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Organizational Behavior - MGT502 VU MGT - 502 ORGANIZATIONAL BEHAVIOR Lesson 1 OVERVIEW OF COURSE This subject/course is designed to teach the basic language of organizationa l behavior to diverse audience/students, including those who are studying this as a supporting subject for their bachelor degree program. This course is designed to provide you the foundations of organizational behavior whether you intend to work in any field of interest. Organizational behavior offers both challenges and opportunities for managers. It recognizes differences and helps managers to see the value of workforce di versity and practices that may need to be changed when managing in different countries. It can he lp improve quality and employee productivity by showing managers how to empower their people as well as how to design and implement change programs. It offers specific insights to improve a manager’s people skills. In times of rapid and ongoing change, faced by most managers today, OB can he lp managers cope in a world of “temporariness” and learn ways to stimulate innovation. Finally, OB can offer managers guidance in creating an ethically healthy work climate. Managers need to develop their inte rpersonal or people skills if they ar e going to be effective in their jobs. Organizational behavior (OB) is a field of study that investigates the impact that individuals, groups, and structure have on behavior within an organization, and then applies that knowledge to make organizations work more effectively. Specifically , OB focuses on how to improve productivity, reduce absenteeism and turnover, and increase employee citizenship and job satisfaction. OB studies three determinants of behavior in or ganizations: individuals, groups, and structure. OB applies the knowledge gained about individuals, groups , and the effect of structure on behavior in order to make organizations work more effectively. OB is concerned with the study of what people do in an organization and how that behavior affects the performance of the organization. There is increasing agreement as to the components of OB, but there is still considerable deba te as to the relative importance of each: motivation, leader behavior and power, interpersonal communication, group structure and processes, learning, attitude development and perception, change processes, conflict, work design, and work stress. Organizational behavior is a developing field of study, presenting new challenges to a manager’s understanding of work behavi or and the ability to manage it effectively. This course addresses the following points: Organizational behavior studies the factors that impact individual and group behavior in or- ganizations and how organizati ons manage their environmen ts. Organizational behavior provides a set of tools—theories and concep ts—to understand, analyze, describe, and manage attitudes and behavior in organizations. The study of organizational can improve and change individual, group, and organizational behavior to attain individual, group, and organizational goals. Organizational behavior can be analyzed at th ree levels: the individual, the group, and the organization as a whole. A full understanding must include an examination of behavioral factors at each level. A manager’s job is to use the tools of organi zational behavior to increase effectiveness, an organization’s ability to achieve its goal. Management is the process of planning, organizing, leading, and controlling an organi zation’s human, financial, material, and other resources to increase its effectiveness. Managers of organizational behavior face five ch allenges: using information technology to enhance © Copyright Virtual University of Pakistan 1 Organizational Behavior - MGT502 VU creativity and organizational learning, using hu man resources to gain a competitive advantage, developing an ethical organization, managing a diverse workforce, and managing organizational behavior internationally. What Is Organizational Behavior? Organizational Behavior is a field of study that investigates the impact that individuals, groups and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness. An organization is a collection of people who work togetehr to achieve a wide variety of goals, both goals of the various individuals in the organization and goals ofthe organization as a whole. Organizations exist to provide goods and services that people want. These goods and services are the products of the behaviors of workers. Organizational behavior is the study of the many factosrthat have an impact on how individuals and groups respond to and act in organizations and howorganizations manage their environments. Although many people assume that understanding human behavior in organizations is intuitive, many commonly held beliefs about behavior in organizations, s ch as the idea that a “happyworker is a productive worker,” are either entirely false or true only in sp ecific situations. The study of organizational behavior provides a set of tools—concepts adn theories—that help people understand, analyze, and describe what goes on in organizations and why. How do the characteristics of individuals, groups, work situations, and the organization itself affect how membe srfeel about their organization? The ability to use the tools of organizational behaviortnderstand behavior in orgnaizations is one reason for studying this subject. A second reason is to learn how to apply these concepts, theories, and techniques to improve behavior in organizations so that individuals, groups, and organizations can achieve their goals. Managers are challenged to find new ways to motivate ancd oordinate employees to ensure that their goals are aligned with organizational goals. Forces Reshaping the Process of Management An understanding of organizational behavior is impo rtant to managers, who have the responsibility of improving organizational effectiveness, the ability ofan organization to achieve goals. A goal is a desired future outcome that an orgnaization seeks to achieve. In the last 10 years, the challenges facing managersin effectively utilizing human resources and managing organizational behavior have increased. These challeng es stem from changing forces in the technological, global, and social or cultural environments. Organizations can obtain a competitive advantage, a way of outperforming other organizations providing similar goods and services. They can pursue any or all of the following goals: increase efficiency, increase quality; increase innovation and creativity; and increase responsiveness to customers. Organizational efficiency is increased by reducing the amount