Summary of Organizational Behavior by Robbins and Judge, written in 2013 - donated to WorldSupporter

Chapter 1: What is Organizational Behavior?

Being a good manager requires strong interpersonal skills, as communication is crucial, as one must manage different types of resources: people, money, and time in order to achieve specific goals.

A Manager’s Four Main Functions

Planning function refers to setting goals, creating strategies, and preparation of plans that make different activities work coherently and effectively.

Organising function concerns tasks identification and division, assignment of tasks to individuals, setting reporting and decision- making systems.

Leading function relates to motivating workers and directing others’ actions, choosing communication canals and solving conflicts.

Controlling function refers to controlling others’ work outcomes and checking whether everything is being done as planned; and when necessary undertaking corrective actions.

Management roles

They can be divided into 3 main categories: interpersonal roles, informational roles and decisional roles. The concept was developed by Henry Mintzberg and is called Mintzberg’s Managerial Roles (below).

Management skills

There are 3 types of management skills developed by Robert Katz: Technical skills (application of specialised knowledge, know-how, e.g. think of mechanical engineer, vet, pharmacist), human skills (easiness to work in a team, understand others’ behaviors and motives, stimulate others’ actions, ability to communicate and get along with people), conceptual skills (mental capability to analyse problems, manage complexity of an issue, decide on solutions and evaluation of possibilities).

Effective or successful managers?

It was investigated in Luthans’ Study of Managerial Activities that effective managers spend most of their time on communication activities (44%) and on human resource management activities (26%). In contrast, successful managers spend almost half of their working time on networking activities (48%) and communication activities (28%). It is understandable that average managers work most of the time on traditional management (32%) and on communication activities (29%).

Defining Organisation Behavior (OB)

“A field of study that investigates the impact that individuals, groups, and structures have on behavior within organisations, for the purpose of applying such knowledge toward improving an organization’s effectiveness” (Robbins, Judge “Organisational Behavior”).

It is important to remember that OB deals with 3 levels of behaviors: individuals, groups and structures. Knowledge about those 3 types of behaviors is necessary to apply actions which make the whole organization function successfully.

How to study OB? EBM

In OB systematic study and evidence-based management is combined with intuition. Behavior can be predicted. If it is examined on the continuous basis one is able to forecast how people can act in particular circumstances (that is why systematic study of people’s actions are necessary). Systematic study involves examining causes and effects, just like in science – this is done to make general law-like conclusions based on gathered data. What is closely related to systematic study is evidence-based management (EBM). EBM implies making managerial decision after consideration of scientific facts, data, conclusions, laws. Managers who apply EBM act like scientists – when they face a problem, they search for scientific information which can give them possible problem solutions, then they apply the most relevant knowledge in order to solve an issue. Of course, intuition is inseparable from decision-making process. Nevertheless, importance of systematic study and thus EBM cannot be questioned.

What major behavioral disciplines contribute to OB?

- Psychology (studies behavior of individual)

- Social psychology (studies behavior of individual within a group)

- Sociology (studies groups, societies, organisational systems, how individual acts in relation to a society)

- Anthropology (studies societies, groups, cultures, organisational systems)

Absolutes in OB

OB concepts, however law-like they can be, must take into account situational factors. Under different conditions different individuals act differently. That is why there only a few absolutes in OB. Because people are different and complex, one needs to consider OB in a contingency framework.

Challenges and opportunities for OB

I) Globalisation implications

Ia) More foreign assignments

Ib) Multicultural work environment

Ic) Coping with anticapitalism backlash – values and norms, even the economical ones, are not the same everywhere

Id) Placing more and more jobs, productions in low-cost labour countries (e.g. China, Taiwan) – managers need to find a balance between organization’s interest in low cost and (corporate) social responsibility.

Ie) Managing people during War on Terror – e.g. people resign from some businesses, cancel flights because they are afraid of terrorism.

II) Managing work diversity

IIa) Embracing diversity – employees from diverse countries do not give up their cultural values and norms to adapt to the rest of society. Managers need to make them accommodate so they don’t feel isolated or ignored

IIb) Changing U.S. demographics

IIc) Implications – Effective managers need to recognize cultural differences and can’t apply the same standards to all employees.

III) Improving quality and productivity

IV) Improving customer service

V) Improving people skills

VI) Stimulating innovation and change

VII) Coping with “temporariness”

VIII) Working in networked organizations

IX) Helping employees balance work-life conflicts

X) Creating a positive work surrounding – in this point the notion of positive organizational scholarship needs to be mentioned – it is research area that focuses on fostering strengths rather than eliminating weaknesses. It is all about what is good, the best in employees and the organization itself.

XI) Improving ethical behavior

OB Models

> Dependent variables: productivity, absenteeism, turnover, job satisfaction, deviant workplace

behavior (antisocial behavior or workplace incivility), organizational citizenship behavior

> Independent variables:

• individual-level variables – motivation, perception, ability, values and attitudes, personality and emotions, individual decision-making and learning, biographical characteristics

• group-level variables – conflict, communication, group decision making, leadership and trust, group structure, conflict, power and politics, work teams

• organisation system-level variables – organizational culture, organization structure and design, human resource policies and practices.

Chapter 2: Foundations of Individual Behavior

Abilities

There are 2 major types of abilities.

• Intellectual abilities – capacity to perform mental tasks. There are a few dimensions of Intellectual ability: number aptitude, verbal comprehension, perceptual speed, inductive reasoning, deductive reasoning, spatial visualization, memory.

Moreover, the notion of general mental ability (GMA) appears – it is an overall aspect of intelligence. Intelligence and job satisfaction do not relate to each other.

• Physical abilities – needed to perform physical tasks. There are nine basic physical abilities grouped in 3 categories: strength factors (dynamic strength, trunk strength, static strength, explosive strength), flexibility factors (extent flexibility, dynamic flexibility) and other factors (body coordination, balance, stamina).

Biographical characteristics

> age and relationship between variables:

1) turnover: the older a person gets, it is less probable that he/she will quit a job.

2) absenteeism: older employees have lower rates of voluntary absenteeism, but higher on involuntary (unavoidable) one (due to health problems).

3) productivity: age and productivity are not related.

4) job satisfaction: mixed evidence. Generally, satisfaction increases with age in professional job types and decreases with age in nonprofessional.

> gender – main difference between females and males refers to working hours. Women prefer more flexible working times and are more often absent at work than men.

> race and relationships:

1) people positively discriminate individuals of the same race as themselves (pay them more, promote and award more often)

2) different approach of black and white race toward affirmative actions

3) African Americans perform worse in employment assessments/decisions

> tenure and relationships:

1) productivity: positive correlation between productivity and tenure

2) job satisfaction: positive correlation between job satisfaction and tenure

2) absenteeism: negative correlation between absenteeism and tenure (seniority)

3) turnover: the longer a person works in a company, the less probable that he will qui

> religion

Religious discrimination can lead to more health problems, absence and turnover.

Learning

Learning is a process, brings changes in behavior, based on experience.

There are 3 main theories of learning.

A) Classical conditioning

Theory based on the concept that unconditioned stimulus causes unconditioned response and that conditioned stimuli cause conditioned response. It is based on building connection between conditioned and unconditioned stimulus. Example: Pavlov’s experiment with dog

B) Operant conditioning

Theory based on idea that one behaves to achieve what he wants or to avoid what he doesn’t want. Reward after the desired and deliberate behavior occurs is the reinforcement. The elimination of punishment in case of lack of desired and deliberate behavior is also reinforcement. Those two methods reinforce achievement of desired response, effect, equal behavior. The theory of operant conditioning is a part of behaviorism concept which argues that people react to stimuli not associating them consciously with response. We act in response to stimuli, but all process takes place on unconscious level.

C) Social learning

People learn by observation others as well as they learn through experience, “on mistakes”. There are 4 models of social learning:

1. attentional process – people learn from people they pay attention to due to their vital characteristics

2. retention process – depends on how well one remembers someone’s behavior when he/she is no longer close, visible, available

3. motor reproduction process – new behavior is a consequence of observation, one copies behavior of another

4. reinforcement process – one performs desired behavior if he is encouraged to do so by rewarding.

Managerial tool

Managers shape behavior of employees, meaning that the change of behavior happens in steps, and each step is reinforced. There are 4 main shaping behavior methods:

• positive reinforcement,

• negative reinforcement,

• punishment

• extinction

Positive reinforcement refers to rewarding desired behavior, negative refers to elimination of something unpleasant, not wanted when a behavior occurs. Punishment causes unpleasant condition when one doesn’t behave in a desired way. Extinction means not applying any reinforcement and waiting until particular behavior extincts, disappears.

Those reinforcements can happen on continuous or intermittent basis. Desired behavior is reinforced each time continuous reinforcement is performed. Intermittent reinforcement occurs when reinforcement is not regular, but it happens enough often to make one behave in a desired way repeatedly.

When it comes to reinforcement schedules, the concept goes further beyond continuous or intermittent models. One distinguishes 4 time schedules:

• fixed-interval schedule

• variable-interval schedule

• fixed-ratio schedule

• variable-ratio schedule.

We are talking about fixed-interval schedule when reinforcement is applied after a particular period of time (e.g. salaries). When reinforcement happens on irregular time basis we are referring to fixed-interval schedule (e.g. class tests in high schools, money bonuses). Fixed-ration schedule tells us that reinforcement happens always after a certain and constant amount of desired behaviors is performed (e.g. pupil is not praised each time he gets A, but he is praised after he gets 10 As, and then 20 As,and so on). Variable-ratio schedule is the opposite. One is rewarded on unpredictable basis; each time after different amount of desired behaviors occurs. In general, variable schedules are more effective than fixed.

OB Mod means the application of reinforcement methods described above to people in their working environment. This happens in 5 steps:

1. Identification of problematic behavior

2. Collecting data

3. Identification of a response’s consequences

4. Setting up and executing a strategic plan

5. Measuring improvement

Chapter 3: Attitudes and Job Satisfaction

Attitudes

Attitudes are evaluations, judgments, opinions about people/objects/states/events. There are 3 main components of attitudes:

• cognitive

• affective

• behavioral

Cognitive refers to just describing things how we see them, e.g. “I have a job”. Affective is related to emotions and feelings, e.g. when one says: “I am so happy with my job”. Behavioral refers to intentions, actions, e.g. when one says “I will never resign from my job” or “I am looking for another job”. All components are related, cognitive and affective aspects of attitudes are inseparable. As one sees attitudes and behaviors are connected, certain attitude leads always/sometimes/often/never to certain behavior.

At this point, the notion of cognitive dissonance appears – it is the reverse effect – when attitude follows behavior. It is explained as inconsistency between attitudes or between behavior and attitude (e.g. advising others to drive slowly when you drive fast yourself). What influences dissonance is: its importance, influence of one’s values, rewards of dissonance.

Major Job Attitudes

• Job satisfaction: a positive feeling about one’s job according to an evaluation of its characteristics.

• Job involvement (level of identification with the job, caring for and participation in it and considering it as important for “self”).

Another notion in this part is psychological empowerment – it expresses the belief in the level of one’s influence on his work setting, abilities, his work importance and locus of control.

• Organisational commitment (employee’s identification with the company’s goals, corporate culture, strategy, mission, values, vision and willingness to preserve his belonging to the organization)

Affective – emotional connection with the company and its values

Continuance – perceived financial benefit resulting from staying rather leaving a firm/company

Normative – feeling obliged to stay in a company because of moral/ethical matters

• Perceived organisational support (POS) – level of employee’s conviction and belief that the organisation supports him, appreciates his work and cares for his comfort, security, and happiness.

