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BU288 Midterm 1 Review.doc

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Wilfrid Laurier University
Simon Taggar

BU288 Midterm 1 Review Rise of Organizations • UK – 18 to the 19 century o Machine based manufacturing o Mechanization of the textile industries o Iron Industry o Steam power • Around the industrial revolution, there was a greater focus on basic needs, unions began to form as workers demanded more rights • 1990s-present day o Urbanization o Industrialization led to the creation of the factory o Child labour o Craft workers lost their jobs – luddites o Unions • Child labour gave rise to first labour laws • Rise in urbanization led to creation of the factory system • WWI o War effort required women to help manufacture o Moved away from Economic Man Principles o Experimented with different management styles • WWII o Pushed for greater war effort o More effort was looked into facilitating the needs of their workers, particularly at the time when women were still the dominant workforce on the home front o Began HR movement, other methods to get the correct behaviour in organizations, ended hierarchies and coercion • Communist Threat o Helped facilitate workers because of the rampant rise in communism o Legislated unionism, recognized unions as a part of a working society o Didn’t want people to support communism o Gave influence, power to people in the workplace What are Organizations? • Classical view and Bureaucracy o Based on economics during the 18 and 19 century; rational man assumption assumes that people want pleasure and avoid punishment – hence reason why workers were rewarded with pay and punished if they do not do their job properly or do work when needed • Hierarchies o Chain of command, large amount of control from the top, Weber’s ideal form of an organization that consisted of a large vertical power distance • Scientific Management o Developed by Frederick Taylor o Based around using scientific methods to find out the more efficient ways, make things faster, specialization of labour • Controls • Centralized decisions o Controls and centralized decisions made sure who controlled what and how much power (or control) would they have over their decisions What is OB? • Attitudes and behaviours of individuals in organizations • How do Organizations work? • Can OB/HR practices have a direct, positive effect on the bottom-line performance of organizations What is “strategy”? • Moves & business approaches to produce successful performance • Management’s “game plan” for running the business, strengthening firm’s competitive position, satisfying customers, and achieving performance targets Thinking strategically: Three big strategic questions 1. Where are we now? 2. Where do we want to go? a. Business positions management wants to stake out: i. Financial objectives to achieve ii. Strategic objectives to achieve 3. How will we get there a. Resources Five tasks of strategic management – iterative 1. Defining business, stating a mission & forming a strategic vision 2. Setting measurable objectives 3. Crafting a strategy to achieve objectives 4. Implementing & executing strategy 5. Evaluating performance, reviewing new developments & initiating corrective adjustments Why a shared vision matters • A strategic vision widely shared among all employees functions similar to how a magnet aligns iron filings • When all employees are committed to a firm’s long-term direction, optimum choices on business decisions are more likely • EEs know intent of firm’s strategic vision • Daily execution of strategy is improved Vision/Mission Enactment (Difference of OB) Mission • Three Goals o Low cost o Innovation o First to Market • Examples: o Example 1:  Key Market: To provide any customer…  Contribution: …a means of moving people and things up, down and sideways over short distances….  Distinction: ….with higher reliability than any similar enterprise in the world  Implication for HR:  QUALITY SERVICE/INNOVATION  Based on this company, their mission statement stats that it “wants to provide every customer” with the ability to move people over short distances with “higher reliability”, meaning that the company wants to provide customers this service at the highest quality possible, which requires a high level of innovation to maintain their standard of quality service. o Example 2:  Key Market: To provide all banks, S&Ls and Investment firms….  Contribution: …with error-free financial instruments delivered in a timely fashion.  Distinction: Error-free means absolutely no errors; timely means a 48-hour turnaround  Implication for HR  COST & QUALITY  Based on this company, they provide quality service through the promise of “error-free financial instruments delivered in a timely fashion” in which it is clarified through their definition of error free and timely o Example 3:  Key Market: To offer the fast food customer….  