of resources, such as people or raw materials, needed to produce a quantity of goods or services. Orgaz naitions try to find better ways to utilize and increase the skills and abilities of their workforce. Cross traig workers to perform different tasks and finding new ways of organizing workers to use their skills more efficiently improve efficiency. The global competitive challenge facing organizations is toinvest in the skills of the workers because better-trained workers make better use of technology. Increased competition has alsoput pressure on companies to increase the quality of the goods and services they provide. One approach to increasing quality is called Total Quality Management (TQM), a technique borrowed from the Japanese. TQM involves a whole new philosophy of managing behav- ior in organizations and includes elements like giving workers the responsibility for finding ways to do their jobs more efficiently and ways to improve quality. © Copyright Virtual University of Pakistan 2 Organizational Behavior - MGT502 VU An organization’s ethics are rules, beliefs, and valuesat outline ways in which managers and workers should behave when confronted with a situation that may help o hrarm other people inside or outside an organization. Ethical behavior enhances the well-being (the happin ess, health, and prosperity) of individuals, groups, organizations, and the organizational environment. Ethicesstablish the goals and behaviors appropriate to the organization. Many organizations have the goal of making a profit, to be able to pay workers, suppliers, and shareholders. Ethics specifies what actions an organizoatishould take to make a po rfit and what limits should be put on organizations and their managers to prevent harm. The challenge of managing a diverse workforce in creases as organizations expand their operations internationally. There are several issuethat arise in the international ara. First, managers must understand cultural differences to interact wiworkers and associates in foreign cuontries. Understanding the differences between national cultures is important in any attemptto manage behavior in global organizations to increase performance. Second, the management functions of planning, organin zi, leading, and controlling become more complex in a global environment. Planning requires coordination between managers in the home country and those abroad. Organizing, the allocation of decision-making authority and responsibility between headquarters and the foreign country is a significant function of global managers. Leading requires managers to tailor their leadership styles to suit differences in the attitudes and values of fore ign workers. Controlling involves establishing the evaluation, reward, and promotion polics ieof the organization and training and developing a globally diverse workforce. Why Do We Study OB? Following are the reasons to study organizational behavior: • To learn about yourself and how to deal with others • You are part of an organization now, and will continue to be a part of various organizations • Organizations are increasingly expecting individuals to be able to work in teams, at least some of the time • Some of you may want to be managers or entrepreneurs The importance of studying organizational behavior (OB) OB applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively. It is concerned with the study of what people do in an organization and how that behavior affects the performance of the organization. There is increasing agreement as to the components of OB, but there is still considerable deba te as to the relative importance of each: motivation, leader behavior and power, interpersonal communication, group structure and processes, learning, attitude development and perception, change processes, conflict, work design, and work stress. It is also important because it focus on the following areas. • OB is a way of thinking. • OB is multidisciplinary. • There is a distinctly humanistic orientation with OB. • The field of OB is performance oriented. • The external environment is seen as having significant impact on OB. Contributing Disciplines to the OB Field Organizational behavior is an applied behavioral science that is built upon contributions from a number of behavioral disciplines. The predominant area s are psychology, sociology, social psychology, anthropology, and political science. © Copyright Virtual University of Pakistan 3 Organizational Behavior - MGT502 VU Psychology: Psychology is the science that seeks to measure, explain, and sometimes change the behavior of humans and other animals. Learning Motivation Personality Emotions Perception Training Leadership effectiveness Job satisfaction Psychology Individual decision making Individuals Performance appraisal Attitude measurement Employee selection Work design Work stress Sociology Sociologists study the social system in which individuals fill their roles; that is, sociology studies people in relation to their fellow human beings. Group dynamics Work teams Communication Power Conflict Organization system Inter-group behavior Sociology Formal organization theory Organizational technology Group Organization change Organizational culture Social Psychology An area within psychology that blends concepts fro m psychology and sociology and that focuses on the influence of people on one another. Behavioral change Attitude change Communication Social psychology Group Group processes Group decision making Anthropology The study of societies to learn about human beings and their activities Comparative values Comparative attitudes Group Cross-cultural analysis Anthropology Organization Organizational culture Organizational environment system © Copyright Virtual University of Pakistan 4 Organizational Behavior - MGT502 VU Political Science The study of the behavior of individuals and groups within a political environment Conflict Organization Political Science Intra-organizational politics Power system Organization Behavior Psychology Individual Sociology Study of Social Psychology Group Organizational Behavior Anthropology Organization Political Science © Copyright Virtual University of Pakistan 5 Organizational Behavior - MGT502 VU Lesson 2 ORGANIZATIONAL BEHAVIOR Overview In last lecture we tried to understand the term of organizational behavior its need and its impact on the organization. The focus in this discussion is to have concept of about different core concepts of the organizational behavior and the increasingly important role of this subject in the ever-changing domestic and global business environment Today we will be covering following topics: Course Structure of OB Basic OB model What managers do Management