Introduction to Business Management and Organizational Behaviour Organizational Behaviour –

Key Themes

Organizational Behaviour –
Key Themes
Introduction
This module captures some key issues, themes, and challenges in the field of organizational
behaviour. Some of these notions have been captured in previous modules; some have not.
Some do not fit comfortably into previous modules and are therefore presented here. All are
considered to have varying levels and degrees of influence on the behaviour of individuals,
groups, and the organization.

The employment "contract" between the organization and the individual employee can be real,
implied, assumed, written or unwritten. Contracts can be formal legal documents, or can be
more psychological in nature. Any form of employment contract has a significant influence on
our behaviour.

A psychological contract is an unwritten, assumed set of beliefs about the terms of the
relationship and the accompanying expectations between the individual and the organization. It
is an increasingly important concept in organizations today.

Recent trends such as outsourcing, downsizing, and contingent work arrangements have
heralded a new form of employment relationship. Under this "new deal", employees can no
longer cling to traditional beliefs of lifetime employment but instead are responsible for
increasing their own employability.

Similarly, employers need to understand that their actions will impact the employee's
psychological attachment to the organization. Employees have greater flexibility and mobility
which, in turn, puts pressure on organizations to develop strategies that will more effectively
manage the psychological contract.

This has placed new emphasis on understanding how to increase employee engagement and
retention in order to positively influence organizational performance.

Organizational socialization is one way to better understand how individuals develop the values
and beliefs that lead to a whole range of general and specific attitudes about work. It has
significant influences on our behaviour.

Career opportunities are important to employees. Organizations that emphasize personal

growth and development for employees will positively impact employee engagement. There are
four generally accepted stages of career growth: establishment, advancement, maintenance
and withdrawal.

During each of these stages, an individual may experience varying levels of stress as outlined in
a previous module. As employees plan and manage their careers and cope with the stress that
accompanies career ambitions, they also need to manage the influences that stress and career
aspirations can have on their behaviour.
Introduction to Business Management and Organizational Behaviour Organizational Behaviour –
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Workforce diversity has dramatically changed the people of organizations. The workforce will
continue to become even more diverse as the future blends with the present. This increased
diversity within the workforce is a change that provides challenges for many individuals, groups,
and organizations. Workforce diversity has a significant influence and impact on the behaviour
of the individuals, groups, and organizations.

Behaviour at work is often, and usually, thought of in terms of task, context, and ethical
performance. Ethical performance focuses on doing the right thing. Everyone faces ethical
dilemmas at work. An individual's personal ethics have a significant influence on their
behaviour.

Increased globalization, with more and more markets, has affected the behaviour of individuals,
groups, and organizations. The challenges in the manufacturing sector in North America have
led managers to become increasingly aggressive in emphasizing the pursuit of increased
productivity.

This managerial approach has resulted in an emphasis on quality while reducing costs. One
strategy that emphasizes quality is Total Quality Management (TQM); another is Quality of
Work Life (QWL). Both these components of quality potentially have an impact on individual,
group, and overall organizational behaviour.

Learning Outcome
 Identify other emerging organizational behaviour issues and challenges
 Describe how the emerging "psychological contract" affects employment relationships
 Explain the importance of organizational socialization
 Describe how to manage organizational socialization
 Explain the process an employee goes through in managing their career
 Describe the benefits and challenges of workforce diversity
 Explain ethical issues in organizational behavior
 Describe the impact of globalization on organizational behaviour.

Current Organizational Issues and Challenge

Today, organizations are facing many issues and challenges which requires their attention. In
order to remain competitive and successful, organizations must adapt to these changing forces.

Adaptations may include the revision of policies, employee training, and a review of their
business procedures.

Some of the challenges facing organizations include:

 New Employment Relationships
 Employee Engagement and Retention
 Quest for Quality
 Global Economy
 Quality of Work Life
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 Diversity in the Workplace and Environment

 Career Management
 Ethics

Psychological Contracts and Employment Relationships

It is now becoming a rarity that people stay with one organization for their entire working lives.
There is an increasing trend in some industries to hire people on a contractual basis, for a fixed
period of time, for a specific purpose.

