All Lec

Organizational Behavior
Eighteenth Edition, Global Edition
Chapter 1
What Is Organizational
Behavior?
Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.

Learning Objectives
1. Demonstrate the importance of interpersonal skills in the
workplace.
2. Define organizational behavior (OB).
3. Show the value to OB of systematic study.
4. Identify the major behavioral science disciplines that
contribute to OB.
5. Demonstrate why few absolutes apply to OB.
6. Identify managers’ challenges and opportunities in applying
OB concepts.
7. Compare the three levels of analysis in this text’s OB
model.
8. Describe the key employability skills gained from studying OB
applicable to other majors or future careers.
INTRODUCTION TO
ORGANISATIONALBEHAVIOUR
Organization & People

• An organization is a deliberate arrangement of people to accomplish some specific
purpose.
• Organizations share three common characteristics

– 1. Each has a distinct purpose
– 2. Each is composed of people
– 3. Each develops some deliberate structure so members can do their work

Describe the Manager’s
Functions, Roles, and
Skills (1 of 4)
• Manager: Someone who gets things done through other
people in organizations.
• Organization: A consciously coordinated social unit
composed of two or more people that functions on a
relatively continuous basis to achieve a common goal or
set of goals.
Managers need a cadre of skills to create a productive workplace, including technical

skills. However, leadership and communication skills are critical to organizational
success.
When managers have solid interpersonal skills, there are positive work outcomes for
the organization. These outcomes include lower turnover of strong employees,
improved recruitment pools for filling employment positions, and a better bottom line.

INTRODUCTION TO
ORGANISATIONALBEHAVIOUR
• The success of every organization depends upon the efficiency and effectiveness of
the management and the effectiveness of the management depends primarily on its
human skills and how well it understands the needs and desires of the people.
• Every organization’s performance is ultimately dependent on the
motivational levels of its human resources and the willingness
and ability of people to work harmoniously and effectively towards
the accomplishment of shared goals
• It is an accepted fact that an organization can develop only when its people are
developed.
• Organizational behavior actually refers to the behavior of the
people in the organizations because organizations themselves do
not behave.

Demonstrate the Importance of
Interpersonal Skills in the Workplace
Interpersonal skills are important because…
• ‘Good places to work’ have better financial performance.
• Better interpersonal skills result in lower turnover of quality
employees and higher quality applications for recruitment.
• There is a strong association between the quality of
workplace relationships and job satisfaction, stress, and
turnover.
• It fosters social responsibility awareness.

Effectiveness Vs. Efficiency

THE P.O.L.C. framework

Skills
• Management functions:
• Planning, organizing, leading, and controlling.
• Henry Mintzberg looked at management differently when
he defined the 10 roles of managers. Mintzberg concluded
that managers perform ten different, highly interrelated
roles or sets of behaviors attributable to their jobs.

Minztberg’s
Managerial Roles

Functions, Roles, and Skills
(2 of 4)
Exhibit 1-1 Minztberg’s Managerial Roles
Role Description
Interpersonal
Figurehead Symbolic head; required to perform a number of routine duties of a legal
or social nature
Leader Responsible for the motivation and direction of employees
Liaison Maintains a network of outside contacts who provide favors and
information
Informational
Monitor Receives a wide variety of information; serves as nerve center of internal and
external information of the organization
Disseminator Transmits information received from outsiders or from other employees to
members of the organization
Spokesperson Transmits information to outsiders on organization’s plans, policies,

actions, and results; serves as expert on organization’s industry

Skills (3 of 4)
[Exhibit 1-1 Continued]
Decisional Description
Entrepreneur Searches organization and its environment for opportunities and
initiates projects to bring about change
Disturbance Handler Responsible for corrective action when organization faces
important, unexpected disturbances
Resource allocator Makes or approves significant organizational decisions
Negotiator Responsible for representing the organization at major
negotiations
Source: H. Mintzberg, The Nature of Managerial Work, 1st ed., © 1973, pp. 92–93. Reprinted and
electronically
reproduced by permission of Pearson Education, Inc., New York, NY.

Katz’s Three skills
areas for leaders

Describe the Manager’s Functions,
Roles, and Skills (4 of 4)
• Management Skills
– Technical Skills – the ability to apply specialized
knowledge or expertise. All jobs require some
specialized expertise, and many people develop their
technical skills on the job.
– Human Skills – the ability to work with, understand,
and motivate other people.
– Conceptual Skills – the mental ability to analyze and
diagnose complex situations.

The activities of a
real manager

Effective Versus Successful
Managerial Activities (1 of 2)
• Luthans and his associates found that all managers
engage in four managerial activities:
– Traditional management: decision making, planning, and controlling.
The average manager spent 32 percent of his or her time performing this activity.
– Communication: exchanging routine information and processing
paperwork. The average manager spent 29 percent of his or her time performing
this activity.
– Human resource management: motivating, disciplining, managing
conflict, staffing, and training. The average manager spent 20 percent of his or her
time performing this activity.
– Networking: socializing, politicking, and interacting with outsiders. The
average manager spent 19 percent of his or her time performing this activity.

Effective Versus Successful
Managerial Activities (2 of 2)
Exhibit 1-2 Allocation of Activities by
Time
Source: Based on F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz, Real Managers (Cambridge, MA: Ballinger,
1988).
Define Organizational
Behavior
” Organizational behavior is a field of
study that investigates the impact that
individuals, group and structure have
on behavior within organizations.
• Organizational behavior is the study of how human behavior affects an organization. By

understanding people, you can better understand an organization.
• In addition, organizational behavior studies how an organization can affect behavior.
• If organizational behavior were a simple topic, this course would be short and sweet. We could
simply say that organizational behavior is how people and groups act within an organization. But
it’s not so simple!

Define Organizational Behavior
• Organizational behaviour is a field of study that
investigates the impact that individuals,
group and structure have on behaviour
within
organizations.
three determinants of behaviour within
• It covers
organizations – individuals , group

and structure (org. systems).
• It is an applied field because it applies the knowledge

gained about individuals, and the effect of structure on
behaviour, in order to make organizations work more
effectively
https://www.youtube.com/watch?v=MnvWxZhsvKA
Why do we study OB
• To learn about yourself and others!
• To understand how the many organizations
you encounter work.
• To become more familiar with how teams
work.
• To help you think about the people issues
faced by managers and entrepreneurs.
OB matters to three key stakeholders. Firstly, it matters to workers. OB can help employees become a more engaged
organizational member. Getting along with others, doing great work, lowering stress levels, making more effective
decisions, and working effectively within a team—these are all things OB addresses!
Secondly, OB matters to employers. People who are satisfied with the way they are treated on the job are generally more
pleasant to their co-workers and bosses and are less likely to quit than those who are dissatisfied with the way others
treat them.
Finally, it matters to organizations. Organizations that offer good employee benefits and that have friendly conditions
are more profitable than those who are less people oriented.

Complementing Intuition
with Systematic Study
• Systematic Study of Behavior
– Behavior generally is predictable if we know how the person
perceived the situation and what is important to him or her.
• Evidence-Based Management (EBM)
– Complements systematic study.
– Argues for managers to make decisions based on evidence.
• Intuition
– Systematic study and EBM add to intuition, or those “gut
feelings” about “why I do what I do” and “what makes others
tick.”
– If we make all decisions with intuition or gut instinct, we’re
likely working with incomplete information.

Big Data
• Background:
– The use of Big Data for managerial practices is a relatively
new area, but one that holds convincing promise.
• Current Usage:
– The reasons for data analytics include predicting any
event, detecting how much risk is incurred at any time,
and preventing catastrophes.
• New Trends:
– The use of Big Data for understanding, helping, and
managing people is relatively new but holds promise.
• Limitations:
– Use evidence as much as possible to inform your intuition
and experience.
Identify the Major Behavioral Science
Disciplines That Contribute to OB (1 of 4)
• OB is a behavioral social science that merges concepts from a
number of different social sciences to apply specifically to the
organizational setting at both the individual (or micro) and
group (or macro) levels. The most significant social sciences are:
– Psychology: Human behavior & mind. seeks to measure, explain, and sometimes change the
behavior of humans and other animals. Psychology's focus on the individual has led to contributions in the areas of learning,
personality, emotions, motivational forces, and more.
– Sociology: social relationships, interactions, culture studies people in relation to their
social environment or culture.
– Social psychology: blends the concepts of psychology and sociology.
– Anthropology: is the study of societies to learn about human beings and their activities.
– Economics( production, distribution and consumption of goods and services)
– Political Science ( political thoughts, activities, behavior)
– Medical Science ( an in depth understanding of the human body)

Identify the Major Behavioral Science
Disciplines That Contribute to OB (2 of 4)
Exhibit 1-3 Toward an OB
Discipline

Demonstrate Why Few Absolutes
Apply to OB
• There are few, if any, simple and universal principles that

explain organizational behavior.
– Contingency variables situational factors are variables
that moderate the relationship between the independent
and dependent variables.

Identify the Challenges and
Opportunities of OB Concepts (1 of 12)
Exhibit 1-4 Employment Options
Sources: Based on J. R. Anderson, E. Binney, N. M. Davis, G. Kraft, S. Miller, T. Minton-Eversole, . . . and A. Wright,
“Action Items: 42 Trends Affecting Benefits, Compensation, Training, Staffing and Technology,” HR Magazine (January
2013): 33; M. Dewhurst, B. Hancock, and D. Ellsworth, “Redesigning Knowledge Work,” Harvard Business Review
(January–February 2013): 58–64; E. Frauenheim, “Creating a New Contingent Culture,” Workforce Management
(August 2012): 34–39; N. Koeppen, “State Job Aid Takes Pressure off Germany,” The Wall Street Journal, February 1,
2013, A8; and M. A. Shaffer, M. L. Kraimer, Y.-P. Chen, and M. C. Bolino, “Choices, Challenges, and Career
Consequences of Global Work Experiences: A Review and Future Agenda,” Journal of Management (July 2012): 1282–
1327.
Opportunities of OB Concepts
• Responding to economic pressure
– In tough economic times, effective management is an asset.
– In good times, understanding how to reward, satisfy, and retain
employees is at a premium.
– In bad times, issues like stress, decision making, and coping
come
to the forefront.
• Responding to globalization
– Increased foreign assignments.
– Working with people from different cultures.
– Overseeing movement of jobs to countries with low-cost labor.
– Adapting to differing cultural and regulatory norms.

• Managing workforce diversity
– Workforce diversity – organizations are becoming more
heterogeneous in terms of gender, age, race, ethnicity, sexual
orientation, and inclusion of Workforce other diverse groups.
• Improving customer service
– Service employees have substantial interaction with
customers.
– Employee attitudes and behavior are associated with
customer satisfaction.
– Need a customer-responsive culture.

• Improving people skills
– People skills are essential to managerial effectiveness.
– OB provides the concepts and theories that allow managers
to predict employee behavior in given situations.
• Working in networked organizations
– Networked organizations are becoming more pronounced.
– A manager’s job is fundamentally different in
networked organizations.
– Challenges of motivating and leading “online” require
different
techniques.

(9 of 12)
• Using social media at work
– Policies on accessing social media at work.
 When, where, and for what purpose.
– Impact of social media on employee well-being.
• Enhancing employee well-being at work

– The creation of the global workforce means work no
longer sleeps.
– Communication technology has provided a vehicle for working
at any time or any place.
– Employees are working longer hours per week.
– The lifestyles of families have changed—creating conflict.
– Balancing work and life demands now surpasses job security
as an employee priority.
(11 of 12)
• Creating a positive work environment

– Positive organizational scholarship is concerned with how
organizations develop human strength, foster vitality and resilience, and
unlock potential.
– This field of study focuses on employees’ strengths versus their
limitations, as employees share situations in which they performed at
their personal best.
• Improving ethical behavior
– Ethical dilemmas and ethical choices are situations in which an
individual is required to define right and wrong conduct.
– Good ethical behavior is not so easily defined.
– Organizations distribute codes of ethics to guide employees through
ethical dilemmas.
– Managers need to create an ethically healthy climate.
Three Levels of Analysis in This
Text’s OB Model
Exhibit 1-5 A Basic OB
Model

Book’s OB Model (1 of 3)
• Inputs
– Variables like personality,
group structure, and
organizational culture that
lead to processes.
– Group structure, roles, and
team responsibilities are
typically assigned
immediately before or after a
group is formed.
– Organizational structure and
culture change over time.

• Processes
– If inputs are like the nouns
in organizational behavior,
processes are like verbs.
– Defined as actions that
individuals, groups, and
organizations engage in as
a result of inputs, and that
lead to certain outcomes.

• Outcomes
– Key variables that you want
to explain or predict, and
that are affected by some
other variables.

Outcome Variables (1 of 6)
• Attitudes and stress
– Employee attitudes are the evaluations employees
make, ranging from positive to negative, about objects,
people, or events.
– Stress is an unpleasant psychological process that
occurs in response to environmental pressures.

• Task performance
– The combination of effectiveness and efficiency at
doing your core job tasks is a reflection of your level
of task performance.

• Organizational citizenship behavior
– The discretionary behavior that is not part of an
employee’s formal job requirements, and that
contributes to the psychological and social environment
of the workplace, is called organizational citizenship
behavior.

• Withdrawal behavior
– Withdrawal behavior is the set of actions that
employees take to separate themselves from the
organization.

• Group cohesion
– Group cohesion is the extent to which members of
a group support and validate one another at work.
• Group functioning
– Group functioning refers to the quantity and
quality
of a group’s work output.

• Productivity
– An organization is productive if it achieves its goals by
transforming inputs into outputs at the lowest cost. This
requires both effectiveness and efficiency.
• Survival
– The final outcome is organizational survival, which is
simply evidence that the organization is able to exist
and grow over the long term.

The Plan of the Text
Exhibit 1-6 The Plan of the Text

Summary
This first chapter has provided a firm foundation that will be the basis for the
study and application of concepts and practices.
• The systematic study of OB can improve predictability of behavior and,
while it is not perfect, it provides excellent roadmaps to guide managers and
leaders.
• These studies help to ensure that contingencies are in place to better
understand people’s behaviors and how to influence them for the success
of the employee and the organization.
• It is important for managers to develop their interpersonal “people skills” to
be effective. Understanding OB makes their organizations work more
effectively by improving productivity, reducing absenteeism, turnover, and
deviant workplace behavior, and increasing organizational citizenship behavior
and job satisfaction.

Implications for Managers (1 of 2)
• Resist the inclination to rely on generalizations; some provide

valid
insights into human behavior, but many are erroneous.
• Use metrics and situational variables rather than “hunches”
to explain cause-and-effect relationships.
• Work on your interpersonal skills to increase your leadership
potential.
• Improve your technical skills and conceptual skills through
training and staying current with OB trends like big data and fast
data.
• OB can improve your employees’ work quality and productivity by
showing you how to empower your employees, design and
implement change programs, improve customer service, and
help your employees balance work-life
Copyright © 2019conflicts.
Pearson Education, Ltd. All Rights Reserved.
Chapter 15
Organizational Culture
Lect. 02

Learning Objectives
1. Describe the common characteristics of organizational culture.
2. Compare the functional and dysfunctional effects of
organizational culture on people and the organization.
3. Identify the factors that create and sustain an organization’s
culture.
4. Show how culture is transmitted to employees.
5. Describe the similarities and differences in creating an ethical culture, a positive culture,
and a spiritual culture.
6. Show how national culture can affect the way organizational culture is transported to
another country.

What is in it for me?
• In a 2021 Global Culture Survey of 3,200 leaders and employees worldwide,
PricewaterhouseCoopers highlighted the following findings:
72% report that culture helps successful change initiatives happen.
69% of organizations that adapted amid the pandemic say culture offers a
competitive advantage.
67% of survey respondents said culture is more important than strategy

or
operations.
•

What is in it for me?
• Organizational culture is present in our daily lives. Whether or
not you recognize it, organizational culture can be found in
every family unit and in any group dynamic you are a part of.
– Understanding how culture is developed
can give insight into an organization.
– Recognizing internal and external factors that contribute
to an organization’s cultural identity and learning how to
adjust them to change culture is a valuable skill to have.
– The ability to identify a positive or negative company
culture can assist you when applying for jobs and when
deciding on a career path.
– Many published empirical research indicated that
corporate culture impacts financial performance
measured as EBIT; and that culture explains as much as
46% of EBIT.

Organization + Culture
What is an organization ?
An organization consists of individuals with different specializations,

educational qualifications and work experiences all working towards a
common goal.
What is culture ?
The attitude, traits and behavioral patterns which govern the way an
individual interacts with others is termed as culture. Culture is
something which one inherits from his ancestors and it helps in
distinguishing one individual from the other.

Common Characteristics of
Organizational Culture (1 of 6)
• A Definition of Organizational Culture
– Organizational culture refers to a system of shared
meaning held by members that distinguishes the
organization from other organizations.
Organizational culture refers to a
system of shared assumptions,
values, and beliefs that show
employees what is appropriate and
inappropriate behavior.
These shared values have a strong influence on the
people in the organization and dictate how they
dress, act, and perform their jobs.
These values have also a strong influence on https://youtu.be/4cBN8xH-5Qw

organizational performance.
Definition of Organizational Culture
The Nordstrom Case. “Use good judgment in all

situations.”
1980s Peters and Waterman’s best-selling book In Search of

Excellence

Levels of Culture (Shein)
https://youtu.be/wd1bsxWeM6Q
linking Values to behaviors.

• You can’t call your culture “transparent” if people are afraid of speaking truth to power. You can’t
say you have a “collaborative” workplace if you regularly promote selfish employees.
Amazon punishes “complacency” and having a “Day 2 mentality.” Mediocrity is not welcomed. The
tech giant rewards speed, relentlessness, and intellectual autonomy. This is consistent with
Amazon’s aggressive culture.

• understanding the organization’s culture may start from observing its artifacts: the
physical environment, employee interactions, company policies, reward systems,
and other observable characteristics.
• However, simply looking at these tangible aspects is unlikely to give a full picture of
the organization.

Levels of Culture (Shein)
Corporate logos, uniforms, rituals, stories, events, "heroes,"
Symbolic posters, buildings, layout, purported organizational structure.
(Artifacts) Artifacts include organizational structures and processes that are
apparent and visible
Buzzwords and phrases, renaming roles/unites, "culture change,"

values and culture explicitly espoused by the organization,
Discursive technical or professional norms and rules. Rules imposed by the
(Values) organization. Values include the “why” behind why a company
operates the way they do. It includes company goals, strategies
and philosophies that drive a company’s mission
Workers’ sense of identity, attitudes towards and feelings about

Affective and the manifestations of levels 1–2, trust in organizations’ espoused
cognitive versions, understanding of the "reality" of working in the
(Underlying organization. Tacit knowledge of how things work. These
assumptions & underlying assumptions create the foundation for the values and
attributes) artifacts levels. They take time and energy to fully decipher and
understand
• The culture of an organization decides the way employees behave
amongst themselves as well as the people outside the organization.
• Primary characteristics that capture the essence of an organization’s culture:
Each of the characteristics exists on a continuum from low to high. They are:
– Adaptability/ Innovation & Risk taking
– Detail orientation/ Attention to details
– Results/Outcome orientation
– People/Customer orientation
– Collaboration/Team orientation
– Integrity
Appraising an organization on the strength of each provides a basis for the shared
understanding that members have about the organization, how things are done in it, and the way
they are supposed to behave.