• Employee engagement – employee’s enthusiasm for the work he does, satisfaction with it and his commitment to his work.

Job satisfaction

Job satisfaction can be measured in two ways:

• Single global rating method (survey participants answer one question: How satisfied are you with your job?)

• Summary of job facets (makes an employee evaluate each element of a job), possible facets can be salary, communication with co- workers and with supervisor, amount of days off, etc.

The first, “one-question” method is fast and inexpensive. The second one (summary of job facets) is more accurate, allows the identification of the core problems and makes it easier to create possible solutions.

What makes employees satisfied with their job?

• The fact that they enjoy their work

• Interesting jobs that provide training, variety, independence and control

• Most people prefer challenging over easy and various over routine

In general, most of the time is the nature of job that makes one satisfied with work. However, also personality is an important factor influencing job satisfaction. It is essential to have positive core self-evaluations (which are one’s evaluations of his possibilities, abilities, and strengths).

Once a person achieves a level of payment that allows for him comfortable living, the relationship between pay and job satisfaction does not exist any longer.

There are 4 responses to dissatisfaction:

1. Exit – behavior indicating the will to leave the organisation

2. Voice – results in actively and constructively trying to change dissatisfying conditions

3. Loyalty – waiting passively hoping for situation improvement

4. Neglect – doing nothing, letting the conditions worsen

Relationships between job satisfaction variables:

• Job satisfaction and job performance  strong positive relation -> more satisfied workers are more productive

• Moderate relation between job satisfaction and organizational citizenship behavior -> more satisfied workers more probable that they engage in OCB

• Satisfied workers enhance customer satisfaction and loyalty

• Satisfied workers are less likely to miss work (moderate relation)

• Satisfied workers are less likely to quit (strong relation)

• Job dissatisfaction is much likely to cause workplace deviance

• Managers usually overestimate job satisfaction but do not actually measure it.

Chapter 4: Personality and Values

Nature of personality

Before going deeper into the subject, we define the term personality as one’s total sum of behaviors, reactions, and interactions with others. In organisations, HRM departments use personality tests to measure and forecast the behavior of prospective employee.

The common method of measuring personality is self-report survey – one evaluates himself on different variables. The other means of personality measurement is the observer-rating survey, which is a more independent assessment – a person observes and rates personality of another person (employee, prospective employee, etc). Claimed to be more successful in the context of organisations.

Personality results from heredity and interactions with an environment. People’s personalities can change over the course of time. Moreover, the notion of personality traits appears at this point – these traits are enduring, rather unchanging attributes that characterise behavior. If one is often shy and/or aggressive and performs these behaviors often, we can call shyness and/or aggression his personality traits.

Models which organise traits

There are two main models which recognise and organise traits:

• The Myers- Briggs Type Indicator

• Big Five Model

The Myers- Briggs Type Indicator  the most common personality-assessment tool. It’s a test which consists of 100 questions related to behaviors, feelings, and attitudes in different situations. After doing the test, a person can be classified to the following groups:

• Extroverted or introverted – extraverted types are gregarious, social, assertive, outgoing

• Sensing or intuitive – sensing types like routine, are practical-oriented, pay attention to details

• Thinking or feeling – thinking types are logical and analytical when facing problems

• Judging or perceiving – judging types like the ordered, structured world, need for control

Disadvantages of the model: a person must be classified either to one type or another –cannot be in-between the types, and do not reflect job performance.

Big Five Model  personality-assessment tool which recognises 5 aspects:

• Extraversion: reflect one’s level of comfort with relationships

• Agreeableness -> describing someone who is warm, cooperative, easily reaches compromises and is trusting.

• Conscientiousness -> describing someone who is organised, determined, responsible and reliable.

• Emotional stability -> handling stress measure. Negative emotional stability relates to people who get angry/nervous/upset easily, irritated quickly, feel insecure, and lack confidence.

• Openness to experience -> describes curiosity of world or some of its aspects, creativity, interest in innovations, novelties.

Studies have demonstrated the relationship between personality dimensions and job performance. Critique: the Big Five model does not represent all relevant traits that a personality can have.

The other traits, which are not shown in the existing 2 models, but are highly relevant to OB are:

• Core-self evaluation -> level to which one likes or dislikes himself, whether he thinks he is effective, able to perform tasks and have control over his surrounding. People with positive core-self evaluation usually perform at work better.

• Machiavellianism -> level of one’s being rational & practical, goal-oriented, very good in bargaining, keeping distance with showing (experiencing) emotions, thinking that ends justify means. People with high level of Machiavellianism tend to manipulate others, appear as very persuasive, and are good in negotiations.

• Narcissism -> people who are high in narcissism level are good leaders, but are perceived by others as arrogant – they want the appreciation, admiration, they may think they are superior.

• Self-monitoring -> one’s ability to adjust himself and his behavior to external world, various environmental circumstances. People with high level of self-monitoring are more responsive to external signs, but also their behavior differs from situation to situation – they tend to behave differently when being in a public and differently in private. High self-monitoring means better job performance than low self-monitoring.

• Risk taking -> willingness to accept changes and take risks. Managers with high risk-taking level make decisions faster.

• Type A personality -> people who are highly competitive, always want to achieve more, be more efficient, they can be aggressive in pursuing their goals, even if it takes being against other people/difficulties. In US type A is associated positively, with ambition, success. Type B personality is the opposite – people with type B never hurry with anything, can be relaxed without guilt. Type A personalities do better during work interviews, are faster workers, work long hours, usually work under stress and their actions are more predictable.

• Proactive personality -> taking initiatives, being ahead with ideas, recognition of opportunities. Proactive people are seen as leaders, make changes within the organization, but they are more likely to leave the organization to start business on their-own.

Nature of values

A personal and cultural value is a relative ethic value, an assumption upon which implementation seems reasonable. Moreover, values that we organise according to their importance and intensity create a value system. In OB, studying values is important because they influence behavior, perception, attitudes. They guide one’s behavior in the sense of doing right and wrong.

The most basic categorisation of values recognises terminal and instrumental values and is used in Rokech Value Survey (RVS). RVS is made of two sets of values: terminal values are desirable goals and instrumental values that represent behaviors/modes which help to achieve the terminal values (terminal goals). People in the similar occupations have similar RVS values.

Moreover, it is necessary to mention generational values. Researches have made the following division:

• Veterans -> begin of the workforce in 1950s and 1960s; rather loyal, belief in authority, order, hardworking, pragmatic, traditionalists.

• Boomers -> born after the WWII; workforce from mid-1960s until mid-1980s; career-oriented, making-money attitude, distrust/dislike of authority.

• Xers -> entered workforce from 1985 until 2000; people with team-sprit at work, who value relationships, bonds, balance their work with private life, question authority, do not like rules.

• Nexters -> on the work market since 2000; people to whom financial success is important, they are technology-oriented at work, confident, value both self and relationships, team spirit combined with work autonomy.

Disadvantages of the division above: does not apply in all cultures, little research – relying on intuition, inexact categories.

Matching individual’s values and personality to the workplace

Two main theories:

1. Person-job fit

2. Person-organisation fit

Ad1. Person-job fit -> recognises 6 personality types and makes a match between particular personality fit and occupation and its environment. A successful match guarantees high job satisfaction and lower probability to resign from the job. The possible personality types in person-job fit theory are: realistic, investigative, artistic, social, conventional, enterprising. Social people match best with social occupations, artistic people with artistic jobs, etc…

Ad 2. Person-organisation fit -> this theory claims that people are attracted to and chosen by organisations that correspond to their values and beliefs. If it is not the case, a person will leave the organization. A fit between one’s values and corporate culture and values guarantees job satisfaction, organizational commitment and low probability of leaving the firm.

Global Consequences

Hofstede’s Framework

Values and value systems differ from culture to culture. Hofstede’s framework explains and forecasts behaviors of people from different cultures. The five dimensions of Hofstede’s theory are:

1. Power distance -> high level of it means large differences between the rich and the poor, accepts the existence of social classes, castes. Low level of it emphasizes equality in society.

2. Individualism versus collectivism

3. Masculinity versus femininity: high masculinity rating  men dominate the society in which the roles for men and women are separated. Femininity 

4. Uncertainty avoidance

5. Long-term versus short-term orientation

Critique: out-of-date (concept developed 30 years ago, based on IBM company), many changes, world events have happened since the development of the theory (and they also shape the dimensions), some results are surprising.

GLOBE Framework

The acronym stands for The Global Leadership and Organizational Behavior Effectiveness. It is an on-going study in leadership and national culture across different countries representing different cultures. Some dimensions are the same as Hofstede’s, but apart from them, GLOBE has much more other aspects: humane orientation, performance orientation.

Chapter 5: Perception and Individual Decision Making

Perception

Perception is defined as a process of organising and interpreting impressions, thus giving meaning to the external environment, it is organizing our world with impressions we have. It is different from reality, it’s subjective, personal. Factors which influence perception can be grouped: there are factors in the perceiver (attitudes, motives, interests, etc.), factors in the target (novelty, motion, sounds, size, etc…) and factors in the situation <context> (time, work and social setting).

Attribution theory

It is important to remember the attribution theory. It is based on the concept that when judging people we try to explain their behavior in two possible ways. Why? Because we recognize that 1) behavior can be internally caused and/or 2) behavior can be externally caused. When observing, judging a person we try to determine whether his behavior is caused internally or externally. Internally caused behaviors are the ones we see as under the control of an individual. Externally caused are the ones we see as the situation forcing a person to do something. There are, however, 3 factors that determine the fact whether we perceive one’s behavior as internally or externally caused.

1. Distinctiveness - > degree to which one behaves differently in different situations

2. Consensus -> degree to which people facing the same situation, respond similarly

3. Consistency -> degree to which one’s behavior is consistent, unchanging over time

Moreover, when we judge behaviors of others, we often make fundamental attribution error. It is a tendency to underestimate the external environment (situational circumstances) and overestimate internal factors (e.g. blame the person, his personality).

Apart from fundamental attribution error, we are usually under the high influence of self-serving bias. It is one’s tendency of attributing his successes to internal factors and failures to external factors. Not blaming self, blaming others.

Shortcuts in judging others

• Selective perception -> we base our judgments on the selected by us range/sample of characteristics (when we judge a person) or aspects of a situation. We can ‘speed-read’ others, but there is a risk of inaccurate judgements.

• Hallo effect -> tendency to make mental generalizations, impressions about a person basing on just his one characteristic. A single trait can influence the overall impression.

• Contrast effects -> when judging a person we compare him to other people we have lately met and whom we have evaluated better or worse on a particular dimension

• Stereotyping-> judging someone on the basis of a perception we have about a group to which he belongs. Profiling is a different category of stereotyping – it is selecting a particular group which we stereotype aiming at intensive inquiry/investigation (used in police, criminology)

Applications of shortcuts in organizations:

• Employment interview - > first impression is extremely important

• Performance expectations -> might be concerned with self-fulfilling prophecy – effect of one’s inaccurate perception about another person makes this person confirm that inaccurate perception (and behave in such way).

• Performance evaluation: subjective evaluations can be problematic.

Link between perception and individual decision making

Perceptions largely influence the quality of decision-making. The decision-maker will evaluate the data received according to his perception, bias may be involved.

Decision-making in organisations can fall into one of the three categories:

1. Rational model -> decision-making model that consists of 6 steps, which one should take to find a problem-solution. Gives a ready scheme that follows a logical order.