Functions New management Functions Management Roles Course Structure of OB We will cover following topics in our coming lectures: Part I: The Individual • Ability & Learning • Values, Attitudes and Job Satisfaction • Personality & Emotions • Perception & Individual Decision Making • Basic Motivation Concepts • Motivation and its Applications Part-II The Group • Foundation of Group Behavior • Group and Team Work • Functions of Communication • Basic Approaches to Leadership • Contemporary Issues in Leadership • Power and Politics • Conflict and Negotiation Part-III The Organization System • Organizational Structure • Work design and Technology • HR Policies and Practices • Organizational Culture • Organizational Change • Stress Management Model of OB Basic OB Model Orrganizattono systemms levell Group levell Inddivduuall evvell Organizational behavior tools to understand and alter behavior can be examined at three levels of analysis—individual, group, and organizational. These factors include personality and ability, attitude s and values, perception and attribution, learning, motivation, stress, and work/life linkages. © Copyright Virtual University of Pakistan 6 Organizational Behavior - MGT502 VU Individual differences can be divided into personalit y and ability differences. Understanding the nature, determinants, and consequences of individual differecnes is essential for managing organizational behavior. An appreciation of the nature of individual differences is necessary to understand why people behave in certain ways in an organization. Group:groupis defined as a collection of two or more people who interact together to achieve their goals. A teamis a group in which members work together intensively to achieve a common goal. Work groups are the basic building blocks of an organization. Work groups use roles, rules, and norms to control their members’ behavior, and they use several socialization tactics to turn newcomers into effective group members. Groups contribute to organizationa l effectiveness when group goals are aligned with organizational goals. Organization. Organizational structure and culture affect performance and how the changing global environment, technology, and ethics impact work attitudes and behavior. Organizational structure and culture affect how peoplenad groups behave in an organization. Together they provide a framework that shapes attitudes, behaviors, and performance. Organizations need to create a structure and culture that allow them to manage individuals and inter-group relations effectively. What Managers Do? An understanding of organizational behavior is impo rtant to managers, who have the responsibility of improving organizational effectiveness, the ability ofan organization to achieve goals. A goal is a desired future outcome that an oranization seeks to achieve. A managersupervises one or more subordinats e. Managers include CEOs, who headtop-management teams of high-ranking executives responsible for planning st rategy to achieve top-level managers might be responsible for thousands of workers. But managers are also found throughout the lower levels of organizations and often are in charge of just a fewubordinates. All managers facethe challenge of helping the organization achieve its goals. Knowledge of organitzonal behavior increases effectiveness by providing managers with a set of tools. Managers can raise a wroker’s self-esteem and increase worker productivity by changing the reward system or the job design. Top-level managers might be responsib le for thousands of workers. But managers are also found throughout the lower levels of organizations and often are in charge of just a few subordinates. All managers face the challenge of helping the organization achieve its goa ls. Knowledge of organizational behavior increases effectiveness by providing managers with a set of to ols. Managers can raise a worker’s self-esteem and increase worker productivity by changing the reward system or the job design. Management Functions Managementis the process of planning, organizing, leading, and controlling an organization’s human, financial, and material resources to increase its effectiveness. In planning, managers establish their organization’s strateg, in other words, how best to allocate and use resources to achieve organizational goals. Much uncertainty and risk surround the decisions of managers during planning, and an understanding of organizationablehavior can improve the quality of decision making, increase success, and lower risk. In organizing, managers establish a structure of relationshipsthat dictate how members of an organization work together to achieve organizational goals. Orga nizing involves grouping workers into departments, groups, and teams based on the tasks they perform. Or ganizational behavior offers guidelines on how to organize employees to make the best use of their cabpilities and enhance commun ciation and coordination. Whenleading, managers encourage workers to do a good job and coordinate individual and groups so that all organizational members are working toward organizational goals. The study of different leadership methods © Copyright Virtual University of Pakistan 7 Organizational Behavior - MGT502 VU and how to match leadership styles to the charact eristics of the organization is a major concern of organizational behavior. When controlling,managers monitor and evaluate individual,group, and organizational performance to see whether organizational goals are being achieved. Knowldege of organizational behai r allows managers to understand and accurately diagnose worksituations and pinpoint the need for corrective action or strive to maintain and improve performance. Several processes at the individual or group levels (e.g., personality conflicts, poor job design) may cause poor performance. Managers perform their four functions by assuming a number of roles in organizations. A roleis a set of behaviors or tasks a person is expected to perform be cause of the position she or he holds in a group or organization. New Management Functions New Managerial Functions To provide leadership and direction Total Quality CContinuous Management Improvement Organizational efficiency is increased by reducing theount of resources, such as people or raw materials, needed to produce a quantity of goods or services. Orgnaitions try to find better ways to utilize and increase the skills and abilities of their workforce. Cross ig workers to perform different tasks and finding new ways of organizing workers to use their skills more efficiently improve efficiency. The global competitive challenge facing organizations is toinvest in the skills of the workers because