Samenvatting Organisational Behaviour (Buelens), part 2 (EN)

Deze samenvatting is gebaseerd op het studiejaar 2013-2014.

Chapter F: Motivation theories

There are different aspects to how people can be motivated and how it influences their performance: In this section three process theories of motivation are elaborated (expectancy theory, equity theory and goal-setting theory). Further, important tools such as feedback and giving rewards will be discussed.

The Expectancy theory is the idea that people’s actions are driven by expected consequences. Hedonism of one component of expectancy theory: Hedonistic people strive to maximise their pleasure and minimize their pain. This theory can be used to predict behaviour in any situation in which a choice between two or more alternatives must be made.

There are two theories of motivation: Victor Vroom’s expectancy theory and Lyman Porter and Edward Lawler’s extension of Vroom’s theory.

Vroom’s expectancy theory

Motivation boils down to the decision about how much effort to exert in a specific task situation. Vroom’s expectancy model is structured in a three-stage sequence of expectations:

  1. Motivation is affected by an individual’s expectation that a certain level of effort will produce the intended performance goal.

  2. Motivation is influenced by a person’s perceived chances of getting various outcomes as a result of performing at a level, which would result in the benefits.

  3. Individuals are motivated to the extent that they value the outcomes receives. This means that only if the perceived value of the outcome is higher than the perceived value of the cost/effort will the effort be exerted.

Expectancy represents an individual’s belief that a particular degree of effort will be followed by a particular level of performance(effort --> performance expectation). Taking the form of subjective probabilities for expectancies, zero is the perception that effort has no effort on performance and one is the perception that everything depends on effort. The factors influencing an employee’s expectancy perceptions are: Self-esteem, self-efficacy, previous success at the task, help received from a supervisor and subordinates, information necessary to complete the task and goods materials/equipment to work with.

Instrumentality: a person’s belief that a particular outcome depends on performing at a specific level (performance --> outcome perception). Performance is instrumental when it leads to something else (e.g. passing exams is instrumental to graduating from university).

Valence: positive or negative values people place on outcomes. It mirrors our personal preferences (e.g. most employees place a positive value (valence) on receiving additional money whereas job loss would be likely to prove negatively valent for most individuals). The outcome of valence depends on an individual’s needs but the sum of the valences of all relevant outcomes has to be positive.

The Vroom’s Expectancy Model is visualised in Figure 6.1 on page 243

On the basis of Vroom’s Expectancy Model Lyman Porter and Edward Lawler developed an extended expectancy model. This model tempts to identify the source of people’s valences and expectancies and to link effort with performance and job satisfaction.

Effort is a function of two elements: the perceived values of a reward (reward’s valence) and the perceived effort - reward probability that means the expectation that performance will lead to rewards. Performance is determined by moiré than effort: It also depends on an employee’s ability and traits and on how the employee perceives his/her role perception. The higher the employee’s abilities the higher the performance when employees understand their roles.

Employees receive both intrinsic (self-granted and consist of intangible) and extrinsic rewards (tangible outcomes) for performance. The job satisfaction, in turn, is determined by employees’ perception of the equity of the rewards received. The employee’s future effort – rewards probabilities are influences by past experience.

The Porter and Lawler’s Expectancy Model is shown in Figure 6.2 on page 244

Even though the expectancy theory predicts some components accurately (e.g. task persistence, achievement), it has bee criticised for several reasons:

  • Theory is difficult to test

  • Measures used to assess expectancy, instrumentality and valence have questionable validity

Expectancy theory can be useful for creating motivating working environments where people like to work and achieve high performance.

Non-challenging work leads to boredom, frustration and low performance. Too difficult tasks cause frustration as they are not attainable. It is crucial to pay attention to individual when trying to influence people’s expectancies.

As the expectancy theory is based on perceptions, motivation decisions should not be cased on manager’s view of abilities.

Organizations also have to deal effectively with employees’ instrumentalities to enhance motivation: trust and honesty are important aspects of organizations that are values by employees. Organizations have to monitor valences for various rewards.

The concept of instrumentality is applied in the concept of performance-related pay (PRP), referred to as pay-for-performance. The idea behind pay-for-performance schemes is to give employees an incentive for working harder or smarter; it is something extra.

The Equity Theory is a model of motivation that explains how people strive for fairness and justice in social exchanges. This theory is based on cognitive dissonance theory (developed by Leon Festinger in 1950s). Equity theory focuses on what people are motivated to do when they feel treated inequitable. According to his theory:

  • People are motivated to maintain consistency between their cognitive beliefs and their behaviour

  • Perceived inconsistencies create cognitive dissonance/psychological discomfort that motivates corrective action

The key components of the individual-organization exchange relationship are inputs and outcomes. This relationship is central to employees’ perception of equity and inequity that is evaluated by comparing their inputs and outcomes with others.

When making equity comparison, employees consider on-the-job inputs and outcomes. (shown in Table 6.2, Page 249).

There are three equity relationships: equity, negative inequity and positive inequity. When two people have equivalent backgrounds and perform the same tasks, equity exists for an individual when the ratio of perceived outcomes to inputs equals the ratio of outcomes to inputs. However, if the individual enjoys greater outcomes for similar outputs, is it called negative inequity. On the other hand, the individual perceives positive inequity when the outcome to input ratio is greater than of the other person.

The Equity Theory of Motivation is shown in Figure 6.3 on page 248.

There are two key findings on the equity theory of motivation in organisations:

  1. Negative inequity is less tolerable than positive inequity. People who feel a negative inequity are more powerfully motivated to correct the situation.

  2. Inequity can be reduced in several ways (shown in Table 6.3, Page 251)

Individuals tend to compare themselves with similar others or close friends rather than dissimilar ones. Further, men and women have the same reaction to negative inequity.

To maintain feeling of equity in organization, the following aspects should be considered:

  • Managing job behaviour needs understanding of cognitive processes

  • It is important to pay attention to employees’ perception on what is fair and equitable

  • Hiring and promotion decisions based on merit-based and job-related information is seen as equitable

  • Having the ability to appeal against any decision promotes the belief that organizations treat employees fairly

  • Equity outcomes makes employees being more likely to accept and support organizational change

  • Organizations can promote teamwork among employees by treating them equitably

  • Treating employees inequitably leads to conflicts

  • The organization’s climate should be for justice as it significantly influences employees’ job satisfaction.

A Goal is what an individual is trying to accomplish or an action or object someone is aiming for. Goal setting has been promoted through management by objectives (MBO). It is an approach that includes participation in decision-making, goal setting and objective feedback.

Locke’s Model of Goal Setting (Figure 6.4 on page 255) involves four motivational mechanisms;

  1. Goals are personally meaningful and direct one’s attention on what is relevant and important

  2. Goals motivate us to act so that the level of effort expended proportionately to the difficulty of the goal

  3. The effort expended on a task over an extended period of time is represented by persistence

  4. Goals can encourage people to develop strategies and action plans enabling them to achieve their goals

In general, goal setting works in different cultures even though goal specificity and difficulty vary between cultures.

Goal difficulty reflects the amount of effort requited to meet a goal. There is a positive correlation between goal difficulty and performance but as the goal seems impossible to reach, the performance drops (see Figure 6.5, on page 256). Goal specificity pertains to the quantifiability of a goal, which refers to the extent to which a goal is specifically stated and specified. Setting specific, difficult goals leads to poorer performance: There are two explanations:

  1. Employees are not likely to make an increased effort to achieve complex goals unless they support them

  2. Novel and complex tasks take employees longer to complete

Further, Feedback lets people know if they are going in the right direction. It provides the information needed to adjust direction, effort and strategies for goal accomplishment. Hence, goals pus feedback is the recommended approach.

The contingency approach is a method that seems best suited to the individual and situation. Individual differences make it necessary to establish different goals for employees performing the same job.

Goal-commitment is the extent to which an individual is personally committed to achieving a goal. It affects the goal-setting outcomes by both strengthen the intention and lower the unwillingness to reach a goal over time.

The number of sources that can be used as input for goal-setting:

  1. Time and motion studies

  2. Average past experience

  3. Employee and his/her superior may set the goal particulately through give-and-take negotiation

  4. Conducting external or internal benchmarking (used when an organization wants to compare its performance or internal work processes with those of other organizations or other internal units, departments within the organization)

  5. Strategy of company may affect the goals set by employees at various level within the organization

Goals must be Specific, Measurable, Attainable, Result- oriented, and Time bound (SMART). When people have multiple goals, goal conflict may arise. Goal conflict refers to degree to which people feel that multiple goals are incompatible. There are three types of goal conflicts:

  1. Externally imposed goal my be in conflict with a personal goal

  2. People have to achieve multiple outcomes when performing a single tasks leading to trade-off between performance quality and quantity

  3. Several tasks or goals have to accomplished

Techniques to increase goal commitment in organizations can be found on page 259

Goal setting only works when people are committed to the goals established. Higher goal commitment can be achieved by understanding the goals.

Feedback serves the following to two functions: It is instructional and motivational. Feedback instructs when it clarifies roles and motivates when it serves as a reward.

To better understand the feedback-performance relationship, the cognitive-processing model of feedback (Figure 6.6 on page 262) can be used.

The sources of giving feedback are ‘others’, the task itself and ‘oneself’. People who tend to be high in self-confidence rely more on personal feedback than those with low self-confidence.

The recipient who gets feedback differs in character, perception and cognitive evaluation. The recipient’s character (self-esteem and self-efficacy) can help or hinder one’s readiness for feedback. Others having low self-esteem and self-efficacy do not seek for feedback. High self-monitors are more open to feedback whereas high self-monitors are tuned into their own internal feelings. The perception can be perceived in a positive or negative way. Research shows that negative feedback can be seen as a challenge and set higher goals whereas positive feedback can less motivate to do better. However, destructive criticism can reduce the beliefs of self-efficacy and self-set goals of recipients.

When receiving feedback, people evaluate it based on several aspects (accuracy, credibility of the source, fairness, expectancies and behavioural standards). If one or more of these cognitive criteria are failed to meet the feedback it will be played down.

As feedback is related to the goal-setting process it comes to the same behavioural outcomes: direction, effort and persistence and resistance.

Table 6.5 in page 265 lists some further problems with regard to organizational feedback systems. Tips on how to help managers to build credible and effective feedback systems are listed on page 265.

The 360-degree feedback and upward feedback are newer approaches as they involve multiple sources of feedback. Nowadays, more and more employees receive feedback from subordinates or even outsiders, which covers all relevant stakeholders in an employee’s performance (‘360-degree’). However, when customers are not included it is described as 270-degree feedback. The popularity for even subordinates giving upward’ feedback’ to his or her boss has grown for at least six reasons:

  1. Traditional performance-appraisal systems created dissatisfaction

  2. The trend to team-based organizations instead of traditional hierarchies

  3. ‘Multiple raters’ are considered to be more valid feedback than single-source rating

  4. Support of computer network technology facilitates multiple-rater systems

  5. Trend towards participative management and employee empowerment

  6. Co-workers are said to know more about a professional’s strengths than the boss

Studies have shown that upward feedback had a positive impact on the performance of low to moderate performers. Further, repeated upward feedback had a lasting positive effect on performance. Both 360-degree and upward feedback may be a motivational tool as the feedback based on anonymity is decoupled from pay and promotion decision. Developing effective 360-degree programmes is not easy as several interconnected steps need to be involved. On page 268, Table 6.6 the organizational conditions for 360-degree feedback are summarised.

Rewards are an omnipresent feature of organizational life. But rewards go far beyond monetary compensation. Hence, there are different reward systems that are similar to each other on some interrelated common components. There are three different types of rewards: financial/material (extrinsic), social (extrinsic) and psychic (intrinsic). Whereas social rewards involve praise and recognition from others psychological rewards come from personal feelings of self-esteem, self-satisfaction and accomplishment.

In general, extrinsic rewards (money or praise) come from the environment and intrinsic rewards (pleasure from a task) are self-granted. If an employee obtains extrinsic rewards he gets extrinsic motivated just like intrinsic rewards turn to an intrinsic motivated employee. In cultural context, however, intrinsic job characteristics are only high valued in rich countries with lower power distance and an individualistic culture.

Besides the different types of rewards, four organization’s reward norms dictate the nature of exchange:

  • Profit maximisation: The objective to maximise its net gain in a selfish way. A profit-maximising employee would thereby seek maximum rewards and even leave the organization for a better deal

  • Equity: The reward equity norm says that rewards should be in proportion to contributions. It is the most common phenomenon in cultures. The equity norm is driven by basic principles of fairness and justice but its cultural strength varies.

  • Equality: The reward equality norm is about rewarding all parties equally without considering their comparative contributions. As there is not absolute equality in hierarchical organizations, the gap between high-level and low-level employees is from importance. The smaller the pay gap, the better the individual and organizational performance.

  • Need: This norm states that distributing rewards should be according to employee’s need rather than their contributions.

The individual preference for reward-allocation norms and the social, cultural and political-economic context when implementing a reward system might enhance people’s job satisfaction and motivation.

There are three general criteria for the distribution of rewards:

  • Performance in terms of result (tangible outcomes)

  • Performance in terms of actions and behaviours

  • Non-performance consideration (where is type of job is rewarded)

Organizational Practices to stimulate a Performance culture is stated in table 6.7 on page 275. Sometimes organizational reward systems do not achieve the desired motivational impact. On page 273, eight reasons for that are listed.

