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Organizational Behavior

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TABLE OF CONTENTS

Preface 1

1 Management and Organizational Behavior 7

1.1 The Nature of Work 8 1.2 The Changing Workplace 11 1.3 The Nature of Management 21 1.4 A Model of Organizational Behavior and Management 26

2 Individual and Cultural Differences 35

2.1 Individual and Cultural Factors in Employee Performance 36 2.2 Employee Abilities and Skills 37 2.3 Personality: An Introduction 40 2.4 Personality and Work Behavior 41 2.5 Personality and Organization: A Basic Conflict? 45 2.6 Personal Values and Ethics 48 2.7 Cultural Differences 52

3 Perception and Job Attitudes 63

3.1 The Perceptual Process 64 3.2 Barriers to Accurate Social Perception 73 3.3 Attributions: Interpreting the Causes of Behavior 76 3.4 Attitudes and Behavior 81 3.5 Work-Related Attitudes 84

4 Learning and Reinforcement 95

4.1 Basic Models of Learning 96 4.2 Reinforcement and Behavioral Change 104 4.3 Behavior Modification in Organizations 112 4.4 Behavioral Self-Management 116

5 Diversity in Organizations 125

5.1 An Introduction to Workplace Diversity 126 5.2 Diversity and the Workforce 127 5.3 Diversity and Its Impact on Companies 138 5.4 Challenges of Diversity 143 5.5 Key Diversity Theories 148 5.6 Benefits and Challenges of Workplace Diversity 151 5.7 Recommendations for Managing Diversity 153

6 Perception and Managerial Decision Making 165

6.1 Overview of Managerial Decision-Making 167 6.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive

Systems 170 6.3 Programmed and Nonprogrammed Decisions 172 6.4 Barriers to Effective Decision-Making 175 6.5 Improving the Quality of Decision-Making 179 6.6 Group Decision-Making 189

7 Work Motivation for Performance 199

7.1 Motivation: Direction and Intensity 201 7.2 Content Theories of Motivation 204 7.3 Process Theories of Motivation 219 7.4 Recent Research on Motivation Theories 236

8 Performance Appraisal and Rewards 247

8.1 Performance Appraisal Systems 248 8.2 Techniques of Performance Appraisal 252 8.3 Feedback 264 8.4 Reward Systems in Organizations 265 8.5 Individual and Group Incentive Plans 271

9 Group and Intergroup Relations 285

9.1 Work Groups: Basic Considerations 286 9.2 Work Group Structure 290 9.3 Managing Effective Work Groups 301 9.4 Intergroup Behavior and Performance 304

10 Understanding and Managing Work Teams 321

10.1 Teamwork in the Workplace 322 10.2 Team Development Over Time 324 10.3 Things to Consider When Managing Teams 328 10.4 Opportunities and Challenges to Team Building 332 10.5 Team Diversity 334 10.6 Multicultural Teams 336

11 Communication 347

11.1 The Process of Managerial Communication 348 11.2 Types of Communications in Organizations 350 11.3 Factors Affecting Communications and the Roles of Managers 354

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11.4 Managerial Communication and Corporate Reputation 357 11.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and

Writing 358

12 Leadership 373

12.1 The Nature of Leadership 374 12.2 The Leadership Process 376 12.3 Leader Emergence 381 12.4 The Trait Approach to Leadership 387 12.5 Behavioral Approaches to Leadership 390 12.6 Situational (Contingency) Approaches to Leadership 394 12.7 Substitutes for and Neutralizers of Leadership 399 12.8 Transformational, Visionary, and Charismatic Leadership 402 12.9 Leadership Needs in the 21st Century 406

13 Organizational Power and Politics 415

13.1 Power in Interpersonal Relations 417 13.2 Uses of Power 423 13.3 Political Behavior in Organizations 427 13.4 Limiting the Influence of Political Behavior 436

14 Conflict and Negotiations 445

14.1 Conflict in Organizations: Basic Considerations 446 14.2 Causes of Conflict in Organizations 450 14.3 Resolving Conflict in Organizations 455 14.4 Negotiation Behavior 459

15 External and Internal Organizational Environments and Corporate Culture

477

15.1 The Organization's External Environment 480 15.2 External Environments and Industries 484 15.3 Organizational Designs and Structures 487 15.4 The Internal Organization and External Environments 499 15.5 Corporate Cultures 505 15.6 Organizing for Change in the 21st Century 507