Hiring full-time permanent positions is still the norm, but both employers and workers are
realizing the benefits of a contractual arrangement.

For Employers:
Their liabilities are decreased and their flexibility is increased during uncertain times and
changing markets.

For Workers:
There are the benefits of being a "free agent", obtaining varied work experiences and more
easily leaving relationships that they do not like or that do not benefit them.

This trend in employment arrangements is sometimes referred to as the contingent workforce.

Contingent work is any job in which the individual does not have an explicit or implicit contract
for long-term employment, or in which the minimum hours of work can vary in a non-systematic
way.

One of the foundations of the employer/employee relationship is the existence of a contract

between the employee and the organization that hires them.

The relationship between the employee and the employer (organization) will likely have three
dimensions:

1. Real Contract Language

This is a legal document outlining the terms and conditions for employment.

It will contain a start and finish date along with the benefits supplied.

The obligations of the employee are stated clearly (i.e., the expectations of the job to be
done).

2. Implied Contract
Implied Contract terms based on patterns of behaviour by each party and conversations
about the work relationship when it begins and throughout the course of the relationship.

Example:
When a person is hired on a permanent full-time basis and there is no end date of the
contract. It is implied that the term of employment is indefinite. Termination will occur
when the contract is frustrated (i.e., one or both of the parties is unable to fulfill the
obligations of the contract).
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3. Psychological Contract
A Psychological Contract that consists of emotional commitment between the employer
and the employee.

Example:
The employer's and employee's perceived mutual obligation about their exchange
relationship.

Trust between the two parties is a large factor in a psychological contract.

In the last few decades, organizations have been much more active in managing the size of
their employee population, resulting in much more frequent use of workforce reduction
strategies and outsourcing strategies, all of which have impacted the employee's view of the
psychological contract.

As a result, workers seem to have decided that if the employer is going to act in their best
interest, employees should do the same thing.

So, when an organization hires an employee that is very productive and is someone they want
to develop a long-term relationship with, the organization needs to work much harder than in the
past to engage them and retain the employment relationship.

This has placed new emphasis on programs such as: organizational socialization, career
development, and management training because these programs help build stronger
relationships between employees and their employer.

Organizational Socialization
Organizational socialization is the process of an employee transforming from an "outsider" to an
"insider" or the process by which individuals learn the values, expected behaviours, and social
knowledge necessary to assume their roles in the organization.

A major part of the socialization process is the employee "on-boarding" process. The quicker
this process can occur, the faster the employee will become an effective and productive
member of the organization.

There are ways in which an employer can manage the socialization process and turn the new
employee into an "insider" faster, such as:

1. Preparing relevant documentation and the employee's workstation in advance of their

arrival for their first day. Provide them with information on start times and dress codes as
appropriate.

2. Outlining the specific duties of the role and how they relate to the department the
employee is joining. Discuss department objectives and company vision/mission.

3. Introducing the new employee to other employees within their department.

Introduction to Business Management and Organizational Behaviour Organizational Behaviour –
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4. Introducing the new employee to other employees outside their department - particularly
those that they will interface with regularly. Include an explanation of how the new
employee's role relates to the role of the employees they meet.

5. Assigning "socialization agents" (supervisors, coworkers and others) to the new

employee to provide training on how to use basic hardware (telephone, computer, etc.)
and to help answer questions.

Organizational socialization does not stop with the employee on-boarding process. The
employee will develop a stronger psychological contract as they see consistency between the
values and culture expressed during the initial orientation to their new job in the reality of the job
several weeks after starting.

These first impressions can leave lasting impressions that will be difficult to change if not
managed effectively. Organizational socialization programs should strongly align with the
desired culture that the organization wishes to foster.

Career Evolution
Employees can move through various stages during the life of a career.

The following model outlines four stages of career evolution.

Stage I
Establishment:
In Stage I, the employee begins experiencing the new organization. Organizational socialization
is important. The employee works at understanding how the organization operates and settling
in.

Once they have settled in, they can begin to pursue a level of performance achievement that will
provide opportunities for promotion or job growth.

Stage II
Advancement:
The advancement stage is very dynamic. It is here where an employee will experience:

Vertical movement: a job change to a higher hierarchical level in the organization.