better-trained workers make better use of technology. Global pressures have fororganizations to find new ways to increase efficiency. Increased competition has also put pressure on companies to increase the quality of the goods and services they provide. One approach to increasing quality is called Total Quality Management (TQM), a technique borrowed from the Japanese. TQM involves a whole newphilosophy of managing behavior in organizations and includes elements like giving workers the responsiblitfor finding ways to do their jobs more efficiently and ways to improve quality. Companies have historically shown the most The 4-P Cycle of Continuous innovation, defined “as the process of bringing any new problem-solving ideas into use.” Ideas for Improvement reorganizing, cutting costs, putting in new budgeting People systems, improving communications, or assembling (Skilled, motivated people who can handle products in teams are also innovations. Understanding change. Less stress.) how to manage innovation and creativity is challenging to managers face because creative people are difficult Productivity Products (Less wasteful, more (Satisfied customers to manage. To encourage innovation, the manager efficient use of all because of better must allow workers freedom (e.g., the use of resources.) quality goods/services.) independent teams) and foster a culture that rewards risk taking. Although all organizations compete for Processes (Faster, more flexible, customers, service organizations in particular need leaner, and ethical organizational to be responsive to customer needs. Because the processes. Organizational learning.) economy is becoming more and more service based, this is an increasingly important issue. © Copyright Virtual University of Pakistan 8 Organizational Behavior - MGT502 VU Management Roles Managers can use their understandnig of organizational behavior toimprove their management skills. Askill is an ability to act in a way tlows a person to perform highly in her ris role. Managers need three types of skills: conceptual skillsto analyze and diagnose a situation to distinguish between cause and effect; human skills to understand, work with, lead, and control the behavior of individuals and groups; and technical skil, job-specific knowledge and techniques required to perform an organizational role. Effective managers need all three types of sk ills—conceptual, human, and technical. For example, entrepreneurs often are technically skilled but lack conceptual and human skills. Scientists who become managers have technical expertise,ut low levels of human skills. The ten roles can be grouped as being primarily concerned with interpersonal relationships, the transfer of information, and decision making. 1. Interpersonal roles • Figurehead—duties that are ceremonial and symbolic in nature • Leadership—hire, train, motivate, and discipline employees • Liaison—contact outsiders who provide the manager with information. These may be individuals or groups inside or outside the organization. 2. Informational Roles • Monitor—collect information from organizations and institutions outside their own • Disseminator—a conduit to transmit information to organizational members • Spokesperson—represent the organization to outsiders 3. Decisional Roles • Entrepreneur—managers initiate and oversee new projects that will improve their organization’s performance • Disturbance handlers—take corrective action in response to unforeseen problems • Resource allocators—responsible for allocating human, physical, and monetary resources • Negotiator role—discuss issues and bargain with other units to gain advantages for their own unit Management Skills Robert Katz has identified three essential management skills: technical, human, and conceptual. 1. Technical Skills • The ability to apply specialized knowledge or e xpertise. All jobs require some specialized expertise, and many people develop their technical skills on the job. 2. Human Skills • The ability to work with, understand, and motiv ate other people, both individually and in groups, describes human skills. Many people are technically proficient but interpersonally incompetent 3. Conceptual Skills 1. The mental ability to analyze and diagnose complex situations 2. Decision making, for example, requires managers to spot problems, identify alternatives that can correct them, evaluate those alternatives, and select the best one. Skills Exhibited by an Effective Manager 1. Clarifies goals and objectives for everyone involved 2. Encourages participation, upward communication, and suggestions 3. Plans and organizes for an orderly work flow 4. Has technical and administrative expertise to answer organization-related questions 5. Facilitates work through team building, training, coaching and support © Copyright Virtual University of Pakistan 9 Organizational Behavior - MGT502 VU 6. Provides feedback honestly and constructively 7. Keeps things moving by relying on schedules, deadlines, and helpful reminders 8. Controls details without being over-bearing 9. Applies reasonable pressure for goal accomplishment 10. Empowers and delegates key duties to others while maintaining goal clarity and commitment 11. Recognizes good performance with rewards and positive reinforcement Evolution of the 21st-Century Manager Past Managers Today’s Managers • Primary Role Order giver, privileged Facilitator, team elite, manipulator, member, teacher, controller advocate, sponsor • Learning & Periodic learning, narrow Continuous life-long Knowledge specialist learning, generalist with multiple specialties • Compensation Time, effort, rank Skills, results Criteria • Cultural OrientationMonocultural, Multicultural, monolingual multiligual © Copyright Virtual University of Pakistan 10 Organizational Behavior - MGT502 VU Lesson 3 ORGANIZATIONS: THE IMPORTANT COMPONENT Overview Organizational structure and culture affect how people and groups behave in an organization. Together they provide a framework that sh apes attitudes, behaviors, and performance. Organizations need to create a structure and cultu re that allow them to manage individuals and inter-group relations effectively. Organizational structure is the formal system of task and reporting relati onships that controls, coordinates, and motivates employees so that they cooperate and work together to achieve an organization’s goals. Differentiation and inte gration are the basic building blocks of organizational structure. The main structures that organizations use to differentiate their activities and to group people into functions or divisions are functional, product, market, geographic, matrix, network, and virtual structures. Each of these is suited toa