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Chapter 7
MOTIVATION
Learning Objectives
After studying this chapter, you should be able to:
2. explore how motivation changes as we apply those ideas in an international
setting.
3. distinguish between the various content theories and process theories.
General Teaching Suggestions
Have an open discussion on various factors that motivate your students. Identify various
motivators and examine the diversity. Discussions should lead to the theories that ensue
in the chapter.
Opening Case Discussion Guide
The case describes the story of Richard Branson’s vision of motivating his employees
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CHAPTER OUTLINE: KEY CONCEPTS AND TERMS
Sections I through V of Chapter 7
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I. MOTIVATION COMPOSITION
1. Key Concepts
Motivation is an internal state or condition that activates a person’s behavior and
2. Key Terms
• Attribution error – Occurs when people try to determine cause and effect in
II. CONTENT (NEED) THEORIES OF MOTIVATION
1. Key Concepts
This section examines four content theories of motivation.
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• Needs Theory: Outlined by psychologist Abraham Maslow in the 1950s, this
theory condenses the innumerable human needs into a hierarchy of five basic
needs. Maslow argued that a person’s behavior is motivated primarily by the
• Alderfer’s ERG Theory: The ERG theory groups human needs into three broad
categories: existence, relatedness, and growth. The ERG theory argues that an
employee’s behavior is motivated simultaneously by more than one need level.
• Motivation–Hygiene Theory: Frederick Herzberg sought to examine extrinsic
2. Key Terms
• Needs – Represent things or conditions that people would like to have.
• Piecework – A type of work in which a worker is paid a fixed ‘‘piece rate’’ for
III. PROCESS THEORIES OF MOTIVATION
1. Key Concepts
• Expectancy Theory
Expectancy theory is based on the idea that work effort is directed toward
behaviors that people believe will lead to desired outcomes. An individual’s
effort level depends on three factors: effort-to-performance (E->P) expectancy,
performance-to-outcome (P->O) expectancy, and outcome valences (V).
• Equity Theory
Equity theory explains how people develop perceptions of fairness in the
distribution and exchange of resources. Four main elements of equity theory:
i. Outcome/Input Ratio: The outcome/input ratio is the value of the
outcomes received divided by the value of inputs provided in an
exchange relationship.
ii. Comparison Other: Equity theory states that we compare our situations
with a “comparison other.”
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iii. Equity Evaluation: We form an equity evaluation after determining our
own outcome/input ratio and comparing this with the comparison other’s
ratio.
iv. Consequences of Inequity: The outcome of the evaluation that inequity
exists is that employees will be motivated to take some action.
• Goal Setting
Goal-setting is the process of motivating employees and clarifying their role
perceptions by establishing performance objectives. Goal setting potentially
improves employee performance in two ways:
2. Key Terms
• Valence – The anticipated satisfaction or dissatisfaction that an individual feels
about an outcome.
• Iron Rice Bowl – In China, the concept of the state meeting all worker’s needs:
• Distributive justice – Asserts that inequality is acceptable if employees have fair
IV. EMPLOYEE INTERESTS
1. Key Concepts:
Performance is closely related to motivation, which itself is based on ability,
values, and life interests. Life interests indicate whether an employee is likely to
V. SUMMARY
1. Key Concepts:
• One of the main implications of content motivation theories is that different
people have different needs at different times.
• To motivate employees (or anyone else, for that matter) we need to learn what
their needs are.
INTERNATIONAL MANAGEMENT Chapter 7: Motivation
• Meeting employee needs, setting useful goals, and providing employees with
work they find interesting and rewarding can all help to create a very motivated
workforce.
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END-OF-CHAPTER GUIDE
* MANAGERIAL GUIDELINES
* OPENING VIGNETTE DISCUSSION QUESTIONS
MANAGERIAL GUIDELINES
1. Recognize employees’ individual needs and job interests.
2. Give goals and clear feedback to employees.
4. Link rewards and performance (expectancy).
5. Check the system for equity.
6. Improve communication.
8. Facilitate interesting work.
10. Find out life interests of each employee.
11. On an ongoing basis, look carefully at the extrinsic motivators you have at your
disposal and use your knowledge of your team’s values and interests.
12. Motivation can differ with culture and situation.
14. Link firm mission with motivation system.
15. The motivation or reward system needs to fit the job type.
OPENING VIGNETTE DISCUSSION QUESTIONS
1. What motivates you? When did you feel most motivated to do something
voluntarily? Think about previous jobs or tasks, or a sport or hobby—what was
the need that was pushing you to work as hard as you did?
Student answers will vary.
2. Apart from rewards (or punishments), can you think of other things that have
motivated you to work hard?
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DISCUSSION QUESTIONS
1. Think about your motivation in this class. Which motivation theory best explains
it?
Student responses may vary.
2. Motivation is a function of your ability and tools to achieve a certain task, your
goals, needs, and interest in the task. Think of a situation in which you were
highly motivated. Assess that situation in terms of those four key items. Were all
four working well for you?
Student responses may vary.
3. Have you ever been in a situation in which your goals and needs were fulfilled by
a job, and you had the right ability and tools but little interest in the work?
Describe that situation and how you fixed it.
This is a good question to identify what really motivates an employee at work.
4. How upset would you be if you discovered that your friend and coworker, doing
essentially the same work, was making more money than you? Suppose that your
friend worked for another company. Would you have the same feeling?
5. Why do you think expectancy theory may be most useful in explaining the
behavior of major league baseball players? How about highly paid surgeons?
6. In some Latin American countries, employees believe that pay levels should be
partly determined by family needs. Their unions insist that those with more
children should be paid more, particularly from multinational firms. Discuss this
idea in the context of the equity theory model. Do you agree? What if you were an
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international manager of an MNC suddenly confronted with this demand by
several workers—what would you do?
Equity theory explains how people develop perceptions of fairness in the
IN-CLASS EXERCISES
1. Equity sensitivity exercise.
Measuring Your Equity Sensitivity
This self-assessment is designed to help you to estimate your level of equity
sensitivity.
2. The salary hikes of professional athletes has created a sense of inequity and
influenced motivation levels of players, according to the equity theory. Base your
answers on this premise. Upon signing a new contract, will players feel the need
to raise their performances to justify their large salaries, consistent with equity
predictions? Or will players’ motivation levels be reduced by contracts that are
guaranteed regardless of how well they play, reflecting the predictions of
TAKE-HOME EXERCISES
1. Consider the demand of your Chinese managers for salary at par with your
European managers, instead of the $12000 which is a substantial amount in
purchasing power parity in China.
Notwithstanding the fact that $12000 is a substantial amount in terms of
2. The “What Workers Want” survey in the text will help you find your views on
what employees want from their jobs: Is it higher salaries followed by good
working conditions or other factors?
3. Think of a time when you were really motivated in performing a certain task
(such as a sport or a hobby). You felt that you really wanted to wake up early to
get at that task. Describe reasons why you felt so motivated. Do you feel this way
about your current school work or job? Why or why not?
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SHORT CASE QUESTIONS
1. How do you think Lincoln Electric would have to adjust its system if they opened
a plant in China?
The cultural factors prevalent in China should be considered in the
2. Would the result of Lincoln Electric’s efforts have been different if it had tried to
introduce its system in a desperately poor domain, such as the Sudan, rather than
in a relatively wealthy nation, such as Mexico?
As mentioned in the case, some of the strategies like piecework could work well in
3. Why do you think more firms have not tried to copy a system like Lincoln
Electric’s?
Student answers may vary. Factors that influence motivation are different across