Chapter 1: Organizational
Behavior
Organizational Behavior
• How people act and react in organizations
– And an understanding of why people behave the
way they do
• Organizations are social entities
• Combine management, psychology, &
sociology
Why is OB Important?
• Helps you influence the behavior of others
(subordinates, managers, coworkers, etc.)
• Helps you understand and influence your own
behavior
• Technical expertise will only get you so far
– Need to be able to accomplish things through
others
• Employee behaviors impact financial
performance
Historical Perspective of OB
•
•
•
•
Human Relations Movement
Quality Movement
E-Business
Human & Social Capital
Human Relations Movement
• The Hawthorne Studies
– People’s attitudes about management affect their
performance
– Recent re-analysis
• Elton Mayo & Mary Parker Follett
– People aren’t machines – human factors should be
considered
• Motivation, attitudes, emotional state, etc.
Human Relations Movement
• Douglas McGregor’s Theory X & Theory Y
Theory X
– Most people dislike work
and want to avoid it
– People require close
direction
– People want to avoid
responsibility and have
little ambition
• Theory Y
– Work is a natural activity
– People can be self-directed
if they are committed to
the objective
– Rewards help commitment
– Most employees accept
and seek responsibility
– Employees have
imagination, ingenuity and
creativity
Quality Movement
• Began in 1980s in US in response to Japan
• Total Quality Management (TQM)
– Continuous improvement
– Customer focused
– Employee driven*
• W. Edwards Deming
– Early leader of quality movement
– Expert in statistical process control techniques
– Claimed importance of employees in TQM
E-Business
• Internet changed communication
• Easier to communicate more information to
more people
• Net Generation
– Value freedom, want customization, skeptical of
info., value integrity, good collaborators, like
speed and innovation.
Human & Social Capital
• Human Capital
– An individual’s talents & skills
– Important to all “knowledge workers”
– Must be grown & developed
• Social Capital
– An individual’s professional social network
– Good relationships with boss, co-workers,
subordinates, etc.
– Helps you get things done & move career forward
21st Century Management
• Management: working with & through others
to achieve organizational objectives
• Individual  Teams
• Command & Control  Participative Mgt.
• Ego-centered  Customer Centered
• Centralized  Decentralized
Clark Wilson Management Skills
Research
• Dealing effectively with people is the
cornerstone of effective management
• More skilled managers have more productive
and happier employees
• Failed managers tend to overestimate their
skill set
Contingency Theories
• There is no one best way to do something
• The appropriate managerial action depends
on the specifics of the situation
• No universal rules or laws
• Roberta received her first managerial assignment, after completing
the management training program, to be the new supervisor of the
Customer Complaints department. Friday afternoon, she talked to
several managers she had worked with in the training program, and
they confirmed what she had heard elsewhere – the department had
a terrible reputation, and it was deserved.
• Monday Roberta arrived early to familiarize herself with the office
before the staff arrived. Much to her surprise, over half of them were
already there. Within fifteen minutes, the rest had arrived. This
seemed like a good time for an informal meeting. Roberta walked
out of her office and addressed the group as they sat at their desks.
• “Good morning, I'm Roberta James, your new supervisor. I’m looking
forward to getting to know all of you and to working with you to
develop and maintain a good Customer Complaint department.”
Suddenly the phone started ringing, but no one answered it. “Why
doesn't someone answer the phone?” Roberta asked. One staff
member replied, “It's not 9:00 yet, we're not open.” “They'll call
back,” said another.
Corporate Social Responsibility
• Corporations have an obligation to constituent
groups in society other than stockholders and
beyond that prescribed by law or union
contract.
Corporate Social Responsibility
Pyramid
Is Business Ethics Really a Problem?
• 62% occasionally observe unethical behavior
• Senior managers think their companies are
more ethical than lower level employees
• 64% mislead about finances
• 41% of applicants lied about their education
7 Moral Principles for Managers
•
•
•
•
•
•
•
Dignity of human life
Autonomy
Honesty
Loyalty
Fairness
Humaneness
The common good
Ethical Climate
• In order to create an ethical climate, managers
should:
– Behave ethically themselves
– Screen job applicants
– Have a code of ethics
– Provide ethics training
– Reward ethical behavior
– Assign responsibility for ethical climate to
someone (chief ethics officer)
Jonica Gunson is the environmental compliance manager for a small
plastics manufacturing company. She is currently faced with the
decision whether or not to spend money on new technology that will
reduce the level of a particular toxin in the wastewater that flows out the
back of the factory and into a lake.
The factory's emission levels are already within legal limits. However,
Jonica knows that environmental regulations for this particular toxin are
lagging behind scientific evidence. In fact, a scientist from the university
had been quoted in the newspaper recently, saying that if emission
levels stayed at this level, the fish in the lakes and rivers in the area
might soon have to be declared unsafe for human consumption.
Further, if companies in the region don't engage in some self-regulation
on this issue, there is reason to fear that the government — backed by
public opinion — may force companies to begin using the new
technology, and may also begin requiring monthly emission level reports
(which would be both expensive and time consuming).
But the company's environmental compliance budget is tight. Asking for
this new technology to be installed would put Jonica's department overbudget, and could jeopardize the company's ability to show a profit this
year.
The Performance of Ethics
• Ethical companies outperform unethical ones by
200-300 % in market value (Business and Society
Review)
• $30K invested in 30 ethical companies over 30 years
would yield 4.7x to the Dow Jones Industrials
(Johnson & Johnson Research Study)
• 40% of consumers would boycott an unethical
company, 20% have done so (Conference Board)
• Workers in ethical companies are 6x more loyal
(Hudson Institute)