The Nature of Management What is expected of a manager? If organizations are to be successful in meeting these challenges, management must lead the way. With effective management, contemporary companies can accomplish a great deal toward becoming more competitive in the global environment. On the other hand, ineffective management dooms the organization to mediocrity and sometimes outright failure. Because of this, we turn now to a look at the nature of management. However, we want to point out that even though our focus is on managers, what we discuss is also relevant to the actions of nonmanagers. On the basis of this examination, we should be ready to begin our analysis of what managers can learn from the behavioral sciences to improve their effectiveness in a competitive environment. What Is Management? Many years ago, Mary Parker Follett defined management as “the art of getting things done through people.” A manager coordinates and oversees the work of others to accomplish ends they could not attain alone. Today this definition has been broadened. Management is generally defined as the process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational objectives. In a broad sense, then, the task of management is to facilitate the organization’s effectiveness and long-term goal attainment by coordinating and efficiently utilizing available resources. Based on this definition, it is clear that the topics of effectively managing individuals, groups, or organizational systems is relevant to anyone who must work with others to accomplish organizational objectives. Management exists in virtually all goal-seeking organizations, whether they are public or private, large or small, profit-making or not-for-profit, socialist or capitalist. For many, the mark of an excellent company or organization is the quality of its managers. Managerial Responsibilities An important question often raised about managers is: What responsibilities do managers have in organizations? According to our definition, managers are involved in planning, organizing, directing, and controlling. Managers have described their responsibilities that can be aggregated into nine major types of activities. These include: Long-range planning . Managers occupying executive positions are frequently involved in strategic planning and development. Controlling . Managers evaluate and take corrective action concerning the allocation and use of human, financial, and material resources. Environmental scanning . Managers must continually watch for changes in the business environment and monitor business indicators such as returns on equity or investment, economic indicators, business cycles, and so forth. Supervision . Managers continually oversee the work of their subordinates. Coordinating . Managers often must coordinate the work of others both inside the work unit and out. Customer relations and marketing . Certain managers are involved in direct contact with customers and potential customers. Community relations . Contact must be maintained and nurtured with representatives from various constituencies outside the company, including state and federal agencies, local civic groups, and suppliers. Internal consulting. Some managers make use of their technical expertise to solve internal problems, acting as inside consultants for organizational change and development. Monitoring products and services . Managers get involved in planning, scheduling, and monitoring the design, development, production, and delivery of the organization’s products and services. As we shall see, not every manager engages in all of these activities. Rather, different managers serve different roles and carry different responsibilities, depending upon where they are in the organizational hierarchy. We will begin by looking at several of the variations in managerial work. Variations in Managerial Work Although each manager may have a diverse set of responsibilities, including those mentioned above, the amount of time spent on each activity and the importance of that activity will vary considerably. The two most salient perceptions of a manager are (1) the manager’s level in the organizational hierarchy and (2) the type of department or function for which they are responsible. Let us briefly consider each of these. Management by Level. We can distinguish three general levels of management: executives, middle management , and first-line management (see ). Executive managers are at the top of the hierarchy and are responsible for the entire organization, especially its strategic direction. Middle managers, who are at the middle of the hierarchy, are responsible for major departments and may supervise other lower-level managers. Finally, first-line managers supervise rank-and-file employees and carry out day-to-day activities within departments. Levels in the Management Hierarchy (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) shows differences in managerial activities by hierarchical level. Senior executives will devote more of their time to conceptual issues, while first-line managers will concentrate their efforts on technical issues. For example, top managers rate high on such activities as long-range planning , monitoring business indicators, coordinating, and internal consulting. Lower-level managers, by contrast, rate high on supervising because their responsibility is to accomplish tasks through rank-and-file employees. Middle managers rate near the middle for all activities. We can distinguish three types of managerial skills: R. Katz, “Skills of an Effective Administrator,” Harvard Business Review, September-October 1974, pp. 34–56. Technical skills . Managers must have the ability to use the tools, procedures, and techniques of their special areas. An accountant must have expertise in accounting principles, whereas a production manager must know operations management. These skills are the mechanics of the job. Human relations skills . Human relations skills involve the ability to work with people and understand employee motivation and group processes. These skills allow the manager to become involved with and lead his or her group. Conceptual skills . These skills represent a manager’s ability to organize and analyze information in order to improve organizational performance. They include the ability to see the organization as a whole and to understand how various parts fit together to work as an integrated unit. These skills are required to coordinate the departments and divisions successfully so that the entire organization can pull together. As shown in , different levels of these skills are required at different stages of the managerial hierarchy. That is, success in executive positions requires far more conceptual skill and less use of technical skills in most (but not all) situations, whereas first-line managers generally require more technical skills and fewer conceptual skills. Note, however, that human or people skills remain important for success at all three levels in the hierarchy. Difference in Skills Required for Successful Management According to Level in the Hierarchy (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) Management by Department or Function. In addition to level in the hierarchy, managerial responsibilities also differ with respect to the type of department or function. There are differences found for quality assurance, manufacturing, marketing, accounting and finance, and human resource management departments. For instance, manufacturing department managers will concentrate their efforts on products and services, controlling, and supervising. Marketing managers, in comparison, focus less on planning, coordinating, and consulting but more on customer relations and external contact. Managers in both accounting and human resource management departments rate high on long-range planning, but will spend less time on the organization’s products and service offerings. Managers in accounting and finance are also concerned with controlling and with monitoring performance indicators, while human resource managers provide consulting expertise, coordination, and external contacts. The emphasis on and intensity of managerial activities varies considerably by the department the manager is assigned to. At a personal level, knowing that the mix of conceptual, human, and technical skills changes over time and that different functional areas require different levels of specific management activities can serve at least two important functions. First, if you choose to become a manager, knowing that the mix of skills changes over time can help you avoid a common complaint that often young employees want to think and act like a CEO before they have mastered being a first-line supervisor. Second, knowing the different mix of management activities by functional area can facilitate your selection of an area or areas that best match your skills and interests. In many firms, managers are rotated through departments as they move up in the hierarchy. In this way they obtain a well-rounded perspective on the responsibilities of the various departments. In their day-to-day tasks they must emphasize the right activities for their departments and their managerial levels. Knowing what types of activity to emphasize is the core of the manager’s job. In any event, we shall return to this issue when we address the nature of individual differences in the next chapter. The Twenty-First Century Manager We discussed above many of the changes and challenges facing organizations in the twenty-first century. Because of changes such as these, the managers and executives of tomorrow will have to change their approaches to their jobs if they are to succeed in meeting the new challenges. In fact, their profiles may even look somewhat different than they often do today. Consider the five skills that Fast Company predicts that successful future managers, compared to the senior manager in the year 2000, will need. The five skills are: the ability to think of new solutions, being comfortable with chaos, an understanding of technology, high emotional intelligence, and the ability to work with people and technology together. For the past several decades, executive profiles have typically looked like this: The person started out in finance with an undergraduate degree in accounting, then methodically worked their way up through the company from the controller’s office in a division, to running that division, to the top job. The military background shows. They are used to giving orders—and to having them obeyed. As head of the philanthropic efforts, they are important in the community. However, the first time the individual traveled overseas on business was as chief executive. Computers, which became ubiquitous, make them nervous. J. Lindzon, “Five Skills That You’ll Need to Lead the Company of the Future,” Fast Company, May 18, 2017, https://www.fastcompany.com/40420957/five-skills-youll-need-to-lead-the-company-of-the-future; A. Bennett, “Going Global: The Chief Executives in the Year 2000 Are Likely to Have Had Much Foreign Experience,” Wall Street Journal, February 27, 1989, p. A–4. Now compare this with predictions about what a twenty-first-century executive will look like: Their undergraduate degree might be in French literature, but they also have a joint MBA/engineering degree. The individual started in research and was quickly picked out as a potential CEO. They are able to think creatively and thrives in a chaotic environment. They zigzagged from research to marketing to finance, are comfortable with technology and people, and have a high degree of emotional intelligence. The executive proved valuable in Brazil by turning around a failing joint venture. This person speaks multiple languages and is on a first-name basis with commerce ministers in half a dozen countries. Clearly, the future holds considerable excitement and promise for future managers and executives who are properly prepared to meet the challenges. How do we prepare them? One study suggested that the manager of the future must be able to fill at least the following four roles: Jacob Morgan, “5 Qualities of the Modern Manager,” Forbes, July 23, 2013, https://www.forbes.com/sites/jacobmorgan/2013/07/23/5-must-have-qualities-of-the-modern-manager/#644a2b6a3a0b. Global strategist. Executives of the future must understand world markets and think internationally. They must have a capacity to identify unique business opportunities and then move quickly to exploit them. Master of technology. Executives and managers of the future must be able to get the most out of emerging technologies, whether these technologies are in manufacturing, communications, marketing, or other areas. Leadership that embraces vulnerability. The successful executive of the future will understand how to cut through red tape to get a job done, how to build bridges with key people from highly divergent backgrounds and points of view, and how to make coalitions and joint ventures work. Follow-from-the-front motivator. Finally, the executive of tomorrow must understand group dynamics and how to counsel, coach, and command work teams and individuals so they perform at their best. Future organizations will place greater emphasis on teams and coordinated efforts, requiring managers to understand participative management techniques. Great communicator. To this list of four, we would add that managers of the future must be great communicators. They must be able to communicate effectively with an increasingly diverse set of employees as well as customers, suppliers, and community and government leaders. Whether these predictions are completely accurate is difficult to know. Suffice it to say that most futurists agree that the organizational world of the twenty-first century will likely resemble, to some extent, the portrait described here. The task for future managers, then, is to attempt to develop these requisite skills to the extent possible so they will be ready for the challenges of the next decade. Define management. How does the nature of management change according to one’s level and function in the organization? What is expected of a manager? Management is the process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational goals. Managerial responsibilities include long-range planning, controlling, environmental scanning, supervision, coordination, customer relations, community relations, internal consulting, and monitoring of products and services. These responsibilities differ by level in the organizational hierarchy and by department or function. The twenty-first-century manager will differ from most current managers in four ways. In essence, they will be a global strategist, a master of technology, a good politician, and a premier leader-motivator. Executive managers Generally, a team of individuals at the highest level of management of an organization. First-line management The level of management directly managing nonmanagerial employees. Long-range planning A process of setting goals that outlines the path for the company's future. Management The process of planning, organizing, directing, and controlling the activities of employees in combination with other resources to accomplish organizational objectives. Middle management The managers in an organization at a level just below that of senior executives.

