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Chapter 1

Chapter 1 - OB and Management.docx

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Wilfrid Laurier University
David Scallen

BU288 – Textbook Notes – Chapter 1 Chapter 1 – Organizational Behaviour and Management  What are Organizations?  Definition of “Organizations”  Organizations are social inventions for accomplishing common goals through group effort.  Social Inventions  When we say that organizations are “social inventions”, we mean that their essential characteristic is the coordinated presence of people, not necessarily things.  Organizations have people who present both opportunities and challenges.  The field of organizational behaviour is about understanding people and managing them to work effectively.  Goal Accomplishment  Individuals are assembled into organizations for a reason.  The field of organizational behaviour is concerned with how organizations can survive and adapt to change.  Certain behaviours are necessary for survival and adaptation. People have to: Be motivated to join and remain the organization   Carry out their basic work reliably, in terms of The field of OB productivity, is concerned with quality, and all these basic services.  Be willing to continuously learn and upgrade their knowledge and skills  Be flexible and innovative  PS: Flexibility and innovation provide for adaptation to change, which are especially important for contemporary organizations. 1 BU288 – Textbook Notes – Chapter 1  Group Effort  “Organizations are based on group effort.”  It means organizations depend on interaction and coordination among people to accomplish their goals.  The field of organizational behaviour is concerned with how to get people to practice effective teamwork.  What is Organizational Behaviour?  Organization Behaviour ---the attitudes and behaviours of individuals and groups in organizations  The discipline of OB:  Studying these attitudes and behaviors and providing insight about effectively managing and changing them.  Studying how organizations can be structured more effectively and how events in their external environments affect organizations.  Goals of OB include predicting, explaining and managing behaviour that occurs in organizations.  Those who study OB are interested in attitudes…  How satisfied people are with their jobs.  How committed people feel to the goals of the organization.  How supportive people are of promoting women and minorities into management position.  Behaviours [e.g. cooperation, conflict, innovation, resignation, ethical lapses] are important areas of study in the field of OB.  Human Resources Management ---programs, practices, and systems to acquire, develop, and retain employees in organizations  Compared to OB, human resources management is a close related but distinct discipline. 2 BU288 – Textbook Notes – Chapter 1  Why Study Organizational Behaviour?  Organization Behaviour is Interesting  OB is about people and human nature.  OB helps us understand why employees becomes committed to an organization and what motivates them to work hard.  Organization Behaviour is Important  OB is important to managers, employees, and consumers.  Understanding OB can make us more effective managers, employees, or consumers.  There is tremendous variation in OB.  e.g. skilled sales people in insurance make many more sales than some of their peers.  The field of OB is concerned with explaining these differences and using the explanations to improve organizational effectiveness and efficiency.  Organization Behaviour Makes a Difference Jeffrey Pfeffer  “Organizations can no longer achieve a competitive advantage through the traditional sources of success. <> resources, 3 BU288 – Textbook Notes – Chapter 1 and economies of scale]”  Today, the main factor that differentiates organizations is their workforce and human capital.  Sustained competitive advantage and organizational effectiveness are increasingly related to the management of human capital and OB. There is direct positive link  OB can make a big difference between for the effectiveness and competitiveness of employees relations organizations. & attitudes PS: Suggesting company should & financial performance  How create attractive workplace without hurting the bottom line. Much do You Know about Organizational Behaviour?  A list of statements which concerns the behaviour of people in organizations:  1) Effective organizations leaders tend to possess identical personality traits.  2) Nearly all workers prefer stimulating, challenging jobs.  3) Managers have a very accurate idea These 5 statements about how much their peers and are all wrong! superiors and are paid. 4) Workers have a very accurate idea   5) Pay is the best way to motivate most employees and improve job performance.  PS: You should not jump to unwarranted conclusions based on the inaccuracy of these statements until we determine why they tend to be incorrect. 4 BU288 – Textbook Notes – Chapter 1  Goals of OB  A number of commonly agreed upon goals of the field of OB are effectively predicting, explaining, and managing behaviour that occurs in organizations.  Goal 1: Predicting OB  In organizations, there is considerable interest in predicating when people will make ethical decisions, create innovative products, or engage in sexual harassment.  The vary regularity of behaviour in organizations permits the prediction of its future occurrence.  BUT, untutored predictions of OB are not always as accurate.  So, through systematic study, the field of OB provides a scientific foundation that helps improve predictions of organizational events. 5 BU288 – Textbook Notes – Chapter 1  Since being able to predict OB does not guarantee that we can explain the reasons for the behaviour and develop an effective strategy to manage it.  So, this bring us to the second goal of the field of OB.  Goal 2: Explaining OB  In general, accurate prediction precedes explanation.  OB is especially interested in determining why people are more or less motivated, stratified or prone to resign.  Explaining events is more complicated than predicting them.  A behaviour could have multiple causes.  The underlying causes of some behaviour can change over time.  The ability to understand behaviour is necessary prerequisite for effectively managing it.  Goal 3: Managing OB  Management is the art of getting things accomplished in organizations through others.  This definition does not include a prescription about how to get things accomplished. Managers acquire, allocate, and utilized physical and human  resources to accomplish goals.  If behaviour can be predicted and explained, then the behaviour can often be managed.  If prediction & explanation constitute analysis, then management constitutes action.  But, in many cases, managers act without analThe result is often disaster. looking for a quick fix to problems.  Solution: evidence-based management 6 BU288 – Textbook Notes – Chapter 1  Evidence-Based Management ---translating principles based on the best scientific evidence into organizational practices  By using evidence-based management, managers can make decisions based on the best available scientific evidence from social science and organizational research, rather than personal preference & unsystematic experience.  