16 Organizational Structure and Change 515

16.1 Organizational Structures and Design 516 16.2 Organizational Change 523 16.3 Managing Change 528

17 Human Resource Management 549

17.1 An Introduction to Human Resource Management 550 17.2 Human Resource Management and Compliance 553 17.3 Performance Management 555 17.4 Influencing Employee Performance and Motivation 559 17.5 Building an Organization for the Future 564 17.6 Talent Development and Succession Planning 566

18 Stress and Well Being 579

18.1 Problems of Work Adjustment 580 18.2 Organizational Influences on Stress 583 18.3 Buffering Effects of Work related Stress 594 18.4 Coping with Work related Stress 601

19 Entrepreneurship 613

19.1 Overview of Entrepreneurship 615 19.2 Characteristics of Successful Entrepreneurs 618 19.3 Business Model Canvas 621 19.4 New Venture Financing 627 19.5 Design Thinking 630 19.6 Optimal Support for Entrepreneurship 633

A Scientific Method in Organizational Research 643

B Scoring Keys for Self-Assessment Exercises 651

Index 689

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Preface

Preface 1

About Organizational Behavior

The field of management and organizational behavior exists today in a constant state of evolution and change. Casual readers of publications like the New York Times, The Economist and the Wall Street Journal will learn about the dynamic nature of organizations in today’s ever-changing business environment. Organizational Behavior is designed to meet the scope and sequence requirements of the introductory course on Organizational Behavior. This is a traditional approach to organizational behavior. The table of contents of this book was designed to address two main themes. What are the variables that affect how, when, where, and why managers perform their jobs? What theories and techniques are used by successful managers at a variety of organizational levels to achieve and exceed objectives effectively and efficiently throughout their careers? Management is a broad business discipline, and the Organizational Behavior course covers many areas such as individual and group behavior at work, as well as organizational processes such as communication in the workplace and managing conflict and negotiation. No one individual can be an expert in all areas of management, so an additional benefit of this text is that specialists in a variety of areas have authored individual chapters. Finally, we all made an effort to present a balanced approach to gender and diversity throughout the text in the examples used, the photographs selected, and the use of both male and female in alternating chapters when referring to generic managers or employees.

Pedagogical Foundation We have taken a structured approach in the writing of the chapters that reduces inconsistencies throughout and makes selecting topics to match the course syllabus easier for faculty.

Exploring Managerial Careers. Each chapter starts with a profile that describes a manager and illustrates how the content of the chapter is vital for a successful managerial career.

Consistent, integrated learning. Targeted learning outcomes are listed at the beginning of each chapter and then repeated throughout the chapter. The learning outcomes connect to the text and the additional resources that accompany Organizational Behavior. After reading each section, students can test their retention by answering the questions in the Concept Checks. Every learning goal is further reinforced by a summary at the end of the chapter.

Hundreds of business examples to bring concepts to life. This book is designed to speak to the typical student. We have done a lot of research about student needs, abilities, experiences, and interests, and then we have shaped the text around them. We have used experiences both inside and outside the classroom to create a book that is both readable and enjoyable. We believe that the real applications found throughout every chapter set the standard for readability and understanding of key concepts.

Learning business terminology, made easy. As students begin to study management, they will explore new words and concepts. To help them learn this language, we define each new term in the chapter, display the terms in bold, and offer a complete glossary at the end of the book.

Applied Features Rather than provide a dry recitation of facts, we illustrate concepts with contemporary examples. In addition to the in-text examples, we have several boxed features that provide more extensive examples in areas of importance in today’s business environment. Each of the boxed features described below includes a series of critical thinking questions to prompt the student to consider the implications of each business strategy.

Ethics in Practice. Ethics in Practice features demonstrate how businesses are responsible not only to the bottom line, but to providing goods and services in a responsible manner.

2 Preface

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Managing Change. The turbulent business climate requires companies to adapt their business strategies in response to a variety of economic, social, competitive, and technological forces. The Managing Change feature highlights how businesses have altered their business strategies in response to these forces.

Catching the Entrepreneurial Spirit. This feature highlights the challenges and opportunities available in small businesses and other entrepreneurial ventures.