2. Bounded rationality -> based on the idea that people simplify problems to be able to deal with them, we take out multifaceted aspects of the problem and thus reduce complexity. Only find the first acceptable solution, but not the optimal one.

3. Intuitive decision making -> relaying on intuition when making a decision, takes place on unconscious level. It would be effective to complement this with evidence and good judgements in decision making.

Common biases and errors in decision- making:

• Overconfidence bias – we overestimate our abilities, intellect, knowledge.

• Anchoring bias – we rely too much on one piece of information or “anchor”.

• Confirmation bias – in a decision-making it means seeking out information that reaffirm our previous choices and discount information that contradicts it.

• Availability bias – basing decision on information that is already gathered and available.

• Escalation of commitment – not changing the previous decision despite the negative information.

• Randomness error – tendency to believe that one can predict random events

• Winner’s curse – concept which states that winners of auctions usually pay too much

for items they bought, in that they overvalue the items.

• Hindsight bias – inclination to see events that have occurred as more predictable than they in fact were before they took place.

Individual differences in decision- making:

• Personality: achievement striving people are more likely to escalate commitments than dutiful people.

• Gender – women have tendency to rumination (over-thinking problems, decisions, analyzing them for very long, before and after some decisions are made)

Organisational constraints:

• Performance evaluation – managers are influenced in their decision-making by criteria of their later evaluation

• Reward system – organization’s reward system influences decision-making

• Formal regulations – choices, decisions which are made have to fit to regulations, rules, directives of a firm

• System-imposed time constraints – imposing deadlines influence decision-making

• Historical precedents – today’s choices are influenced by past choices

Ethics in decision making - 3 ethical decision criteria

Utilitarian criterion – the aim of utilitarianism –> make the best decision that provides greatest good for the greatest number. Pros and cons: promotes efficiency, productivity but ignores individuals (can be minorities).

Rights – making decisional choices consistent with rights, laws, liberties. This criterion protects whistle-blowers who are workers that reveal unethical practices of their organization (because they have a right to free speech). Pros and cons: gives individual freedom, rights, protection, but at the same time creates too much of a law-based environment, which lowers productivity and efficiency

Justice – criterion which characterises people who make decision to achieve equity and aim at fair distribution of benefits. Pros and cons: protects rights of underprivileged, but creates a sense of entitlement, this reduces risks taking, innovation, productivity.

Utilitarianism tends to be the safe choice for decision-makers, but should not be the single criterion to judge good decisions.

Improving creativity in decision making

Creativity can be described as ability to generate new, innovative, useful and resourceful ideas. It is becoming more important in decision-making process. Allows to see more perspectives and angles of a problem. Most of us need to learn to unleash our creative potential

Three-component model of creativity. It is a model that proposes that one’s creativity needs expertise (know-how, particular knowledge), creative thinking skills and task motivation (high motivation to work on interesting, challenging projects)

Global consequences:

1. Attributions – attributions which people make differ across countries. One needs to be aware of this fact when making decision or judging decisions of others.

2. Decision-Making – culture has influence on the decision-making process.

3. Ethics – there are different ethical norms in different cultures.

Chapter 6: Motivation Concepts

One defines motivation as a reason for engaging in a particular behavior towards attaining a goal. It relates to 3 key concepts: direction, intensity and persistence of human behavior. Intensity=how much one tries, direction= it leads to the desired outcome, persistence=how long one tries.

Early theories of motivation

Hierarchy of needs – Maslow pyramid

1^st level -> Psychological – hunger, thirst, shelter, sex

2^nd level -> Safety – security, protection

3^rd level -> Social – friendship, belonging

4^th level -> Esteem – respect, status, recognition

5^th level -> Self-actualization – self- fulfilment

Lower order needs (psychological, safety) must be first satisfied so high-order needs (the rest) can be attained. One cannot move from satisfying psychological needs directly to social, because safety needs were not satisfied. Higher-order needs are often satisfied internally (within the person), lower-order needs are satisfied externally (pay, tenure) Later, Maslow’s theory of needs was elaborated to ERG theory. This theory proposes only 3 core needs – existence, relatedness and growth.

Theories X (negative) and Y (positive)

This theory is based on manager’s assumptions of their employees. Theory X is full of assumptions such as: employees are lazy, dislike their work, everything is somebody’s fault, employees’ interest in job is restricted to just being paid, employee cannot be trusted. Theory Y is based on assumptions such as: employees may be ambitious, motivated, can handle work autonomy, can be given authority and be empowered. In terms of Maslow hierarchy, higher-order needs dominate individuals in theory Y, lower-needs dominate in theory X.

Two-factor theory (motivation-hygiene theory)

Theory developed by F. Herzberg. His studies proved that certain factors cause job satisfaction and a separate set of factors cause job dissatisfaction. Hygiene factors are: status, job security, salary, fringe benefits – if these factors are present, a worker won’t be dissatisfied. If they are absent, workers will be dissatisfied. There are as well motivation factors: challenging work, recognition, responsibility, and empowerment. These factors give positive satisfaction. Despite many criticisms, this theory is widely known by managers.

McClelland’s Theory of Needs

It focuses on 3 needs: need for achievement (nAch), need for power (nPow) and need for affiliation (nAff). These needs are subconscious. Researches focus mainly on nAch and the relationship between nAch and job performance. Critique: the theory has less practical approach than others and applying and measuring concept in practice is expensive and time-consuming.

Contemporary theories of motivation

Cognitive Evaluation Theory

Theory which addresses the effects of social contexts on intrinsic motivation. It states that if we think we will be able to complete the task, we will be intrinsically motivated to complete the task, requiring no further external motivation. And if we are extrinsically awarded for behavior which was previously intrinsically rewarding, then the general motivation level drops. Examples of extrinsic rewards: bonus, salary, verbal praise. Why does it happen?

1. When we are losing control over something, our (previous) intrinsic motivation lowers.

2. Absence of extrinsic reward changes one’s reasons to work (example: mother asks you to clean your room – your behavior is influenced by an external factor, but with a course of time you begin to like your room looking clean and neat and you do cleaning without your mother’s requests, just because you are internally motivated, the cause of cleaning a room changes).

Critique: criticizing methodology and outcomes analysis. The effect of verbal and intangible award is different on intrinsic behavior of an individual. A recent modernized version of the theory is called self-concordance theory – it is degree to which a person’s motives for pursuing a goal are consistent with the person’s interests and core values (page 219, Organisational Behavior). If one is working to achieve intrinsic goal, it is more probably he will succeed and if he does not succeed he is still happy. On the other hand, if a person works to achieve extrinsic goals (e.g. money), then it is less probable he will succeed. Studies suggest that people whose work goals are connected with intrinsic motives achieve higher job satisfaction, perform better and there is a person-organisation fit.

Goal-setting Theory

This theory claims that providing specific, challenging and interesting goals, while giving constant feedback, results in better outcome. Acceptance of a goal, however hard it can be to achieve, results in higher effort to achieve it.

Why are we ‘attracted’ to difficult goals?

1. Because a difficult goal focuses us, makes us concentrate on it and diminishes distractions.

2. A difficult goal makes us more energetic and more hard- working because indeed we need to work better, harder to accomplish it.

3. Difficult goal equals more determination in pursuing it.

4. Difficult goal equals invention, finding new working methods to be more effective and efficient. In this whole process, feedback serves as guidance, check list of things that are done and need to be done.

Self-generated feedback is more effective than externally- generated feedback. There are also other factors that influence goal-setting effect: a) Goal commitment b) Task characteristic c) National culture. One can implement a programme called management by objectives (MBO) – setting SMART goals (specific, measurable, actionable, realistic and tangible). Elements of MBO: goal specificity, participation in decision making process, time period and feedback. MBO is similar to the goal-setting theory, only differ in participative goal-setting vs. manager assigned goals. MBO may not work due to unrealistic expectation, lack of commitment or the inability/unwillingness to reward according to goal accomplishment.

Self-efficacy Theory

Developed by Albert Bandura. It is based on one’s confidence that he/she can perform/achieve a goal. The higher one’s belief in succeeding (that is the higher one’s self-efficacy), the higher one’s motivation and response to feedback. There are four methods of enhancing self-efficacy: enactive mastery-relevant experience with the task/job, vicarious modeling- gaining confidence by watching others performing the task, verbal persuasion-someone persuades you that you can succeed, and the enhancement of positive emotional responses by the reduction of stress reactions (arousal). Training programs use enactive mastery. The Galatea effect means communicating expectations directly to employees and self-fulfilling of this expectation.

Reinforcement Theory

It is opposite to goal setting theory, indicating that behaviors are environmentally caused. Not a motivation theory, but widely considered when discussing about motivation.

Equity Theory

This theory argues that employees compare their efforts and their outcomes with those of other employees, in case of inequities they act. There are four ways one can compare his inputs and outputs with those of co- worker: self-inside, self-outside, other-inside, other-outside. The moderating variables of comparison are gender, length of tenure, level in the organization and amount of education/professionalism. Same gender prefers references from the same gender. If one spots inequity, he can make the following decisions:

• Change the input

• Change the output

• Choose a different referent

• Distort perception of self

• Distort perception of others

• Leave the field (e.g. leave the job)

Equity was perceived from the employee’s standpoint in the past (distributive justice), but now is increasingly perceived from the organisation’s standpoint (organisational justice).

Expectancy Theory

Developed by Victor Vroom. Vroom's theory assumes that behavior results from conscious choices among alternatives whose purpose it is to maximize pleasure and to minimize pain. Expectancy is the belief that increased effort will lead to increased performance i.e. if I work harder then this will be better. Focuses on 3 relationships:

• Effort-performance relationship (“The harder I try, the better outcome will be”)

• Performance-reward relationship (“The more TVs I sell, the higher bonus I will get”)

• Reward-personal goal relationship (“The higher bonus I get, the better car I will buy”)

Challenge: To combine these theories and understand the relations between them (Figure 6.10, page 161). Also, cultural differences must be considered.

Chapter 7: Motivation - applications

Job Characteristics Model
 

Look at the appendix for the model.

Motivating Potential Score (MPS) – index that estimates the job’s motivating potential. It is calculated as:

MPS = ((skill variety + task identity + task significance)/3) x autonomy x feedback Motivating jobs needs to high at least on one of the three dimensions that create meaningfulness and on both autonomy and feedback. However, it is better to add the above characteristics to improve motivation, rather than using this complex model.

Job Redesign

• Job rotation (employee is performing different tasks at different times, tasks shift, employee moves from one job to another which requires the same skills level). Reduce boredom, increase motivation, increase flexibility as employees have more skills. But it increases training costs, creates disruptions, reduce productivity.

• Job enlargement (employee is performing more different and various tasks, his work is becoming more diverse and it horizontally widened) The application of job enlargement is not always successful, as employees may dislike the job even more.

• Job enrichment (vertical widening of one’s job, adding activities from different expertise fields, e.g. controlling, leading, planning, implementing, one has more responsibilities and independence). Reduces absenteeism, turnover costs, increase satisfaction, but doesn’t work very well in productivity.

Alternative work arrangements

Flextime – flexible time work

Job sharing – two or more workers share a 40-hour week job

Telecommuting – working from home

Ability and opportunity

Performance may be calculated as = (ability x motivation x opportunity to perform). Opportunity to perform means absence of barriers that may limit the performance of an employee

Employee involvement programs

Participative management – joint decision making between employees are their supervisors

Representative participation – representation of employees who participate in organizational decision making instead of all workers participating in decision making, in form of works councils and board representatives.

