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Chapter-Notes

Organizational Behaviour (University of Waterloo)

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Organizational Behavior

Chapter 1: What is Organizational Behaviour?

Defining Organization Behaviour

 Organizational Behavior is a field of study that investigates the impact that individuals, groups, and structure
have on behaviour within organization
o The aim is to apply such knowledge toward improving organizational effectiveness
 OB is for everyone
o OB is relevant anywhere: people come together and share experiences, work on goals, or meet to solve
problems. OB is not just for managers and employees.
 The Importance of Interpersonal Skills
o Recognition of the importance of developing interpersonal skills is closely tied to the need for
organizations to get and keep high-performing employees
o Creating a pleasant workplace makes good economic sense
o Business schools were the slowest to get the message; initially thought they can get by on technical skills
but leadership and communication skills come to the fore in distinguishing those whose careers really
take off
o Most workers look past salary when deciding where to work; quality of work and support system are
very important
 What do we mean by an organization?
o A consciously coordinated social unit, made up of a group of people who work together on common
goals on a relatively continuous basis

OB: Making Sense of Behaviour in Organizations

 The Building Blocks of OB
o OB is an applied behavioural science that is built upon contributions from a number of behavioural
disciplines.
o Main areas are: psychology (Individual), sociology, social psychology, anthropology (most influential),
political science (more than psychology)
 The Rigour of OB
o OB Looks at Consistencies
 What is common about behaviour, and helps predictability? Certainly there are differences
among individuals; placed in similar situations, all people don't act exactly alike
 There are certain fundamental consistencies underlying the behaviour of all individuals
o OB Looks Beyond Common Sense
 Systematic study: looking at relationships, attempting to attribute cause and effects, and drawing
conclusions based on scientific evidence
 Methods include Field Studies (Real-life organizations), Laboratory Studies (Simulated
and controlled settings), Case Studies (In-depth studies of single situations), Survey
Studies (Questionnaires and interviews in sample populations), Meta-Analysis (Statistics
that pool results of different studies)
 Evidence-Based Management (EBM) is basing managerial decisions on the best available
scientific evidence
 This approach complements systematic study
 Systematic Study and EBM add to intuition; making decisions based solely on intuition is often
inaccurate
o OB Has Few Absolutes
 Few, if any, simple and universal principles that explain OB (unlike sciences where there are
universal absolutes)
 Humans are not alike, which limits the ability to make simple, accurate, and sweeping
generalizations

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o OB Takes a Contingency Approach

 Considers behaviour in context

How Will Knowing OB Make a Difference?

 In the Workplace
o Managing people well may lead to greater organizational commitment
 Measured by the degree to which an employee identifies with the organization and wishes to
remain with the organization
o Affective commitment is the strength of an individual’s emotional attachment to, identification with, and
involvement in the organization
o Employees who are highly committed go beyond expected behaviours to provide extra service, extra
insight, or whatever else is needed to get the job done
 For You as an Individual
o “What if I am just a student?”
 Many of the concepts that apply to organizations also apply to teamwork, something many
students have to do
o “What if I am not going to work in a large organization?”
 Throughout your life you will work with a variety of organizations, and OB will help you better
understand how those organizations work
o “What if I do not want to be a manager?”
 The study of OB gives all of us more insight into how to work with others, and how to prepare to
become employees in the 21st century workplace
 Nowadays, employees are also being also to move beyond their traditional role as inputs
to the process of achieving organizations goals

Today’s Challenges in the Canadian Workplace

 Challenges at the Individual Level
o Individual Differences
o Job Satisfaction
 Doesn't necessarily correlate to salary amount
o Motivation
o Empowerment
 Giving employees responsibility for what they do
 This is becoming more common
o Behaving Ethically
 Ethics is the study of moral values or principles that guide our behaviour and inform us whether
actions are right or wrong
 Challenges at the Group Level
o Working with Others (developing good interpersonal skills)
o Workforce Diversity (accommodate different life and work styles / recognize difference among people)
 The 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
 Challenges at the Organizational Level
o Improving Quality and Productivity
 An organization is productive if it achieves its goals and does so by transferring inputs (labour
and raw materials) to outputs (finished goods or services) at the lowest cost
 Productivity is a performance measure that includes effectiveness and efficiency
 Effectiveness is the achievement of goals
 Efficiency is the ratio of effective work output to the input require to produce the work
o Developing Effective Employees
 Major challenge is how to engage employees so that they are committee to the organization

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 Organizational citizenship behaviour (OCB) is discretionary behaviour that is not part of an

employee’s formal job requirements, but that nevertheless promotes the effective functioning of
the organization
 Absenteeism: Failure to report to work
 Turnover: voluntary or involuntary permanent withdrawal from an organization
o Helping Employees with Work-Life Balance
 Communication technology; people bring work home (world never sleeps)
 Organizations are asking employees to work longer hours
o Creating a Positive Work Environment
 Real growth area in OB research has been positive organizational scholarship, which concerns
how organizations develop human strengths, foster vitality and resilience and unlock potential
o Global Competition
o Managing and Working in a Multicultural World

Extra
 Improving Customer Service
o OB can provide considerable guidance in helping managers create a customer-responsive culture – in
which employees are: friendly and courteous, accessible, knowledgeable, prompt in responding to
customer needs, and willing to do what’s necessary to please the customer
 Stimulating Innovation and Change
o The challenge for managers is to stimulate their employees’ creativity and tolerance for change
o Stimulated by flexibility and continuous improvement

Competing Values Framework (False –most useful values)

 Skills for understanding yourself and others
 Flexibility vs. control and external focus vs. internal focus (production processes)
 Using this, managers/employees can develop skills necessary to operate at various organizational levels

Chapter 2: Perception, Personality, and Emotions

Perception is the process by which individuals select, organize, and interpret their sensory impressions in order to give
meaning to their environment.

Factors Influencing Perception

 The Perceiver
o When an individual (perceiver) looks at a target and attempts to interpret, the interpretation is heavily
influenced by the perceiver’s personal characteristics (attitude, personality, interest, past experiences)
 The Target
o A target’s characteristics can affect what is perceived
 The Situation
o Time can influence attention such as location, light, heat (ex: attire at nightclub vs. class but perceiver
and target are the same)

Perceptual Errors
 Attribution Theory
o The theory that when we observe what seems to be atypical behaviour by an individual, we attempt to
determine whether it is internally or externally caused
 Internal: individual is responsible for the behaviour; external: something outside the individual
caused the behaviour
o Rules for Determining Attribution
 Distinctiveness
 A behavioural rule that asks whether an individual acts similarly across a variety of
situations

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 Distinct = internal; Not distinct = external

 Consensus
 A behavioural rule that asks if everyone faced with a similar situation responds in the
same way
 Same = external; different = internal
 Consistency
 A behavioural rule that asks whether the individual has been acting in the same way
over time
 Same = internal; different = external
o How Attributions Get Distorted
 Fundamental Attribution Error: tendency to underestimate the influence of external factors and
overestimate the influence of internal factors when making judgments about the behaviour of
others (manager blaming sales agents for low sales when the problem is the product)
 Self-Serving Bias (true): tendency for individuals to attribute their own successes to internal
factors while putting the blame for failures on external factors
 Selective Perception
o People’s selective interpretation of what they see based on their interests, background, experience, and
attitudes (why you don't pay attention during lecture, but listen if prof says it will be on the test)
o Allow us to “speed-read” others, but we draw inaccurate pictures as result (make unwarranted concs)
 Halo Effect (true)
o Drawing a general impression of an individual on the basis of a single characteristic
o Ex: wise, humorous and warm had good perception; wise, humorous and cold has bad perception
 Contrast Effects
o The concept that our reaction to one person is often influence by other people we have recently
encountered (candidate likely to receive better evaluation if interviewed after a bad candidate)
 Projection
o Attributing one’s own characteristics to other people (in job, you want work so assume others do too)
 Stereotyping
o Judging someone on the basis of one’s perception of the group to which that person belongs
o Easy to make decision if we use heuristics (judgment shortcuts in decision making) but lead to inaccurate
o Prejudice is an unfounded dislike of a person or group base on their belonging to a particular
stereotyped group (dislike people of a particular religion)

Why Do Perception and Judgment Matter?