Managerial Leadership. It is generally agreed that in a turbulent business climate leadership is an important function of management that helps to maximize efficiency and to achieve organizational goals. Leaders initiate action, motivate organizations, provide guidance, build morale, and create a sense of confidence within the organization and to outside stakeholders.

Sustainability and Responsible Management. This feature highlights the knowledge, skills, tools, and self- awareness that are needed to become responsible managers. While the area of corporate social responsibility and sustainability has gained wide general support and commentary, these featured boxed items should provide the reader with insights of how managers can embed responsible practices in their careers.

Activities and Cases That Put Knowledge to Work Organizational Behavior helps students develop a solid grounding in the skills that they can apply throughout their managerial careers. These skill-building activities and resources help build and polish competencies that future employers will value.

Chapter Review Questions. These questions provide a broad set of challenging questions that students can use to assure themselves that they have mastered the chapter concepts.

Management Skills Application Exercises. These activities at the end of each chapter present real-world challenges and provide assignment material for students to hone their business skills.

Managerial Decision Exercises. These activities provide assignment material that challenge students’ decision-making processes. There are a variety of exercises for individual or team assignments.

Critical Thinking Case. The Critical Thinking case in each chapter invites students to explore business strategies of various companies, analyze business decisions, and prepare comments.

Additional Resources

Student and Instructor Resources We’ve compiled additional resources for both students and instructors, including Getting Started Guides. Instructor resources require a verified instructor account, which you can apply for when you log in or create your account on openstax.org.

Instructor and student resources are typically available within a few months after the book’s initial publication. Take advantage of these resources to supplement your OpenStax book.

Comprehensive instructor’s manual. Each component of the instructor’s manual is designed to provide maximum guidance for delivering the content in an interesting and dynamic manner. The instructor’s manual includes an in-depth lecture outline, which is interspersed with lecture “tidbits” that allow instructors to add timely and interesting enhancements to their lectures.

Test bank. With nearly 1,000 true/false, multiple-choice, fill-in-the-blank, and short-answer questions in our test bank, instructors can customize tests to support a variety of course objectives. The test bank is available in Word format.

Preface 3

PowerPoint lecture slides. The PowerPoint slides provide images and descriptions as a starting place for instructors to build their lectures.

Community Hubs OpenStax partners with the Institute for the Study of Knowledge Management in Education (ISKME) to offer Community Hubs on OER Commons—a platform for instructors to share community-created resources that support OpenStax books, free of charge. Through our Community Hubs, instructors can upload their own materials or download resources to use in their own courses, including additional ancillaries, teaching material, multimedia, and relevant course content. We encourage instructors to join the hubs for the subjects most relevant to your teaching and research as an opportunity both to enrich your courses and to engage with other faculty.

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Technology Partners As allies in making high-quality learning materials accessible, our technology partners offer optional low-cost tools that are integrated with OpenStax books. To access the technology options for your text, visit your book page on openstax.org.

Contributing Authors

J. Stewart Black, INSEAD David S. Bright, Wright State University Donald G. Gardner, University of Colorado-Colorado Springs Eva Hartmann, University of Richmond Jason Lambert, Texas Woman’s University Laura M. Leduc, James Madison University Joy Leopold, Webster University James S. O’Rourke, University of Notre Dame Jon L. Pierce, University of Minnesota-Duluth Richard M. Steers, University of Oregon Siri Terjesen, American University Joseph Weiss, Bentley University

Reviewers

Susan Adams, Bentley University Shane Bowyer, Minnesota State University Kim S. Cameron, University of Michigan Stephen J. Carroll, University of Maryland Daniel R. Cillis, Molloy College Linda Davenport, Klamath Community College Diana L. Deadrick, Old Dominion University James J. Freiburger, Southern New Hampshire University Robert A. Giacalone, John Carroll University Gregory O. Ginn, Embry-Riddle Aeronautical University John Goldberg, University of California-Davis