Quality circles – volunteer group composed of workers who meet to talk about workplace improvement, and make presentations to management with their ideas, especially relating to quality of output in order to improve the performance of the organization, and motivate and enrich the work of employees.

Rewards as motivators

What to pay? Pay structure -> process of establishing pay level to balance internal and external equity. Pay more: better qualified, motivated and longer loyalty, but leads to very high cost.

How to pay? More and more organizations use variable-pay programs – refers to compensation that is received in addition to the base pay. The amount received may be linked directly to individual, team, division and/or organization performance, and is determined (typically) by a variety of measures important to the organization.

• Piece-rate pay – employees is paid stable price for each unit of completed production. Limitation: not feasible and realistic for many jobs.

• Merit-based pay – pay plan that is performance-related. It provides bonuses for workers who perform their jobs better, according to measurable criteria. Limitation: only valid upon the performance evaluation on which it is based; dependant on the pay raise pool, resisted by (trade) unions.

• Bonuses – pay plan rewarding employees for latest performance (not past)

• Skill-based pay - employees are paid on the basis of the number of job skills they have or have acquired or number of jobs they can perform. Limitation: the organization may pay the employees for acquiring skills which are not immediately needed.

• Profit-sharing plan - various incentive plans introduced by businesses that provide direct (cash) or indirect (stock) payments to employees that depend on company's profitability in addition to employees' regular salary and bonuses

• Gainsharing - program that returns cost savings to the employees, usually as a lump-sum bonus. It is a productivity measure, as opposed to profit-sharing which is a profitability measure

• Employee stock ownership plan – plan in which employees can buy company’s stock for below-market prices as benefits.

What benefits to offer? Flexible benefits enable employers to select the benefits that suit them. There are also 3 main types of benefits plan: modular plans, core-plus plans and flexible spending plans.

How to construct employee recognition programs? – Intrinsic rewards

Financial motivators (pay plans, wage) are effective in short-term, while intrinsic rewards are crucial motivator in long-term. Intrinsic rewards can be just informal thank you as well as the whole formally developed program. Intrinsic rewards plans are inexpensive but are vulnerable to politics of management.

Chapter 8: Emotions and moods

Affects

Also referred to as the experience of different feelings, can be divided into emotions and moods.

Emotions

Are more intense and have a contextual stimulus (they are caused by a person, situation, action, event); they usually last for seconds/minutes. Emotions: most of researches have agreed that there are 6 basic emotions: happiness-surprise-fear-sadness-anger-disgust.

Emotions are critical to rational thinking because they provide us with information regarding our comprehension of surrounding world. There are few functions of emotions. First set of functions is based on the concept if evolutionary psychology – it is concept which states that people need to experience emotions since they have a purpose. It is based on Darwin’s theory that emotions help solve problems. There are researches who question evolutionary psychology because it may not be valid in case of all emotions (e.g. fear).

Moods

Are less intense and lack situational stimulus. Are usually not felt towards people and last longer than emotions. Moods are more cognitive while emotions are more behavioral (can lead us to action). Moods and emotions can influence each other. Emotion, if it is deep and lasting, and turn into mood.

Moods can be of negative or positive affect. Positive affect is a set of moods consisting of positive emotions, we distinguish high positive emotions: excitement, self-assurance, cheerfulness and low positive emotions: boredom, sluggishness and tiredness. Negative affect is a set of moods consisting of negative emotions, we distinguish high negative emotions: nervousness, stress and anxiety and low negative emotions: relaxation, tranquility and poise. Moreover, exists something like positivity offset what means that most of people experience slightly positive mood when nothing special is happening.

Sources of emotions/moods

• Personality – people have tendencies to experience some moods/emotions/ Moreover, people also differ in how intense they experience emotions. This last concept is called affect intensity

• Time – worst moods early in the week, best moods late in the week. Most positive emotions at mid-point between waking and sleeping, negative emotions highest in the morning and later average

• Weather – weather has little influence on mood. What happens on the cultural level in the society is illusory correlation (people think that nicer whether makes them feel better) – it occurs when people associate some events when in reality there’s no link between them

• Stress – stress negatively influence moods/emotions

• Social life – social activities make people experience positive emotions and also people experiencing positive emotions seek social activities

• Sleep – poor sleep equals negative emotions (at work reduces job satisfaction).

• Exercise – sport increase positive moods

• Age – negative emotions occur less and less with age. With age, we are more emotionally wise

• Gender – women are more emotionally expressive than men due to differences in socialization

Emotional labour

Emotional labour is form of emotional regulation in which workers are expected to display certain emotions as part of their job, and to promote organizational goals. The intended effects of these emotional displays are on other, targeted people, who can be clients, customers, subordinates or co-workers. What happens sometimes is emotional dissonance (showing one emotion while experiencing another), it is often a difference between felt emotion and displayed emotion (displayed emotions/regulations are organisationally required and claimed as appropriate in a particular job).

Employees can show displayed emotions by:

1. Surface acting - "painting on" affective displays, or faking; Surface acting involves an employee's presenting emotions on his or her "surface" without actually feeling them. Is more stressful than deep acting

2. Deep acting - attempt to change one’s inner feeling to match emotion expressions that an organization requires (that is displayed emotions).

Affective events theory

Model developed to identify how emotions and moods influence job performance and job satisfaction. The model increases understanding of links between employees and their emotional reaction to things that happen to them at work.

Look at the appendix for the model.

Hypothesis:

1. Emotions affect different job satisfaction and job performance dimensions, such as

organizational citizenship, organizational commitment, workplace deviance, level of effort and intention to quit.

2. Emotional episode is actually a series of emotional experiences precipitated by a

single event.

3. Current emotions always influence job satisfaction, also past emotions about the

event influence the job satisfaction.

4. Since emotions/moods vary over time, their influence on performance varies.

5. Emotion-caused behaviors are rather short lasting and of high variability.

6. Emotions, even the positive ones, have negative influence on job performance.

7. Emotions provide valuable insight into understanding employees’ behaviors.

8. Employees and managers cannot ignore emotions and events that influence them.

Emotional intelligence

EI is the self-perceived ability to identify, assess, and manage the emotions or emotional cues of one's self, of others, and of groups. It is a controversial concept in OB.

OB applications of moods and emotions

Selection -> More and more employers use EI tests when hiring.

Decision making -> Moods/emotions have an important influence on decision- making. Positive ones improve decision- making and problem- solving. Depression undermines performance.

Creativity -> Good moods contribute to creativity.

Motivation -> Organisations that promote positive moods are likely to have more motivated employees, thus there is a positive correlation between positive mood and higher motivation

Leadership -> Leaders usually are and should display emotions, like excitement, enthusiasm, etc… This is critical in persuading people/employees to new idea, strategy, vision.

Negotiation -> Moods and emotions may hamper negotiations. Displaying negative emotion may be effective, but feeling of poor performance may hinder future cooperation.

Customer Service -> sometimes employees experience emotional dissonance. Moreover, what employees feel may transfer to customers. It is called emotional contagion – “catching” or copying emotions from others.

Job attitudes -> People who had good day at work, usually are in good mood when coming back home that day and the same refers to bad day at work.

Deviant workplace behavior -> negative emotions may lead to deviant workplace behavior.

How managers can influence moods? -> By showing them a funny video – make them laugh, offering them pleasant beverage – using humor and showing appreciation for good job. When managers are rather in good mood then employees are positive as well. Use emotional contagion.

Global consequences

• Degree to which people experience emotions varies across countries

• Norms for expression of emotions differ across cultures

• People’s interpretations of emotions vary across cultures (some cultures value certain emotions more than others, but interpretations are basically similar)

Chapter 9: Foundations of Group Behavior

A group is defined as two or more people coming together to achieve an objective.

Group types

• Formal group – a work group defined by organisational structure

  • Command group – group composed of people who report directly to a manager

  • Task group – composed of people working and aiming at completion of a task

Command groups are also task groups, but not necessarily vice versa.

• Informal group – is not formally structured, formed by the needs of social contacts

  • Interest group – people working together to achieve some objective, but at the same time each and every single member is concerned about the issue/aim

  • Friendship group – people who share one or more common features/characteristics

Reasons to join a group: security, status, self-esteem, affiliation, power and goal-achievement.

Stages of group development

1. Five-Stage model

2. An alternative model for temporary groups with deadlines. Punctuated-equilibrium model

Five-stage model:

Stage 1. Forming: orientation, testing, dependence. Members come together to form a group.

Stage 2. Storming: conflict, emotionality, and resistance to influences and task requirements. Members become hostile and combative. Leadership is formed during this stage.

Stage 3. Norming: in-group feeling and cohesiveness develops, new standards evolve, new

roles adopted. Members accept roles and behaviors of others.

Stage 4. Performing: the group becomes a functional instrument for dealing with tasks and present reality. Members have established norms and are able to diagnose problems and come up with solutions.

Stage 5. Adjourning: the group ends its existence, closure. For temporary groups, it is a stage when members prepare for group dissolution.

Assumptions:

• What makes an effective group is more complex than the model suggests

• Groups do not have to go through all the stages, they may jump e.g. from 1^st to 4^th stage

• Stages may go simultaneously

• Critique: the model ignores organisational context

Punctuated-equilibrium model:

Stages:

1. Setting the group’s direction

2. First phase of group activity – inertia (inactivity, apathy, lethargy)

3. At the end of first phase a transition takes place (group has already used ½ its time)

4. Transition leads to major changes

5. Second phase of inertia follows transition

6. Group’s last meeting can be described as accelerated activity

The model does not apply to all groups, but only those which work temporarily and have a set deadline to complete work.

Group properties

Roles: a set of expected behaviors ascribed to a person occupying a particular position in a social unit (e.g. one can have a role of student, son/daughter, (boyfriend, worker, etc.) Zimbardo’s Prison Experiment shows that people quickly learn/assume roles, sometimes through stereotypes and information that mass media and other parties disseminate.

• Role identity – situation when attitudes and behaviors are consistent with a role

• Role perception – person’s vision on how he/she should behave in a certain circumstances

• Role expectations – how other people believe one should behave in a certain situation

• Role conflict - takes place when one is forced to take on two different and incompatible roles at the same time and as a result he/she faces conflicting role expectations

Norms: standards of behavior shared by a group’s members. Norms tell us what we should do in particular situations. Groups, communities, units, cultures, nations have norms. There are performance roles, appearance roles, social arrangement roles and resource allocation roles.

The Hawthorne studies proved that people behave differently if they are aware of being watched, observed, or examined, but as a group, they don’t violate the norm established. They also emphasised the role of norms in one’s work behavior.

As a member of a group, one often experiences the conformity phenomenon – it is the adjustment of one’s behavior to align with the norms of the group. There are group norms which press us to conform with them, to be one of the group’s members.

Deviant workplace behavior is intentional behaviors that violate organizational norms, which threatens the members and well-being of an organization (e.g. wasting resources, sabotage properties, spreading rumours, sexual harassment). Individuals who belong to a group are more likely to engage in deviant behaviors.

Status: is important because it can play the role of a motivator and due to inconsistencies between perceived and self-status it can have behavioral consequences.

The Status Characteristics Theory states that there are 3 sources of status:

1. The power a person wields over others

2. A person’s ability to contribute to a group’s goals

3. An individual’s personal characteristics

There are a few correlations between status and norms. First of all, people of higher status are allowed for more deviations from norms and are more resistant to conformity phenomenon. There is also a tendency for high status people to be more assertive and to be more active in group interactions. Due to differences in status between group members, a group’s work can suffer – people of lower status could contribute greatly to a group’s work if it wasn’t for their passiveness in group’s discussions. Moreover, it is important for group members to think of others in a group as people of comparable, equitable status. E.g. hiring through relationship, contacts - differences in status creates tensions.

