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MGMT 330 ORGANIZATIONAL BEHAVIOUR 1 CHAPTER 1 THE MEANING AND SCOPE OF ORGANIZATIONAL BEHAVIOUR 2 WHAT IS OB? • A study of human behaviour, attitudes and performance in organization. • Interaction between individual and organization • An interdisciplinary – drawing on concepts from social and clinical psychology, sociology, cultural anthropology, industrial engineering and organizational psychology. 3 UNIT OF ANALYSIS • Individual • Group • Organization 4 RELATIONSHIP BETWEEN OB AND MANAGEMENT • Organizational behaviour: – Interaction between individual and organization • Management: – A critical element in the economic growth of the country – Essential in all organized effort – The dynamic, life giving element in every organization 5 WHY STUDY OB? • Cherrington identified three main objectives in organizational behaviour: – Explain – Identify – Control 6 CHAPTER 2 THE BEGINNINGS OF STUDIES 7 CLASSICAL SCHOOL OF MANAGEMENT • Consists of three streams of thought: – Bureaucratic organization • Max Webber – Administrative management • How organizations should be managed and structured • Henri Fayol and Chester Bernard – Scientific management • Application of scientific methods to increase individual worker’s productivity • Frederick Winslow Taylor, Henri Gant and Frank and Lillian Gilbreth 8 HAWTHORNE STUDIES • The Test Room Studies • Interviewing Studies • Observational Studies 9 HUMAN RELATIONS SCHOOL • Abraham Maslow – Motivation theory • Human needs • Human behaviour • Hierarchy of needs • Douglas Mc Gregor – Theory X and Y 10 EARLY BEHAVIOUR THEORY • Mary Parker Follett – Management is getting things done with and through other people – Sharing of empowerment through working together between employer and employee – Conflict solution through integration • Hugo Munsterberg – Implement psychology approach in organization’s problem – Psychology study is very relevant in organizational behaviour 11 DISCIPLINE OF ORGANIZATIONAL BEHAVIOUR • Psychology • Sociology • Political science • Economy • Ecology 12 CHALLENGES IN ORGAZATIONAL BEHAVIOUR • Business and industry towards globalization and international • Quality is more important • Society is concern on management ethics • Increase of diversity among employees 13 CHAPTER 3 BEHAVIOURAL THEORIES OF ORGANIZATION 14 PSYCHOLOGICAL PERSPECTIVE • Psychology discipline is the most influent discipline in an organization • Focus on understanding individual’s behaviour • Biographic • Talent • Personality • Learning • Motivation 15 SOCIOLOGICAL PERSPECTIVE • Focus on group behaviour • Conflict and counselling • Communication 16 POLITICAL PERSPECTIVE • Empowerment and authority are part of political discipline • Distribution of power • Direction of attempts to influence: – Upward – Downward – Laterally 17 ECONOMICS PERSPECTIVE • Economics perspective helps managers to make decision • Techniques on problem solving • Decision making: – Individual – Group 18 ECOLOGICAL PERSPECTIVE • Organization as a sub-system of society • Environmental factors: – Suppliers – Distributors – Customers – Competitors 19 CHAPTER 4 INDIVIDUAL BEHAVIOUR IN ORGANIZATION 20 ATTITUDES • Reflects an individual’s background and experiences • Components of attitudes: – Affective component – Cognitive component – Behavioural component 21 WORK ATTITUDES • Two key work attitudes: – Job satisfaction – Organizational commitment • Job satisfaction: – Sources of job satisfaction – Relation to job behaviour • Organizational commitment: – Sources of commitment – Relation to job behaviour 22 PERCEPTION • The process by which people select, organize, interpret and respond to information form the world around them • Basic element in the perceptual process: – Environmental stimuli – Observation – Perceptual selection – Perceptual organization – Interpretation – Response 23 PERCEPTUAL PROCESS • The perceptual process is a sequence of steps that begins with the environment and leads to our perception of a stimulus and an action in response to the stimulus. • The process is continual but we do not spend time thinking about the actual process that occurs when we perceive many stimuli that surround us at any moment 24 ENVIRONMENTAL STIMULI • Everything in our environment that has the potential to be perceived • Includes anything that can be seen, touched, tasted, smelled, heard, movements of the arms and legs or change in position of the body in relation to objects in the environment • Objects and environment people in the immediate 25 OBSERVATION • Taste • Smell • Hearing • Sight • Touch 26 PERCEPTUAL SELECTION • Depends on several factors: – External factors: • • • • • • Size Intensity Contrast Motion Repetition Novelty and familiarity – Internal factors: • Personality • Learning • Motivation 27 PERCEPTUAL ORGANIZATION • Perceptual organization – Continuity – Closure – Proximity – Similarity 28 INTERPRETATION • Perceptual errors – Perceptual defense – Stereotyping – Halo effect – Projection – Expectancy effects • Attributions – Internal versus external causes – Causes for success and failure 29 RESPONSE • Convert – Attitudes – Motivations – Feelings • Overt – Behaviour 30 COGNITIVE DISSONANCE • Being used to describe the feeling of discomfort that results from holding two conflicting beliefs • Happens when an individual’s behaviour conflicts with beliefs that are integral to his or her self-identity • How to reduce? – Focus – Reduce – Change 31 PERSONALITY TRAITS/ TYPES • Heredity • Experience • Environment • Situation 32 PERSONALITY TRAITS THAT INFLUENCE ORGANIZATIONAL BEHAVIOUR • Locus of control • Goal orientation • Authoritarianism • Machiavellianism • Self-esteem 33 CHAPTER 5 GROUP BEHAVIOUR IN ORGANIZATION 34 WHAT IS A GROUP? • Members who share goals, communicate with one another over a period of time • Group classification: – Formal group – Informal group 35 FORMAL AND INFORMAL GROUPS • Formal groups – Functional group – Task group: • Permanent task group • Temporary task group • Informal groups – Interest group – Friendship group 36 WHY PEOPLE JOIN GROUPS? • Generating ideas • Networking • Task completion – Accuracy – Speed – Creativity – Cost 37 GROUP NORMS AND DYNAMICS • Behavioural norms – Rules of behavioural that are shared by members – Main function is to regulate and standardize the behaviours viewed as important to members • Performance norms – Exists when three criteria have been met: • Standard of appropriate behaviour • Members must agree on the standard • Members must aware that group support the standard 38 ROLE AND ROLE EXPECTATIONS • Role – Cluster of tasks and behaviours that a person should perform • Role expectation – What are you expected to do depending on what role you obtain • Example – If you are a police officer, then as your role as a police officer you would expected to protect the country 39 GROUP MEMBER ROLES • Task-oriented role – Involves facilitating and coordinating work-related decision making – Initiating, seeking information, giving information, coordinating and evaluating • Relation-oriented role – Involves building team-centered feelings and social interactions – Encouraging members, harmonizing, encouraging participation, expressing, following 40 GROUP MEMBER ROLES • Self-oriented role – Involves the person’s self-centered behaviours that are at the expense of the team or group – Blocking progress, seeking recognition, dominating, avoiding 41 INFORMAL ORGANIZATION AND ITS IMPACT • Informal organization is defined by the patterns, behaviours and interactions that stem from personal rather than official relationship • Emphasis is on people and their relationships • Workers may create an informal group to go bowling, form a union, discuss work challenges 42 EFFECT OF DIVERSITY ON GROUP PERFORMANCE • Poses a threat to the organization’s effective functioning • Expressed discomfort with the dominant group’s values • Members of the group want to become like the dominant • Positive multiculturalism 43 CHAPTER 6 ORGANIZATIONAL STRUCTURE AND ITS IMPACT ON OB 44 WHAT IS ORGANIZATION? • Organizations are formed so that people who share a common set of values or interest can work together towards achieving common objective • Elements of organization: – People – Objectives – Structure 45 WHAT IS ORGANIZATION? • Amitai Etzioni – Organization is a social unit or human grouping, structured for the purpose of attaining specific goals • Stoner – Organization is a pattern of relationships through which people under direction of managers pursue their common goals 46 WHAT IS ORGANIZATION? • Vision • Mission • Strategy • Planning – Short term – Long term 47 ORGANIZATIONAL STRUCTURE • Distribution and segregation of work • Organizational chart • Key factors in organizational structure – Environmental factors – Strategic factors – Technological factors – Integrative framework 48 ORGANIZATIONAL STRUCTURE • Environmental factors – Suppliers – Distributors – Competitors – Customers • Strategic factors – Low cost – Differentiation – Focused 49 ORGANIZATIONAL STRUCTURE • Technological factors – Technology – Task interdependence • Pooled interdependence • Sequential