particular purpose and has specific coordination and motivation advantages and disadvantages. As organizations grow and diffe rentiate, problems of integrating activities between functions and divisions arise. Organizations can use the hierarchy of authority, mutual adjustment, standardization, and new information technology to increase integration. To integrate their activities, organizations devel op a hierarchy of authority and decide how to allocate decision-making responsibility. Two importa nt choices are how many levels to have in the hierarchy and how much authority to decentralize to managers throughout the hierarchy and how much to retain at the top. To promote integration, organi zations develop mechanisms for promoting mutual adjustment (the ongoing informal communication and in teraction among people and functions). Mechanisms that facilitate mutual adjustment include direct contact, liaison roles, teams and task forces, cross-functional teams and cross-func tional team structures, integrating roles, and matrix structures. Organizations that use standardization to integrate their activities develop performance programs that specify how individuals and functions are to coordinate their actions to accomplish organizational objectives. Organizations can standardize their input, throughput, and output activities. Organizational culture is the set of informal va lues and norms that control the way individuals and groups interact with each other and with pe ople outside the organization. Organizational cultures are collections of two kinds of values: terminal and instrumental. Norms encourage members to help adopt organizational values a nd behave in certain ways as they pursue organizational goals. The values of the founder of the organization and the ethical values the organization develops to inform its employees about appropriate ways to behave have a significant impact on organizational culture. Strong cultures have c ohesive sets of values and norms that bind organizational members together and foster commitment from employees to achieve organizational goals. Strong cultures can be bu ilt through an organization’s socialization process and from the informal ceremonies, rites, stories, and language that develop in an organization over time. What is organization? A consciously coordinated social unit composed of two or more people, those functions on a relatively continuous basis to achieve a common goal or set of goals. Organizational structure is used manage © Copyright Virtual University of Pakistan 11 Organizational Behavior - MGT502 VU individuals and inter-group relations effectively, particularly between different functions and divisions. It describes how managers group people and resources, integrate people and groups to stimulate them to work together, and how organizational values an d norms influence inter-group relationships and organizational effectiveness. Managers try to: encourage employees to work ha rd, develop supportive work attitudes, and allow people and groups to cooperate and work together e ffectively. An organization’s structure and culture affect the way people and groups behave. Organizati onal structure is the formal system of task and reporting relationships that controls, coordinates, and motivates employees so they cooperate and work together to achieve organizational goals. Organizations are Social entities Goal oriented Deliberately structured Linked to the external environment Components of an Organization The environment influences organizational design. When uncertainty exists , the ability to respond quickly and creatively is important; when the en vironment is stable, an organization improves performance by making attitudes and behaviors predicta ble. Creativity and predictability are fostered by certain structures and cultures. Task - an organization’s mission, purpose, or goal for existing People - the human resources of the organization Structure- the manner in which an orga nization’s work is designed at the micro level; how departments, divisions , & the overall organization are designed at the macro level Technology- the intellectual and mechanical processes used by an organization to transform inputs into products or services that meet Formal vs. Informal Organization Formal Organization - the part of the organization that has legitimacy and official recognition Informal Organization - the unofficial part of the organization How does an Organization Create Value? © Copyright Virtual University of Pakistan 12 Organizational Behavior - MGT502 VU Organization’s Inputs Processation’s Conversion – Raw material – Machinery – Capital – Computers – HR – Human Skills & Abilities – Information & Knowledge Organization’s Environment Organization’s Outputs – Customers – Finished Goods – Shareholders – Services – Suppliers – Dividends – Distributors – Values for Stakeholders Why do Organizations Exist? To increase specialization and division of labor Use large-scale technology Manage the external environment Economize on transaction costs Exert power and control Factors Affecting Organizations Organizational Environment Technological Environment Organizational Process The organizational environment is theesources surrounding an organization, including inputs (e.g., raw materials and skilled employees)to transform inputs (e.g., computers, buildings, and machinery); and resources (e.g., custOrganizations compete for the scarce, needed resources. There is much uncertainty aboning needed resources. Organizations design their structures and cultures in ways to secure and protect needed resources. Technology is the second design contingency an organization faces. Technoloto the combination of human resources (skills, knowledge abilities, and techniques) and raw materials and equipment (machines, computers, and tools) that workers use to convert raw materials into goods a nd services. Each job is part of an organization’s technology. An organization must design its structure and culture to allow for the operation of technology. Organizational processes develop plans of actions for competing successfully by obtaining resources and outperforming competitors. These plans of actions are strategies. To attract customers, for example, organizations can pursue the following strategies. Organizational change Organizational change is an ongoing processhas important implications for organizational performance and for the well-being of an organiza tion’s members. An organization and its members must be constantly on the alert for changes from within the organization and from the outside © Copyright Virtual University of Pakistan 13 Organizational Behavior - MGT502 VU environment and they must