A. Management Functions
1. All managers perform five management functions: planning, organizing,
commanding, coordinating, and controlling. Modern management scholars have
condensed these functions to four: planning, organizing, leading, and controlling.
2. Planning requires a manager to:
a. Define goals (organizational, departmental, worker levels).
b. Establish an overall strategy for achieving those goals.
c. Develop a comprehensive hierarchy of plans to integrate and coordinate activities.
3. Organizing requires a manager to:
a. Determine what tasks are to be done.
b. Who is to be assigned the tasks.
c. How the tasks are to be grouped.
d. Determine who reports to whom.
e. Determine where decisions are to be made (centralized/decentralized).
4. Leading requires a manager to:
a. Motivate employees.
b. Direct the activities of others.
c. Select the most effective communication channels.
d. Resolve conflicts among members.
5. Controlling requires a manager to:
a. Monitor the organization’s performance.
b. Compare actual performance with the previously set goals.
c. Correct significant deviations.
B. Management Roles (Exhibit 1-1)
1. Introduction
a. In the late 1960s, Henry Mintzberg studied five executives to determine what
managers did on their jobs. He concluded that managers perform ten different,
highly interrelated roles or sets of behaviors attributable to their jobs.
b. The ten roles can be grouped as being primarily concerned with interpersonal
relationships, the transfer of information, and decision making. (Exhibit 1-1)
2. Interpersonal Roles
a. Figurehead—duties that are ceremonial and symbolic in nature.
b. Leader—hire, train, motivate, and discipline employees.
c. Liaison—contact outsiders who provide the manager with information. These
may be individuals or groups inside or outside the organization.
3. Informational Roles
a. Monitor—collect information from organizations and institutions outside their
own.
b. Disseminator—a conduit to transmit information to organizational members.
c. Spokesperson—represent the organization to outsiders.
4. Decisional Roles
a. Entrepreneur—managers initiate and oversee new projects that will improve their
organization’s performance.
b. Disturbance handlers—take corrective action in response to unforeseen problems.
c. Resource allocators—responsible for allocating human, physical, and monetary
resources.
d. Negotiator role—discuss issues and bargains with other units to gain advantages
for their own unit.
C. Management Skills
1. Introduction
a. Researchers have identified a number of skills that differentiate effective from
ineffective managers.
2. Technical Skills
a. The ability to apply specialized knowledge or expertise. All jobs require some
specialized expertise, and many people develop their technical skills on the job.
3. Human Skills
a. Ability to work with, understand, and motivate other people, both individually
and in groups.
b. Many people are technically proficient but interpersonally incompetent.
4. Conceptual Skills
a. The mental ability to analyze and diagnose complex situations.
b. Decision making, for example, requires managers to spot problems, identify
alternatives that can correct them, evaluate those alternatives, and select the best
one.
D. Effective Versus Successful Managerial Activities (Exhibit 1-2)
1. Fred Luthans and his associates asked: Do managers who move up most quickly in an
organization do the same activities and with the same emphasis as managers who do
the best job? Surprisingly, those managers who were the most effective were not
necessarily promoted the fastest.
a. Luthans and his associates studied more than 450 managers. They found that all
managers engage in four managerial activities.
1) Traditional management
a.) Decision making, planning, and controlling.
b.) The average manager spent 32 percent of his or her time performing this
activity.
2) Communication
a.) Exchanging routine information and processing paperwork.
b.) The average manager spent 29 percent of his or her time performing this
activity.
3) Human resource management
a.) Motivating, disciplining, managing conflict, staffing, and training.
b.) The average manager spent 20 percent of his or her time performing this
activity.
4) Networking
a.) Socializing, politicking, and interacting with outsiders.
b.) The average manager spent 19 percent of his or her time performing this
activity.
2. Successful managers are defined as those who were promoted the fastest. (Exhibit
1-2)
a. Networking made the largest relative contribution to success.
b. Human resource management activities made the least relative contribution.
c. Effective managers—defined as quality and quantity of their performance, as well
as commitment to employees:
1) Communication made the largest relative contribution.
2) Networking made the least relative contribution.
3) Successful managers do not give the same emphasis to each of those activities
as do effective managers—it is almost the opposite of effective managers.