interdependence • Reciprocal interdependence • Integrative framework 50 MECHANISTIC STRUCTURE • Individuals and functions will behave in predictable ways • Characteristic of mechanistic structure – Formal rules and regulations – Centralization of decision making – Defined job responsibilities – Rigid hierarchy of authority 51 IMPACT OF MECHANISTIC STRUCTURE ON ORGANIZATIONAL BEHAVIOUR • Tightly control the behaviour of employees • Employees follow extensive impersonal rules and procedures in making decisions • Each employee’s job involves specified area of expertise • Employees are appointed and not elected 52 ORGANIC STRUCTURE • Characteristic of organic structure – Low to moderate use of formal rules and regulations – Decentralized and shared decision making – Broadly defined job responsibilities – Flexible authority structure with fewer levels in the hierarchy – Job specialization is low 53 IMPACT OF ORGANIC STRUCTURE ON ORGANIZATIONAL BEHAVIOUR • Emphasizes employee competence rather than employee’s formal position in the hierarchy • Flexible hierarchy and empowers employees to make decision 54 NEW FORMS OF ORGANIZATION • Functional design – Involves creation of positions, teams and departments on the basis of specialized activities • Place design – Involves establishing an organization’s primary units geographically • Product design – Involves the establishment of self-contained units, each capable of developing, producing, marketing and distributing its own goods or services 55 NEW FORMS OF ORGANIZATION • Multidivisional design – Tasks are organized by division on the basis of product/geographic markets • Multinational design – Produce and sell products/services in two or more countries • Network design – Focuses on sharing authority, responsibility and resources • Virtual design – Coordinate and link people from many different 56 locations CHAPTER 7 UNDERSTANDING WORK TEAMS 57 STAGES OF TEAM DEVELOPMENT • Forming stage • Storming stage • Norming stage • Performing stage • Adjourning stage 58 FORMING STAGE • Focus on: – Defining or understanding goals – Developing procedures • Involves getting acquainted and understanding leadership and other member roles • Deal with members’ feelings 59 STORMING STAGE • Manage conflict among members • This stage may be shortened or can be avoided if members use a team-building process from the beginning • Involves development of decision-making, interpersonal and technical capabilities 60 NORMING STAGE • Sharing of information, different options acceptance of • Team members set rules by which the team will operate • Developing of cooperation and sense of shared responsibility 61 PERFORMING STAGE • Team members show how effectively and efficiently they can achieve results together • The roles of individual members are accepted and understood • At this stage, teams may differ: – Continue to learn and develop from their experiences – May perform only the level needed for survival 62 ADJOURNING STAGE • Termination of work behaviours disengagement from social behaviours and • Normally happens when team has achieved their goals • A problem-solving or a cross-functional team will investigate and report on specific issue within 6 months 63 DIFFERENCE BETWEEN GROUPS AND TEAMS • A group is two or more individuals who come into personal and meaningful contact on a continuing basis • Example: departments, divisions and business units • Teams are much smaller than organizational groups 64 TYPES OF TEAMS • Functional teams • Problem-solving teams • Cross-functional teams • Self-managed teams • Virtual teams 65 FUNCTIONAL TEAMS • Include individuals who work together daily on similar tasks • Exist within functional departments: – Marketing – Production – Finance – Human resource 66 PROBLEM-SOLVING TEAMS • Focus on specific issues in their areas of responsibility, develop potential solutions and empowered to take action within defined limits • Members are employees from a specific department who meet at least once or twice a week for an hour or two 67 CROSS-FUNCTIONAL TEAMS • Bring together people from various work areas to identify and solve mutual problems • Effective in situations that require innovation, speed and focus on responding to customer needs • Members from several specialties or functions and deal with problems 68 SELF-MANAGED TEAMS • Consist of employees who must work together effectively daily to manufacture an entire product or service to customers • The teams are empowered (potency, meaningfulness, autonomy and impact) 69 VIRTUAL TEAMS • A group of individuals who