Business


A Model of Organizational Behavior and Management What is the role of the behavioral sciences in management and organizations? A major responsibility—perhaps the major responsibility—of managers is to make organizations operate effectively. Bringing about effective performance, however, is no easy task. As Nadler and Tushman note: Understanding one individual’s behavior is challenging in and of itself; understanding a group that’s made up of different individuals and comprehending the many relationships among those individuals is even more complex. Imagine, then, the mind-boggling complexity of a large organization made up of thousands of individuals and hundreds of groups with myriad relationships among these individuals and groups. D. Nadler and M. Tushman, “A Model for Diagnosing Organizational Behavior,” Organizational Dynamics, 1980, p. 35. Despite this difficulty, however, organizations must be managed. Nadler and Tushman continue: Ultimately the organization’s work gets done through people, individually or collectively, on their own or in collaboration with technology. Therefore, the management of organizational behavior is central to the management task—a task that involves the capacity to understand the behavior patterns of individuals, groups, and organizations, to predict what behavioral responses will be elicited by various managerial actions, and finally to use this understanding and these predictions to achieve control . Ibid. The work of society is accomplished largely through organizations, and the role of management is to see to it that organizations perform this work. Without it, the wheels of society would soon grind to a halt. What Is Organizational Behavior? The study of the behavior of people in organizations is typically referred to as organizational behavior . Here, the focus is on applying what we can learn from the social and behavioral sciences so we can better understand and predict human behavior at work. We examine such behavior on three levels—the individual, the group, and the organization as a whole. In all three cases, we seek to learn more about what causes people—individually or collectively—to behave as they do in organizational settings. What motivates people? What makes some employees leaders and others not? Why do groups often work in opposition to their employer? How do organizations respond to changes in their external environments? How do people communicate and make decisions? Questions such as these constitute the domain of organizational behavior and are the focus of this course. To a large extent, we can apply what has been learned from psychology, sociology, and cultural anthropology. In addition, we can learn from economics and political science. All of these disciplines have something to say about life in organizations. However, what sets organizational behavior apart is its particular focus on the organization (not the discipline) in organizational analysis (see ). Thus, if we wish to examine a problem of employee motivation, for example, we can draw upon economic theories of wage structures in the workplace. At the same time, we can also draw on the psychological theories of motivation and incentives as they relate to work. We can bring in sociological treatments of social forces on behavior, and we can make use of anthropological studies of cultural influences on individual performance. It is this conceptual richness that establishes organizational behavior as a unique applied discipline. And throughout our analyses, we are continually concerned with the implications of what we learn for the quality of working life and organizational performance. We always look for management implications so the managers of the future can develop more humane and more competitive organizations for the future. Origins of Organizational Behavior (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) For convenience, we often differentiate between micro- and macro-organizational behavior. Micro-organizational behavior is primarily concerned with the behavior of individuals and groups, while macro-organizational behavior (also referred to as organization theory ) is concerned with organization-wide issues, such as organization design and the relations between an organization and its environment. Although there are times when this distinction is helpful, it is always important to remember that in most instances we learn the most when we take a comprehensive view of organizational behavior and integrate these two perspectives. That is, issues such as organization structure can influence employee motivation. Hence, by keeping these two realms separate we lose valuable information that can help us better understand how to manage organizations. Invo new Hire Xinyu Liu was hired as the studio as a designer at Invo, a Massachusetts-based firm. Prior to joining Invo, she was a user experience researcher at Samsung, where she investigated how to apply future technologies in everyday living. Changing behavior for good was a key component of the R&D work, leveraging invisible sensing tech, devising emotional effects, and crafting just-in-time graphic communication. Her wide-ranging skills, from analyzing social behavior to 3D modeling to electronics to UI design, are well-suited for the multi-domain projects at Invo. As part of the employee selection process, the hiring managers at Invo needed to recognize that their employees come from various backgrounds and have varying abilities and skills, differing motivational levels, and different ambitions. Within the organizational context, they needed to consider how Xinyu would fit on the team in the areas of communication, decision-making, and leadership, and how she would handle power and organizational politics as she carried out her responsibilities. (Credit: Juhan Sonin/ flickr/ Attribution 2.0 Generic (CC BY 2.0)) Building Blocks of Organizations Understanding the behavior of people at work is fundamental to the effective management of an organization. Obviously, a number of factors come together to determine this behavior and its organizational consequences. In order to understand the origins and characteristics of these factors, it is necessary to have a model that organizes and simplifies the variables involved. We offer such a model here in the hope that it will bring some order to the study of this subject. The model can be considered in two parts (see ). A Model of Management and Organizational Behavior (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) The first part of the model is the simple recognition of organizational inputs and outcomes. That is, organizations receive inputs from the external environment in the form of capital, raw materials, labor, community or government support, and so forth. In addition, organizations experience or produce certain outcomes, including (1) organizational goal attainment, (2) group performance and effectiveness, and (3) individual performance and effectiveness. Thus, organizations and the people in them exist in a constant state of flux, receiving and transforming inputs from the environment and returning those transformed inputs in the form of finished goods and services, return on stockholders’ equity, salaries that are paid to employees, and so forth. It is, in short, a dynamic system. The second aspect of the model is the organization itself and all of its parts. One way to understand the complexity of organizations is to think of them simply as a set of building blocks, including: Individuals and groups. Organizations are collectives of individuals and groups working to pursue common objectives. Their members come from various backgrounds and have varying abilities and skills, differing motivational levels, and different ambitions. Within the organizational context, these people must communicate, make decisions, show leadership, and handle power and organizational politics as they carry out their assigned activities. Tasks and technology. In addition to variations among individuals and groups, we must recognize variations in the technology of the workplace. That is, how does the work actually get done? Technology includes both the actual design of jobs and the tools and techniques used in manufacture (e.g., robotics and expert systems). Organization design. Putting together these factors—individuals and groups and tasks—is the subject of organization design . That is, how do we structure an organization so it effectively coordinates and controls employee behavior to facilitate performance? Organizational processes. In addition to people, machines, and structure, we must recognize a series of organizational processes , such as leadership, communication, decision-making, power and politics, and so forth. The processes largely determine the nature and quality of interpersonal and intergroup relations within the workplace and, as such, influence ultimate organizational performance. Management. Finally, the glue that holds these building blocks together is the character of management. Throughout this text, we shall see numerous examples of how the degree of managerial effectiveness and prowess have determined the success or failure of a venture. We shall take a managerial view throughout our survey of organizational behavior. There have been many attempts to provide a differentiation between leadership and management over time. While they are not the same thing, they are necessarily linked, and complementary. Any effort to separate the two is likely to cause more problems than it solves and as business evolved the content of leadership and management has changed. The emergence of the “knowledge worker,” and the profound differences that this causes the way business is organized. With the rise of the knowledge worker, one does not ‘manage’ people, and instead the task is to lead people and the goal is to make productive the specific strengths and knowledge of every individual. These five variables, then, will constitute the primary ingredients of this book. We shall proceed sequentially, beginning with individual behavior and moving to group and intergroup behavior and finally to organization design and structure. On the basis of this, we will turn to a consideration of several of the more important organizational processes. Finally, we will look to the future and examine ways that organizations can continue to develop and improve their workforces and the organization as a whole. Throughout, the roles of technology and management will be considered. Also, throughout, we will blend theory with research and practice. Discuss the role of management in the larger societal context. What do you think the managers of the future will be like? Identify what you think are the critical issues facing contemporary management. Explain. What is the role of the behavioral sciences in management and organizations? Organizational behavior is the study of people in organizations. It can be studied on a micro level, which focuses on individual or group behavior, or on a macro level, which focuses on organization-wide actions and events. A model of organizational behavior is presented, consisting of five building blocks: individuals and groups, tasks and technology, organization design, organizational processes, and management. Chapter Review Questions Define work . What functions does work serve in modern society? Describe the extent and nature of the challenges facing the workplace in the next decade. What can be done about these challenges? Define management. How does the nature of management change according to one’s level and function in the organization? Discuss the role of management in the larger societal context. What do you think the managers of the future will be like? Identify what you think are the critical issues facing contemporary management. Explain. Critical Thinking Case New Management Challenges for the New Age Today’s news is littered with scandals, new allegations of sexual assault, and tragedy. Since 2017 and the #metoo movement, stemming from the Harvey Weinstein scandal, more and more public figures have been put into the spotlight to defend themselves against allegations from women around the globe. Not only publicly, but privately in companies around the world, there have been firings and investigations into misconduct from coworkers, managers, and CEOs. It is a relevant topic that is getting long-overdue publicity and encouraging more men and women to come forward to discuss openly rather than hide the events and injustices of the past. Other events showcase the tumultuous and on-edge society we are living in, such as the Charlottesville, VA, attack that left one dead and 19 injured when a person drove a car through a crowd of protestors during a White nationalist gathering. With unanticipated events on a daily business, it is important for companies to take a stand against racial hatred and harassment of any kind, and to have firm policies when such events occur. Take Netflix, for example, who in July 2018 fired their chief communications officer for saying the “N-word” in full form. This event occurred during an internal meeting in which the speaker was not directing the slur at anyone specific, but claimed it was being made as an emphatic point about offensive words in comedy programming. The “Netflix way,” the culture that is built around radical candor and transparency, was put to the test during this occurrence. The offender, Jonathan Friedland, attempted to apologize for his misdeed, hoping it would fade away and his apology would be accepted. However, it didn’t work that way; instead, the anger was palpable between coworkers and eventually led to the firing of Friedland after a few months of inaction. Netflixers are given a high level of freedom and responsibility within their “Netflix way” culture. Blunt feedback is encouraged, and trust and discretion are the ultimate gatekeeper, as employees have access to sensitive information and are ultimately trusted for how they expense items and take vacation time. In the insanely fast-paced streaming-services industry, it is hard to keep this culture at a premium, but it is imperative for the success of the company overall. “As you scale a company to become bigger and bigger, how do you scale that kind of culture?” said Colin Estep, a former senior engineer who left voluntarily in 2016. “I don’t know that we ever had a good answer.” In order to keep up, sometimes the company is seen as harsh in their tactics to keep the best of the best. “I think we’re transparent to a fault in our culture and that can come across as cutthroat,” said Walta Nemariam, an employee in talent acquisition at Netflix. Netflix has stayed true to their cultural values despite the pressures and sometimes negative connotations associated with this “cutthroat” environment. Their ability to remain agile, while displaying no tolerance for societal injustices, puts them at the forefront of new-age companies. It is a difficult pace to stay in line with, but it seems that they are keeping in stride and remaining true to who they are, for now. Questions: How has the current cultural environment of our country shaped the way that companies are looking at their own corporate cultural standards? What are the potential downfalls and positive influences of the “Netflix way”? How does Netflix’s internal culture negatively or positively affect their ability to stay competitive and deliver cutting-edge content? Sources: B. Stelter, “The Weinstein Effect: Harvey Weinstein scandal sparks movements in Hollywood and beyond,” CNN Business, October 20, 2017, https://money.cnn.com/2017/10/20/media/weinstein-effect-harvey-weinstein/; L. Hertzler, “Talking #MeToo, one year after bombshell Weinstein allegations,” Penn Today, October 30, 2018, https://penntoday.upenn.edu/news/talking-me-too-one-year-later; S. Ramachandaran and J. Flint, “At Netflix, Radical Transparency and Blunt Firings Unsettle the Ranks,” Wall Street Journal, October 25, 2018, https://www.wsj.com/articles/at-netflix-radical-transparency-and-blunt-firings-unsettle-the-ranks-1540497174. Macro-organizational behavior Macro-organizational behavioral research steps back and looks at an organization as a whole. Micro-organizational behavior Micro-organizational behavioral studies focus on individual and group dynamics within an organization. Organizational design A formal methodology that identifies dysfunctional aspects of workflow, procedures, structures and systems, and then realigns them to fit current business goals and develops plans to implement change. Organization theory The study of organization designs and organization structures, relationship of organizations with their external environment, and the behavior of managers and workers within organizations. Organizational behavior The study of the actions and attitudes of individuals and groups toward one another and toward the organization as a whole. Organizational processes The activities that establish the business goals of the organization and develop processes , product and resource assets that when used will help to achieve business goals. Theory A set of principles on which the practice of an activity is based.