Financial rewards have an impact on the performance in three different ways:

  • Motivational: the sense that rewards make people try harder

  • Sending signals: paying an extra payment when the target is reached

  • ‘Worker sorting’ effect: organizations using rewards extensively tend to attract people valuing such rewards.

There are several issues to consider when deciding on the right balance between monetary and non-monetary rewards:

  1. Employees value interesting work and recognition more than money

  2. Extrinsic rewards can lose their motivating factor over time

  3. Monetary rewards must be large enough to generate motivation

Pay should not be linked to goal achievement unless the performance goals are under the employees’ control, the goals are quantitative and measureable and large payments are made for performance achievement. The visualization of the General Model of Organizational Reward Systems is illustrated in Figure 6.7 on page 270.

Chapter G: Group dynamics

Groups and teams are an inescapable feature in our everyday life. The term ‘group’ can be defined as two or more freely interacting individuals who share collective norms and goals and have a common identity

The psychologist Edgar Schein made distinctions between a group, a crowd and an organization (shown in Figure 7.1 on page 296): the size of a group is limited by the possibilities of mutual interaction and mutual awareness. Hence, a whole organization cannot be considered as a group as they do not all interact and are aware of each other.

But work teams, subparts of departments or other informal associations among organizational members are by definition a group.

The psychologist Rensis Likert views organizations as a collection of groups rather than individuals. According to Likert, groups have a psychological function and are more productive if they satisfy individual’s needs.

A formal group is formed by the organization to help the organization to accomplish a goal (e.g. work groups, team, committee). Functional reporting between subordinates and group managers is one characteristic of a command or functional group. The aim of a task group is to complete a particular task for a limited time. In organizations, employees can belong to a command group and to at least one task group.

An informal group evolves naturally and is not created on purpose by an organization. There are two specific types of information groups: friendship groups and interest groups.

Whereas friendship groups arise from common characteristics of people (age, ethnic background), interest groups develop because of a common interest or activity they belong to. Formal and informal groups often overlap which may be problematic as it can foster the productive teamwork on the job but also threaten the productivity by ‘gossip’.

Groups fulfil two basic functions: organizational and functional (shown in table 7.1 on page 299). The social identity theory states that these functions are defined by personal social affiliations: Groups that are similar to ourselves reinforce the personal social identity and motivate the individual to belong to that group.

Social networks are social entities and the relations between them. They differ from groups or teams as they have no clear boundaries. Social networks or ‘shadow organizations’ can emerge in a given company or be prescribed.

In the field of research the social network analysis is a systematic and quantifiable collection and analysis of social relations. Emerged in the 1930s, the method has developed through the insights of statistics, social-psychology and sociology. The sociogram (shown in figure 7.2; page 300), is one output of a social network analysis. It concerns with the structure and patterning of relationships and identifies their causes and consequences. There are different types of individuals that can be identified: (1) Star (individual having large number of relations), (2) Isolate (individuals having no relations), (3) Bridge builder (individual connecting parts of the network).

Tuckman’s group development and formation process

Groups and teams go through a maturation process in identifiable stages. The psychologist Bruce W. Tuckman proposed in 1977 the five-stage model (Figure 7.3; P.301), which is akin to Maslow’s need hierarchy model.

Stage 1: Forming: Group members are uncertain and anxious about their roles. The mutual trust is low. If formal leader does not assert his/her authority, another leader emerges.

Stage 2: Storming: This is the time of testing the leader’s policies. Subgroups are shaped that can lead to procrastination. Some groups may stay in the second stage due to eruptions turning into rebellion

Stage 3: Norming: Power struggles are resolved as the new respected member becomes the leader. Questions about authority and power are resolved and team spirit develops. Members have found their proper roles.

Stage 4: Performing: The activity is focused on task problems. The climate is characterised by open communication, strong cooperation and helping behaviour. Instead of conflicts and job boundary disputes, the members are cohesive and personal committed to group goals.

Stage 5: Adjourning: The work is done so that members feel a compelling sense of loss

There are rituals celebrating the “end” or “new beginning”. Leaders emphasis the valuable lessons learn in group dynamics. Everyone gained new experiences.

Evidence has shown that Tuckmans’s performing stage, in what researchers called group decay, can be subdivided into:

  • De-norming: different standard of conduct towards the project among the members as their interest and expectation change

  • De-storming: Whereas sudden conflicts arise in the storming stage, slowly discontent comes up during the de-storming stage

  • De-forming: Work groups falls apart in subgroups. Group members isolate themselves from each other. As a result, performance declines rapidly.

A study shows that interpersonal feedback increases as the group develops through succeeding stages and becomes more specific during the group development. Further, the credibility of peer feedback increases as well as the amount of positive feedback.

In the early group development stages active, aggressive and task-oriented leadership behaviour are related to strong functioning. Supportive, decentralized and participative behaviour, on the other hand, leads to poorer functioning but lead to more productivity and satisfaction throughout the life of the group.

Roles are sets of behaviour that people expect of occupants of a position

Role theory attempts to explain how these social expectations influence employee behaviour

Role episode is composed of a snapshot of the ongoing interaction between two people (shown in Figure 7.4 on Page 304). At the beginning of any role episode, the role sender perceives the relevant organization’s or group’s behaviour requirements that serve as a standard for formulation expectations for the focal person’s behaviour. Then, the role sender evaluates the action behaviour of the focal person’s behaviour against those expectations followed by verbal and non-verbal messages. The focal person accurately or inaccurately perceives the communicated role expectations, which can be experienced as role overload, role conflict and role ambiguity. Then the focal person responds constructively by engaging.

Roles overload occurs as the total of what role senders expect of the focal person far exceeds his or her ability. Role conflict is experienced when various members of the role set expect various things of the focal person. This may be also the case when values, ethics or personal standards collide with others’ expectations.

Those who do not know what is expected of them experience role ambiguity. It can foster job dissatisfaction, cause lack in self-confidence and hamper job performance.

Task roles enable the work group to pursue a common purpose while maintenance roles keep the group together. In table 7.2 on page 306, task and maintenance roles that need to be performed by group members are listed.

Norms are shared attitudes, opinions, feelings or actions that guide social behaviour. They evolve due to psychological and sociological mechanisms and have a powerful influence on group and organisational behaviour. Norms develop in the following four ways:

  • Explicit statements by supervisors or co-workers

  • Critical events in the group’s history

  • Primacy

  • Carry-over behaviours from past situations

Group members enforce norms for the following four reasons:

  1. Group/organisation survive

  2. Clarification of behavioural expectations

  3. Avoidance of embarrassment

  4. Clarification of central values/unique identity

Two different approaches determine the optimum group size: mathematical modelling and laboratory simulations

The first approach, the mathematical modelling, includes building around certain desired outcomes of group action (e.g. decision quality). But this research is inconclusive due to differing assumptions and statistical techniques.

The second approach, the laboratory simulations, assumes that group behaviour needs to be observed first in controlled laboratory settings. This studies exploit that brainstorming productivity of ideas does not increase as the size of the group increases.

In general, the group size depends on the organisation’s objective. While a three- to five –member group would be appropriate to make high-quality decisions, a larger group could generate creative ideas and socialise new members. According to studies, the increase in group size leads to more directive group leaders and decreasing group member satisfaction.

Further, it was found that diverse dyads performed better than homogeneous sensing dyads that work on a complex task. However, that was the case when comparing them with homogeneous intuiting dyads. Several studies reveal that task-related diversity leads to greater effectiveness whereas relations-oriented diversity (e.g. gender, age) even inhibits effectiveness. Diversity may increase the knowledge pool but too much heterogeneity can make the communication between team members difficult.

The three major threats to group effectiveness are the Asch effect, groupthink and social loafing. Even though conformity to norms, role expectations, policies and rules need to be established in an organisation, there are two drawbacks: First, the pressure to conform suppresses creativity and influences members concerning their attitudes that are not of any organisational need. Second, blind conformity destroys creative thinking.

The psychologist Solomon Asch has shown in his study that naive subjects conform to 80 % to a majority opinions that is obviously wrong. He called the distortion of individual judgment by a unanimous but incorrect opposition the Asch effect.

Unlike Asch’s subjects, who are strangers to each other, members of groups involved in groupthink are tightly cohesive. It is the mode of thinking that people engage in when they are deeply involved in a cohesive in-group and is a deterioration of mental efficiency that results from pressures.

The last threat to group effectiveness is social loafing which refers to the tendency for individual effort to decline as group size increases. There are four explanations for the social loafing effect:

  1. Equity of effort

  2. Loss of personal accountability

  3. Motivational loss due to sharing rewards

  4. Co-ordination loss as more people perform the task

Laboratory studies have shown that social loafing occurs when the task is perceived to be unimportant or simple, group members thought their individual output is not identifiable and when members expect their co-workers to loaf.

Chapter H: Teamwork

Katzenbach and Smith defined the term ‘Team’ as a small number (between 2-25 members) of people with complementary skills who are committed to a common purpose and approach for which they hold themselves mutually accountable. The following conditions apply to a team: members of the group have shared goals and interact with each other to achieve those goals. Moreover, team members have well-defined and interdependent roles and an organisational function as team.

As organisations want to use effectively talents to improve performance of all groups, the contingency model for staffing work teams (Figure 8.2 on page 329) would be appropriate. This way, it can also train and develop new talents whereas concentration of talent would lead to the maximised performance.

Within every team are different roles with its positive qualities and allowable weaknesses in order to be successful. Meredith Belbin identified in her framework nine roles that can be classified into do-roles, think-roles and social roles (shown in Table 8.1 on page 330). In creative groups is a balance of all these roles that are complementary to each other.

Erik Sundstrom developed the general typology of work teams and identified four general types of work teams: advice, production, project and action teams. Further, he examined these types by means of four key variables: the degree of technical specialisation and of co-ordination with other work units, work cycles and typical outputs.

Advice teams are formed to broaden the information base for decisions. They tend to have a low degree of technical specialisation and co-ordination. The second type of team, production teams, perform day-to-day operations, have a low degree of technical specialisation but a high degree of co-ordination as work flows from one team to another. Project teams, on the other hand, have a high degree of technical specialisation as they are specialised in that field. The degree of co-ordination is low for traditional units but high for cross-functional units. The last type of teams, action teams, have a high degree of technical specialisation and co-ordination. The only challenge for those teams is to perform at its peak on demand.

There are two effectiveness criteria for work teams: performance and variability. Whereas performance satisfies the need and expectations of outsiders (clients, customers and fans), team variability satisfies the team member’s willingness to contribute. The ecological model of work-team effectiveness (Figure 8.3, page 334) illustrates the interaction of work teams in their organizational context. It emphasizes the need of an organization life-support system. Six critical variables in the organizational context help work teams to be effective: strategy, structure, technology, culture, rewards system and administrative support/training. The five important factors of the internal processes of work teams are listed in Figure 8.3 and again expanded in Table 8.3 on page 335.

However, 80% to 100% of teams have difficulties in achieving their goals that may have the following reasons:

  • Hidden agendas

  • Lack of understanding and/or leadership

  • Wrong mix of team members

  • Unhealthy team environment

Figure 8.4 on page 336 presents a summary of why work teams fail and what managers and team managers should bear in mind to avoid problems. The main threats, according to that figure, are unrealistic expectations leading to frustration, which, in turn, encourages people to abandon teams.

Further, the common management mistakes involve doing a poor job of creating a supportive environment for teamwork.

Michael J. Stevens and Michael A. Campion developed a model for assessing one’s readiness for teamwork as also organizations need to make sure teams are staffed with skilled people. In Table 8.4 on page 338, Interpersonal KSAs (the right Knowledge, Skills and Abilities) and the Self-management KSAs are divided up. The KSAs that are interpersonal are conflict resolution, collaborative problem solving and communication. The other KSAs that are involved in self-management are goal setting and performance management and planning and task co-ordination. Team-oriented organizations need to keep in mind to consider these KSAs when recruiting, hiring, staffing and training. But this alone is not enough: other characteristics such as personality also facilitate team functioning.

Studies have shown that co-operation is superior to competition and to individualistic efforts in promoting achievement and productivity. Further, Co-operation with intergroup competition promotes lower achievement and productivity.

The three most important components of teamwork are co-operation, trust and cohesiveness.

Co-operation occurs when individual efforts are integrated to achieve a collective objective. Morton Deutch showed how people’s beliefs are related to their interdependence: when acting in co-operation, people believe that goal attainment by other people will also foster their own goals but, in turn, believe that goal attainment by others will diminish their own when they are in competition. Hence, team members are in a ‘mixed motive’s situation.