collaborate through various information technologies on one or more projects while being at two or more locations • Work primarily across distance, time and organizational boundaries 70 BUILDING HIGH-PERFORMANCE TEAMS • • • • • • • • Clear goals Clear communication Clear role Members’ behaviour Proper decision-making procedure Involvement by all members Rules and regulations of the team Know the complete process of a team 71 WHY TEAMS FAIL? • Conflict exist • Lack of resources • Different personality, experience and value • Unsuitable goals 72 CHAPTER 8 LEADERSHIP AS INFLUENCING THE BEHAVIOUR OF OTHERS 73 MANAGERS AND LEADERS • Managers: – Direct the work of others and is responsible for the results – Effective managers bring a degree of order and consistency to the work for their employees • Leaders: – Exhibits the attributes of leadership (ideas, vision, values, influencing others and making decisions) – Do no perform management functions (planning, organizing, leading and controling) 74 TYPES OF LEADERS • Transactional leaders – Involves motivating and directing followers through contingent reward-based practices – Three components to achieve performance goals • Contingent rewards • Active management by exception • Passive management by exception • Charismatic leaders – Emphasizes shared vision and values – Promotes shared identity – Exhibits desired behaviours – Reflects strength 75 TYPES OF LEADERS • Transformational leaders – Anticipating future trends – Inspiring followers to understand and embrace a new vision of possibilities – Developing others to be leaders or better leaders – Building organization or group into a community of challenged and rewarded learners 76 LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR • Hersey and Blanchard’s Situational Model – Based on the amount of relationship and task behaviour that a leader provides to subordinates in a situation – The amount of relationship and task behaviour is based on the readiness of the followers to perform needed tasks 77 HERSEY AND BLANCHARD’S SITUATIONAL MODEL Relationship Behaviour High Participating Style Selling Style Delegating Style Telling Style Low Low High Task Behaviour 78 LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR • Vroom-Jago Leadership Model – Developed by Victor Vroom, in collaboration with Phillip Yetton and later Arthur Jago – Focuses on the leadership role in decision-making situations – Prescribers a leader’s choices among five leadership styles based on seven situational factors, recognizing the time requirements and costs associated with each style 79 VROOM-JAGO LEADERSHIP MODEL 80 LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR • Theory X and Theory Y – Developed by Douglas McGregor in 1957 – Theory X is a composite of propositions and underlying beliefs that take a command and control view of management based on a negative view of human nature – Theory Y is a composite of propositions and beliefs that take a leadership and empowering view of management based on a positive view of human nature 81 LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR • Managerial Grid – Developed by Robert Blake and Jane Mouton – Identifies five leadership styles that combine different degrees of concern for production and concern for people • • • • • Impoverished style Country club Produce or perish Middle of the road Team 82 BLAKE MOUTON MANAGERIAL GRID 83 LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR LEADERSHIP STYLES AND THEIR IMPACT ON ORGANIZATIONAL BEHAVIOUR BEHAVIOURAL APPROACH TO LEADERSHIP AND AUTHORITY • Visionary • Confident • Trustworthy • Thoughtful • Considerate • Charismatic ethical and 86 CHANGING LEADERSHIP REQUIREMENTS • • • • Assess current leadership talent Create leadership strategy Review and align talent management system Develop comprehensive approach to leadership development • Offer specific courses in leadership • Provide individual coaching • Assist senior leadership in combining organizational change and leadership development 87 CHAPTER 9 COMMUNICATION AS THE LIFE BLOOD OF THE ORGANIZATION 88 WHAT IS COMMUNICATION? • Exchange of information and ideas to create understanding between two parties • Not limited to only verbal communication 89 IMPORTANCE OF COMMUNICATION TO ORGANIZATION • To carry out the thoughts and visions of an organization to the people • To convey directions and provide synchronization • Through phone, fax, email, letter, website, social networking websites • More crucial when we are on a mission or need to fulfill a goal 90 COMMUNICATION FLOWS IN ORGANIZATION • Downward channels • Upward channels • Horizontal channels • Grapevine • External networking 91 COMMUNICATION PROCESS • Sender (encoder) – Sender is the source of information and the initiator of the communication process – Encoding is the process of translating thoughts or feelings into a medium (writing, visual or spoken) that conveys the meaning intended – Five principles of communication: • • • • • Relevancy Simplicity Organization Repetition Focus 92 COMMUNICATION PROCESS • Receiver (decoder) – Receiver is the person who receives and decodes the sender’s message – Decoding is translating messages into a form that has meaning to the receiver 93 COMMUNICATION PROCESS • • • • • • • Sender has an idea Sender encodes the idea Sender transmits the message to the sender Receiver gets the message Receiver decodes the message Receiver sends feedback Noise 94 TYPES OF COMMUNICATION • Interpersonal • Formal and informal • Internal and external • Non-verbal • Active listening 95 GRAPEVINE • Organization’s informal communication system • Main features: – Exist in every organization – Difficult to eliminate or control – Spontaneous in nature – Travels very fast • Types of chains – Single-strand chain – Cluster chain – Gossip chain 96 COMMUNICATIONS NETWORKS AND THEIR EFFECTIVENESS • Star network • Y network • Chain network • Circle network • All-channel network 97 COMMUNICATIONS NETWORKS AND THEIR EFFECTIVENESS Factor Degree of centralization Leadership predictability Average group satisfaction Range in individual member satisfaction Star Very high TYPE OF COMMUNICATION NETWORK Y Chain Circle All-Channel High Moderate Low Very low Very high High Moderate Low Very low Low Low Moderate Moderate High High Moderate Low High Very low 98 COMMON BARRIERS TO EFFECTIVE COMMUNICATION • • • • • • • • • Noise Semantics Language routines Lying and distortion Perceptual differences Language differences Filtering of information Poor listening Information overload 99 CROSS-CULTURAL COMMUNICATION • Open communication • Dialogue • Crisis communication • Feedback 100 HOW TO IMPROVE COMMUNICATION • Understand the communication process • Able to talk and listen • Respect the receiver • Establish rapport 101 CHAPTER 10 UNDERSTANDING DECISION-MAKING BEHAVIOUR 102 DECISION-MAKING (HEART OF MANAGEMENT) • Conscious process of making choices among one or more alternatives for getting the desired outcome • Includes defining problems, gathering information, generating alternatives and choosing a course of action 103 RATIONAL DECISION-MAKING PROCESS • Identify the problem or opportunity • Think of alternative solutions • Evaluate alternatives and select solution • Implement and evaluate solution chosen 104 NON-RATIONAL DECISION-MAKING PROCESS • Problem not clearly defined • Knowledge is limited to possible alternatives • Choice of a satisfying alternative • Managerial action 105 LIMITS TO RATIONALITY • Satisficing • Limited search • Inadequate information and control 106 DECISION MAKING PROCESS • • • • • • • Define and diagnose the problem Set goals Search for alternative solutions Compare and evaluate alternative solutions Choose among alternative solutions Implement the solution selected Follow up and control the results 107 DECISION PREMISES • Factual premises • Value premises 108 PARTICIPATION IN DECISION-MAKING • Known as participative management • Lighten the burden of the manager • Makes the employees feel accepted and appreciated • Will increase performance motivation, innovation and 109 PARTICIPATION IN DECISION-MAKING • Factors that can help participative management: – Top management is continually involved – Middle and supervisory managers are supportive – Employees trust managers – Employees are ready – Employees do not work in interdependent jobs – Participative management is implemented with TQM 110 BUILDING DECISION-MAKING SKILLS • Create a constructive environment • Generate good alternatives • Explore these alternatives • Choose the best alternatives • Check your decision • Communicate your decision and take action 111 CHAPTER 11 MOTIVATION PEOPLE FOR INCREASED PRODUCTIVITY 112 WHY MOTIVATE? • Motivation is a psychological state that exist whenever internal and / or external forces stimulate, direct or maintain behaviours • By understanding employee motivation, managers can increase productive behaviours, enables managers to decrease disruptive behaviours such as tardiness, theft and loafing • Motivating employees are important to ensure a productive and harmonious work environment • Can affect organizational climate 113 HOW TO