4 Preface

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Brian Graham-Moore, University of Texas Regina Greenwood, Nova University William F. Grossnickle, East Carolina University Nell Tabor Hartley, Robert Morris University Nai H. Lamb, University of Tennessee at Chattanooga Kristie J. Loescher, University of Texas Marcia Marriott, Monroe Community College Therese Madden, Notre Dame de Namur University Eleonor Moore, Kirtland Community College Bonnie L. McNeely, Murray State University Robert McNulty, Bentley University Jeffrey Muldoon, Emporia State University Karli Peterson, Colorado State University Raymond Pfang, Tarrant Community College Jodell Raymond, Monroe Community College Richard Savior, SUNY Empire State Amit Shah, Frostburg State University Paul L. Starkey, Pennsylvania College of Technology Carolyn Stevenson, Kaplan University Dianna L. Stone, University of New Mexico Maria Vitale, Chaffey College Valerie Wallingford, Bemidji State University

Preface 5

Preface

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Introduction

Learning Outcomes

After reading this chapter, you should be able to answer these questions:

What is the meaning of work in a societal context? How do recognize and meet the challenges facing managers in the new millennium? What is expected of a manager? What is the role of the behavioral sciences in management and organizations?

Exhibit 1.1 (leyla.a/ flickr/ Attribution 2.0 Generic (CC BY 2.0))

The Management Challenge at Apple and Google

When Apple was developing iOS 10, a group of 600 engineers was able to debug, develop, and deploy the new programming within two years. Contrarily, Microsoft engineers were able to develop and execute the programming on Vista, but it took considerably longer and was a bigger undertaking, with almost 6,000 engineers at hand. What was the difference?

According to the study conducted by leadership consulting firm Bain & Company, companies like Apple, Google, and Netflix are 40 percent more productive than the average company. Some may think that this is a product of the hiring pool; big companies generally attract a more talented group of recruits. With unique benefits and prowess in the industry, this must be the case. Wrong. Google and Apple have found a way to answer the most fundamental question in management: How do you balance productivity while maintaining employee satisfaction and commitment?

E X P L O R I N G M A N A G E R I A L C A R E E R S

1. 2. 3. 4.

1

Management and Organizational Behavior

1.1 The Nature of Work

1. What is the meaning of work in a societal context?

Companies such as Google have approximately the same percentage of “star players” as other companies, but instead of spreading out the talent, they group them dynamically to achieve more throughout the day. This grouping focuses on grouping key players in the most business-critical roles, and is the key to success for the overall company. You’ve heard the saying “You’re only as strong as your weakest link,” and in the case of Apple, there were no weak links, making their productivity extremely high overall. To make matters more complicated, the fast-paced workplace and technology changes, including the diversity of employees and the global marketplace, takes a considerable toll on employee expectations, as do the overall stresses of the business performance. Apple is just one example of a company that figured out one of the pieces to this puzzle, but it is illustrative of what is happening in the workplace all around the globe.

Contemporary managers are witnessing changes in technologies, markets, competition, workforce demographics, employee expectations, and ethical standards. At the heart of these changes is the issue of how to manage people effectively. To attain corporate objectives, each manager must discover how to develop and maintain a workforce that can meet today’s needs while getting ready for tomorrow’s challenges. As a result, managers are asking questions such as:

How can we meet the international competition? How can we make this organization more effective? How can we better utilize our human resources? How can we create a more satisfying and rewarding work environment for all employees? How can we improve the quality of our products? How can we improve communication and decision-making processes at work? How should we evaluate and reward performance? How can we develop the company leaders of tomorrow?

Questions such as these point to the issue of effective management. That is, what can managers do to improve both organizational and employee performance? Effective management requires an in-depth knowledge of financial management, marketing research and consumer behavior, accounting and control practices, manufacturing and production techniques, and quantitative methods. In addition, however, effective management requires “people skills.” That is, a good manager must be able to motivate his employees, to lead skillfully, to make appropriate and timely decisions, to communicate effectively, to organize work, to deal with organizational politics, and to work to develop both employees and the organization as a whole. These issues constitute the subject of this course. We shall examine principles of the behavioral sciences that can help managers improve both their own skills and abilities and those of their subordinates in order to enhance organizational performance and effectiveness.

As a prelude to this analysis, we begin with a brief look at the natures of work and of management. Contemporary challenges are discussed. Next, we consider a model of organizational behavior that will serve as a guide throughout the study of management and organizational behavior. We begin with an examination of work.

8 Chapter 1 Management and Organizational Behavior

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