Business


Introduction Cooking (Credit: US Army Africa/ flickr/ Attribution 2.0 Generic (CC BY 2.0)) Learning Outcomes After reading this chapter, you should be able to answer these questions: How do managers and organizations appropriately select individuals for particular jobs? How do people with different abilities, skills, and personalities build effective work teams? How do managers and employees deal effectively with individual differences in the workplace? How can organizations foster a work environment that allows employees an opportunity to develop and grow? How do managers know how to get the best from each employee? What is the role of ethical behavior in managerial actions? How do you manage and do business with people from different cultures? Building Back Trust on the Back End One institution that has been around for generations is banking. However, many individuals have lost faith in the banking system, and who’s to blame them? Big banks have let the general consumer down with security breaches and countless stories of scandals. One glaring example is Wells Fargo & Co., who are still recovering their brand from their admission of creating nearly two million accounts for customers without their permission. But this problem is not new. The approach to bolstering this trust factor is, however, taking on a new perspective with some quick adaptation and managerial foresight. One CEO, Cathie Mahon, chief executive officer of the National Federation of Community Development Credit Unions, is not taking the disparities between credit unions and big banks lying down. Credit unions have always operated differently from big banks, and one key factor is that they are nonprofit while their big-bank counterparts are for-profit enterprises. This also can mean that they offer higher interest rates on deposits due to their size. Mahon has begun a keen undertaking to educate and empower low-income residents about financial resources. Her most recent endeavor is to provide a platform called CU Impact that keeps customers more informed about their balances, creates more trustworthy auto-pay features, more information delivered at ATMs as well. The improvements to the back-end reliability within the credit union system sustain the small, community feel of the credit union, while providing powerful, trustworthy systems that restore faith in their business. Her willingness to embrace technology and embrace differences of customers, employees, and the company structure overall made her the key to success for the future of their business. Sources: Cohen, Arianne, “The CEO Who’s Leveling the Playing Field Between Credit Unions and Big Banks,” Bloomberg Businessweek , July 9, 2018, https://www.bloomberg.com/news/articles/2018-07-09/the-ceo-who-s-leveling-the-playing-field-between-credit-unions-and-big-banks; Koren, James Rufus, “It’s been a year since the Wells Fargo scandal broke—and new problems are still surfacing,” Los Angeles Times , September 8, 2017, http://www.latimes.com/business/la-fi-wells-fargo-one-year-20170908-story.html.