Trust is the reciprocal (give-and-take) faith in other’s intentions and behaviour. The personality trait called propensity to trust includes one’s general willingness to trust others and is an element of organizational trust model. Trust involves a cognitive leap that is based on beyond the actual experience with another person. To trust someone means to have faith in somebody’s good intentions. However, the act of trusting someone also carries risks of betrayal. There are six guidelines for building and maintaining trust:

  1. Communication: Tell the trust by informing team members and employees

  2. Support: Provide any help and be approachable/available

  3. Respect: Delegate authority and listen actively to others’ ideas

  4. Fairness: Ensure that appraisals and evaluations are objective and impartial

  5. Predictability: Keep to promises and be consistent and predictable

  6. Competence: show your competences of good business sense

Cohesiveness is the process of togetherness. Team members that are cohesive stick together for the following reasons: the enjoyableness each others’ company and the need to accomplish a common goal. There are two types of cohesiveness:

  • Socio-emotional cohesiveness: this type of togetherness develops when individuals derive emotional satisfaction from team participation

  • Instrumental cohesiveness: this type of togetherness develops when team members are mutually dependent on one another as they do not believe in achieving the team’s goal alone

There is evidence to the connection between team cohesiveness and performance: In smaller cohesive teams the performance effect was strong. This effect becomes even stronger in military groups and sport teams. Further, this has also the most powerful impact on the commitment to the task. Regarding the performance, the tendency for success rather binds team members together.

However, cohesiveness does not minimise friction. To conclude, enhancing group performance is not likely to be effective by fostering interpersonal attraction.

Steps Managers can take to enhance the two types of cohesiveness are listed in table 8.5 on page 342.

The three approaches to teams in action are: quality circles, virtual teams and self-managed teams. All have recognisable labels, some research evidence and range from low to high degrees of empowerment. The three types of teams are distinct but still overlap somehow.

In general, quality circles are also called parallel structures as they exist outside normal channels of authority and communication. On the other hand, self-managed teams are integrated into the organisational structure whereas virtual teams tend to be parallel.

Quality circles consist of small teams of people who work in the same field of activity and identify, analyse and recommend solution for problems. They (10-12 members) meet on regular basis during work hours once a week or twice a month. Management supports the quality circle programme by additional training. Not monetary rewards but intrinsic motivation is the primary reward for quality circle volunteers.

In the field of research, one expert made the conclusion that about 60% of quality circles failed due to poor implementation. However, the lack of standardised variables makes research on quality circle inconclusive.

Virtual teams contain of individuals across various boundaries using the communication technology. They may be defined as a physically dispersed task team that conducts its business through modern information technology. The characteristics that differentiate virtual teams from traditional teams is shown in Figure 8.6 on page 345. Whereas the spatial distance in virtual teams is distributed and the communication is mediated technologically, traditional team’s distance is proximal and the communication takes place in face-to-face meetings. In the dynamic global environments, virtual teams are beneficial due to flexibility, lower costs and improved resource utilisation. However, the lack of face-to-face interaction can weaken trust, communication and accountability that can lead to low individual commitment, role overload, role ambiguity, absenteeism and social loafing. The flow of conversation is in virtual teams disturbed because communication modalities (paraverbal and non-verbal) cannot be mediated. Further, difficulty in communication and understanding the salience of information and in interpreting the meaning of silence can cause problems. Hence, those teams are more task-oriented and less in the exchange of social-emotional information. To prevent geographical and organisational distance, trust that is not based on strong interpersonal relationships had to be established. The so-called ‘swift’ trust develops on social bonds formed by informal chats. Virtual teams that started with low levels of trust had a lack of social introduction, concern with technical uncertainties and a lack of enthusiasm whereas high level of trust showed high enthusiasm and extensive social dialogue. Repairing broken trust after a conflict between virtual team members is the most critical role for the e-team leader.

Research has proven that the group development in virtual teams is similar to that for face-to-face teams. However, virtual teams yield poorer decisions than face-to-face meetings. The team members in face-to-face groups, moreover, are more satisfied with the team’s outcome but the effectiveness of information exchange is the same in virtual and face-to-face teams. Team leaders in virtual teams need to consider two things to be effective: focus on results and recognise that virtual teams require better supervisory skills among existing managers. In table 8.7 on page 347 eight recommendations of leadership in virtual teams are listed.

Self-managed teams are groups of workers that are given ‘administrative oversight’ such as planning, monitoring and staffing for their task domains. Those work groups supervise themselves and are referred to autonomous work groups are self-directed work groups. Team members share or rotate leadership and hold themselves mutually responsible. The former manager starts as a team leader and is responsible for keeping the project on track. During the team maturation, the former manager acts more as coach but remains member of the team. To determine whether on-the-job training and coaching is necessary, the team members measure their progress against the agreed-upon goals, approach, skills and competences. The most delegated tasks among companies with self-managed teams are work scheduling and dealing directly with customers.

Self-monitored groups are a British concept from the 1940s that is often in place in Australia, Scandinavia, USA and the Netherlands. Team members of self-managed teams score high on group autonomy that empowers those who are able to handle additional responsibility. Group autonomy comprises three types: work method autonomy, work scheduling autonomy and work criteria autonomy.

Studies concluded that self-managed teams positively affect productivity and specific attitudes such as responsibility and control but negatively affect general attitudes and absenteeism. Other studies searched out that disciplinary actions must be handled by a group consensus and that group cohesiveness lead to higher performance. Further, societal values and personality need to be taken in consideration when implementing self-managed teams in multinational companies. The approach to better build a new production around self-managed teams than convert an existing one is called ‘greenfield sites’. However, most organizations cannot afford to apply to the Greenfield opportunities. As the organizational already adjusted to clear leadership it, in addition, is difficult to employ self-managed teams. Structural redesign is necessary to make the self-managed team be a part of the organization. To encourage the new self-managed teamwork, goal setting and rewards need to be adapted.

Team building is a term for many techniques aimed at improving the internal functioning of work teams. They strive for greater cooperation, better communication and less dysfunctional conflict. Team building gives team members the possibility to struggle with simulated or real-life problems. Analysing the outcomes can then determine on how to improve the team processes. The four purposes of team building are according to Richard Beckhard: (1) to set goals, (2) to analyse the way work is performed, (3) to examine the way a group is working and its processes and (4) to examine relationships among the people.

An analysis of a survey states that high-performance teams have the following eight attitudes: Participative leadership, sharing responsibility, aligned on purpose, good communication, future focused, focused on task, creative talents and rapid response.

Self-management leadership is the process of leading others to lead themselves. It is assumed that self- managed teams fail if team members are not taught to engage in self-management behaviours. Hence, transition training that engages managers in self-management leadership behaviours, is necessary. There are six aspects of self-management leadership behaviour to develop team members’ self-management skills:

teach others to appreciate and motivate themselves, ask others to keep track of their own progress and expect much from themselves. Further, managers should expect team members to practice their skills and be critical of their own performance. Hence, instead of domination, empowerment is the primary goal.

Chapter I: Organisational climate

Climate is the shared perception about what is important and appropriate in an organization. The climate is determined by feelings, reflections and behaviour of people. It can change over time whereas culture is a state determined by history. Culture is resistant to change and is about the examination of underlying values and assumptions. Climate, however, only examines surface level manifestations. In Table 9.1 on Page 373, the eight dimensions of Climate Perceptions are listed.

The following items can assess climate and can take action to change climate: Communication, Values, Expectations, Norms, Policies and Rules, Programs and Leadership.

A Conflict is a process in which on party experiences its interests as being negatively affected by another party. Conflict can strengthen or weaken over time.

Frederick Taylor believed that conflicts threatened management’s authority and hence should be avoided. Later, researchers recognized the inevitability of conflicts. In the 1970s, OB specialists realized that conflicts had positive and negative outcomes that depend on its intensity and nature (see Figure 9.1 on Page 375). Too little conflicts leads thus to a lack of creativity. But excessive conflicts, on the other hand, can decrease the organizational performance due to workplace aggression and violence.

Conflicts are related to people’s personalities. As people have different traits and characteristics, conflicts are likely to occur.

There are two kinds of distinction: personality conflicts – intergroup conflicts, and functional conflicts – dysfunction conflicts. The first distinction is about the origins of conflicts whereas the second one deals with the outcomes of conflict.

Personality conflicts often refer to people’s personalities. These personalities are stable and different. They can influence a number of other factors. Conflicts at the individual level can grow and endanger an organization. The manager should thus protect the organization by documenting the nature of the conflict. Conflicts among work groups (intergroup conflicts) are a threat to organizational competitiveness. Too much cohesiveness can lead to groupthink. Changes associated with increased group cohesiveness revealed that members of in-groups consider themselves as a collection of unique individuals but other groups as being similar. Further, outsiders are seen as threat but in-group members view themselves as morally correct. Finally, the perception of reality distorts as in-group members overact differences between their group and the other group.

Among situations that tend to produce either functional or dysfunctional conflicts belong, for instance, incompatible personalities, unclear job boundaries and competition for limited resources (see Page 379). Stimulating functional conflict sometimes is essential to gain value in the decision-making groups. Programmed conflict can be helpful as it means to raise different opinions apart from personal feelings. This way, contributors have to defend or criticize ideas based on personal preferences. Two programmed conflict techniques are:

  • Devil’s advocacy: This technique is about one individual playing the role of devil’s advocate and thus generate critical thinking (see Figure 9.2 on Page 379)

  • Dialectic method: This technique is time-honoured as it is referable to dialectic school of philosophy in Greece. It is about exploring opposite positions in a structured debate. However, this method requires more skill training than the devil’s advocacy and overshadows the issue.

Afzalur Rahim identified five different conflict-handling styles that are classified in high to low concern for self and low to high concern for others. These two variables produce five styles: integrating, obliging, dominating, avoiding and compromising. Each style has its strength and limitations so that there is no best style.

  • Integrating/problem-solving style: the problem of the issue is cooperatively identified in order to generate solutions and select one of them.

Strength: long-lasting impact; Weakness: time-consuming

  • Obliging/ smoothing style: it emphases on the commonalities and is appropriate in complex problems. Strength: encourages co-operating; Weakness: temporary fix

  • Dominating / forcing style: it has high concern for self and low concern for others and is appropriate in implementing an unpopular solution. Strength: speed; weakness: resentment

  • Avoiding tactic: it suppresses the issue and is appropriate for trivial issues. Strength: buys time in ambiguous situations; Weakness: temporary fix

  • Compromising: it involves moderate concern for self and others and is appropriate when parties possess equal power. Strength: democratic process; Weakness: keeps from creative problem solving

These types of styles are used when conflicts become dysfunctional.

Negotiation is a decision-making process that involves dependent parties with different preferences. There are two types of negotiation: distributive and integrative. The first type concerns that sharing of a fixed amount, whereas the integrative type of negotiation goes beyond. It calls for a win-win strategy where all can benefit. The added-value negotiation is an integrative approach (see Figure 9.4 on Page 383). However, the success of integrative negotiation depends on the quality of information exchanged. Unethical tactics in negotiations can erode trust and goodwill.

When conflicting parties are unable to integrative negotiation, third-party interventions are essential to abandon fixed-pie thinking (or win-lose thinking). The Alternative dispute resolution (ADR) is a more constructive and less expensive approach. In Table 9.3 on Page 385, the four ADR techniques are presented.

In general, the more members of different groups interact, the less intergroup conflicts arise. Further, negative relationships are related to higher perceptions of intergroup conflict. Figure 9.5 on Page 386 illustrates how to minimize intergroup conflicts. Studies revealed that:

  • People that highly need affiliation tend to rely on a obliging style

  • The way someone disagrees with someone is determining in conflict situations

  • Aggression by one party tends to produce aggression from the other party

  • The group satisfaction and motivation decreases as conflict increases

Further evidence suggests that:

  • Win-lose negotiations produce poor outcomes

  • Women tend to negotiate more cooperatively than men

  • Personality characteristics affect negotiating success: those scored high on extraversion and agreeableness tend to do poorly with distributive negotiations

  • The mood affects negotiators in a positive or negative way

  • Negotiations across cultures have less productive outcomes than within cultures

All in all, various types of conflict are inevitable and there is no best way of avoiding conflict. It is hence recommendable to monitor conflicts and thereby to use techniques such as devil’s advocacy and the dialectic method.

A stereotype is an individual’s belief about characteristics of a group. Stereotypes are not always negative and accurate. They are used to differentiate groups of people from another and may create barriers. Stereotyping is a four-step process: (1) categorizing people into groups (gender, age, rage ect.), (2) inferring that people within a category possess the same traits, (3) forming expectations and (4) interpreting their behaviour. Stereotypes are maintained by overestimating stereotypic behaviours, incorrectly explaining expected/unexpected behaviours and differentiating individuals from oneself. However, people that encounter information inconsistent with a stereotype are less apt to judge others. Gender stereotype is the belief that men and women have different traits that make them suitable for different roles. These stereotypes still persist so that the ‘typical’ male has a job and a profession. Underlying trends, such as the dominating number of female students in the legal industry, slowly change the view on gender stereotypes. Glass ceiling is an invisible barrier separating women from advancing into top management positions. It exists because of the masculine culture in the highest corporate echelons. Career advancement is hard for women as there are stereotyped as being focused on the needs of family.

Age stereotypes concern the discrimination of age. Older people, for instance, are seen as less satisfied and motivated than younger workers. However, evidence proves otherwise: the job satisfaction increases with the age.

Regarding ethic and racial stereotypes, there are three trends that suggest ethic minorities experience their own glass ceiling: they are advancing less in the professional ranks, earn less and experience companies that are unwilling to hire them.