 An employee’s performance appraisal is another process that depends very much on perceptual factors
 Subjective measures are easier to implement and provide managers with more freedom to do, as they like.
Subjective measures are judgmental.
 Self-Fulfilling Prophecy is a concept that proposes a person will behave in ways consistent with how he or she is
perceived by others
o Ex: instructors were told some students had high potential and some had low potential, but it was
random. High potential scored better because instructors expected better performance. Not always
about expectation; sometimes it is the treatment. Students expected to do well may receive more time
and help from instructors.

Personality
 What is Personality?
o The stable patterns of behaviour and consistent internal states that determine how an individual reacts
to and interacts with others
 Measuring Personality
o Research shows that personality tests are useful in hiring decisions but there are some problems:
 Person could fake test to create good impression
 Accuracy; perfectly good candidate could have just been in a bad mood when taking survey

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o Observer ratings provide an independent assessment of personality; another observer does rating
(sometimes with subject’s knowledge and sometimes without)
 Research suggest observer ratings are a better predictor of success on the job
 Personality Determinants
o Adult’s personality is now generally considered to be made up of both heredity and environmental
factors, moderated by situation conditions (before situation was not taken into consideration)
o Heredity refers to those factors that were determined at conception (physical stature)
o If personality characteristics were completely dictated by heredity, they would be fixed at birth and no
amount of experience could alter them
 But that is not true; research has found genetics can explain about 50% of personality
differences and > 30% of variation in occupational and leisure interests found in individuals
 Blood-related siblings are likely to have similar personalities
o Some personality changes over time, but research shows that the rank orderings do not change very
much (people and their different part of personality tend to change by the same amount)
 Personality Traits
o Personality traits are enduring characteristics that describe an individual’s behaviour
o Myers-Briggs Type Indicator
 Personality test that taps four characteristics and classifies people into 1 of 16 personality types
 Most widely used personality-assessment instrument in the world
 Extraverted/Introverted: Measures where we direct our energy when dealing with people and
things; extroverted are outgoing, sociable, assertive
 Sensing/Intuitive: How we process information; sensing are practical and prefer routine; intuitive
rely on unconscious process and look at the ‘big picture’
 Thinking/Feeling: Thinking uses logic and reason; Feeling uses personal value and emotions
 Judging/Perceiving: Judging want control and structure; perceiving are flexible and spontaneous
o Big Five Personality Model
 Most widely accepted model of personality (better for job performance)
 Extraversion: degree to which someone is sociable, talkative, and assertive (relationships)
 Agreeableness: degree to which someone is good-natured, cooperative, warm and trusting
 Conscientiousness: degree to which someone is responsible, dependable, persistent, and
achievement-oriented (person’s reliability)
 Emotional Stability: degree to which someone is calm, self-confident and secure (stress factor)
 Openness to Experience: degree to which someone is imaginative, artistically sensitive, and
intellectual (range of interests and fascination with novelty)
 Major Personality Attributes Influencing OB
o Core Self-Evaluation
 The degree to which an individual likes or dislikes himself or herself, whether the person see
himself or herself as capable and effective, and whether the person feels in control of his or her
environment or powerless over the environment
 Some people that are overconfident and have perceived infallibility make bad decisions
o Machiavellianism
 The degree to which an individual is pragmatic, maintains emotional distance, and believes that
ends can justify means
 High Machs manipulate more, win more, persuade more and are persuaded less (good for
bargaining skills or commissioned sales jobs)
o Narcissism
 The tendency to be arrogant, have a grandiose sense of self-importance, require excessive
admiration, and have a sense of entitlement
 Study shows they are worse leaders, bad at helping people (disagreeable extraverts)
o Self-Monitoring
 A personality trait that measures an individual’s ability to adjust behaviour to external,
situational factors
 High self-monitoring adapt to situations; low self-monitors act the same way regardless

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o Risk-Taking
 A person’s willingness to take chances or risks
 High risk-taking managers make more rapid decisions and use less information than low risk
takers (decision accuracy was the same for both groups)
o Type A and Type B Personalities
 Type A (salespeople) is a personality with aggressive involvement in a chronic, incessant struggle
to achieve more and more in less and less time, and if necessary, against the opposing efforts of
other things or other people (Type B is the opposite; Type A easier to predict than Type B)
 Type A works long hours, quantity over quality but Type B is more successful and healthier
o Proactive Personality
 A person who identifies opportunities, shows initiative, takes action, and perseveres until
meaningful change occurs (have desirable behaviours that organizations look for)
 Personality and National Culture
o There is evidence that culture differs in terms of people’s relationships to their environment
 Ex: people from Canada have more positive core self-evaluation than people from Iran
o One caveat regarding personality tests is that they may be subject to culture bias when used on samples
of people other than those for whom the tests were designed
o There are specific common personality types for any given culture (False)

Emotions
 What are Emotions?
o Intense feelings that are directed at someone or something
 Reactions to an object they are not lasting personality traits
 Choosing Emotions: Emotional Labour (emotionally stability is about stress)
o Jobs require emotional labour: when an employee expresses organizationally desired emotions during
interpersonal interactions (crying may or may not be acceptable in the workplace)
 Emerged from studies of service jobs (flight attendants, waitresses)
o Emotional Dissonance: inconsistencies between the emotions people feel and the emotions they show
 Can take a heavy toll on employees because of emotional labor’s increasing importance
o Felt emotions are an individual’s actual emotions
o Displayed emotions are those that the organization requires the employees to show and considers
appropriate in a given job
o Surface acting is hiding one’s inner feelings and hiding emotional expressions in response to display
rules; related to displayed emotions (employee smiles at customer even though they don't like him)
o Deep acting is trying to modify one’s true inner feelings to match what is expected; related to felt
emotions (nurse trying to genuinely feel more empathy for her patients)
 Why Should We Care About Emotions in the Workplace?
o Groups with positive leaders had employees with better performance
o Emotional Intelligence
 An assortment of noncognitive skills, capabilities, and competencies that influence a person’s
ability to succeed in coping with environmental demands and pressures
 Describes person’s ability to be self-aware, detect emotions in others, and manage emotional
cues and information (read other people)
 Some HR managers are starting to think EI is important to move up the corporate ladder
o The Case for EI
 Intuitive Appeal
 Almost everyone agrees that it is good to possess street smarts and social intelligence
 People think people with strong EI will have powerful leg up in business world
 EI Predicts Criteria That Matter
 More and more evidence suggests that high EI means person will perform well on job
 EI is Biologically Based
 People with damage to the part of the brain that governs emotional processing score

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significantly lower than others on EI tests

 Study shows that EI is neurologically based in a way that is unrelated to standard
measures of intelligence, and that people who suffer neurological damage score lower
on EI and make poor decisions that people who are healthier in this regard
o The Case Against EI
 EI Is Too Vague a Concept
 Many researchers are not clear what EI is; too broad a concept
 EI Cannot be Measured
 Tests have right and wrong answers; ‘I’m good at ‘reading’ other people’ is not concrete
 Validity of EI is Suspect
 Critics argue that EI is so closely related to intelligence and personality, once you control
those factors; nothing unique to offer; highly correlated with measures or personality
 Negative Workplace Emotions
o Evidence shows that people who feel negative emotions are more likely to have employee deviance
 Voluntary actions that violate established norms and threaten the organization, its members, or
both (leaving early, gossiping, sexual harassment)