Contribution: …food prepared in the same high-quality manner world-wide, tasty and reasonably priced  Distinction:…..delivered in a consistent, low-key décor and friendly atmosphere  Implication for HR  LOW COST  This mission statement reflects cost & quality because their mission statement states that the food they provide is delivered in the same high-quality manner worldwide (Consistent Quality) at a reasonable price (Cost Efficient). It is also reflected in their delivery, where it is “convenient, low-key décor and friendly atmosphere”. Cost Reduction • One-third of surveyed companies said cost reduction was a dominant strategic issue • Components: o Tight controls o Overhead minimization o Economies of scale • HR approach: o Increase amount of centralization o Downsize  Helps to reduce the number of workers assigned to one particular job, multitasking o Use temporary workers o Use part-time workers  Temporary/part-time workers work for limited hours with no benefits, which saves the company compensation costs o Re-engineer  Re-engineering tasks, jobs or products to be better produced at minimal cost o Overtime  Saves costs of hiring additional workers to meet demands, which will cost the company compensation costs, especially benefits o Reduce management  Reducing management saves the costs of keeping many high levels of management together and helps to unify tasks being managed by one manager o Outsource  Saves costs by having a company who can produce more cost efficiently to produce the product Innovation Strategy • Dominant business strategy of the 1990s • Requires employees to have: o Flexibility o Knowledge o Empowerment • HR implementations o Employee suggestion programs  Help management receive feedback from the front-line workers producing the products, uses this to determine more cost- efficient ways o Flexible job design  Allowed workers to change their role if need be, prevent monotonous work, giving some autonomy o Self-directed work groups  Work independently to achieve a common goal for the organization Quality Improvement Strategy • Key concern of management • Requires: o Cooperative behaviour o Commitment to organization’s goals o Feedback o Teamwork o Autonomy o Flexible job classifications • HR implementations o Employee suggestion programs o Flexible job design o Information sharing with employees o Problem-solving teams o Self-directed work groups Conclusions • Our findings show: o The important, if not fundamental role, played by OB/HRM in the achievement of firm strategy o That a universal set of best practices cannot be advocated in light of the need for internal alignment (HR/OB practices align with other HR/OB practices) o Organizational effectiveness and good strategies result when there is a fit among four points: mission, competencies, capabilities, and the environment Shifts in Strategic Change • Changes reflect the changes towards a HR focused practice • Organizations have become less hierarchical and more autonomous • Empowerment has led employees to take control of the product they make and allows them to make their own decision • Changes to practices has led to better quality, speed and innovation • Low job responsibilities and skills have changed into creativity and innovation • Careers can take multiple directions and branch out, rather than a singular, narrow career plan • Employees can now take control of their own development, career branches to other potential directions • Changed from a management-driven economy to a knowledge driven economy More on strategy • Corporate strategy o What business should we be in? • Business strategy o How should we compete? o Focus on how to build a competitive position – means and ends o Action plan for managing a single line of business Operationalizing Strategy • The current state of strategic OB/HRM research o OB/HR systems are a strategic asset o OB/HR provides a competitive advantage because it is difficult to imitate • Casual ambiguity – it is difficult to reverse engineer • Path dependency – cannot buy culture/interpersonal relationships – policies develop over time • Is there one best way, many best ways, or does it depend? o Linear relationship o Fit versus universalistic approach • Sustainable competitive advantage is key to any business • Unable to take cultures across borders and replicate them or reengineer them • Cannot reverse engineer relationships or cultures a company has • Path dependency is based around the inability for companies to duplicate their particular culture or relationship with employees that is prevalent • It depends on the company itself based on the best way to use strategy; has to fit with what the organization believes, its goals and purposes, must fit what the company’s culture and strategy will be for its products/services • Business strategies: o Low Cost Provider  Product/service must be perceived by the customer to be relatively comparable  Buyers are price sensitive  Low-cost producers survive by obtaining high market share or higher margins o Implications