1. Adaptability (innovation & Risk taking). The degree to which employees are
encouraged to be innovative and flexible as well as to take risks and experiment.
2.Detail orientation (Attention to detail). The degree to which employees are
expected to exhibit precision, analysis, and attention to detail.
3.Results/Outcome orientation. The degree to which management focuses on
results or outcomes rather than on the techniques and processes used to achieve
them.
4.People/Customer orientation. The degree to which management decisions
take into consideration the effect of outcomes on people within and outside of the
organization.
5. Collaboration/Team orientation. The degree to which work activities are
organized around teams rather than individuals.
6.Integrity. The degree to which people exhibit integrity and high ethical
standards in their work.

• Another common cultural framework groups organizations into one of
four types, each which has its own assumptions, beliefs, values,
artifacts, and even criteria for effectiveness:

• Another common cultural framework groups organizations into one
of four types, each which has its own assumptions, beliefs, values,
artifacts, and even criteria for effectiveness:
– The Clan- ex. Family business
 A culture which is based on human affiliation. Employees value attachment,
collaboration, trust, and support.
– The Adhocracy – ex. Google
 A culture which is based on change. Employees value growth, variety,
attention to detail, stimulation, and autonomy.
– The Market
 A culture which is based on achievement. Employees value communication,
competence, and competition.
– The Hierarchy- ex Mcdonald’s
 A culture which is based on stability. Employees value communication,
formalization, and routine.
• Culture as a Descriptive Term
– Organizational culture is concerned with employees’
perceptions of the characteristics of the culture, not
whether they like them.
 Does it encourage teamwork?
 Does it reward innovation?
 Does it stifle initiative?
– It differs from job satisfaction:
 Job satisfaction is evaluative.
 Organizational culture is descriptive.

Characteristics of
Organizational Culture (5
of 6)
• Do Organizations Have Uniform (Single) Cultures?

– Most organizations have a dominant culture and
numerous sets of subcultures.
– The dominant culture expresses the core values a
majority of members share and that give the
organization distinct personality.
 Subcultures tend to develop in large organizations
to reflect common problems, situations, or
experiences that members face. subcultures can
influence members’ behavior too. A subculture can
function quite well within the dominant culture.

• Strong versus Weak Cultures
– Strong culture: core values are intensely held and widely
shared.
 The more members who accept the core values and the
greater their commitment, the stronger the culture and
the greater its influence on member behavior.
– an organizational culture with a consensus on the
values that drive the company and with an intensity that
is recognizable even to outsiders BECAUSE
 They are characterized by goal alignment.
 They create a high level of motivation because of shared values by the
members.
 They provide control without the oppressive effects of bureaucracy.

– In weak culture employees treat their organization as a
mere source of earning money and never get attached to it.
– Strong culture companies can be either positive (an asset)
or
negative (a liability).
– If the company’s values are constructive, then having a
strong culture is an asset. If the company’s values are
negative or dysfunctional, then having a strong culture will be
a liability.

For example, the informal culture at Ford Motor Company during the late
1960s and early 70’s was captured in the statement made among
employees that: “if you can get it to drive out the door, we can sell it!”
This was not a formal corporate pronouncement, but a statement that was
prevalent in conversations at the company. It was a statement that
contained an implicit lack of respect for the customer, and suggested the
lack of importance of true product quality. Although Ford later made the
pronouncement that “Quality is Job 1,” this was clearly a response to
damage to its brand when customers realized that Ford products had
declined in quality.
In contrast, Toyota has steadily increased its customer loyalty and

overcome the once prevailing view that products “made in Japan” were of
inferior quality. It has accomplished this by a culture that emphasizes
“perfection” in the customer experience from the product to the sales
process and the service process as well.

What Do Cultures Do?
(1 of 9)
• organizations that have a rare and hard-to-imitate

organizational culture benefit from it as a competitive
advantage
• The Functions of Culture: Culture is the social glue that
helps hold an organization together by providing
appropriate standards for what employees should say
or do.
– Boundary-defining role.
– Conveys a sense of identity for members.
– Facilitates the generation of commitment to the Org..
– Enhances the stability of the social system.
– Serves as a sense-making and control mechanism.

What Do Cultures Do?
(1 of 9)
• The Functions of Culture: Culture is the social glue that helps hold
an organization together by providing appropriate standards for
what employees should say or do.
– Boundary-defining role.
 Culture helps to create distinctions between one organization and others.
– Conveys a sense of identity for members.
– Facilitates the generation of commitment.
 Culture encourages the members of the organization to give priority to
organizational interests over and above their personal interests
– Enhances the stability of the social system.
 Culture is also known as the social glue that helps to hold the organization together by
providing appropriate standards for what employees should say and do. It provides a
list of social do’s and don’ts for the employees
– Serves as a sense-making and control mechanism.
 Every organization has its own set of assumptions, understandings and implicit rules to
guide the day to day behavior of the employees.

What Do Cultures Do? (2 of 9)
• Culture Creates Climate
– Organizational climate is shared perceptions about the organization and
work environment.
• The Ethical Dimension of Culture

– the ethical culture, or the shared concept of right and wrong behavior in that
workplace, develops as part of the organizational climate.
• Sustainability
– A culture of sustainability is one in which organizational members hold shared
assumptions and beliefs about the importance of balancing economic efficiency,
social equity and environmental accountability.
• Culture and Innovation
– The most innovative companies have open, unconventional, collaborative,
vision-driven, and accelerating cultures.

• Culture Creates Climate
– Organizational climate is shared perceptions about
the organization and work environment.
The unique culture of an organization creates a distinct atmosphere that

is felt by the people who are part of the group, and this atmosphere is
known as the climate of an organization.
Difference between organizational culture and organizational climate is that the

culture is about the norms, values and behavior adopted by the
employees within the organization while the climate is about the
atmosphere of the organization that is created based on the culture.

• The Ethical Dimension of Culture
– Organizational cultures are not neutral in their ethical
orientation, even when they are not openly pursuing
ethical goals.
 Over time, the ethical culture, or the shared concept of right

and wrong behavior in that workplace, develops as part of
the organizational climate.
– The ethical climate reflects the true values of the organization
and shapes the ethical decision making of its members.

• Ethical climate theory (ECT) and the ethical climate index
(ECI) categorize and measure the ethical dimensions of
organizational cultures.
– Five climate categories: instrumental, caring,
independence, law and code, and rules.
– Each explains the general mindset, expectations, and
values of the managers and employees in relationship
to their organization.
• Ethical climate powerfully influences the way its individual
members feel they should behave.

Sustainability:
• A culture of sustainability is one in which organizational

members hold shared assumptions and beliefs about the
importance of balancing economic efficiency, social
equity and environmental accountability.
• To create a truly sustainable business, an
organization must develop a long-term culture and
put its values into practice.
•

• Sustainability: practices that can be maintained over very
long periods of time because the tools or structures that
support the practices are not damaged by the processes.
– Social sustainability practices.
– Sustainable management doesn’t need to be purely
altruistic.
• To create a truly sustainable business, an organization
must develop a long-term culture and put its values into
practice.
• Like other cultural practices we’ve discussed, sustainability
needs time and nurturing to grow.
• Culture and Innovation
– The most innovative companies have open,
unconventional, collaborative, vision-driven, and
accelerating cultures.
– Startup firms often have innovative cultures.
 They are usually small, agile, and focused on
solving problems in order to survive and grow.

• Culture as an Asset
– Culture can significantly contribute to an organization’s
bottom line in many ways.
– There are many more cases of business success stories
because of excellent organizational cultures than there are
of success stories despite bad cultures, and almost no success
stories because of bad ones.
– Culture is beneficial to the organisation as it enhances
organizational commitment and increases the consistency
of employee behavior.
– Culture is beneficial to the employee also as it reduces
ambiguity. Employees become very clear as to how things are
to be done and what is more important for the organisation.

What Do Cultures Do? (9 of
9)
• Culture as a Liability
– Institutionalization
 Barriers to
Change. (IBM,
XEROX, GM)
 Barriers to
Diversity
 Toxicity and
Dysfunctions
 Barriers to Acquisitions and Mergers.
(DaimlerChrysler merger)
–
9)
– Institutionalization
• That is, the organization is valued for itself and not for the goods or services it produces—and it
takes on a life of its own, apart from its founders or members. It doesn’t go out of business even if its
original goals are no longer relevant. Acceptable modes of behavior become largely self-evident to
members, and although this isn’t entirely negative, it does mean behaviors and habits that should be
questioned and analyzed become taken for granted, which can stifle innovation and make
maintaining the organization’s culture an end in itself.
– Barriers to Change
• Consistency of employee behavior is an asset to the organization, when it has a stable
environment. When the organization is dynamic, it will prove to be a liability as the employees will
try to resist changes in the environment. Companies such as IBM, Xerox and General motors’ have
very strong cultures which worked well for them in past, but these strong cultures only become
barriers to change when business environment changes. Therefore, organizations which have strong
cultures which proved successful in the past can lead to failure in future, when these cultures do not
match with the changing environmental needs.

9)
– Barriers to Diversity
Strong cultures put a lot of pressure on the employees to conform to the accepted values and styles of the
organization. Even the new employees who belong to different race, religion etc. are expected to conform to
the organization’s core cultural values, otherwise they are deemed to be unfit for the organization. Strong
cultures do not acknowledge the fact that people from different backgrounds bring unique strengths to the
organization. Strong cultures can also prove to be barriers to diversity when these support organization bias
or when these become insensitive to people who are different in one way or the other. Diverse behaviors and
strengths are likely to diminish in strong cultures as people attempt to fit in. Strong cultures can be
liabilities when they effectively eliminate the unique strengths that people of different backgrounds
bring to the organization, or when they support institutional bias or become insensitive to people who are
different.
– Toxicity and Dysfunctions

In general, we’ve discussed cultures that cohere around a positive set of values and attitudes.
This consensus can create powerful forward momentum. However, coherence around negativity
and dysfunctional management systems in a corporation can produce downward forces that are
equally powerful yet toxic.be less creative.

9)
– Barriers to Acquisitions and Mergers
• Culture can act as barrier to mergers and acquisitions. Historically financial matters and product synergy alone were
considered to decide which company should acquire which company or which unit should merge with which firm.
But in the recent years there has been a change in the trend. Cultural compatibility has become a primary concern
while deciding about acquisitions and mergers. Favorable financial statement or product line are, of course, the
initial attractions at the time of acquisition, but another important factor to be considered is how well the cultures of
the two organizations match with each other.

Creating and Sustaining Culture (1 of 6)
• How a Culture Begins
– Ultimate source of an organization’s culture is its
founders.
– Founders have the vision of what the organization
should be.
– New organizations are typically small, which facilitates
the founders’ imparting of their vision on all
organizational members.
– Industry demands also matter

• Culture creation occurs in three ways:
– Founders hire employees who think and feel the way
they do.
– Employees are indoctrinated and socialized into the
founders’ way of thinking.
– Founders’ own behavior encourages employees to
identify with them and internalize their beliefs, values,
and assumptions.
(ex: David Packard of Hewlett-Packard, Bill Gates of Microsoft, Herb Kelleher of Southwest
Airlines, Mary Kay of Mary Kay Cosmetics, etc)

• Keeping a Culture Alive
– Selection
 Identify and hire individuals with the knowledge,
skills, and abilities to perform successfully.
 Two-way street.
– Top Management
 Establish norms of
behavior.

Creating and Sustaining Culture
 First, it’s reflected and sustained via HR policies – selection (after minimum
qualifications are established, then hire for “fit”), perf evaluations, training and
career development, promotions, reward those who support culture, remove
those who do not.
 Next, top management behavior exemplifies culture (norms filter down – is

risk taking desirable? How much freedom do managers give employees to
make decisions? What should we wear to work? What behaviors get rewarded
and lead to promotions?, etc).
 Finally, socialization methods (the process that adapts employees to the

organization’s culture) are key (pre-arrival, encounter, metamorphosis stages).

Creating and Maintaining Organizational
Culture
• How Are Cultures Created? Where do cultures come from?
• Understanding this question is important so that you know how they can be changed.
This explains one

reason why
culture is so hard
to change: It is
shaped in the
early days of a
company’s
history.

Exhibit 15-2 A Socialization
Model

Creating and Sustaining
Culture (4 of 6)
• Socialization is the process of helping new employees adapt to the organization’s culture.
The
socialization model is a three-stage process.
– The first stage is prearrival, which explicitly recognizes that each individual arrives
with a set of values, attitudes, and expectations. One way to capitalize on pre-hire
characteristics in socialization is to use the selection process to inform prospective
employees about the organization as a whole. The selection process ensures the
inclusion of the “right type”—those who will fit in.
– The second stage is encounter, in which the individual confronts the possible
dichotomy between expectations and reality. If expectations were fairly accurate, the
encounter stage merely cements earlier perceptions. However, this is often not the
case. At the extreme, a new member may become disillusioned enough to resign.
Proper recruiting and selection should significantly reduce that outcome, along
with encouraging friendship ties in the organization—newcomers are more
committed when friends and coworkers help them “learn the ropes.”
– Finally, to work out any problems discovered during the encounter stage, the
new member changes or goes through the metamorphosis stage.

Exhibit 15-4 How Organizational Cultures Form

Show How Culture is
Transmitted to Employees
• Culture is transmitted to employees through:
– Stories – (ex. Nordstrom and car tires)
– Rituals – repetitive sequence of activities expressing and reinforcing key values (ex. Mary
Kay cosmetics annual award meeting & Saturday morning meetings of Wal-Mart)
– Material Symbols – convey to employees what is important, who holds power and
what kinds of behavior are appropriate (ex. Limousines, jets, offices, dress)
– Language – identifies members of cultures or subcultures, if used by all then it’s
accepted and
preserved
 (ex. Slang used by some companies)
– Mission Statements: “To be Earth’s most customer-centric company, where customers can
find and discover anything they might want to buy online, and endeavors to offer its customers
the lowest possible prices.” : Amazon
– Rules & Policies – Policies about issues such as decision making, human resources, and
employee privacy reveal what the company values and emphasizes. For example, a
company that has a policy such as “all pricing decisions of merchandise will be made at
corporate headquarters” is likely to have a centralized culture that is hierarchical
– Physical Layout –

Influencing an Organizational Culture (1 of 5)
• How can management create a more ethical culture?
– Be a visible role model.
– Communicate ethical expectations.
– Provide ethics training.
– Visibly reward ethical acts and punish unethical ones.
– Provide protective mechanisms.

Influencing an
• There is a trend today for organizations to attempt to

create a positive organizational culture:
– Emphasizes building on employee strengths.
– Rewards more than it punishes.
– Emphasizes individual vitality growth.
• Positive culture is not a cure-all.

Influencing an Organizational
Culture (2 of 5)
• There is a trend today for organizations to attempt to
create a positive organizational culture:
– Emphasizes building on employee strengths.
– Rewards more than it punishes.
– Emphasizes individual vitality growth.
• Positive culture is not a cure-all.

Culture (3 of 5)
• What Is Spirituality?
– Workplace spirituality is not about organized religious
practices.
 It is not about God or theology.
– Workplace spirituality recognizes that people have an
inner life that nourishes and is nourished by meaningful
work that takes place in the context of community.

Culture (4 of 5)
Exhibit 15-5 Reasons for the Growing Interest in
Spirituality
• Spirituality can counterbalance the pressures and stress of a turbulent pace of life.
Contemporary lifestyles—single-parent families, geographic mobility, the temporary
nature of jobs, new technologies that create distance between people—underscore the
lack of community many people feel and increase the need for involvement and
connection.
• Formalized religion hasn’t worked for many people, and they continue to look for
anchors to replace lack of faith and to fill a growing feeling of emptiness.
• Job demands have made the workplace dominant in many people’s lives, yet they
continue to question the meaning of work.
• People want to integrate personal life values with their professional lives.
• An increasing number of people are finding that the pursuit of more material
acquisitions leaves them unfulfilled.

Culture (5 of 5)
• Characteristics of a Spiritual Organization
– Cultural characteristics present in spiritual organizations
include:
 Benevolence
 Strong sense of purpose
 Trust and respect
 Open-mindedness

Identify Characteristics of a Spiritual
Culture (1 of 2)
• Achieving a Spiritual Organization
– Many organizations have grown interested in
spirituality but have had difficulty putting its principles
into practice.
 Leaders can demonstrate values, attitudes, and
behaviors that trigger intrinsic motivation and a
sense of calling through work.
 Encouraging employees to consider how their work
provides a sense of purpose through community
building also can help achieve a spiritual workplace.

Identify Characteristics of a Spiritual
Culture (2 of 2)
• Critics of spirituality in organizations focus on:
– The question of scientific foundation: what really is
workplace spirituality?
– Are spiritual organizations legitimate? Do organizations
have the right to impose spiritual values on their
employees?
– The question of economics: are spirituality and profits
compatible?

The Global Context
• Organizational cultures often reflect national culture.
• One of the primary things U.S. managers can do is to
be culturally sensitive.
• The management of ethical behavior is one area where
national culture can rub up against corporate culture.

How Do Cultures Change?
• Culture is part of a company’s DNA and is
resistant to change efforts.
• Many organizations may not even

realize that their current culture
constitutes a barrier against
organizational productivity and
performance.
• It would be easier to convince managers

and employees that culture change is
necessary in certain conditions such as:
– if an organization
is experiencing failure or
– is under threat of bankruptcy or
– an imminent loss of market share,
• A company can use such downturns to

generate employee commitment to the
change effort.

Exhibit 15-6 How Organizational Cultures Have an Impact

on Employee Performance and Satisfaction

Implications for Managers
(2 of 3)
• Realize that an organization’s culture is relatively fixed in the
short term. To effect change, involve top management and
strategize a long-term plan.
• Hire individuals whose values align with those of the
organization; these employees will tend to remain committed
and satisfied. Not surprisingly, “misfits” have considerably higher
turnover rates.
• Understand that employees’ performance and socialization
depend to a considerable degree on their knowing what to do
and not do. Train your employees well and keep them
informed of changes to their job roles.

(3 of 3)
• You can shape the culture of your work environment,

sometimes as much as it shapes you. All managers can
especially do their part to create an ethical culture and to
consider spirituality and its role in creating a positive
organizational culture.
• Be aware that your company’s organizational culture
may not be “transportable” to other countries.
Understand the cultural relevance of your organization’s
norms before introducing new plans or initiatives overseas.

