MOS 2181 OB Detailed Textbook Notes Chapter 1

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Western University
Management and Organizational Studies
Management and Organizational Studies 2181A/B
Hayden Woodley

1 Part  1:  An  Introduction:  Organizational  Behaviour  and  Management Sodexo  Canada -­  leading  provider  of  food  services  and  facilities  management -­  offers  integrated  facilities  management  services  i.e.  building  maintenance,  construction, landscaping,  security,  concierge  services,  housekeeping,  fitness  centre  management -­  Better  Tomorrow  Plan:  global  initiative  that  was  developed  at  the  company’s  headquarters -­  global  and  local  issues  that  touch  every  part  of  the  organization -­  three  main  pillars  :  actively  promote  nutrition,  health,  and  wellness;;  support  development of  communities;;  protect  the  environment -­  plan:  company  wide  commitments  to  reduce  its  carbon  footprint,  water  consumption,  waste diversion  and  composting -­  online  toolkit  to  communicate  to  and  engage  employees -­  Green  Team:    educate  and  engage  employees  +  inspire  them  to  adapt  practises  and  reduce waste -­  quarterly  newsletters -­  Chris  Roberts:  Director  of  Corporate  Citizenship -­  decentralized  employment  population  is  tough -­  used  cross  functional  teams  to  help  with  initiatives -­  company  works  with  World  Wildlife  Fund -­  national  sustainable  seafood  policy -­  supports  ongoing  employee  education -­  tuition  subsidies,  training  programs  etc. What  are  organizations? Organizations:  Social  inventions  for  accomplishing  common  goals  through  group  effort -­i.e.  Sodexo,  CTV,  Toronto  Blue  Jays Social  Inventions -­  that  their  essential  characteristic  is  the  coordinated  presence  of  people.  not  things -­  people  who  present  both  opportunities  and  challenges  -­the  field  of  organizational  behaviour:  understanding  people  and  managing  them  to  work effectively Goal  Accomplishment -­  non-­profit  organizations:  soul  saving,  promoting  arts,  education  etc. -­  every  organization  has  survival  as  a  goal -­  field  of  organizational  behaviour  is  concerned  with  how  organizations  can  survive  and adapt  to  change -­  Behaviours  that  are  necessary  for  survival  and  adaptation: -­  be  motivated  to  join  and  remain  within  the  organization -­  carry  out  their  basic  work  reliably,  in  terms  of  productively,  quality,  and  service -­  be  willing  to  continuously  learn  and  upgrade  their  knowledge  and  skills -­  be  flexible  and  innovative  (especially  important  for  contemporary  organizations  since they  provide  adaption  to  change) Group  Effort 2 -­  interaction  and  organization  among  people  to  accomplish  orgs.  goals -­  much  of  intellectual  and  physical  work  done  in  organizations  is  literally  provided  by  groups -­  informal  grouping:  friends  and  alliances  develop  to  finish  work -­  informal  contact:  can  have  strong  impact  on  goal  achievement -­  field  of  organizational  behaviour  is  concerned  with  how  to  get  people  to  practise  effective teamwork What  is  organizational  Behaviour? Organizational  Behaviour:  attitudes  and  behaviours  of  individuals  and  groups  in  organizations -­  systematically  studies  these  attitudes  and  behaviours  and  provides  insight  about  effectively managing/changing  them -­  studies  how  organization  can  be  structured  more  effectively -­  studies  how  events  in  their  external  environment  affect  organizations -­  those  who  study  OB: -­  interested  in  attitudes:  how  satisfied  people  are,  committed  they  feel,  supportive  they  are  towards promoting  women/minorities  into  management  positions Human  Resource  Management  :  refers  to  programs,  practises,and  systems  to  acquire,  develop  and retain  employees  in  organizations -­  recruitment  and  selection,  compensation,  training  and  development -­  knowledge  of  OB  helps  understand  effectiveness  of  HRM -­  role  of  perception,  employee  absenteeism  and  turnover  (necessary  for  developing  effective  HR practices) -­  theories  of  motivation:  understand  employee  motivation  and  performance -­  HR  practises  ;;  contribute  to  socialization  process  in  organization Why  Study  OB? It’s  Interesting -­  about  human  nature  and  people -­  includes  interesting  example  sofa  success  and  failure It’s  Important -­  impact  of  OB  is  important  -­  does  not  stop  at  the  walls  of  any  organization -­  consumers  are  also  affected -­  tremendous  variation  in  OB It  Makes  a  Difference -­  organizations  can  no  longer  achieve  a  competitive  advantage  through  the  traditional  sources  of success  i.e.  technology,  regulated  markets,  financial  resources  etc. -­  main  factor  that  differentiates  organizations  is  their  workforce  and  human  capital -­  human  capital  is  strongly  related  and  a  key  determinant  of  firm  performance -­  sustained  competitive  advantage  therefore,  and  organizational  effectiveness  are  related  to  the management  of  human  capital  and  OB -­  Pfeffer:  16  practices  i.e.  incentive  pay,  participation  and  empowerment,  teams,  job  redesign, training  and  skill  development How  much  do  you  know  about  Organizational  Behaviour? 3 -­  research:  each  of  the  statements  is  actually  false  (pg  8  of  textbook) -­  researchers  have  found  that  the  personalities  of  effective  leaders  vary  a  fair  amount,  many  superiors, workers  underestimate  their  own  absenteeism  and  pay  is  not  always  the  most  effective  way  to  motivate workers  and  improve  job  performance -­  experience  indicates  that  people  are  good  at  giving  sensible  reasons  why  the  same  statement  is  either true  or  false  -­  thus,  pay  will  always  motivate  workers  because  most  people  want  to  make  more  money  and  will work  harder  to  get  more  pay -­ Research  Focus:  Are  the  best  Companies  to  work  for  the  best  companies? -­  additional  costs  associated  with  being  a  great  place  to  work  justified  by  higher  firm performance? -­  Ingrid,  fulmer  Barry  Gerhart,  Kimberly  Scott:  Study -­  compared  50  Fortune  100  best  list  -­-­>  comparable  in  terms  of  industry  size  and  operating performance -­  comparisons  indicated  100  best  companies  outperformed  the  matched  groups  of companies  on  financial  performance  and  stock  returns -­  Financial  performance:  measures  by  return  on  assets  (ROA)and  market  to  book  value  of  equity was  generally  better  among  100  best  than  matched  group -­    cumulative  stock  returns  of  the  companies    the  100  best  list  outperformed  a  composite  market index  by  183  percentage  points,  or  95% -­  companies  in  the  100  best  list  has  more  positive  employee  relations  and  attitudes  compared  to  the other  companies -­  to  assess  stability  of  employee  attitude -­  2  years:  the  relationship  was  positive  and  significant  and  there  was  little  change  from one  year  to  next -­  employee  attitudes  were  highly  positive  at  best  100  and  stable  -­-­>  provided  support  for  the  belief that  positive  employee  relations  are  a  source  of  sustainable  competitive  advantage -­  therefore,  direct  positive  link  between  employee  relations  and  attitudes  and  financial performance -­  companies  can  create  attractive  workplaces  without  hurting  bottom  line Goals  of  OB -­  predicting,  explaining  and  managing  behaviour Predicting  OB -­  anticipate  when  people  will  get  angry -­  interest  in  predicting  when  people  will  make  ethical  decisions,  create  innovative  products  or engage  in  sexual  harassment -­  the  regularity  of  it,  permits  the  predictions  of  its  future  occurrence -­  untutored  predictions  of  OB  are  not  always  accurate -­  field  of  OBB  provides  scientific  foundation  that  helps  improve  predictions  of  organizational events 4 -­  being  able  to  predict  OB  does  not  guarantee  that  we  can  explain  the  reason  for  the  behaviour and  develop  an  effective  strategy  to  manage  it Explaining  OB -­  prediction  and  explanation  are  not  synonymous -­  accurate  predictions  precedes  explanations -­  determining  why  people  are  more  or  less  motivated,  satisfied,  or  prone  to  resign -­  explaining  events  is  more  complicated  than  predicting -­  case  can  have  multiple  causes -­  underlying  causes  of  some  event/behaviour  can  change  over  time Managing  OB -­  Management:  the  art  of  getting  things  accomplished  through  others -­  acquire,  allocate  and  utilize  physical  and  HR  to  accomplish  goals -­  prediction  and  explanation  =  analysis,  management=  action -­  we  see  cases  where  managers  act  without  analysis:  i.e.  quick  fix  result=  disaster -­  do  not  overanalyze:  rather  approach  the  problem  with  a  systematic  understanding  of  behavioural science  and  OB  +use  that  understanding  to  make  decisions:  evidence-­based  management -­  evidence-­based  management:  involves  translating  principles  based  on  