Size: the size of the group affects it’s functioning. Smaller groups tend to be faster, but larger groups are better for complex problem-solving issues. General rule may be that large groups can put more diverse input, but smaller groups do it more productive. The concept of social loafing appears. This concept states that individuals try less when working in a group than when working individually. To prevent this phenomenon the following tactics can be used: a) set group goals, b) increase competition within a group, c) set an evaluation plan – peers evaluate peers, d) distribute group rewards.

Cohesiveness: it is a degree of members attraction to each other combined with motivation to stay in the group. It is easier for smaller groups to achieve cohesiveness. Cohesiveness relates to group productivity. If performance-related norms are high, a cohesive group will experience more productivity.

What can encourage group cohesiveness? Smaller groups, consensus on common goals, more time spent tighter by group members, enhance the group’s status, encourage competition with other groups, reward group, not just members, physically isolate the group.

Group decision- making

Group versus individual:

Effectiveness:

When we take into account accuracy, group decision making is better, when speed is the concern, then individual decision making is more effective, In terms of creativity, groups will also bring more to the table.

Efficiency:

It takes longer for a group to make a decision than it does for an individual.

There are two phenomena that can take place in group decision -making: groupthink and groupshift.

Groupthink is exhibited by group members trying to minimise conflict and reach consensus, which can lead to a lack of critical testing, analysing, and evaluation of ideas. Conformity pressures are very high and group members decide to follow the ideas, thinking, and decisions made by others. There are few signs of groupthink:

• Illusions of unanimity among group members; silence is viewed as agreement.

• Self-censorship of ideas that deviate from the apparent group consensus.

• Direct pressure to conform placed on any member who questions the group’s consensus.

• Rationalising warnings that might challenge the group's assumptions.

Groupthink does not characterise all groups. It happens more often when the group’s identity and cohesiveness is high. Also groups that have a negative self image are more threatened by groupthink.

The remedies for groupthink can be:

• Monitoring the size of the group. The bigger group, the more probable the occurrence of groupthink.

• At least one group member should be assigned the role of Devil's advocate. This should be a different person for each meeting.

• Leaders should be impartial and should encourage different opinions and views.

• Using techniques that stimulate discussion.

Groupshift is a phenomenon in which the initial positions of individual group members become exaggerated because of the interactions of the group. Group opinions are more conservative than individual’s. There are risky shifts and cautious shifts. More often, the shift is towards greater risk. The best explanation for that is that group diffuses responsibility and the accountability objects are not clearly defined and that’s why members dare to take riskier decisions.

Group decision- making techniques

Interacting groups are typically groups where there is face-to-face contact.

Brainstorming is the idea-generation process or creativity-technique that is meant to generate many, different ideas in order to solve a problem. The drawback of this technique is that it is not efficient. Individuals are more productive in this respect; as groups tend to face “production blocking” – many people talking at once, thoughts are blocked, communication is hampered.

Nominal group technique (NGT) is a decision making method for use amongst groups of many sizes who want to make their decision quickly, as by a vote, but where everyone's opinions are taken into account. Discussion and interpersonal communication are limited. NGT outperforms brainstorming.

Steps in NGT:

1. Silent generation of ideas - members meet and write down individually ideas on a sheet of paper.

2. Sharing ideas - each group member presents one idea to the group members. There are turns until all ideas are shared.

3. Group discussion – the group discusses ideas and clarifies them.

4. Voting and ranking – each member ranks ideas. The idea with the biggest amount of votes wins.

Electronic meeting or computer-assisted group:

Group members work with computers to make a decision. First issues are presented. Then, group members type their responses. On the projection screen there are comments and cumulated votes. Ideas that a person types, appears on the screens of the other team members. Advantages of this technique: anonymity, speed, honesty. However, researches showed that this method causes decreased group effectiveness, is time-consuming and leads to lower satisfaction than face-to-face meetings.

Global consequences:

• Cultural differences affect status. It is important to know the role of status in a given culture.

• Social loafing is consistent with individualistic cultures/societies, not with collective ones.

• Group diversity (especially ethnical and cultural) can lead to increased conflict and low group morale. However, if they survive initial conflicts over time diverse groups perform better.

Chapter 10: Understanding work teams

Teams have become an effective and efficient way to make use of employees’ talents. It was found out that teams have more flexibility and sensitivity to changing circumstances as well as benefitting from additional motivational factors.

What are the differences between groups and teams?

Work team: the output (result) is greater than sum of individual inputs.

Types of teams

Problem- solving teams -> 5-12 employees from the same department meet on a weekly basis to discuss issues such as quality, efficiency, opportunities and working conditions. They share information on how things can be improved. They usually cannot make decisions.

Self-managed work teams -> teams that can solve problems and implement solutions as well as take accountability for their results. Such teams count 10-15 employees who perform very similar/interdependent jobs. Team members take some duties, tasks from their supervisors. Nevertheless, there is not clear evidence of the effectiveness of self-managed teams. It happens that members of those teams are more absent at work and have higher turnover statistics. At the same time, they can be more satisfied with their job. Effectiveness depends on the teams’ norms, strength, task types and rewards system.

Cross-functional teams -> teams composed of employees who are comparable in a hierarchy, but are from different departments and their common goal is to accomplish a task. It is a good method for information exchange between different work areas. They are effective in idea generation, problem solving and controlling complex assignments. However, they are time-consuming (to build trust and teamwork)

Virtual teams -> teams that use ICT to have a contact with physically unreachable members in order to accomplish a common goal. To the main challenges of these teams belong: less direct interactions between members (least social method), face-to-face discussion advantages cannot be transferred; members report less satisfaction with group interactions. Those teams are more task-oriented. For virtual teams to work effectively a manager should make sure that there is trust between team members, progress on an assignment is monitored and outcomes of team work are publicized within organization.

What are the characteristics of effective teams?

Look in the appendix for an overview

1. Context components:

- Adequate resources -> teams rely on resources the organisation is willing to give them. Not enough resources limit teams’ effectiveness. Resources can include information, equipment, staffing, assistance and support.

- Leadership and structure -> team members must agree on who is doing what. It requires leadership and team structure to create a fit between individuals’ skills and work tasks. In self-managed teams, the manager is limited to outside management, while team members perform many inside management duties. Moreover, what is also important is the multi-team system, where various teams need coordination to achieve a goal. In multi-team system, leadership plays crucial role – leaders are to empower teams and facilitate inter-teams processes.

- Climate of trust -> effective team is a team of people that trust each other and trust the leader. Trust in the leader makes team members follow the strategy and accept the chosen solutions. If there is trust between team members, the team is more inclined to take risks.

- Performance evaluation and reward system -> rewards must be focused on both individual and team performance. Individual rewards should be reinforced by team rewards.

2. Composition components:

- Abilities of members -> effective teams need members that have technical skills, problem-solving skills and decision-making skills, and/or lastly interpersonal skills. The balance between these three skill components must be kept. Skills can be learnt throughout the working process. There are a few relations between team members’ abilities and team performance. In case of thought-demanding tasks, high-ability teams perform better. They are also more flexible. In case of easier tasks, low-ability teams stay on track of the tasks, while high-ability teams are easily distracted. It needs to be remembered that matching team ability with task matters. Finally, the leader’s abilities matter.

- Personality of members -> teams that have members who rate higher on conscientiousness and openness to experience, perform better. Moreover, there has to be a minimum degree of agreeableness among team members.

- Allocation of roles -> There are 9 major, team roles:

Plant - initiate creative ideas and solve difficult problems

Resource investigator - being the communicator to the external, explore opportunities and contacts.

Coordinator - chairperson, set goals, delegate and promote decision making.

Shaper – putting pressure, push to overcome obstacles

Monitor evaluator: judging carefully and accurately all options

Teamworker: listener, build, avoid conflicts

Implementer: turn ideas into practical actions efficiently

Completer finisher: total check for errors/omissions, ensure on-time delivery

Specialist: provide special knowledge, but only on one side of the problem, i.e. single minded)

- Diversity of members -> The most important point in managing diverse teams is to focus on members’ uniqueness in thinking, perceiving, analysing in order to get out of them creativity and support for other members. Furthermore, a notion of organisational demography appears – concept which claims that analysing team members’ shared demographic features (age, sex, race, work experience, education) allows turnover prediction. Obviously, the less common features, the more difficult communication and thus the more probable turnover.

- Size of teams -> Most effective teams are composed of no less than 5 and more than 9 people. Usually, managers make too big teams. The bigger the team, the less cohesive it can be; Additionally, bigger teams are more vulnerable to social loafing, less interpersonal interactions and worse coordination.

- Member preferences -> not all people are team- players, some prefer working individually and that should be taken into account when creating a team.

3. Work design components -> work-design dimension, discussed in Chapter 7, improve members’ motivation and teams’ effectiveness. They motivate because they increase degree of responsibility and make work more interesting.

4. Team processes components -> because of social loafing, the group effectiveness is less than the sum of individual members’ effectiveness.

- Common plan and purpose: showing reflexivity

- Specific goals -> effective teams have SMART objectives/goals

- Team efficacy -> effective teams believe in themselves, have high team-efficacy. However, managers should provide teams with training, because the higher team members’ abilities and belief in them, the higher team’s confidence.

- Mental models -> effective teams have similar mental models, which are knowledge and beliefs about how tasks and work are accomplished successfully.

- Conflict levels -> not every conflict is bad. The most dysfunctional conflict type is relationship conflict. On the contrary, positive conflict example may be task conflict. In general, teams without conflicts can suffer from lethargy; conflict reduces probability of groupthink. Conflicts (on the acceptable level) have the ability to improve team’s effectiveness.

- Social loafing -> effective team is composed of people that avoid social loafing and feel accountable for the task outcome individually and as a team.

Ways to create team players:

1. Selection: hiring team players -> the best opinion is to hire already good team players to work areas that demand group working, instead of training them or transferring to a work field that does not require team spirit.

2. Training: creating team players -> hire specialists to train employees to become good team workers.

3. Rewarding: encouraging team players -> individual rewards should be balanced with rewards given to teams. In case of teams however, rewards should favor collective effort.

NOTE

To some tasks better are individuals than teams. Teams are not always the solution. If the task is simple and can be accomplished by one person, the team should not be created. Moreover, the work in a team has to be based on aiming at a common goal, one purpose. If it is not the case, team creation is not reasonable. Finally, team creation has sense when people working in a team have interdependent tasks and thus need to cooperate to achieve a goal.

Global consequences:

• Extent of teamwork varies. For example, in the US (a particularly individualistic country) the extent of teamwork is not as big as in e.g. Canada or Asia.

• When creating self-managed teams, managers need to be careful of the cultural norms and values. Workers from countries high in power distance are less willing to operate in a self-managed team (due to their respect from hierarchy, authority) and need more guidance.

• Culturally diverse teams have difficulties in team’s functioning at the early stages. It takes time for people to learn how to overcome conflicts and effectively communicate with others.

Chapter 11: Communication

Effective and successful communication in a workplace is very important. Problems with communication are the number one cause of conflicts. Recently, communication skills were discovered to be the most important skill of a job applicant. Communication is the spread of information as well as understanding the meaning of the information received/given.

Communication functions

In the OB context there are several functions that communication fulfills. Those functions are: control, emotional expression, motivation and information. First of all, communication aims at controlling one’s behavior – think of e.g. an employee required to report work progresses. Moreover, communication enhances motivation – all motivational techniques require communication. Furthermore, communication as an emotional expression helps in social interactions to express our feelings, moods, emotions, and attitudes. Lastly, communication provides information that is a must in decision- making processes and managerial tools.