MOTIVATE? • Through job design – Motivator factors – Hygiene factors • Through performance expectations – Expectancy model • Through equity 114 STICK AND CARROT APPROACH • Idiom that refers to a policy of offering a combination of rewards and punishment to induce behaviour • Sometimes it takes both a carrot (goal) and a stick (motivator) to overcome procrastination and get the job done • Most people, rewards work better than penalties 115 MANIPULATING WORKERS • Most managers engage in some form of manipulation to get employees to do their best • An employer may use inappropriate manipulation to coerce an employee into doing something he doesn’t want to do by threatening or implying some manner of punishment • Example: threats, fear, bribery, pressure, deceit, charm 116 EXTRINSIC MOTIVATORS • Factors external to the job • Includes company policy and administration, technical supervision, salary, fringe benefits, working conditions and interpersonal relations • These factors are associated with an individual’s negative feelings about job and are related to the environment in which the job is performed 117 INTRINSIC MOTIVATORS • Directly related to the job and are largely internal to the individual • Includes the work itself, advancement and responsibility recognition, • These positive feelings are associated with the individual’s experiences of achievement, recognition and responsibility 118 WORK DESIGN • Determined by factors that cannot be easily changed without changing the technology or the structure of an entire work unit • Enriched jobs are more motivating than jobs that are narrow in scope • Example: – Job enlargement – Job enrichment – Team management 119 REWARDS SYSTEM • The ability of rewards to motivate individuals or team depends on six factors: – Availability – Timeliness – Performance contingency – Durability – Equity – Visibility 120 MANAGERS’ PERCEPTION • High internal work motivation • High-quality work performance • High satisfaction with the work • Low absenteeism and turnover 121 SATISFIER AND DISSTISFIER • Herzberg’s Two-Factor Theory – Relationship between job satisfaction and motivation is a complicated one – He discovered that the presence of a particular job characteristic, such as responsibility might increase job satisfaction – Lack of responsibility didn’t necessarily produce dissatisfaction • Hygiene factors • Motivator factors 122 MASLOW’S HIERARCHY OF NEEDS • Abraham H. Maslow suggested that people have a complex set of exceptionally strong needs, which can be arranged in a hierarchy • Five types of needs: – Physiological – Security – Affiliation – Esteem – Self-actualization 123 EXPECTANCY THEORY • Work effort is directed toward behaviour that is believed to produce desired outcomes • Effort is employee’s actual exertion of energy and motivation • Three concepts of effort level: – Expectancy – Instrumentality – Valence 124 CHAPTER 12 UNDERSTANDING ORGANIZATIONAL CONFLICT AND POLITICS 125 ORGANIZATIONAL CONFLICT • Conflict refers to a process in which one party perceives that its interests are being opposed or negatively affected by another party • Negative outcomes: – Loss of skilled employees – Sabotage – Low quality of work • Positive outcomes: – Creative alternatives – Increased motivation and commitment 126 ORGANIZATIONAL POLITICS • When employees are in group, there will be an individual who will practice power to influence others in the group • Influence tactics to gain power that others perceive to be self-serving behaviour to gain self-interests • Can be minimized by providing clear rules for resource allocation 127 WHY CONTROL ORGANIZATIONAL CONFLICT AND POLITICS? • Organizational control comprises formal policies, rules, procedures and records for preventing or correcting deviations form plans and for achieving desired goals • Power in conflict management – Reward power – Coercive power – Legitimate power – Expert power – Referent power 128 INSTRUMENTS OF CONTROL • Preventive Control – Mechanisms intended to reduce errors and thereby minimize the need for corrective action • Corrective Control – Mechanisms intended to reduce or eliminate unwanted behaviours or results and thereby achieve conformity with the organization’s regulations and standards 129 CORRECTIVE CONTROL MODEL • • • • • Define the system Identify key characteristics Set standards Collect information Make comparisons – If okay, continue – If deviations, next step • Diagnose and correct problems 130 CHAPTER 13 ORGANIZATIONAL RESISTANCE TO CHANGE 131 NEED FOR ORGANIZATIONAL CHANGE • Organizational change refers to