the  best  scientific evidence  into  organizational  practices -­  managers  can  make  decisions  based  on  best  available  scientific  evidence  from  social science  and  organizational  research -­  voids  personal  preference  and  unsystematic  experience -­  derives  principles  from  research  evidence  and  makes  practises  that  solve  problems -­  more  likely  to  result  in  attainment  of  Organizational  goals,  also  those  affecting employees,  stockholders,  and  public  in  gener;; Early  Prescriptions  Concerning  Management -­  ongoing  concern:  prescribing  the  ‘correct’  way  to  manage  an  organization  to  reach  its  goals -­  history  of  management  thought  and  Ob  has  developed The  Classical  view  and  Bureaucracy -­  early  1900s -­  military  settings,  mining  operations,  factories  that  produces  everything -­  Henri  Fayol -­  James  D.  Mooney:  GM  executive -­  Lyndall  Urwick:  consultant -­  Classical  viewpoint:  tended  to  advocate  a  very  high  degree  of  specialization  of  labour  and  a very  high  degree  of  coordination -­  each  department:  tend  to  own  affairs,  centralized  decision  making  from  upper  management -­  suggests  that  managers  have  fairly  few  workers  except  for  low  level  jobs  where  machine  pacing will  substitute  for  close  supervision -­  Fredrick  Taylor  :  father  of  scientific  management  :  system  for  using  research  to  determine  the optimum  degree  of  specialization  and  standardization  of  work  tasks 5 -­  mainly  concerned  with  job  design  and  structure  of  work  on  the  shop  floor -­  supported  development  of  written  instructions-­-­>  clearly  defining  work  procedures, encouraged  supervisors  to  standardize  workers  movements  and  breaks  for  maximum efficiency -­  extended  scientific  management  to  the  supervisor;;s  job:  functional  foremanship  )where supervisors  would  specialize  in  particular  functions) -­  Max  Weber -­  German  social  theorist -­  made  the  term  bureaucracy:  ideal  type  of  organization  (Weber)  that  included  a  strict chain  of  command,  detailed  rules,  high  specialization,  centralized  power,  and  selection  and  promotion  based on  technical  competence -­  advocating  it  as  a  means  of  rationally  managing  complex  organizations -­  time  of  industrial  growth;;  most  management  was  done  by  intuition,  nepotism  and favouritism  were  rampant -­  following  qualities  of  bureaucracy  (Weber) -­  strict  chain  of  command  in  which  each  member  reports  to  only  a  single  supervisor -­  criteria  for  selection  and  promotion  based  on  impersonal  technical  skills  rather  than nepotism  favouritism -­  a  set  of  detailed  rules,  regulations  and  procedures  ensuring  that  the  job  gets  done regardless  of  who  the  specific  worker  is -­  the  use  of  strict  specialization  to  match  duties  with  technical  competence -­  the  centralization  of  power  at  the  top  of  the  organization -­  weber  saw  it  as  an  ideal  type,  or  theoretical  model  -­-­>  would  standardize  behaviour  and provide  workers  with  security+  sense  of  purpose -­  jobs  would  be  performanced  as  intended,  not  whims  of  specific  role  occupant -­  workers  would  have  a  fair  chance  at  promotion  and  rising  in  the  power  structure -­  provide  security  to  workers:  rules,  clear  cut  command  chain  etc. -­  Mary  Parker:  classical  view  of  management  seemed  to  take  for  granted  essential conflict  of  interest  between  managers  and  employees The  Human  Relations  Movement  and  a  Critique  of  Bureaucracy -­  began  with  famous  Hawthorne  studies  :  research  conducted  at  the  Hawthorne  plant  of Western  Electric  near  Chicago  in  the  1920s  that  illustrated  how  psychological  and  social  processes  affect productivity  and  work  adjustment -­  1920s  and  30s -­  began  in  the  strict  tradition  of  industrial  engineering -­  concerned  with  impact  of  fatigue,  rest  pauses,    lighting  on  productivity -­  researchers  began  to  notice  the  effect  of  psychological  and  social  processes  on  productivity  and work  adjustment  -­-­>  could  be  dysfunctional  aspects  to  how  work  was  organized -­  one  sign:  resistance  to  management  through  strong  informal  group  mechanisms,  i.e.  norms  that limited  productivity  to  less  that  management  wanted -­  after  WWII -­  human  relations  movement:  critique  of  classical  management  and  bureaucracy  that 6 advocated  management  styles  that  were  more  participative  and  oriented  toward  employee  needs -­  called  attention  to  dysfunctional  aspects  of  classical  management -­  advocated  people-­orientated  style  of  management  catering  to  social  and  psychological needs  of  employees -­  critique  addressed  several  specific  problems: -­  strict  specialization  is  incompatible  with  human  needs  for  growth  and  achievement.  