Communication process

To understand communication, one needs to be familiar with the so-called communication process in which the two objects are central – sender and receiver. However, for the communication to be effective between a message sender and receiver the following phases take place.

• As soon as there is a message ready to be sent, sender encodes the message.

• The message is transmitted through a chosen channel.

• The communication process can be more difficult because of the noise (anything that makes message more difficult to be understood, received)

• The communication can end with the receiver receiving and encoding the message (understanding the meaning) or with the feedback given from receiver to message source, which is sender.

A sender can choose either informal or formal channels to transmit the message. Formal channels are set up by the organisation and refer to transmitting work-related messages. Informal channels are spontaneous and are the response to individual needs.

There are 3 possible communication directions:

There are a few types of interpersonal communications. The first one is oral communication. It is superior to others in the case of speed and immediate feedback availability. The main disadvantages, however, are the number of possible parties involved (it is not the best option for a number of potential message receivers, the effect of a “telephone game” – message goes along many people what can distort its initial meaning). There is also written communication. The main pluses of this communication type are: tangibility and verifiability. Complex reports, business plans allow to go back to parts already read. Moreover, there is tendency to value written word more than spoken. One of minuses is that writing a message/text/(news)letter requires time and written communication does not allow for direct feedback. Lastly, there is nonverbal communication. Oral communication cannot take place without nonverbal communication. Nonverbal communication components are: body movements, intonation, facial expressions, physical distance. Sometimes it happens that our nonverbal and verbal communications are inconsistent with each other.

Formal communication networks

1. Formal small-group networks. Three possible networks are: chain, wheel and all channel. The communication in chain is strictly operating in a chain of command. Its strongest point is accuracy. The wheel network is dependent on a person that coordinates communication between people. This type often happens in teams with strong leaders. All-channel network permits free communication between network’s members. Everyone talks to everyone. Its strongest point is high member satisfaction. It often takes place in self-managed teams.

2. The Grapevine – organization’s informal communication network. The fact that it is not formal, does not refer to meaningfulness of messages communicated. This network has 3 main features: it is not controlled, it is seen as very trustworthy source of information, it is often used for the vested-interest of individuals. It was estimated that 75% of information passed though the grapevine is accurate, true. Grapevine effects are reinforced by news’ importance, ambiguity and created by them anxiety. Grapevines fulfill also social and security needs. However, there are negative consequences to grapevines that managers should eliminate.

3. Electronic communications – basic and important communication channel.

   • E-mails (its minuses include: possibility of message misunderstanding, a must to be sensitive when communicating bad news, negative information, e-mail overuse (abuse), difficulties with expressing the right level of emotions via e-mails, e-mails control and security)

   • Instant messaging/text messaging (better than e-mail with short messages, but may be distracting from work; security concern; informal language usage)

   • Networking software: Facebook, MySpace, LinkedIn should be used for “high-value items only”, not as a daily tool.

   • Web logs (blogs) – employees write blogs while many companies do not have content policies regulating that, however, this does not mean that employees can share everything with internet users.

   • Video conferencing – soon alternative to business traveling

Knowledge Management (KM)

It is a concept that comprises a range of practices used by organizations to identify, create, represent, distribute and enable adoption of what it knows, how it knows it and how/to whom it is communicated. KM makes people in the organization aware of how and what information may be revealed. Thanks to this, it makes the organization competitive for longer. For KM to work effectively, the right corporate culture needs to be in place. The culture that promotes information sharing, transparency. KM should be the motivator for employees to share information with other employees and third parties. KM also regulates the leak-tightness of the organization making it more hermetic in case of unwanted information leaks.

One should choose the communication channel carefully. Each channel has different information richness (quantity of information conveyed). The choice of channel depends on the fact whether the message is more routine or non-routine based. Rich channels better communicate non-routine messages. Good managers usually find the right match between channel richness and message ambiguity. There is a tendency to use more often richer channels.

Communication barriers

Whatever communication form we choose, we should prepare for facing communication barriers. These barriers include:

1. Filtering – sender manipulates the information so the receiver takes it as more favorable. Telling what others want to hear. It happens more often in case of status differences and in organizations with higher hierarchical ladders.

2. Selective Perception – we select and interpret information we are exposed to. Not everything that sender is transmitting, is received by receiver because the receiver picks the information he values, is interested in, etc…

3. Information Overload – we cannot process each and every information that is sent to us. We are not capable of that (imagine processing each ad you are exposed to every day). And thus we select, pick and ignore some information.

4. Emotions – the way we feel, influences the way we interpret information.

5. Language – slag, professional jargon, dialects.

6. Communication Apprehension – fear/anxiety felt about oral or/and written communication e.g. public speeches, calling on a phone, writing formal letters.

7. Gender differences – researches showed that in communication men emphasize status and position, while women try to make connection.

8. “Politically correct” communication – carefully expressing opinions in a way that does not offense anyone, while loosing some of the message’s meaning and can hamper effective communication.

Global consequences:

A) Cultural Barriers

• barriers caused by semantics

• barriers caused by word connotations

• barriers caused by differences among perceptions

• barriers caused by tone differences

B) Cultural Context -> high and low context cultures: the importance of non-verbal language in the culture.

C) Cultural Guide: try to understand, put yourself in shoes of people you are talking/listening to; if you are not sure whether the interlocutor is culturally similar to you first assume a difference and check if it true; when explaining something try to describe, not interpret; if you have created theory that is based on your interpretation, try to confirm it and research on it more.

Chapter 12: Leadership

First of all, the difference between management and leadership has to be explained. Management, according to John Kotter, means coping with complexity. Leadership, however, means coping with change. Robert House has different view on this. He thinks that management’s job is to execute strategies set by leaders, as well as to control, take care of HR and be busy with everyday problems.

The book defines leadership as ability to motivate, encourage a group to achieve set goals, vision or strategy. The role of the leader may be assigned (formal) or deduced by a person from the position he/she occupies in the organization. Managers are not equal to leaders. Nevertheless, management needs both: effective management and effective leadership.

There are a few theories on leadership:

Trait theories on leadership

Theories based on the concept of distinguishing leaders from non-leaders on the basis of person’s individual qualities and characteristics. These theories claim that leaders are born, not made.

Researches have had difficulties with determining the number and naming the traits that make a person a good leader. Then, the development of Big Five personality model made it easier for researches. It has become noticeable that many traits attributed to leaders fall into one or many categories of the Big Five. So, accordingly:

• Extraversion is claimed to be the most important trait of leader emergence, not necessarily of leader’s effectiveness. Social people are the better leaders than unsocial. Moreover, leaders that are too assertive are less effective.

• Conscientiousness and openness to experience also show strong, positive correlation to leadership.

• Agreeableness and emotional stability are not highly related to leadership.

• Another trait, not included in the above Big Five model, is EI (emotional intelligence). What is decisive in case of EI’s importance to leadership is EI’s core value: empathy. Effective leaders are empathic leaders (leaders that can read other’s feelings, reactions, are good listeners). Nevertheless, there is more research on other traits, other than EI, and their corrections to leadership.

Summing up, person’s traits help to predict his/her leadership behaviors. Nevertheless, one has to careful with linking traits with effective leadership, because traits are better predictor of leaders’ emergence rather than effectiveness.

Behavioral theories

Theories based on assumptions that certain behaviors distinguish leaders from non-leaders. The limitation of this theory can be proved by theory’s main assumption that people can be trained to be leaders, what is obviously not complete truth. So theories proposed that leadership can be taught.

Ohio State Studies

Ohio State Studies developed 2 dimensions of leadership behavior:

• Initiating structure - task-oriented behaviors that facilitate goal accomplishment. Extent, to which a leader defines leader and group member roles, initiates actions, organizes group activities and defines how tasks are to be accomplished by the group.

• Consideration – people-oriented behaviors. Extent to which a leader exhibits concern for the welfare of the members of the group. This factor is oriented towards interpersonal relationships, mutual trust and friendship

Leaders high in consideration make their followers more job-satisfied, motivated and more respectful.

Leaders high in initiating structure make their followers perform better in groups.

University of Michigan Studies

Also developed 2 dimensions of leadership behavior

• Employee- oriented leaders: focus on interpersonal relations, have personal interest in employees’ needs and recognise differences between group members. Associated with higher group productivity, greater job satisfaction.

• Production oriented leaders: focus on task-related and technical issues. Associated with lower group productivity and job satisfaction.

Blake and Mounton developed a managerial grid (leadership grid), a 9-by-9 matrix representing two variables; concern for people and concern for production. It represents both University of Michigan studies on employee and production oriented leaders and Ohio State studies on initiating structure and consideration. The managerial grid is a good tool for conceptualizing leadership. Leader that score 9,9 on the grid are the most effective ones.

Trait theories and behavioral theories should be combined for maximum effectiveness. However they both lack some situational factors.

Contingency theory

This theory states that the leader's ability to lead is contingent upon various situational factors, including the leader's preferred style, the capabilities and behaviors of followers and also various other situational factors.

Fiedler Model

The model postulates that the leader’s effectiveness is based on ‘situational contingency’, that is a result of interaction of two factors, known as 'leadership style' and 'situational favourableness’ (situational control). For the purpose of the research Fiedler developed the least preferred co-worker (LPC) questionnaire to measure whether an individual is task or relationship oriented. On the scale 1-8, with 16 sets of adjectives employees rate their co-workers. On this basis, the leadership style of the respondent is developed. Fiedler claims that in reality there are combined leadership styles (both task and relationship oriented to different degrees). After fulfilling LPC questionnaire and thus estimating leadership style, a fit between the leadership style and situation has to be found. Fiedler defined 3 situational factors:

• Leader-member relations (either poor or good) – the better score, the better for leader

• Task structure (either high or low) – the higher structured job, the better for leader

• Position power (strong or weak) – the stronger position power, the better for leader

Together, there are 8 categories the leader can fall into. To change the state of art (in case of ineffectiveness), the leader or the situation can be changed.

• The model has been positively evaluated. But there are some complications with LPC questionnaire and practical application of the model.

• The recent update of Fiedler model is cognitive resource theory. The theory focuses on the influence of the leader's intelligence and experience on his or her reaction to stress, and states that the intelligence and experience can actually reduce stress. But it is the degree of stress that verifies if the intelligence and experience will positively (low stress) or negatively (high stress) influence leadership behavior.

Hersey and Blanchard’s Situational Theory

This theory states that depending on employees’ competences and commitment to task as well as on acceptance/rejection of the leader, leadership style should vary from one person to another. It focuses on leader’s followers. In this theory effectiveness of leader depends on followers’ behavior. Hersey and Blanchard recognise 4 leader behaviors that depend on followers’ readiness:

• Unable and willing – leader need to show high task-orientation and high relationship orientation

• Unable and unwilling - leader needs to give unambiguous directions

• Able and willing – leader doesn’t do much

• Able and unwilling – leader need to use motivating, supportive leadership style

The evaluation of the theory was rather under critique. There are inconsistencies in the model and issues with research techniques.