Evidence shows that managing diversity is competitive advantage as it:

  • Lower costs and improves employee attitudes

  • Improves recruiting efforts

  • Increases sales, creativity and productivity

Equality means to an organization to achieve equality of opportunity by laws. Important directive agreed by the EU in 2000 referred to the outlawing discrimination in the workplace. Managing diversity enables people to perform to their maximum. It is about changing an organisation’s culture so that people provide the highest productivity. Barriers to Diversity Management are listed in Table 9.4 on Page 395. In addition, there are eight action options that can be used to address diversity issues:

  • Include/exclude: the goal to increase or decrease the number of diverse people

  • Deny: this option is used by people denying the existence of differences

  • Assimilate: Diverse people learn to fit the dominant group

  • Suppress: differences are discouraged in this approach

  • Isolate: Diverse people are set off to the side and hence unable to influence organizational change

  • Tolerate: differences are acknowledged but not valued or accepted

  • Build relationships: it addresses diversity by fostering relationship with acceptance and understanding

  • Foster mutual adaption: people recognize and accept differences

The way on how to manage diversity is based on the context of the organization. Ann Morrison made a study on how to successfully manage diversity. As a result, she classified three main types: accountability, development and recruitment. In Table 9.5 on Page 397, the top 10 practices associated with each type are presented. Three diversity practices are shown: Accountability practices refer to manager’s responsibility to treat diverse employees the same. On the other hand, development practices emphases on preparing diverse employees for greater responsibility. Recruitment practices focus on attracting job applicants that are willing to accept challenges.

Work stress results from many factors such as fundamental changes (increased competition, work pressure), technological advancements (mobile phones, email, the Internet), the dynamics of modern life and motivation to reach extrinsic goals (money, status). The term ‘stress’ is a response of individual characteristics that result from any external action and places physical/psychological demands upon a person. Stressors are environmental demands that product such a response.

Stress causes one basic reaction: fight-or-flight response. It means to either run away or accept stressors. This stress response involves hormonal changes mobilizing the body for extreme demands. It can lead to headaches, insomnia and high blood pressure or outward symptoms such a exhaustion, aching limbs and depression. Hans Selye stated that both positive and negative events cause an identical stress response. Further, a positive outcome as a result of stress is referred to as ‘eustress’. Moreover, Selye said that stress can have positive consequences and should not be avoided. The absence of stress is, according to Selye, death. Hence, moderate amount of stress is beneficial.

Robert Karasel developed the job demand-control model that focuses on the stress factors inherent in the work organization. It consists of three dimensions: psychological demand of a job, amount of autonomy and social support. He figured out that only the combination of high psychological demand and low autonomy triggered work stress. A lack of social support can even reinforce this negative effect. But people do not experience the same level of stress for a given type of stressor. Women perceive interpersonal conflicts more stressful than men and the belief of having control over the stressors leads to lower levels of stress. Stressful life events (e.g. death of a family member) can create stress because it includes significant changes.

Burnout is a stress-induced problem that occurs over time and does not involve a specific feeling. It has an impact on employee well-being. Characteristics of Burnout are listed in table 9.6 on page 405. Burnout develops in three phases: emotional exhaustion, depersonalization and feeling a lack of personal accomplishment (see Figure 9.7 on Page 405). Personal stressors (e.g. high expectations) and job stressors (e.g. role overload, role conflict) can lead to the first phase of stress: emotional exhaustion. Over time, it can turn into depersonalization so that the individual feels ineffective and being unappreciated. The effects of all three phases are several negative attitudinal and behavioral symptoms of burnout.

Studies revealed that women rated life events as more stressful than men. Further, burnout was positively related to job stressors and turnover intentions but negatively related to supportive resources. In addition, the order of phases of burnout is not completely proved to be true. Finally, the employees’ work demand was more strongly correlated to stress than employees’ perception of resources at work.

To reduce burnout, organisations buffer its effects. This includes increased autonomy, support from the management and recognition for accomplishment. Organisations can also change the content of the job to reduce burnout. Moderators are variables that can either weaken or strengthen the effects of stressors. The awareness of moderators can reduce the negative outcomes of stress.

Social relationships can help people to better handle stress. Social support is measured in regard to the quantity and quality of an individual’s social relationship. The mechanism of social support is illustrated in Figure 9.8 on Page 409. Support network evolve from cultural norms, social institutions, companies, groups or individuals that provide four types of support:

  • Esteem support

  • Informational support

  • Social companionship

  • Instrumental support

While global social support is broad in scope, functional social support is narrower. People with low social support tend to have poorer immune systems functioning and die earlier. Negative social support can negatively affects one’s mental health.

Coping is the process of managing external or internal demands that exceed the resources of the person. It reduces the impact of stress and enhances the personal life and professional skills (see Figure 9.9 on Page 410). Situational factors are characteristics from the environment that affect how people interpret stressors (e.g. the ambiguity of a situation). Personal factors are personality traits that have an impact on the appraisal of stressors. Other traits such as self-esteem, optimism and self-efficacy also affect the appraisal of stressors. An individual’s overall perception of a stressor is reflected in the cognitive appraisal that can result in a categorization of harmful, threatening or challenging stressor. Then, specific behaviours and cognitions are used to cope with the situation (coping strategies). There are three coping strategies:

  1. Control strategy

  2. Escape strategy

  3. Symptom management strategy

More and more organisations implement a variety of stress-reduction programmes to help employees cope with stress. There are different individual stress-reduction techniques such as the muscle relaxation. Further techniques to reduce stress are listed in Table 9.7 on Page 412.

Chapter J: Culture

Intercultural differences: cultural differences between countries and regions.

Intercultural aspects which are necessary in the recent globalising world:

  • Ethnocentrism: the belief that one’s native country, culture, language and modes of behaviour are superior to all others. It can be managed through education, greater cross-cultural awareness and international experience.

  • High-context and low-context cultures: high context consists of social trust, personal relations and goodwill and agreement by general trust. It is verbal. China/Korea. Low context consist of ‘business first’, expertise and performance, agreement by specific, legalistic contracts and efficient negotiations. It is non-verbal. Western countries.


Hostede’s cultural dimensions

  1. Power distance: inequality in social constitutions

  2. Individualism vs. collectivism: the bon between individuals and societal groups, loose / tight

  3. Masculinity vs. femininity: to what extent do people embrace competitive masculine traits (assertiveness) and / or nurturing feminine traits (solidarity)?

  4. Uncertainty avoidance: to what extent do people prefer structured vs. unstructured situations?

  5. Long-term vs. short-term orientation: to what extent do people orientate towards future (saving and being persistent) or to the present/past (traditions)?

Conclusions from Hofstede’s research

  • Varying cultural values, theories and practices need to be adapted to the local culture.

  • Only high long-term orientation correlated positively with national economic growth.

  • Industrious cultural values are a necessary but insufficient condition for economic growth.


Trompenaar’s developed five dimensions according to a research about the cultural differences between 28 countries.

  1. Universalism – Particularism: the first focusses on rules, legal contracts, ‘deal is a deal’. The second focusses on relationships, no legal contracts.

  2. Individualism – Collectivism: the first uses ‘I’, prefer to achieve things alone and assume personal responsibility. The second uses ‘we’, prefer to achieve things within a group.

  3. Neutral – Emotional: the first does not express what he or she thinks/feels and feels does not feel comfortable with physical contact outside his or her ‘private’ cycle. The second express his or her feelings and thoughts immediately and is easy with physical contact.

  4. Specific – Diffuse: the first is more open in public space and more closed in private space. He or she separates work and private life. The second is more closed in public space and more open in private space. Work and private life is closely linked.

  5. Achievement – Ascription: the first is about what you achieved. The second is about your personal addition.

Cultural perceptions of time, space and communication

Monochromic time: you prefer to do one thing at the time because time is limited.

Polychronic time: you prefer to do several things at the same time because time is flexible.

Interpersonal space has to do with proxemics, which are cultural expectations about interpersonal space. Hall distinguished four interpersonal distance zones:

  1. Intimate

  2. Personal

  3. Social

  4. Public

Three options are available to be able to communicate between different cultures, despite the different distance zones:

  • Stick to your own language

  • Rely on translators

  • Learn the local language

Chapter K: Intercultural differences

Culture is a series of beliefs, attitudes, and values developed by a group that is considered as the correct way to think (Edgar Schein). Fons Trompenaars and Charles Hampden-Turner define culture as an implicit sphere of assumptions, norms and values encircled by an explicit sphere of artefacts and products (See Figure 12.1 on Page 505). Culture develops unconsciously so that we do not notice our own behaviour as culturally influenced.

Culture can also influence organisational behaviour as employees bring their societal culture (customs, language) to work (see Figure 12.2 on Page 507). This creates the organisational culture that in turn affects others. Organizational behaviour accrues.

Organizational culture is the series of implicit assumptions within a group that determines their perception and thinking in various environments. There are three important characteristics of organizational culture:

  1. Culture is passed to the next generation of employees by socializing

  2. Culture influences the employees’ behaviour at work

  3. Culture operates at two levels varying from ‘outward visibility’ to ‘resistance to change’. At the more visibility level it represents artefacts (physical manifestation of an culture) and visible behaviours. Culture reflecting values and believes are at the less visible level. These values are more resistant to change. Both levels influence each other

The foundation of culture is values (see chapter 3) that possess five characteristics: (1) they are beliefs, (2) pertain to desirable behaviours, (3) transcend situations, (4) guide evaluation of behaviour and are ordered by relative importance.

Espoused values are explicitly stated values and norms by companies whereas enacted values are exhibited into the employee behaviour. The difference between these two types is the following: If espoused values are enacted is can influence the individual behaviour. But if the espoused value is only stated and not enacted it does not influence any employee behaviour. The gap between theses two is important because it influences not only the organizational culture but the working attitude of employees.

The typology of organisational values (see Figure 12.3 on Page 510) shows four value systems that are based on crossing organisational reward norms (belief about how to allocate rewards) and organizational power structures (basic belief about how to distribute power/authority). There are four types of value systems that contain positive and negative responses to values: Elite, Meritocratic, Leadership and Collegial. Some values are reinforced by the systems and others are inconsistent. A study revealed four trends about the typology of organisational values:

  • Organizational values were stable over four years

  • No universal movement to on type of value system

  • The greatest amount of change was experience with the elite value system

  • Overall increase in organisations that endorsed the individual value of employee commitment

The Model for Observing and Interpreting General Manifestations of Organisational Culture developed by Vijay Sathe (See Figure 12.4. on Page 513) illustrates the four general manifestations of organisational culture: objects, talk, behaviour and emotion.

The organisational culture has four functions: Sense-making device, Social system stability, Collective Commitment and Organisational Identity (see Figure 12.5 on Page 514). These functions help employees better understand the organization’s long-term goals. There are four types of organisational cultures: adaptability culture, external control culture, development culture and internal consistency culture. These types of organisational culture are classified into two basic dimensions: ‘change and flexibility’ and ‘stability and direction’ (see Table 12.1 on Page 513). Those organisations that apply an adaptable culture respond fast to changes. They rapidly react to new needs and quick interpret signals from its environment. Organisations with an external control culture focus rather on the market. They value goal achievement and competition. The third type of culture, the development culture, is characterised by its focus on teamwork and participation. Collaboration is valued in those organisations. In an internal consistency culture, everything is planned well. They value rules and respect for hierarchy.

Normative beliefs are people’s expectations and thoughts about how members of an organisation approach their work and interact with others.

A strong culture is not always a good thing because it may override a system’s goals. The central values of a culture are more important than its strength. Culture stems from a founder’s beliefs. To embed a culture involves a process where organisational members teach each other by using the following mechanism:

  • Formal statements of the organisation (philosophy, mission, vision)

  • Design of physical space, work environments and buildings

  • Slogans and language

  • Role modelling, training programmes, coaching

  • Explicit rewards, status symbols

  • Stories, legends and myths

  • Organisational activities

  • Leader reactions to organisational crises

  • Workflow and organisational structure

  • Organisational systems and procedures

  • Organisational goals and criteria used for employee recruitment

Organisational socialisation describes the process by which an individual learns values/norms and required behaviours which make her/him seen as a members of the organisation. It integrates outsiders by promoting the organisation’s core values and beliefs.

The researcher Daniel Feldman proposed there are three phases to socialization placed upon new members: Anticipatory socialisation, encounter, and chance and acquisition (see Figure 12.6 on Page 518). Each stage of organisational socialisation has its perceptual and social processes.

  1. Anticipatory socialisation: The individual has not yet joined the organisation and but already received information that helps the individual anticipate organisational realities. Unrealistic expectations are often formulated. A realistic job preview (RJP) includes giving recruits a realistic idea (positive and negative aspects) of the job. As a result, it lowers the initial expectations of job applicants and the labour turnover.

  2. Encounter: The employment contract has been signed. During this stage, newcomers may feel surprised after experiencing unexpected events (reality shock). The individual manages lifestyle vs. work -, and intergroup conflicts.

  3. Change and acquisition: The individual has mastered role conflicts and internalised critical tasks as well as group norms and values.

Professionals should avoid haphazard approaches and rather apply formulised socialisation to enhance the newcomers’ adjustment to their job. It reduces role ambiguity, role conflict and stress symptoms. In the encounter phase, managers should help new recruits to integrate in the culture.