Chapter 3: Values, Attitudes and Their Effects in the Workplace

Values
 Basic convictions that a specific mode of conduct or end-state of existence is personally or socially preferable to
an opposite or converse mode of conduct or end-state of existence
 Values generally influence attitudes and behaviour
 Rokeach Value Survey
o Milton Rokeach classified values that people hold into two sets:
 Terminal values: refers to desirable end-states of existence (achieve during duration of life)
 Instrumental values: refers to preferable ways of behaving
o Several studies confirm that these sets of values vary among groups
 people in same occupations or categories tend to hold similar values
 Hodgson’s General Moral Principles
o Ethics is the study of moral values or principles that guide our behaviour and inform us whether actions
are right or wrong
o Kent Hodgson has identified seven general moral principles that individuals should follow when making
decisions about behaviours; calls them the ‘Magnificent Seven Principle’
 Dignity of human life: Lives of people are to be respected
 Autonomy: All persons are intrinsically valuable and have the right to self-determination
 Honesty: Truth should be told to those who have a right to know it
 Loyalty: Promises, contracts, and commitments should be honored
 Fairness: People should be treated justly
 Humaneness: Our actions ought to accomplish good, and we should avoid doing evil
 The Common Good: Actions should accomplish the greatest good for the greatest number of
people

Assessing Cultural Values

 Hofstede’s Framework for Assessing Cultures
o One of the most widely referenced approaches for analyzing variations among cultures (attributes of
national culture)
o Power Distance: Describes the extent to which a society accepts that power in institutions and
organizations is distributed unequally (poor countries rate higher)
o Individualism: Describes the degree to which people prefer to act as individuals rather than as members
of groups
o Masculinity: Describes the extent to which the culture favors traditional masculine work roles of
achievement, power and control (japan is biggest gender differentiation)

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o Femininity: See little differentiation between male and female roles; women are treated as the equals of
men in all respects
o Uncertainty Avoidance: Describes the extent to which a society feels threatened by uncertain and
ambiguous situations and tries to avoid them
o Long term orientation: Emphasizes future, thrift and persistence
o Short term orientation: Emphasizes the past and present, respect for tradition, and fulfillment of social
obligations
 The GLOBE Framework for Assessing Cultures
o Global Leadership and Organizational Behaviour Effectiveness research program
o Similar ones are future orientation, gender differentiation, uncertainty avoidance, power distance,
individualism/collectivism, in-group collectivism
o Assertiveness: Extend to which society encourages people to be tough, confrontational, assertive
o Performance Orientation: Extent to which society encourages and reward members for performance
o Humane Orientation: Extent to which society encourages and rewards individuals for being fair
 Give more emphasis to Hofstede’s because it has been around longer and GLOBE studies confirmed them

Values in the Canadian Workplace

 Cultural Differences
o Most Canadians (93%) have never/rarely experienced unfair treatments because of ethnicity/culture,
while 20% of visible minorities reported having been treated unfairly
o Francophone and Anglophone Values
 Number of studies show they have distinctive values; Francophones are group-orientated, while
Anglophones are more individualists with a greater need for achievement
 They have differences in lifestyles; Francophones smoke more and are less physically active
 Today, both have been exposed to similar types of organizational theories during post-secondary
school training; thus, we would not expect to find large differences in the way that firms in
francophone Canada are managed compared to rest of Canada
o Aboriginal Values
 Aboriginal values are usually perceived (by non-aboriginals) as an impediment to economic
development and organizational effectiveness; aboriginals do not agree
 Aboriginal organizations are much more likely to reflect and advance goals of community;
greater sense of family with greater affiliation and loyalty
 Have small power distance and emphasis on consensual decision making; have less rules
 Difference suggest Aboriginal businesses will differ from non-aboriginal businesses (supported
by research and anecdotal evidence)
o Asian Values
 Importance of guanxi: personal connections with the appropriate authorities or individuals
 Guanxi is the establishment of connection between two independent individuals to enable a
bilateral flow of personal or social transactions. Both parties must derive benefits to ensure
continuation of relationship
 Based on reciprocation, long-term and enduring, rely more on personal power and authority
 Extremely important for business success in China
 Generational Differences
o Elders
 Characterized by playing by the rules and core values are authority, discipline and order
o Baby Boomers
 Autonomous rebels (25%), anxious communitarians (20%), connected enthusiasts (14%),
disengaged Darwinists (intimidated by change and anxious about professional future) (41%)
 Sense of accomplishment
o Generation X
 Flexibility, life options and achievement of job satisfaction, enjoy team orientated work
 Less willing to make personal sacrifices for sake of their employer than previous generations

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 Rate high on friendship, happiness and pleasure

 Thrill seeking materialists (25%), aimless dependents (27%) (seek financial independence), social
hedonists (15%) (experience-seeking), New Aquarians (13%) (experience seeking, ecologically
minded), Autonomous post-materialists (20%) (seek personal autonomy and human rights)
o The Ne(x)t Generation (Generation Y)
 High expectations and seek meaning in their work, life goals toward becoming rich and famous
 Tend to be questioning, socially conscious, and entrepreneurial, sometimes needy
o Generations Meet in the Workplace
 Managing expectations of each of these very different groups is not an easy task
 Requires managers to be flexible, observant and willing to adjust more to individual needs
 Members of next generation will change the face of workplace in significant ways; mastered
communication and information system that many of their parents have yet to understand

Attitudes
 Attitudes are positive or negative feelings about objects, people or events
 Not the same as values but the two are interrelated
 Job Satisfaction
o Individual’s general attitude towards his or her job
o What Causes Job Satisfaction?
 Enjoying the work is almost always the one most strongly linked to high levels of job satisfaction
 Pay, advancement opportunities, supervision, co-workers are others
 People who have positive core self-evaluations are more satisfied with their jobs
o Job Satisfaction and Productivity
 Estimated that correlation between job satisfaction and job performance is moderately strong
o Job Satisfaction and Organizational Citizenship Behaviour
 Evidence suggests that satisfaction does influence OCB, but through perceptions of fairness (not
as obvious or logical as it seems) => Modest overall relationship between the two
 But job satisfaction is unrelated to OCB when fairness is considered
 If you trust employer and they’re fair, your job satisfaction increases and OCB is higher
o Job Satisfaction and Customer Satisfaction
 Satisfied employees increase customer satisfaction and loyalty
o How Employees Can Express Dissatisfaction
 People who are more positively disposed toward life are more likely to quit
 Four types of behaviour result:
 Exit: destruction action from point of view of organization
 Voice
 Loyalty: passively but optimistically waiting for conditions to improve
 Neglect: passively allowing conditions to worsen (reduced effort, increased error rate)
 Organization Commitment
o Defined as state in which employee identifies with a particular organization and its goals, and wishes to
maintain membership in organization
o Three types
 Affective Commitment: Individual’s relationship to organization, emotional attachment
 Normative Commitment: obligation an individual feels to staying with the organization
 Continuance Commitment: Individual’s calculation that it is in best interest to stay with
organization based on perceived costs of leaving the organization
o Continuance Commitment is often associated with negative work behaviours (high paid may exhibit
continuance commitment rather than their preference of the job)
o People no longer remain with organizations for all/majority of their career
o Employees in high organizational commitment places are committed because:
 Proud of company’s aspirations, accomplishments and legacy; share its value
 Know what each person is expected to do
 Control of their own destinies; savor high-risk, high-reward work environment

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 Recognized mostly for quality of their individual performance

 Have fun and enjoy supportive and highly interactive environment
 Employee Engagement
o An individual’s involvement with, satisfaction with, and enthusiasm for the work he or she does
o Concept has attracted quite a following in many business organizations but it is relatively new
o Companies with higher levels of customer satisfaction showed higher levels of employee engagement

Chapter 4: Motivating Self and Other

Chapter 5: Working in Teams

Teams vs. Groups: What’s the Difference?