Chapter 14
Foundations of Organization
Structure
Lect. 03

Learning Objectives
1. Identify seven elements of an organization’s structure.
2. Identify the characteristics of the functional structure,
the bureaucracy, and the matrix structure.
3. Identify the characteristics of the virtual structure, the
team structure, and the circular structure.
4. Describe the effects of downsizing on organizational
structures and employees.
5. Contrast the reasons for using mechanistic versus
organic structural models.
6. Analyze the behavioral implications of different
organizational designs.

Organizational Structure- Definition
• Organizational structure is a mechanism for linking and coordinating people and groups
together within the framework of their roles, authority and power.
• Organizational structure defines how job tasks are formally divided, grouped, and
coordinated.
https://youtu.be/zUd0UNHyy60
Organizational Structure- Definition
• The structure of an organization usually features six different
elements:
1) Work specialization (Work Design/ “type & No.”)

2) Departmentalization (Administrative division)
3) Chain of command (Hierarchy)
4) Span of control (Management ratio)
5) Centralization and decentralization (distribution of Power)
6) Formalization (Standardization)
There is no perfect or optimal organizational structure which ideally

combines those areas. The ideal thing is to implement a structure which
is most suitable to the organization’s goals.

Identify Seven Elements of an
Organization’s Structure (1 of 10)
Exhibit 14-1 Key Design Questions and Answers for Designing
the
Proper Organizational Structure
The Key Question The Answer Is Provided by
1. To what degree are activities subdivided into Work specialization
separate jobs?
2. On what basis will jobs be grouped together? Departmentalization
3. To whom do individuals and groups report? Chain of command
4. How many individuals can a manager efficiently Span of control
and effectively direct?
5. Where does decision-making authority lie? Centralization and decentralization
6. To what degree will there be rules and Formalization
regulations to direct employees and
managers?
7. Do individuals from different areas need to Boundary spanning
regularly interact?

• Work specialization: the division of labor into separate
activities & how responsibilities are split between
employees based on the job description.
– Repetition of work.
– Training for specialization.
– Increasing efficiency through invention.
– Henry Ford (assembly line)

Exhibit 14-2 Economies and Diseconomies of Work
Specialization

• Grouping jobs together so common tasks can be
coordinated is called departmentalization.
– By functions performed.
– By type of product or service the organization
produces.
– By geography or territory.
– By process differences.
– By type of customer.

• Chain of command: an unbroken line of authority that
extends from the top of the organization to the lowest
echelon and clarifies who reports to whom.
– Once a basic cornerstone in organization design.
– Two complementary concepts:
 Unity of command
 Authority

• The chain of command is less relevant today because of
technology and the trend of empowering people.
– Operating employees make decisions once reserved
for management.
– Increased popularity of self-managed and cross-
functional teams.
• Many organizations still find that enforcing the chain of
command is productive.

Exhibit 14-3 Contrasting Spans of Control

• Centralization and Decentralization
– Centralization refers to the degree to which decision making
is concentrated at a single point in the organization.
– Advantages of a decentralized organization:
 Can act more quickly to solve problems.
 More people provide input into decisions.
 Employees are less likely to feel alienated from those
who make decisions that affect their work lives.

• Formalization: the degree to which
jobs within the organization are
standardized.
– A highly formalized job means a
minimum amount of discretion.
– Low formalization – job
behaviors are relatively non-
programmed, and employees
have a great deal of freedom to
exercise discretion in their work.

Key takeaways
An organizational structure is the arrangement of an organization’s
workforce according to job responsibility and ranking.
It ensures the proper functioning of an organization by establishing its chain
of command and workflow.
The key elements of an organizational structure are work design,
departmentalization, Centralization, chain of command, formalization and span of
control.
Organizational structure enables quick decision-making and better coordination
and communication among employees resulting in enhanced productivity.
Thus, an OS of a company:
 Forms the basis of employee reporting and relations
 Decides the post of employees in their administrative divisions
 Formulates a system of coordination and interdependence in an organization
 Establishes a well-defined workflow aimed at attaining organizational goals

Common Organizational
Frameworks and
Structures (1 of 7)
The most common different types of organizational structure are:
1. Flat (Simple Structure)
2. Hierarchical/ Bureaucracy Structure
– Functional
– Divisional
3. Matrix structure
4. Team Structure
The most common OS in use in all the companies is the functional
OS.

Common Organizational Frameworks
and Structures (1 of 7)
Exhibit 14-4 A Simple Structure (Jack Gold’s Men’s Store)
“pre-bureaucratic”, lacks a standardization of tasks.

• Simple structure: the manager and the owner are one
and the same.
– Strengths:
 Simple, fast, and flexible.
 Inexpensive to maintain.
 Accountability is clear.
– Weaknesses:
 Difficult to maintain in anything other than small
organizations.
 As size increases decision making slows.
 Risky—everything depends on one person.
Bureaucracy
(Hierarchical OS)
Bureaucratic organizational structures take a chapter out of researcher

Max Weber’s book, with clearly defined roles and responsibilities,
hierarchical structure and respect for merit.

Organizational
Frameworks and
Structures (3 of 7)
• A bureaucracy (Hierarchical OS) This pyramid-like,
centralized organizational structure.
• There is a hierarchy of workers with leaders at the top, the workers below,
and supervisors placed in between to get the work done.
• It is more of a linear OS where the delegation of power emanates from the
top management. It is a widely popular form of OS and is seen in companies
like Amazon. Nevertheless, it is a salient feature of most government
organizations.
• Organizations with bureaucratic structures can get by with less talented
people at lower levels, because decision making almost always falls to
senior leaders.

• A bureaucracy is characterized
by standardization.
– Highly routine operating tasks
achieved through specialization.
– Very formalized rules and
regulations.
– Tasks grouped into functional
departments.
– Centralized authority.
– Narrow spans of control.
– Decision making that follows the
chain of command.

Common Organizational
Frameworks and Structures (3 of 7)
• A bureaucracy (Hierarchical OS)
Pros:
• ideal for organizations that require standardization (think banks,
government offices).
• ideal for organizations looking for the ability to perform standard tasks
highly efficiently.
Cons:
• concentrates decision-making at the top level. As a result, the organization suffers
from a lack of creativity as innovative ideas have to work their way up through various
levels of management.
• each employee communicates with their immediate superior and subordinates only.
This reduces coordination at various levels of power and departments.
• create silos – functional areas that often don’t talk to each other.
• specialization creates subunit conflicts, and functional unit goals can override the
organization’s goals.
• obsessive concern with following the rules can develop.
• bureaucracy is efficient only as long as employees confront familiar problems with
programmed decision rules.
If the bureaucratic organizational structure looks familiar, it’s because it’s still
tremendously popular with organizations today. Even as trends are changing
toward teams and other types of structures that help businesses compete,
organizations still hold onto the hierarchical structure of the bureaucratic
structure as the norm.
• Two aspects of bureaucracies:
• Functional structure: groups employees by their
similar specialties, roles, or tasks. Used in Amazon
and starbucks
• the functional structure allows specialists to become experts more easily than if they
worked in diversified units. Employees can also be motivated by a clear career path
to the top of the organization chart specific to their specialties.
• Divisional structure: groups employees into units by

product, service, customer, or geographical market
area.

Functional structure

• The functional organizational structure creates a fixed set of departments
based on certain functions like HR, accounts, marketing, etc.
• It segregates the workforce based on the requirements of each department.
For example, an accounting department will employ accountants and work to
manage the firm’s finances in the best possible manner. Likewise, the HR
department will look after the recruitment, payroll, and administration of the
firm.
• Moreover, the functional OS allows the employees to work for a particular
functional role without worrying about the other departments. So, for
example, a sales executive won’t be worried about a firm’s accounting work
and vice versa


Divisional Structure
• A divisional structure organizes employees around a common product or
geographical location. Examples of companies applying a divisional structure are
McDonald’s Corporati on and Disney. These brands can’t help but split the entire
organization by locati on to be able to adjust their strategies for audiences
representi ng different markets.


• This type of organizational structure comes into play when a firm
has grown exponentially to become a giant in its sector. For
example, a giant clothing company will require separate divisions
based on customer groups, product types, and geographical
locations. Hence, it will create a ladies’ fashion garment division,
kids wear division, men’s wear division, and affordable clothing
division.
• Each division will have its own Functions: production,
marketing, human resource, IT, and sales teams. In this
manner, the company could manage the product line or
geography with all necessary functional resources.

Matrix Structure
• Examples of organizations with a matrix structure include: Caterpillar, Phillips, Texas
Instruments.

• The matrix structure creates dual lines of authority and combines

two forms of departmentalization—functional and product.
• It is designed in an effort to give equal emphasis and

attention to product and function.
• For example, an Ad agencies use the matrix organizational structure. By
creating a dual reporting situation, a manager who’s working with a company
on advertising would be able to manage a team that included a
representative from each of the needed areas to get a campaign running—a
graphic designer, a space planner and so on.
Copyright © 2019 Pearson Education , Ltd. All Rights Reserved.

Whats are the weaknesses
of Matrix Structure?
ⓘ Start presenting to display the poll results on this

slide. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.
Organizational
Frameworks and
Structures (6 of 7)
– The strength of functional is putting specialists together. pooling
and sharing of specialized resources across products.
 This structure allows for the efficient allocation of specialists.
 It is ideal when environmental change is high.
 facilitates communication and coordination to cope with rapid
environmental change and enables an equal balance between product
and functional bosses.
 This structure also provides an opportunity for employees to acquire
functional or general management skills, depending on their
interests
 work best in organizations of moderate size with a few product
lines.
– The major drawback is that of duplication of costs and It can also
create power struggles, because it tosses aside the idea of
unity of command. Requires excellent interpersonal skills.
Matrix Structure

Exhibit 14-5 Matrix Structure for a College of Business
Administration

Alternate Design Options (1 of 4)
• The Virtual (Network) Organization
– The essence of the virtual organization is that it is typically a small,
core
organization that outsources major business functions. Think of it as
“renting” departments rather than owning them. Examples of
companies using this structure: Dow Chemical, H&M, IBM.
– Also referred to as a modular or network organization.
– It is highly centralized, with little or no departmentalization.
– the firm outsources or subcontracts many or most of its major processes to
separate companies and coordinates their activities from a small headquarters
organization.
Copyright © 2019 Pea rson Education, Ltd. All Rights Reserved.

Alternate Design Options (3 of 4)
• The team structure:
– A team-based organizational structure creates small teams that focus on
delivering one product or service. These teams are capable of solving
problems and making decisions without bringing in third parties.
Examples of organizations with a team-based structure include: Apple,
Cisco, Google.
– eliminates the chain of command and replaces departments with
empowered teams.
 Removes vertical and horizontal boundaries.
 Breaks down external barriers.
– Flattens the hierarchy and minimizes status and rank.
• When fully operational, the team structure may break down
geographic barriers. When larger organizations decide to use teams, they do so as a
part of a bureaucratic structure rather than a straight team structure.

Benefits of well-designed organizational
structure
Swift decision-making – The organizational structure helps the flow of information
effortlessly across different levels of management. It enables quick decision-making.
Coordination between different geographical divisions of a company – OS promotes
easy administration and working of an organization at multiple locations. A well-defined
OS enables better coordination between different units at various locations to ensure the
attainment of common organizational goals.
Enhances efficiency and productivity – OS improves the level of efficiency as the
staff knows their roles and responsibilities, and the supervisor knows what to expect of
their subordinates. Thus, it improves productivity in general.
Empowers employees – When workers have specific roles and duties according to
their skill set, they learn and become competent. Thus, OS boosts their confidence and
empowers them.
Reduces conflict within an organization – If an employee knows the scope of his work,
there is no possibility of conflict with other workers. Thus, OS reduces friction among the
workers.
Better communication among members – OS establishes excellent communication
between the management, supervisors, and workers. This promotes an effective flow of
information and work.

Identify the best structures for different
types of organizations
• Organizations have different strategic needs, and to facilitate those needs
they should have an organizational structure that supports business
activities
We’ve already learned about different kinds of organizational structures, from

the rigid bureaucratic type to the loose and free boundaryless organizational
structure. What works for one organization won’t work for another,

Mechanistic vs. Organic Structural
Models (1 of 8)
When managers combine the basic components and elements of an organizational
structure together, the result has certain characteristics that are best understood by
looking at it through the lens of organic and mechanistic organizations.
Exhibit 14-7 Mechanistic versus Organic

Models Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.
Mechanistic vs. Organic Structural Models (1 of 8)
• Organic Organizations have a low degree of formality,
specialization and standardization. Their decision making
is decentralized and their activities are well-integrated. The
organic model is usually flat, and it usually uses cross-
hierarchical and cross-functional teams and possesses a
comprehensive information network that features lateral
and upward communication in addition to downward
communication.
Organic structures are used in dynamic, unstable
• environments where the business needs to quickly adapt
to change, as the structure gives the organization the

flexibility to deal with fast-paced environmental change
and many different elements.
• A good example of an organization that uses an organic
structure might be a consulting firm. A consulting firm
responds to customer issues as they come up, and those
issues change with the business environment.

• Mechanistic organizations have centralized decision making and formal,
standardized control systems. Essentially, they are bureaucracies.
• Mechanistic organizations work well in stable, simple environments.
Managers integrate the activities of clearly defined departments through
formal channels and in formal meetings. Often, they feature many
hierarchical layers and a focus on reporting relationships.

Organic Mechanistic
General tasks Specialized tasks
Loosely defined departments and hierarchy Well-defined departments with clear hierarchy
Decentralized decision making by many individuals Centralized decision making by a few people
Integration achieved by managers and employees Integration achieved by formal manager meetings
interacting and exchanging information as
needed
Flexibility and capability of rapid change Clear and efficient reporting relationships
Most companies find themselves falling somewhere in between the

two extremes of organic and mechanistic. Each organization designs
its structure to enable its mission, goals, and strategy. If the structure
fits with other contextual elements, it has a better chance of being
effective in supporting the organization.

Factors of an Organizational Structure
• What elements influence the design of an
organization’s structure? Some organizations
choose to be mechanistic, others choose to be
more organic. Why is that the case?
1. Strategy ( Apple, Walmart, IBM)
2. Organization Size
3. Technology
4. Environment

Models (2 of 8)
• An organization’s structure is a means to help management
achieve its objectives.
• Most current strategy frameworks focus on three
dimensions:
– Innovation strategy
– Cost Minimization strategy
– Imitation strategy

Models (3 of 8)
Exhibit 14-8 The Strategy–Structure Relationship
Strategy Structural Option

Innovation Organic: A loose structure; low specialization, low
formalization, decentralized
Cost minimization Mechanistic: Tight control; extensive work specialization, high
formalization, high centralization
Imitation Mechanistic and organic: Mix of loose with tight properties;
tight controls over current activities and looser controls for new
undertakings

Models (4 of 8)
• Organizational Size
– Large organizations—employing 2,000 or more
people—tend to have more specialization, more
departmentalization, more vertical levels, and more
rules and regulations than do small organizations.
 The impact of size becomes less important as an
organization expands.

Models (5 of 8)
• Technology: the way an organization transfers its inputs

into outputs.
– Numerous studies have examined the technology-
structure relationship.
– studies have found that there is some correlation between the degrees
of routine-ness of the technology the organization employs, and
the structure that best supports it. By “degree of routine-ness” we
mean that the technology tends either toward routine (automated and
standardized) or non-routine (varied operations) activities.
– Routine tasks are often supported by organization structures that are
taller and more departmentalized
– Non-routine tasks required decentralization of decisions to support
the uniqueness of the tasks.
. Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.
Models (6 of 8)
• An organization’s environment includes outside
institutions or forces that can affect its performance.
– Dynamic environments create significantly more
uncertainty for managers than do static ones.
– To minimize uncertainty:
 Broaden structure to
sense and respond to
threats.
 Form strategic alliances.

Models (7 of 8)
Exhibit 14-9 Three-Dimensional Model of the Environment

Models (8 of 8)
• Another factor that shapes organizational structure is institutions.
– Regulatory pressures.
– Simple inertia.
– Culture.
– Fads or trends.
• Institutional pressures are often difficult to see specifically because we take

them for granted, but that doesn’t mean they aren’t powerful.
• A company should always be reviewing its strategy, size, technology and
environment to decide if the organization’s structure still supports the
business. If it’s in need of a change, then change should occur.

Analyze the Behavioral Implications of
Different Organizational Designs (1 of 2)
• An organization’s structure can have significant effects on
its members.
• It’s impossible to generalize!
– Not everyone prefers the freedom and flexibility of
organic structures.
– Some people are most productive and satisfied when
work tasks are standardized and ambiguity minimized.

Analyze the Behavioral Implications of
Different Organizational Designs (2 of 2)
• Organizational Designs and Employee Behavior
– Work specialization contributes to higher employee
productivity.
– No evidence supports a relationship between span of
control and employee satisfaction or performance.
– Fairly strong evidence links centralization and job
satisfaction, meaning that less centralization is
associated with higher satisfaction.
– National culture influences the preference for
structure.

Exhibit 14-10 Organizational Structure: Its Determinants
and Outcomes from

• In addition to individual and group factors, the structural relationships in which people
work has a bearing on employee attitudes and behavior.
– What’s the basis for this argument? To the degree that an organization’s
structure reduces ambiguity for employees and clarifies concerns, it shapes
their attitudes and facilitates and motivates them to higher levels of
performance.
• Specialization can make operations more efficient, but remember that

excessive
specialization can create dissatisfaction and reduced motivation.
• Avoid designing rigid hierarchies that overly limit employees’ empowerment and
autonomy.
• Consider the scarcity, dynamism, and complexity of the environment, and balance
organic and mechanistic elements when designing an organizational structure.
• A company should always be reviewing its strategy, size, technology and

environment to decide if the organization’s structure still supports the
business
• What should every good organizational structure do for a company? The
list includes, but is not limited to, the following:
 Aids effective communication.
 Aids in performance evaluation.
 Increases efficiency.
 Unburdens employees from excess or redundant work.
 Provides faster and better decision making.
 Provides clear reporting and working relationships

Examples of mechanistic structure
• General Motors is a good example of an organization using the
mechanistic model. Why do they use that?
• For one, they’re very large, and when that many people and
functions are involved, order is needed. But they’re also in a stable, if
not somewhat simple, environment. The car market fluctuates with
the economy, yes, but the company builds cars and trucks. Across all
their divisions, that function is basically the same.

Examples of companies undergoing
Structure changes
• Google is an excellent example of how a couple of guys in a garage changed
the world. They started out with a single focus—to develop the world’s best
internet search engine.
• That was about the last time that Google had a single focus.
• Google grew up fast, and in 20 years they’ve accumulated dozens of locations,

over 90,000 “Googler” employees, and many, many different interests. Among
their offerings are Google Docs, Google Translate, Google
Android, YouTube, Blogger, Google Fiber, Maps, Waze, Google
Home and
vehicles. Just to name a few. Google’s single umbrella, with its self-driving
relatively “flat”
organizational structure, was growing monstrously diverse.
• How does a single, relatively flat organizational structure support “monstrously

diverse”? The short answer is, it doesn’t.