learn how to adjust to change quickly and effectively. Often, the revolutionary types of change that result from restructuring and reengineering are necessary only because an organization and its managers ignored or were unaware of changes in the environment and did not make incremental changes as needed. The mo re an organization changes, the easier and more effective the change process becomes. Developing a nd managing a plan for change are vital to an organization’s success. Globalization and Culture Understanding and managing global organizational behavior begins with unders tanding the nature of the differences between national cultures and then tailoring an organization’s strategy and structure so that the organization can manage its activities as it expands abroad. To succeed, global companies must help their managers develop skills that allow them to work effectively in foreign contexts and deal with differences in national culture. A global organization is an organizati on that produces or sells goods or services in more than one country. Global comp anies treat the world as one large market. The presence of organizations in countries other than th eir home country is so common that local people assume they are domestic companies. Organizations expand globally to gain access to resources as inputs and to sell outputs. Labor costs are lower in many other countries, and raw materials can be obtained more cheaply, due to lower labor costs. Companies seek the expertise found in other countries (e.g., the design skills of Italian automakers or the engineering skills of German companies). Customers are a resource that motivates companies to expand globally. To operate abroad, to obtain inputs or customers, an organization must understand differences in national cultures. A national culture is a set of economic, political, and social values in a particul ar nation. People who move to a foreign country feel confused and bewildered by the country’s customs and will have difficulty adapting. This is known as culture shock. Culture shock can include homes ickness, and citizens living abroad tend to buy national newspapers or frequent stores or restaurants similar to those in the home country. High Quality and Low Cost Technology is changing pe ople’s jobs and their work behavior. Quality management and its emphasis on continuous process improvement can increase employee stress as individuals find that performance expectations are constantly being increased. Process reengineering is eliminating millions of jobs and completely r eshaping the jobs of those who remain, and mass customization requires employees to learn new skills. The e-organization, with its heavy reliance on the Internet, increases potential workplace distractions. Managers need to be particularly alert to the negative effects of cyber-loafing. In addition, the e-org will rely less on individual decision making and more on virtual-team decision making. Probably the most significant influence of the e-organization is that it is rewriting the rules of communication. Traditional barriers are coming down, replaced by networks that cut across vertical levels and horizontal units. An understanding of work design can help manage rs design jobs that positively affect employee motivation. For instance, jobs that score high in motivating potential increase an employee’s control over key elements in his or her work. Therefore, jobs that offer autonomy, feedback, and similar complex task characteristics help to satisfy the individual goals of employees who desire greater control over their work. Of course, consistent with the soci al information-processing model, the perception that task characteristics are complex is probably more im portant in influencing an employee’s motivation than the objective task characteristics themselves. The key, then, is to provide employees with cues that suggest that their jobs score high on factors such as skill variety, task identity, autonomy, and feedback. Workspace design variables such as size, arra ngement, and privacy have implications for communication, status, socializing, satisfaction, a nd productivity. For instance, an enclosed office typically conveys more status than an open cubicle, so employees with a high need for status might find an enclosed office increases their job satisfaction. © Copyright Virtual University of Pakistan 14 Organizational Behavior - MGT502 VU Multiple Stakeholders Organizations expand globally to gain access to the valuable resources found throughout the world. Global expansion also provides an enlarged customer base and the opportunity for greater profit. As to the effect of culture on the decision where to expand, organizations tend to expand into countries with a similar national culture. This results in the least amount of conflict. The cost of expansion is an important factor and may ultimately drive the deci sion-making process. The ability to compromise in terms of culture is important. Or ganizations can make use of electronic communication media, global networks, and global teams to de velop and transmit a strong global culture. Technologies assist in the communication of norms and values while global networ ks (and teams) socialize managers into these values and norms. Transferring manage rs between subsidiaries enables them to internalize norms and values. Organizations need strong and clear top-management norms and values, communicated from the top down. Managing global organizations shares some of the challenges inherent in managing domestic operations. Differences in cultures add to the difficulty of managing global organizations. Given today’s increasingly global environment, most managers will need to enter the global environment where they will experience these additional challenges. Rapid Pace of Change The need for change has been im plied throughout this text. “A casual reflection on change should indicate that it encompasses almost all our concepts in the organizational behavior literature. Think about leadership, motivation, organizational environment, and roles. It is impossible to think about these and other concepts without inquiring about change.” If environments were perfectly static, if employ ees’ skills and abilities were always up to date and incapable of deteriorating, and if tomorrow were always exactly the same as today, organizational change would have little or no rele vance to managers. The real world, however, is turbulent, requiring organizations and their members to undergo dynamic change if they are to perform at competitive levels. Managers are the primary change agents in most or ganizations. By the decisions they make and their role-modeling behaviors, they