This can  lead  to  employee  alienation  from  the  organization  and  its  clients -­  strong  centralization  and  reliance  on  formal  authority  often  fail  to  take  advantage  of  the creative  ideas  and  knowledge  of  lower-­level  members,  who  are  often  closer  to  the  customer -­  as  a  result;;  the  org.  will  fail  to  learn  from  mistakes,  threatening  innovation  and adaption -­  strict,  impersonal  rules  lead  members  to  adopt  the  minimum  a  higher  performance  levels are  possible -­  strong  specialization  causes  employees  to  lose  sight  of  the  overall  goals  of  the  org.  Forms procedures,  required  signatures  become  ends  in  themselves.  divorced  rom  needs  of  customers,  clients,  and departments  in  org.  -­-­>  called  the  red-­tape  mentality -­  not  all  orbs.  have  these  problems-­-­>  common Contemporary  Management  :  The  contingency  approach How  the  apparent  tension  between  the  classical  approach  and  human  relations  approach  has  been resolved: -­  classical  advocates:  critical  role  of  control  and  coordination  in  getting  goals  accomplished -­  human  relationists:  dangers  of  forms  of  control  and  coordination  (plus  addressed  needs  for flexibility  and  adaptability) -­  contemporary  scholars:  management  approached  need  to  be  tailored  to  fit  the  situation -­  i.e.  manage  a  payroll  department  more  bureaucratically  than  research  and  development department  -­-­>  payroll  once  a  week  is  no  margin  for  error -­  research  requires  creativity  that  is  fostered  by  a  more  flexible  work  environment -­  OB  cannot  be  a  cookbook -­  there  is  a  growing  body  of  research  and  management  experience  to  help  sort  out  complexities  of what  happens -­  everything  relies  on  :  it  depends  :  dependencies  are  called  contingencies -­  contingency  approach:  approach  to  management  that  recognized  that  there  is  no  one  best  way to  manage,  and  that  an  appropriate  management  style  depends  on  the  demands  of  the  situation -­  the  effectiveness  of  a  leadership  style  is  contingent  on  the  abilities  of  the  followers,  i.e. consequence  of  a  pay  increase  is  contingent  on  need  for  money -­  contingencies  :  illustrate  complexities  of  OB  and  why  we  need  to  study  it  systematically What  do  managers  do? -­  strong  impact  on  what  happens  in  and  to  orgs. -­  influence  and  are  influenced  by  OB  -­-­>  net  result  can  have  a  huge  effect  for  organizational  effectiveness Managerial  roles -­  Henry  Mintzberg 7 -­  canadian  management  theorist -­  conducted  study  of  behaviour  of  several  managers -­  complex  set  of  roles  played  by  the  managers:  figurehead,  leader,  liaison  person,  monitor, disseminator,  spokesperson,  entrepreneur,  disturbance  handler,  resource  allocator,  negotiator -­  Informational  Roles:  Monitor,  disseminator,  spokesperson -­  interpersonal  roles:  figurehead,  leader,  liaison -­  decisional  roles:  entrepreneur,  disturbance  handler,  resource  all Interpersonal  Roles: -­  expected  behaviours  that  have  to  do  with  establishing  and  maintaining  interpersonal  relations -­  figurehead  role:  managers  service  symbols  of  their  organization  rather  than  active  decision makers -­  i.e.  making  a  speech  to  a  trade  group,  entertaining  clients,  signing  documents. -­  Liaison  role:  managers  maintain  horizontal  contacts  inside  and  outside  the  organization -­  i.e.  discussing  project  with  colleague  in  another  department,  delegate  in  another  country -­  Monitor  role:  managers  scan  internal/external  environments  of  the  firm  to  follow  performance and  keep  themselves  informed -­  attend  professional  engineering  conference  (head) -­  disseminator  role:  managers  send  out  information  on  both  facts  and  preferences  to  others -­  i.e.  R&D  summarized  what  he/she  learnt  at  conferences -­  spokesperson  role:  mainly  sending  message  into  organization’s  external  environment  i.e.  drafting annual  report  to  stockholders Decisional  Roles -­  entrepreneur  role;;  managers  turn  problems  and  opps.  into  plans  for  improved  changes
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