for OB/HR  Employee • Possibly low skilled workers that can be replaced • Routine jobs  HR planning • Minimal success planning • Contingency workers • Labour supply  Selection • Internal promotions • Large selection pools • Word of mouth, referrals, Canada Employment Centers  Compensation • Low • Off-shore/outsourcing/contingent and part-time workers • Pay-for-performance  Training • Minimal • Focused on increasing efficiency  Performance evaluations • Short-term focus • Explicit • Individual behaviour  Labour Relations • Avoid Unions • Alignment with the differentiation strategy o Customers pay a premium for uniqueness o Innovation is important to serve specific market segments • Differentiation through: o High quality products o Customer service o Style o Convenient location o Technology o Branding o Communications • The Employee o Creativity o Context o HR planning  Getting high quality people is important  Succession planning is important  EE participation  Long-term o Selection  New perspectives  Creative people o Compensation  Do incentives help?  Internal and external equity o Training  Technical and teamwork skills are important  Learning is varied o Performance evaluation  Focus on empowerment, diversity sensitivity, teams, extra-role behaviour – broader competencies o Labour relations  Avoid unions/structure Subsystems • Resource based view of the organization – distinguish between core and peripheral resources • Resources that contribute rare or exceptional value and those that do not • Core – contributes rare or exceptional value to the firm o Contributes most directly to formulating and implementing the organization’s grand strategy • Peripheral • Boxall (1999) o The inner core are the managers, technical specialists and strategically located who are responsible for valuable innovations or for successful imitation o An open egalitarian management process is best suited to these ‘key value generators’ so that criticism can be used creatively to generate new ways of operating, to foster the kind of ‘contention’ that stimulates variety and adaptability o The outer core consists of those employees…with whom stable employment relations must be built if the firm is to meet its commitments to customers without process disruptions. Furthermore, these are the employees on whom the firm will depend for continuous improvement within a given strategic paradigm GovernmenCt onfiguration Inner ore Outer Core Inner Peripheral core Outer Peripheral Substrategies • Behavioural perspective – different strategies impose differing behavioural imperatives • Three strategic activities: innovation, quality improvement, and cost reduction • HRM/OB Practitioners need to: o Understand the grand strategy and the value the company offers to its customers o Understand the core and peripheral employee segments and their substrategies o Correctly assign jobs to employee segments, and o Create HRM bundles, policies and procedures that cue employees to act in support of the defined substrategies Personality & Learning Attributes Associated with Leadership Effectiveness • Vitality and endurance • Decisiveness • Persuasiveness • Responsibility • Intellectual capacity Traits Associated with Leadership Effectiveness • Stable internal dispositions to behave in a certain way on the job • Intelligence • Personality Traits • Relatively stable internal states that help to explain how a job incumbent or applicant will behave at work • Personality is a hypothetical concept or construct (like gravity) • It is a predisposition to behave systematically Personality • Is a relatively stable set of characteristics that influence the way an individual interacts with his or her environment and how (s)he feels, thinks and behaves • Stable predisposition to behave in a certain way • WWII o Involved with trying to get the best candidates to be leaders • Person-situation debate o Would involve studies to measure the different paths of each twin with regard to achievement, knowledge; both person and the situation have an impact • Interactionism – increase in weak situation o How one interacts with the environment • Personality is a predictor of interactionism via weak situations; North America has evolved management into a lower span of control and increased autonomy History of Personality Assessment • Astrology o The configuration of the stars (horoscope) at the moment of birth dictates your personality o No evidence of support o If this is so, why does the notion of astrology continue to exist • Biorhythms o Day-to-day effectiveness is governed by the position of cycles o Physical, mental, emotional o No evidence • Palmistry o No evidence to support the idea that the lines and folds in your hand dictate personality • Barnum Effect o Astrologists and palmists make use of the Barnum effect o Use of descriptions that fit most individuals rather than a specific individual – statements that describe 99% of the population • Humoural Theory o Hippocrates (460-377 