Through globalization organizational and social culture merge so that managers need to consider organisational behaviour in different cultural contexts. Ethnocentrism is the belief that one’s native country (incl. culture, language) is superior to all others. It involves the tendency of groups to rejects outsiders. Ethnocentrism can best dispatched through conscious effort to value cultural diversity and international experience. High- and low-context cultures (see Figure 12.7. and Table 12.2) give a general distinction of differing cultures.

A high-context culture relies heavily on non-verbal cues and value personal relations. Agreements are made by general trust whereas in countries with low-context culture agreements made by a legalistic contact. Further, in low-context cultures focus on written and spoken words and read non-verbal messages from body language

Geert Hofstede and Michael Harris Bond are the two most influential men in the field of cultural organization studies. Hofstede studied employees of IBM and researched differences in cultural values and beliefs. In his work, he identified four dimensions of culture (see Table 12.3) and asked IBM employees from 72 countries on these cultural dimensions.

Bond on the other hand, elaborated on this research by adding long-term or short-term goals. He used the Chinese Value Survey (CVS) as survey instrument.

The two studies merged in the Hofstede-Bond Studies and showed differences between then value orientations in western Europe and central Europe. While Slovakia is most collectivistic and has the largest power distance, Poland shows the smallest power distance.

This study illustrated that there is no one best way to manage multinationals. Further, high long-term orientation correlates positively with national economic growth

Fons Trompenaars has developed five dimensions of culture in his study:

  • Universalism-particularism: Universalism refers to rule-based cultures that apply ‘good’ regulations to every situation (e.g. Netherlands, Germany). Particularistic cultures, however, are friendship-based and rather deflect from rules (e.g Spain, Russia).

  • Individualism- collectivism: Individualist countries are oriented towards one’s self which has an impact on decision-making and motivation (e.g. Netherlands, Sweden). On the other hand, collectivist countries are group oriented and family-minded (e.g. France).

  • Neutral-emotional: this dimension refers to the level of showing emotions. Neutral cultures are less likely to express their feeling than people from southern countries where emotional people are affective and open and hence considered as being out of control.

  • Specific- Diffuse: In specific countries home and workplace are strongly separated, whereas in more diffuse countries it is interrelated (e.g. France).

  • Achievement-Ascription: Achievement-oriented cultures (e.g. France) the focus lies on the accomplished goals. Other countries (e.g. Anglo-Saxons) put emphasis on the reasons for achievement.

Another great cultural difference is the view of time and space. Monochronic time (present in low-context cultures) is the ordered definable scheduling of time used to maximize efficiency. Polychronic time (present in high-context cultures) is seeing time as flexible and fluid.

Edwards T.Hall observed cultures and noticed the different amount of interpersonal space in various countries. Proxemics is the study of the amount of space people need across cultures. He identified four interpersonal distance zones: intimate, personal, friendly, and public (see Figure 12.8. on Page 531). North Americans and Europeans usually stay about a meter away from each other. South Americans and Asians like to be one foot away followed by even less interpersonal space in Arabian cultures.

Communication across cultures requires the use of one of these three options: stick to own language, use translators or learn the local language. The first option can lead to competitive disadvantage as the use of the own language shows ignorance towards the local language. Translation through a person or device is possible, but can lead to many mistakes that are often very embarrassing. Successful international organizations will bear down and learn the local language. This makes it imperative to have good language acquisition skills.

More and more companies become global and transfer employees to another country. This requires organizational leaders to expatriate. The term, expatriate, refers a person that lives or works outside their home countries. Unfortunately, expatriate managers prone to failure on international assignments. The most common reasons for failure are:

  • Inability to adjust and adapt to new cultural surroundings

  • Family issues or emotionally immature of the expatriate

  • Inability to cope with foreign duties and not be technically competent

  • Lack on motivation for foreign assignments

An expatriate must be adventurous and prepared for the expensive and arduous process that often fails because of a lack of facts or support. Above all, the expatriate needs to feel supported. The Foreign Assignment Cycle (Figure 12.9 on Page 535) illustrates the four steps of the expatriates’ process. To prevent a failed assignment, an organization needs enact by preparing the expatriates. This means to avoid unrealistic expectations with cross-cultural training (simulation to help one adjust) and realistic job previews (RJPs).

The next step is to avoid culture shock. It is the anxiety felt when experiencing foreign things. It can lead to confusion and early quitting. However, culture shock can be avoided by cross-cultural training and intensive language study.

Management also should support the expatriate during a foreign assignment. A supportive host country, local staff, and a network of other expatriates can contribute to the expatriates’ successful functioning.

Lastly, an organization must avoid re-entry shock. This happens when an expatriate assimilates into the native culture and considers the surroundings as strange. This is a traumatic experience as the person is left questioning themselves and their concept of home.

Chapter L: Decision-making process

Decision-making is important for two reasons: First, the quality of decision affects career opportunities, rewards and job satisfaction. Second, decisions can conduce to success or failure of an organization. Decision-making includes the identification solutions and choosing of one that leads to a desired state of affairs.

There are several models of decision-making: The rational-, Carnegie, Incrementalist, ‘Garbage can’, and the Unstructured model.

The rational model describes the usage of a rational, four-step sequence when making decisions: identify the problem, generate solutions, select one solution and implement/evaluate it. The decision-maker is objective and possesses all the information needed to make the decision. The first step, the problem, occurs when the actual situation differs from the desired situation. An expert proposed to use one of the following methods to identify problems:

  • Historical cues: it assumes that the recent past is the best estimate of the future. Managers, hence, should rely on the past experience to identify future problems. Nevertheless, this method is highly subjective.

  • Planning approach: This method is more systematic and more accurate by using projections to evaluate the future.

  • Scenario technique: Based on environmental conditions, it is used to identify the future by setting up different scenarios. This way companies can devise alternative strategies to survive in various circumstances.

  • Perception of others

The second step is to generate solutions. Decisions that are made routinely (every day basis), rules for decision are formed (‘decision rules’). Otherwise, novel and unstructured decisions must be made.

Then, decision-makers select one solution that maximises the expected utility of the outcome. Other alternatives will be evaluated and judged according to standards or criteria. Once the solution is chosen, it will be implemented. Managers should try to avoid the three managerial tendencies that reduce the effectiveness of implementing solutions (see Table 13.1; page 549). It is necessary to understand, accept and motivate others. After implementation, the solution will be evaluated on its effectiveness. If the difference between the actual and the desired states are not reduced, the implementation was unsuccessful so that one of the four steps was wrongly performed.

The rational model is based on optimizing (the aim to solve problems by means of the best possible solution). It assumes that managers have complete knowledge of all possible alternatives and its consequences. Further, optimising assumes managers to be well-organised and the ability to compare consequences and to determine the most preferred one.

The Carnegie model, named after the Carnegie Institute of Technology, attempts to identify the process managers use when making decisions. This process is constrained by a decision-maker’s bounded rationality meaning that decision-makers are restricted by constraints when making decisions. These constraints have personal or environmental characteristics that reduce the rational decision-making. Unlike the rational model, the Carnegie model is characterised by limited information processing. Hence, the optimal not complete amount of information is used.

The constraints of bounded rationality (e.g. limited capacity of the human mind) cause decision-makers to fail to evaluate all potential alternatives. In addition, judgemental heuristics (=rules of thumbs) can reduce information processing demand. It helps decision-makers to reduce the uncertainty in the decision-making process as it represents the knowledge gained from past experiences. However, systematic errors may lower the quality of decisions. There are two common categories of heuristics: the available heuristic and the representativeness heuristic.

Satisficing means to meet some minimum qualifications by choosing a solution. It produces satisfactory solutions that are ‘good enough’.

The decisions made are subject to satisficing and heuristics by the organization. The Carnegie model adapts to environmental uncertainty but remain rational thinking with a set of constraints.

The Incrementalist model, developed in the 1950s by Charles Lindblom, is about selecting those actions that differ slightly from the previously done. Small changes reduce the risk of doing something fatally wrong as well as the costs. This model is referred to as ‘muddling through’. This model assumes that information is incomplete beyond the immediate future. Hence, the model can deal with moderate uncertainty.

The ‘Garbage can’ model assumes that organizational decision making result from complex interaction between problems, solutions, participants and choice opportunities. These independent streams interact with each other but are not related. Problems are the gap between an actual and a desired situation but are independent from solutions. Solutions are the answers for questions that are represented as ideas. They occur when people have an idea of what they can get. Participants are members that dwell on the organization. They contribute values, experiences an attitudes to the garbage can but are limited by time pressures. Choice opportunities are occasions in which organizations make their decisions. This model does not follow a rational process but implies that decision-making is more a function of chance encounters. Only when all four streams of events connect a decision is made. However, these connections occur randomly and decision quality generally depends on timing. The Garbage Can model has four practical implications:

  1. Many decisions are made by oversight of a salient opportunity

  2. Political motives guide the process by which participants make decisions

  3. The process is sensitive to load

  4. Important problems are more likely to be solved that unimportant ones

The Unstructured model of decision making, proposed by Henry Mintzberg, follows three stages: identification, development and selection. Identification is the ability to sport changes that will necessitate decisions. Development seeks alternatives and tries to develop them. In the last stage, selection, managers arrive at the final decision by mixing judgement, negotiation and analysis. It mixes elements and it thus better suited to high uncertainty.

There are three dynamic aspects of decision-making: contingency considerations, decision-making styles and the problem of decision biases.

The contingency model for selecting decision strategies (see Figure 13.1 on Page 554) has three approaches at choice: aided-analytic, unaided-analytic and non-analytic. People using the aided-analytic strategy systematically use tools to analyse and evaluate alternatives.

When systematically comparing alternatives, the decision-maker uses an unaided-analytic strategy. The non-analytical strategy, however, is about using a simple rule formulated beforehand to make the decision. The characteristics of the decision task (divided into specific problem and environment) and those of the decision-maker determine which approach to use. The greater the demands and constraints the decision-maker encounters, the higher the probability of using the aided-analytic approach. This approach helps individuals to make more consistent decisions in less predicable and unstable situations. Research proved that aided-analytic strategies are more used by competent and motivated individuals.

In choosing one of these strategies, decision-makers must make a compromise between their desire to make correct decisions and the amount of time they want to spend on the decision-making process. Whereas analytical strategies are more likely used for irreversible problems, the non-analytic method is used for problems in which the decision can be reversed.

A decision-making style reflects the combination of the individual’s perception and comprehension and the general manner someone chooses to respond. This model is based on two different dimensions: value orientation and tolerance for ambiguity (see Figure 13.3 on Page 557). Value orientation is the extent to which an individual focuses on taks and technical concerns or people and social concerns when making decisions. The other dimension, tolerance for ambiguity, is the extent to which a person needs structure in his or her life. The combination of these two dimensions forms four styles of decision –making: directive, analytical, conceptual and behavioural. People that use the directive style have a low tolerance for ambiguity and are oriented towards tasks and technical concerns. The action-oriented and decisive style is used to focus on facts. Individuals tend to be autocratic, exercise power and focus on the short run when applying this decision-making style. The analytical style has higher tolerance for ambiguity and tends to consider more alternatives than do directives. They are careful decision-makers that respond later but well to uncertain situations. People using the conceptual style have a high tolerance for ambiguity and tend to focus on the social aspects of a work situation. They like to consider many options and adopt a long-term perspective. Further, they rely rather on intuition and are good at finding creative solutions. Those people are willing to take risks but this style, on the other hand, can foster an indecisive approach to decision-making. The last decision-making style, the behavioural, focuses the most on the people aspect of decisions. They like social interactions in which opinions are exchanged.

The availability biases is the decision-maker’s tendency to base decisions on information that is simply available in memory. This is likely to cause people to overestimate the occurrence of unlikely events. The representativeness bias is the tendency to assess the likelihood of an event based on one’s impression about similar occurrences. The escalation of commitment is the tendency to stick to an ineffective course of action when it is unlikely that the bad situation can be reversed. For instance, to invest more money into an old car or to wait for a long time for a bus when you could have walked there. Anchoring occurs when the decision-maker pays too much emphasis on the first perception and not enough on information that comes later. The confirmation bias has impact on the decision-making in the phase of collecting information on which we base the decision. When people come to believe that they have in fact predicted what really happened after the event occurred, it is called hindsight.

The framing bias occurs when the decision-maker values a gain more than a loss. The overconfidence bias occurs when people overestimate themselves: the greater the overconfidence the lower the intellectual and interpersonal abilities.

The knowledge of decision-making styles can be used in three ways:

  1. It helps to understand yourself

  2. It increases your ability to influence other by being aware of styles

  3. Knowledge of styles gives you an awareness of how people can take in the same information and arrive at different decisions by applying a variety of decision-making strategies.

In general, there is no ideal decision-making style applicable to all situations.

Decision-making in groups can have its advantages and disadvantages. To start with the advantages, groups contain a greater pool of knowledge, provide more perspectives, create more comprehension, increase decision acceptance and create a training ground for inexperienced employees. However, the advantages must be balanced and the manager must determine in which extent to apply to the advantages and disadvantages. The disadvantages as well as the advantages of Group-Aided Decision-Making are listed in Table 13.3 on Page 561.