4) This finding challenges the historical assumption that promotions are based on
performance, vividly illustrating the importance that social and political skills
play in getting ahead in organizations.
3. Organizational Behavior: OB 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.
E. Organizational behavior is a field of study.
1. OB studies three determinants of behavior in organizations: individuals, groups, and
structure.
2. OB applies the knowledge gained about individuals, groups, and the effect of
structure on behavior in order to make organizations work more effectively.
3. OB is concerned with the study of what people do in an organization and how that
behavior affects the performance of the organization.
4. There is increasing agreement as to the components of OB, but there is still
considerable debate 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 and negotiation, and
work design.
II. Complementing Intuition with Systematic Study
A. Introduction
1. Each of us is a student of behavior.
2. A casual or commonsense approach to reading others can often lead to erroneous
predictions.
B. You can improve your predictive ability by replacing your intuitive opinions with a more
systematic approach.
C. The systematic approach used in this book will uncover important facts and relationships
and will provide a base from which more accurate predictions of behavior can be made.
D. Systematic Study of Behavior
1. Behavior, generally, is predictable if we know how the person perceived the situation
and what is important to him or her.
2. Looks at relationships.
3. Attempts to attribute causes.
4. Bases our conclusions on scientific evidence.
E. Evidence-Based Management (EBM)
1. Complements systematic study.
2. Argues for managers to make decisions on evidence.
3. But a vast majority of management decisions are made “on the fly.”
F. Intuition
1. Systematic study and EBM add to intuition, or those “gut feelings” about “why I do
what I do” and “what makes others tick.”
2. If we make all decisions with intuition or gut instinct, we’re likely working with
incomplete information.
3. Relying on intuition is made worse because we tend to overestimate the accuracy of
what we think we know.
4. We find a similar problem in chasing the business and popular media for management
wisdom. Information—like making an investment decision with only half the data.
G. Big Data
1. Big data—the extensive use of statistical compilation and analysis—didn’t become
possible until computers were sophisticated enough both to store and manipulate large
amounts of information.
2. Background: It’s difficult to believe now, but not long ago companies treated online
shopping as a virtual point-of-sale experience: shoppers browsed websites
anonymously, and sellers tracked sales data only on what customers bought.
3. Gradually, though, online retailers began to track and act upon information about
customer preferences that was uniquely available through the Internet shopping
experience, information was far superior to data gathered in simple store transactions.
4. This enabled them to create more targeted marketing strategies than ever before.
5. Current usage: The reasons for data analytics include: predicting any event; detecting
how much risk is incurred at any time; and preventing catastrophes large and small.
6. New trends: While accessibility to data increases organizations’ ability to predict
human behavioral trends, the use of big data for understanding, helping, and
managing people is relatively new but holds promise.
7. It is good news for the future of business that researchers, the media, and company
leaders have identified the potential of data-driven management and decision making.
8. Limitations: As technological capabilities for handling big data have increased, so
have issues of privacy. This is particularly true when data collection includes
surveillance instruments.
9. What do people think about big data when they are the source of the data?
Organizations using big data run the risk of offending the very people they are trying
to influence: employees and customers.
10. We must keep in mind that big data will always be limited in predicting behavior,
curtailing risk, and preventing catastrophes.
11. In contrast to the replicable results we can obtain in the sciences through big data
analytics, human behavior is often capricious and predicated on innumerable
variables. Otherwise, our decision making would have been taken over by artificial
intelligence by now!
12. We’re not advising that you throw your intuition, or all the business press, out the
window.
13. What we are advising is to use evidence as much as possible to inform your intuition
and experience.
III. Disciplines That Contribute to the OB Field
A. Introduction (Exhibit 1-3)
1. Organizational behavior is an applied behavioral science that is built upon
contributions from a number of behavioral disciplines.
2. The predominant areas are psychology, social psychology, sociology, and
anthropology.
3. Exhibit 1-3 overviews the major contributions to the study of organizational behavior.
B. Psychology
1. Psychology is the science that seeks to measure, explain, and sometimes change the
behavior of humans and other animals.
2. Early industrial/organizational psychologists concerned themselves with problems of
fatigue, boredom, and other factors relevant to working conditions that could impede
efficient work performance.