Examples of mechanistic/ organic structures
• CEO and founder Larry Page created a holding company for all of Google’s
projects and called it Alphabet. Then, each of those Google interests (26 in all,
as you might have guessed) became its own company, with its own CEO. The
CEO of each of those companies is now able to concentrate on the goals of that
company without worrying about the mission of Google overall. It allowed
greater autonomy to those smaller companies under the Alphabet umbrella.

• Larry Page explained in a blog post: “Fundamentally, we believe this allows us
more management scale, as we can run things independently that aren’t very
related. Alphabet is about businesses prospering through strong leaders and
independence.”
• Page admitted the reorg was radical in the same post, saying, “in the
technology industry, where revolutionary ideas drive the next big growth areas,
you need to be a bit uncomfortable to stay relevant.”
• The reorganization of Alphabet as a holding company for the 26 Google

subsidiaries has been going strong since 2015. Employees are able to
concentrate on the mission of their own company and, with each company
accountable for its own expenditures and income, Page expected that they’d
find innovating more meaningful.

• This is an example of how a very large company, forced into mechanistic
structure by its sheer size and scope, made an organizational move to allow its
smaller divisions to innovate and adopt more organic structures if that better fit
their needs. Alphabet’s 2018 revenue was $136.82 billion last year, and that’s a
good indication that it’s working.

Chapter 7
Motivation Concepts

Learning Objectives (1 of 2)
1. Describe the three key elements of motivation.
2. Compare the early theories of motivation.
3. Contrast the elements of self-determination theory and goal-setting theory.
4. Understand the differences among self-efficacy theory, reinforcement

theory, and expectancy theory.
5. Describe the forms of organizational justice, including distributive justice,

procedural justice, informational justice, and interactional justice.
6. Identify the implications of employee job engagement for managers.
7. Describe how the contemporary theories of motivation complement one

another.

Motivation Process

Describe the Three Key Elements of
Motivation (1 of 2)
• Motivation is the processes that account for an
individual’s intensity, direction, and persistence of effort
toward attaining a goal.
The level of motivation varies both between individuals and within individuals at
different times.

Describe the Three Key Elements of
Motivation (2 of 2)
• The three key elements of motivation are:
1. Intensity: concerned with how hard a person tries.
This is the element most of us focus on when we talk about motivation .
1. Direction: the orientation that benefits the organization.
High intensity is unlikely to lead to favorable job-performance outcomes unless the effort is channeled in a
direction that benefits the organization. Therefore, the quality of effort as well as its intensity matters. Effort
directed toward, and consistent with, the organization’s goals is the kind of effort once should be seeking.
2. Persistence: a measure of how long a person can

maintain his/her effort.
Motivated individuals stay with a task long enough to achieve their goal.

What is motivation
Motivation is said to be intrinsic or
extrinsic.
Intrinsic motivation refers to motivation
that is driven by an interest or enjoyment
in the task itself, and exists within the
individual rather than relying on any
external pressure.
Extrinsic motivation comes from outside

of the individual. Common extrinsic
motivations are rewards like money and
grades, coercion and threat of
punishment.

What is motivation
I nt ri ns i c m o ti va ti o n often resulti ng E x t r i n s i c m o ti va ti o n is energized
f ro m a n individual’s n e e d to be by external factors such as an
c o m p e t e n t and self- d e t e r m i n i n g expectation of k e e p i n g a job,
such as opportunity to u s e o ne ’s advancing or getting a pro m o ti o n ,
ability, a sense of c h a l l e n g e and being we l l paid, keeping o ne ’s b o s s
a c h i e v e m e n t , receiving appreciation, h a p p y, gaining some re co g ni ti o n ,
positive recognition, and being treated in or being praised for a job well done.
caring and considerate matter

EARLY THEORIES OF MOTIVATION
• Motivation theories are important to managers attempting to be effective leaders.

Compare the Early Theories of
Motivation (1 of 7)
Exhibit 7-1 Maslow’s Hierarchy of Needs

Compare the Early Theories
of Motivation
Maslow’s Hierarchy of needs
Maslow’s theory is based on the

following assumptions:
• People’s behavior is based on their needs. Satisfaction of such needs influences their behavior.
• People’s needs are in hierarchical order, starting from basic needs to other higher
level needs.
• A satisfied need can no longer motivate a person; only next higher level need can
motivate him
• A person moves to the next higher level of the hierarchy only when the lower need is satisfied.
• Maslow separated the five needs into higher and lower orders.
• As a need becomes substantially satisfied, the next need becomes dominant. No need is ever fully
gratified; a substantially satisfied need no longer motivates.

of Motivation
• Abraham Maslow’s hierarchy of needs is the most well-known theory of motivation.

Maslow hypothesized that within every human being there exists a hierarchy of five
needs, beginning with:
– physiological needs that include hunger, thirst, shelter, sex, and other
bodily needs. In most cases, these needs have highest strength and intensity. An
individual cannot perceive any other type of needs unless these needs are fulfilled
to the extent required for satisfactory operations of the body. A man on the verge of
starvation has no thought other than that of food. In the organizational context,
basic salary helps to satisfy these needs.
– The second level is safety needs that include security and protection from physical
and emotional harm. .g., protection against risks of job and security of employment,
safety of personal life and property, protection against fire, accident, etc.
Essentially, these needs are to be free from physical danger and deprivation of
physiological needs. These are needs for self-preservation and assurance for
tomorrow. In organizational context, stability of income, pension plans, etc., help to
satisfy these needs. However, over-provision of these needs is harmful as it makes
people careless and defenseless. It is a fact that permanency of government jobs
is resulting in low productivity.

of Motivation
– The next level is social needs that include affection, belongingness, acceptance,
and friendship. Everyone looks for a meaningful relationship and to live in harmony
with others. As a social being, man has need of association (to love and be loved),
desire to conform to group norms and contribute to its goals. In the organizational
context, belongingness, recognition, cordial relations with colleagues, etc., help to
satisfy theses needs. This forms the basis of team spirit and group cohesiveness in
any organization.
– Reaching a higher level, we find esteem needs that include internal esteem factors
such as self-respect, autonomy, and achievement, and external esteem factors
such as status, recognition, and attention. Satisfaction of these needs produces
feelings of self-confidence, prestige, power and control. People begin to feel that
they are useful and have some effect on environment (growth-seeking). In the
organizational context, autonomy status, recognition, etc., help to satisfy these
needs. Non-fulfillment of these needs results in destructive behavior to draw
attention of others. Immature arguments with co-workers are one such example.
– At the top of the hierarchy is self-actualization needs; this is the drive to become
what one is capable of becoming, and includes growth, achieving one’s potential,
and self-fulfillment. Satisfying these needs gives a sense of self-fulfillment. In the
organizational context, these needs are fulfilled by achievement of goals

Motivation
• Maslow’s need theory has received wide recognition,

particularly among practicing managers.
– It is intuitively logical and easy to understand and some
research has validated it.
– However, most research does not, and it hasn’t been
frequently researched since the 1960s.
Maslow’s theory makes sense in the industrial situation and in motivational
aspects quite noticeably. Therefore, at the lower level, employees are
motivated by money but people at higher level the motive of self-actualization
should be more important.

What is the opposite of Satisfaction?
“What do people want from their jobs?”

Motivation (3 of 7)
Exhibit 7-2 Comparison of Satisfiers and Dissatisfiers
Source: Based on Harvard Business Review, “Comparison of Satisfiers and Dissatisfiers,” An exhibit from One More
Time: How Do You Motivate Employees? by Frederick Herzberg, January 2003. Copyright © 2003 by the Harvard
Business School Publishing Corporation. All rights reserved.

Motivation (4 of 7)
Exhibit 7-3 Contrasting View of Satisfaction and Dissatisfaction
Intrinsic
Extrinsic

Compare the Early Theories of Motivation
Herzberg’s Two factors theory
• Herzberg’s Motivation Theory model, or Two

Factor Theory, argues that there are two
factors that an organization can adjust to
influence motivation in the workplace.
• These factors are:

• Motivators: Which can encourage
employees to work harder.
• Hygiene factors: These won’t
encourage employees to work harder
but they will cause them to become
unmotivated if they are not present.

Motivating factors include:

• Achievement: A job must give an employee a sense of achievement. This will provide a
proud feeling of having done something difficult but worthwhile.
• Recognition: A job must provide an employee with praise and recognition of their
successes. This recognition should come from both their superiors and their peers.
• The work itself: The job itself must be interesting, varied, and provide enough of a
challenge to keep employees motivated.
• Responsibility: Employees should “own” their work. They should hold themselves
responsible for this completion and not feel a s though they are being micromanaged.
• Advancement: Promotion opportunities should exist for the employee.
• Growth: The job should give employees the opportunity to learn new skills. This can
happen either on the job or through more formal training.

Hygiene factors include:
• Company policies: These should be fair and clear to every employee. They
must also be equivalent to those of competitors.
• Supervision: Supervision must be fair and appropriate. The employee should
be given a s much autonomy a s is reasonable.
• Relationships: There should be no tolerance for bullying or cliques. A healthy,
amiable, and appropriate relationship should exist between peers, superiors,
and subordinates.
• Work conditions: Equipment and the working environment should be safe, fit
for purpose, and hygienic.
• Salary: The pay structure should be fair and reasonable. It should also be
competitive with other organizations in the same industry.
• Status: The organization should maintain the status of all employees within
the organization. Performing meaningful work can provide a sense of status.
• Security: It is important that employees feel that their job is secure and they
are not under the constant threat of being laid-off.

The Four Stats: In a general sense, there are four states an
organization or team can find themselves in when it comes to Two
Factor Theory.
1. High Hygiene and High Motivation
This is the ideal situation and the one which every manager should strive for. Here,
all
employees are motivated and have very few grievances.
2. High Hygiene and Low Motivation
In this situation, employees have few grievances but they are not highly motivated. An
example of this situation is where pay and working conditions are competitive but the
work isn’t very interesting. Employees are simply there to collect their salary.
3. Low Hygiene and High Motivation
In this situation, employees are highly motivated but they have a lot of grievances. A typical
example of this situation is where the work is exciting and really interesting but the pay and
conditions are behind competitors in the same industry.
4. Low Hygiene and Low Motivation
This is obviously a bad situation for an organization or team to find itself in. Here,
employees aren’t motivated and the hygiene factors are not up to scratch.

• Criticisms of Herzberg’s theory:

– reliability of Herzberg’s methodology is questioned.
– Limited because it relies on self-reports.
– Reliability of methodology is questioned.
– No overall measure of satisfaction was utilized.

McClelland’s Needs Theory
You have one beanbag and five targets set up in front of you,
each farther away than the last.
• Target A sits almost within arm’s reach. If you hit it, you get
$2.
• Target B is a bit farther out and pays $4, but only about 80
percent of the people who try can hit it.
• Target C pays $8, and about half the people who try can hit it.
• Very few people can hit Target D, but the payoff is
• $16 for those who do.
• Finally, Target E pays $32, but it’s almost impossible
to
achieve.
Which would you try for? If you selected C, you’re likely to be a
high achiever. Why? Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.
The three motives correspond, in consonance, with Maslow’s

love, esteem and self-actualization needs

• McClelland’s Theory of Needs
– The theory focuses on three needs:
 Need for achievement (nAch): drive to excel, to achieve in
relation to a set of standards, to strive to succeed. High
achievers perform best when they perceive their probability of success as 50/50. They
like to set goals that require stretching themselves a little.
 Need for power (nPow): need to make others behave in a
way that they would not have behaved otherwise. the desire to have
impact, to be influential, and to control others. Individuals high in nPow enjoy being “in
charge.” They prefer to be placed into competitive and status-oriented situations. They
also tend to be more concerned with prestige and gaining influence over others than with
effective performance.
 Need for affiliation (nAfl): desire for friendly and close
interpersonal relationships. individuals with high affiliation strive for
friendship and prefer cooperative situations over competitive ones. They typically desire
relationships involving a high degree of mutual understanding.

• McClelland’s theory has had the best support.
– Persons with high n-Aff tend to prioritize social relationships over task
accomplishment
– A person who has a high n-Pow concentrates on seeking and exercising
power/authority. Such a person is oriented towards influencing others and
winning arguments.
– People with high n-Ach prefer challenge of working a problem, and accept
personal responsibility for success or failure rather than leaving the outcome
to chance or the actions of others.
– McClelland and subsequent researchers focused most of their attention
on nAch.
– McClelland saw the achievement need (n-Ach) as the most critical for an
organization’s economic growth and success.
– McClelland has also suggested that the effective manager should possess a
high need for power.
– Both nAff and nPow tend to be closely related to managerial success.
– The best managers may be high in their need for power and low in their need
for affiliation.
CONTEMPORARY THEORIES OF
MOTIVATION
• Contemporary theories of motivation have a reasonable degree of valid supporting
documentation.
• We call them “contemporary theories” because they represent the latest thinking in
explaining
employee motivation.

CONTEMPORARY THEORIES OF MOTIVATION
Self Determination theory
• self-determination theory
– A theory of motivation that is concerned with the
beneficial effects of intrinsic motivation and the
harmful effects of extrinsic motivation.

• Self-Determination Theory
– People prefer to feel they have control over their actions.
 Focus on the beneficial effects of intrinsic motivation and harmful
effects of extrinsic motivation.
 Cognitive evaluation theory - hypothesizes that extrinsic rewards
will reduce intrinsic interest in a task. When people are paid for work, it
feels less like something they want to do and more like something
they have to do.
– Proposes that in addition to being driven by a need for autonomy, people
seek ways to achieve competence and positive connections to others.
However, of all the three needs, the autonomy need is the most important for attitudinal
and affective outcomes, whereas the competence need appears to be most important for
predicting performance.

• Early theories of motivation have not been supported by research or have
fallen out favor. In contrast, contemporary theories have generally been
supported, but caution is still in order.
• We begin our discussion of contemporary motivation theories with self-

determination theory, which proposes that people prefer to feel they have
control over their actions, so anything that makes a previously enjoyed task
feel more like an obligation than a freely chosen activity will undermine
motivation. Much research on self-determination theory in OB has focused on
cognitive evaluation theory, which hypothesizes that extrinsic rewards will
reduce intrinsic interest in a task. For example, when people are paid for work,
it feels less like something they want to do and more like something they have
to do. Self-determination theory also proposes that in addition to being driven
by a need for autonomy, people seek ways to achieve competence and
positive connections to others. However, of all the three needs, the autonomy
need is the most important for attitudinal and affective outcomes, whereas the
competence need appears to be most important for predicting performance.
• When organizations use extrinsic rewards as payoffs for superior performance,
employees feel they are doing a good job less because of their own intrinsic desire to
excel than because that’s what the organization wants. Eliminating extrinsic rewards can
also shift an individual’s perception of why he or she works on a task from an external to
an internal explanation. For example, if you’re reading a novel a week because your
English literature instructor requires you to, you can attribute your reading behavior to an
external source. However, if you find yourself continuing to read a novel each week after
the course is over, your natural inclination is to say, “I must enjoy reading novels
because I’m still reading one each week.”
• Studies examining how extrinsic rewards increased motivation for some creative tasks
suggest we might need to place cognitive evaluation theory’s predictions in a broader
context. Goal setting is more effective in improving motivation, for instance, when
we provide rewards for achieving the goals. The original authors of self-determination
theory acknowledge that extrinsic rewards, such as verbal praise and feedback
about competence, can improve even intrinsic motivation under specific
circumstances. Deadlines and specific work standards do, too, if people believe they
are in control of their behavior. This is consistent with the central theme of self-
determination theory: rewards and deadlines diminish motivation if people see them
as coercive.
• When extrinsic rewards are used as payoffs for
performance, employees feel they are doing a good job
less because of their own intrinsic desire to excel than
because that’s what the organization wants..
– Eliminating extrinsic rewards can also shift an
individual’s perception of why he or she works on a
task from an external to an internal explanation.
• Self-determination theory acknowledges that extrinsic
rewards can improve even intrinsic motivation under
specific circumstances.

• What does self-determination theory suggest for providing

rewards?
• Self-concordance: considers how strongly people’s
reasons for pursuing goals are consistent with their
interests and core values.
– If individuals pursue goals because of an intrinsic interest, they are more likely to attain
their goals and are happy even if they do not. The process of striving toward them is fun.
– In contrast, people who pursue goals for extrinsic reasons, like money or status, are less
likely to attain their goals and are less happy even when they do because the goals are less
meaningful to them. OB research suggests that people who pursue work goals for intrinsic
reasons are more satisfied with their jobs, feel they fit into their organizations better, and may
perform better.

• What does all of this mean?
– For individuals:
 Choose your job for reasons other than extrinsic
rewards.
– For organizations:
 Provide intrinsic as well as extrinsic incentives.

Locke’s Goal Setting Theory
Goal-setting theory is a motivational technique based on the concept that the
practice of setting specific goal, and ultimately putting efforts to attain the goal,
along with appropriate feedback contribute to higher and better task
performance.
Goal Setting theory specifies that specific and difficult goals, with feedback,
lead to higher performance.

• Goal-Setting Theory
– Goals tell an employee what needs to be done and
how much effort is needed.
• Evidence suggests:
– Specific goals increase performance.
– Difficult goals, when accepted, result in higher
performance than do easy goals.
– Feedback leads to higher performance than
does
non-feedback.

• Three other factors influencing the goals-performance

relationship:
– Goal commitment
 most likely to occur when accomplishing the goal is attractive to them,
and when they actively participate in goal setting.
– Task characteristics
 strongly when task characteristics are: simple rather than complex
and independent rather than interdependent. On interdependent
tasks, group goals along with delegation of tasks are preferable.
– National culture

• Goal- s e tti n g is synonymous to identifying something that you want to do and what measures
are required to get it done. The process of setting goal is based on the acronym “SMART”, which
involves a principle that calls for establishing a goal that is, Specific, Measurable, Attainable,
Relevant, and timebound
• Specifi c goals define clearly and precisely what is to be achieved. Goals should be the specific,
measurable, attainable, realistic and time-related.
• C h a l l e n g i n g goals encourage employees to aim higher than they would normally be expected to
but should not be above the level of their capability otherwise such aims would be demotivating.
Difficult goals focus attention, make us work harder, persist in attaining them and assist in
creating new ways of achieving results.
• Pa r ti c i p a ti o n by employees in setting their goals may increase commitment to the goals and so
improve performance. Goals assigned by a manager without consultation should be fully explained
and justified if good performace is to be achieved.
• F e e d b a c k of past performance is necessary for effective goal achievement in the future.