Employee involvement in decision-making and employee empowerment can increase productivity. Further, it increases employee satisfaction, commitment and performance. Nevertheless, the factors influence the effectiveness of employee involvement:

  • The design of work

  • The level of trust between management and employees

  • The employee’s competence and readiness to participate

Five issues need to be considered when using groups to make decisions:

  • Groups are less efficient than individuals but more confident about their judgement and choices. But group confidence does not guarantee a better quality of decision (e.g. groupthink).

  • Group size negatively affects the decision quality

  • The greater the knowledge of the issue of each member in the group, the more accurate the decision-making. Inaccurate judgements can, hence, be downplayed by the group leader

  • The composition of a group affects its decision-making processes and performance.

Participative management increases employee job involvement, organizational commitment, creativity and perceptions. Managers should use the contingency approach when determining whether to include others in the decision-making process. High levels of participation are important for innovative groups. However, given time constraints it is recommendable to let the individual make the decision. Employee involvement is effective in certain situations and obtains positive results by using the contingency approach. When implementing employee involvement programs it is recommendable to: gain the support of employees who have managerial responsibility, to implement a broader totally- quality management programme and to monitor the process of implementing.

To arrive to a consensus decision (the overall agreement of a decision), groups come across barriers. To successfully achieving a consensus, groups should use active listening skills, involve all members and seek out reasons behind arguments and facts. They should not ‘horse trade’ or vote/agree just to avoid upsetting the process.

Experts have developed three group problem-solving techniques: brainstorming, the nominal group technique and the Delphi technique.

Brainstorming, developed by A.F. Osborn, increases creativity as it helps groups generate multiple ideas for solving problems. It reduces interference from the judgement reactions of other group members and it hence effective. Study has proven that collecting the brainstormed ideas anonymously is preferred. It is advised to follow four rules while brainstorming:

  • Generate and write down as many ideas as possible

  • Do not set limits

  • Do not criticise during the stage of idea generation

  • Ignore seniority and think freely

The nominal group technique (NGT) helps groups to generate ideas and to evaluate and select solutions. It is a structured group meeting where a particular issue is discussed. Individuals generate ideas in writing just after they understood the problem. These ideas are then recorded on a flip chart and discussed after all ideas are elicited. The ’30-second soap box’ technique (= 30secs to argue for or against an idea) can be applied. Finally, group members vote anonymously for their choices. The normal group technique reduces the obstacles by separating brainstorming from evaluation. Further, it balances participation between group members.

The Delphi technique is used by physically dispersed experts to general ideas or judgements. The ideas are anonymously obtained from questionnaires or via the Internet. The Delphi process starts with identifying the issue(s) to be investigated. Then, participants are identified; the questionnaire is developed and e-mailed to participants. The participants are then asked to

  • Review the feedback,

  • Prioritise the issues being considered and

  • Return the survey within a given time.

This technique is useful when face-to-face discussions are impractical (e.g. conflicts, groupthink). Computer-aided decision- making can reduce obstacles while collecting more information. There are two types of systems: chauffeur-driven and group-driven. Whereas chauffeur-driven systems ask participants to answer on electronic keypads or dials (e.g. Who Wants to Be a Millionaire), group-driven meetings are conducted in special facilities with individual computer workstations that are connected to each other. In general, computer driven processes can reduce obstacles to consensus: input is anonymous, the chance for everyone to contribute, and the production of greater quality and quantity of ideas. This process produces more ideas than groups with 5-10 members.

Creativity is the process of using imagination and skill to develop a new or unique object or product. There are three broad types of creativity: creation, synthesis, and modification. Even though researchers are uncertain of how creativity takes place, it is known that it involves by connecting events, ideas, physical objects or information that is stored in memory. The creative process underlies five stages (see Figure 13.4 on Page 568):

  1. Preparation: Experts suggests that creativity starts from the knowledge and involves a convergence between tacit and explicit knowledge.

  2. Concentration: The individual focuses on the problem at hand

  3. Incubation: People engage in daily activities while their minds stew over information and make remote associations.

  4. Illumination: associations are generated at this stage

  5. Verification: the associations are verified, modified and tried out

The last three stages are often promoted by organizations. Research has proven that creativity can be enhanced by effectively managing the creativity process.

The model of organisational creativity and innovation (Figure 13.5 on Page 569) shows that organizational characteristics and the amount of creative behaviour within work groups directly influence creativity. Group creative behaviour is influenced by group characteristics and the individual creative behaviour that is formed by the characteristics of the individual (intellectual abilities, personality traits and intrinsic task motivation). Creative people are highly motivated of their field of interest and are not necessarily geniuses. Further, they are dissatisfied with the status quo and look, hence, for new solutions for problems. Suggestions for Improving Employee Creativity are shown in Table 13.4 on Page 570. In general, a cohesive environment supports open interaction and creativity as well as structured-solving procedures.

Chapter M: Power and Politics

Organisations struggle between individual and collective interests. Socialisation in family settings, for instance, developed in the notion of mutuality of interest. The term ‘mutuality of interest’ includes the win-win thinking and thus to serve one’s self-interest.

David Kipnis (1980) revealed in his study how people influence each other in organisations. There are nine generic influence tactics ranked in order of use in the workplace:

  1. Rational persuasion: convincing someone by logic or facts

  2. Inspirational appeals: building enthusiasm by appealing to other’s emotions

  3. Consultation: convincing others to participate in planning

  4. Ingratiation: being friendly and helpful to get someone in a good mood

  5. Personal appeals: Making a request by referring to friendship

  6. Exchange: Making implied promises

  7. Coalition tactics: convincing others to support you effort to persuade someone

  8. Pressure: Demanding compliance

  9. Legitimating tactics: establishing a request on one’s authority

These tactics influence people on all directions (downward, upward or lateral). ‘Soft’ influence tactics are perceived as fair whereas ‘hard’ influence tactics are considered as unfair. If someone uses the exchange tactics to convince someone towards a direction, three possible influence outcomes may show up: Commitment, Compliance or Resistance. Commitment is more likely when people rely on consultation and when the influence involves something important.

Robert C. Cialdini offered research-based advice of sic principles of influence and persuasion (see Table 14.1 on Page 584). It is recommended to use these principles in combination for maximum impact.

Power is essential for a host of reasons. It is a positive force in organisations. Social power is the ability to arrange resources (human, informational, material) to get something done. Power can be classified into two dimensions: the two types of power (socialised and personalised) and the five bases of power. Socialised power involves self-doubts, mixed outcomes and concerns for others, while personalised power expresses the set priority of personal aggrandisement. Women have a higher need of socialised power than men. John French and Bertram Raven proposed that power arises from the following five bases:

  • Reward power: the extent to what a manager obtains compliance by promising rewards

  • Coercive power: the extent to what someone punishes another person

  • Legitimate power: the base of power is rooted to one’s authority

  • Expert power: the power of valued knowledge

  • Referent power: the power to consent to do something by charisma

Study revealed that expert, referent, reward and legitimate power had a positive impact on work outcomes (e.g. job performance, job satisfaction), whereas coercive power had a rather negative one. Further, expert and referent power resulted in favourable reactions from lower-level employees and have the best potential for increasing job satisfaction. Positive legitimate, expert and referent power foster commitment that is superior to compliance as it is powered by internal motivation.

Empowerment means to release the power that people have in their knowledge, experience and internal motivation into the organisation. A unified information base in an organisation is a competitive advantage but comprises risks of betrayal as information sharing occurs to a large extent.

Power is not a zero-sum situation (person’s gain is another’s loss) and hence not threat. Empowerment should be considered as a matter of degree. The degree of empowerment from domination to delegation is illustrated in Figure 14.1 on Page 590. The goal is to increase productivity and competitiveness.

The highest degree of empowerment is delegating which empowers lower-level employees to make their own decisions. Barriers to delegation are the following: belief in ‘do it better yourself’, lack of trust, low self-confidence, fear of considered to be lazy and of competition from below and vague job definition. Other barriers are the lack of control and the reluctance to take risks when delegate tasks to employees. However, delegation is associated with competent employees that share manager’s task objectives. Further, it was associated with a manager’s positive relationship with employees and the view of lower-level person as supervisor.

But delegation requires trust. Evolving trust from consultation over participation leads to stage of delegation.

Randolph’s Empowerment Model on Page 591 consists of a three-pronged empowerment plan. Information sharing, trust, clear goals and training are necessary to build up the empowerment plan.

Individuals taking an active approach to work and going beyond have a behaviour syndrome called personal initiative. It is characterised by consistency, long-term focus, goal-directness, persistence in facing barriers and being proactive.

Organisational politics is a positive force in modern organisations and ever-present in work life. It is defined as intentional acts of influence to protect the self-interest of individuals. However, when self-interests erode, politic behaviour becomes a negative force. Uncertainty triggers political intervention. Sources of uncertainty are unclear objectives, vague performance measures, ill-defined decision processes, strong individual completion and any type of change.

There are three levels of political action: the individual level, the coalition level and the network level (see Figure 14.4 on Page 596). At the first level, the individual pursues his/her personal self-interests. People with a common interest, form a coalition that it described as an informal group bound due to pursuit of a common issue. As the target of the coalition is resolved, the informal group bound disbands. The last level of political action is the network level. In contrast to coalition, networks are people-oriented and not issue-oriented. They seek for social support for their general self-interests and have a broader agenda.

Researchers have identified eight common political tactics in organisations such as blaming someone else for a mistake (see Table 14.2 on Page 597).

Impression management is a process by which people manipulate the reactions of others to their ideas. It is used to differentiate the organisation’s image for competitor companies and involves high self-monitoring employees (‘chameleons’ that adjust to their surroundings), systematic manipulation of attributions and organisational politics (focus on self-interest).

There are three categories od favourable upward impression management tactics: job-focused (manipulating information about the job), supervisor-focused (doing favours for the supervisor) and self-focused (presenting oneself as being nice). For the average employee, a moderate amount of upward impression management is essential. As impression management tactics cross gender, racial, ethic and cultural lines, the risk of an unintended insult increases.

Tactics for making oneself look bad at work may result from the following four motives: avoidance of work, obtain concrete rewards, exit (employee who seeks to get fired) and power (employee who seeks to control).

In the context of these motives, researchers identified five unfavourable upward impression management tactics:

  • Decreasing performance

  • Not working to potential

  • Withdrawing

  • Displaying a bad attitude

  • Broadcasting limitations

To manage employees making a bad impression, it is recommended to give employees, for instance, a more challenging work, greater autonomy and better feedback.

In conclusion, organisation politics are necessary and cannot be eliminated. Personal values, ethics and temperament create the individual’s degree of ‘politicalness’. Negative expressions of organisation politics can be avoided in organisation by, for example, screening out overly-political workers in the hiring process and creating an open-book system. Further practical steps are listed on page 601.

Chapter N: Leadership

Leaders drag people in directions they would not normally go and are successful when they can male a difference. They are culturally differing: While Americans are obsessively bound by the notion Netherlands and French only have vague concepts. Figure 15.1 on Page 614, describes the intensity of Supervision in 16 countries. It shows that supervision differs from very low in Switzerland to very high in the USA. But also concepts of leadership are different among the European countries: The Nordic countries of Europe, for instance, score high on ‘interpersonal directness and proximity’. In other countries (Georgia, Poland, Turkey and Slovenia) leaders are successful as they are self-interested, indirect and well organized. However, autonomy is very important to the Germanic cluster (Germany, Austria, Switzerland). Visionary and status conscious leaders are more seen as successful in the Latin cluster.

Organizational leadership can be defined as the influence in which leaders seeks subordinate’s participation in an effort to reach goals. A leader is able to influence, motivate and make others contribute towards organizational success. Individual leadership includes mentoring, coaching, inspiring and motivating. Leaders are able to build culture and teams. The ‘Conceptual Framework for Understanding Leadership’ (Figure 15.2 on Page 616) integrates components of different theories that, in turn, affect an individual’s ability to employ managerial behaviour.

However, there is a difference between leading and managing as the two activities entail a unique set of functions. Managing means to plan, investigate, organize and control whereas leading deals with the interpersonal aspects of a manager’s job. Management is about handling complexity; leadership is handling the change. The differences between ‘weak’/dedicated managers and ‘real’/’sick’ leaders can be found in Table 15.2 and 15.3 on page 617.

There are two approaches that explain leadership: trait theories and behavioural theories. While the first theory identifies the personal traits that differs leaders from followers, the second one examines leadership from another perspective.

The leader trait is a born predisposition to be a leader. Ralph Stogdill and Richard Mann summarized leaders into five traits: intelligence, dominance, self-confidence, level of energy and activity, and task-relevant knowledge. But research revealed that the five traits can not predict the future leaders in organizations. Among all the seven categories, Mann highlighted intelligence as the best predictor. Still the positive relationship between traits and leadership was weak (correlation: 0.15).

Modern studies by Robert Lord assume that people have leadership prototypes that affect perceptions of who is effective as leader and who is not. Leadership prototype is the mental concept of behaviours that you believe are possessed by leaders. Hence, people perceive others as a leader as he/she possesses the traits they look for. Traits associated with intelligence, masculinity and dominance are most perceived as leader’s characteristics. Studies revealed that males and those who are more behaviourally flexible are more seen to be leaders. Leadership prototypes, however, are culturally bound and influences by national cultural values. According to another research, the leader’s credibility is constituted by honesty, forward-lookingness, inspiration and competence.