Business


Individual and Cultural Factors in Employee Performance How do managers and organizations appropriately select individuals for particular jobs? As we can see in the example of Cathie Mahon, our unique personal characteristics can have a dramatic influence on both individual behavior and the behavior of those around us. To succeed in any managerial position, it is necessary to have the appropriate skills and abilities for the situation. Moreover, when selecting subordinates, managers have similar concerns. In short, individual differences can play a major role in how well someone performs on the job. They can even influence whether someone gets the job in the first place. Because of this, we begin this section with a look at individual differences in the workplace. Several factors can be identified that influence employee behavior and performance. One early model of job performance argued simply that performance was largely a function of ability and motivation . V.H. Vroom, Work and Motivation (New York: Wiley, 1964). Using this simple model as a guide, we can divide our discussion of individual factors in performance into two categories: those that influence our capacity to respond and those that influence our will or desire to respond . The first category includes such factors as mental and physical abilities, personality traits, perceptual capabilities, and stress-tolerance levels. The second category includes those variables dealing with employee motivation. Both of these sets of factors are discussed in this part of the book as a prelude to more complex analyses of overall organizational performance. Specifically, we begin our analysis in this chapter with a look at individual differences, including employee abilities and skills, personality variables, and work values. We will also examine the nature of culture and cultural diversity as it affects behavior in organizations both at home and abroad. Later we look at perception and job attitudes, and we review basic learning and reinforcement techniques. The basic theories of employee motivation are then introduced, including the concept of employee needs. More complex cognitive models of motivation will be examined, and finally, we review contemporary approaches to performance appraisals and reward systems in organizations. All told, this coverage aims to introduce the reader to the more salient aspects of individual behavior as they relate to organizational behavior and effectiveness. What are the various abilities and skills that should be considered when hiring employees? How should the personality differences and work values be taken into account when selecting employees? What is the role of cultural diversity in selecting employees? How do managers and organizations appropriately select individuals for particular jobs? Because people enter organizations with preset dispositions, it is important to be able to analyze important individual characteristics, effectively select individuals, and appropriately match them to their jobs. However, this must be done carefully in light of both ethical and legal issues that face managers today.

Business


Employee Abilities and Skills How do people with different abilities, skills, and personalities build effective work teams? We begin with a look at employee abilities and skills . Abilities and skills generally represent those physical and intellectual characteristics that are relatively stable over time and that help determine an employee’s capability to respond. Recognizing them is important in understanding organizational behavior, because they often bound an employee’s ability to do the job. For example, if a clerk-typist simply does not have the manual dexterity to master the fundamentals of typing or keyboard entry, her performance will likely suffer. Similarly, a sales representative who has a hard time with simple numerical calculations will probably not do well on the job. Mental Abilities It is possible to divide our discussion of abilities and skills into two sections: mental abilities and physical abilities. Mental abilities are an individual’s intellectual capabilities and are closely linked to how a person makes decisions and processes information. Included here are such factors as verbal comprehension, inductive reasoning, and memory. A summary is shown in . Dimensions of Mental Abilities Verbal comprehension . The ability to understand the meanings of words and their relations to each other. Word fluency . The ability to name objects or use words to form sentences that express an idea. Number aptitude . The ability to make numerical calculations speedily and accurately. Inductive reasoning . The ability to discover a rule or principle and apply it to the solution of a problem. Memory . The ability to remember lists of words and numbers and other associations. Spatial aptitude . The ability to perceive fixed geometric figures and their relations with other geometric figures. Perceptual speed . The ability to perceive visual details quickly and accurately. (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) From a managerial standpoint, a key aspect of mental ability is cognitive complexity. Cognitive complexity represents a person’s capacity to acquire and sort through various pieces of information from the environment and organize them in such a way that they make sense. People with high cognitive complexity tend to use more information—and to see the relationships between aspects of this information—than people with low cognitive complexity. For example, if a manager was assigned a particular problem, would they have the capacity to break the problem down into its various facets and understand how these various facets relate to one another? A manager with low cognitive complexity would tend to see only one or two salient aspects of the problem, whereas a manager with higher cognitive complexity would understand more of the nuances and subtleties of the problem as they relate to each other and to other problems. People with low cognitive complexity typically exhibit the following characteristics: R.J. Ebert and T.R. Mitchell, Organization Decision Processes: Concepts and Analysis (New York: Crane, Russak, 1975), p. 81. They tend to be categorical and stereotypical. Cognitive structures that depend upon simple fixed rules of integration tend to reduce the possibility of thinking in terms of degrees. Internal conflict appears to be minimized with simple structures. Since few alternative relationships are generated, closure is quick. Behavior is apparently anchored in external conditions. There is less personal contribution in simple structures. Fewer rules cover a wider range of phenomena. There is less distinction between separate situations. On the other hand, people with high levels of cognitive complexity are typically characterized by the following: Ibid. Their cognitive system is less deterministic. Numerous alternative relationships are generated and considered. The environment is tracked in numerous ways. There is less compartmentalization of the environment. The individual utilizes more internal processes. The self as an individual operates on the process. Research on cognitive complexity has focused on two important areas from a managerial standpoint: leadership style and decision-making. In the area of leadership, it has been found that managers rated high on cognitive complexity are better able to handle complex situations, such as rapid changes in the external environment. Moreover, such managers also tend to use more resources and information when solving a problem and tend to be somewhat more considerate and consultative in their approach to managing their subordinates. T.R. Mitchell, “Cognitive Complexity and Leadership Style,” Journal of Personality and Social Psychology, 1970, 16, pp. 166–174. In the area of decision-making, fairly consistent findings show that individuals with high cognitive complexity (1) seek out more information for a decision, (2) actually process or use more information, (3) are better able to integrate discrepant information, (4) consider a greater number of possible solutions to the problem, and (5) employ more complex decision strategies than individuals with low cognitive complexity. H. M. Schroder, M. H. Driver, and S. Streufert, Human Information Processing (New York: Holt, Rinehart and Winston, 1967). Physical Abilities The second set of variables relates to someone’s physical abilities . Included here are both basic physical abilities (for example, strength) and psychomotor abilities (such as manual dexterity, eye-hand coordination, and manipulation skills). These factors are summarized in . E. J. McCormick and J. Tiffin, Industrial Psychology (Englewood Cliffs, N.J.: Prentice-Hall, 1976). Considering both mental and physical abilities helps one understand the behavior of people at work and how they can be better managed. The recognition of such abilities—and the recognition that people have different abilities—has clear implications for employee recruitment and selection decisions; it brings into focus the importance of matching people to jobs. For example, Florida Power has a 16-hour selection process that involves 12 performance tests. Over the test period of a couple of years, 640 individuals applied for “lineperson” jobs. Of these, 259 were hired. As a consequence of the new performance tests and selection process, turnover went from 43 percent to 4.5 percent, and the program saved net $1 million. Dale Feuer & Chris Lee. 1988. The Kaizen Connection: How Companies Pick Tomorrow’s Workers. Training. May, 23–35. In addition to selection, knowledge of job requirements and individual differences is also useful in evaluating training and development needs. Because human resources are important to management, it is imperative that managers become more familiar with the basic characteristics of their people. Dimensions of Physical Abilities Physical Abilities Dynamic strength . The ability to exert muscular force repeatedly or continuously for a period of time. Trunk strength . The ability to exert muscular strength using the back and abdominal muscles. Static strength . The amount of continuous force one is capable of exerting against an external object. Explosive strength . The amount of force one is capable of exerting in one or a series of explosive acts. Extent flexibility . The ability to move the trunk and back muscles as far as possible. Dynamic flexibility . The ability to make rapid and repeated flexing movements. Gross body coordination . The ability to coordinate the simultaneous actions of different parts of the body. Equilibrium . The ability to maintain balance and equilibrium in spite of disruptive external forces. Stamina . The ability to continue maximum effort requiring prolonged effort over time; the degree of cardiovascular conditioning. Psychomotor Abilities Control precision. The ability to make fine, highly controlled muscular movements needed to adjust a control mechanism. Multilimb coordination . The ability to coordinate the simultaneous movement of hands and feet. Response orientation . The ability to make an appropriate response to a visual signal indicating a direction. Rate control . The ability to make continuous anticipatory motor adjustments in speed and direction to follow a continuously moving target. Manual dexterity . The ability to make skillful and well-directed arm-hand movements in manipulating large objects quickly. Finger dexterity . The ability to make skillful and controlled manipulations of small objects. Arm-hand steadiness . The ability to make precise arm-hand movements where steadiness is extremely important, and speed and strength are relatively unimportant. Reaction time. How quickly a person can respond to a single stimulus with a simple response. Aiming. The ability to make highly accurate, restricted hand movements requiring precise eye-hand coordination. (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) Why should abilities and skills be taken into account when selecting employees? Describe the components of mental abilities, cognitive complexity, physical ability, and psychomotor abilities. How do people with different abilities, skills, and personalities build effective work teams? Ability refers to one’s capacity to respond, whereas motivation refers to one’s desire to respond. Abilities can be divided into mental abilities and physical abilities. Personality represents a stable set of characteristics and tendencies that determines the psychological behavior of people. Personality development is influenced by several factors, including physiological, cultural, family and group, role, and situational determinants. Cognitive complexity Represents a person’s capacity to acquire and sort through various pieces of information from the environment and organize them in such a way that they make sense. Mental abilities An individual’s intellectual capabilities and are closely linked to how a person makes decisions and processes information. Included here are such factors as verbal comprehension, inductive reasoning, and memory. Physical abilities Basic functional abilities such as strength, and psychomotor abilities such as manual dexterity, eye-hand coordination, and manipulation skills. Psychomotor abilities Examples are manual dexterity, eye-hand coordination, and manipulation skills.