Self-Determination Theory vs.
Goal-Setting Theory (8 of 9)
Exhibit 7-4 Cascading of Objectives
Four ingredients common to MBO programs are: goal specificity, participation

in decision making, explicit time period, and performance feedback.
Bandura’s Self-efficacy Theory
• Also known as social cognitive theory
and social learning theory.
• You can refer to self efficacy with terms
such as confidence, competency or
ability
• Self-efficacy theory is an individual’s
belief that he or she is capable of
performing a task.
– Enactive mastery
– Vicarious modeling
– Verbal persuasion
– Arousal

Self-efficacy Theory
Exhibit 7-5 Joint Effects of Goals and Self-Efficacy on Performance
Source: Based on E. A. Locke and G. P. Latham, “Building a Practically Useful Theory of Goal Setting and Task
Motivation: A 35-Year Odyssey,” American Psychologist (September 2002): 705–17.
It is argued that setting a high goal for an employee can lead to employees having higher self-efficacy as
their boss’ belief in t h e m leads to i n c re a sed confi dence.
Also, research has shown that intelligence and personality related to conscientiousness and emotional stability can increase
self-efficacy.

• Implications of self-efficacy theory:

– The best way for a manager to use verbal persuasion is
through the Pygmalion effect.
 A form of self-fulfilling prophecy – believing in something
can make it true.
– Training programs often make use of enactive mastery by
having people practice and build their skills.

• Social-learning theory: we can learn through both

observation and direct experience.
– Models are central, and four processes determine
their influence on an individual:
 Attentional processes
 Retention processes
 Motor reproduction processes
 Reinforcement processes

Reinforcement Theory
• Reinforcement theory: behavior is a function of its

consequences.
– Reinforcement conditions behavior.
– Behavior is environmentally caused.
• Goal setting is a cognitive approach: an individual’s
purposes direct his or her action.
• Operant conditioning theory: people learn to behave to
get something they want or to avoid something they don’t
want.
– B.F. Skinner’s behaviorism.

Operant
conditioning
theory: people
learn to behave
to get
something they
want or to avoid
something they
don’t want.


Vroom’s Expectancy Theory
• Expectancy theory: a tendency to act in a certain way
depends on an expectation that the act will be followed by
a given outcome and on the attractiveness of that outcome
to the individual.
people will behave or act in a certain way because they are motivated to select a specific behavior over others due to feelings of
satisfaction they anticipate to obtain from the selected behavior. Essentially, the motivation of the selected behavior is determined by
the desirability of the outcome.

Expectancy Theory
• Expectancy theory helps explain why a lot of workers
aren’t motivated and do only the minimum.
• Three questions employees need to answer in the
affirmative if their motivation is to be maximized:
– If I give maximum effort, will it be recognized
in my
performance appraisal?
– If I get a good performance appraisal, will it lead to
organizational rewards?
– If I’m rewarded, are the rewards attractive to me?

Vroom’s Expectancy Theory

Adam’s Equity Theory
The E q u i t y T h e o r y is principally an
economic approach for individuals who tend to
compare their job inputs and outputs with
those of others.
Exhibit 7-7 Equity

Theory
Ratio Comparisons* Perception
O < O Inequity due to being under rewarded
I I
A B
O = O Equity
I I
A B
O O Inequity due to being over rewarded
>
IA IB
O O
*Where represents the employee and represents relevant others
IA IB

Equity Theory
• When employees perceive an inequity, they can be
predicted to make one of six choices:
– Change inputs.
– Change outcomes.
– Distort perceptions of self.
– Distort perceptions of others.
– Choose a different referent.
– Leave the field.
Although equity theory’s propositions have not all held up, the hypothesis
served as an important precursor to the study of organizational justice, or
more simply, fairness, in the workplace.

Forms of Organizational Justice
Exhibit 7-8 Model of Organizational Justice
Organizational justice is concerned with

how employees feel they are treated by
authorities and decision makers at work.

Employees make their evaluations of Organizational justice along four dimensions.
• Distributive justice is concerned with the fairness of the outcomes, such as pay and
recognition that employees receive.
• procedural justice examines how outcomes are allocated. Having direct influence
over how decisions or made, or at the very least being able to present your opinion to
decision makers, creates a sense of control and makes us feel empowered. Employees
also perceive that procedures are fairer when decision makers follow several “rules.”
It turns out that procedural and distributive justice combine to influence people’s
perceptions of fairness. If outcomes are favorable and individuals get what they want,
they care less about the process, so procedural justice doesn’t matter as much when
distributions are perceived to be fair.
• Research has shown that employees care about two other types of fairness that have to
do with the way they are treated during interactions with others.
– The first type is informational justice, which reflects whether managers provide employees
with explanations for key decisions and keep them informed of important
organizational matters.
– The second type of justice relevant to interactions between managers and employees
is
interpersonal justice, which reflects whether employees are treated with dignity and
respect.
• Justice Outcomes
– All the types of justice discussed have been linked to
higher levels of task performance and citizenship.
 Why does justice have these positive effects? Fair treatment
enhances commitment to the organization and makes employees feel
it cares about their well-being. In addition, employees who feel fairly
treated trust their supervisors more, which reduces uncertainty and
fear of being exploited by the organization. Finally, fair treatment
elicits positive emotions, which in turn prompts behaviors like
citizenship.
– Third-party, or observer, reactions to injustice can be
substantial.

Motivation & Culture
• All of the theories presented in this chapter are culturally bound.
• They have formulated by Western researchers and tested on

Western samples.
• Cultural constraints may in some instances cause a reinterpretation
of a given theory. For example, in countries like Portugal or Chile
which are high uncertainty avoidance goal setting theory (which
assumes a high degree of independence) may not apply.
– Employees in these countries would feel uncomfortable setting
their own goals because they are high in uncertainty avoidance
and high in power distance.

Employee Engagement
• Job engagement: the investment of an employee’s
physical, cognitive, and emotional energies into job
performance.

Implications of Job Engagement
for Management (1 of 3)
• Job engagement: the investment of an employee’s

physical, cognitive, and emotional energies into job
performance.
– Gallup organization: more engaged employees in
successful organizations than in average
organizations.
– Academic studies: job engagement is positively
associated with performance and citizenship behaviors.

How to Measure Employee Motivation
• 1. Performance reviews
• 2. Employee motivation and engagement surveys
• 3. Customer satisfaction surveys
The Easiest of All Employee Motivation Techniques is to Ask

What Motivates them.

• What makes people more engaged in their job?

– The degree to which an employee believes it is
meaningful to engage in work.
– A match between the individual’s values and
the
organization’s.
– Leadership behaviors that inspire workers to a
greater sense of mission.

• Are highly engaged employees getting “too much of a

good thing?”
– Construct is partially redundant with job attitudes.
– It may have a “dark side.”
 Positive relationships between engagement and
work-family conflict.

Compare Contemporary Theories
of Motivation
Exhibit 7-9 Integrating

Contemporary Theories
of Motivation

• Make sure extrinsic rewards for employees are not
viewed as coercive, but instead provide information
about competence and relatedness.
• Either set or inspire your employees to set specific,
difficult goals and provide quality, developmental
feedback on their progress toward those goals.
• Try to align or tie in employee goals to the goals of
your organization.
• Model the types of behaviors you would like to see
performed by your employees.

• Expectancy theory offers a powerful explanation of
performance variables such as employee productivity,
absenteeism, and turnover.
• When making decisions regarding resources in your
organization, make sure to consider how the resources
are being distributed (and who’s impacted), the fairness
of the decision, along with whether your actions
demonstrate that you respect those involved.

Chapter 8
Motivation: From Concepts to
Applications
Session 05

Learning
Objectives
1. Describe how the job characteristics model motivates by
changing the work environment.
2. Compare the main ways jobs can be redesigned.
3. Explain how specific alternative work arrangements can
motivate employees.
4. Describe how employee involvement measures can motivate
employees.
5. Demonstrate how the different types of variable-pay programs can
increase employee motivation.
6. Show how flexible benefits turn benefits into motivators.
7. Identify the motivational benefits of intrinsic rewards.

How to Measure Employee
Motivation
• People usually need to work in order to make money. Although it is a strongest incentive,
it is not the only one.
• Motivation can be categorized into and

The Job Characteristics Model

TThhee JJoobb
• The job characteristic model (JCM) is an approach to job redesign that seeks to fo r m u l ate
CChhaarraacctteerriissttiiccss MMooddeell
j o b s i n w a y s t h at m o ti v a te w o r ke r s and lead to positive work outcomes. It suggests
that jobs should be diagnosed and i m p r o v e d a l o n g fi ve c o r e d i m e n s i o n s .
• Hackman and Oldham (1976, 1980) proposed the job characteristics theory to suggest that fi ve
j o b c h a r a c t e r i s ti c s produce criti cal p s y c h o l o g i c a l s t ate s in the job holder, and
ultimately result in a set of positive work-related outcomes.
• According to this model, a motivated, satisfied, and productive employee

1. experiences meaningfulness of the work performed,
2. experiences responsibility for work outcomes, and
3. has knowledge of the results of the work performed.
From a motivational standpoint, the JCM says that internal rewards are
obtained by individuals when they learn that they personally have
performed well on a task that they care about.

The Job Characteristics Model (1 of 2)
Exhibit 8-1 The Job Characteristics Model
Source: Based on J. L. Pierce, I. Jussila, and A. Cummings, “Psychological Ownership within the Job Design
Context: Revision of the Job Characteristics Model,” Journal of Organizational Behavior 30, no. 4 (2009): 477–96.

The Job Characteristics
Model
• The core dimensions of the job characteristics model
(JCM) can be combined into a single predictive index
called the motivating potential score (MPS).
– The first three dimensions—skill variety, task identity, and task
significance—combine to create meaningful work the incumbent will view
as important, valuable, and worthwhile.
– From a motivational standpoint, the JCM proposes that individuals obtain
internal rewards when they learn (knowledge of results) that they
personally (experienced responsibility) have performed well on a task
they care about (experienced meaningfulness).

JCM Primary School Fast food Worker
teacher
Skill Variety
Task Identity
Task Significance
Autonomy
Feedback
T h e j o b c h a ra c t e r i s ti c s m o d e l p r o p o s e s t h a t t h e m o r e t h e s e
fi ve c o r e c h a ra c t e r i s ti c s c a n b e d e s i g n e d i nto t h e job, t h e
m o r e t h e e m p l o y e e s will b e m o ti v a t e d a n d t h e h i g h e r will b e
p e r fo r m a n c e , quality, a n d sati sfacti on.

• Hackman and Oldham believe that five core job dimensions produce the three psychological
states. The five core dimensions that were identified are as follows:
• 1. Skill variety
– Reflects the degree to which a job involves a variety of different activities, which
demand the use of a wide variety of the job holder’s skills and abilities.
– For example, a routine, repetitious assembly-line job is low in variety, whereas an
applied research position that entails working on new problems everyday is high
in variety.
• 2. Ta s k identi ty
– is the extent to which the job holder feels he or she is responsible for completion of a
whole and indefinable piece of work, that is, doing a job from beginning to end with a
visible outcome.
– For instance, a chef who prepares an entire meal has more task identity than a worker
on a cafeteria line who ladles mashed potatoes.

• 3. Ta s k s i g n i fi c a n c e
– concerns the degree to which the job is perceived as important and having a
substantial impact on the lives or work of other people, whether in the immediate
organization or in the external environment.
– For instance, people who distribute penicillin and other medical supplies during times
of emergencies would feel they have significant jobs.
• 4. Autonomy
– means the degree to which the job provides substantial freedom, independence, and
discretion to the individual in scheduling the work and in determining the procedures to
be used in carrying it out.
– A house painter, for instance, can determine how to paint the house; a paint sprayer
on an assembly line has little autonomy.

• 5. Feedback
– the extent to which carrying out the work activities required by the job provides
information back to the job holder about the effectiveness of his or her performance.
– Jobs vary in their ability to let workers see the outcomes of their efforts. A football
coach knows whether the team won or lost, but a basic research scientist may have to
wait years to learn whether a research project was successful

Job Redesign programs
Clever redesign of jobs to accommodate employees’ needs for additional flexibility can serve to motivate them.
Job design is concerned with changing, modifying, and enriching jobs in order to capture the talents of
employees while improving organization performance.

Examples of Job Redesign programs

Compare the Main Ways Jobs Can
Be Redesigned (1 of 2)
• Repetitive jobs provide little variety, autonomy, or
motivation.
1) Job Rotation
– Referred to as cross-training.
– Periodic shifting from one task to
another.
– Strengths: reduces boredom, increases motivation,
and helps employees better understand their work
contributions.
– Weaknesses: creates disruptions, requires extra time
for supervisors addressing questions and training
time, and reduced efficiencies.
Compare the Main Ways Jobs
Can Be Redesigned (2 of 2)
2) Job Enlargement
– Horizontal expansion of one’s job.
– It increases the number and variety of tasks that an individual performs
results in a job with more diversity.
3) Job Enrichment
– Vertical expansion of one’s job to include additional responsibilities
that allow employees to control planning, execution, and evaluation
aspects of their work.
– Job enrichment has its roots in Herzberg’s theories of providing hygiene, or motivating factors
to the job to increase motivation.
– Increasing a job’s high-level responsibilities to increase intrinsic
motivation.
 Involves adding another layer of responsibility and meaning.
 Can be effective at reducing turnover.

• There are many different ways to enrich a job. Ask yourself the
following questions:
Are there tasks that can be combined to give variety?
Are there tasks that can be separated and divided among employees to increase variety?
Is a siloed function working (everyone on this team makes hamburgers), or would it increase variety,
autonomy, and task significance if you had everyone responsible for creating a customer’s entire meal?
Is there an opportunity for growth? Are the skills the employee develops with this job applicable to
higher-level positions? If not, what tasks can you add to increase these skills?
Are you providing proper feedback? Is natural feedback occurring? Allowing employees to see how
their work fits into the larger picture can increase the feedback organically

3) Relational Job Design
– To make jobs more prosocially motivating:
 Connect employees with the beneficiaries of their
work.
 Meet beneficiaries firsthand.
For instance, a group that formerly only handled
the development of art for marketing materials
might be retrained to meet with clients, get a
better understanding of their needs, and then
work with a printer to produce the final product.

Alternative work
Arrangements
• Flexible Hours. Flexible hours allow employees a degree of autonomy when it comes to the hours
of their workday.
• Flexible hours often reduce absenteeism because employees can schedule their work hours
to align with personal demands, increase productivity, and reduce overtime expenses.
However, this approach is not applicable to every job.
• Job Sharing. This program allows for two or more individuals to share a 40-hour work week.
• Job sharing allows an organization to draw on the talents of more than one person to
complete a job and allows them to avoid layoffs due to overstaffing. Conversely, a manager
has to find compatible pairs of employees, which is not always such an easy task.
• Telecommuting.
• When an individual can work from home, he or she can have more flexible hours, less
downtime in a car, the ability to wear whatever he or she wants, and fewer interruptions.
Organizations that employ telecommuting can realize higher productivity, enjoy a larger
labor pool from which to select employees, and experience less office space costs. But
telecommuters can’t experience the benefits of an office situation, and managers can tend
to undervalue the contributions of workers they don’t see regularly. Innovation tends to
decline as well.
How Specific Alternative Work
Arrangements Motivate
Employees (1 of 7)
Exhibit 8-2 Possible Flextime Staff Schedules
Schedule 1
Percent Time: 100% = 40 hours per week
Core Hours: 9:00 A.M.–5:00 P.M., Monday through Friday
(1 hour lunch)
Work Start Time: Between 8:00 A.M. and 9:00 A.M.
Work End Time: Between 5:00 P.M. and 6:00 P.M.
Schedule 2
Work Hours: 8:00 A.M.–6:30 P.M., Monday through Thursday
(1/2 hour lunch)
Friday off
Work Start Time: 8:00 A.M.
Work End Time: 6:30 P.M.

Schedule 3
Work Hours: 8:30 A.M.–5:00 P.M., Monday through
How Specific Thursday
(1/2 hour lunch)
Alternative 8:00 A.M.–Noon Friday (no lunch)
Work Work Start Time: 8:30 A.M. (Monday–Thursday); 8:00

A.M. (Friday)
Arrangements Work End Time: 5:00 P.M. (Monday–Thursday); Noon
(Friday)
Motivate Schedule 4
Employees (2 of 7) Percent Time: 80% = 32 hours per week
Work Hours: 8:00 A.M.–6:00 P.M., Monday through
Wednesday
(1/2 hour lunch)
8:00 A.M.–11:30 A.M. Thursday (no
lunch)
Friday off
Work Start Time: Between 8:00 A.M. and 9:00 A.M.

Work End Time: Between 5:00 P.M. and 6:00 P.M.

How Specific Alternative Work
Arrangements Motivate
Employees (3 of 7)
• Job Sharing
– Two or more people split a 40-hour-a-week job.
 Declining in use.
 Can be difficult to find compatible pairs of
employees who can successfully coordinate the
intricacies of one job.
 Increases flexibility and can increase motivation and
satisfaction when a 40-hour-a-week job is just not
practical.

How Specific Alternative
Work Arrangements
Motivate Employees (4 of 7)
• Telecommuting
– Employees who do their work at home at least two
days a week through virtual devices linked to the
employer’s office.
 Some well-known organizations actively discourage
telecommuting, but for most organizations it remains
popular.

Alternative Work
Arrangements
Motivate Employees
(5 of 7)
• Telecommuting Advantages
– Positively related to objective performance and job
satisfaction.
– Reduced work-family conflict.
– Reduced carbon emissions.
• Telecommuting Disadvantages
– Employer
 Social loafing.
 Difficult to coordinate teamwork.
 Difficult to evaluate non-quantitative performance.
– Employee
 Reduced innovation
 Increased feelings of isolation and reduced
coworker relationship quality.
 May not be noticed for his or her efforts.
• Job redesign and scheduling can be linked to several motivational
theories.
•Herzberg’s two-factor theory supports the idea of job
enrichment in its proposal that increasing intrinsic factors of a
job will increase an employee’s satisfaction with a job.
• Flexibility is an important link in linking rewards to personal goals
in the expectancy theory.

Employee Involvement Programs
employee involvement is a process that uses the entire capacity of employees and is designed to increase employee’s
commitment to the organization’s success.

Employee Involvement
and Employee Motivation
• Employee stock ownership plans (ESOPs). A fairly popular employee involvement
program, where an ESOP trust is created, and the organization will contribute stock
or cash to buy stock for the trust. The stock is then allocated to employees.
• Participative management. This is a program where subordinates share a significant
responsibility for decision making with their managers. As jobs become more
complex, managers aren’t always aware of everything that employees do, and
studies have found that this process increases the commitment to decisions.
• Representative participation. This is an approach where workers are represented by

a small group of employees who participate in organizational decisions.
Representative participation is mean to put labor on more equal terms with
management and stockholders where company decisions are concerned. The two
most common forms:
• Works councils
• Board representatives

(1 of 3)
• Employee Involvement: a participative process that

uses employees’ input to increase their commitment to
the organization’s success.
• Examples of Employee Involvement Programs
– Participative management
– Representative participation

(2 of 3)
• Participative management
– Joint decision making.
– Acts as a panacea for poor morale and low productivity.
– Trust and confidence in leaders is essential.
– Studies of the participation-performance have yielded
mixed results.