Horizontal (lateral movement): a change of job where they remain at the same hierarchical
level in the organization. This is can be intended to provide additional experience before a
vertical movement or can be utilized to provide job variety.

Inclusion:- movement toward the core decision-making group of the organization.

Stage III
Maintenance:
In Stage III, employees typically find themselves being identified in one of three roles. These
include:
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 High Potentials: employees who top management have identified as having the
potential to occupy senior management positions in the future. These employees expect
to receive promotions, new job assignments and increased status.
 Solid Citizens: very reliable and competent employees whose opportunity for promotion
is more limited.
 Underachievers: employees who have no chance for promotion, who may be assigned
to dead-end positions or may be at risk if a reorganization or downsizing occurs.

Stage IV
Withdrawal:
This stage marks the twilight of the employee's career or the employee thinks about retirement
and the accompanying changes that go with it.

There are initiatives that an individual and an organization may do to assist with career
development. The benefits to working with an individual for career planning is that the employee
attempts to achieve their personal limit. The person and the organization benefit from this
probable increase in job satisfaction and engagement.

Ideally, the process of career planning should be shared with the individual employee in the
organization. Employees will seek out opportunities that match their career interests and devote
time and energy to building capabilities that will enable them to pursue these opportunities.

The organization is responsible for outlining the capabilities that are required for the different
roles within the organization and to actively communicate job openings to employees.

The organization can also provide formal training and development, special assignments,
mentoring and coaching and, where appropriate, job rotations.

Individual career planning should also be integrated within organizations' succession

management plans. The succession management planning process enables an organization to
be intentional about the development of employees.

Time should be invested with employees who are identified as high potentials to ensure that
they are developing capabilities of the organization will need in the future and to ensure that
they are engaged and motivated by the career development process.

In order for an organization to have a successful career management process, they must have
an effective performance management process.

An effective performance management process will enable the organization to identify high
potential employees and to provide meaningful feedback to all employees with respect to their
current performance and their potential for advancement.

Managing Diversity
The composition of the Canadian workforce changed dramatically during the last half of the
twentieth century. Canada now has the most highly diversified workforce of any developed
country. The working population is made up of people who differ from one another in cultural
background and native language, age, skills, gender, and social status.
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Diversity among employees has an impact on organizational behaviour because employees

who have different backgrounds and characteristics have varied values and needs. The
behaviours of a diverse working staff are more varied and hence less predictable than in earlier
times, when most organization members were relatively similar.

Some Facts:
 The Ontario birth rate from 2001 to 2006 was lower than from 1991 to 1996. This is
reflective of a consistent trend of decline over the past several decades.
 Immigration patterns have changed. Population growth is significantly impacted by the
increasing level of immigration.
 More women are entering the workforce and are staying longer.
 The advent of two income families continues to evolve.
 There is an increase in legislation to help disabled persons integrate into the workforce.
 There is an increasing number of lobby groups pressing for social change.
 There is a developing labour shortage which will result in increased competition in the
labor market.
 The work environment continues to evolve as it integrates a variety of demographic
classifications including women, disabled persons, racial minorities and other
demographic groups that were not as present in the workforce 50 years ago.

Another interesting fact worth noting is the increasing number of diverse generation groups that
exist within organizations.

The generation groups include:

 Baby Boomers
 Generation X and
 Generation Y (also known as "Millennials").

These groups all have different perspectives with respect to the psychological contract at work
in their expectations of fellow employees.

Organizations are now facing situations where 30-year-old employees are placed in roles that
require them to manage 55-year-old employees.

Their differences in perspective can cause friction in the workplace relationship. This is an
emerging area of diversity that requires much attention.

There are benefits to diversity in the workplace. There are also challenges that accompany this
organizational change.

An organization, including both its leaders and members, must be prepared to develop
strategies for managing diversity and the impact the changes will have on organizational culture.

Benefits for an organization that engages in bringing diversity to their workforce:

 They provide more access to different perspectives and a broader range of skills and
abilities.
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 The quality of decision-making increases with a wider pool of information.

 Diversity also contributes to enhance creativity and innovation.