Business


Personality: An Introduction How do managers and employees deal effectively with individual differences in the workplace? The second individual difference variable deals with the concept of personality. We often hear people use and misuse the term personality . For example, we hear that someone has a “nice” personality. For our purposes, we will examine the term from a psychological standpoint as it relates to behavior and performance in the workplace. To do this, let us start with a more precise definition of the concept. Definition of Personality Personality can be defined in many ways. Perhaps one of the more useful definitions for purposes of organizational analysis is offered by Salvatore Maddi, who defines personality as follows: “. . . a stable set of characteristics and tendencies that determine those communalities and differences in the psychological behavior (thoughts, feelings, and actions) of people that have continuity in time and that may not be easily understood as the sole result of the social and biological pressures of the moment.” S.R. Maddi, Personality Theories: A Comparative Analysis (Homewood, III.: Dorsey, 1980), p. 10. Several aspects of this definition should be noted. First, personality is best understood as a constellation of interacting characteristics; it is necessary to look at the whole person when attempting to understand the phenomenon and its effects on subsequent behavior. Second, various dimensions of personality are relatively stable across time. Although changes—especially evolutionary ones—can occur, seldom do we see major changes in the personality of a normal individual. And third, the study of personality emphasizes both similarities and differences across people. This is important for managers to recognize as they attempt to formulate actions designed to enhance performance and employee well-being. Influences on Personality Development Early research on personality development focused on the issue of whether heredity or environment determined an individual’s personality. Although a few researchers are still concerned with this issue, most contemporary psychologists now feel this debate is fruitless. As noted long ago by Kluckhohn and Murray: “The two sets of determinants can rarely be completely disentangled once the environment has begun to operate. The pertinent questions are: (1) which of the various genetic potentialities will be actualized as a consequence of a particular series of life-events in a given physical, social, and cultural environment? and (2) what limits to the development of this personality are set by genetic constitution?” C. Kluckhohn and H. Murray, Personality in Society and Nature, (New York: Knopf, 1953). In other words, if the individual is viewed from the whole-person perspective, the search for the determinants of personal traits focuses on both heredity and environment as well as the interaction between the two over time. In this regard, five major categories of determinants of personal traits may be identified: physiological, cultural, family and social group, role, and situational determinants. Physiological Determinants. Physiological determinants include factors such as stature, health, and sex that often act as constraints on personal growth and development. For instance, tall people often tend to become more domineering and self-confident than shorter people. Traditional sex-role stereotyping has served to channel males and females into different developmental patterns. For example, males have been trained to be more assertive and females more passive. Cultural Determinants. Because of the central role of culture in the survival of a society, there is great emphasis on instilling cultural norms and values in children growing up. For instance, in capitalist societies, where individual responsibility is highly prized, emphasis is placed on developing achievement-oriented, independent, self-reliant people, whereas in socialistic societies, emphasis is placed on developing cooperative, group-oriented individuals who place the welfare of the whole society ahead of individual needs. Cultural determinants affect personal traits. As Mussen notes, “The child’s cultural group defines the range of experiments and situations he is likely to encounter and the values and personality characteristics that will be reinforced and hence learned.” P.H. Mussen, The Psychological Development of the Child (Englewood Cliffs, N.J.: Prentice-Hall, 1963). Consider, for example, how Japanese society develops its world-renowned work ethic. Family and Social Group Determinants. Perhaps the most important influences on personal development are family and social group determinants. For instance, it has been found that children who grow up in democratic homes tend to be more stable, less argumentative, more socially successful, and more sensitive to praise or blame than those who grow up in authoritarian homes. Ibid. One’s immediate family and peers contribute significantly to the socialization process, influencing how individuals think and behave through an intricate system of rewards and penalties. Role Determinants. People are assigned various roles very early in life because of factors such as sex, socioeconomic background, and race. As one grows older, other factors, such as age and occupation, influence the roles we are expected to play. Such role determinants often limit our personal growth and development as individuals and significantly control acceptable behavior patterns. Situational Determinants. Finally, personal development can be influenced by situational determinants. These are factors that are often unpredictable, such as a divorce or death in the family. For instance, James Abegglen studied 20 successful male executives who had risen from lower-class childhoods and discovered that in three-fourths of the cases these executives had experienced some form of severe separation trauma from their fathers. Their fathers (and role models) had either died, been seriously ill, or had serious financial setbacks. Abegglen hypothesized that the sons’ negative identification with their fathers’ plights represented a major motivational force for achievement and success. J. C. Abegglen, “Personality Factors in Social Mobility: A Study of Occupationally Mobile Businessmen,” Genetic Psychology Monographs, August 1958, pp. 101–159. What is the role of personality and personality development in the workplace? How do managers and employees deal effectively with individual differences in the workplace? Self-esteem represents opinions and beliefs concerning one’s self and one’s self-worth. Locus of control is a tendency for people to attribute the events affecting their lives either to their own actions (referred to as internal locus of control) or to external forces (referred to as external locus of control). Personality A stable set of characteristics and tendencies that determine those communalities and differences in the psychological behavior (thoughts, feelings, and actions) of people that have continuity in time and that may not be easily understood as the sole result of the social and biological pressures of the moment.