 A group is two or more people with a common relationship
 A team is a small number of people who work closely together toward a common objective and are accountable
to one another
 Groups become teams when they share leadership, accountability, purpose, problem solving continuously rather
than at scheduled times, and effectiveness is measured in team’s goals and not individual’s goals
Why Have Teams Become So Popular?
 Teams create potential for an organization to generate greater outputs with no increase in inputs
 Evidence suggest teams typically outperform individuals when tasks being done require multiple skills

Stages of Group and Team Development

 The Five-Stage Model
o Stage 1 Forming: The first stage in group development, characterized by much uncertainty.
o Stage 2 Storming: The second stage in group development, characterized by intragroup conflict
o Stage 3 Norming: Norm is acceptable standards of behaviour within a group that are shared by the
group’s members. Stage is complete when group structure solidifies and the group has assimilated a
common set of expectations about what defines correct member behaviour.
o Stage 4 Performing: The fourth stage in group development, when the group is fully functional.
o Stage 5 Adjourning: The final stage in group development for temporary groups, where attention is
directed toward wrapping up activities rather than task performance. For permanent groups, stage 4 is
the last stage.
o Groups do not always proceed clearly from one stage to the next; stages can happen simultaneously
 The Punctuated-Equilibrium Model
o The first meeting sets group direction
o The first phase of group activity is one of inertia
o A transition takes place at the end of the first phase, which occurs exactly when group has used up half
its allotted time
o The transition initiates major changes
o A second phase of inertia follows the transition
o Group’s last meeting is characterized by high levels of productive activity
o Pretty much: starts of slow, half way realize they need to do a lot more, go hard at end, one last meeting

Creating Effective Teams

 Relatively focused model with four general categories:
o Resources and other contextual influences that make teams effective
o Team composition
o Work design
o Team process (those things that go on in the team that influence how effective the team is)
 Characteristics of an Effective Team: Clear purpose, informality, participation, listening, civilized disagreement,
consensus decisions, open communication, clear rules and work assignments, shared leadership, external

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relations, style diversity, self-assessment

 Team Context
o Adequate Resources: scarcity of resources directly reduces ability of team to perform its job effectively
 One of most important characteristics of effective work group is support from organization
o Leadership and Structure
 Role of team leader involves creating a real team rather than a team in name only, setting a clear
and meaningful direction for the team’s work, making sure that the team structure will support
its working effectively, ensures team operates within supportive organizational context, proving
expert coaching
o Climate of Trust: Members of effective teams must trust each other
o Performance Evaluation and Rewards: large discrepancy in wages => collaboration is lowered
 Team Composition
o Skills: team requires three different types of skills:
 Technical expertise, Problem-solving and decision-making, Interpersonal skills
o Personality: one bad apple can spoil the whole bunch; conscientious people are good at backing up
other team members; open team members have better communication
 Orients team to problem-solving situation
 Organizes and manages team performance
 Promotes a positive team environment
 Facilitates and manages task conflict
 Appropriately promotes perspective
o Roles: a set of expected behaviours of a person in a given position in a social unit
 Task-oriented roles: roles performed by group members to ensure that the tasks of the group are
carried out
 Maintenance roles: roles performed by group members to maintain good relations within group
 Individual roles: roles performed by group member that are not productive for keeping the team
on tasks
 Role expectations: how others believe a person should act in a given situation
 Role conflict: a situation in which an individual finds that complying with one role requirement
may make it more difficult to comply with another
 Roles that build task accomplishment: initiating, seeking information and opinions, providing
information and opinions, clarifying, elaborating, summarizing, consensus testing
 Roles that build and maintain a team: harmonizing, compromising, gatekeeping, encouraging
o Diversity: Heterogeneous mix of individuals within a group
 Research shows that team of strangers were more profitable than team of friends
 Advantages: Multiple perspectives, greater openness to new ideas, multiple interpretations,
increased creativity, increased flexibility, increased problem-solving skills
 Disadvantages: Ambiguity, complexity, confusion, miscommunication, difficulty in reaching a
single agreement, difficult in agreeing on specific actions
o Size: most effective teams have fewer than 10 members
 Social loafing: tendency of individuals to expend less effort when working collectively than when
working individually
 People can be tempted to free-ride; Can be fixed by having smaller groups
o Member Flexibility: teams made up of flexible individuals have members who can do each other’s tasks
o Member’s Preference for Teamwork
 High performing teams are likely composed of people who prefer working as a team
 Work Design
o Effective teams need to work together and take collective responsibility to complete significant tasks
o Includes freedom and autonomy, opportunity to use variety of skills and talents, ability to complete a
whole and identifiable task or product, and participation in task that has substantial impact on others
o These characteristics enhance member motivation and increase team effectiveness
 Team Process

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o Common Purpose: effective teams have common and meaningful purpose that provides direction
 Effective teams show reflexivity: characteristic of effective teams, allowing them to reflect on
and adjust their master plan when necessary
o Specific Goals: Translate common purpose into specific, measurable and realistic performance goals
o Team Efficacy: Teams that have confidence and believe that they can succeed
 Cohesiveness: degree to which team members are attracted to one another and are motivated
to stay on the team
 High-cohesiveness and high performance norms will be most productive
o Managed Level of Conflict: teams that avoid conflict also tend to have lower performance levels
 Groups need mechanisms by which they can manage the conflict
o Accountability: successful teams make members individually and jointly accountable for team’s purpose,
goals and approach

Twenty-First Century Teamwork: Virtual Teams

 Virtual Teams are teams that seldom interact face-to-face and use computer technology to tie together physically
dispersed members in order to achieve a common goal
 Can suffer from absence of paraverbal and nonverbal cues
o Paraverbal cues are tone of voice, inflection and voice volume
o Nonverbal cues are eye movement, facial expression, hand gestures and other body languages
 Virtual Teams and Trust
o May be more difficult to build trust because of lack of face-to-face interaction
o In virtual teams, trust is either established at the outset or it generally does not develop
 Creating Virtual Workspaces
o Research shows that majority of teams use virtual workspaces (virtual meeting rooms) to communicate

Beware! Teams Are Not Always the Answer

 Teams have greater communication demands, conflicts to be managed, and meetings to be run
 Can more than one person do the work better?
o Simple tasks that do not require diverse input are probably better left to individuals
 Does the work create a common purpose or set of goals for the people in the group that is more than the sum of
individual goals?
 Are the members of the group interdependent?
o Teams makes sense when there is interdependence between tasks – where success of whole depends on
success of each one and success of each one depends on success of others (soccer vs. swimming)
 Others have outlined the conditions under which organizations would find teams more useful:
o When work processes cut across functional lines; when speed is important (and complex relationships
are involved); when the organization mirrors a complex, differentiated, and rapidly changing marker
environment; when innovation and learning have priority; and when tasks that have to be done require
online integration of highly interdependent performers

Chapter 6: Communication, Conflict and Negotiation

The Communication Process

 Communication: transfer and understanding of a message between two or more people
 Encoding and Decoding
o Encoding: converting a message to symbolic form
o Decoding: interpreting a sender’s message
 The Message
o What is communicated
 The Channel
o The medium through which a message travels
o Communication apprehension: undue tension and anxiety about oral communication, written