shape the organiza tion’s change culture. For instance, management decisions related to structural design, cultural factors, and human resource policies largely determine the level of innovation within the organization. Similarl y, management decisions, policies, and practices will determine the degree to which the organizati on learns and adapts to changing environmental factors. We found that the existence of work stress, in a nd of itself, need not imply lower performance. The evidence indicates that stress can be either a pos itive or negative influence on employee performance. For many people, low to moderate amounts of stress enable them to perform their jobs better by increasing their work intensity, alertness, and ability to react. However, a high level of stress, or even a moderate amount sustained over a long period of tim e, eventually takes its toll and performance declines. The impact of stress on satisfaction is far more straightforward. Job- related tension tends to decrease general job satisfaction. Even though low to moderate levels of stress may improve job performance, employees find stress dissatisfying. © Copyright Virtual University of Pakistan 15 Organizational Behavior - MGT502 VU Lesson 4 UNDERSTANDING THE BASICS OF HUMAN BEHAVIOR Overview Organizational behavior is not a designated function or area. Rather, it is a perspective or set of tools that all managers can use to carry out their jobs more effectively. The ability to use the tools of organizational behaviotro understand behavior in organizations is one reason for studying this topic. A second reason ilearn how to apply these concepts, theories, and techniques to improve behavior in organizations sothat individuals, groups, and organizations can achieve their goals. Managers are challenged to fdew ways to motivate and coordinate employees to ensure that their goalsaligned with organizational goals. A manager supervises one or more subordin ates. Managers include CEOs, who head top- management teams of high-ranking executives respon isle for planning strategy to achieve top-level managers might be responsible for thousands of woers. But managers are also found throughout the lower levels of organizations and often are in chargoef just a few subordinates. All managers face the challenge of helping the organization achieve its goals. Knowledge of organizational behavior increases effectiveness by providing managers withset of tools. Managers can raise a worker’s self- esteem and increase worker productivity by changing the reward system or the job design. Understanding the Basics of Human Behavior An organization’s human resource policies and pr actices represent important forces for shaping employee behavior and attitudes. In this chapter, we specifically discussed th e influence of selection practices, training and development programs, perform ance evaluation systems, and the existence of a union. Human resource policies and practice influe nce organizational effectiveness. Human resource management includes: employee selection, traini ng performance management, and union-management relations and how they influence organizations effectiveness. Biographical Characteristics 1. Finding and analyzing the variables that have an impact on employee productivity, absence, turnover, and satisfaction is often complicated. 2. Many of the concepts—motivation, or power, politics or organizational culture—are hard to assess. 3. Other factors are more easily definable and readily available—data that can be obtained from an employee’s personnel file and would include characteristics such as: Biographical Characteristics • Age • Gender Age Gender • Marital status • Length of service, etc. Tenure Marital A. Age Status 1. The relationship between age and job performance is increasing in importance. • First, there is a widespread belief that job performance declines with increasing age. • Second, the workforce is aging; workers ove r 55 are the fastest growing sector of the workforce. 2. Employers’ perceptions are mixed. • They see a number of positive qualities that older workers bring to their jobs, specifically experience, judgment, a strong work ethic, and commitment to quality. • Older workers are also perceived as lacking flexibility and as being resistant to new technology. © Copyright Virtual University of Pakistan 16 Organizational Behavior - MGT502 VU • Some believe that the older you get, the less likely you are to quit your job. That conclusion is based on studies of the age-turnover relationship. 3. It is tempting to assume that age is also inversely related to absenteeism. • Most studies do show an inverse relationship, but close examination finds that the age- absence relationship is partially a function of whether the absence is avoidable or unavoidable. • In general, older employees have lower rates of avoidable absence. However, they have higher rates of unavoidable absence, probably due to their poorer health associated with aging and longer recovery periods when injured. 4. There is a widespread belief that productivity declines with age and that individual skills decay over time. • Reviews of the research find that age and job performance are unrelated. • This seems to be true for almost all types of jobs, professional and nonprofessional. 5. The relationship between age and job satisfaction is mixed. • Most studies indicate a positive association be tween age and satisfaction, at least up to age 60. • Other studies, however, have found a U-shap ed relationship. When professional and nonprofessional employees are separated, satis faction tends to continually increase among professionals as they age, whereas it falls among nonprofessionals during middle age and then rises again in the later years. B. Gender 1. There are few, if any, important differences between men and women that will affect their job performance, including the areas of: • Problem-solving • Analytical skills • Competitive drive • Motivation • Sociability • Learning ability 2. Women are more willing to conform to authorit y, and men are more aggressive and more likely than women to have expectations of success, but those differences are minor. 3. There is no evidence indicating that an employee’s gender affects job satisfaction. 4. There is a difference between men and women in terms of preference for work schedules. • Mothers of preschool children are more likely to prefer part-time work, flexible work schedules, and telecommuting in order to accommodate their family responsibilities. 