Men and women differ in the type of leadership roles: Whereas men display more overall leadership, women display more social leadership. Moreover, women make the use of a more democratic and participative style while men employ a more autocratic and directive style. The outcome of a meta-analysis revealed three key findings:

  1. Female and male leaders were classified as equally effective

  2. Men are more effective leaders than women when their roles were more masculine defined and women are more effective leaders in less masculine defined roles

  3. Male leaders were seen more effective than female when there was a greater percentage of male leaders and subordinates

Behavioural styles theory

The Ohio State studies states that two independent dimensions describe the behaviour of a leader: consideration and initiating structure. The first dimension focuses on group member’s needs and desires. The second dimension, the initiating structure, is leader behaviour that organises and defines what to do next to maximise the output. The Figure 15.3 on Page 621 illustrates the four leadership styles that derive from the two dimensions that are again scored either low or high on the dimension. As a result, the four leadership styles are: low structure, high consideration; low structure, low consideration; high structure, high consideration or high structure, low consideration.

The University of Michigan also studied leadership and identified two styles of leadership: leaders that either focus on the employee or on the job. In conclusion, effective leaders have a good relationship with their subordinates, use the group as a method of supervision, and set high goals.

The most popular leadership model is the Robert Blake and Jane Mouton Leadership Grid (See Figure 15.4 on page 622). It is formed by the intersection of two dimensions of leader behaviour: ‘concern for production’ and ‘concern for people’. These dimensions involve attitudes and patterns of thinking and even specific types of behaviour. The five leadership styles that derive from the leadership grid are ‘country club management’, ‘impoverished management’, ‘middle-of-the-road management’, ‘team management’ and ‘authority compliance’. However, Blake and Mouton’s research is criticised as being self-serving.

The behavioural style approach declares that leaders are shaped by improving and developing their behaviour. Further, there is no best style of leadership as the effectiveness of leadership styles depend on the circumstances. Research also states that there is a difference between how frequently and how effectively managers exhibit various types of leadership behaviour.

Situational theories state that a different style of leader behaviour is only effective depending on the situation. As the situation changes, the style does too. There are three alternative situational theories of leadership: Fiedler’s contingency model, the path-goal theory and Hersey and Blanchard’s situational leadership theory.

The first model, developed by Fred Fiedler, is the oldest and most known model of leadership. It assumes that the performance of a leader depends on the degree to which the leader has control/influence and the leader’s basic motivation. Fiedler, thereby, believes that leaders are either task-motivated or relationship-motivated. Moreover, leaders have one dominant leadership style that is not modifiable.

Situational control is the amount of control and influence the leader has in his/her work environment. It ranges from high to low. The three dimensions of situational control are leader-member relations, task structure and position power.

Leader-member relations: the leader can depend on the group and ensure that the group tries to meet the leader’s objectives. It is the most important component of situational control.

Task Structure: the amount of structure within work tasks. It is the second most important component.

Position power: the leader’s formal power to reward or punish employees

These three dimensions form eight combinations of situational control (see Figure 15.5 on Page 626). Fiedler’s model is not agreed upon and is not confirmed for every possible variant. His main contribution is the recognition that leadership success is contingent on the situation and style.

The Path-goal theory focalizes on the influence leaders have on followers’ expectations. It is based on the expectancy theory of motivation and states that employees only accept the leader’s behaviour when it is seen as a source of satisfaction. This theory avoids obstacles to goal accomplishments, supports and rewards employees and is, hence, motivational. It is an intuitive approach as leaders are always trying to change people’s behaviour to product better results.

In contrast to Fiedler, Roubert House argues that leaders do not use only one style of leadership. He states there are four styles that leaders use intermittently:

  • Directive leadership: Guiding and managing workers through knowledge

  • Supportive leadership: Looking after the employees’ needs and treating everyone as equal

  • Participative leadership: Considering others ideas and consulting with employees

  • Achievement-oriented leadership: To set high performance levels by challenging goals and thereby demonstrating confidence in the abilities of employees.

Research supports the idea of several leadership styles.

Contingency factors are situational factors that make one style of leadership a better choice than another. This model is divided into two variables: the employee characteristics and the environmental factors. The employee characteristics include locus of control, task ability, need for achievement, experience and need for clarity. The environmental factors are employee’s task, authority system and work group. These factors can either hinder or motivate employees.

The Situational leadership theory (SLT) developed by Paul Hersey and Kenneth Blanchard states that effective leadership behaviour is dependant on the level of readiness the leaders’ followers have. Readiness is the amount of willingness someone possesses to complete a task. Willingness, thereby, is a mix of confidence, commitment and motivation. In Figure 15.6 on Page 630, the SLT model is shown. It represents four leadership styles and declares which style to use depending on the level of readiness.

However, scientific research revealed that leadership effectiveness is not imputable to follower readiness and leadership style.

Two new theories of leadership have emerged over the last decades: The transactional leadership and the charismatic leadership. The transactional leadership tries to engage employees’ behaviour. This means leaders motivate employees by giving rewards and exert corrective action when performance goals are not obtained. The charismatic leadership enables followers to develop deep commitment. Leaders using this approach can transform followers by appealing to followers’ values and personal identity (self-concept). In Figure 15.7 on Page 632, the charismatic model of leadership is shown. The use of charismatic leadership is necessary in organizations with adaptive cultures. The charismatic leaders first three sets of leader behaviour that positively affects followers and, in turn, positively influences outcomes.

In addition, there are four more approaches to leadership: substitutes for leadership, servant leadership, superleadership and coaching.

Steven Kerr and John Jermier developed the first approach, which identifies the substitutes for leadership to improve leadership effectiveness. Different characteristics (of the subordinate, task and organization) can determine different types of leader behaviour (see Table 15.4 on Page 635). Two leader behaviours are at choice depending on the individual characteristics: the relationship-oriented and the task-oriented leader behaviour.

The second approach to leadership is the servant-leadership by Robert Greenleaf. It assumes that leaders act as servants and serve the needs of others as priority. Characteristics of the Servant-Leader can be found in Table 15.5 on Page 636.

The approach to superleadership is about developing team members’ self management skills. It means that superleaders strengthen the follower’s skills by acting as a coach that, in turn, encourages employees to manage themselves.

The last approach, coaching, includes different characteristics. Coaches must be committed to the goals and the team, they must spend much time educating and instructing the group (skill building) and support the team. Further, coaches are team builder by bridging gaps between unique members, and results-oriented in their discipline.

Chapter O: Change

Organisations encounter many forces for changes that come from external or internal sources. External forces for change take place in the organization’s environment and have global effects. The four key external factors are demographic characteristics, technological advancements, market changes and social/political pressures (see Figure 16.1 on Page 649). The development of information technology is one of the biggest forces for change since every organisation must adapt a lot of technologies. Due to global economy, companies also need to change the way of doing business (market changes).

Internal forces for change develop within the organization (e.g. low job satisfaction) and hail from human resource problems and managerial behaviour/decisions. These problems derive from employee perception of their treatment at work and the relation between an employee’s needs and job satisfaction. High levels of absenteeism and staff turnover may force an organisation for change. Another force for change is an interpersonal conflict between managers and their subordinates. It requires interpersonal skills training or simply the need for separation of the two parties.

Kurt Lewin and John Kotter both developed models on how to enact change in an organization. Lewin’s change model is a three-stage model of planned change that explains how to manage the change process. Change only occurs as the motivation to change exists and the people are willing to. The three stages are:

  1. Unfreezing requires people to be critical and dissatisfied with the current method so that they are motivated to replace old behaviours and attitudes. Benchmarking is a process by which companies compare their organizational performance with others to unfreeze employees’ attitudes and motivate them to change internal processes.

  2. Changing is the second stage where organisations provide employees with new information and new ideas of looking at things. This way, employees learn new concepts that, in turn, facilitate change.

  3. Refreezing is accomplished when the change is stabilised and employees integrate the changed behaviour into everyday work. To reinforce the stability of change, additional training and modelling are used.

Among several models that classify different types of change, two are mentioned in this chapter: the three-way typology of change and Theory E and Theory O of change.

The first model is generic as it refers to all kind of changes. Adaptive change has a low degree of complexity, cost and uncertainty (see Figure 16.2). It involves reintroducing a familiar practice. Innovative changes entail the modification of the way of working. The degree of complexity, cost and uncertainty is medium. The last type of change with the highest degree of complexity, cost and uncertainty is the radically innovative change. It is difficult to implement this sort of change because it could threaten the managerial trust by introducing a new practice to the industry. Resistance to change increases from adaptive to innovative to radically innovative.

The second model by Beer and Nohria is Theory E and Theory O of change. This approach considers how change methods are implemented. Theory E stands for economic value whereas Theory O is based on organisational capability. In Theory E, change is planned. The focus is on formal structure and systems. On the other hand, in Theory O the focus lies on the development of a high-commitment culture.

Thereby the change is not planned. Theory E and O distinguish themselves in six dimensions: goals, leadership, focus, process, reward system and use of consultants (see Table 16.1 on Page 654). Both theories have their advantages and liabilities. It is a challenge to optimise the benefits and limit the liabilities between E and O.

Design approaches are driven top-down and based on a model implemented according to a plan (e.g. total quality management, lean production). Development approaches focus on a bottom-up approach and involve participants in the change process (e.g. team work, participative management).

John Kotter states that change fails when management make one of fundamental errors listed on page 656. To overcome these problems there are eight steps to follow (see Table 16.2 on Page 657). Each step is thereby linked to one of the fundamental errors. Kotter’s design approach conclude Lewin’s model of change. Step 1-4 correspond to Lewin’s ‘unfreezing’ stage, step 5-7 the ‘changing’ one and the last steps represent the ‘refreezing’ stage. Kotter’s eight steps give a rational view on change but the change process is not always simple. The complex nature of change is oversimplified in this approach.

Organizational Development (OD) is the field of study that is used to implement change through commitment, co-ordination and competence. The key dependent variables of OD are:

  • Advance organisational renewal

  • Engage organisation culture change and enhance profitability/competiveness

  • Ensure health of organisations and employees

  • Facilitate learning and improve problem-solving

  • Increase effectiveness and manage change

  • Strengthen system and process improves as well as support adaption to change

Using OD consultants means to change for a long-lasting improvement. This approach is driven by both customer needs and worker co-operation. Hence, it is aimed to provide value to an organisation’s products and services. Further, internal and external OD consultants act as medical doctors by making a diagnosis of the ‘sick’ organisation and then implementing an intervention. Moreover, consultants focus on the process and rather on behavioural and administrative dealings. OD-related interventions led to the following findings:

  • When the top management was highly committed to the change effort, employee satisfaction was higher

  • There was a positive relationship between individual behaviour change and organisational-level change

  • The use of more than one OD technique is more effective in changing job and work attitudes

Research revealed that planned organisation change works and change programmes are more successful when they are adapted for short- and long-term goals. Lastly, only a truly committed top management succeeds more likely in organisational change.

Organisational change can be examined in multiple contexts and levels of analysis. The different types of change mentioned earlier are typical approaches to the change process but it is also important to investigate the field around these processes.

Two of the contextual characteristics that influence the way of change process are the culture of an organisation and its competitive environment. In addition, it should also be investigated on the historical part of the organisation as it also affects the implementation of new changes. Even though an organisational change may be successful it is not automatically linked to the performance of the organisation. Pettigrew and Whipp studied the process of operational change and concluded that high performers conducted environmental assessment more intensively, linked strategic and operational change and led change. Further, they managed their human resources as assets/liabilities and managed coherence in the process of change.

Episodic change refers to discontinuous and intentional change pattern that is seen as failure of the organisation to adapt to a changing environment. Continuous change describes a self-organising organisation that deals with change as a pattern of endless modifications in work processes and social practices. In contrast to continuous change, episodic change is the classic approach of many change studies.

The Continuum of Resistance to Change (Figure 16.3 on Page 663) shows differing individual and group behaviour towards organisational change. It ranges from acceptance to resistance to change. As shown in this Figure, resistance can be classified as passive resignation or even active sabotage.

Individual’s positive predispositions towards change contribute to handling other changes in a more positive way. Negative predisposition can strengthen the fear of unknown and failure, mistrust, loss of job security and peer pressure. Moreover, it can increase disruption of cultural tradition, personality conflicts, lack of poor timing and the non-reinforcing reward system.

Lester Coch and John R.P.French developed a study of resistance to change (1948) that focused on the introduction of a new work in a factory. While employees without participation in the procedure rather quit their job, employees who could actively be part of the process stayed. Hence, participation became a good approach to overcoming resistance to change.

Another study revealed that a ‘positive self-concept’ and ‘tolerance for risk’ were positively related to coping with change whereas high self-efficacy and an internal locus of control were negatively associated with resistance to change. Systems models should rather be used to determine the causes of failed change. They suggest that individual’s resistance to change is due to obstacles within the work environment. Hence, systems models disregard any other factors that could have led to the individual’s resistance.

There are four conclusions that should be kept in mind before mentioning approaches for overcoming resistance:

  1. The organisation must be ready for change

  2. Organisational change is only successful when top management keeps on informing employees about the process of change

  3. People are not consciously resisting change

  4. Employee’s perception of a change affects resistance significantly

As a result, managers should provide as much information as possible and conduct meeting to address employees’ questions. Further, managers should give the employees the opportunity to discuss how the change might affect them.