any transformation in the design or functioning of an organization • Degree of change – Radical change • Occurs when organizations make major innovations in the ways they do business – Incremental change • An ongoing process of evolution over time, during which many small adjustments occur routinely 132 NEED FOR ORGANIZATIONAL CHANGE • Timing of change – Reactive change • Occurs when an organization is forced to change in response to some event in the external or internal environment – Anticipatory change • Occurs when managers make organizational modifications based on forecasts of upcoming events or early in the cycle of a new trend 133 CHANGE PROCESS • • • • Assess the environment Determine the performance gap Diagnose organizational problems Articulate and communicate a vision for the future • Develop and implement an action plan • Anticipate resistance and take action to reduce it • The monitor changes 134 RESISTANCE OF CHANGE • Individual resistance – Perceptions – Personality – Habit – Threats to power and influence – Fear of the unknown – Economic reasons 135 RESISTANCE OF CHANGE • Organizational resistance – Organization design – Organizational culture – Resource limitations – Fixed investments – Inter-organizational agreements 136 MAKING CHANGES IN THE ORGANIZATION • • • • • • • Individuals Teams Leadership Organizational systems Reward systems Organization design Culture 137 ORGANIZATIONAL DEVELOPMENT • Management of change and development of organization • Comprehensive approach to planned change that is aimed at improving the overall effectiveness of organization • Three methods of OD: – Focus group – Survey feedback – Team building 138 CHAPTER 14 IMPACT OF CHANGING ENVIRONMENT ON ORGANIZATIONAL BEHAVIOUR 139 IMPORTANCE OF CULTURE • Culture is the unique pattern of shared assumptions, values and norms that shape the socialization, symbols, language, narratives and practices of a group of people • Elements of a culture – Assumptions – Values and norms – Socialization – Symbols – Language – Narratives – Practices 140 IMPACT OF TECHNOLOGY AND INFORMATION AGE • Technological change – Involves incremental adjustments or radical innovations that affect work-flows, production methods, materials and information system • Information technology – Comprises complex networks of computers, telecommunications systems and remote-controlled devices 141 INCREASED CONCERN WITH QUALITY • Quality control process – Inputs – Transformation operations – Outputs • Importance of quality – Positive company image – Lower costs and higher market share – Decreased liability 142 ENVIRONMENT OF UNCERTAINTY • Uncertainty avoidance is the extent to which members of a culture rely on social norms, procedures and organizations to avoid ambiguity, unpredictability and risk • With high uncertainty avoidance, individuals seek orderliness, consistency, structure, formalized procedures and laws to cover situations in their daily lives 143 IMPORTANCE OF ETHICS AND SOCIAL RESPONSIBILITY • Ethics is a set of values and rules that define right and wrong conduct • These values and rules indicate when behaviour is acceptable and when it is unacceptable • Four basic forces that influence the ethical conduct of individuals and organizations – Cultural forces, legal and regulatory organizational forces, individual forces forces, 144 IMPORTANCE OF ETHICS AND SOCIAL RESPONSIBILITY • Social responsibility holds that managers and other employees have obligations to identifiable groups that are affected by or can affect the achievement of an organization’s goals • Protecting the natural environment • Finding win-win solutions • Evaluating social performance 145 MANAGING DIVERSITY • Categories of diversity – Primary categories – Secondary categories • • • • Changing workforce Gender Race and ethnicity Age 146 CHAPTER 15 MANAGING INDIVIDUAL STRESS 147 NATURE OF STRESS • Stress is the excitement, feeling of anxiety and physical tension that occurs when the demand placed on an individual are thought to exceed his ability to cope • Stressor is the physical or psychological demands from the environment that cause stress • Stressor create stress or potential for stress when an individual perceives them as representing a demand that may exceed that person’s ability to respond 148 PERSONALITY AND STRESS • Many personality traits are related to stress • Example: – Individuals with low self-esteem is more likely to experience stress in demanding work situations than is a person with high self-esteem – Individuals with high internal locus of control may take more