5. Absence and turnover rates • Women’s quit rates are similar to men’s. • The research on absence consistently indicates that women have higher rates of absenteeism. • The logical explanation: cultural expectati on that has historically placed home and family responsibilities on the woman. C. Marital Status 1. There are not enough studies to draw any conclusions about the effect of marital status on job productivity. 2. Research consistently indicates that married employees have fewer absences, undergo fewer turnovers, and are more satisfied with their jobs than are their unmarried coworkers. 3. More research needs to be done on the other statuses besides single or married, such as divorce, domestic partnering, etc.. D. Tenure 1. The issue of the impact of job seniority on job performance has been subject to misconceptions and speculations. © Copyright Virtual University of Pakistan 17 Organizational Behavior - MGT502 VU 2. Extensive reviews of the seniority-productivity relationship have been conducted: • There is a positive relationship between tenure and job productivity. • There is a negative relationship between tenure to absence. • Tenure is also a potent variable in explaining turnover. • Tenure has consistently been found to be ne gatively related to turnover and has been suggested as one of the single best predictors of turnover. • The evidence indicates that tenure and satisfaction are positively related. Individual differences can be divided into personalit y and ability differences. Understanding the nature, determinants, and consequences of individual differec nes is essential for managing organizational behavior. An appreciation of the nature of individual differences is necessary to understand why people behave in certain ways in an organization. 1. Organizational outcomes predicted by personality include job satisfaction, work stress, and leadership effectiveness. Personality is not a eful predictor of organizational outcomes when there are strong situational constraints. Because personality tends to be stable over time, managers should not expect to change personality in the shor t run. Managers should accept workers’ personalities as they are and delep effective ways to deal with people. 2. Feelings, thoughts, attitudes, and behaviors in an organization are determined by the interaction of personality and situation. 3. The Big Five personality traits are extraversion (positive affectivity), neuroticism (negative affectivity), agreeableness, conscientiousness, and openness to experience. Other personality traits particularly relevant to organizationalhavior include locus of control, self-monitoring, self-esteem, Type A and Type B personality, and the needs for achievement, affiliation, and power. 4. In addition to possessing different personalities, workers also differ in their abilities, or capabilities. The two major types of ability are cognitive and physical ability. 5. Types of cognitive ability can be arranged in a hierarchy with general intelligence at the top. Specific types of cognitive include: verbal, nu merical, reasoning, deductive, ability to see relationships, memory, spatial, and perceptual. 6. There are two types of physical ability: motor skills (the ability to manipulate objects) and physical skills (a person’s fitness and strength). 7. Both nature and nurture contribute to determin ni physical and cognitive ability. A third, recently identified, ability isemotional intelligence. 8. In organizations, ability can be managed by selteicng individuals who have the abilities needed to accomplish tasks, placing workers injobs that capitalize on their lities, and training workers to enhance their ability levels. The Ability-Job Fit 1. Employee performance is enhanced when there is a high ability-job fit. 2. The specific intellectual or physical abilities required depend on the ability requirements of the job. For example, pilots need strong spatial-visualization abilities. 3. Directing attention at only the employee’s abiliti es, or only the ability requirements of the job, ignores the fact that employee performance depends on the interaction of the two. 4. When the fit is poor employees are likely to fail. 5. When the ability-job fit is out of sync because the employee has abilities that far exceed the requirements of the job, performance is likely to be adequate, but there will be organizational inefficiencies and possible declines in employee satisfaction. 6. Abilities significantly above those required can also reduce the employee’s job satisfaction when the employee’s desire to use his or her abilities is particularly strong and is frustrated by the limitations of the job. © Copyright Virtual University of Pakistan 18 Organizational Behavior - MGT502 VU Lesson 5 INDIVIDUAL DIFFERENCES: ABILITIES AND PERFORMANCE Overview Understanding and managing global organizational behavior begins with understanding the nature of the differences between national cultures and then tailoringan organization’s strategyand structure so that the organization can manage its activities as it expands abroad. To succeed, global companies must help their managers develop skills that allow them to work effectiely in foreign contexts and deal with differences in national culture. A global organization is an organization that produes or sells goods or services in more than one country. To exploit the advantages of the global environmet,nan organization has to manage activities at the raw-materials, intermediate-manufacturing, assembly, distribution, and final-customer stages. Methods an organization can use to control th ese activities include exporting, licensing, joint ventures, and wholly owned foreign subsidiaries. Global learning is learning how to manage suppliers and distributors and to respond to the needs of customers all over the world. There are three principal strategies that globalranizations can use to manage global expansion, each of which is associated with a type of globalorganizational structure: an international strategy and international divisional structure, and a trantional strategy and global matrix structure. The more complex the strategy, the greater is the needto integrate the global organizational structure, and the stronger the global culture needs to be. All the challenges associated with understanding adnmanaging individual and group behavior that are found at a domestic level, such as motivating and leading workers and managing groups and teams, are found at a global level. Expatriate maaers must adapt their management styles to suit differences in national culture if they are to be effective. Implications of globalization: Following are the implications of globalizations: – New organizational structures – Different forms of communication – More competition, change, mergers, downsizing, stress – Need more sens
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