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Chapter 1

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Ryerson University
Human Resources
MHR 405
Ron Babin

Chapter 1- Intro to Organizational Behaviour Organizational Behaviour – the study of what people think, feel, and do in and around org’s (Behaviour, decisions, perceptions, and emotional responses) Organizations- Groups of people who work interdependently toward some purpose Key Features of Organizations: - They are collective entities o They consist of humans interacting together in an organized way o This organized relationship involves communication, coordination, and collaboration - Their members have a collective sense of purpose o Provides direction and a unifying force OB has been around for a long time, but was organized into a unified discipline around WW2 - Plato (essence of leadership) - Philosopher Confucius (ethics and leadership) - Adam Smith (Job specialization and division of labour) - Max Weber (rational organizations) - Frederick Taylor (systematic goal setting and rewards) - William Lyon Mackenzie King (worker involvement and reward systems) - Elton Mayo (employee attitudes and group dynamics) - Mary Parker Follett (constructive conflict, team dynamics, org democracy, power, leadership) - Chester Barnard (communication, coordination, leadership, and authority) The Ultimate Dependent Variable in OB ? - Organizational effectiveness is the ultimate dependent variable on OB, OB’s theories and practices ultimately try to improve the organizations effectiveness Organizational Effectiveness - is a broad concept - Includes org’s fit with external environment, internal subsystems configuration for higher performance, emphasis on org learning, ability to satisfy the needs of stakeholders “Goal Attainment” definition of Organizational Effectiveness: Org’s are effective when they achieve their stated organizational objectives Why goal attainment is poor for viewing effectiveness? - Goals could be too easy to achieve - Goals may be less aggressive than competitors - Goals might aim the org in the wrong direction Best Definition of Organizational Effectiveness is through 4 perspectives: 1. Open systems 2. Organizational Learning 3. High performance work practices 4. Stakeholders Organizations are effective when… - they have a good fit with the external environment - are learning org’s - have efficient and adaptive internal subsystems - Satisfy the needs of key stakeholders OPEN SYSTEMS PERSPECTIVE Open systems: organizations depend on the external environment for resources, affect that environment through their output, and consist of internal subsystems that transform inputs into outputs Open Systems - One of the earliest and well entrenched ways of thinking about org’s - Views org’s as complex organisms that “live” within an external environment - Depends on interaction with external environment - Depends on external environment for resources( raw materials, job applicants, financial resources, information, and equipment) External Environment - Consists of rules and expectations (laws and cultural norms) which place demands on how organizations should operate - Some environmental resources (raw materials) are transformed into products that are exported to the external environment - Some environmental resources (job applicants, equipment) become subsystems in the transformation process Subsystems within the Organization - Departments, teams, informal groups, work processes and technological configurations - Org subsystems are also systems with their subsystems - Org’s subsytems are organized interdependently so they interact with each other to transform inputs into various outputs - Some outputs (products, services, community support) may be valued by external environment - Some outputs (layoffs, pollution) are by-products and may have adverse effects on the environment and its relationship with the organization - Throughout the process Org’s receive feedback from the external environment regarding the value of their outputs and availability of future inputs (ie a car, if people like it they buy it and in return the manufacturer can make more, if not the car company should discontinue the car) Organizations are effective when they make a good fit with their environment. - A good fit is when the org puts resources where they are most useful to adapt to and align with the needs of the external environment - Successful org’s have a good fit by anticipating change in the environment and quickly reconfiguring their subsystems to become more consistent with their environment - Also by managing their external environment( limiting competitor access to critical resources) - Changing consumer perceptions and needs (marketing) - Supporting legislation that strengthens their position in the marketplace - If the current environment is too challenging move into different environments Internal Subsystems Effectiveness - Effectiveness is also defined as how well a company operates internally - How well it transforms inputs into outputs - Organizational Efficiency (productivity):the ratio of inputs to outputs/outcomes - Successful org’s are adaptive and innovative - In a successful open system coordination is vital in the relationship among an org’s subsystem - Coordination flaws include: lost info, files not being shared, hoarding materials, misinterpreted messages, and resources and rewards are distributed unfairly Organizational Learning Prospective Organizational Learning(Knowledge management): a perspective that holds that org’s effectiveness depends on the org’s capacity to acquire, share, use, and store valuable knowledge. - In the ‘new economy’ most valued input is knowledge 4 Organizational Learning Processes: Knowledge sharing - Communication - Training information systems - Observation Knowledge Use - Knowledge awareness - Sensemaking - Autonomy - Empowerment Knowledge Storage - Memory - Documentation - Databases - Practices/habits Knowledge Acquisition - Environment scanning - Individual learning - Grafting - Experimentation Absorptive Capacity: the ability to recognize the value of new info, assimilate it, and use it for value added activities. - Important prerequisite for acquiring, sharing, and using new knowledge - Companies need to have people with sufficient knowledge to receive and apply new knowledge Intellectual Capital: The Stock of Organizational Knowledge Includes: human capital, structural capital, and relationship capital Human capital: knowledge, skills, and abilities of employees Structural capital: knowledge embedded in an organizations systems structure. - Even if every employee left the org, intellectual capital would still remain in the form of structural capital - Contained in documentation of work procedures and the physical layout of the production line. - Could also include extracting knowledge by taking apart finished products and seeing how they work and are constructed Relationship Capital: the value derived from an organizations relationships with customers suppliers, and others who provide other mutual value for the org. Organizational Memory- corporate leaders keep the memory (storage and preservation of intellectual capital). Includes an
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