Evidence-based management derives principles from research evidence and translate them into practices that solve organizational problems.  The use of evidence-based management is more likely to result in the attainment of organizational goals, including those affecting employees, stockholders, and the public in general.  Early Prescriptions Concerning Management  Intro  For many years, experts interested in organizations were concerned with prescribing the “correct” way to manage an organization to achieve its goals.  There were 2 basic phrases to this prescription: 1) The Classical View 2) The Human Relations View  A summary of these viewpoints will illustrate how the history of management thought and OB has developed.  The Classical View and Bureaucracy 7 BU288 – Textbook Notes – Chapter 1  The Classical Viewpoint ---an early prescription on management that advocated high specialization of labour, intensive coordination, and centralized decision making  Each department was to tend to its own affairs, with centralized decision making from upper management providing coordination.  To maintain control, the classical view suggested that managers have fairly few workers, except for lower-level jobs where machine pacing might substitute for close supervision.  PS: Most of the major advocates of the classical viewpoint were experienced managers or consultants who took the time to write down their thoughts on organizing.  This activity occurred in the early 1900s.  Scientific Management ---Frederick Taylor’s system for using careful research to determine the optimum degree of specialization and standardization of work tasks.  Frederick Taylor supported the development of written instructions that clearly defined work procedures Frederick Taylor encouraged supervisors  to standardize workers’ movements and breaks for maximum efficiency.  Frederick Taylor extended scientificmanagement to the supervisor’s job, advocating “functional foremanship” whereby supervisors would specialize in particular functions. 8 BU288 – Textbook Notes – Chapter 1  Bureaucracy ---Max Weber’s ideal type [OR theoretical model] of organization that would standardize behaviour in organizations and provide workers with security and a sense of purpose.  A bureaucracy has the following qualities: 1) A strict chain of command  in which each member reports to only a single superior.  2) Criteria for selection and promotion based on impersonal technical skills rather than nepotism or favoritism.  3) A set of detailed rule, regulations, and procedures ensuring that the jobs gets done regardless of who the specific worker is.  4) The use of strict specialization to match duties with technical competence.  5) The centralization of power at the top of the organization.  Jobs would be performed as intended rather than following the whims of the specific role occupant.  In exchange for this conformity, workers would have a fair chance of being promoted and rising in the power structure.  The Human Relations Movement and a Critique of Bureaucracy  The human relations movement generally began with the famous Hawthorne studies. Hawthorne studies  ---research conducted at the Hawthorne plant of Western Electric near Chicago in the 1920s and 1930s that illustrated how psychological and social processes affect productivity and work adjustment 9 BU288 – Textbook Notes – Chapter 1  This impact suggested that there could be dysfunctional aspects to how work was organized.  A obvious sign was resistance to management through strong informal group mechanisms. [e.g. norms that limited productivity to less than what management wanted]  Human Relations Movement ---a critique of classical management and bureaucracy that advocated more people-oriented management styles that catered more to the social & psychological employees’ needs. This critique of bureaucracy addressed several specific problems:   1) Strict specialization is incompatible with human needs for growth & achievement. 10 BU288 – Textbook Notes – Chapter 1  This can lead to employee alienation from the organization and its clients.  2) 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.  So, the organization will fail to learn from its mistakes, which threatens innovation and adaptation. Resistance to change will occur as a matter of course.  3) Strict, impersonal rules lead members to adopt the minimum acceptable level of performance that the rules specify.  If a rule states that employees must process at least eight claims a day, eight claims will become the norm, even though higher performance levels are possible.  4) Strong specialization cause employees to lose sight of the overall goals of the organization.  Forms, procedures, and required signatures become ends in themselves, divorced from the true needs of customers, clients, and other departments in the organization. This is the “red-tape mentality” that we sometimes observe in bureaucracies.  PS: Not all bureaucratic organizations have these problems.  But, they were common enough that human relations advocates:  The adoption of more flexible systems of management and the design of more interesting jobs.  Open communication , more employee participation in decision making, and less rigid, more decentralized forms of control.  Contemporary Management – The Contingency Approach  Contemporary scholars and managers recognize the merits of both approaches.  The classical advocates 11 BU288 – Textbook Notes – Chapter 1 pointed out the critical role of control and coordination in getting organizations to achieve their goals.  The human relationists pointed out the dangers of certain forms of control and coordination and addressed the need for flexibility and adaptability.  PS: Contemporary scholars have learned that management approaches need to be tailored to fit the situation.  There is a growing body of research and management experience to help sort out the complexities of what happens in organizations.  But, the general answer to many of the questions that we will pose in the following chapters is “It depends”.  These dependencies are called contingencies.  Contingency Approach ---an approach to management that recognizes that there is no one best way to manage; rather, an appropriate management style depends on the demands of situation Contingencies illustrate the complexity of OB  and show why we should study it systematically.  What do Managers do?  There is no shortage of texts and popular press books oriented toward what managers should do. 12 BU288 – Textbook Notes – Chapter 1  But, the field of OB is also concerned with what really happens in organization.  Managers can have a strong impact on what happens in and to organizations.  Managers both influence and are influenced by OB.  Let’s look at several research studies that explore what managers do do, which provides a context for appreciating the usefulness of understanding OB.  Managerial Roles  Mintzberg’s Managerial Roles---Exhibit 1.2 [P15] 13 BU288 – Textbook Notes – Chapter 1  The relative importance of the following roles will vary with management level and organizational technology.  Mintzberg’s major contribution to OB is PS: to highlight the complexity
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