(3 of 3)
• Representative participation
– Workers are represented by a small group of
employees who actually participate in decision making.
– Almost every country in Western Europe requires
representative participation.
– The two most common forms:
 Works councils
 Board representatives

employees involvement programs can also
satisfy an employee’s needs for
responsibility, achievement, etc.

MBO
We talked a bit about management by objectives (MBO) when we discussed goal setting as a part of the
work component of motivation. Management by Objective is a response to the goal-setting theory as a
motivator.

Management by Objectives
• MBO advocates specific, measurable goals and feedback. . The approach is most
effective when the individual has to stretch to meet the goals set.
MBO can be a participative process. When individuals are consulted in the creation of
their own goals, it often results in workers setting a goal that stretch them further.. The
process seems to be about as effective when goals are assigned by a manager to the
individual.

Variable Pay Programs
pay isn’t always a motivator for employees, revamping an organization’s compensation system to incentivize employees can
play well into increasing motivation and productivity

Variable-Pay Programs
(1 of 8)
• What to Pay:
– In determining pay structures, companies must make
some strategic decisions. The process of initially
setting pay levels entails balancing internal and
external equity.
– Some organizations prefer to pay leaders by paying
above market.
– Paying more may net better-qualified and more highly
motivated employees who may stay with the firm
longer.

(2 of 8)
• Variable Pay base a portion of an employee’s pay on some individual and/or

organizational measure of performance. Individual earnings therefore fluctuate up and
down.
• How to Pay:
– Variable pay programs:
 Piece-rate plans
– employees are compensated by the number of units they produce
 Merit-based pay
– differentiate pay based on performance.
 Bonuses
 Profit sharing
– organizations share compensation with employees based on the
company’s profitability.
 Employee stock ownership plans

(3 of 8)
• Piece-Rate Pay
– A pure piece-rate plan provides no base salary and
pays the employee only for what he or she produces.
– Limitation: not a feasible approach for many jobs.
– The main concern for both individual and team piece-
rate workers is financial risk.

(4 of 8)
• Merit-Based Pay
– Allows employers to differentiate pay based on
performance.
– Creates perceptions of relationships between
performance and rewards.
– Limitations:
 Based on annual performance appraisals.
 Merit pool fluctuates.
 Union resistance.

(5 of 8)
• Bonuses
– An annual bonus is a significant component of total
compensation for many jobs.
– Increasingly include lower-ranking employees.
 Many companies now routinely reward production
employees with bonuses when profits improve.
– Downside: employees’ pay is more vulnerable to
cuts.

(6 of 8)
• Profit-Sharing Plans
– Organization-wide programs that distribute
compensation based on some established formula
centered around a company’s profitability.
– Appear to have positive effects on employee
attitudes
at the organizational level.
 Employees have a feeling of psychological
ownership.

(7 of 8)
• Employee Stock Ownership Plan (ESOP)

– A company-established benefit plan in which
employees acquire stock, often at below-market prices,
as part of their benefits.
– Increases employee satisfaction and innovation.
 Employees need to psychologically experience
ownership.
– Can reduce unethical behavior.
– Can be used for community wealth building.

(8 of 8)
• Evaluation of Variable Pay

– Do variable-pay programs increase motivation and
productivity?
 Generally, yes, but that doesn’t mean everyone
is
equally motivated by them.

Variable-pay programs increase motivation and productivity, as organizations with
these plans are shown to have higher levels of profitability than those who don’t.
Variable-pay is most compatible with the expectancy theory predictions that
employees should perceive a strong relationship between their performance and
the rewards they receive.
These programs help managers address differences in individual needs and allow
employees to participate in decisions that affect them. Combining some of these
tactics with MBO so that employees understand what’s expected of them, linking
performance and rewards through recognition and making sure the system is
equitable can help make a manager’s organization productive.

Other Employee Perks
• Benefit packages
– Health Insurance.
– Accommodation.
– Transportation / Company Car
– Continuous Education/Training Reimbursement
– Wellbeing programs: health club memberships, on-site gym, psychological
consultation.
– Free or low-co s t Drink/ Meals
– Baby-sitting services
Upper management can expect other perks, such a s the use of company-
owned luxury apartments, dry-cleaning services, country-club memberships,
season tickets to cultural and sporting events, limousines and drivers and
use of corporate jets.

Show How Flexible Benefits Turn
Benefits Into Motivators
• Developing a Benefits Package
– Flexible benefits individualize rewards.
– Allow each employee to choose the compensation
package that best satisfies his or her current needs
and situation.
 Today, almost all major corporations in the United
States offer flexible benefits.
 However, it may be surprising that their usage is
not
yet global.

Identify the Motivational Benefits of
Intrinsic Rewards
– Organizations are increasingly recognizing that important work
rewards can be both intrinsic and extrinsic.
– Rewards are intrinsic in the form of employee recognition
programs and extrinsic in the form of compensation
systems.
Employee Recognition Programs

– programs in which specific types of behavior are encouraged and
the
procedures for attaining recognition are clearly identified.
– They are inexpensive: praise is free!
– With or without financial rewards, they can be highly motivating to
employees.
– Problem with Employee Recognition Programs is ….Politics

Motivation is a highly individual process, and motivating all the employees within a company can
be a significant hard (if not nearly impossible) task.
Employees who are engaged with their work and with the organization drive productivity and profits.
It’s
necessary to motivate.
Motivation is individual, but in the framework of organizational behavior it can be built from not only
individual, but also work and organizational components. We can examine motivation as a product
of needs and wants and translate those theories into approaches and programs that incent
employees to work harder.
Variable-pay programs, or employee recognition programs, or even management by objective,

are managers’ answers to employee needs and motivations as identified through the lenses of
motivational theories.
Finally, as the world gets smaller, more managers will be called upon to understand the cultural
dimensions of multi-national teams, and adjust their approaches to motivate team members
who have learned differently than we have.
Motivation is key to success. Without the motivation to set an action into motion, we have no effort,
no performance, no outcomes, no organization, and no reward.

• Recognize individual differences.
– Spend the time necessary to understand what’s important to each employee.
– Design jobs to align with individual needs and maximize their motivation
potential.
• Use goals and feedback.
– You should give employees firm, specific goals, and they should get feedback on
how well they are faring in pursuit of those goals.
• Allow employees to participate in decisions that affect them.
– Employees can contribute to setting work goals, choosing their own benefits
packages, and solving productivity and quality problems.
• Link rewards to performance.
– Rewards should be contingent on performance, and employees must perceive
the link between the two.
• Check the system for equity.
– Employees should perceive that individual effort and outcomes explain
differences in pay and other rewards.

Chapter 13
Leadership
Lect. 07

Learning Objectives
1. Summarize the conclusions of trait theories of leadership.

2. Identify the central tenets and main limitations of behavioral
theories.
3. Contrast contingency theories of leadership.
4. Describe the contemporary theories of leadership and
their
relationship to foundational theories.
5. Discuss the roles of leaders in creating ethical
organizations.
6. Describe how leaders can have a positive impact on their
organizations through building trust and mentoring.
7. Identify the challenges to our understanding of leadership.
What is Leadership?
https://youtu.be/tYW6X5qwnMw
Leadership is the ability to influence a group toward

the achievement of a vision or set of goals.

What is Leadership?
Leadership is the ability to influence a group toward the
achievement of a vision or set of goals.
• Leadership is a process. It is a verb, an action word, not a noun. Leadership manifests itself in doing; it is a performing
art.
• A leader cannot exist without followers
• Leadership entails i n fl u e n c i n g followers—their t h o u g h t s (the cognitive target), their fe e l i n g s (the

affective target), and/or their a c ti o n s (the behavioral target).
• Leadership is intenti onal , not accidental.
• L e a d e r s h i p is exercised in a lot of different places and in a wide variety of situations, n o t j u st b y m a n a g e r s i n t h e

w o r k p l a c e . P e r s u a d i n g a friend to h ave d i n n e r at one’s favorite restaurant, for example, requires leadership.
All the key elements are there: a locus of leadership, a follower, and an act of intentional influence undertaken to accomplish
a goal.
• The objective of leadership is goal accomplishment. Leadership is i n st r u mental ; it is done for a purpose.
• Non-sanctioned leadership is often as important or more important than formal

influence. Leaders may emerge from within a group as well as by formal appointment to lead a group.

Evolution of leadership theories

Trait Theories of Leadership
leaders differ from non-leaders
Trait Theories of
Leadership
• Trait theories of leadership focus on personal
qualities and characteristics.
– The search for personality, social, physical, or
intellectual attributes that differentiate leaders from
non-leaders goes back to the earliest stages of
leadership research.

Trait Theories of
Leadership

Trait Theories of
Leadership
• A comprehensive review of the leadership literature, when
organized around the Big Five, has found extraversion to
be the most predictive trait of effective leaders, but it
is more strongly related to the way leaders emerge than
to their effectiveness.
• Unlike agreeableness and emotional stability,
conscientiousness and openness to experience also
showed strong relationships to leadership, though not
quite as strong as extraversion.

Trait Theories of
Leadership
Another trait that may indicate effective leadership is emotional
intelligence.
– A core component of EI is empathy.
– AI can be defined as: the ability to perceive, use, understand,
manage, and handle emotions
• People high in EI are more likely to emerge as leaders, even
after taking cognitive ability and personality into account.

Trait Theories of
Leadership
• Two conclusions:
– Traits can predict leadership.
– Traits do a better job predicting the emergence of

leaders than they do at distinguishing between
effective and ineffective leaders.

Behavioral Theories of Leadership
Leaders are made, not born
What the leader delivers?
Behavioral Theories of
Leadership
• Behavioral theories of leadership imply we can train people to be
leaders.
• anyone can be made a leader (Behavioral Theories) by

teaching them the most appropriate behavioral response
for any given situation.
– Ohio State Studies found two behaviors that accounted for
most leadership behavior:
 Initiating structure
 Consideration

Leadership
– Initiating structure :describes the degree to which a lea der o r g a n i z e s
a n d d e fi n e s t h e ro les a n d acti viti es of g r o u p m e m b e r s . It involves stating a
goal and delineating what is to be done, how it will be done, when it will be done, where it
will be done, and who is responsible for specific tasks. This leadership style involves one-
way communication; the leader tells followers what to do in order to accomplish a goal.
– Consideration: describes the extent to which the leader exhi bi ts c o n c e r n
for t h e we l fa re of t h e g r o u p a n d its m e m b e r s . It involves two- way
communication, responding to the group’s needs by requesting opinions, beliefs, desires,
and so forth. Group activities and discussions are consideration interventions.
Further, consideration refers to establishing mutual trust between and among group
members, showing respect and warmth. Establishing effective interpersonal
relationships is part of consideration.

Leadership
1– Leaders retreats to a generally passive role of allowing the situation to take care of itself.
2 – Leader strives to promote group harmony and social needs satisfaction.
3– The leader strives to achieve a productive balance between getting the job done and
maintains a cohesive friendly workgroup.
4 – Leader devotes primary attention to getting the job done. And, personal
concerns are strictly secondary.

Central Tenets and Main Limitations
of Behavioral Theories
• Summary of Trait Theories and Behavioral Theories

– First, employees who had managers who were high in
consideration were more satisfied with their jobs and more
motivated and also had more respect for their leader.
– Second, a manager that initiated structure was more strongly
related to group and organizational productivity and evaluated
performance.
– Leaders who have certain traits and who display culturally
appropriate consideration and structuring behaviors do appear
to be more effective.
– Traits and behaviors do not guarantee success.
 Context matters too.

Contingency Theories of Leadership
situational variables
Leadership styles dependent on the situation.
Contingency Theories of Leadership
Fiedler contingency model
• The Fiedler contingency model:

effective group performance depends upon
the proper match between the leader’s
style and the degree to which the situation
gives control to the leader.
• Leader style is fixed and is
by
determined
The least preferred coworker If you describe the person you are least
able to work with in favorable terms (a
(LPC) questionnaire: high LPC score), Fiedler would label you
relationship-oriented. In contrast, if you
see your least preferred co-worker in
 Task- or relationship- relatively unfavorable terms (a low LPC
score), you are primarily interested in
oriented. productivity and are task-oriented.
 Assumes leadership style is

fixed.
Contingency Theories of
Leadership
• After assessing leadership style, it is necessary to match the leader with the
situation.
• Fiedler has identified three contingency or situational dimensions:
Contingency
dimensions:
 Leader-member relations: the degree of confidence, trust, and respect
members have in their leader.
 Task structure: the degree to which the job assignments are procedural.
 Position power: the degree of influence a leader has over power variables such as
hiring, firing, discipline, promotions, and salary increases.

Leadership
Exhibit 13-1
Findings from the
Fiedler Model

Leadership
Situational leadership theory (SLT)
• Situational leadership theory (SLT) is a contingency theory that focuses on the

followers.
– Successful leadership is achieved by selecting the right leadership style, which is
contingent on the level of the followers’ readiness (Maturity).
– readiness refers to the extent to which people have the ability and willingness to accomplish a specific task
If followers are unable and unwilling to do a task, the

leader needs to give clear and specific directions;
If they are unable but willing, the leader needs to

display high task orientation to compensate for followers’
lack of ability and high relationship orientation to get
them to “buy into” the leader’s desires.
if followers are able but unwilling, the leader needs

to use a supportive and participative style.
If they are both able and willing, the leader doesn’t

need to do much.

Leadership
Situational leadership theory (SLT)
• Situational leadership theory (SLT) is a contingency theory that focuses on the

followers.
– Successful leadership is achieved by selecting the right leadership style, which is
contingent on the level of the followers’ readiness (Maturity).
– readiness refers to the extent to which people have the ability and willingness to accomplish a specific task

Leadership
Path-goal theory
• Path-goal theory:
– Contingency model of leadership that extracts key elements from the Ohio State
leadership research on initiating structure and consideration and the expectancy
theory of motivation.
– Derived from belief that effective leaders clarify the path to help followers
achieve work goals. assumes that the role of the leader is to provide the
information, support, and other resources necessary for followers to
achieve their goals.
This theory combines two popular

theories – goal-setting and expectancy –
into one.
Essentially, this theory holds that effective

leaders create clear paths to help their
subordinates achieve goals and that they
work to remove obstacles that stand in the
way.

Leadership
Path-goal theory
House identifies four leadership behavior:

• directive leaders (give specific guidance and schedules),
• supportive leaders (friendly, show concern for the needs
of followers),
• participative leaders (consult with followers and uses
their suggestions),
• achievement-oriented leaders (set challenging goals).
House assumes that leaders are flexible and that the same leaders can display any or all of these
styles. House also identifies a number of contingency variables: environmental factors (task
structure, formal authority system, and work group) and personal characteristics (locus of control,
experience, and perceived ability).
Environmental factors determine the type of leader behavior required as a complement if
follower outcomes are to be maximized, while personal characteristics determine how the
environment and leader behavior are interpreted.

Leadership
Path-goal theory
• Path-goal theory:
– According to path-goal theory, whether a leader should be directive
or supportive or should demonstrate some other behavior depends
on complex analysis of the situation.
– The theory predicts the following:
 Directive leadership yields greater satisfaction when tasks
are ambiguous or stressful than when they are highly
structured and well laid out
 supportive leadership results in high performance and
satisfaction when employees are performing structured
tasks.
 Directive leadership is likely to be perceived as redundant
among employees with high ability or considerable
experience.

Leadership
Leader–Participation Model
Leader–Participation Model
• Argues that the way the leader makes
decisions is as important as what he or
she decides
• It is limited to recommending what types of
decisions might be best made with
subordinate participation.
• Decision making methods:
– Autocratic/ Authoritarian
– Consultative/ participative
– Group/ Democratic

Contemporary
Theories of
Leadership
Leadership Styles
We have already talked about how

personality traits, behaviors and
situations (and response to those
situations) affect leadership. But what
about style? Every leader has their own
personal approach

Leadership Styles
We have already talked about how personality traits,
behaviors and situations (and response to those situations)
affect leadership. But what about style? Every leader has
their own personal approach.
Leadership style is a leader’s approach to providing

direction, implementing plans, and motivating people.

CCoonntteemmppoorraaryr
yThTehoerioesrioefs of
Exhibit 13-2 Leader–Member Exchange Theory
from Lead e rs heirpship
L e ad

Contemporary Theories of
Leadership
Leader–Member Exchange Theory
• Suggests that the way a leader behaves toward followers if a function of

whether they are members of the leader's "in-group."
• In-group members tend to have attitude and personality characteristics that are
similar to the leader's or a higher level of competence than out-group members.
• The leader-member exchange (LMX) theory argues that because of time pressures, leaders establish
a special relationship with a small group of their followers. These individuals make up the in-group—
they are trusted, get a disproportionate amount of the leader’s attention, and are more likely to receive
special privileges.
• The theory proposes that early in the history of the interaction between a leader and a given
follower, the leader implicitly categorizes the follower as an “in” or an “out” and that relationship is
relatively stable over time. The leader does the choosing on the basis of the follower’s
characteristics.
• Substantive evidence that leaders do differentiate among followers. Followers with in-group status will
have higher performance ratings, engage in more helping or “citizenship” behaviors at work, engage in
less deviant or “counterproductive” behaviors at work, and report greater satisfaction with their
superior.

Leadership styles
what makes great leaders extraordinary
Charismatic Leader
• Two contemporary leadership theories—charismatic leadership and transformational
leadership—share a common theme in the great leader debate: They view leaders as
individuals who inspire followers through words, ideas, and behaviors.
• Charisma is Greek Divine gift.

• THE CHARISMATIC LEADERSHIP style relies on the charm and
persuasiveness of the leader.
• Charismatic leaders are driven by their convictions
and
commitment to their cause.
KeyVision
1. Characteristics
and articulationof a Charismatic
. Has Leader
a vision—expressed as an idealized goal
—that proposes a future better than the status quo; able to clarify the
importance of the vision in terms that are understandable to others.
2. Personal risk. Willing to take on high personal risk, incur high costs,
and
3. engage in self-sacrifice to achieve the vision.
Sensitivity to follower needs. Perceptive of others’ abilities and
4. responsive to their needs and feelings.
Unconventional behavior. Engages in behaviors that are perceived as
novel and counter to norms.
of Leadership
Charismatic Leadership
Charismatic leaders don’t doubt their own decisions, they move forward unwaveringly and believe that the decisions
they make are the correct ones. They move through a crowd of their followers shaking hands and lending an
encouraging word. They are undeniably clear on their expectations and where they see the company going. They have
mastered the art of developing images for themselves that others want to emulate. Charismatic leaders have four
common personality traits
• High degree of confidence and lack of internal conflict

• High energy and enthusiasm
• Good communication skills
• Good image and role model
The relationship between charismatic leader and followers is an emotional one (this can sometimes go awry—just
think about the relationship between the leaders and followers in a cult). In order for a charismatic leader to be
effective, the situation has to be right. There are four situations required for a charismatic leader to have success:
• Organization is in a time of crisis or stress.