3. More recently, their contributions have been expanded to include learning,
perception, personality, emotions, training, leadership effectiveness, needs and
motivational forces, job satisfaction, decision making processes, performance
appraisals, attitude measurement, employee selection techniques, work design, and
job stress.
C. Social Psychology
1. Social psychology blends the concepts of psychology and sociology.
2. It focuses on the influence of people on one another.
3. Major area—how to implement it and how to reduce barriers to its acceptance.
D. Sociology
1. Sociologists study the social system in which individuals fill their roles; that is,
sociology studies people in relation to their fellow human beings.
2. Their greatest contribution to OB is through their study of groups in organizations,
particularly formal and complex organizations.
E. Anthropology
1. Anthropology is the study of societies to learn about human beings and their
activities.
2. Anthropologists work on cultures and environments; for instance, they have helped us
understand differences in fundamental values, attitudes, and behaviors among people
in different countries and within different organizations.
IV. There Are Few Absolutes in OB
A. Introduction
1. There are few, if any, simple and universal principles that explain organizational
behavior.
2. Human beings are complex. Because they are not alike, our ability to make simple,
accurate, and sweeping generalizations is limited.
3. That does not mean, of course, that we cannot offer reasonably accurate explanations
of human behavior or make valid predictions. It does mean, however, that OB
concepts must reflect situational, or contingency, conditions.
B. Contingency variables—situational factors are variables that moderate the relationship
between the independent and dependent variables.
C. Using general concepts and then altering their application to the particular situation
developed the science of OB.
D. Organizational behavior theories mirror the subject matter with which they deal.
V. Challenges and Opportunities for OB
A. Introduction (Exhibit 1-4)
1. There are many challenges and opportunities today for managers to use OB concepts.
2. Exhibit 1-4 details some of the types of options individuals may find offered to them
by organizations or for which they would like to negotiate.
B. Responding to Economic Pressure
1. Deep and prolonged recession in 2008 that spread world-wide.
2. In economic tough times, effective management is an asset.
3. During these times, the difference between good and bad management can be the
difference between profit and loss.
4. In good times, understanding how to reward, satisfy, and retain employees is at a
premium. In bad times, issues like stress, decision making, and coping come to the
forefront.
C. Responding to Globalization
1. Increased Foreign Assignments
a. You are increasingly likely to find yourself in a foreign assignment.
b. Once there, you’ll have to manage a workforce very different in needs,
aspirations, and attitudes from those you are used to back home.
2. Working With People From Different Cultures
a. Even in your own country, you’ll find yourself working with bosses, peers, and
other employees born and raised in different cultures.
b. Management practices need to be modified to reflect the values of the different
countries in which an organization operates.
3. Overseeing Movement of Jobs to Countries with Low-Cost Labor
a. Managers are under pressure to keep costs down to maintain competitiveness.
b. Moving jobs to low-labor cost places requires managers to deal with difficulties in
balancing the interests of their organization with responsibilities to the
communities in which they operate.
4. Adapting to Differing Cultural and Regulatory Norms
a. “Going global” for a business is not as simple as typing in an overseas e-mail
address, shipping goods off to a foreign port, or building facilities in other
countries.
b. To be successful, managers need to know the cultural practices of the workforce
in each country where they do business.
D. Workforce Demographics
1. People adapt to survive, and OB studies the way those adaptations affect individuals’
behavior.
2. As students of OB, we can investigate what factors lead employees to make various
choices and how their experiences affect their perceptions of their workplaces.
3. In turn, this can help us predict organizational outcomes.
4. Socioeconomic shifts have a profound effect on workforce demographics. The days
when women stayed home because it was expected are just a memory in some
cultures, while in others, women face significant barriers to entry into the workforce.
E. Managing Workforce Diversity
1. Workforce diversity is one of the most important and broad-based challenges
currently facing organizations.
2. Workforce diversity acknowledges a workforce of women and men; many racial and
ethnic groups; individuals with a variety of physical or psychological abilities; and
people who differ in age and sexual orientation.
3. Managing this diversity is a global concern.
F. Improving Customer Service
1. Service employees include technical support reps, fast food counter workers, waiters,
nurses, financial planners, and flight attendants.