Communication and employee participation are two generic approaches for reducing resistance. There are six strategies for overcoming resistance to change (see Table 16.3 on Page 670). All approaches have advantages and drawbacks. In conclusion, there is not universal strategy for overcoming resistance to change.

An organisation’s ability to learn and manage the knowledge can be seen as forms of organisational change. If the organisation is able to become a learning organisation, it is able to develop continuous change. Peter Senge described in his book the term ‘learning organisation’ as a group of people working together to enhance their capacities in order to create results of particular interest. Argyris says that organisational learning occurs when two conditions are fulfilled:

  1. The organisation achieves what it intended

  2. The imbalance between intentions and outcomes is identified and corrected

Individual and organisational learning have similarities. Individuals learn by stimuli and responses during acting similar to organisational learning (interaction with their environment). Further, organisations retain their behavioural patterns in routines that is alike to the individuals’ retention of knowledge in their brains. Both knowledge and feedback from organisations or individuals are, in addition, filtered in mental models and memory. The main difference between the two types is that organisational learning requires an institutionalisation process (e.g. communication channels) and the acceptance to share knowledge in an organisation.

Knowledge management is about managing information, knowledge and experience available to an organisation to further build on the knowledge and extend it. The knowledge management process has a range of activities: To take stock of knowledge and to develop or buy it to fill gaps, to share knowledge and apply it and finally to evaluate the process. Whereas a learning organisation focuses on the creation of new knowledge and adaption to changed environmental conditions, knowledge management refers more to internal knowledge, sharing processes and finding a balance between knowledge exploration (creation of new knowledge) and exploitation (use and development of knowledge).

Knowledge management and developing a learning organisation have the same conditions: both require new ideas for learning, must share new knowledge and as a result, the change the behaviour.

There are two types of learning: single loop learning and double loop learning. The first type is about reacting to responses from the environment. It means to adapt one’s behaviour to the impulses from others. The second type, the double loop learning, is not only about adaption but about questioning the underlying models. This type is most difficult type of learning. Whereas the first type adds knowledge to the existing knowledge, the second one questions the use of this knowledge.

Another aspect of knowledge management is the concept of knowledge creation. There are four modes of knowledge conversation developed by Nanaka and Takeuchi (see Figure 16.5 on Page 674). This model is composed of the interaction between individually or organisationally held knowledge and tacit or explicit knowledge. Explicit knowledge is tangible information and written down in a form whereas implicit knowledge has not been made explicit. To create knowledge, it is required to share knowledge (knowledge sharing).

Then, the knowledge is available and useful so that it leads to the four phases in the knowledge creation process where new knowledge is acquired, recombined and applied to extend the organisation’s knowledge stock. The four fields in the knowledge stock are socialisation, externalisation, internalisation and combination. The process is as follows: First the knowledge is created individually and shared in a socialisation process. Then, the shared knowledge transforms into explicit knowledge (externalisation). The knowledge can be incorporated into documents (combination). By the creation of culture, explicit knowledge transforms finally into implicit knowledge (internalisation). The creation of new knowledge is a continuous knowledge-transformation process by means of socialisation and externalisation of knowledge among all members of the organisation.

According to McGill and Slocum, smart organisations manage the learning process and process their experiences to be successful. It requires flexibility and intensive individual and organisational knowledge creation. Figure 16.6 on Page 676 shows how to build an organisation’s learning capability. The term ‘learning capacity’ represents core competencies that are characterised as special knowledge and skills that distinguishes an organisation from another. Learning capabilities are the driving factors for success that can even more satisfy customers and increase sales and profitability. The two major contributors to an organisation’s learning capability are facilitating factors and learning modes. Facilitating factors represent the internal structure and processes that determine the level of learning occurrence and amount of effective learning. In Table 16.4 on Page 677 all factors that facilitate Organisational Learning Capabilities are listed. According to Nonaka and Takeuchi, the conditions for knowledge sharing and creation are:

  • Intention: clear goals to evaluate the value of one’s knowledge

  • Autonomy: freedom to develop new knowledge

  • Fluctuation and creative chaos: assurance of change to make people think of new solutions

  • Redundancy: excess and duplication of information to make people understand the knowledge of others

  • Requisite variety: internal structure adapted to the complexity of the environment

Learning modes are the variety of techniques an organization uses to create and maximise learning. They are influenced by an organisation’s culture, experience or history. Danny Miller, OB researcher, identified six dominant modes of learning (see Table 16.5 on Page 679). Researchers assume that there is an optimal matching between facilitating factors and learning modes as well as types of mismatch.

Learning modes also set the scope of knowledge sharing: prior related knowledge is important to absorb new knowledge.

Robert Grant identified five conditions to make knowledge integration possible: common language, common symbols, a minimum of shared specific knowledge, shared meaning and knowledge about the knowledge stock. But the most important factor is the culture of trust on which knowledge sharing is based on. People can be intrinsically or extrinsically motivated to share their knowledge. Intrinsic motivation is about identifying oneself with the organisation that turns into effective knowledge sharing whereas extrinsic motivation stimulates knowledge sharing by financial rewards.

However, organisations cannot always keep on learning due to three fundamental problems: the focus on the fragmentation rather than systems, the emphasis on competitors over collaboration and the tendency to be more reactive than proactive. Fragmentation in organisations separates the group from each other and creates specialists that, in turn, hamper any learning, sharing and cooperation. Also the focus on competitors prohibits learning and leads to fixation on short-term results rather than long-term solutions.

To overcome these problems leaders must adopt new roles and associated activities to create a learning organisation. This can have an impact on the culture by facilitating learning and knowledge processes. There are three key functions in building and learning organisations: Building a commitment to learning and Working to generate- and generalise ideas with impact.

Chapter P: CSP

Corporate social responsibility (CSR) is the organisation’s obligation to ensure active compliance with the spirit of ethic standards and international norms. It can be divided into two kinds of views: the normative view and the instrumental one. The first view on Corporate social responsibility holds that organisations have obligations to their stakeholders. The instrumental view holds that organisations pursue corporate social responsibility to do good business.

In the 1950s, Bowden’s book Social Responsibilities of Businessmen(1953) addressed the belief to be social responsible to follow those lines of action that correspond to the values of the society. Then, in the 1960s Keith Davis created the iron law of responsibility that stated that people not being social responsible tend to loose their power in the long term. Milton Friedman completely rejected his notion of organisations that practise social responsibility in his book Capitalism and Freedom.

During the 1970s, the term ‘corporate social responsibility’ became more specific. The first view on CSP was the conventional wisdom saying that a responsible company is not only about making profits but rather balances multiple interests (employees, suppliers, location communities). The second view of CSP contained additional social programmes to increase profits while the third view assumed companies seek multiple goals to maximise the company’s utility. The last approach had a ‘lexicographic’ view by stating that firms should engage in socially responsible behaviour.

The 1980s and 1990s new alternative concepts emerged such as business ethics theory, corporate citizenship and stakeholder theory. Contrary to Corporate social responsibility, business ethic theory revealed that business ethics is about setting rules of organisational conduct. The concept of corporate citizenship is, according to Dawkins, another word for corporate social performance, underlying the fact that employees are members of the society. The stakeholder theory refers to the responsible companies have towards their stakeholders.

The three main differing views of social responsibilities addressed the following issues:

  1. Social responsibility concerns with an organisations that is responsible

  2. It is about companies addressing social issues and carrying about responsibility

  3. Social responsibility concerns with the way of organisations will respond to their responsibilities

These three interrelated aspects form Carroll’s corporate performance model into three dimensions.

  1. Dimension: Responsibilities

The range of responsibilities companies have towards society are shown in the Responsibilities Pyramid (see Figure 17.1 on Page 699). The first layer is economic responsibilities. It is the economic foundation of responsibilities as it responds to society’s needs for producing goods and services. Then, the second layer contains legal responsibilities and thus refers to law and regulations under which a company operates. Ethical responsibilities, the third layer, involve behaviours that are expected by society. The final layer is about philanthropic responsibilities. It is the responsibility companies take voluntary.

  1. Dimension: Social issues

According to Carroll an organisation’s corporate social performance also includes to identify social topics such as child labour, human rights and so on. These issues are dynamic and changing over time. The attention of social topics shifts so that, for instance, environmental protection had supreme importance in the 1990s. As CSP is linked to globalisation, three social areas became essential: human rights, labour issues and environmental issues.

  1. Dimension: Response action

This philosophy sets the focus on the society. The organization’s duty is hence to act upon the social issues and responsibilities and to respond to changes.

Carroll’s corporate performance model reveals that organisations only fail as they do not carry economic responsibilities (see dimension 1). However, organisations can also fail for other reasons. This model can be used as a problem-solving tool to assist managers in conceptualising social performance and to improve planning in the area of social performance.

The relationship between corporate social responsibility and financial performance can be considered from the point of view of practitioners, theorists and researchers.

Practitioners view corporate social responsibility as a long-term investment. Further, it is a corporate strategy to gain organisational success.

Theorists have a positive association between CSR and financial performance because it is considered as a form of marketing and effort to secure resources. The other theorist’s view of CSR is the normative one. Hence, firms should not do anything that could harm their stakeholders.

Meta-studies concluded that CSR is hard to compare. Moreover, there is a positive relationship between company social performance and company financial performance but the causality remains unclear.

There are a host of reasons for engaging in CSP:

  1. Potential source of opportunities

  2. Cost savings

  3. Product differentiation

Corporate social reporting is used by organisations to ensure stakeholders are satisfied with their public behaviour. Advertising and communicating CSR can help to achieve performance objectives such as the sales volume. It improves the company’s reputation for quality, reliability and honesty. There are three main types of motivation for CSR communication:

  1. ‘Performance-driven’ CSR: It is an instrument for maximising profitability

  2. ‘Stakeholder-driven’ CSR: Conforming to stakeholder norms who define appropriate behaviour

  3. ‘Value-driven’ CSR: Self-motivation positively affects CSR initiatives

Cultural differences in corporate social reporting led to an interesting finding that US and non-US companies have a similar set of CSR topics. The success of companies is essential to three stakeholder groupings: customers, employees and owners. Customers emphasises the value of good and services. They got aware of awarded certifications of firms. Employees focus on skill development and career enhancement whereas the owners discuss the importance of trust gained by corporate social reporting.

A recent study between France, the Netherlands, the UK and the USA about CSR communication revealed that UK and US firms rather discuss dimensions of CSR principles and motivations than the other two countries. CSR is perceived differently across the countries. Further, motivational principles to justify their involvement in CSR practices distinguish: The USA makes use of the value-driven approach and the UK applies a combination of performance-driven and stakeholder-driven approach. In addition, the US firms focus more on their engagement in initiatives (philanthropic programmes) whereas French and Dutch companies build up a socially responsible image by promoting their production practices.

Ethical and unethical behaviour is attributable to a complex combination of influences. Three sources affect the individual’s role expectations: cultural, organisational and general environmental factors. These sources influence, in turn, a person’s ethical actions. To improve the organisation’s ethical climate, researchers developed guidelines (see Table 17.3 on Page 708).

Leaders can serve as a role model and set standards for moral behaviour. Depending on two aspects, leaders can develop an ethical reputation. The first aspect is the perception of a moral person including traits, behaviours and the way of decision-making (see Figure 17.2 on Page 710). Typical behaviours of ethical leaders are openness and carrying about the others. The second aspect concerns the view of a moral manager. The reputation of ethical leaderships develops and employees perceive an ethical leader by role modelling, communicating about ethics and values and using rewards that shape the desirable conduct.

Utilitarianism is an influential ethical and consequential theory that looks at the consequences of an action to determine the moral rightness. Kantianism (named after Immanuel Kant) is a non-consequential theory saying that only the act, not the consequences, should be considered. A synonym for ‘non-consequential’ is the ‘deontological’ theory. This theory values principles such as fairness and existing ideas of best practice. The third influential ethical theory is ethical relativism. It states that moral norms should be set in relation to particular cultures. Rules of conduct are not applicable in every society so that each community has its own norms and morality.

The rational choice theory (RCT) is associated with the consequential theory (utilitarianism). It is about maximising the utility but not implicitly used by decision-makers. Hence, the image theory was introduced. This approach is more naturalistic and concerns moral decision-making. In this theory, the decision-maker executes decisions based on his personal view on values. The first step consists of screening potential choices and then selecting the option that fits to his/her personal set of values in the second stage. The decision is accepted as the option and the internal images (values, goals, strategies) are compatible.

Kent Hodgson identified seven moral principles for making decisions (see Table 17.4 on Page 713).

Evidence about moral decision-making revealed that uncertainty made managers to ponder. Doubts about their decision led to the attempt of finding reasons for justification. Otherwise cognitive dissonance might occur. Further, disagreeing responses were far more used than undecided responses. The response analysis stated additionally that disagreeing responses underlined the company’s long-term interest while agreeing responses emphasised more on the short-term interest of the company. The relativistic thinking appeared the most in the response analysis. Finally, research revealed that women are more sensitive towards ethical issues and take action whereas men tend to make more unethical decisions.

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