effective action, more quickly in coping with a sudden emergency than might individuals with high external locus of control 149 SOURCES OF STRESS • Workload • Job conditions • Role conflict and ambiguity • Career development • Interpersonal relations 150 EFFECTS OF STRESS • Impacts on health • Impacts on performance • Impacts on job burnout 151 MANAGING STRESS • Individual initiatives – Control the sources of stress – Be able to cope with stress • Organizational initiatives – Reducing work stressors – Modifying behaviours – Creating wellness programs 152 CHAPTER 16 CULTIVATING ORGANIZATIONAL CULTURE 153 DYNAMICS OF ORGANIZATIONAL CULTURE • Organizational culture: - represents a complex pattern of beliefs, expectations, ideas, values, attitudes and behaviors shared by members of organization - includes: routine ways of communicating norms shared by individuals and teams 154 DYNAMICS OF ORGANIZATIONAL CULTURE • Organizational culture: - includes: dominant values held by organization philosophy that guides management rules for getting along in organization feeling in the organization 155 HOW CULTURES EMERGE • Top management – Agrees on shared assumptions of human behaviour – Develops a shared vision of cultural values • Behaviours – Employees behave in ways that are consistent with shared values and assumptions 156 HOW CULTURES EMERGE • Results – Financial performance – Market share – Employee commitment • Culture – Strong culture emerges – Traditions are maintained – Socialization practices for new employees 157 TYPES OF ORGANIZATIONAL CULTURE • Bureaucratic culture • Clan culture • Entrepreneurial culture • Market culture 158 BUREAUCRATIC CULTURE • Values formality, rules, standard operating procedures and hierarchical coordination • Its members highly value standardized goods and customer service • Managers view their roles as being good coordinators, organizers and enforces of written rules and standards 159 CLAN CULTURE • Tradition, loyalty, personal commitment, extensive socialization, teamwork, selfmanagement and social influence • Its members recognize an obligation beyond the simple exchange of labour for a salary • Members have strong sense of identification and recognize their common fate in organization 160 ENTREPRENEURIAL CULTURE • High levels of risk taking, dynamism and creativity • Commitment to experimentation, innovation and being on the leading edge • Not only quickly react to changes in the environment but it creates change • Provide new and unique products and rapid growth 161 MARKET CULTURE • Achievement of measurable and demanding goals, especially those that are financial and market-based (sales growth, profitability and market share) • Hard-driving competitiveness and a profit orientation prevail throughout the organization • Relationship between organization is contractual individual and 162 ETHICAL BEHAVIOUR AND ORGANIZATIONAL CULTURE • Impact of culture – Organizational culture involves a complex interplay of formal and informal systems that may support either ethical or unethical behaviour. – An important concept linking organizational culture to ethical behaviour is principled organizational dissent, by which individuals in an organization protest, on ethical grounds, some practice or policy 163 ETHICAL BEHAVIOUR AND ORGANIZATIONAL CULTURE • Whistle-blowing – Disclosure by current of former employees of illegal, immoral or illegitimate organizational practices to people or organizations that may be able to change the practice – The whistle-blower lacks the power to change the undesirable practice directly and so appeals to other either inside or outside the organization 164 FOSTERING CULTURAL DIVERSITY • Challenges • Characteristics of effective diversity culture – Managers and employees must understand that a diverse workforce will embody different perspectives and approaches to work – Managers must recognize learning opportunities and challenges – Organizational culture must create an expectation of high standards of performance and ethics – Organizational culture must stimulate personal development – Organizational culture must encourage openness 165 SOCIALIZATION OF NEW EMPLOYEES • Organizational socialization is the systematic process by which an organization brings new employees into its culture. • Steps in socialization – Careful selection – Challenging early work assignments – Training to develop capabilities with culture – Rewards that sustain culture – Adoption of cultural value policies – Ritual, taboos, rites and stories to reinforce culture – Role model to sustain culture 166