• Organization is in need of change.
• There is opportunity for the organization to have new goals or direction.
• Availability of dramatic symbols (like the CEO taking a pay cut or donating his salary to charity)
Culturally speaking, those cultures with a tradition of prophetic salvation (e.g., Christianity, Islam) are more welcoming
of the charismatic leader, while cultures without prophetic tradition are less likely to embrace them.
In spite of a limited amount of scientific study where charismatic leaders are concerned, researchers agree there are
applications and lessons to be learned out of this type of leadership. Leaders should have belief in their own actions.
They should seek to develop bonds with their followers. And they must be able to communicate their messages clearly.

of Leadership
• Are Charismatic Leaders Born or Made?
– Some individuals are born with charismatic traits, others are trained to exhibit
charismatic behaviors.
– Develop the aura of charisma.
 Use your passion to generate enthusiasm.
– Speak in an animated voice, reinforce your message with eye contact and
facial expressions, and gesture for emphasis.
– Bring out the potential in followers by tapping into their emotions and
create a bond that inspires them.
• How Charismatic Leaders Influence Followers

– Articulating an appealing vision.
– Developing a vision statement.
– Establishing a new set of values.
– Conveying courage and conviction about the vision.

of Leadership
• Does Effective Charismatic Leadership Depend on the
Situation?
– People are especially receptive when they sense a crisis
or when they are under stress.
• The Dark Side of Charismatic Leadership
– Many leaders don’t necessarily act in the best interest of
their companies.
 Many have allowed their personal goals to override
the
goals of the organization.
 Individuals who are narcissistic are also higher in some
behaviors associated with charismatic leadership.

of Leadership
Transactional & Transformational Leadership
Charismatic leadership theory relies on leaders’ ability to inspire followers to believe in them. In contrast,
Fiedler’s model, situational leadership theory, and path–goal theory describe transactional leaders , who
guide their followers toward established goals by clarifying role and task requirements.
Transactional Leadership
• Transactional leadership is a set of activities that involve an exchange between followers and
leader and deal with daily tasks that get the job done.
• The majority of models we talked about in the last section—Fiedler’s Contingency Theory,
Path-Goal among them—are based on the concept of this exchange between leaders and
followers. The leader provides followers with direction, resources and rewards in exchange
for productivity and task accomplishment.
Transformational Leadership
• Transformational leadership takes a chapter out of the book of charismatic leadership.
Followers admire and are inspired to act. But the transformational leadership concept takes
that one step further and expects intellectual stimulation from a leader, as well as individual
consideration, in which a leader singles out followers and provides them with additional
motivation. The transformational Leaders inspire followers to transcend their self-interests
for the good of the organization Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.
of Leadership
Exhibit 12-4 Characteristics of Transactional and Transformational

Leaders
Transactional Leader
Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good performance,
recognizes accomplishments.
Management by Exception (active): Watches and searches for deviations from rules and standards, takes
corrective action.
Management by Exception (passive): Intervenes only if standards are not met.

Laissez-Faire: Abdicates responsibilities, avoids making decisions.
Transformational Leader
Idealized Influence: Provides vision and sense of mission, instills pride, gains respect and trust.
Inspirational Motivation: Communicates high expectations, uses symbols to focus efforts, expresses
important purposes in simple ways.
Intellectual Stimulation: Promotes intelligence, rationality, and careful problem solving.

Individualized Consideration: Gives personal attention, treats each employee individually, coaches, advises.
Sources: Based on B. M. Bass, Leadership and Performance Beyond Expectations (New York, NY: Free Press, 1990);
and T. A. Judge and R. F. Piccolo, “Transformational and Transactional Leadership: A Meta-Analytic Test of Their
Relative Validity,” Journal of Applied Psychology 89, no. 5 (2004): 755–68.
of Leadership
Exhibit 13-5 Full Range of

Leadership Model

of Leadership
Transactional and transformational leadership complement each other; they aren’t

opposing approaches to getting things done.
The best leaders are transactional and transformational. Transformational leadership
builds on transactional leadership and produces levels of follower effort and
performance beyond what transactional leadership alone can do.

of Leadership
Transformational leaders motivate and teach with a shared vision of the future. They
communicate well. They inspire their group because they expect the best from everyone
and hold themselves accountable as well. Transformational leaders usually exhibit the
following traits:
• Integrity
• Self-awareness
• Authenticity
• Empathy
Measuring a leader’s ability to inspire and enable is a challenge, so researchers rely on

anecdotes to supply data. This makes scientific study difficult. And even though this theory
emphasize leadership behavior, it’s difficult to determine how a leader can learn to be
charismatic and transformational.

of Leadership
• How Transformational Leadership Works
– Creativity – theirs and others.
– Decentralization of responsibility.
– Propensity to take risks.
– Compensation is geared toward long-term results.
– Greater agreement among top managers about the organization’s
goals.
• Evaluation of Transformational Leadership
– Transformational leadership has been supported at diverse job
levels and occupations, but it isn’t effective in all situations.
 It has a greater impact on the bottom line in smaller,
privately-held firms than in more complex organizations.

of Leadership
• Transformational versus Charismatic Leadership

– Charismatic leadership places more emphasis on
the way leaders communicate – are they passionate
and dynamic?
– Transformational leadership focuses more on
what
they are communicating – is it a compelling vision?
– Both focus on the leader’s ability to inspire followers.

Responsible Leadership
the roles of leaders in creating ethical organizations: theories we’ve discussed so far have increased our
understanding of effective leadership, they do not deal explicitly with the roles of ethics and trust, which are
perhaps essential to complete the picture
of Leadership
Authentic Leadership
• Authentic leadership focuses on the moral
aspects of being a leader.
• Authentic leaders:
– Know who they are, Know what they believe
in and value, Act on those values and beliefs
openly and candidly.
– leaders practice what they preach, or act
on their values openly and candidly
• The result: people come to have faith in them
and trust them.
• Mark Zuckerberg, founder and CEO of Facebook, has
resolved to halt the proliferation of fake news by adding
fact checking and flagging to Facebook posts because
it was the right thing to do.

of Leadership
Ethical Leadership
• Ethical Leadership: Leadership is not value-free. In assessing its
effectiveness, we need to address the means that a leader uses to achieve goals as
well as the content of those goals
– Leaders must be willing to express their ethical beliefs
and persuade others to follow their standards.
– Leaders need to set high ethical standards, demonstrate them
through their own behavior, and encourage and reward integrity
in others while avoiding abuses of power.
• Leaders rated as highly ethical tend to be very positively evaluated by their subordinates,
who are also more satisfied and committed to their jobs as well as experience less strain
and turnover intentions.
Efforts have been made by scholars to combine ethical and charismatic
leadership into an idea of socialized charismatic leadership – leadership that
conveys other-centered (not self-centered) values by leaders who model ethical conduct.

of Leadership
Abusive Supervision
• Abusive Supervision
– Refers to the perception that a supervisor is hostile in
their verbal and nonverbal behavior.
 Negatively affects health, leads to increased
depression, emotional exhaustion, and job tension
perceptions.
 Leads to decreases in organizational commitment,
job satisfaction, and perceived organizational
support along with increased work-family conflict.
 Can adversely affect employee performance and
other employee behaviors.

of Leadership
Servant Leadership
• Servant Leadership
– Considering ethical leadership from a new angle resulted
in Servant leadership.
– Servant leaders go beyond their self-interest and instead
focus on opportunities to help followers grow and
develop.
– Characteristic behaviors include listening, empathizing,
persuading, accepting stewardship, and actively developing
followers’ potential.
Copyright © 2019 Pearson Education, Ltd. All Righ ts Reserved.

Positive Leadership
leaders can have a positive impact on their organizations through building trust and mentoring
of Leadership
Positive Leadership
• Trust and Leadership
– Trust: a psychological state that exists when you agree to
make yourself vulnerable to another because you have positive
expectations about how things are going to turn out.
 A primary attribute associated with leadership.
 When trust is broken, it can have serious adverse effects on
a
group’s performance.
• The Outcomes of Trust :
– Trust encourages taking risks.
– Trust facilitates information sharing.
– Trusting groups are more effective.
– Trust enhances productivity.

of Leadership
Positive Leadership
• The Outcomes of Trust :
– Trust encourages taking risks. Whenever leaders and employees decide to deviate
from the usual way of doing things, or when employees decide to take their supervisor’s
word on a new direction, they are taking a risk. In both cases, a trusting relationship can
facilitate that leap.
– Trust facilitates information sharing. One big reason employees fail to express
concerns at work is that they don’t feel psychologically safe revealing their views.
When managers demonstrate that they will give employees’ ideas a fair hearing and
actively make changes, employees are more willing to speak out.
– Trusting groups are more effective. When a leader sets a trusting tone in a group,
members are more willing to help each other and exert extra effort, which increases
trust. Members of mistrusting groups tend to be suspicious of each other, constantly
guard against exploitation, and restrict communication with others in the group. These
actions tend to undermine and eventually destroy the group.
– Trust enhances productivity. The bottom-line interest of companies appears to be
positively influenced by trust. Employees who trust their supervisors tend to receive
higher performance ratings, indicating higher productivity. People respond to mistrust by
concealing information and secretly pursuing their own interests.

of Leadership
Positive Leadership
Exhibit 13-6 The Nature of Trust
• Integrity refers to honesty and truthfulness. It seems the most critical of the three in
assessing
another’s trustworthiness.
• Benevolence means the trusted person has your interests at heart, even if yours
aren’t necessarily in line with theirs.
• Ability encompasses an individual’s technical and interpersonal knowledge and skills.

Leader’s role
Exhibit 13-7 Career and Psychological Functions of the Mentoring
Relationship
Career Functions Psychosocial Functions
• Lobbying to get the protégé challenging and • Counseling the protégé to bolster his or her self-
visible assignments confidence
• Coaching the protégé to help develop his • Sharing personal experiences with the protégé
or her skills and achieve work objectives
• Providing exposure to influential • Providing friendship and acceptance
individuals within the organization
• Protecting the protégé from possible risks • Acting as a role model
to his or her reputation
• Sponsoring the protégé by nominating him
or her for potential advances or promotions
• Acting as a sounding board for ideas the
protégé might be hesitant to share with a
direct supervisor

Challenges to our Understanding of
Leadership
Exhibit 13-8 Substitutes for and Neutralizers of Leadership
Defining Characteristics Relationship-Oriented Leadership Task-Oriented Leadership
Individual
Experience/training No effect on Substitutes for
Professionalism Substitutes for Substitutes for
Indifference to rewards Neutralizes Neutralizes
Job
Highly structured task No effect on Substitutes for
Provides its own feedback No effect on Substitutes for
Intrinsically satisfying Substitutes for Neutralizes
Organization
Explicit formalized goals No effect on Substitutes for
Rigid rules and procedures No effect on Substitutes for
Cohesive work groups Substitutes for Substitutes for
Source: Based on K. B. Lowe and W. L. Gardner, “Ten Years of the Leadership Quarterly: Contributions and
Challenges for the Future,” Leadership Quarterly 11, no. 4 (2000): 459–514.

Challenges to our Understanding of
Leadership
• Selecting Leaders
– Identifying effective leaders:
 Review specific requirements for the position.
 Consider personality tests to identify leadership traits.
 Situation-specific experience is relevant.
– Plan for a change in leadership.
• Training Leaders
– Leadership training is likely to be more successful with high self-monitors.
– Teach implementation skills.
– Teach trust building, mentoring, and situational-analysis.
– Behavioral training through modeling exercises can increase an individual’s
charismatic leadership qualities.
– Review leadership after key organizational events.
– Train in transformational leadership skills.

• For maximum leadership effectiveness, ensure that your preferences on the
initiating structure and consideration dimensions are a match for your
work dynamics and culture.
• Hire candidates who exhibit transformational leadership qualities and
who have demonstrated success in working through others to meet a long-
term vision. Personality tests can reveal candidates higher in extraversion,
conscientiousness, and openness, which may indicate leadership readiness.
• Hire candidates whom you believe are ethical and trustworthy for
management roles and train current managers in your organization’s ethical
standards to increase leadership effectiveness and reduce abusive
supervision.
• Consider investing in leadership training such as formal courses,
workshops, and mentoring.

Chapter 17
Organizational Change and
Stress Management
(lect. 08)
Learning Objectives (1 of 2)
1. Contrast the forces for change and planned change.
2. Describe ways to overcome resistance to change.
3. Compare the four main approaches to managing organizational change.
4. Demonstrate three ways of creating a culture for change.
5. Identify the potential environmental, organizational, and personal sources of

stress at work and the role of individual and cultural differences.
6. Identify the physiological, psychological, and behavioral symptoms of stress

at work.
7. Describe individual and organizational approaches to managing stress at

work.

Why It Matters: Organizational
Change
Change is the only constant thing in life

Why It Matters:
Organizational Change
Why learn about the impact organizational change has on individuals and the
workplace?
In January, 2018, the Money Talks Newsletter posted a story called “22 Iconic
Brands that Could Disappear in 2018.” It highlighted the likes of Sears, Toys R Us,
and Harley Davidson. The reason was not just lackluster profits.
Over 2018, these businesses each made changes trying to stay in business.
Some stores have moved away from brick-and-mortar stores, relying solely on
online retail, others changed names or strategies, and some filed for bankruptcy.

What is CHANGE?
Change means the alteration of status quo or making things different.
“The term change refers to any alterations which occurs in the overall work
environment of an organisation.”
A common theme found in all definitions of Change is that change represents a

movement from the present state of the organization to a desired future state.
An organizational change occurs due to two major factors namely:

What is CHANGE?
An organizational change occurs due to two major factors namely:
• External factor − External factors are those factors that are present outside the firm but force the
firm to change or implement a new law, rule etc.
• Internal factor − Internal factors are those factors that are caused or introduced inside an
organization that forces a change. For example, no smoking in the workplace.

Contrast the Forces for
Change and Planned
Change (1 of 2)
Exhibit 17-1 Forces for Change
Force Examples
Nature of the workforce More cultural diversity
Aging population
Increased
immigration and
outsourcing
Technology Faster, cheaper, and more mobile computers and handheld
devices Emergence and growth of social-networking sites
Deciphering of the human genetic code
Economic shocks Rise and fall of global housing market
Financial sector collapse
Global recession
Competition Global competitors
Mergers and consolidations
Increased government
regulation of commerce
Social trends Increased environmental awareness
Liberalization of attitudes toward gay, lesbian, and transgender employees
More multitasking and connectivity
World politics Rising health care costs
Negative social attitudes toward business and executives
Opening of new markets worldwide

Contrast the Forces for
Change and Planned
Change (2 of 2)
• While change involves making things different, planned change
is
both proactive and purposeful.
• When change is an intentional, goal-oriented activity it is
planned change.
– There are two goals of planned change:
 Improve the ability of the organization to adapt to changes
in its environment.
 Change employee behavior.
• Change agents are those responsible for managing change
activities. These individuals can be managers or non-managers, either insiders or third parties.

Resistance to Change
Why do we resist change at work?
Individual Resistance
Habit, security, economic factors, fear

of the unknown, selective information
processing.
Organizational Resistance
Structural inertia, limited focus of

change, group inertia, threat to
established power relationships

Overcoming Resistance to
Change (1 of 4)
Exhibit 17-2 Sources of Resistance to Change
Individual Sources
Habit—To cope with life’s complexities, we rely on habits or programmed
responses. But when confronted with change, this tendency to respond in our
accustomed ways becomes a source of resistance.
Security—People with a high need for security are likely to resist change
because it threatens their feelings of safety.
Economic factors—Changes in job tasks or established work routines can arouse
economic fears if people are concerned that they won’t be able to perform the
new tasks or routines to their previous standards, especially when pay is closely
tied to productivity.
Selective information processing—Individuals are guilty of selectively processing
information in order to keep their perceptions intact. They hear what they want to
hear, and they ignore information that challenges the world they’ve created.

Change (2 of 4)
Organizational Sources
Structural inertia—Organizations have built-in mechanisms—such as their selection
processes and formalized regulations—to produce stability. When an organization is
confronted with change, this structural inertia acts as a counterbalance to sustain
stability.
Limited focus of change—Organizations consist of a number of interdependent
subsystems. One can’t be changed without affecting the others. So limited changes
in subsystems tend to be nullified by the larger system.
Group inertia—Even if individuals want to change their behavior, group norms may
act as a constraint.
Threat to expertise—Changes in organizational patterns may threaten the expertise
of specialized groups.
Threat to established power relationships—Any redistribution of decision-making
authority can threaten long-established power relationships within the organization.

Resistance to Change

Overcoming Resistance
to Change (3 of 4)

Overcoming Resistance
to Change (3 of 4)
•Education and communication. If there is fear of the unknown, organizations shouldn’t compound that
with a lack of information. Face-to-face meetings, newsletters, and updates can often help reduce those
fears. A disadvantage of this, though, is the ability to communicate to manage change effectively to large
numbers of people.
•Participation and involvement. People who participate in change are less likely to resist it. Managers
can involve employees in the change process, creating an ownership around it that minimizes resistance.
The disadvantage of this approach is that it’s somewhat time consuming and managers do have to
relinquish some control over change implementation.
•Facilitation and support. Facilitation and support requires active listening and counseling. These
methods can be highly effective when dealing with individual resistance, but are time consuming and run
a high risk of failure.
•Negotiation and agreement. This approach recognizes the role and power of others in the success of
the change effort. Trade-offs and incentives are offered in exchange for acceptance. This is a relatively
easy way to deal with resistance but can be expensive and lead to more negotiation.
•Manipulation and Cooptation. Changing employees focus and attention to other issues can be a quick
and easy way to minimize resistance to change, but it can lead to mistrust and resentment on behalf of
those manipulated.
•Explicit and implicit coercion. If there’s no time and no choice, managers can rely on force to push past
change. This method is quick and effective, but it doesn’t build commitment.

Change (4 of 4)
• The Politics of Change
– Change threatens the status quo, making it an
inherently political activity.
– Politics suggests the impetus for change is more likely
to come from:
 Outside change agents.
 Employees new to the organization who have less
invested in the status quo.
 Managers slightly removed from the main power
structure.