Path-goal theory

A theory which states that a leader's function is to clear the path towards the goal of the group, by meeting the needs of subordinates. The theory is based on Expectancy Theory of Motivation and on Ohio State Studies (on structure initiating and consideration). The author of the theory, R.House, recognized 4 leadership behaviors:

• Directive leader - leader lets followers know what is expected of them and tells them how to perform their tasks

• Participative leader - involves leaders consulting with followers and asking for their suggestions before making a decision

• Supportive leader - leader is friendly and approachable, shows concern for the followers’ psychological well being

• Achievement-oriented leader - leader sets challenging goals for followers, expects them to perform at their highest level

• The model assumes 2 categories of situational variables. A category of variables that can be and cannot be controlled by an employee. The first category of variables that can be controlled are personal characteristics (locus of control, experience and perceived ability), the second category are environmental contingency factors that cannot be controlled (task structure, formal authority system and work group).

Critique of contingency theories – they do not take into account followers. Leadership does not when it is considered only from the perspective of a leader, because leadership is a relation between a leader and followers. In reality, leaders act differently towards different people.

Leader-member exchange (LMX) Theory

Focuses on the two-way relationship between supervisors and subordinates. Leaders often develop relationships with each member of the group that they lead, and Leader-Member Exchange Theory explains how those relationships with various members can develop in unique ways. In the group, there are in-groups – trusted followers to who leader pays more attention an out-groups – followers who get less attention, time, and rewards. The relationship between a leader and out-groups are more formally set than those between a leader and in-groups. It is the leader who classifies certain followers to in-groups or out-groups at the beginning of a group’s functioning. This classification is usually driven by absence/presence of common characteristics. This relationship is rather stable.

It is claimed that people in leader’s in-group and the leader share more common features than in case of people in leader’s out-groups.

The evaluation of this theory was rather positive. It is true that leaders do make distinctions between followers. In-groups have better performance, higher satisfaction, more support for leader and higher citizenship behavior.

Decision Theory: Vroom and Yetton’s Leader-Participation Model

Relates leadership behavior and participation to decision making. Provides a set of rules to determine the form and amount of participative decision- making in different situations.  There are now 12 contingency variables in the latest revision of this model. This model is often too complicated for managers/leaders to actually put into place in organizations.

Leaderships in Europe:

Three clusters identified:

Cluster 1: The Anglo culture (UK & Ireland). Focus on results. Leaders empower and motivate people

Cluster 2: Scandinavian, focus on relationships. Similar values to cluster 1, but differ in the general quality of life, instead of competitive individualism in cluster 1.

Cluster 3: Mediterranean cluster: leaders are expected to be more powerful.

Europe leadership can also be clustered as East and West. Western Europe is also clustered in north and south with differences in leadership style and perception

.

Global consequences - differences in leadership around the world:

Brazil: managers in Brazil need to team-oriented, participative and caring. Leaders in Brazil are people-oriented, are high on consideration level.

France: leaders over there need to be high in structure; initiating, task-oriented, better directive style of leadership rather than participative or supportive.

Egypt: similar to Brazil with the difference in power distance. There is a clear status and power distinction between leader and followers.

China: High-performance orientation combined with high level of consideration. There are also status differences expectations. The best option: moderately participative style.

Chapter 13: Contemporary Issues in Leadership

Framing is a way of communicating to create/modify/change meaning. Framing influences leadership behavior because it makes leaders capable of influencing how people comprehend, perceive and make meaning of different situations, people, events.

Charismatic leadership

There are four characteristics of charismatic leaders, as described by R.House: vision and articulation, personal risk, sensitivity to followers’ needs and unconventional behavior. Followers of charismatic leaders by observing leader’s behavior notice the leader’s abilities which distinguish him/her from other people, which are extraordinary and make the leader exceptional.

• Born vs. made?

Many leaders are both with charisma, however, those were not charisma-gifted can be trained how to expose charismatic behaviors. There is even a 3 phase program of how to become a charismatic individual. First step is to develop charismatic thinking-attitude and acting. Secondly, individual creates relation with followers. Thirdly, individual ‘produces’ potential in followers by influencing their emotions.

• Charismatic leaders and their influence on followers

Charismatic leaders do influence their followers, using 4-step process. First, a leader communicates attractive/interesting vision. Next, the first step is followed by vision statement, what is a formal expression of a company’s vision or mission. Then, the leader shows the modelled behavior, values, which are supposed to be examples for followers. Lastly, the charismatic leader influences followers’ emotions, usually by unconventional behavior; displaying courage and assurance of vision’s success and rightness. The most important element of a vision is its inspirational aspect and focus on the future. Moreover, the vision should adapt to reality and relevant events as well it should be challenging and realistic to achieve.

• Charismatic leadership versus situational factors.

There are several relations:

• Charismatic leaders influence high performance and high satisfaction among their followers.

• Organisations that have charismatic leaders make more profit

• Charismatic leaders affect people differently – people are more willing to follow a leader in a case of stress, disaster, emergence, crisis. Also people with low self-esteem are more likely to take leader’s direction.

However, despite those positive relations, there is reasonable assumption that charismatic leaders’ effectiveness depends on situation. The situational factors that enhance charismatic leaders’ effectiveness are the ideological components of followers’ tasks or high level of stress/uncertainty. In these situations, charismatic leaders are successful. The factors that limit charismatic leaders’ usefulness relate to the organizational context – lower level managers with charismatic qualities do not have a field of activity to demonstrate them.

• Charismatic leadership: problems and disadvantages:

Charismatic leaders use their charisma for abusive actions: e.g. to increase their salaries, re-position their companies due to their image, blur the line between their interest and organization’s interest and use company’s resources for their personal benefit. They may be ego-driven and then cause problems for organizations. There is a name for those leaders who are ambitious, driven, loyal and use these features to act in their organization’s interest, well-being rather than in their own interest. They are level-5 leaders. They have the 5 following qualities: individual capability, team spirit and skills, managerial competence, ability to motivate others and a mixture of humility and professional will.

Transformational leadership

Transformational vs. transactional leaders.

Transactional leaders use conventional reward and punishment to gain compliance from their followers. They clarify employees’ roles, tasks requirements. They use management by exception: which seeks to minimize the opportunity for exceptions by enforcing defensive management processes (looking for deviations and intervention when standards are not met). Transactional leaders’ aspects: contingent rewards, management by exception and laissez-faire.

Transformational leaders are those who inspire and get things done by injecting enthusiasm and energy. They have profound and outstanding effect on their followers. They provide a vision, communicate high expectation and promote intelligence, careful problem-solving and have belief in followers. They give followers personal attention and individual care. They are the inspiration; they are coaches, advisors, and listeners. Transformational leadership can be learnt.

Transformational leaders’ aspects: idealized influence, inspirational motivation, intellectual stimulation and individual consideration.

Assumptions about transformational leadership:

• • Transformational leaders are more creative and encourage/promote creativity and innovativeness among their followers

  • Followers of transformational leaders are more ambitious in achieving goals and take personal interest in pursuing organizational goals

  • Vision is very important in mechanism of transformational leadership. It explains the effectiveness of transformational leadership

  • Transformational leaders make followers more committed to the organization; its strategy and make followers have more belief, trust in their leaders.

Transformational leadership can ‘boost’ impressive evidence for its effectiveness. Transformational leadership style generates more productive and satisfied followers-workers. But, there are also studies proving that contingent reward leadership is sometimes more effective than transformational leadership.

There are debates about transformational leadership and charismatic leadership. Some researches use them interchangeably, some think that charisma is just one of a trait that transformational leaders have and that transformational leadership is broader than charismatic one. Nevertheless, studies show that leaders, who score high on charisma, score also high on transformational leadership.

Authentic leadership: ethics and trust as fundamentals of leadership

Authentic leaders are those who know who they are, act openly and accordingly to their beliefs and values, are honest with themselves and with the followers, are considered as ethical. Their main advantage and virtue is trust. Authentic leaders build trust on their transparency – they value information sharing and communicate messages reflecting their values, beliefs, norms, ideals. Authentic leadership, unlike other leadership styles, focus on the moral side of leadership.

The topic of ethics in leadership is getting more and more attention. There are several reasons for that. First, there is a general trend towards ethical shift in management. Moreover, bibliographies of famous leaders revealed their unethical behaviors.

Moreover, the relations between leaders and their ethical behavior are crucial. Unethical leaders abuse their power, position to achieve self-serving goals. Ethical leaders, however use their power and charisma for the benefit of society or a group.

The notion of socialised charismatic leadership has recently emerged as a leadership style that is non-exploitative and motivates followers to maximize the gains of the organization without regard for the leader's personal needs. Those leaders demonstrate other- centred attitude rather than self-centred.

Trust

Trust is a relationship of reliance, it is the expectation that another party will not behave opportunistically. The notion implies willingness to take risk and familiarity. There are however other trust dimensions to be mentioned: integrity (the most important), competence, consistency, loyalty and openness. Trust is crucial in leadership. It is the fundamental on which leader builds his/her image and identity.

There are 3 types of trust:

1) Deterrence-based trust – trust is based on fear or reprisal in the trust is abused (most fragile type, most new relationships are based on it, punishment as a result of trust violation). Example: new manager-employee relationship.

2) Knowledge-based trust – trust based on the predictability of behaviors, this predictability is built on past relations, experiences. It relies on information. In this trust type, predictability builds trust, if you are able to predict person’s behavior, then you trust him/her more. Most relations in organisations are based on this trust type. Example: manager-employee relationship

3) Identification-based trust – trust based on emotional connection between the parties, on mutual understanding, on knowing what the other party wants, expects, appreciates. Exists loyalty between parties and minimum level of control is imposed. Example: marriage.

There are also principles of trust:

• Mistrust drives out trust

• Trust begets trust

• Trust can be regained

• Mistrusting groups self-destruct

• Mistrust lowers productivity

Contemporary Leaders

Mentoring

A mentor is a person from the higher-level management who takes the position of sponsor and supervisor for the less-experienced employee (protégé). Mentoring is based on career and psychological function. Some firms have official mentoring programs, some have informal mentoring. Mentoring is beneficial for mentor, protégé and the whole organization. The main benefits for mentor include the access to what lower-level employees think, feel and thanks to that it also gives possibility to sense potential problems. There is a tendency to select protégé basing on his/her similarities with the mentor. Nevertheless, although mentoring approach serves many functions, most of its outcomes emphasize psychological benefits rather than material.

Self-leadership

Its main assumption proposes that individuals, by controlling their actions, can develop leadership behaviors and qualities. The importance of self-leadership goes along with the importance of team creation. Teams need self-directed people.

Online leadership

There has only been little research on this leadership type. It’s important to remember that words, sent digitally, can also (de)motivate. Good online leaders need to carefully select words, “read between the lines”, and learn how to make messages transmit trust, status, warmth, motivation. They also need to think about the actions that need to follow the message on the employee’s side. The main challenge of online leaders is to build and maintain trust.

Challenges to the leadership construct

There are 2 assumptions that challenge the importance of leadership (leadership not being necessary):

1. Attribution theory of leadership -> this theory states that leadership is one of the attributions that people make about others, to explain social events. People simply associate leaders certain with characteristics and when they meet individual representing these characteristics, they take him/her for leader. In organizations, people explain organizational situations by attribution theory, e.g. high profit is explained by having a good leader. By appearing as a good leader, others can view you as one, even if you lack actual accomplishments.

2. Substitutes for and neutralizers of leadership -> some people think that there are substitutes for leadership and neutralisers of leaders’ influence on others. The substitutes make leaders’ activities unnecessary, while neutralisers negate leaders’ effectiveness and influence. This theory is however under controversy, as there are many problems with applying the theory of substitutes and neutralisers and the difference between these two notions are sometimes blurred.

Finding and creating effective leaders:

• Selecting leaders – analysis of situation a company faces, helps to find what kind of leader is needed. Tests as well as interviews may help to identify a leader. Moreover, companies should plan/prepare for leadership changes.