BC), Galen (AD 130-200) o Sanguine (blood-cheerful-stable extravert) o Melancholic (black bile – sad – unstable introverts) o Choleric (yellow bile – angry – unstable extravert) o Phlegmatic (Phlegm – lethargy – stable introverts) Theory of Personality • Trait models • Type Theories o Carl Jung o Briggs – Myers – Briggs Type Indicator  Briggs most used – very low measure of personality, seen as low ranking and a poor indicator of personality o Type A and Type B  Type A – hypertensive, stressed  Type B – relaxed, calm • Psychoanalytic Theories o ID, ego, and super-ego  Make up the irrational side and the rational side of us, going against egos, not seen anymore • Behaviourist Theories o Skinner “Stimulus-Response-Consequence Model”  Behaviourist theories such as Skinner and Pavlov’s Dog, trains and anticipates a specific a specific response when a particular situation is triggered  Focused on the environment, what happens in the environment has an impact on human behaviour • Social cognitive theories o Behaviour is explained as guided by cognitions (eg. Expectations) o Bandura – observational learning, or modeling  Self-efficacy • Related with self-confidence, setting low goals, belief that a task or goal can be accomplished  Locus of control • The location of where issues in the environment occur • Low self control = no control over what happens, blame the environment • Internal locus of control – less likely to become depressed, internal environment becomes controlled • Bias to blame the environment if the result is bad, but can attribute success to our personal reason  Attributional style • Humanistic theories o People have free will and they play an active role in determining how they behave – Maslow • Sheldon’s Somatotype Theory o Ectomorph  Restrained, introverted, mentally intense, restless o Mesomorph  Competitive, energetic, assertive, bold o Endomorph  Lovers of comfort, social, warm, good-willed • Critiques on the application of personality o If personality is an important concept, then individual differences in behaviour should be invariant in like situations – this is not always true o Behaviour need not be consistent between situation; it need only be functionally equivalent o Personality means people’s behaviour just has to be functionally equivalent  multiple pathways towards approaching a situations, doesn’t change the underlying personality traits, achieving the same goal but behaving in different ways to achieve said goal o Personality is only likely to be a useful construct if it is stable over time o Personality is not reliable, cannot predict something that is continuously changing o We say that reliability is a necessary but not sufficient condition for validity  can’t measure something reliably, then it cannot be valid, can have something reliable but cannot be valid, measuring something intended but not intended, cannot having something unreliable and be valid, for something to be valid it has to be reliable and true to the subject o Personality has been shown to explain only a small percentage of the variance in human behaviour, often less than 10% o This could be interpreted to mean that attention should be directed toward the factors that influence the other 90% o When people gain autonomy, personality and intelligence become more prominent The Big Five Model (OCEAN) • Virtually all personality theories can be reduced or categorized under the umbrella of the “Big Five” • The dimensionality of the Big Five has been found to generalize across virtually all cultures and remains fairly stable over time • In addition, research suggests that the Big Five traits have a genetic basis and the heritability of its dimensions appears to be quite substantial • O – Openness, how open is the person, are they willing to accept new experiences or tasks • C – Conscientious, are they aware of the situation, need for action • E – Extravert, are they open minded, are they willing to accept leadership • A – Agreeableness, are they easy to get along with • N – Neuroticism, how controlled is their personality • G – general cognitive ability, plays a role in some instances, essentially intelligence, measures 25% of most jobs, universal predictor • All are uncorrelated, not related to each other, not measuring the same thing • Possible to fake personality evaluations – the ability to fake is an important personality trait, faking often involves duplicating the common trait around them • Even faking can still capture something about them, to catch faking via checking • Worthwhile to find out personality trait? o If we know our tendencies, we are better prepared to counteract their effects. For example, an individual low in conscientiousness may have had his or her career inhibited by being undependable, disorganized, and careless o Surely if this person is to subdue these weaknesses, he or she should know about his or her inherent tendencies to engage in such behaviours o At the very least, knowing oneself can aid in