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communication, or both; why people choose one channel of communication over another
o Channel Richness: the amount of information that can be transmitted during a communication episode
 The Feedback Loop
o Final link in the communication process; it puts the message back into the system as a check against
misunderstandings
 The Context
o Communication has context, and violations of that may create problems in sending/receiving messages

Barriers to Effective Communication

 Filtering
o A sender’s manipulation of information so that it will be seen more favorably by the receiver
 Selective Perception
o Receivers in communication selectively see and hear based on their needs, experience, background
 Defensiveness
o When people feel threatened, they tend to react in ways that reduce ability to achieve understanding
 Information Overload
o The state of having more information that one can process
 Language
o Age, education and cultural background are three of the more obvious variables that influence language
o Words and terms do not always mean the same to the receiver as it does to the sender
 Communication Under Stress
o These tips are appropriate for less stressful communication: speak clearly, be aware of nonverbal part of
communication (tone, facial expression), think carefully about how you state things
 Electronic Communications
o Organizational boundaries become less relevant as a result of electronic communications
 Network computers allow employees to jump vertical levels within organization and have
communications with people in other organizations
o Email: Some of the more significant limitations of emails are
 Misinterpreting the message (research says we can only encode tone and intent 50% of time)
 Communicating negative messages (better face-to-face)
 Overuse of email (spam)
 Email emotions (email makes senders write things they wouldn’t be comfortable saying)
 Privacy Concerns (Emails are monitored and recipient may not keep it confidential)
o Instant Messaging and Text Messaging
 Not going to replace email; good for 1-2 lines (very short messages)
 Nonverbal Communication
o Messages conveyed through body movements, facial expressions, and the physical distance between the
sender and the receiver
o Kinesics: study of body motions, such as gestures, facial configurations and other movements of body
o Most important messages of body language conveys: extent to which individual likes another and
interested in their views, and relative perceived status/class between sender and receiver
o Proxemics: study of physical space in interpersonal relationships
 Silence as Communication
o Can mean someone is thinking or contemplating response; or person is anxious and fearful of speaking
 Communication Barriers Between Women and Men
o Women speak and hear a language of connection and intimacy
o Men speak and hear a language of status and independence
 Men think women speak too much, women think men don't listen
 Cross-Cultural Communication
o Four specific problems related to language difficulties in cross-cultural communications
 Barriers caused by semantics (words mean different things to different people), word
connotations (words imply different things in different languages), tone difference, differences in

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perceptions
o Overcoming Cross-Cultural Difficulties
 Assume difference until similarity is proven
 Emphasize description rather than interpretation or evaluation
 Be empathetic
 Treat your interpretations as a working hypothesis

How Communication Breakdown Leads to Conflict

 Conflict: process that begins when one party perceives that another party has negatively affected, or is about to
negatively affect, something that the first party cares about
 Functional vs. Dysfunctional Conflict
o Functional (constructive) conflict: conflict that supports goals of the group and improves performance
o Dysfunctional conflict: conflict that hinders group performance
o Cognitive Conflict: conflict that is task-orientated and related to differences in perspectives/judgments
o Affective Conflict: conflict that is emotional and aimed at a person rather than an issue

Conflict Resolution
 Conflict Management Strategies
o Forcing (win-lose): imposing one’s will on the other party
o Problem solving (win-win)
o Avoiding (lose-lose): Ignoring or minimizing importance of issues creating conflict
o Yielding (win-lose): accepting and incorporating the will of the other party
o Compromise (lose-lose)
 What Can Individuals Do to Manage Conflict?
o Problem Solving
o Developing superordinate goals (shared goal that requires both parties to work together)
o Smoothing (playing down differences while emphasizing common interests with other party)
o Compromising
o Avoidance
o When the conflict is work-related, other techniques are: expansion of resources, authoritative command,
altering the human variable (human relations training), altering the structural variables (change
organization structures; transfers, job redesign, creation of coordinating positions)
 Resolving Personality Conflicts:
o Variety of factors leads to personality conflicts, including the following:
 Misunderstandings between age, race or cultural differences; intolerance, prejudice,
discrimination, or bigotry; perceived inequities; misunderstandings, rumors, or falsehoods about
individuals or group; blamings for mistakes or mishaps (finger-pointing)
o Can result in lowered productivity when people find it difficult to work together
o Ideal situation: people work it out between themselves, without involving others, but rarely happens

Negotiation
 Process in which two or more parties exchange goods/services and try to agree upon the exchange rate for them
 Within negotiation, one should be aware individuals have issues (items specifically placed on bargaining table for
discussion), positions (individual’s stand on the issue), interests (underlying concerns that are affected by
negotiation resolution)
 Bargaining Strategies
o Distributive Bargaining
 Negotiation that seeks to divide up a fixed amount of resources (win-lose situation)
 Most widely cited example: labour-management negotiations
 Best thing to do when making first offer, is to make is as aggressive as you can
o Integrative Bargaining
 Negotiation that seeks one or more settlements that can create win-win situation

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 This builds long-term relationships and makes working together easier in the future
 How to Negotiate
o Developing a Strategy
 Parties should consider their BATNA: best alternative to a negotiated agreement; the outcome
an individual faces if negotiations fail
 Bargaining zone: zone between each party’s resistance point, assuming there is overlap in range
o Defining Ground Rules
o Clarification and Justification
 Part of the process need not be confrontational; educating and information each other on issues
 May want to provide other party with any documentation that helps support your position
o Bargaining and Problem Solving
 Essence of negotiation process is the actual give and take in trying to hash out an agreement
o Closure and Implementation
 Final step in negotiation process is formalizing agreement that has been worked out and
developing procedures that are necessary for implementation and monitoring

Chapter 7: Power and Politics

A Definition of Power
 Power: a capacity that A has to influence the behaviour of B, so that B acts in accordance with A’s wishes
 Dependency: B’s relationship to A when A possesses something that B needs

Bases of Power
 Coercive Power
o Power that is based on fear
o The most often used, most often condemned and most difficult to control
o Organizational Level: A has coercive power on B if A can dismiss, suspend or demote B
 Reward Power
o Power that achieves compliance based on the ability to distribute rewards that others view as valuable
 Legitimate Power
o Power that a person receives as a result of his or her position in the formal hierarchy of an organization
 Expert Power
o Influence based on special skills or knowledge
 Referent Power
o Influence based on possession by an individual of desirable resources or personal traits
 Information Power
o Power that comes from access to and control over information
 Evaluating the Bases of Power (people will respond in one of three ways)
o Commitment: The person is enthusiastic about the request and shows initiative and persistence in
carrying it out (Expert and Referent; and research shows deadline pressures results in Information)
o Compliance: The person goes along with the request grudgingly, puts in minimal effort, and takes little
initiative in carrying out the request (Reward and Legitimate)
o Resistance: The person is opposed to the request and tries to avoid it with such tactics as refusing,
stalling or arguing about it (Coercive)
o Ironically, least effective bases of power for improving commitment (coercive, reward and legitimate) are
the ones most often used by managers, perhaps because they are easiest to introduce

Dependency: The Key to Power

 General Dependency Postulate
o The greater B’s dependency on A, the greater the power A has over B

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o Dependency is inversely proportional to the alternative sources of supply

 If something is plentiful, possession of it will not increase your power (scarcity; below)
 What Creates Dependency?
o Importance
 If nobody wants what you have, there is no dependency
 To create dependency, the things you control must be perceived as important
o Scarcity
 A resource must be perceived as scarce to create dependency
o Nonsubstitutability
 The fewer substitutes for a resource, the more power comes from control over that resource
 Ex: why organizations have multiple suppliers rather than give their business to only one