• Training leaders – there are a few things managers can do to enhance the training outcomes. Leaders high in self-monitoring benefit from training more. Leaders can be even more effective is they are taught how to implement skills, build trust, mentor, recognise situational contexts and cope with them. Moreover, research has shown that charismatic leadership qualities can be enhanced by behavioral training using modelling. Also, transformational leadership skills can be taught.

Global consequences:

Transformational/charismatic leadership style works around the globe. There are some universal dimensions of leadership e.g. leaders’ vision, foresight, motivating skills, trust, proactivity, dynamism. However, cultural differences and leadership type adaptation are also important. Globalisation made the leadership style more universal.

Chapter 14: Power and Politics

What is power?

Power refers to the potential of the influence that a person/party can exert on another person/party so that it acts in a way that the influencer wants. It can exist, but not be used. It is based on a dependency variable.

Relationship between power and leadership

Leaders use power as a mean to achieve goals. Power just needs dependability, while leadership requires goals compatibility between leader’s and his/her followers’ goals.

Bases of power

Formal power:

Based on one’s position in an organisation.

- Coercive power: power dependent on fear. A person acts in a way because he/she fears of outcomes of incompliance. This power bases on threat of application e.g. sanction, restrictions, pain, dismissal and so on.

- Reward power: can be gained from one's capacity to reward compliance. People comply with directives, orders because compliance generates positive benefits. There are those who reward and those who see it as valuable. It is the opposite of coercive power.

- Legitimate power: a formal power one gains by holding a particular position in an organization, includes both coercive and reward power. In OB context, it is probably the most common.

Personal power:

Power originating from a person’s characteristics.

Expert power: power that is based on unique skills or know-how/knowledge.

Referent power: individual power based on a high level of identification with, admiration of, or respect for the powerholder (e.g power of celebrities)

Personal bases of power are most effective. They relate positively to satisfaction, organisational commitment and performance. Coercive power causes less satisfaction and less commitment.

Dependency: Relation between A and B - The greater B depends on A, the greater power A has over B.

Dependency is inversely proportional to the alternative resources e.g. among the famous people, fame is no longer a power. In the business context, an example of suppliers can be given - many suppliers are better than one.

What creates dependency? It is the resources’…

• Importance

• Scarcity

• Impossibility of substitutes

Power tactics

Power tactics are ways in which a person uses power in specific situations.

There are 9 different influence tactics:

(1) Legitimacy

(2) Rational persuasion

(3) Inspirational appeal

(4) Consultation

(5) Exchange

(6) Personal appeals

(7) Ingratiation – using flattery, praise

(8) Pressure

(9) Coalitions

Research has proved that rational persuasion, inspirational appeal and consultation are the most effective. Pressure is probably the least effective. Combination of many may be helpful. The effectiveness of those tactics depends on the influence’s direction e.g. rational persuasion works only in upward influence. Moreover, the order of tactics matter. It’s better to start with “softer”. Using just one soft tactic works better than using just one hard tactic and the best way of all is to combine many soft tactics.

People differ in their political skills. More politically skilled are more effective users of power tactics. Moreover, organizational culture influences the acceptance or refusal of some power tactics.

Politics: Power in action

Organisational Politics

• Political behavior is used to describe “activities that are not required as part of a person’s formal role in the organization but that influence or attempt to influence, the distribution of advantages and disadvantages within the organization” (page 381). This definition includes decision- making process as the’ distribution of advantages and disadvantages’.

• There are 2 dimensions of political behavior: legitimate political behavior (normal day-to-day politics, e.g. complain to supervisor, form coalitions) and illegitimate political behavior (political actions, decision which violate rules, are abusive e.g. sabotage).

The reality of politics: organizations are politics-loaded because of competition for scarce, limited resources as well as disagreement between different parties in many issues. Politics exists because there is a lot ambiguity in interpreting facts and some people use politicking (using influence to support facts aiming at achieving their interests).

Causes and consequences of political behavior:

Factor encouraging political behavior can be individual or organizational.

• Individual factors: some traits, qualities are connected with political behavior. These traits are high self-monitoring, internal locus of control, High Machiavellian personality, organizational investment, perceived job alternatives, expectations of success.

• Organisational factors: factors resulting from organizational culture and internal, working environment. Certain cultures do promote political activity. Organizational factors that promote political behaviors are: resource reallocation, promotion opportunities, low trust, role ambiguity, vague evaluation system, zero-sum reward practices (win/lose approach), democratic decision making, high performance pressures, self-serving senior managers.

People’s responses to organizational politics:

For most people in the organization, outcomes of politicking are negative. Organizational politics may threaten employees. It correlates to decrease in job satisfaction, increase of anxiety and stress, increased turnover and lower performance. Apart from these relations, there is also correlation between politics influence and understanding or organizational politics mechanisms. If an employee knows the politics in a firm, he know why certain decisions are made and by whom. If the understanding is high and politics level is high then employees perceive politics as opportunities and their performance increases. Nevertheless, low understanding means perceiving organizational politics as a threat and then employees feel threatened response with defensive behaviors (action performed to avoid action, blame or change). People from politically unstable countries are used to political issues and their tolerance is higher.

Impression management (IM):

IM is the process through which people try to control the impressions other people form of them. Only people high in self-monitoring are IM concerned. IM is usually used in job interviews and performance evaluations. To IM techniques belong: flattery, excuses, favors, self-promoting, apologies, association, and conformity, which some works better than the others. Impression Managers must be careful to avoid being perceived as manipulative or insincere, since the impressions conveyed about them are not always false.

Global challenges:

• Politics perceptions have rather negative effects around the world

• People from different cultures prefer different power tactics

• Effectiveness of power tactics differ between cultures.

Chapter 15: Conflict and negotiation

Conflict is the process initiated when one party perceived as about to be, or being negatively affected by another party on something that the first party cares about.

School of thoughts on conflict:

Traditional school of conflict assumes that conflict must be avoided at all costs and that it causes group’s functioning deterioration. The conflict is perceived as dysfunctional, bad, violent.

Human relations school of conflict assumes that conflict is a natural response and should be accepted as such. Still, the theory argues it cannot be avoided and sometimes can be functional.

Interactionist school of conflict argues that minimum level of conflict benefits group’s performance. Conflict is viewed as helpful to avoid group’s stagnation, apathy. Conflict is something necessary.

The theory distinguished between functional and dysfunctional conflicts. Functional conflicts help the group, while dysfunctional worsen its operation.

It also distinguishes between task, relationship and process conflicts. Relationship conflicts are usually dysfunctional. Low levels of process conflicts as well as low/moderate levels of task conflicts are functional.

The conflict process

Stage 1 - Potential opposition or incompatibility

3 categories of conditions that can lead to a potential conflict:

• Communication (misunderstandings, a lot of noise in communication channel, jargon, different connotations of words, etc…)

• Structure (assignment size, specialization, rewards, dependence between members, etc…)

• Personal variables (personality, emotions, values, etc…)

Stage 2 – Cognition and personalisation

2 possibilities: felt conflict or perceived conflict.

At this stage, at least one party is aware of the conflict’s existence. This is the phase when conflict issues tend to be defined and parties think how to react. Moreover, emotions play a role in how we perceive the conflict situation. Negative emotions tend to worsen the situation, while positive emotions encourage agreement.

Stage 3 – Intentions

Conflict-handling intentions: competing, collaborating, compromising, avoiding and accommodating.

• Competing - assertive and uncooperative –parties want to satisfy their interests

• Collaborating - assertive and cooperative –parties want to reach agreement that satisfies everyone

• Compromising – moderate level of assertiveness and cooperativeness – parties are willing to resign from some of their postulates/potential benefits

• Avoiding – unassertive and uncooperative – withdrawal or suppression

• Accommodating – unassertive and cooperative – readiness to take another party’s interest as superior and place them above own concerns.

Stage 4 – Behavior

Party’s behavior and other’s reactions. Conflict becomes visible. One should pay attention to conflict-intensity continuum – the higher the conflict level, the more intense the reaction. High level of conflicts usually implies dysfunctional outcomes. There are however conflict management techniques which can minimize or stimulate the conflict level to reach the required conflict degree.

• Conflict-resolution techniques: problem- solving, compromise, resources expansion, superordinate goals, smoothing, avoidance, authoritative command, altering the human variable and altering the structural variables.

• Conflict-stimulation techniques: communication, outsiders’ appearance, organizational restructure, devil’s advocate appointment.

Stage 5 – Outcomes

Functional outcomes – eliminates groupthink, enhance creativity and decision making quality, increase productivity. Cultural diversity acts in favor of functional conflicts. Functional conflicts can be created – rewarding people who go against the mainstream with their ideas, programs that encourage dissention, systems of managers’ evaluation, assigning devil’s advocates. Successful organizations reward dissenters and punish conflict avoiders.

Dysfunctional outcomes – decrease in group’s cohesiveness, group’s performance, lower satisfaction, commitment.

Negotiation: Bargaining strategies

Distributive bargaining

The different parties are trying to divide something up-distribute something, creation of win//lose situation. The parties assume that there is not enough to go around, and they cannot "expand the fixed pie," so the more one side gets, the less the other side gets. In OB context, the best example is wage negotiation.

The process of distributive bargaining involves 2 negotiators. Each of them has his target (most acceptable situation) and resistance point (the least acceptable situation) as well as aspiration range (area between these 2 points where negotiation can take place).

Some hints on how to negotiate in distributive bargaining:

• Make the first offer, it should be aggressive (recall anchoring bias)

• Reveal a deadlin

Integrative bargaining

The parties are trying to make more of something. Creation of win/win solutions. It is preferable to the distributive bargaining because it builds relations.

There must be some conditions for integrative bargaining to succeed: parties involved in negotiations need to be flexible, open, sensitive about others’ needs and value information-sharing.

• Teams bargain more in integrative style than individuals

• When more issues are under negotiation, more likely win/win situation will appear

• Compromise does not almost implies win/win outcomes because it reduces need for integrative bargaining

The negotiation process

1) Preparation and planning -> ‘doing homework’, results in BATNA (best alternative to a negotiated agreement) – the least acceptable situation

2) Definition of ground rules

3) Clarification and justification

4) Bargaining and problem solving

5) Closure and implementation

What individual differences influence a negotiation’s effectiveness?

• Personality traits – lack of strong evidence, but some of them indicate that certain traits of The Big Five are connected to negotiation processes Agreeable and extraverted negotiators do not perform well in distributive bargaining. Also intelligence seems to influence bargaining.

• Moods/emotions – yes, depends on the bargaining type. In distributive bargaining, angry negotiators perform better. In integrative bargaining positive moods/emotions have positive influence.

• Gender – women and men negotiate similarly, but gender affects negotiation’s outcomes. Men are supposedly slightly better negotiators than women. Women are exposed to stereotype threat, if they do not confirm they are blamed for breaking gender stereotype. Women may also more influenced by their own attitudes and actions.

Third-party negotiations

• Mediator – A neutral party who assists in negotiations and conflict resolution, the process being known as mediation

• Arbitrator - legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons, by whose decision they agree to be bound. Arbitrator has authority to dictate the agreement.

• Conciliator - parties to a dispute agree to utilize the services of a conciliator, who then meets with the parties separately in an attempt to resolve their differences (serves as informal communication link between parties)

• Consultant – is a trained in conflict management third party who tries to assist creative problem solving by communication and proper analysis.

Global challenges:

Negotiation and communication differs across cultures in terms of purpose, perception (win/win, win/lose), style and expressing emotions.