Significant Challenges

The two most significant challenges in a diverse workforce are:

 stereotyping (discrimination)
 communication breakdowns and conflicts due to differences in background perspectives.

Many of these issues are a function of perceptual filtering discussed in earlier modules. As a
result of these challenges, organizations need to engage in diversity training to help employees
gain greater sensitivity and understanding of different perspectives.

Steps in changing organizational culture

1. Identify the existing culture.

2. Have organizational leaders define the new values and philosophy and transmit the
information to all employees.

3. Have the organization institute mechanisms for reinforcing changes in behaviour.

Ethics
Ethics in business and society are constantly changing.

For example, those who do not recycle their garbage may be seen to be behaving unethically,
which would not have been the case in the 1980s.

Definition of Ethics:
Standards of conduct based on the commonly held values and moral principles of a society.

A society's standards of conduct tell its members what is generally considered to be "right and
wrong" behaviour.

An employee's behaviour can be classified:

Amoral: The employee is unconcerned with different standards of moral conduct.

Immoral: The employee disregards ethical principles and often focuses on achievement of the
desired goal without concern for how the goal is achieved.

Moral: An employee who respects the ethical norms of society and the rules of the workplace.
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All employees must respect the standards of conduct if they are to be considered as behaving
ethically.

These standards include:

 professional business ethics
 the standards of conduct of the Canadian society as a whole
 personal ethical standards of conduct
 the ethical standards of business partners from other countries

Different people have different ideas of what is right and wrong, which causes organizations to
face a number of ethical issues.

Ethical challenges often come down to balancing the tension between an employee's pursuit of
an organization's financial goals and the means used to achieve the goals.

For example:
There is a great deal more regulation with respect to financial reporting because of past
situations where inappropriate actions were taken by business leaders. These leaders
misrepresented the financial health of their organization, hoping that things would change, and
decided that the "end justifies the means".

Organizations are moving towards more decentralized leadership and organizational structures.

As a result, they need to build cultures that focus on integrity and other positive character values
so that they can trust the actions of employees without having to micromanage them.

Global Economy
Most businesses in Canada are operating within a global economy, which means that many
different nations and cultures of the world come together to conduct business in one big
marketplace.

This new marketplace has meant that Canadian businesses have had to adapt their way of
doing business. Canadian organizations now have a varied clientele that they must be prepared
to deal with.

This may mean:

 an increase in travel by employees

 a need for cultural diversity training and sensitivity
 varied hours of operation
 a different approach to marketing their products
 an examination of the skills and competencies needed by employees
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You can see that globalization can impact employee behaviour in many ways.

Technology has enabled us to communicate with people around the world.

This impacts the nature of how we communicate. It also increases the value of having
acceptance of diversity as a cultural norm of organization.

Quality of Work Life

Quality of Work Life (QWL) is a process by which all members of the organization, through
appropriate and open channels of communication set up for this purpose, have some say in
decisions that affect their job in particular and/or their work environment in general. This results
in greater job involvement and satisfaction and less stress and fatigue.

QWL represents a management style in which employees experience feelings of ownership,

self-control, responsibility, and self-respect. One of the ways that QWL in an organization can
be enhanced is by introducing alternative work arrangements.

Emerging alternative work arrangements:

 Flextime Schedules
 Compressed Work Week
 Permanent Part-Time Work
 Job Sharing
 Industrial and Electronic Cottages

Summary
Workplaces today are transforming - and will continue to re-model themselves - in the future.
The trends of today - globalization, technological advancements, diversity enhancements and
the like - will continue to have an impact on behaviour. It is highly likely other, yet unknown,
additional issues and challenges will emerge over time.

Telecommuting, the use of virtual teams and groups; employment and employability patterns;
and ever-changing employee values are seen as part of the ever-shifting landscapes in the
behavioural worlds of organizations.

The onset, evolution, and implementation of as yet clearly articulated experimental and
imaginative management and organizational philosophies and theories are likely to severely
challenge traditional values, behaviours, and basic beliefs about how organizations are
supposed to work and function in society. This will drastically alter the behaviour of individuals,
groups, and organizations in ways yet uncharted and unknown. And they laughed at Galileo,
too!

You have now completed this module.