Introduction tothe Field ofOrganizational Behavior

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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Practicing OB at Brasilata

Brasilata has become one of

Brazil’s most innovative and

productive companies by applying

organizational behavior

knowledge, including employee

involvement, creativity,

motivation, leadership, teamwork,

and organizational culture.

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Organizational Behavior and Organizations

Organizational behavior

• The study of what people think,

feel, and do in and around

organizations

Organizations

• Groups of people who work

interdependently toward some

purpose

• Collective entities – people

interact with each other in an

organized way.

• Collective sense of purpose

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Satisfy the need to understand and predict

Helps us to test personal theories

Influence behavior – get things done

OB improves an organization’s financial

health - leverages human capital

OB is for everyone – regardless of profession

or position one’s hold in the organization

Why Study OB?

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Organizational Effectiveness

The ultimate dependent

variable in OB

Old approach -- achievement of

stated goals

Problem with goal attainment

• Could set easy goals

• Company might achieve wrong

goals

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Four Perspectives of Organizational Effectiveness

Stakeholder Perspective

High-Performance WP Perspective

Organizational Learning Perspective

Open Systems Perspective

NOTE: Need to consider all four perspectives

when assessing a company’s effectiveness

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Organizations are complex systems that

“live” within (and depend upon) the external

environment

Effective organizations

• Maintain a close “fit” with changing conditions

• Transform inputs to outputs efficiently and flexibly

Foundation for the other three organizational

effectiveness perspectives

Open Systems Perspective

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•Products/services

•Shareholder dividends

•Community support

•Waste/pollution

Technological subsystem

Marketing /Sales

subsystem

Production subsystem

subsystem

Engineering

subsystem

Accounting subsystem

•Raw materials

•Human resources

•Information

•Finances

•Equipment

FeedbackFeedback

Managerial subsystem

Transforming inputs to outputs

Open Systems Perspective

External

Environment

External environment - raw materials, job

applicants, financial resources, etc.

Internal subsystems – transform outputs into

inputs e.g. departments, teams, work

processes, etc,

Organization – Environment Fit - effective

when organizations maintain a good “fit with

their external environment.

Internal Subsystems Effectiveness - how

well the organization transforms inputs to

outputs

Open Systems Perspective

McShane/Von Glinow OB 6e © 2013 The McGraw-Hill Companies, Inc. All rights reserved9

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An organization’s capacity to acquire, share,

use, and store valuable knowledge

Need to consider both stock and flow of

knowledge

• Stock: intellectual capital

• Flow: org learning processes

of acquisition, sharing, use,

and storage

Organizational Learning Perspective

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Intellectual Capital

Relationship

CapitalValue derived from satisfied customers,

reliable suppliers, etc.

Structural

Capital

Knowledge captured in systems and

structures (documentation, finished

products)

Human

CapitalKnowledge that people possess and

generate (KSAO)

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Employee knowledge, skills, and abilities

Competitive advantage because:

• Helps discover opportunities and minimize threats

in the external environment

• Rare and difficult to imitate

• Nonsubstitutable: Not easily replaced by

technology

The Human Capital Advantage

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Organizational Learning Processes

Knowledge

Acquisition

Knowledge

Sharing

Knowledge

Use

Knowledge

Storage

• Information and ideas from the external environment (hiring people, acquiring companies, experimentation, etc)

• Communication

• Training

• Info systems

• Observation

• Awareness

• Sensemaking

• Autonomy

• Empowerment

• Human memory

• Documentation

• Practices/habits

• Databases

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The storage and preservation of intellectual

capital

Retain intellectual capital by:

• Keeping knowledgeable employees

• Transferring knowledge to others

• Transferring human capital to

structural capital

Successful companies also unlearn (unlearn

routines and patterns of behavior, removes

knowledge that no longer adds value)

Organizational Memory

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High-Performance Practices at American Express

American Express encourages

employees to go “off script,”

meaning that they are

empowered to customize their

conversations rather than rely on

memorized statements. This

autonomy is one of several high

performance work practices.

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Workplace practices that leverage the

potential of human capital

Four HPWPs (likely others)

1. Employee involvement

2. Job autonomy (motivation, improve decision-

making, organizational responsiveness, and

commitment to change)

3. Employee competence (training, selection of

people with KSAO)

4. Performance-based rewards (financial and non-

financial rewards valued by employees)

Need to “bundle” them – work best together

High-Performance Work Practices

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Corporate Social Responsibility at MTN Group in Africa

At MTN Group, Africa’s largest

mobile (cell) phone company,

employees help the community

and environment through the

company’s award-winning “21

Days of Y’ello Care” program.

This photo shows MTN

employees in Uganda planting

trees during a Y’ello Care event.

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Stakeholder Perspective

Stakeholders: entities who affect

or are affected by the firm’s

objectives and actions

Personalizes the open systems

perspective (identifies people

and social entities in the

environment

Challenges with stakeholder

perspective:

• Stakeholders have conflicting

interests

• Firms have limited resources to

satisfy all stakeholder needs

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Values and ethics prioritize stakeholder

interests

Values

• Stable, evaluative beliefs, guide preferences for

outcomes or courses of action in various situations

Ethics

• Moral principles/values, determine whether actions

are right/wrong and outcomes are good or bad

Stakeholders: Values and Ethics

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Stakeholders and CSR

Stakeholder perspective includes

corporate social responsibility

(CSR)

• Benefit society and environment

beyond the firm’s immediate

financial interests or legal

obligations

• Organization’s contract with

society

Triple bottom line

• Economy, society, environment

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Economic, social, and cultural connectivity

with people in other parts of the world

Improved communication and transportation

systems have increased globalization

Effects of globalization on organizations

• Cost efficiencies, innovation, knowledge

• Increasing diversity (cultural values, leadership,

etc)

• Increasing competitive pressures, intensification

(additional knowledge and skills, global mindset)

Globalization

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Increasing Workforce Diversity

Surface-level vs deep-level

diversity

Implications

• Better knowledge, decisions,

representation, financial returns

• Manage challenges of diversity

(e.g. teams, conflict)

• Ethical imperative of diversity

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Work/life balance

• Minimizing conflict between work and nonwork

demands number one indicator of career success

Virtual work

• Using information technology to perform one’s job

away from the traditional physical workplace

• Telecommuting – issues of social isolation,

emphasis on face time, employee self-leadership

Emerging Employment Relationships

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Systematic research anchor

• OB knowledge is built on systematic research

• Evidence-based management – decisions and

actions based on research evidence rather than

fads, hype, and untested assumptions

Multidisciplinary anchor

• Many OB concepts adopted from other disciplines,

psychology (individual and interpersonal behavior),

sociology, communications, marketing, info

systems.

• OB develops its own theories, but scans other

fields

Organizational Behavior Anchors

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Contingency anchor

• A particular action may have different

consequences in different situations (no single

solution is best all the time)

• Need to diagnose the situation and select best

strategy under those conditions

Multiple levels of analysis anchor

• Individual, team, organizational level of analysis

• OB topics usually relevant at all three levels of

analysis

Organizational Behavior Anchors (con’t)

Introduction tothe Field ofOrganizational Behavior