2. Employee attitudes and behavior are associated with customer satisfaction.
G. Improving People Skills
1. People skills are essential to managerial effectiveness.
2. OB provides the concepts and theories that allow managers to predict employee
behavior in given situations.
H. Working in Networked Organizations
1. Networked organizations are becoming more pronounced.
2. Manager’s job is fundamentally different in networked organizations. Challenges of
motivating and leading “online” require different techniques.
I. Social Media
1. Social media is a difficult issue for today’s manager, presenting both a challenge and
an opportunity for OB. For instance, how much should HR look into a candidate’s
social media presence?
2. Once employees are on the job, many organizations have policies about accessing
social media at work – when, where, and for what purposes. But what about the
impact of social media on employee well-being?
J. Enhancing Employee Well-Being at Work
1. Employees are increasingly complaining that the line between work and non-work
has become blurred, creating conflict and stress.
2. Communication technology has provided a vehicle for working at any time or any
place.
3. Employees are working longer hours per week.
4. The lifestyles of families have changed, creating conflict: more dual career couples
and single parents find it hard to fulfill commitments to home, children, spouse,
parents, and friends.
5. Balancing work and life demands now surpasses job security as an employee priority.
K. Creating a Positive Work Environment
1. Positive organizational scholarship or behavior studies what is ‘good’ about
organizations.
2. This field of study focuses on employees’ strengths versus their limitations as
employees share situations in which they performed at their personal best.
L. Improving Ethical Behavior
1. Ethical dilemmas and ethical choices are situations in which an individual is
required to define right and wrong conduct.
2. Good ethical behavior is not so easily defined.
3. Organizations are distributing codes of ethics to guide employees through ethical
dilemmas.
4. Managers need to create an ethically healthy climate.
VI. Coming Attractions: Developing an OB Model
A. An Overview
1. A model is an abstraction of reality, a simplified representation of some real-world
phenomenon. (Exhibit 1-5)
2. It proposes three types of variables (inputs, processes, and outcomes) at three levels
of analysis (individual, group, and organizational).
3. The model proceeds from left to right, with inputs leading to processes, and
processes leading to outcomes.
4. Notice that the model also shows that outcomes can influence inputs in the future.
B. Inputs
1. Inputs are the variables like personality, group structure, and organizational culture
that lead to processes.
2. These variables set the stage for what will occur in an organization later.
3. Many are determined in advance of the employment relationship.
4. For example, individual diversity characteristics, personality, and values are shaped
by a combination of an individual’s genetic inheritance and childhood environment.
5. Group structure, roles, and team responsibilities are typically assigned immediately
before or after a group is formed.
6. Finally, organizational structure and culture are usually the result of years of
development and change as the organization adapts to its environment and builds up
customs and norms.
C. Processes
1. If inputs are like the nouns in organizational behavior, processes are like verbs.
2. Processes are actions that individuals, groups, and organizations engage in as a
result of inputs and that lead to certain outcomes.
3. At the group level, they include communication, leadership, power and politics, and
conflict and negotiation.
4. Finally, at the organizational level, processes include human resource management
and change practices.
D. Outcomes
1. Outcomes are the key variables that you want to explain or predict, and that are
affected by some other variables.
2. Scholars have emphasized individual-level outcomes like attitudes and satisfaction,
task performance, citizenship behavior, and withdrawal behavior.
3. At the group level, cohesion and functioning are the dependent variables.
4. Finally, at the organizational level, we look at overall profitability and survival.
Because these outcomes will be covered in all the chapters, we’ll briefly discuss
each here so you can understand what the “goal” of OB will be.
E. Attitudes and stress
1. Employee attitudes are the evaluations employees make, ranging from positive to
negative, about objects, people, or events.
2. For example, the statement, “I really think my job is great,” is a positive job
attitude, and “My job is boring and tedious” is a negative job attitude.
3. Stress is an unpleasant psychological process that occurs in response to
environmental pressures.
4. Some people might think that influencing employee attitudes and stress are purely
soft stuff, and not the business of serious managers, but as we will show, attitudes
often have behavioral consequences that directly relate to organizational
effectiveness.
5. The belief that satisfied employees are more productive than dissatisfied employees
has been a basic tenet among managers for years, though only now has research
begun to support it.