Influence Tactics
 Ways that individuals translate power bases into specific actions
 Rational Persuasion: Using facts and data to make a logical or rational presentation of ideas
 Inspirational Appeals: Appealing to values, ideals, and goals when making a request
 Consultation: Getting others involved to support one’s objectives
 Ingratiation: Using flattery, creating goodwill, and being friendly prior to making a request
 Personal Appeals: Appealing to loyalty and friendship when asking for something
 Exchange: Offering favors or benefits in exchange for support
 Coalition Tactics: Getting the support of other people to provide backing when making a request
 Pressure: Using demands, threats and reminders to get someone to do something
 Legitimating Tactics: Claiming authority or right to make a request, or showing that is supports organizational
goals or policies
 Evidence shows rational persuasion, inspirational appeals, and consultation tend to be most effective; pressure
tends to frequently backfire and is typically the least effective

Empowerment: Giving Power to Employees

 Empowerment: Freedom and ability of employees to make decisions and commitments
 Empowerment in the Workplace
o For employees to be empowered and have an ownership mentality, four conditions need to be met:
 There must be a clear definition of the values and mission of the company
 The company must help employees gain the relevant skills
 Employees need to be supported in their decision making and not criticized when they try to do
something extraordinary
 Employees need to be recognized for their efforts
 Effects of Empowerment
o Researchers have shown that at both the individual and team level, it leads to greater productivity
o Some managers do not want empowered employees because this can take away some of their own base
of power
o Some employees have little/no interest in being empowered (some get ill when empowered) and resist
o Empowerment is not something that works well in every workplace throughout the world

The Abuse of Power: Harassment in the Workplace

 Workplace Bullying
o No clear definition of workplace bullying
o Research found consequences of bullying were more harmful to victims than those of sexual harassment
 Sexual Harassment
o Unwelcome behaviour of a sexual nature in the workplace that negatively affects the work environment
or leads to adverse job-related consequences for the employee
o Individuals who are sexually harassed report more negative job attitudes

Politics: Power in Action

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 Lobbying others to get them to vote with you on a particular decision is engaging in organizational politics
 Political Behaviour: those activities that are outside one’s formal role that influence, or attempt to influence, the
distribution of advantages and disadvantages within the organization
o Behaviour attempts to use one’s bases of power
o Not confined to just individual hopes and goals; might be used to achieve organizational goals
 Reality of Politics
o Resources in organizations are limited, which turns potential conflict into real conflict
o The most important fact behind politics within organizations is that realization that most of the ‘facts’
that are used to allocate the limited resources are open to interpretation
o It is possible to have an organization that is politics-free, only if all members hold the same goals and
interest, organizational resources are not scarce, and performance outcomes are completely clear and
objective; but in reality, this never happens
 Types of Political Activity
o Attacking or blaming others
o Using information (withholding or distorting information)
o Managing impressions
o Building support for ideas
o Praising others
o Building coalitions
o Associating with influential people
o Creating obligations
 Impression Management
o The process by which individuals attempt to control the impression others form of them
o Doesn't imply that impressions people convey are necessarily false; sometimes it could be sincere but
taken the wrong way
 Making Office Politics Work
o Nobody wins unless everyone wins (it’s about pulling people toward your ideas and pushing them
through other people)
o Don't just ask for opinions – change them
o Everyone expects to be paid back
o Success can create opposition (be prepared to deal with this if your success comes at others expense)

Chapter 8: Leadership

Are Managers and Leaders the Same?

 Leaders establish direction by developing a vision of the future; they align people by communicating this vision
and inspiring them to overcome hurdles
 Managers implement the vision and strategy provided by leaders, coordinate and staff the organization, and
handle the day-to-day problems

Leadership as Supervision
 Trait Theory: Are Leaders Different From Others?
o Theories proposing that traits – personality, social, physical, or intellectual- differentiate leaders from
non-leaders
o Breakthrough came when researchers began organizing traits around Big Five Personality Model
 Extraversion is the most important trait; Conscientiousness and openness to experience follow
o Emotional Intelligence and Leadership – must less investigated than the other traits
 Behavioural Theories: Do Leaders Behave in Particular Ways?
o Three behavioural theories of leadership (propose specific behaviours differentiate leaders)
o Ohio State Studies
 Initiating structure refers to the extent to which a leader is likely to define and structure his or
her role and the roles of employees in order to attain goals

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 Consideration refers to the extent to which a leader is likely to have job relationships
characterized by mutual trust, respect for employees’ ideas, and regard for their feelings
o Michigan Studies
 Employee-oriented leader: a leader who emphasizes interpersonal relations
 Production-oriented leader: a leader who emphasizes the technical or task aspects of the job
o Leadership Grid
 9 possible positions but emphasis has been placed on 5
 Country Club management (low concern for production, high concern for people)
 Team management (high concern for production, high concern for people)
 Middle-of-the-road management (medium concern for production, medium concern for people)
 Impoverished management (low concern for production, low concern for people)
 Authority-obedience (high concern for production, low concern for people)
 Contingency Theories: Does the Situation Matter?
o Theories that propose that leadership effectiveness depends on the situation
o Fiedler Contingency Model: Theory that proposes that effective group performance depends on the
proper match between the leader’s style and the degree to which the situation gives control to leader
 Identified three contingency dimensions that together define the situation a leader faces
 Leader-member relations, Task structure, Position power (degree of influence a leader
has over power variables; ex: hiring)
o Hersey and Blanchard’s Situational Leadership Theory: Theory that proposes that effective leaders adapt
their leadership style according to how willing and able a follower is to perform tasks
 Four specific leader behaviours – from highly directive to highly laissez-faire
o Path-Goal Theory: Theory that says it is the leader’s job to assist followers in attaining their goals and to
provide the necessary direction and/or support to ensure that their individual goals are compatible with
the overall goals of the group or organization
 Three guidelines to be effective: determine the outcome subordinates want, reward individuals
with their desired outcomes when they perform well, let individuals know what they need to do
to receive rewards
 Four leadership behaviours that might be used in different situations: Directive, supportive,
participative and achievement-oriented leader
 Substitutes for leadership
o Experience and training can replace need for leader’s support or ability
o Organizational characteristics (rigid rules and procedures) can replace formal leadership

Inspirational Leadership
 From Transactional to Transformational Leadership
o Transactional leaders: leaders who guide or motivate their followers in the direction of established goals
by clarifying role and task requirements
o Transformational leaders: leaders who inspire followers to go beyond their own self-interests for the
good of the organization and have a profound and extraordinary effect on their followers
o Charismatic leadership: leadership that critically examines the status quo with a view to developing and
articulating future strategic goals or vision for the organization, and then leading organizational members
to achieve these goals through empowering strategies
o Both transformational and charismatic leaders work to empower their followers to reach higher goals
o The best leaders are transactional and transformational
 Sharing a Vision
o A vision has clear and compelling imagery that offers an innovative way to improve, which recognizes
and draws on traditions, and connects to actions that people can take to realize change. Vision taps
people’s emotions and energy. Properly articulated, a vision creates the enthusiasm that people have for
sporting events and other leisure-time activities, bringing the energy and commitment to the workplace.
 Charismatic Leadership
o It is proven that visionary companies perform better than comparable non-visionary firms

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o People working for charismatic leaders are motivated to exert extra work effort because they like their
leaders and express greater satisfaction
o Dark side of charismatic leadership: leaders become overconfident and a liability, as they are unable to
listen to others and become uncomfortable when challenged by aggressive employees
o Key difference in successful charismatic leaders may be fact that they are not ego-driven
 They are level 5 leaders: leaders who are fiercely ambitious and driven, whose ambition is
directed toward their company rather than themselves
 Have four basic leadership qualities: individual capability, team skills, managerial competence,
ability to stimulate others to high performance and fifth dimension: paradoxical blend of
personal humility and professional will

