ( O B) is a field o f study that investigates the impact that individuals, gro ups, and structure have o n behavio ur within an o rganizatio n. It uses that kno wledge to make o rganizatio ns wo rk mo re effectively. Specifically, OB fo cuses o n how to improve pro ductivity, reduce bo th absenteeism and turnover, and increase employee jo b satisfactio n. OB also helps us understand how peo ple can wo rk to gether mo re effectively in the wo rkplace.
O B reco gnizes differences, helps us see the value o f wo rkfo rce diversity, and calls attentio n to practices that may need to be changed when managing and wo rking in different co untries. It can help improve quality and employee pro ductivity by show-ing managers how to empower their peo ple, as well as how to design and implement change pro grams. It o ffers specific insights to impro ve peo ple skills.
2 IsnÕt organizational behaviour common sense? Or just like psychology? O B is built o n co ntributio ns fro m a number o f behavio ural disciplines, including psy-cho lo gy, so cio lo gy, so cial psypsy-cho lo gy, anthro po lo gy, and po litical science.
We all ho ld generalizatio ns abo ut the behavio ur o f peo ple. So me o f o ur gener-alizatio ns may pro vide valid insights into human behavio ur, but many are wro ng. If understanding behavio ur were simply co mmo n sense, we wo uld see fewer pro b-lem s in the wo rkplace, because m anagers and em plo yees wo uld kno w ho w to behave. O B pro vides a systematic appro ach to impro ving predictio ns o f behavio ur that wo uld be made fro m co mmo n sense alo ne.
3 How does know ing about organizational behaviour make w ork and life more understandable?Fro m a management po int o f view, kno wing O B can help yo u manage well. Managing peo ple well pays o ff. It may also lead emplo yees to have greater o rganizatio nal co mmitment. Fro m an individual po int o f view, knowing O B can help yo u understand why the wo rkplace functio ns in the way it do es. OB can also help yo u understand how to deal with o thers if yo u decide to start yo ur own business.
4 What challenges do managers and employees face in the w orkplace of the tw enty-first century?O B co nsiders three levels o f analysis— the individual, the gro up, and the o rganizatio n— which, co mbined, help us understand behavio ur in o rganizatio ns. Each level has different challenges. At the individual level, we enco unter emplo yees who have different characteristics, and thus we co nsider ho w to better understand and make the mo st o f these differences. Because emplo yees have beco me mo re cynical abo ut their emplo yers, jo b satisfactio n and mo tivatio n have beco me impo rtant issues in to day’s o rganizatio ns. Emplo yees are also co n-fro nted with the trend to ward an empo wered wo rkplace. Perhaps the greatest chal-lenge individuals ( and o rganizatio ns) face is ho w to behave ethically.
At the gro up level, individuals are increasingly expected to wo rk in teams, which means that they need to do so effectively. Employees are expected to have go o d inter-perso nal skills. The wo rkplace is no w made up o f peo ple fro m many different back-gro unds, requiring a greater ability to understand tho se different fro m o urselves.
At the o rganizatio nal level, Canadian businesses face many challenges in the twenty-first century. They face o ngo ing co mpetitio n at ho me and fro m US busi-nesses, as well as gro wing co mpetitio n fro m the glo bal marketplace. Pro ductivity is critical. It has beco me essential to develo p effective emplo yees who are co mmitted to the o rganizatio n. By putting peo ple first, o rganizatio ns can generate a co mmitted wo rkfo rce, but taking this appro ach beco mes a challenge fo r businesses that fo cus so lely o n the bo tto m line. O rganizatio ns also have to learn how to be mo re sensitive to cultural differences, no t o nly because Canada is a multicultural co untry, but also because co mpetitive co mpanies o ften develo p glo bal alliances o r set up plants in fo reign co untries, where being aware o f o ther cultures beco mes a key to success.
For Review
1. Define organizational behaviour.
2. What is an organization? Is the family unit an organization? Explain.
3. “ Behaviour is generally predictable, so there is no need to formally study OB.” Do you agree or disagree w ith this statement? Why?
4. What does it mean to say OB takes a contingency approach in its analysis of behaviour?
5. What are the three levels of analysis in our OB model? Are they related? If so, how ?
6. What are some of the challenges and opportunities that managers face as w e move into the tw enty-first century?
7. Why is job satisfaction an important consideration for OB?
8. What are effectiveness and efficiency, and how are they related to OB?
For Critical Thinking
1. “ OB is for everyone.” Build an argument to support this statement.
2. Why do you think the subject of OB might be criticized as being “ only common sense,” w hen w e w ould rarely hear such a comment about a course in physics or statistics? Do you think this criticism of OB is fair?
3. On a scale of 1 to 10, measuring the sophistication of a scientific discipline in predicting phenomena, mathematical physics w ould probably be a 10. Where do you think OB w ould fall on the scale? Why?
4. Can empow erment lead to greater job satisfaction?
OB for You
■ As you journey through this course in OB, bear in mind that the processes w e describe are as relevant to you as an individual as they are to organizations, managers, and employees.
■ When you w ork together w ith student teams, join a student organization, or volunteer time to a community group, know that your ability to get along w ith others has an effect on your interactions w ith the other people in the group and the achievement of the group’s goals.