6. Ample evidence shows that employees who are more satisfied and treated fairly are
more willing to engage in the above-and-beyond citizenship behavior so vital in the
contemporary business environment.
F.Task performance
1. The combination of effectiveness and efficiency at doing your core job tasks is a
reflection of your level of task performance.
2. If we think about the job of a factory worker, task performance could be measured
by the number and quality of products produced in an hour.
3. The task performance of a teacher would be the level of education that students
obtain.
4. The task performance of a consultant might be measured by the timeliness and
quality of the presentations offered to the client firm.
5. All these types of performance relate to the core duties and responsibilities of a job
and are often directly related to the functions listed on a formal job description.
6. Obviously task performance is the most important human output contributing to
organizational effectiveness, so in every chapter we devote considerable time to
detailing how task performance is affected by the topic in question.
G. Organizational Citizenship Behavior (OCB)
1. The discretionary behavior that is not part of an employee’s formal job
requirements, and that contributes to the psychological and social environment of
the workplace, is called organizational citizenship behavior.
2. Successful organizations need employees who will do more than their usual job
duties—who will provide performance beyond expectations.
3. In today’s dynamic workplace, where tasks are increasingly performed by teams
and flexibility is critical, employees who engage in “good citizenship” behaviors
help others on their team, volunteer for extra work, avoid unnecessary conflicts,
respect the spirit as well as the letter of rules and regulations, and gracefully tolerate
occasional work-related impositions and nuisances.
4. Organizations want and need employees who will do things that aren’t in any job
description.
5. Evidence indicates organizations that have such employees outperform those that
don’t.
6. As a result, OB is concerned with citizenship behavior as an outcome variable.
H. Withdrawal behavior
1. We’ve already mentioned behavior that goes above and beyond task requirements,
but what about behavior that in some way is below task requirements?
2. Withdrawal behavior is the set of actions that employees take to separate
themselves from the organization.
3. There are many forms of withdrawal, ranging from showing up late or failing to
attend meetings to absenteeism and turnover.
4. Employee withdrawal can have a very negative effect on an organization.
a. The cost of employee turnover alone has been estimated to run into the
thousands of dollars, even for entry-level positions.
5. Absenteeism also costs organizations significant amounts of money and time every
year.
a. For instance, a recent survey found the average direct cost to U.S. employers of
unscheduled absences is 8.7 percent of payroll.
b. In Sweden, an average of 10 percent of the country’s workforce is on sick leave
at any given time.
6. It’s obviously difficult for an organization to operate smoothly and attain its
objectives if employees fail to report to their jobs.
a. The work flow is disrupted, and important decisions may be delayed. In
organizations that rely heavily on assembly-line production, absenteeism can be
considerably more than a disruption; it can drastically reduce the quality of
output or even shut down the facility.
b. Levels of absenteeism beyond the normal range have a direct impact on any
organization’s effectiveness and efficiency.
c. A high rate of turnover can also disrupt the efficient running of an organization
when knowledgeable and experienced personnel leave and replacements must
be found to assume positions of responsibility.
7. All organizations, of course, have some turnover.
a. The U.S. national turnover rate in 2014 averaged about 40 percent, often the
average is around 3 percent per month.
b. If the “right” people are leaving the organization—the marginal and
submarginal employees—turnover can actually be positive.
c. It can create an opportunity to replace an underperforming individual with
someone who has higher skills or motivation, open up increased opportunities
for promotions, and bring new and fresh ideas to the organization.
d. In today’s changing world of work, reasonable levels of employee-initiated
turnover improve organizational flexibility and employee independence, and
they can lessen the need for management-initiated layoffs.
8. So why do employees withdraw from work?
a. As we will show later in the book, reasons include negative job attitudes,
emotions and moods, and negative interactions with coworkers and supervisors.
I. Group cohesion
1. Although many outcomes in our model can be conceptualized as individual level
phenomena, some relate to how groups operate.
2. Group cohesion is the extent to which members of a group support and validate one
another at work.
a. In other words, a cohesive group is one that sticks together.
When employees trust one another, seek common goals, and work together to achieve these
common ends, the group is cohesive; when employees are divided