Business


Personality and Work Behavior How can organizations foster a work environment that allows employees an opportunity to develop and grow? Personality theories that utilize the trait approach have proven popular among investigators of employee behavior in organizations. There are several reasons for this. To begin with, trait theories focus largely on the normal, healthy adult, in contrast to psychoanalytic and other personality theories that focus largely on abnormal behavior. Trait theories identify several characteristics that describe people. Allport insisted that our understanding of individual behavior could progress only by breaking behavior patterns down into a series of elements (traits). G.W. Allport, Pattern and Growth in Personality (New York: Holt, Rinehart and Winston, 1961). “The only thing you can do about a total personality is to send flowers to it,” he once said. Hence, in the study of people at work, we may discuss an employee’s dependability, emotional stability, or cognitive complexity. These traits, when taken together, form a large mosaic that provides insight into individuals. A third reason for the popularity of trait theories in the study of organizational behavior is that the traits that are identified are measurable and tend to remain relatively stable over time. It is much easier to make comparisons among employees using these tangible qualities rather than the somewhat mystical psychoanalytic theories or the highly abstract and volatile self theories. The number of traits people are believed to exhibit varies according to which theory we employ. In an exhaustive search, over 17,000 can be identified. Obviously, this number is so large as to make any reasonable analysis of the effects of personality in the workplace impossible. In order for us to make any sense out of this, it is necessary for us to concentrate on a small number of personality variables that have a direct impact on work behavior. If we do this, we can identify six traits that seem to be relatively important for our purposes here. It will be noted that some of these traits (for example, self-esteem or locus of control) have to do with how we see ourselves, whereas other traits (for example, introversion-extroversion or dependability) have to do with how we interact with others. Moreover, these traits are largely influenced by one’s personality development and, in turn, influence actual attitudes and behaviors at work, as shown in . Relation of Personality to Attitudes and Behavior (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) Self-Esteem One trait that has emerged recently as a key variable in determining work behavior and effectiveness is an employee’s self-esteem. Self-esteem can be defined as one’s opinion or belief about one’s self and self-worth. It is how we see ourselves as individuals. Do we have confidence in ourselves? Do we think we are successful? Attractive? Worthy of others’ respect or friendship? Research has shown that high self-esteem in school-age children enhances assertiveness, independence, and creativity. People with high self-esteem often find it easier to give and receive affection, set higher goals for personal achievement, and exert energy to try to attain goals set for them. Moreover, individuals with high self-esteem will be more likely to seek higher-status occupations and will take more risks in the job search. For example, one study found that students possessing higher self-esteem were more highly rated by college recruiters, received more job offers, and were more satisfied with their job search than students with low self-esteem. R. A. Ellis and M. S. Taylor, “Role of Self-Esteem within the Job Search Process,” Journal of Applied Psychology, 1983, 68, pp. 632–640. Hence, personality traits such as this one can affect your job and career even before you begin work! Locus of Control Locus of control refers to the tendency among individuals to attribute the events affecting their lives either to their own actions or to external forces; it is a measure of how much you think you control your own destiny. Two types of individual are identified. People with an internal locus of control tend to attribute their successes—and failures—to their own abilities and efforts. Hence, a student would give herself credit for passing an examination; likewise, she would accept blame for failing. In contrast, people with an external locus of control tend to attribute things that happen to them as being caused by someone or something else. They give themselves neither credit nor blame. Hence, passing an exam may be dismissed by saying it was “too easy,” whereas failing may be excused by convincing one’s self that the exam was “unfair.” If you want to determine your own locus of control, fill out the self-assessment in the end-of-chapter assignments. This is an abbreviated and adapted version of the scale originally developed by Rotter. When you have finished, refer to that reference for scoring procedures. Recent research on locus of control suggests that people with an internal locus of control (1) exhibit greater work motivation, (2) have stronger expectations that effort will lead to actual high job performance, (3) perform better on tasks requiring learning or problem-solving, (4) typically receive higher salaries and salary increases, and (5) exhibit less job-related anxiety than externals. P. Spector, “Behavior in Organizations as a Function of Locus of Control,” Psychological Bulletin, May 1982, pp. 482–497; P. Nystrom, “Managers’ Salaries and Their Beliefs About Reinforcement Control,” Journal of Social Psychology, August 1983, pp. 291–292. Locus of control has numerous implications for management. For example, consider what would happen if you placed an “internal” under tight supervision or an “external” under loose supervision. The results probably would not be very positive. Or what would happen if you placed both internals and externals on a merit-based compensation plan? Who would likely perform better? Who might perform better under a piece-rate system? Introversion-Extroversion The third personality dimension we should consider focuses on the extent to which people tend to be shy and retiring or socially gregarious. Introverts ( introversion ) tend to focus their energies inwardly and have a greater sensitivity to abstract feelings, whereas extroverts ( extroversion ) direct more of their attention to other people, objects, and events. Research evidence suggests that both types of people have a role to play in organizations. L. R. Morris, Extroversion and Introversion: An Interactional Perspective (New York: Hemisphere, 1979), p.8. Extroverts more often succeed in first-line management roles, where only superficial “people skills” are required; they also do better in field assignments—for example, as sales representatives. Introverts, on the other hand, tend to succeed in positions requiring more reflection, analysis, and sensitivity to people’s inner feelings and qualities. Such positions are included in a variety of departments within organizations, such as accounting, personnel, and computer operations. In view of the complex nature of modern organizations, both types of individual are clearly needed. Authoritarianism and Dogmatism Authoritarianism refers to an individual’s orientation toward authority. More specifically, an authoritarian orientation is generally characterized by an overriding conviction that it is right and proper for there to be clear status and power differences among people. T. W. Adorno, E. Frenkel-Brunswik, and D. J. Levinson, The Authoritarian Personality (New York: Harper & Row, 1950). According to T. W. Adorno, a high authoritarian is typically (1) demanding, directive, and controlling of her subordinates; (2) submissive and deferential toward superiors; (3) intellectually rigid; (4) fearful of social change; (5) highly judgmental and categorical in reactions to others; (6) distrustful; and (7) hostile in response to restraint. Nonauthoritarians, on the other hand, generally believe that power and status differences should be minimized, that social change can be constructive, and that people should be more accepting and less judgmental of others. In the workplace, the consequences of these differences can be tremendous. Research has shown, for example, that employees who are high in authoritarianism often perform better under rigid supervisory control, whereas those rated lower on this characteristic perform better under more participative supervision. V. H. Vroom, Some Personality Determinants of the Effects of Participation (Englewood Cliffs, N.J.: Prentice-Hall, 1960). Can you think of other consequences that might result from these differences? Related to this authoritarianism is the trait of dogmatism. Dogmatism refers to a particular cognitive style that is characterized by closed-mindedness and inflexibility. M. Rokeach, The Open and Closed Mind (New York: Basic Books, 1960). This dimension has particularly profound implications for managerial decision-making; it is found that dogmatic managers tend to make decisions quickly, based on only limited information and with a high degree of confidence in the correctness of their decisions. R. N. Taylor and M. D. Dunnette, “Influence of Dogmatism, Risk-Taking Propensity, and Intelligence on Decision-Making Strategies for a Sample of Industrial Managers,” Journal of Applied Psychology, 1974, 59, pp. 420–423. Do you know managers (or professors) who tend to be dogmatic? How does this behavior affect those around them? Dependability Finally, people can be differentiated with respect to their behavioral consistency, or dependability . Individuals who are seen as self-reliant, responsible, consistent, and dependable are typically considered to be desirable colleagues or group members who will cooperate and work steadfastly toward group goals. R. Stogdill, “Personal Factors Associated with Leadership: A Survey of the Literature,” Journal of Psychology, 1948, 25, pp. 35–71; F. L. Greer, Small Group Effectiveness (Philadelphia: Institute for Research on Human Relations, 1955). Personnel managers often seek a wide array of information concerning dependability before hiring job applicants. Even so, contemporary managers often complain that many of today’s workers simply lack the feeling of personal responsibility necessary for efficient operations. Whether this is a result of the personal failings of the individuals or a lack of proper motivation by superiors remains to be determined. Obviously, personality factors such as those discussed here can play a major role in determining work behavior both on the shop floor and in the executive suite. A good example of this can be seen in the events leading up to the demise of one of America’s largest and oldest architectural firms. Observe the role of personality in the events that follow. Personality Clash: Design vs. Default Philip Johnson, at age 86, was considered the dean of American architecture and was known for such landmarks as the AT&T building in New York and the Pennzoil Center in Houston, but he was also forced out of the firm that he built, only to watch it fall into default and bankruptcy. In 1969, Johnson invited John Burgee, who was just 35, to become his sole partner to handle the management side of the business and thereby allow him to focus on the creative side. “I picked John Burgee as my righthand man. Every design architect needs a Burgee. The more leadership he took, the happier I was,” Johnson said. Burgee’s personality was perfectly suited to the nuts-and-bolts tasks of managing the firm and overseeing the projects through construction. For all his management effort, Burgee felt that only Johnson’s name ever appeared in the press. “It was always difficult for me, being a younger man and less flamboyant,” commented Burgee. Eventually, Burgee was able to get Johnson to change the name of the firm, first to Philip Johnson & John Burgee Architects, then to Johnson/Burgee Architects, and finally to John Burgee Architects, with Philip Johnson. Although Burgee wanted to be involved in all aspects of the business, Johnson was unwilling to relinquish control over design to Burgee. In 1988, Burgee sent a four-page memo to Johnson in which he listed each of the firm’s 24 projects and outlined the ones for which Johnson could initiate designs, initiate contact with clients, or work on independently at home. Burgee also instructed Johnson not to involve himself with the younger architects or advise them on their drawings. The clash of the creative personality of Johnson and the controlling personality of Burgee came to a climax when Burgee asked Johnson to leave the firm. Unfortunately, Burgee underestimated the reaction of clients and lost many key contracts. Eventually, Burgee had to file for bankruptcy, and Johnson continued working on his own, including a project for Estée Lauder. Source: Michelle Pacelle, “Design Flaw.” Wall Street Journal, September 2, 1992, p. A1, A5. What are the things that managers can do to foster an environment where employees can gain personal development and grow? How can organizations foster a work environment that allows employees an opportunity to develop and grow? Authoritarianism represents an individual’s orientation toward authority and is characterized by an overriding conviction that it is appropriate for there to be clear status and power differences between people. Authoritarianism Refers to an individual’s orientation toward authority. Dependability Individuals who are seen as self-reliant, responsible, and consistent, are viewed as dependable. Dogmatism Refers to a particular cognitive style that is characterized by closed-mindedness and inflexibility. Extroversion Refers to people who direct more of their attention to other people, objects, and events. Introversion Refers to people who focus their energies inwardly and have a greater sensitivity to abstract feelings. Locus of control Refers to the tendency among individuals to attribute the events affecting their lives either to their own actions or to external forces; it is a measure of how much you think you control your own destiny. Self-esteem One’s opinion or belief about one’s self and self-worth.