Managing
Organizational Change
(1 of 7)
• Approaches to managing change:

– Lewin’s Three-Step Model (Exhibit 18-3)
– Kotter’s Eight-Step Plan for Implementing Change
(Exhibit 18-5)
– Action Research
– Organizational Development

Approaches to Managing
Organizational Change (2 of 7)
Exhibit 17-3 Lewin’s Three-Step Change Model
Companies that have been successful in the past are likely to encounter restraining forces because
people question the need for change. Similarly, research shows that companies with strong cultures excel
at incremental change but are overcome by restraining forces against radical change.
Once the change has been implemented, the new situation needs to be refrozen so that it can be sustained
over time. Unless this last step is taken, there is a very high chance that the change will be short-lived and
that employees will attempt to revert to the previous equilibrium state. The objective of refreezing is to
stabilize the new situation by balancing the driving and restraining forces.

Exhibit 17-4 Unfreezing the Status Quo
Lewin’s three-step model of change consists of three steps: unfreezing the status quo, movement to a new
state, and refreezing the new change to make it permanent. It attempts to increase driving forces, which direct
behavior away from the status quo, and decrease restraining forces, which hinder movement from the existing
equilibrium.

Organizational Change (4
of 7)
John Kotter, who developed an 8-step plan for implementing

change, begins by listing common failures that managers make
when trying to initiate change. Kotter builds upon Lewin’s model
by providing managers with a more detailed guide for
successfully implementing change.

of 7)
Exhibit 17-5 Kotter’s Eight-Step Plan for Implementing
Change
1. Establish a sense of urgency by creating a compelling reason for why change is needed.
2. Form a coalition with enough power to lead the change. Unfreezing
3. Create a new vision to direct the change and strategies for achieving the vision.
4. Communicate the vision throughout the organization.
5. Empower others to act on the vision by removing barriers to change and encouraging change
risk taking and creative problem solving.
6. Plan for, create, and reward short-term “wins” that move the organization toward the
new vision.
7. Consolidate improvements, reassess changes, and make necessary adjustments in
the new programs.
Refreezing
8. Reinforce the changes by demonstrating the relationship between new behaviors
and organizational success.
Source: Based on J. Kotter, Leading Change (Boston, MA: Harvard Business School,
1996).

• Action research: a change process based on the systematic collection of
data and selection of a change action based on what the analyzed data
indicate.
– Five steps: Diagnosis, Analysis, Feedback, Action, and Evaluation.
– Provides at least two specific benefits:
 It is problem-focused.
 It reduces resistance to change.
• During the analysis step, the change agent synthesizes the information into primary concerns, problem areas,
and possible actions.
• In the feedback stage, information from the first two stages is shared with employees and goals and action plans
are developed.
• The action step involves carrying out the specific actions to correct the problems that have been identified.
• Finally, the change agent evaluates the effectiveness of the action plan.

of 7)
• Organizational development (OD): a collection of change

methods that try to improve organizational effectiveness
and employee well-being.
– OD methods value human and organizational growth,
collaborative and participative processes, and a spirit
of inquiry.
– The focus is on how individuals make sense of their
work environment. The change agent may take the
lead in OD, but there is a strong emphasis on
collaboration.

Organizational Change (7 of
7)
• Under the umbrella of organizational development, six interventions that facilitate change for change
agents, which are are:
– Sensitivity training (laboratory training, or training groups)
 unstructured group interaction wherein participants discuss themselves and their interactive processes. loosely
directed by a professional behavioral scientist. It attempts to enhance group functioning by increased
participants’ understanding of group processes
– Survey feedback
 collect data on employee attitudes on a broad range of topics, including decision-making practices;
communication effectiveness; coordination between units; and satisfaction with the co., job, peers, and their
immediate supervisor
– Process consultation (PC)
 similar to sensitivity training, but is task oriented - An outside consultant works with clients to understand
the process managers must deal with, diagnose the problem, and then coaches the client through the
problem.
– Team building
– Intergroup development
 training sessions focus on differences among occupations, departments, or divisions within an organization.
– Appreciative inquiry (AI)

 seeks to identify the unique qualities and special strengths of an organization and build on these to improve
performance. asks participants to look forward and project the future based on the positive components of
an organization.

of 7)
• Sensitivity training a thorough, unstructured group interaction wherein
participants discuss themselves and their interactive processes, loosely
directed by a professional behavioral scientist.
• Survey’s generally probe perceptions held by employees. Everyone
can participate in survey feedback, in which a questionnaire is usually
completed by a manager and all of his or her subordinates. Data from
the survey are calculated for an individual’s “family” (work group).
Feedback and discussions should lead to implications.
• process consultation (PC). An outside consultant works with clients
to understand the process events managers must deal with, and then
coaches his or her client through the problem..
• team building, which uses high-interaction group activities to increase
trust and openness among team members, improve coordinative
efforts, and increase team performance.

Organizational Change (7 of
7)
•intergroup development. seeks to change groups’ attitudes,
stereotypes, and perceptions about each other. Here, training sessions
closely resemble diversity training (in fact, diversity training largely
evolved from intergroup development in OD), except rather than
focusing on demographic differences, they focus on differences among
occupations, departments, or divisions within an organization.
appreciative inquiry (AI), or participation. This type of OD brings to light
the positive, rather than the conflict. AI asks participants to look forward
and project the future based on the positive components of an
organization. The AI process consists of four steps—discovery,
dreaming, design, and destiny—often played out in a large-group
meeting over a 2- or 3-day time period and overseen by a trained
change agent.

CHANGE Management
• Nokia was responsible for pioneering many of the features many people now take for granted on
their smartphones – including touchscreen capability, web browsing and cameras.
• The Finnish company was the world's top cell phone maker in 1998, it sold its billionth phone in
2005.
• after this, the Finnish company suffered a string of setbacks
• in 2009 laid off 1,700 employees worldwide,
• competition from upstarts such a s Apple, Blackberry, HTC, LG and Sa m s u n g were taking its toll.
• ia struggled to regain its focus and footing until 2013, when it announced it was selling its
cellphone division to Microsoft why?
– so it could return to its core business: networking equipment.
• Nokia executives were candid about their anguish, but their ability to embrace one of the
fundamentals of positive organizational behavior may have helped ease their pain, which one is it?
– Change
• Nokia h a s since returned billions of dollars in cash to shareholders and regained its status
a s Finland's most valuable company.

Collaboration
• Windows operating system and Office products catapulted it to the top of the tech world, but it was struggling
to forge a new identity a s Google dominated online searches and Apple and Samsung overtook the smartphone
market.
• Consumers did not see much to get excited about. It turns out that Microsoft's true problems were festering under
the surface, with internal turf wars that made internal divisions behave more like separate companies – competitive
to the point of being hostile – rather than colleagues on the same team.
• Rather than preach about the importance of positive organizational behavior in the workplace, new
CEO Satya Nadella eliminated those sparring divisions and turned employees' focus to three goals: creating more
personal computing, building an intelligent cloud platform and reinventing productivity and business
processes.
• Two years later, in 2016, he created the AI and Research Group – a merger of the former Microsoft Research
Group and the Bing, Cortana and Information Platform Group teams.
• Since then, computer scientists and engineers work together to instill AI across Microsoft's product lines.
• In interviews, Nadella says he finds proof of the importance of positive organizational behavior not in
Microsoft's new organizational chart but in employee attitudes. Once laboring without a clear sense of
purpose, they now are engaged, working from a sense that their work once again has real meaning.

TAKE ACTION
• A search engine that became so dominant that it morphed from a noun to a verb – a s in,
“I'm going to Google that.”
• At the urging of co-founder Larry Page, engineering teams were studying “moonshot”
projects that included everything from AI and self-driving vehicles to smart home
automation and virtual reality headgear.
• The company had become so diverse, with so many teams, that it was becoming
impossible to manage.
• Pag e effectively wrote his own chapter on positive organizational behavior examples in
2015 by breaking up Google into “a collection of companies” and creating a new parent
company, named Alphabet, to oversee them all.

Learn From These Organizational Behavior Examples
Change Management Best Practices
• Define clear goals. Clearly define the change and align it to business goal.
• Be honest and transparent
• Train and reassure your teams
• Communicate regularly and effectively
• Bring your leaders on board
• Empower your employees
• Encourage knowledge sharing
• Document and make information easily accessible
• Measure the change process.
• Recognize and reward

We’ve considered how organizations can adapt to change.
But recently, some OB scholars have focused on a more
proactive approach—how organizations can embrace
change by transforming their cultures.
In this section, we review three such approaches: managing
a paradox, stimulating an innovative culture, and creating
a learning organization.

Creating a Culture for
Change (1 of 8)
• Managing a Paradox
– There is no such thing as a separate discipline of
“change management” because all management is
dealing with constant change and adaptation.
 Learning: is a paradox because it requires building on the past while rejecting it
at the same time
 Organizing is a paradox because it calls for setting direction and leading
while requiring empowerment and flexibility.
 Performing is a paradox because it calls for setting direction and leading
while requiring empowerment and flexibility.
 Belonging is a paradox between establishing a sense of collective identity
and acknowledging our desire to be recognized and accepted as unique
individuals.
– Managers can learn a few lessons from paradox theory,
which states the key paradox in management is that there is
no final optimal status for an organization.

Change (1 of 8)
• Let’s begin with managing a paradox. In a paradox situation, we are required to balance
tensions across various courses of action. There is a constant process of finding a balancing
point, a dynamic equilibrium, among shifting priorities over time. From this perspective, there
is no such thing as a separate discipline of “change management” because all management
is dealing with constant change and adaptation.
• The idea of paradox sounds abstract, but more specific concepts have begun to emerge
from a growing body of research. Several key paradoxes have been identified. Learning is a
paradox because it requires building on the past while rejecting it at the same time.
Organizing is a paradox because it calls for setting direction and leading while requiring
empowerment and flexibility. Organizing is a paradox because it calls for setting direction
and leading while requiring empowerment and flexibility. . And finally, belonging is a paradox
between establishing a sense of collective identity and acknowledging our desire to be
recognized and accepted as unique individuals.
• Managers can learn a few lessons from paradox theory, which states the key paradox in
management is that there is no final optimal status for an organization. The first lesson is that
as the environment and members of the organization change, different elements take on
more or less importance. There is some evidence that managers who think holistically and
recognize the importance of balancing paradoxical factors are more effective, especially in
generating adaptive and creative behavior in those they are managing.

Change (2 of 8)
• Stimulating a Culture of Innovation
– Innovation: a more specialized kind of change, is a new idea
applied to initiating or improving a product, process, or services.
– Innovations can range from small incremental improvements,
such as netbook computers, to radical breakthroughs, such as
Nissan’s electric Leaf car.
• Innovative organizations tend to have similar cultures:
– They encourage experimentation.
– They reward both successes and failures.
– They celebrate mistakes.
• Managers in innovative organizations recognize that failures are
a natural by-product of venturing into the unknown.

Change (3 of 8)
• Sources of Innovation: Structural variables are the most studied
potential source of innovation.
– Organic structures positively influence innovation.
– Innovation-contingent rewards positively influence integration.
– Innovation is nurtured when there are slack resources.
– Inter-unit communication is high in innovative organizations.
• Innovative organizations:
– Actively promote the training and development of their members so they keep
current.
– Offer high job security so employees don’t fear getting fired for making
mistakes.
– Encourage individuals to become champions of change.
• Once a new idea is developed, idea champions actively and enthusiastically promote it,
build support, overcome resistance, and ensure it’s implemented.

Creating a Culture
for Change (6 of 8)
Exhibit 17-6 Characteristics of a Learning Organization
1. There exists a shared vision that everyone agrees on.
2. People discard their old ways of thinking and the standard routines they
use for solving problems or doing their jobs.
3. Members think of all organizational processes, activities, functions, and
interactions with the environment as part of a system of interrelationships.
4. People openly communicate with each other (across vertical and
horizontal boundaries) without fear of criticism or punishment.
5. People sublimate their personal self-interest and fragmented departmental
interests to work together to achieve the organization’s shared vision.
Source: Based on P. M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization, 2nd ed.
(New York: Random House, 2006).

Creating a Culture
for Change (7 of 8)
• What can managers do to make their firms learning organizations?

– Establish a strategy.
 Management needs to make explicit its commitment to change,
innovation, and continuous improvement.
– Redesign the organization’s structure.
 The formal structure can be a serious impediment to learning. Flattening the
structure, eliminating or combining departments, and increasing the use of
cross-functional teams reinforces interdependence and reduces boundaries.
– Reshape the organization’s culture.
 To become a learning organization, managers must demonstrate by their
actions that taking risks and admitting failures are desirable. That means
rewarding people who take chances and make mistakes. And
management needs to encourage functional conflict

Change
• Organizational Change and Stress
– Changes are stressful because employees perceive aspects to be
threatening.
 Employees need to see the changes as fair.
• Organizational Change and Stress

– Research shows that organizational changes incorporating OB knowledge
of how people react to stressors may yield more effective results than
organizational changes that are only objectively managed through goal-
setting.
 The role of leadership is critical. A recent study found that transformational
leaders can help shape employee affect so employees stay committed to the change
and do not perceive it as stressful.

Stress at Work (1 of 4)
Exhibit 17-7 Work Is a Top Source of Stress

What area of your life causes you the most stress?
Area Causes Most Stress
Financial worries 64%
Work 60%
Family responsibilities 47%
Health concerns 46%
Source: Based on “Stress in America: Paying with Our Health,” American Psychological Association, February 4,
2015, http://www.apa.org/news/press/releases/stress/2014/stress-report.pdf.

OB POLL Many Employees Feel Extreme Stress
Source: Based on J. Hudson, “High Stress Has Employees Seeking Both Wellness and Employee Assistance
Help,” ComPsych Corporation press release, November 12, 2014,
http://www.compsych.com/press-room/press-releases- 2014/818-nov-12-2014.

Exhibit 17-8 A Model of Stress

from

• Cultural Differences
– Research suggests the job conditions that cause
stress show some differences across cultures.
 For example, U.S. employees are stressed by a
lack of control, whereas Chinese employees are
stressed by job evaluations and lack of training.
– Research also shows that stress is equally bad for
employees of all cultures.

Consequences of
Stress at Work
• Consequences of Stress
– Physiological Symptoms: research supports the link
between job stress and poor health.
– Psychological Symptoms: job dissatisfaction is an
obvious cause of stress.
– Behavioral Symptoms: reductions in productivity,
absence, turnover, as well as changes in eating
habits, increased smoking and/or consumption of
alcohol, rapid speech, fidgeting, and sleep disorders.

Consequences of Stress at
Work (2 of 2)
Exhibit 17-9 The Proposed Inverted-U Relationship between

Stress and Job Performance

Managing Stress at Work
(1 of 11)
• Managing Stress
– Because low to moderate levels of stress can be
functional and lead to higher performance,
management may not be concerned when employees
experience stress at these levels.
– What management may consider to be “a positive
stimulus that keeps the adrenaline running” is very likely
to be seen as “excessive pressure” by the employee.

Managing Stress at Work
Individual Approaches Organizational Approaches
• An employee can take personal • Several organizational factors that cause
responsibility for reducing stress stress are controlled by management.
levels. – Task and role demands can be modified
• Individual strategies include: or changed.
– Time-management – Strategies include:
techniques.  Better selection and placement, and
training.
– Increased physical exercise.
 Goal-setting.
– Relaxation training.
 Redesigning jobs.
– Expanded social support  Employee involvement.
networks.
 Organizational communication.
 Employee sabbaticals.
 Wellness programs.

Managing Stress
at Work
• Selection and Placement
– Individuals with little experience or an external locus of control tend to
be more prone to stress.
– Selection and placement decisions should take these facts into
consideration.
– Training can increase an individual’s self-efficacy and thus lessen job
strain in these situations.
• Employee involvement
– Role stress is detrimental to a large extent because employees feel
uncertain about goals, expectations, how they’ll be evaluated, and the
like.
 Giving employees a voice in management decisions can increase
employee control and reduce role stress.
 Managers should consider increasing employee involvement in
decision making.
Managing Stress
at Work
• Goal-setting
– Goals can reduce stress as well as provide motivation.
– Employees who are highly committed to their goals and see purpose in their jobs
experience less stress.
• Goal-setting
– Goals can reduce stress as well as provide motivation.
– Employees who are highly committed to their goals and see purpose in their jobs
experience less stress.
• Redesigning Jobs
– Redesigning jobs to give employees more responsibility, more meaningful work,
more autonomy, and increased feedback can reduce stress because these factors
give employees greater control over work activities and lessen dependence on
others.
• Organizational Communication
– Increasing formal organizational communication with employees reduces
uncertainty by lessening role ambiguity and role conflict.
– Given the importance that perceptions play in moderating the stress-
response relationship, management can also use effective
communications as a means to shape employee perceptions.

Managing
Stress at Work
• Organizational Communication
– Increasing formal organizational communication with
employees reduces uncertainty by lessening role
ambiguity and role conflict.
– Given the importance that perceptions play in
moderating the stress-response relationship,
management can also use effective communications
as a means to shape employee perceptions.

Managing Stress
at Work
• Employee sabbaticals
– Some employees need an occasional escape from the
frenetic pace of their work.
– These sabbaticals—ranging in length from a few weeks to
several months—allow employees to travel, relax, or pursue
personal projects that consume time beyond normal
vacations.
• Corporate wellness programs
– Typically provide workshops to help people quit smoking,
control alcohol use, lose weight, eat better, and develop a
regular exercise program.
– Focus on the employee’s total physical and mental condition.

Implications for
Managers
• Consider that, as a manager, you are a change agent in your organization. The
decisions you make and your role-modeling behaviors will help shape the
organization’s change culture.
• Your management policies and practices will determine the degree to which the
organization learns and adapts to changing environmental factors.
• Some stress is good. Increasing challenges brought by autonomy and responsibility

at work will lead to some stress, but they will also increase feelings of accomplishment
and fulfillment. Hindrance stressors like bureaucracy and interpersonal conflicts, on the
other hand, are entirely negative and should be eliminated.
• You can help alleviate harmful workplace stress for your employees by accurately
matching work-loads to employees, providing employees with stress-coping
resources, and responding to employee concerns.
• You can identify extreme stress in your employees when performance declines,
turnover increases, health-related absenteeism increases, and engagement
declines. Stay alert for early indicators and be proactive.

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Organizational Behavior

Eighteenth Edition, Global Edition

Copyright © 2019 Pearson Education, Ltd. All Rights Reserved.

Organization & People

• Organizations share three common characteristics

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Managers need a cadre of skills to create a productive workplace, including technical

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Spokesperson Transmits information to outsiders on organization’s plans, policies,

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• Organizational behavior is the study of how human behavior affects an organization. By

• In addition, organizational behavior studies how an organization can affect behavior.

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organizations – individuals , group

• It is an applied field because it applies the knowledge

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• There are few, if any, simple and universal principles that

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• Enhancing employee well-being at work

• Creating a positive work environment

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• Resist the inclination to rely on generalizations; some provide

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67% of survey respondents said culture is more important than strategy

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An organization consists of individuals with different specializations,

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These values have also a strong influence on https://youtu.be/4cBN8xH-5Qw

The Nordstrom Case. “Use good judgment in all