Contemporary Leadership Roles

 Mentoring
o A senior employee who sponsors and supports a less-experienced employee (coach, council, support)
o It is a valuable communication channel that allows mentors to learn about problems before they become
common knowledge to others in upper management
o Provide personal satisfaction to mentors, it gives them opportunity to share knowledge and experience
o Coaching is different from mentoring: more task oriented and short term. A good coach
 Emphasizes self-development, offers constructive feedback, meets regularly, good listener,
challenges mentee, and sets realistic standards
 Self-Leadership (or Self-Management)
o With self-leadership, individuals and teams set goals, plan and implement tasks, evaluate performance,
solve their own problems and motivate themselves
o Leaders create self-leaders by: model self-leadership, encourage employees to create self-set goals,
encourage use of self-rewards to strengthen and increase desirable behaviours, create positive thought
patterns, create climate of self-leadership, encourage constructive self-criticism
 Providing Team Leadership
o As teams grow in popularity, role of leader in guiding team members takes on more importance
o Effective team leaders need to build commitment and confidence, remove obstacles, create
opportunities, and be part of the team
o They are liaisons with outsiders (represent team to other constituencies), troubleshooters, conflict
managers and coaches
 Online Leadership
o In face-to-face communications, harsh words can be softened by nonverbal action. The structure of
words in digital communication has the power to motivate or demotivate the receiver
o Leaders need to be sure the tone of their email correctly reflects the emotions they want to send
o Characteristics of transformational leaders are appropriate for long-distance managing
o Confront unique challenges, the greatest of which appears to be developing and maintaining trust
o With emphasis on online communication, writing skills are likely to become part of interpersonal skills
 Leading Without Authority
o Leading without authority means exhibiting leadership behaviour even though you don't have formal
position or title that might encourage others to obey. Benefits include
 Latitude for creative deviance, issue focus (focus on single issue, rather than a lot that those in
authority face), front-line information

Contemporary Issues in Leadership

 Authentic Leadership
o Leaders who know who they are, know what they believe in and value, and act on these values and
beliefs openly and candidly. Their followers would consider them to be ethical people.
o Primary quality produced by authentic leadership is trust, through sharing information, encouraging
open communication and stick to their ideals
 Is There a Moral Dimension to Leadership?

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o Researchers have begun to consider ethical implications in leaderships recently because there is a
growing interest in ethics and seems that ethical lapses by leaders are never absent from headlines
o Charisma has ethical component; unethical leaders are likely to use charisma to enhance power over
followers, directed toward self-serving ends
o Socialized charismatic leadership: leadership concept that states that leaders model ethical conduct and
convey values that are other centered vs. self-centered
 Four cornerstones: truth telling, promise keeping, fairness and respect for individual
 Gender: Do Men and Women Lead Differently?
o People with traits associated with leadership – such as intelligence, confidence and sociability are more
likely to be perceived as leaders and encourages to pursue careers where they can exert leadership
o Women are particularly stronger in managing interpersonal relationships and approach is consensual
o Men are likely to use directive command-and-control style; rely on formal authority to influence
o Research shows today’s organizations rely on flexibility, teamwork, trust and information sharing rather
than rigid structures, competitive individualism, control and secrecy
 In these workplaces, effective managers must use more social and interpersonal behaviours. The
must inspire and influence rather than control. Women seem to do this better than men.

Chapter 9: Decision Making, Creativity, and Ethics

How Should Decisions Be Made?

 Decision: the choice made from two or more alternatives
 Problem: discrepancy between some current state of affairs and some desired state
 Opportunity: occasion that gives rise to thoughts about new ways of proceeding
 The Rational Decision-Making Process
o The rational decision make makes consistent, high-quality choices within specified constraints
o The rational model
 Define the problem, Identify the criteria, allocate weights to the criteria, develop alternatives,
evaluate the alternatives, select the best alternative
o Assumptions of the model are: problem clarity (problem is clear and unambiguous), known options,
clear preferences, constant preferences, no time or cost constraints (regarding obtaining of information),
maximum payoff

How Do Individuals Actually Make Decisions?

 Most decisions in the real world do not follow the rational model
 Problem Identification
o Most of the decisions that get made reflect only the problems the decision makers see
o One person’s problem may even be another person’s acceptable status quo
o Problems that are visible tend to have a higher chance of being selected than ones that are important
 It is easier to recognize visible problems
 Decision makers want to appear competent and ‘on top of problems’; it motivates them to focus
attention on problems that are visible to others
 Bounded Rationality in Considering Alternatives
o Bounded rationality: limitations on a person’s ability to interpret, process and act on information
o Individuals will settle on alternative that is ‘good enough’
 So decision makers choose final solution that satisfices rather than optimizes; that is, they seek
solution that is both satisfactory and sufficient
 Intuition
o Intuitive decision making is a non-conscious process created from distilled experience
o It is not rational but that does not necessarily make it wrong; because it is so unquantifiable it’s hard to
know when our hunches are right or wrong
 Key is not to either abandon or rely solely on intuition, but to supplement it with evidence and
good judgment

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 Judgment Shortcuts
o Overconfidence Bias: error in judgment that arises from being too optimistic about own performance
o Anchoring Bias: tendency to fixate on initial information and fail to adjust for subsequent information
o Confirmation Bias: tendency to seek out information that reaffirms past choices and to discount
information that contradicts past judgments
o Availability Bias: tendency for people to base their judgments on information that is readily available to
them rather than on complete data
o Escalation of commitment: an increased commitment to a previous decision despite clear evidence
suggesting that decision may have been incorrect
o Randomness Error: tendency of individuals to believe that they can predict outcome of random events
o Winner’s curse: tendency for winning participants in an auction to pay too much for the item won
o Hindsight Bias: tendency to believe falsely, after the outcome of an event is actually known, that one
could have accurately predicted that outcome

Group Decision Making

 Group vs. the Individual
o Strengths of Group Decision Making
 More complete information and knowledge, Increased diversity of views, Higher-quality
decisions, Accurate, Creative and increased acceptance of a solution
o Weaknesses of Group Decision Making
 Time-consuming, conformity pressures, dominated by few members, ambiguous responsibility
o Effectiveness and Efficiency
 Groups are more effective, but individuals are more efficient
 Groupthink and Groupshift
o Groupthink is a phenomenon in which group pressures for conformity prevent the group from critically
appraising unusual, minority or unpopular views
o Symptoms are illusion of invulnerability (overconfident members), assumption of morality,
rationalization, stereotyping outgroups, minimized doubts, illusion of unanimity, mindguards, peer
pressure
o To minimize groupthink, monitor group size, encourage group leaders to play an impartial role, appoint
one group member to play the role of devil’s advocate, stimulate active discussion of diverse alternative
o Groupshift is a phenomenon in which the initial positions of individual group members become
exaggerated because of the interactions of the group
 Group Decision-Making Techniques
o Interacting Groups: typical groups, in which members interact with each other face to face
o Brainstorming: an idea-generation process that specifically encourages any and all alternatives while
withholding any criticism of those alternatives
o Nominal Group Technique: a group decision-making method in which individual members meet face to
face to pool their judgments in a systematic but independent fashion
o Electronic Meetings: a meeting in which members interact on computers, allowing for anonymity of
comments and aggregation of votes

Creativity in Organizational Decision Making

 Creative Potential
o Creativity is the ability to produce novel and useful ideas
 Three-Component Model of Creativity
o The proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task
motivation
o Expertise is the foundation for all creative work
o Intrinsic task motivation is the desire to work on something because it’s interesting, involving
 This motivational component turns creativity potential into actual creative ideas
 Organization Factors that affect creativity

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o Positive factors are challenge, freedom, resources, work-group features, supervisory encouragement,
organizational support
o Negative factors: expected evaluation, surveillance, external motivator, competition, constrained choice

What About Ethics in Decision Making?