Business


Personality and Organization: A Basic Conflict? How do managers know how to get the best from each employee? Most theories of personality stress that an individual’s personality becomes complete only when the individual interacts with other people; growth and development do not occur in a vacuum. Human personalities are the individual expressions of our culture, and our culture and social order are the group expressions of individual personalities. This being the case, it is important to understand how work organizations influence the growth and development of the adult employee. A model of person-organization relationships has been proposed by Chris Argyris. C. Argyris, “Personality and Organization Theory Revisited,” Administrative Science Quarterly, 1973, 18, pp. 141–167. This model, called the basic incongruity thesis , consists of three parts: what individuals want from organizations, what organizations want from individuals, and how these two potentially conflicting sets of desires are harmonized. Argyris begins by examining how healthy individuals change as they mature. On the basis of previous work, Argyris suggests that as people grow to maturity, seven basic changes in needs and interests occur: People develop from a state of passivity as infants to a state of increasing activity as adults. People develop from a state of dependence upon others to a state of relative independence. People develop from having only a few ways of behaving to having many diverse ways of behaving. People develop from having shallow, casual, and erratic interests to having fewer, but deeper, interests. People develop from having a short time perspective (i.e., behavior is determined by present events) to having a longer time perspective (behavior is determined by a combination of past, present, and future events). People develop from subordinate to superordinate positions (from child to parent or from trainee to manager). People develop from a low understanding or awareness of themselves to a greater understanding of and control over themselves as adults. Although Argyris acknowledges that these developments may differ among individuals, the general tendencies from childhood to adulthood are believed to be fairly common. Next, Argyris turns his attention to the defining characteristics of traditional work organizations. In particular, he argues that in the pursuit of efficiency and effectiveness, organizations create work situations aimed more at getting the job done than at satisfying employees’ personal goals. Examples include increased task specialization, unity of command, a rules orientation, and other things aimed at turning out a standardized product with standardized people. In the pursuit of this standardization, Argyris argues, organizations often create work situations with the following characteristics: Employees are allowed minimal control over their work; control is often shifted to machines. They are expected to be passive, dependent, and subordinate. They are allowed only a short-term horizon in their work. They are placed on repetitive jobs that require only minimal skills and abilities. On the basis of the first four items, people are expected to produce under conditions leading to psychological failure. Hence, Argyris argues persuasively that many jobs in our technological society are structured in such a way that they conflict with the basic growth needs of a healthy personality. This conflict is represented in . The magnitude of this conflict between personality and organization is a function of several factors. The strongest conflict can be expected under conditions where employees are very mature, organization are highly structured and rules and procedures are formalized, and jobs are fragmented and mechanized. Hence, we would expect the strongest conflict to be at the lower levels of the organization, among blue-collar and clerical workers. Managers tend to have jobs that are less mechanized and tend to be less subject to formalized rules and procedures. Basic Conflict Between Employees and Organizations (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) Where strong conflicts between personalities and organizations exist, or, more precisely, where strong conflicts exist between what employees and organizations want from each other, employees are faced with difficult choices. They may choose to leave the organization or to work hard to climb the ladder into the upper echelons of management. They may defend their self-concepts and adapt through the use of defense mechanisms. Disassociating themselves psychologically from the organization (e.g., losing interest in their work, lowering their work standards, etc.) and concentrating instead on the material rewards available from the organization is another possible response. Or they may find allies in their fellow workers and, in concert, may further adapt as a group by such activities as quota restrictions, unionizing efforts, strikes, and sabotage. Unfortunately, although such activities may help employees feel that they are getting back at the organization, they do not alleviate the basic situation that is causing the problem. To do this, one has to examine the nature of the job and the work climate. Personality represents a powerful force in the determination of work behavior and must be recognized before meaningful change can be implemented by managers to improve the effectiveness of their organizations. Integrating Employee and Organizational Goals at Kayak In many ways the above scenario paints a bleak portrait of the relationship of many workers to their employers. However, it should be noted that many companies are trying to change this relationship and create a partnership between employees and company in which the goals of both are realized. In doing so, however, these companies are careful to select and hire only those employees who have the potential to fit in with the company’s unique culture. A case in point is Kayak, an Internet-based travel company in Stamford, Connecticut. The company strives to create customer satisfaction, starting with their own culture and employees within the walls of their building. Cofounder and former CTO Paul English’s goal was to bring a constant stream of “new-new ideas” and surround himself with “childlike creative people” to liven up the space and be able to promote inspiration. Kayak doesn’t hire based on technical skills; their philosophy is to hire an employee on the basis of being the smartest person that somebody knows. Employees are constantly pushed to put their ideas to the test, and the company emphasizes a work-life balance that puts their employees first, which in turn makes for a productive work environment. Kayak’s ability to make fast-paced decisions comes from the empowerment of their employees to try out their ideas. Current CTO Giorgos Zacharia takes pride in the way they are able to keep order and drive deadlines. “Anyone on any team can come up with the idea, prototype it, and then we see what the user thinks about it. If it works, great! But there’s no grand design; it’s very organic and we see that as a strength,” says Zacharia. By encouraging and rewarding risk-taking, Kayak is able to make fast decisions, fail fast, and then turn around and come up with something more innovative that will be better than the last idea. Overall, the company hopes to offer its employees a work environment that allows for considerable personal growth and need-satisfaction. In short, the company aims to reduce the possibility of a basic incongruity developing between employee and organizational goals. Sources: Hawkes, Jocelyn, “KAYAK on Creating a Culture of Innovation,” Fast Company , April 4, 2012. (https://www.fastcompany.com/1827003/kayak-creating-culture-innovation); Hickey, Matt, “How KAYAK Converts Employee Well-Being Into Customer satisfaction,” Forbes , October 4, 2015. https://www.forbes.com/sites/matthickey/2015/10/07/how-kayak-converts-employee-well-being-into-customer-satisfaction/#6c97f519b7a4. Personality and Employee Selection Recent years have seen an increased interest in the use of preemployment screening tests. Several key assumptions underlie the use of personality tests as one method of selecting potential employees: (1) individuals have different personalities and traits, (2) these differences affect their behavior and performance, and (3) different job have different requirements. Consequently, tests can be used to select individuals who match the overall company as well as match particular types of people to specific jobs. However, managers must be careful in their use of these selection instruments. Legally all selection tests must meet the guidelines for nondiscrimination set forth in the Equal Employment Opportunity Commission’s Uniform Guidelines on Employee Selection Procedures. Specifically, in 1971 the Supreme Court ruled (Griggs v . Duke Power Company) that “good intent or the absence of discriminatory intent does not redeem . . . testing mechanisms that operate as built-in ‘head-winds’ for minority groups and are unrelated to measuring job capability.” This ruling led to two important cases in which discrimination might apply to selection practices. First, “disparate treatment” involves the intentional discrimination against an individual based on race, color, gender, religion, or national origin. Second, “disparate impact” involves the adverse effect of selection practices (as well as other practices) on minorities regardless of whether these practices were intended to have an adverse impact or not. Consequently, although personality tests can be an important means of selecting potential employees as well as matching them to appropriate jobs, care must be taken to demonstrate that the characteristics measured actually predict job performance. What are some things that managers can do to foster organizational harmony where they get the best results from all employees? How do managers know how to get the best from each employee? Dogmatism refers to a cognitive style characterized by closed-mindedness and inflexibility. The basic incongruity thesis asserts that individuals and organizations exist in a constant state of conflict because each has different goals and expectations from the other. Employees want organizations to provide more autonomy and meaningful work, while organizations want employees to be more predictable, stable, and dependable. Basic incongruity thesis Consists of three parts: what individuals want from organizations, what organizations want from individuals, and how these two potentially conflicting sets of desires are harmonized.