■ If you are aw are of how your perceptions and personality affect your interactions w ith others, you can be more careful in forming your initial impression of others.
Beware o f the Q uick Fix!
We all w ant to find quick and simple solutions to our complex problems. But here’s the bad new s: On problems related to OB, the quick and simple solutions are often w rong because they fail to consider the diversity among organizations, situations, and individuals. As Einstein said, “ Everything should be made as simple as possible, but not simpler.”
When it comes to trying to understand people at work, there is no shortage of simplistic ideas that books and consultants promote. And these books are not just on leadership. Consider three recent bestsellers. Who M oved M y Cheese?is a metaphor about tw o mice that is meant to convey the benefits of accepting change. Fish! tells
how a fish market in Seattle made its jobs motivating. And Whale Done!proposes that managers can learn a lot
about motivating people from techniques used by w hale trainers at Sea World in San Diego. Are the “ insights” from these books generalizable to people working in hun-dreds of different countries, in a thousand different organizations, and doing a million different jobs? It’s very unlikely.
Popular books on OB often have cute titles and are fun to read. But they can be dangerous. They make the job of managing people seem much simpler than it really is. They are also often based on the authors’ opinions rather than substantive research.
OB is a complex subject. There are few, if any, simple statements about human behaviour that are generaliz-able to all people in all situations. Should you really try to apply leadership insights you got from a book on Shakespeare or Attila the Hun to managing software engi-neers in the tw enty-first century?
The capitalist system ensures that w hen a need exists, opportunistic individuals w ill surface to fill that need. When it comes to managing people at w ork, there is clearly a need for valid and reliable insights to guide man-agers and those aspiring to managerial positions. How ever, most of the offerings available at your local bookstore tend to be simplistic solutions. To the degree that people buy these books and enthusiastically expect them to provide them w ith the secrets to effective man-agement, they do a disservice to themselves and those they are trying to manage.
Lo o king fo r the Q uick Fix
to O B Issues
Walk into your nearest major bookstore. You w ill undoubtedly find a large section of books devoted to management and managing human behaviour. A close look at the titles w ill find there is certainly no shortage of popular books on topics related to OB. To illustrate the point, consider the follow ing popular book titles that are currently available on the topic of leadership:
• The Leadership Secrets of Attila the Hun(Warner,
1990)
• M ake It So: Leadership Lessons from Star Trek, The Next Generation(Pocket Books, 1996)
• The Art of Leadership by Sun Tzu(Premier, 2000)
• Pow er Plays: Shakespeare’s Lessons in Leadership and M anagement(Simon & Schuster, 2000)
• The Leadership Teachings of Geronimo(Sterling House, 2002)
• Leadership Wisdom from the M onk Who Sold His Ferrari(Hay House, 2003)
• Tony Soprano on M anagement: Leadership Lessons Inspired by America’s Favorite M obster(Berkley, 2004)
Organizations are always looking for leaders; and man-agers and manager-w annabes are continually looking for w ays to hone their leadership skills. Publishers respond to this demand by offering hundreds of titles that proclaim to provide insights into the complex subject of leadership. People hope that there are “ shortcuts” to leadership suc-cess and that books like these can provide them w ith the secrets to leadership that others know about and w hich they can quickly learn through these books.
LEA RN I N G A BO U T
Y O U R
S
ELF
EX ERC I SE
The Co mpeting Values Framewo rk:
Identifying Yo ur Interperso nal Skills
From the list below, identify what you believe to be your strongest skills, and then identify those in which you think your per-formance is w eak. You should identify about 4 strong skills and 4 w eak skills.
1. Taking initiative 2. Goal setting
3. Delegating effectively
4. Personal productivity and motivation
5. M otivating others
6. Time and stress management
7. Planning
8. Organizing
9. Controlling
10. Receiving and organizing information
11. Evaluating routine information
12. Responding to routine information
13. Understanding yourself and others
14. Interpersonal communication
15. Developing subordinates
16. Team building
17. Participative decision making
18. Conflict management
19. Living w ith change 20. Creative thinking
21. M anaging change
22. Building and maintaining a pow er base
23. Negotiating agreement and commitment
24. Negotiating and selling ideas
Sc
oring Key:
These skills are based on the Competing Values Framew ork (pages 27–29), and they appear in detail in Exhibit 1-6 on page 23. Below, you w ill see how the individual skills relate to various managerial roles. Using the skills you identified as strongest, identify w hich roles you feel especially prepared for right now. Then, using the skills you identified as w eakest, identify areas in which you might want to gain more skill. You should also use this information to determine whether you are currently more internally or externally focused, or oriented more tow ard flexibility or control.
Director: 1, 2, 3 M entor: 13, 14, 15
Producer: 4, 5, 6 Facilitator: 16, 17, 18
Coordinator: 7, 8, 9 Innovator: 19, 20, 21
M onitor: 10, 11, 12 Broker: 22, 23, 24
After review ing how your strengths and w eaknesses relate to the skills that today’s managers and leaders need, as illus-trated in Exhibit 1-6, you should consider w hether you need to develop a broader range of skills.