 Ethics is the study of moral values or principles that guide our behaviour and inform us whether actions are right
or wrong
 Four Ethical Decision Criteria
o Utilitarianism: a decision focused on outcomes or consequences that emphasizes the greater good for
the greatest number
o Whistle-blowers: individuals who report unethical practices by their employers to outsiders
o Justice: requires individuals to impose and enforce rules fairly and impartially so there is an equitable
distribution of benefits and costs
o Care: individuals should be aware of the needs, desires and well-being of those to whom they are closely
connected
 Factors that Influence Ethical Decision-Making Behaviour
o Stages of moral development are developmental stages that explain a person’s capacity to judge what is
morally right; higher moral development, the less dependent on outside influences and will be
predisposed to behave ethically
o Three levels of moral development and each level has two stages
 Preconventional: sticking to rules to avoid punishment, follow rules only when doing so in your
immediate interest
 Conventional: Living up to what is expected by people close to you, maintaining conventional
order by fulfilling obligations to which you have agreed
 Principled: valuing rights of others, following self-chosen ethical principle even if violate law
o Locus of Control: people with external locus of control believe lives are controlled by outside forces (luck,
chance) and are less likely to take responsibility for behaviour (ex: Ronnie, Dion)
 Internal locus of control are people who believe they are responsible for own destinies
o Organization Environment: employee’s perception of organizational expectations
 Written code of ethics, high level of morals from upper management, realistic performance
expectations are likely to foster high levels of ethical decision making
 Making Ethical Decisions (must consider three key questions)
o First question: Addresses self-interest versus organizational goals
o Second question: Does decision respect right of individuals affected
o Third question: is the decision fair and equitable
 What About National Culture?
o What is unethical in one country may not be viewed similarly in another country (no global standards)

Corporate Social Responsibility

 An organization’s responsibility to consider the impact of its decisions on society

Chapter 10: Organizational Culture and Change

What is Organizational Culture?

 Organizational Culture is the pattern of shared values, beliefs, and assumptions considered appropriate for
thinking and acting within an organization
o Key features are: shared by members of organization, these assumptions, beliefs strongly influence how
people perceive, think, feel, and behave within organization, because assumptions, beliefs make up
culture over time, members of organization believe they are valid
 Levels of Culture
o Artifacts: Aspects of an organization’s culture than an individual can see, hear and feel
o Beliefs: Understandings of how objects and ideas relate to each other

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o Values: Stable, long-lasting beliefs about what is important

o Assumptions: Taken-for-granted notions of how something should be
 Characteristics of Culture
o Innovation and risk-taking, attention to detail, outcome orientation, people orientation, team
orientation, aggressiveness, stability
 Functions of Culture
o Has boundary-defining role because creates distinction between one organization and others
o Conveys sense of identity; create commitment to something larger than individual’s self-interest
o Enhances stability; serves as control mechanism that guides and shapes attitudes and behaviours
 Do Organizations Have Uniform Cultures?
o Dominant culture: a system of shared meaning that expresses the core values shared by a majority of the
organization’s members
o Subcultures: mini-cultures within an organization, typically defined by department designations and
geographical separation
o Core values: the primary, or dominant, values that are accepted throughout the organization

Creating and Sustaining an Organization’s Culture

 How a Culture Begins
o The ultimate source of an organization’s culture: its founders
o Can be created in three ways:
 Founders hire and keep only employees who think and feel the way they do
 Indoctrinate and socialize these employees to their way of thinking and feeling
 Founders’ behaviour acts as a role model
 Keeping a Culture Alive
o Selection
 Explicit goal is to identify and hire individuals who have knowledge, skills and abilities to perform
the jobs within the organization successfully
 Two way street as it provides information about the organization to applicants
o Top Management
 Through what they say/behave, senior executives establish norms that filter down organization
o Socialization
 The process by which new employees adapt to an organization’s culture

The Liabilities of Organizational Culture

 Culture as a Barrier of Change
o Culture is a liability when the shared values do not agree with those that will further the organization’s
effectiveness; when environment is changing, entrenched culture may no longer be appropriate
 Culture as a Barrier to Diversity
o Hiring new employees who are not like the majority of the organization’s members creates a paradox
o Management wants new employees to accept organizational cultural values but wants to openly
acknowledge their differences the they bring to the workplace
 Culture as a Barrier to Mergers and Acquisitions
o Recently, cultural compatibility has become primary concern in mergers/acquisitions
o Strategies for Merging Cultures
 Assimilation: entire new organization is determined to take on culture of one of merging
organizations; good if culture of one organization is bad
 Separation: Organizations remain separate and keep their individual cultures
 Integration: New culture is formed by merging parts of each organizations

Approaches to Managing Change

 Change Agents: people who act as catalysts and assume the responsibility for managing change
 Lewin’s Three-Step Model

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1. Unfreezing: Change efforts to overcome the pressures of individual resistance and group conformity
2. Moving: Efforts to get employees involved in the change process
3. Refreezing: Stabilizing a change intervention by balancing driving and restraining forces
o Driving force: force that direct behaviour away from the status quo
o Restraining force: forces that hinder movement away from the status quo
o Third alternative is to combine the first two approaches
 Kotter’s Eight-Step Plan for Implementing Change
1. Establish a sense of urgency by creating a compelling reason for why change is needed
2. Form a coalition with enough power to lead the change
3. Create a new vision to direct the change and strategies for achieving the vision
4. Communication the vision throughout the organization
5. Empower others to act on the vision by removing barriers to change and encouraging risk-taking and
creative problem solving
6. Plan for, create, and reward short-term ‘wins’ that move the organization toward the new vision
7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs
8. Reinforce the changes by demonstrating the relationship between new behaviours and organizational
success
 Action Research
o A change process based on systematic collection of data and then selection of a change action based on
what the analyzed data indicate
o Diagnosis, analysis, feedback, action, evaluation
o Two benefits: problem-focused, less resistance to change
 Appreciative Inquiry
o An approach to change that seeks to identify the unique qualities and special strengths of an
organization, which can then be built on to improve performance
o Discovery, dreaming (speculate future for organization), design, destiny (participants discuss how
organization is going to fulfill its dream)

Resistance to Change
 Types of Resistance
o Overt, implicit (subtle – loss of loyalty, more sick days), immediate, deferred
 Individual Resistance (reasons why individuals would resist)
o Self-Interest, misunderstanding and lack of trust, different assessments, low tolerance for change
o Cynicism (major elements contribution to cynicism are)
 Feeling uninformed about what was happening, lack of communication and respect from one’s
manager, lack of communication and respect from one’s union representative, lack of
opportunity for meaningful participation in decision making
 Organizational Resistance (six major sources of organizational resistance to change)
o Structural Inertia: organizations have built-in mechanisms to produce stability
o Limited focus of change: organizations consist of interdependent systems (changing one changes all)
o Group Inertia: individuals may want to change, but group norms can act as a constraint
o Threat to Expertise: change may threaten expertise of specialized groups
o Threat to Established Power Relationships
o Threat to Established Resource Allocations
 Overcoming Resistance to Change (seven tactics that can be used by change agents to deal with resistance)
o Education and communication
o Participation and involvement
o Building support and commitment
o Implementing changes fairly
o Manipulation and co-optation
o Selecting people who accept change
o Explicit and implicit coercion (threats)

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