Business


Personal Values and Ethics What is the role of ethical behavior in managerial actions? A factor that has surprised many business leaders is the alarming rise in accusations of unethical or disreputable behavior in today’s companies. We hear with increasing regularity of stock market manipulations, disregard of environmental hazards, bribes, and kickbacks. To understand these behaviors, we must examine the role of values and personal ethics in the workplace. We begin with the concept of values. A value may be defined as “an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.” M. Rokeach, The Nature of Human Values (New York: Free Press, 1973), p. 5. In other words, a value represents a judgment by an individual that certain things are “good” or “bad,” “important” or “unimportant,” and so forth. As such, values serve a useful function in providing guidelines or standards for choosing one’s own behavior and for evaluating the behavior of others. Characteristics of Values The values people have tend to be relatively stable over time. The reason for this lies in the manner in which values are acquired in the first place. That is, when we first learn a value (usually at a young age), we are taught that such-and-such behavior is always good or always bad. For instance, we may be taught that lying or stealing is always unacceptable. Few people are taught that such behavior is acceptable in some circumstances but not in others. Hence, this definitive quality of learned values tends to secure them firmly in our belief systems. This is not to say that values do not change over time. As we grow, we are increasingly confronted with new and often conflicting situations. Often, it is necessary for us to weigh the relative merits of each and choose a course of action. Consider, for example, the worker who has a strong belief in hard work but who is pressured by her colleagues not to outperform the group. What would you do in this situation? Rokeach has identified two fundamental types of values: instrumental and terminal. Ibid. Instrumental values represent those values concerning the way we approach end-states. That is, do we believe in ambition, cleanliness, honesty, or obedience? What factors guide your everyday behavior? Terminal values , on the other hand, are those end-state goals that we prize. Included here are such things as a comfortable life, a sense of accomplishment, equality among all people, and so forth. Both sets of values have significant influence on everyday behavior at work. You can assess your own instrumental and terminal values by completing the self-assessment in the end-of-chapter assignments. Simply rank-order the two lists of values, and then refer to the reference for scoring procedures. Role of Values and Ethics in Organizations Personal values represent an important force in organizational behavior for several reasons. In fact, at least three purposes are served by the existence of personal values in organizations: (1) values serve as standards of behavior for determining a correct course of action; (2) values serve as guidelines for decision-making and conflict resolution; and (3) values serve as an influence on employee motivation. Let us consider each of these functions. Standards of Behavior. First, values help us determine appropriate standards of behavior. They place limits on our behavior both inside and outside the organization. In such situations, we are referring to what is called ethical behavior , or ethics . Employees at all levels of the organization have to make decisions concerning what to them is right or wrong, proper or improper. For example, would you conceal information about a hazardous product made by your company, or would you feel obliged to tell someone? How would you respond to petty theft on the part of a supervisor or coworker in the office? To some extent, ethical behavior is influenced by societal values. Societal norms tell us it is wrong to engage in certain behaviors. In addition, however, individuals must often determine for themselves what is proper and what is not. This is particularly true when people find themselves in “gray zones”—situations where ethical standards are ambiguous or unclear. In many situations, a particular act may not be illegal. Moreover, one’s colleagues and friends may disagree about what is proper. In such circumstances, people have to determine their own standards of behavior. Two Cultures’ Perspectives of Straight Talk Yukiko Tanabe, a foreign exchange student from Tokyo, Japan, was both eager and anxious about making new friends during her one-year study abroad in the United States. After a month-long intensive course in English over the summer, she began her studies at the University of California. Yukiko was in the same psychology class as Jane McWilliams. Despite Yukiko’s somewhat shy personality, it did not take long before she and Jane were talking before and after class and studying together. Part of the way through the term, the professor asked for volunteers to be part of an experiment on personalities and problem-solving. The professor also offered extra credit for participation in the experiment and asked interested students to stay after class to discuss the project in more detail. When class was over, Jane asked Yukiko if she wanted to stay after and learn more about the project and the extra credit. Yukiko hesitated and then said that she was not sure. Jane replied that it would only take a few minutes to listen to the explanation, and so the two young women went up to the front of the class, along with about 20 other students, to hear the details. The project would simply involve completing a personality questionnaire and then attempting to solve three short case problems. In total, it would take about one hour of time and would be worth 5 percent extra credit. Jane though it was a great idea and asked Yukiko if she wanted to participate. Yukiko replied that she was not sure. Jane responded that they could go together, that it would be fun, and that 5 percent extra credit was a nice bonus. To this Yukiko made no reply, so Jane signed both of them up for the project and suggested that they meet at the quad about 10 minutes before the scheduled beginning of the experiment. On the day of the experiment, however, Yukiko did not show up. Jane found out later from Yukiko that she did not want to participate in the experiment. “Then why didn’t you just say so?” asked Jane. “Because I did not want to embarrass you in front of all your other friends by saying no,” explained Yukiko. Source: Personal communication by the author. Names have been disguised. Guidelines for Decision-Making and Conflict Resolution. In addition, values serve as guidelines for making decisions and for attempting to resolve conflicts. Managers who value personal integrity are less likely to make decisions they know to be injurious to someone else. Relatedly, values can influence how someone approaches a conflict. For example, if your boss asks your opinion about a report she wrote that you don’t like, do you express your opinion candidly or be polite and flatter her? An interesting development in the area of values and decision-making involves integrity or honesty tests. These tests are designed to measure an individual’s level of integrity or honesty based on the notion that honest or dishonest behavior and decisions flow from a person’s underlying values. Today over 5,000 firms use these tests, some of which use direct questions and some of which use camouflaged questions. Although the reliability of the most common tests seem good, their validity (i.e., the extent to which they can accurately predict dishonest behavior) is more open to question. Paul R. Sackett, Laura R. Burris, and Christine Callahan. 1989. Integrity Testing for Personnel Selection. Personnel Psychology, 42, 491–529. Nevertheless, because they do not cost much and are less intrusive than drug or polygraph testing, integrity tests are increasingly used to screen potential employees. Influence on Motivation. Values affect employee motivation by determining what rewards or outcomes are sought. Employees are often offered overtime work and the opportunity to make more money at the expense of free time and time with their families. Which would you choose? Would you work harder to get a promotion to a perhaps more stressful job or “lay back” and accept a slower and possibly less rewarding career path? Value questions such as these confront employees and managers every day. Prominent among work-related values is the concept of the work ethic . Simply put, the work ethic refers to the strength of one’s commitment and dedication to hard work, both as an end in itself and as a means to future rewards. Much has been written lately concerning the relative state of the work ethic in North America. It has been repeatedly pointed out that one reason for our trouble in international competition lies in our rather mediocre work ethic. This is not to say that many Americans do not work hard; rather, it is to say that others (most notably those in East Asia) simply work harder. There are many ways to assess these differences, but perhaps the simplest way is to look at actual hours worked on average in different countries both in Asia and Western Europe. Looking at , you may be surprised to discover that although the average American works 1,789 hours (and takes an average of 19.5 vacation days) per year, the average South Korean works 2,070 hours per year (and takes only 4.5 days of vacation)! R. M. Steers, Y. K. Shin, and G. R. Ungson, The Chaebol: Korea’s New Industrial Might (New York: Harper & Row, 1989), p. 96. The typical Japanese worker works 1,742 hours per year and takes 9.6 days of vacation. Meanwhile, Western Europeans work fewer hours and take more vacation days. Thus, although Americans may work longer hours than many Europeans, they fall far behind many in East Asia. Average Hours Worked and Vacation Taken per Worker Country Average Hours Worked per Year Vacation Days Actually Taken Source: Adapted from OECD.Stat, “Average annual hours actually worked per worker,” accessed July 20, 2018, https://stats.oecd.org/Index.aspx?DataSetCode=ANHRS; and Richard M. Steers, Yoo Keun Shin, and Gerardo R. Ungson, The Chaebol: Korea’s New Industrial Might (Philadelphia: Ballinger, 1989). South Korea 2,070 4.5 United States 1,789 19.5 Japan 1,742 9.6 United Kingdom 1,676 22.5 Germany 1,288 30.2 France 1,472 25.0 (Attribution: Copyright Rice University, OpenStax, under CC BY NC-SA-NC-SA 4.0 license) Example: A Country Tries to Reduce Its Workweek What does a country do when its people are overmotivated? Consider the case of Japan. On the basis of Japan’s newfound affluence and success in the international marketplace, many companies—and the government—are beginning to be concerned that perhaps Japanese employees work too hard and should slow down. They may be too motivated for their own good. As a result, the Japanese Department of Labor has initiated a drive to shorten the workweek and encourage more Japanese employees to take longer holidays. The effort is focusing on middle-aged and older employees, because their physical stamina may be less than that of their more junior colleagues. Many companies are following this lead and are beginning to reduce the workweek. This is no easy task in a land where such behavior may be seen by employees as showing disloyalty toward the company. It requires a fundamental change in employee attitudes. At the same time, among younger employees, cracks are beginning to appear in the fabled Japanese work ethic. Younger workers are beginning to express increased frustration with dull jobs and routine assignments, and job satisfaction appears to be at an all-time low. Young Japanese are beginning to take longer lunch periods and look forward to Friday and the coming weekend. Whether this is attributable to increasing affluence in a changing society or simply the emergence of a new generation, things are changing—however slowly—in the East. L. Smith, “Cracks in the Japanese Work Ethic,” Fortune, May 14, 1984, pp. 162–168; K. Van Wolferen, The Enigma of Japanese Power (New York: Knopf, 1989). What role do managers undertake to ensure an environment where ethics and values are followed? What is the role of ethical behavior in managerial actions? A value is an enduring belief that one specific mode of conduct or end-state is preferable to others. Instrumental values are beliefs concerning the most appropriate ways to pursue end-states, whereas terminal values are beliefs concerning the most desirable end-states themselves. Ethics are important to individuals because they serve as (1) standards of behavior for determining a correct course of action, (2) guidelines for decision-making and conflict resolution, and (3) influences on employee motivation. The work ethic refers to someone’s belief that hard work and commitment to a task are both ends in themselves and means to future rewards. Ethics Values that help us determine appropriate standards of behavior and place limits on our behavior both inside and outside the organization. Instrumental values Represent those values concerning the way we approach end-states and whether individuals believe in ambition, cleanliness, honesty, or obedience. Personal values Represent an important force in organizational behavior for several reasons. Terminal values End-state goals that we prize. Work ethic Refers to the strength of one’s commitment and dedication to hard work, both as an end in itself and as a means to future rewards.

Business