gravitating to occupations commensurate with one’s personological orientations o It makes awareness of their current behaviour and explains the possible path to changing such behaviour o Low attention to detail = not good for a vocation that involves a higher attention to detail Locus of Control • Refers to an individual’s belief about the location of the factors that control his or her behaviour – internal versus external • Internals = effort performance link, less stress, more satisfied, more $ • Internals – effort will lead to high performance, belief • Stress is a precursor to depression and other issues • CBT involves changing behaviour and attitudes, if attitudes and behaviours are not aligned (cognitive dissonance) then one will feel uncomfortable, will start changing how and what to believe, desire to get someone to behave in a way that is consistent with their attitude Self-Monitoring • The extent to which people observe and regulate how they appear and behave in social settings and relationships • High self monitors – take great care to observe and control their image – pick certain jobs • Ability to fake behaviours is predicated on ability to self monitor, observe what is required and duplicate that behaviour • The observe that environment and control their image Self-Esteem • The degree to which a person has a positive self-evaluation • Low = susceptible to external and social influences o React badly to negative feedback o Lower job satisfaction and performance o Increased decision making, autonomy, and interesting work helps • People with low self-esteem will develop when kids start developing low self- efficacy • Positive Affectivity – positive, emotionally controlled state, having an emotional reaction to something • Tendency to have better performance, more likely to rebound back to an original state of mind • Positive Affectivity leads to: o Higher satisfaction, Job performance, creativity • Negative Affectivity leads to: o Stress & counterproductive behaviours • General Self-Efficacy (GSE) o It is a general belief in yourself, setting higher goals, less likely to give up easily, associated with positive mindset, associated with being extraverted Learning • A relatively permanent change in behaviour potential that occurs due to practice or experience • Practical Skills o Job specific skills o Knowledge o Technical competence • Intrapersonal Skills o Problem solving o Critical Thinking o Learning about alternative work processes o Risk Taking • Interpersonal Learning o Interactive Skills  Communicating  Teamwork  Conflict Resolution • Cultural Awareness o Social norms/metanorms of organizations o Understanding company goals o Business Operations o Company expectations and priorities • Reinforcement Theories o The theories by which stimuli strengthen behaviours o A reinforce is a stimulus that follows some behaviour and increases or maintains the probability of that behaviour o NB of consequences that follow behaviour o Interested in the environment = the response to one’s environment, there are certain consequences that cause a behaviour to occur more often • Positive Reinforcement o The application of addition of a stimulus that increases or maintains the probability of some behaviour o Positive reinforcers tend to be pleasant • Negative Reinforcement o The removal of a stimulus that, in turn, increases or maintains the probability of some behaviour o Negative reinforcers tend to be unpleasant o Different from punishment, as it creates the likelihood of a behaviour occurring by taking something away o Creates reinforcements from a reason to duplicate a particular reinforcement • Reinforcement Strategies o To obtain fast acquisition of some response, continuous and immediate reinforcement is used o Behaviour tends to be persistent when learned under conditions of partial and delayed reinforcement o Behaviourists will say that one should reward them immediately and continuous reward will maintain a particular behaviour o Intermittent rewards will help reinforcement as it still gives some incentive o Continuous reinforcement, the desired behaviour is reinforced every single time it occurs o Generally this schedule is best used during the initial stages o Fixed Ratio  Fixed ratio schedules are those where a response is reinforced only after a specified number of responses. This schedule produces a high, steady rate of responding with only a brief pause after the delivery of the reinforce  To keep a particular behaviour going, partial reinforcement can be used to maintain the likelihood of a particular behaviour  Example: Frequent flyer program – getting a free flight after accumulating x number of flight miles  Example: Factory worker paid on piece work. Paying on commission or getting a bonus for every x number of items sold o Variable Ratio  Variable ratio schedules occur when a response is reinforced after an unpredictable number of responses.  This schedu
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